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    • Jul 18, 2022

More Buyers or Sellers: The calm before the storm


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Unknown member
Jul 20, 2022

Hi John - could you please provide a mid-week update on how you are interpreting the current breakout?

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John
Jul 20, 2022
Replying to

Hi Jeff


It looks to me like a short squeeze - ARKK took out the recent range highs for example. Retail were getting all excited over PGY and a bunch of other names. Most international indices were lower today, and there wasn't much volume traded in SPY/QQQ so there's nothing to suggest that the market has switched to a bullish view.


SPY should stall out at around 400 (A=C target). If it can close above there it could cause a bigger rally.


John.

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Dominik Orlowski
Jul 19, 2022

Hi John, could you please check RKLB. Thank you!

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John
Jul 19, 2022
Replying to

Hi Dominik


RKLB looks okay to me. Once it took out 4.00 at the end of June I think it pretty much completed it's downtrend from a technical perspective.


Positioning looks supportive for a rally from here so the only question is what is the bull thesis?


I think it is an interesting ticker in that it would seem to be largely dependent on government contracts. I was formulating a hypothesis the other day that information on such companies was more likely to be revealed through the purchase of options due to insider trading laws apparently not applying to politicians.


RKLB does have more calls than puts, but there hasn't been any recent activity that might suggest anything out of…


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Norman Taralrud-Bay
Jul 19, 2022

John, would you take a large position in a probability in your favour of 0.0125% Or go out of your way to avoid that possibility of loss? (absolute risk of those adverse events).

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John
Jul 19, 2022
Replying to

Hi Norman


A 1% edge is typical of a quant equity strategy. It only makes sense if you are taking positions in many stocks so that the risk of individual adverse events is cancelled out by corresponding favourable events, and you capture the average.


This is why we target risk adjusted returns in our model portfolios.


John.

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Unknown member
Jul 18, 2022

Great post! “AAPL has been trying to lead the market higher in recent weeks, but the rally looks corrective to us.” I thought this exact thing last week

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John
Jul 19, 2022
Replying to

No, there's no particular reason for concern. My only point there was the fact that they beat the consensus forecast is not informative, so the market must be looking at something else in the report.

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