SOXL is hovering around 125, and in the past 24 hours it was directly hammered down 18%. It’s a 3x leveraged product: the underlying is down about 6 points, but on the chart it’s a triple-speed selloff.
Conclusion first: at this level, I won’t bottom-fish. Price is sticking close to the 24-hour low. The 15-minute double moving averages are completely stacked overhead, and on the 4-hour chart, 5 out of the last 6 candlesticks are bearish. The daily chart has been dropping from 152 and closing at a low level—this is a breakdown, not a pullback.
The flow of funds is also pushing in the same direction. Buy-side aggressive orders (active buys) only make up about 45%, while sell orders are pinning the buys and hitting them. Over the past seven hours, buy volume shrank by 8%. The funding rate has flipped negative, and bulls no longer have the urge to keep lifting the price. The large players are even more direct: although accounts are still net long, the long positioning has been cut by 13% over the past seven hours. Big funds holding longs are clearly running.
Open interest built up by more than 10% within the day, and after this drop, it further cut down by another more than 10% over the last seven hours—classic de-leveraging: longs are stacked first, then swept away one by one. The order book’s bid layers are also thinner than the asks, so there aren’t enough “hands” picking up the dip in the short term.
My stance: the trend is downward, and since it’s already down 18%, chasing a short here isn’t great risk-reward. I’m also more afraid of a bounce from the lows. So I won’t bottom-fish or chase short—I'll wait for a反抽 (a rebound). If it can reclaim the area near the moving averages, then we can reassess. If it can’t reclaim, and it keeps dropping, that’s when the trend-following short setup makes sense.
#soxl $SOXL
Conclusion first: at this level, I won’t bottom-fish. Price is sticking close to the 24-hour low. The 15-minute double moving averages are completely stacked overhead, and on the 4-hour chart, 5 out of the last 6 candlesticks are bearish. The daily chart has been dropping from 152 and closing at a low level—this is a breakdown, not a pullback.
The flow of funds is also pushing in the same direction. Buy-side aggressive orders (active buys) only make up about 45%, while sell orders are pinning the buys and hitting them. Over the past seven hours, buy volume shrank by 8%. The funding rate has flipped negative, and bulls no longer have the urge to keep lifting the price. The large players are even more direct: although accounts are still net long, the long positioning has been cut by 13% over the past seven hours. Big funds holding longs are clearly running.
Open interest built up by more than 10% within the day, and after this drop, it further cut down by another more than 10% over the last seven hours—classic de-leveraging: longs are stacked first, then swept away one by one. The order book’s bid layers are also thinner than the asks, so there aren’t enough “hands” picking up the dip in the short term.
My stance: the trend is downward, and since it’s already down 18%, chasing a short here isn’t great risk-reward. I’m also more afraid of a bounce from the lows. So I won’t bottom-fish or chase short—I'll wait for a反抽 (a rebound). If it can reclaim the area near the moving averages, then we can reassess. If it can’t reclaim, and it keeps dropping, that’s when the trend-following short setup makes sense.
#soxl $SOXL