Hey, Ross here:
After yesterday’s close, the S&P 500 is now down about 4.5% from its recent high.
The Nasdaq is down 7.2%.
So the question on most people’s minds is – especially with the SpaceX IPO hitting tomorrow is…
Is the pullback over yet?
Chart of the Day
This is the Put-Call ratio.
It shows us the ratio of put options to call options for U.S. stocks.
Whenever the Put-Call ratio spikes – those tend to reliably mark market bottoms.
I’ve indicated the November and end-March bottoms on the chart above so you can see it for yourself.
Now, of course put options reflect traders expecting negative outcomes for the market…
So, on the surface, you wouldn’t expect more put options to be a good thing.
But as I’ve said many times before, the market works in many counterintuitive ways.
Markets tend to bottom at moments of peak fear (just like how they top at moments of peak euphoria).
And the Put-Call ratio has been a reliable way of spotting these bottoms in the past.
Now, if you look at the chart again…
You’ll notice that although the ratio has indeed spiked quite a lot…
It’s still significantly below where it was at the November and end-March bottoms.
So based on this, I would say the pullback still has some ways to go.
Still, I’ve seen many people pin their hopes on the SpaceX IPO tomorrow.
I explain why the world’s most important IPO may – or may not – end the pullback below.
Insight of the Day
The capital that investors have taken OUT of the market in anticipation of the SpaceX IPO could come flooding back in – and send the markets up again.
At this point, most institutional investors – the big buyers – are almost fully invested.
So to make room for the SpaceX IPO, it means they have to sell shares…
Which no doubt contributed to the pullback.
But when they buy back in tomorrow, that incoming flood of capital could send the markets rising again.
Couple that with the Nasdaq changing their inclusion rules to let SpaceX in as little as 15 days after the IPO…
And we could have tens of billions of “forced buying” as every fund tracking the index finds itself with no choice but to buy SpaceX.
So, yes, there are real reasons to believe that the SpaceX IPO could end this pullback.
Personally though, I’m not that convinced (although I do believe that SpaceX stock itself will most likely go up in the short term after the IPO).
But that’s why tomorrow, Friday June 12 at 11 a.m. Eastern…
I’m hosting a real-time market update to show you exactly what I’m seeing as the SPCX trade goes live.
During the broadcast, I will go into the live market to analyze the price action around SpaceX…
Explain what I’m seeing from a macro and sector-level perspective…
And even show some trade setups most people will overlook as they hyperfixate on Elon’s latest venture.
This is hands-down one of the biggest, most exciting stock events of my 20-year career…
And I can’t wait to share it with you.
Attendance is free, but seats are limited.
And considering the massive hype around this IPO, I’m expecting a packed room.
So make sure you click here to secure early access for my live market update tomorrow…
And I’ll see you Friday morning at 11 a.m. ET.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785
Android: https://play.google.com/store/search?q=goto&c=apps
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