Derrick Oldensmith, Senior Trader and Managing Supervisor for T3 Trading Group.
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00:00 Feels like buyer exhaustion happening here a little bit.
00:02 I mean, we've run a long ways here, Derek.
00:04 And you had some good calls when you were on the show
00:06 a couple of weeks ago.
00:07 You were leaning on the bullish side.
00:09 I mean, we still set up well into the end of the year,
00:12 but we've got a month here.
00:13 I feel like we're due for a little healthy pullback.
00:16 What are you thinking?
00:17 - Yeah, so this month of November
00:19 has obviously been incredible.
00:20 On the last day of October,
00:23 I got probably the most long I've been in two years.
00:26 It worked out really well.
00:27 And in a relatively short period of time,
00:29 for at least for me, for the way that I've traded,
00:32 on Wednesday last week,
00:34 I got really fairly heavily net short.
00:38 So that's a pretty big switch for me.
00:41 I'm not looking for a full reversal of the November move
00:46 or anything like that.
00:46 I just think that this market
00:48 got a little bit ahead of itself.
00:50 There was a lot of bullish flow
00:52 throughout the entirety of the month.
00:54 It seemed like Wednesday morning,
00:56 first of all, we had NVIDIA report earnings
00:58 and that earnings report was stellar
01:00 and the stock couldn't go up on it.
01:02 For me, I've seen this for years.
01:06 When stocks can't continue on good news,
01:09 that's usually a signal of some sort of buyer exhaustion,
01:12 like you're saying.
01:13 At the same time, we had that very heavy run up
01:16 for about 15 minutes on Wednesday morning
01:18 that to me seemed like short-term upside capitulation.
01:22 This is all happening as the market flows
01:24 that have been so supportive for the month of November,
01:27 while they're still supportive,
01:28 they're significantly less so.
01:29 We've seen the CTA funds go from net short to net long.
01:34 Goldman's saying it's the largest month of buying for CTAs
01:38 in the history of their data set.
01:40 We do still have some vol control fund buying
01:44 and systematic flows that are coming into the market.
01:46 The buyback machines are still on
01:48 for the month of November here for a lot of stocks.
01:51 But at the same time,
01:52 you're looking at a heavier pension rebalance.
01:53 This market's had a huge move.
01:55 We got really extended.
01:56 So while I would say more intermediate timeframe,
02:00 probably throughout the rest of the year,
02:02 I do remain bullish on a little bit of a shorter timeframe
02:05 as we're trying to get through this week.
02:07 I think some more correction,
02:09 whether that's through time or prices,
02:11 yet to be seen, just makes a lot of sense.
02:14 A little bit of a pullback
02:15 that maybe can create a higher low,
02:16 a pullback to upper 440s, 450 in the SPY
02:21 after we run from 410 to 460.
02:26 I just think makes a lot of sense here.
02:28 And that's what I'm trying to be positioned for
02:30 and what I'm trying to be patient for right now.