Should You Short The Market Right Now?
In a Nutshell
The trader is ready to short but holding off until the S&P breaks below 738 support, as current bullish momentum and strong breadth divergence suggest risk-to-reward still favors waiting for confirmation. The 10-year yield spiking above 5% is tightening financial conditions and pushing mortgage rates toward 8%, while the Fed’s rate-hike odds have jumped to 76% after hot PMI data. Individual trades in PLTR and MU were closed flat or for small gains rather than carrying shorts overnight, underscoring the speaker’s stance that markets can stay irrational longer than you can stay solvent.
These notes were generated by AI and may contain inaccuracies.
The speaker expresses readiness to short the market but clarifies they are not carrying any short positions overnight. Markets remain incredibly bullish despite the day's pullback, and recovery is possible tomorrow. Risk-to-reward ratios favor downside potential, but confirmation is missing. Strong support held at 740-738, matching previous support levels. Breaking below 738 would signal potential trend reversal, but until that occurs, there is no reason to short.
Markets can stay rational longer than you can stay solvent.
The speaker traded both sides of Palantier during the session. They were down approximately $1,000 early in the day, then closed a long position at $721 profit. After shorting during consolidation and later going long with no progress, they reopened a short near resistance at 192. The stock gapped up on good news but traded sideways throughout the day. The speaker closed the position flat, preferring to exit when there's no upside progress and the market is too bullish to sell off.
The speaker also traded MU and closed a short position when it tested pre-market lows. The stock subsequently dropped another 1.77%, meaning the short would have been more profitable if carried. The final profit on this trade was $989 with the position fully closed.
The 10-year Treasury yield has moved back above 5%, creating concern across markets. The US Treasury plans to inject $6 billion into the market tomorrow. Yields above 5% represent the interest rate the US pays on long-term debt. The 10-year bond serves as a benchmark for mortgages, meaning rising yields directly increase mortgage costs. Current conditions have moved the market closer to 8% mortgage rates than it was a few months ago. The yield increase stems from Middle East uncertainty.
A significant disconnect exists between major indices and underlying components. The S&P 500 and NASDAQ are trading near all-time highs, yet 60% of S&P 500 companies are trading below their 100-day moving average. The speaker plans to create a detailed video explaining this divergence if viewers request it through likes and subscriptions.
Current market probability shows a 75.8% chance the Federal Reserve will raise rates at the October 28th FOMC meeting, up from 55% yesterday. This shift follows today's PMI report showing stronger-than-expected manufacturing data, giving the Fed justification to raise rates due to economic strength that can tolerate higher rates.
The speaker promotes their LPP trading program offering live trading sessions every market open for 30 minutes to one hour. Members receive access to the LPP 3.0 lesson library designed for complete beginners. Current pricing is $110 per day under a sale ending at the end of September. The trading platform shown is Webull, which offers 12 free fractional shares through a referral link.
The speaker encourages viewers to end the year profitably and signs off for the session.
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