Interim Update – 7/19/2021

It took a bit, but the short squeeze finally gripped. Look, when you see the index basing around the lows and the put/call ratio high and rising, you know that these shorts are poorly positioned, not being rewarded, and likely to panic by the close. They often all head for the exits at once and buy to cover.

Today, it had to be especially difficult to hold the short on the S&P 500 when the index moved back above the 50-day line, usually strong support and an institutional money manager buy point. If you were short, there would be a lot going through your head with that in mind.

I rode two contracts into that high and covered with about 50 total points of profit. As to the market, I am not convinced that the correction is over, but more likely, it is just getting underway. It will zig and zig, giving us a lot of nice trades like this.

I will do the usual play-by-play in the Epilogue later tonight. It is good to be home and have nine screens again. Did I mention how much I love trading? If not, let me do so again now.

A.F. Thornton