Crowd favorite AMD took a beating.
TWLO was targeted as well.
Microsoft was another.
In fact, the entire Nasdaq formed a Bearish Engulfing pattern today.
What Happened Today
What happened today is that a small number of hedge funds and investor groups shorted MOMO traders favorite stocks when Powell said in his press conference today that the Fed currently has no bias to either raise or lower rates.
What smart money is doing is a very profitable strategy but it can only be executed by those with a lot of money.
Basically smart money is using Powell’s remarks to attack MOMO traders favorite stocks that have recently ran up from solid earnings reports. This strategy works great because it’s taking advantage of the inherit fickleness of MOMO traders. Unfortunately, we can’t really benefit from it because we do not have enough money to go running with the smart money. Where we can benefit from this wicked smart money strategy is buying the dip once the attack is over.
It’s not possible to predict these types of attacks ahead of time but they usually are short-lived unless market sentiment continues to turn negative from even more significant catalysts over the coming days.