Tras la MASACRE, CAPITULACIÓN. José Luis Cava

The speaker, from Madrid, discusses the current state of the technology sector after a significant downturn, asking if the market is on the verge of capitulation, a sharp rally, or the start of a major bear market. He promises to lay out facts and his expectations, also referencing a video from the Opla Finance team about market positioning relative to COVID-19 and signals ahead of the midterm elections. Analyzing the Nasdaq 100 futures, which have been consistently falling since October 6th with decreasing highs, the Opla team believes hedge fund managers are heavily short in technology. This sharp decline, characterized by negative gamma, means dealers' hedging amplifies the index's downward movements. Social media sentiment is overwhelmingly bearish, with no one expecting a sharp rise in the Nasdaq; the narrative favors defensive stocks. The American Association of Individual Investors survey confirms this deeply bearish sentiment, with a significant increase in bears. The CNN Fear and Greed Index shows "extreme fear" at a reading of 20. Technically, the Nasdaq 100 future is in a zone of recent lows, suggesting a "clean-out" of early September entrants, which is favorable for a rebound. Examining the QQQ ETF, which tracks the Nasdaq 100, shows very low traded volume below the September lows, further supporting the idea that this area is conducive for a rebound. The speaker believes the market is at the "gates of a capitulation" and a forced short covering. While most people currently dislike AI-related stocks and prefer defensive ones, the RSP ETF (equally weighted S&P 500) has been rising while the Nasdaq fell. The RSP still has upside potential towards the 219 zone. The speaker anticipates a final downward "lash" for the Nasdaq (1-2% drop) to allow RSP to approach its resistance, followed by capitulation. He expects a significant rebound into the midterm elections, not a major bear market. Gold, like the Nasdaq 100, shows a similar pattern, having "washed out" those who entered in late July, and is now at a favorable support zone, suggesting both gold and Nasdaq could rise simultaneously. Regarding the oil-gold ratio, currently at a critical point near resistance at 251, a fall in this ratio could imply either a drop in oil prices or a rise in gold prices. The speaker emphasizes caution and alertness. He seeks an exhaustion pattern in the downward movement of both gold and Nasdaq, especially since Nasdaq is in negative gamma territory. Such a pattern would precede a brutal, sharp rise, likely accompanied by gold. He plans to wait for this exhaustion pattern, an upward wave, and then enter on a subsequent correction. He also notes the recent drop in US bond yields despite rising oil prices and inflation concerns. This anomaly is attributed to stop-losses being triggered as fund managers, particularly CTAs, were swept out of their short positions in US Treasuries. With midterm elections two weeks away, high volatility, oversold momentum indicators, and Trump's potential influence, the speaker also points to "malice" in market indicators. He highlights a recent Economist cover predicting bonds would "explode," and how the opposite occurred, with bond yields sharply dropping after its publication. This reinforces the "contrary opinion theory" for good speculators. He urges constant questioning of arguments and positioning. The speaker concludes that the market is likely at an extreme, and a "taco" operation from Trump could lead to buying gold.