Some of Wall Street’s smelliest garbage got airborne Thursday, caught in a short squeeze that could finish out the week. The shares of Lyft and Uber in particular, two companies that are good bets to remain profitless indefinitely, wafted skyward as though launched from a trebuchet. The medieval weapon is capable of hurling an automobile the length of a football field, but the short-covering behind Thursday’s rally packed even more power.

That’s because the day had begun with news that might ordinarily have been expected to scuttle stocks. Instead, the Dow gained a respectable, if not to say insane, 101 points. This extraordinary display of confidence, arguably misplaced, followed reports of an Iranian attack on two oil tankers in the Gulf of Oman. When word of the torpedoing of the ships hit the blogosphere around 9:45 p.m., crude prices instantly shot up around 4% as stock-index futures plunged commensurately. But by the time the NYSE’s regular session opened, the Indoos had wafted back into positive territory and crude had recouped about half its losses. From that point forward bears were screwed, since there was nowhere for stocks to go but up.

In Ordinary Times…

It’s not that investors were fearless, although that is probably the way they will be described by mainstream pundits. It’s more a case of shares moving opposite expectations, energized in particular this time by short-covering bears who had every reason to think that a serious threat to the world’s oil-supply would spook stocks. In ordinary times they would be right. However, there is nothing ordinary about these times, at least not on Wall Street, and especially with regard to how shares behave when credit money to buy them is cheap and in more or less unlimited supply. This condition can turn rationality itself on its head, such that a mushroom cloud billowing over the Middle East might be perceived as bullish for stocks because it would be bullish for oil.

Rick’s Picks trading ‘touts’ are for educational purposes only. Past performance is no guarantee of future performance. (See full disclaimer at https://www.rickackerman.com/)

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD defends gains above 1.1300 amid broad dollar recovery

EUR/USD defends gains above 1.1300 amid a broad-based US dollar recovery. The shared currency remains at the mercy of the broader market sentiment as the data docket is light on Monday. COVID-19 stats in focus. 

EUR/USD News

GBP/USD batting to extend gains beyond 1.2600

Risk-on mood limits the dollar’s bullish potential. GBP/USD bounces from daily lows, but Brexit concerns weigh on Sterling. BOE Governor Bailey's speech awaited.

GBP/USD News

Gold sits near daily tops, just below $1810 level

A combination of supporting factors assisted gold to regain positive traction on Monday. Sustained USD selling remained supportive amid concerns about rising COVID-19 cases. The prevalent risk-on mood might turn out to be the only factor capping any strong gains.

Gold News

Dominance war to push Ethereum to $270

The Altcoin segment is still in full swing while the crypto board leaders, Bitcoin and Ethereum, remain stuck at the same levels as in recent weeks. The dispute for market share, or dominance in technical terms, remains at a point of maximum tension. 

Read more

WTI breaches $40 mark as talks of OPEC+ output cuts easing weigh

WTI (August futures on Nymex) extends Friday’s sell-off into the European trading this Monday, following a brief consolidation seen above $40 mark earlier in the Asian session.

Oil News

Forex Majors

Cryptocurrencies

Signatures