Ghalibaf wrote that the pre-market “so-called news or “truth” is often just a profit-taking setup,”, going on to add that this resembles a “reverse indicator.”
“Do the opposite: If they pump it, short it. If they dump it, go long,” he wrote in his post, adding that “see something tomorrow? You know the drill.”
Ghalibaf’s post comes on the heels of the US-Iran war entering its fifth week with no signs of de-escalation in sight, despite mediation efforts by regional countries.
Last week, US President Donald Trump announced the first five-day pause on the US attacking Iran’s energy infrastructure. The news, which came during pre-market trading on Wall Street, triggered a sharp reversal in US futures, and led to a two-day relief rally across global equities.
However, the recovery was short-lived, as the markets sold into the recovery, as oil prices continued to rise, and bond yields continued to harden.
Data also shows how there was a sharp spike in volumes on both the S&P 500 and the WTI crude futures, with reports showing long positions being taken on the S&P 500 and shorts on the WTI futures, just 15 minutes before Donald Trump announced the five-day pause.
Wall Street had another negative week with benchmark indices ending lower last week. The Dow Jones and the Nasdaq have both entered correction territory, meaning a 10% drop from peak levels.
