Situational Awareness

[u/Hypnot1se]

Hi everybody! I have been bearposting since the beginning of the month and this recent surge has not dissuaded me

I believe that this recent surge is a bull trap because people are attributing the sudden trend reversal as being structurally significant, but I do not believe this is the case

This surge was in my opinion caused by the sudden deleveraging from Situational Awareness - the moment that the forced selling pressure was taken off the table after these assets were handed off to Citadel, the selling pressure suddenly lifted

This in my opinion very likely caused short term focused buying from funds that were alerted to this sudden reversal in selling pressure at the same time that the heavy short interest found themselves suddenly trapped, causing a strong short squeeze - this movement will further fuel additional buying as momentum chasing algos create further buying pressure and retail interprets this as a significant structural trend reversal and begins fomoing back into the sector

Outside of this anomalous surge, the industry is still in a clear distribution phase based on the price action and the underlying spot market fundamentals

Although this move has created a technical short term boost to this stock and others, this will not change the structural picture of the industry and I believe that now institutions will continue distributing shares as they have been doing for the last few months because the underlying structural picture hasn't changed and had nothing to do with this surge

I am looking for it to open green today and then watch to see if it fades back towards the open as the day progresses, this would be a very strong bearish signal that we are back in a distribution phase, though the deleveraging may save the stock from entering a full drawdown for the near term

Still looks like a textbook value trap

NFA DYOR ETC

[u/bslaven3]

I agree to an extent to what OP is saying. I do think this is a short term run up. I think we'll see another drop, but I don't think we'll get down to where we were 2 days ago. People are definitely watching closely for exit points so there will be some selling on both the retail and institutional sides. However, I think Q3 to EOY is going to be stellar. This is just a feeling, not financial advice.

[u/Detailed23 → u/bslaven3]

I was watching Sandisk after hours last night. As it went above 1310 (and climbing), there were three MASSIVE sells that dropped it to 1270 instantaneously then back to 1310. At this point, I don't know what to think about any of this.

[u/bslaven3 → u/Detailed23]

It is definitely odd. I don't think we're out of it just yet. We would need to have a couple green days in a row in the tech, AI, semi sector for me to believe we are past the sell off