Bears historically have loved October, and many bears are expecting the market to crash again this month. The problem is, there are too many of them -- the bears have again bought 1.5 million put options on QQQQ so far. By expiration time that number will surely surpass last month's figure.
All that big money betting the market to go down is making it very difficult to go down. That's why the big guys are now spinning all bad news as good news. The bears need the 401k'ers to head to the exits to harvest their catches. The option writers meanwhile are trying to sooth the herd: stay calm, no problem at all, bad is good, good is also good.
We'll continue to hold our short positions, but will stay away from options. Meanwhile we need to watch our stop strategies in case this short squeeze gets serious.
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