[8.1 After Hours: Views on the US Stock Market] I am currently half invested, and basically have an equal amount of long and short positions (but my longs are mostly profitable today). Next week, I plan to mainly increase my short positions and consider gradually going fully invested. The reason is that I believe the next wave will likely trend downward, so I am preparing for a 70% short and 30% long position.
Bearish, I believe the market is about to start the "recession" narrative. This is the main reason. Additionally, I think that under the dominance of the "recession" narrative, the main force of the recent bull market, the "retail investors," will take profits and close their positions to secure the profits earned over the past three months. In summary, whether from a fundamental or technical perspective, the most likely next step for the market is the "recession" narrative.
My key points for the next short position include: first, junk stocks represented by $arkk; second, recession-sensitive sectors represented by $xop; third, stocks with bad earnings reports represented by $wfc and $gm; fourth, the market represented by $spy, $qqq, or $iwm.
The part where I go long mainly revolves around undervalued stocks that have significantly dropped. For example, the pharmaceutical sector, etc. (4)
The current positions are as follows. Go long above the red line and short below it. (5)
The market trend is actually very clear. Note that today's big drop occurred after all the mag7 companies, except for $nvda, had released their earnings reports. I actually believe that the next wave is likely to be downward, while the wave after that will depend on whether $nvda can single-handedly reverse the trend with its earnings report on August 27. (end)
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