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The Japan-based holding company, Soft Bank, reportedly purchased billions of dollars worth of equity derivatives in the United States, triggering a month-long rally in technology stocks. The surge in call option trading has surprised even market veterans who specialize in derivatives. Research by Goldman Sachs has shown that on a daily basis, the total value of call options traded on individual Wall Street technology stocks averaged $335 billion in the past two weeks alone, three times the moving average in the 2017-2019 period. This contributed to a sharp overheating of the indices, resulting in the impulsive sell-off that started last week.
Even though the S&P500 is set up for a correction, longer-term, the index will reach significantly higher prices. Our target in the S&P500 remains in the area of 6500 points. Afterward, it´s time to brace yourself and buckle up for the next big sell-off.
The Japan-based holding company, Soft Bank, reportedly purchased billions of dollars worth of equity derivatives in the United States, triggering a month-long rally in technology stocks. The surge in call option trading has surprised even market veterans who specialize in derivatives. Research by Goldman Sachs has shown that on a daily basis, the total value of call options traded on individual Wall Street technology stocks averaged $335 billion in the past two weeks alone, three times the moving average in the 2017-2019 period. This contributed to a sharp overheating of the indices, resulting in the impulsive sell-off that started last week.
Even though the S&P500 is set up for a correction, longer-term, the index will reach significantly higher prices. Our target in the S&P500 remains in the area of 6500 points. Afterward, it´s time to brace yourself and buckle up for the next big sell-off.
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