Good Thursday Morning by Jonny Short Side

The Bear Growls - July 30, 2020
News & Sector Flow: Equity markets are resilient …… the short story of the day -KODK

 Equity markets are resilient as the fiscal and monetary policy backstop longs. On Monday the Nasdaq 100 (QQQ) held support and regained the 20 day moving average. The weak dollar continues to help metals (GLD) and (SLV), miners (GDX) and (SIL) and emerging markets (EEM). But it now appears that this short U.S. Dollar/ long gold (or silver) trade is becoming crowded increasing the odds of a substantial pullback. Keep nimble. When everyone is giddy and cocksure that a trend will continue it pays to be vigilant. Talking heads/ pundits are speaking to a resurgence of inflation, but a counter-argument is that Fed Funds futures are once again pricing in zero to negative interest rates starting in June of 2021. That is by definition representative of deflation, not inflation. On a technical data note, keep in mind that there is complacency in equity markets. The 7 day moving average on equity put/calls has been running at very low levels. That at some point will reverse and it usually happens when the market picks up steam to the downside.

Short musings: Eastman-Kodak (KODK) was a massive face ripper to anyone short. Trading halts added to the volatility and prevented some traders from squaring/closing out of losing positions with minimal damage. KODK appeared to be the short story of the day. Ten-point gaps occurred from trading halt to re-opening. Again, this is a profession where preservation of capital is paramount. Stop orders with defined risk are essential. The stock has been in a two and a half year basing pattern. Technically and news related, this stock seemed to be a bull in a china shop, as upside breakouts from longer term bases, on large spikes/long bars, with massive upside volume are generally an indication of higher prices to come. Who expected a move like this in one day?

Hot Shorts @ TradeZero
SNDE, OBLG, OGEN, BLNK, MTP, KGJI, MXC, SPI, HTBX
MIST, YVR, ENTX, CBAY, RNET, ABUS, SUNW, IBIO, IMMP
TCRR, NTZ, ENT, MGEN, ASNA, PTE, MDGS, THTX, ECOM
SCKT, MNOV, MARA, , SOGO, GNCA, WHLM, CAPR,
KODK, SNGX, SYPR, SPPI, MFH, MARA, TFFP, SONM


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