Top signal: Hedge funds just unleashed a monster two day buying wave, the biggest in six months and one of the wildest surges in two years

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Goldman Sachs’ economics team expects a 25-basis-point cut at the December 9-10 meeting and still sees “two additional cuts in 2026.”

The bank noted that equity markets initially rallied, and hedge funds “have significantly net bought US equities in each of the past two trading sessions,” noting activity of “+2.2 SDs Friday and +1.6 SDs Monday vs. the past year.”

In dollar terms, Goldman Sachs said the pace of net buying was “the largest over any two-day period in more than six months and one of the largest in the past two years.”

Both Single Stocks and Macro Products were net bought, making up 56% and 44% of the total, Goldman Sachs said.

https://finance.yahoo.com/news/stocks-pullback-mode-hedge-funds-121720549.html

I am officially adding more to my S&P 500 short position.

We started this entire sequence with 30 puts at $686 and we’ve been trimming the move exactly the way a disciplined trader should. Taking chunks at $675, $664 and $651 while keeping the core intact. 2 days ago we added some back at $670 and today I’m stepping in again.

I’m adding half of what I wanted at $683.
The plan was to add 7 contracts here to bring the position to 20. Instead I added 4. I’ll add the remaining 3 if we get that final pop toward $683 but there’s no guarantee we see it. If I do get my add of 3 at $683, I will still have 10 for wiggle room. Always important to leave dry powder and to manage your risk. The market doesn’t always give clean entry’s. Sometimes you get February candles and sometimes you get April candles.

Right now the hourly signal line is rolling over, turning bearish again and the structure is doing exactly what you’d want to see if you’re positioned for a larger move down. This is where execution matters. This is where patience gets rewarded. And this is where the bulls always get a little too confident at the worst possible time.

Best of luck to them. They’re going to need it.

I’ll see you all down at $659 which is where I will trim what I have added the last couple of days.

Everyone was warned.

You know exactly where I’ll be in the meantime. I’ll be with my team watching the bulls get wrecked. 🤝