Recently, many friends have been asking, don’t we clear a wave of longs?
In fact, if you look at the volatile market in the past week, the price has not changed, and the position has dropped by 6 billion US dollars. This is a spontaneous liquidation in itself. The profitable long orders are not passively liquidated, but actively closed to stop profit;
To put it bluntly, if the long positions cannot be held, the market will not have the need for deliberate liquidation. Only when the longs hold on to them will extreme liquidation occur;
On the contrary, in the past period of time, it was actually the shorts who really held on to their positions, and the crowding behavior was serious, resulting in most of the short liquidity being concentrated in the range of 99,000 to 100,000, which can be regarded as the "cause";
And last night, Lao Bao’s speech triggered the contract and spot buying. Re-entering the market, the price was brought to around 99,000, laying a good foundation for the price behavior of subsequent contracts to pull up and liquidate shorts, which is the "cause" harvested by the market;
Finally, during the Asian session, liquidity decreased, potential spot supply decreased, and contracts became the dominant force, pulling up and liquidating a large amount of short liquidity, thereby driving the price to break through 10w, which is the "result" given by the market;
So it is not that the market deliberately does not liquidate longs, but that the longs themselves are not solid. If the price falls back next, the longs hold their positions and do not run away, and the contract position does not decrease but increases. Then, as new "cause and effect" appear, someone may ask again:
Don't you clear a wave of shorts?
I also learned the concept of "cause, condition and result" from Yuncong.
"Cause": stands for "reason", "cause of origin", which means that every wave of market conditions has a previous setup, or a preparation stage, before it finally comes out;
Before the trend reverses, there will be accumulation at the bottom or distribution at the top. Before the small-level market appears, there will also be the formation of the corresponding range and the basis of the data level;
"Condition": stands for "reason", which means that after the "cause" is constructed, the market needs a reason or excuse to complete the confirmation of the previous setup, which may be a negative or positive news, or a small-level fluctuation that breaks through the key position, etc.;
"Result": stands for "result", which is easy to understand. If the "condition" appears in a range oscillation, the result will be realized soon;
I hope this article is helpful to you!