/biz/ - Business & Finance

I don't know how new you all are but bear markets are notorious for their massive dips AND rips. You all need to understand the mechanics behind the price movement: no short positions to emulsify a drop lead to a meltdown after the final bull has bought. The sudden drop after everyone rushes for exits builds up a massive amount of short positions as the 'boat' tips to the other side, and those shorts then get blown out of the water when buyers step in and a short covering rally ensues. After the shorts are burnt out and the bulls think they are in the clear, the same cycle repeats. Right now, the put/call ratio clocked in a huge number - the same we saw before the December botton. We are about to see a face-ripping rally. Remember even in 2000 we saw a rally as big as 40% after the top was in. It of course was later crushed by more forced selling

Remember this