08Jan10:18 amEST

Capable of Anything

Markets continue to operate in gravity-defying ways, as Bitcoin, crypto-proxies like RIOT, and TSLA, just to name a few, do the heavy lifting this morning while the Dow and other parts of the market either fade a weak jobs number or hug the flat-line. 

Indeed, this market reminds me of the famous scene in Chinatown (1974) where the great John Huston's character tells Jack Nicholson's Jake Gittes, "Most people never have to face the fact that at the right time and the right place they're capable of anything." Indeed, on Wall Street, at the right time and right place, markets are capable of anything, as we are seeing in plain sight. 

On the topic of TSLA, a lesson worth driving home is one you can take from a recent loss of mine. I had previously taken my short at shorting TSLA with a $732.01 entry, under the theory that the name had gone parabolic on most timeframes (see the quarterly, below) and shorts had covered to tender the name no longer a "squeeze play," as the float only had a modest percentage still short. 

My preset cover-stop was $800, which I honored yesterday and closed the position out for a loss. Had I not done so, I would be taking at least another 70 points of heat this morning, as the "capable of anything" market plows ahead. 

It will be interesting to see how much longer the Bitcoin and TSLA rallies extend this winter before some type of multi-day or even multi-week correction takes hold. But we will not know the full extent to which the "bubble" callers are correct or not until we see the size and scope of those pullbacks. Until then, any attempts on the short side (for those who do not consider it blasphemy) should be made with firm and respected stop-losses. 

As for names which are still official short squeezes, SDC is a name we are playing and remains loaded with shorts to potentially squeeze from the long side. As of now, it is looking sharp and has some explosive potential. 

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