Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
The biggest question in today’s markets: Is the Wall Street Bubble bursting? No one knows that answer for sure however we do know there are warning signs pointing in that direction.
Traders are always looking for an edge in markets when they trade trying to create the highest probability. Over the last couple of weeks, we have seen Wall Street Bets by Reddit as the new Ponzi Scheme. This has created one of the most unbelievable short squeezes in history in Gamestop (GME).
GME is an antiquated business with a greater chance of going out of business then continuing this crazy short squeeze taking the stock from 20.00 to a high of 483.00. Before the squeeze began the stock was worthless on its way out of business. What makes GME now worth 483 with a minus PE of 69. The short float is over 100% which may propel the stock higher.
Other than the new Ponzi Scheme being created the markets themselves appear to be in major trouble indicating the possible top of the markets. The heavy selling with rising volatility gives indications the tops are in and the selling has just begun.
Although we recognize that the bubble may be bursting the options markets are still leaning to the bull side with buying calls still the number one strategy. However, the next 5 strategies are bearish advising us that a trend change is near.
The bullish stocks remain AAPL, FB, DKNG, NIO and SPCE. The bearish symbols are changing with the new leaders being QQQ, IWM, DIA, GME and XRT. The next few days should tell the story but the trend is changing.
Todd “Bubba” Horwitz