Midday overseas-market scan — the 3x chip ETF surged about eighteen points in a day, but the books don’t look like a recovery: the weekly hole is still about 30%, some longs have exited but it’s still crowded, funding is exorbitant, and money is flowing out.
$SOXL: up about +17.7% in a day / down about −29% in a week, currently around 53.9. Weekly high around 79.28, with about −32% given back. Account long/short ratio around 3.22 (about 76% long; about a day ago it was around 6.56 / 87% long — longs are backing off). Funding around +0.020%/8h — expensive rent to pay. Coin-margined OI down around −21%. Price has bounced, but the weekly hole is still there, longs are still crowded, rent is still expensive, and money is flowing out — don’t take 53.9 as confirmation that chips are recovering, let alone proof that the weekly hole has been filled.
Meanwhile, $NVDA was nearly flat for the day (about −0.2%), down around −14% for the week, currently around 179. It has given back about −15% from its weekly high. Longs make up about 86% (long/short ratio around 6.17; about a day ago it was around 3.98 / 80% long — longs are still piling in). Funding around +0.0026%/8h, OI up around +59%. The leader itself hasn’t broken out, but longs are getting more crowded and money is piling in fast.
On one side, the 3x ETF has already surged, longs are backing off, and traders are still paying expensive rent; on the other, the leader hasn’t moved, while longs and money are piling in. Is this a chip recovery, or a leveraged dead-cat bounce? Post a counterexample in the comments.
$SOXL: up about +17.7% in a day / down about −29% in a week, currently around 53.9. Weekly high around 79.28, with about −32% given back. Account long/short ratio around 3.22 (about 76% long; about a day ago it was around 6.56 / 87% long — longs are backing off). Funding around +0.020%/8h — expensive rent to pay. Coin-margined OI down around −21%. Price has bounced, but the weekly hole is still there, longs are still crowded, rent is still expensive, and money is flowing out — don’t take 53.9 as confirmation that chips are recovering, let alone proof that the weekly hole has been filled.
Meanwhile, $NVDA was nearly flat for the day (about −0.2%), down around −14% for the week, currently around 179. It has given back about −15% from its weekly high. Longs make up about 86% (long/short ratio around 6.17; about a day ago it was around 3.98 / 80% long — longs are still piling in). Funding around +0.0026%/8h, OI up around +59%. The leader itself hasn’t broken out, but longs are getting more crowded and money is piling in fast.
On one side, the 3x ETF has already surged, longs are backing off, and traders are still paying expensive rent; on the other, the leader hasn’t moved, while longs and money are piling in. Is this a chip recovery, or a leveraged dead-cat bounce? Post a counterexample in the comments.
