Wall Street Is Squeezing Both Sides — Every Bull and Bear That Discloses a Position Gets Crushed
After taking down bullish trader Leopold last week, the market opened on Monday with a short squeeze that caught bears off guard.
Following Leopold's announcement that he was liquidating his fund, well-known short seller Burry declared on July 30 that he was continuing to short Micron and NVDA — adding to his Micron short at 880 and his SOXX short at 506. Then Monday brought a massive rally, effectively putting the shorts back on the fire.
Both bulls and bears got burned, but SPY came out on top again. This aligns with our analysis from last Friday — SPY's rise is a political mandate.
Where does the funding for SPY's political mandate come from? The shorts. How exactly does it work? Take last week's MSFT earnings as an example. Looking at MSFT's price trend, there were multiple resistance levels above 400. A one-gap jump breakout would have been difficult to achieve on cost-cutting alone — and if the breakout failed, the stock would have pulled back again, as seen with INTC's earnings.
So the institutions used a dirty trick: two minutes before the open, they suddenly ramped the price to open at 435, and within five minutes of the open, they pushed it even higher to break 447. By the close, it had stabilized above 450 — and all the earnings-driven shorts were squeezed out.
This reminds me of another CEO who's very skilled at battling the shorts: Elon Musk. SPCX's earnings situation is quite similar to MSFT's — expectations are low, and there's no real positive news. On top of that, SPCX faces a $100 billion+ lockup expiry just two days after earnings.
Yet under these circumstances, Musk went on X and said now is a good time to buy the stock. It's not out of the question that we might see a second MSFT-style moonshot this week.
Because someone has opened 280,000 contracts of this week's 330 call $SPCX 20260807 330.0 CALL$ . Although in previous weeks there have been 100,000+ contracts of weekly 330 calls opened on Fridays, this kind of volume during earnings week is highly unusual. Checking the trade records shows the direction is buy-side. Considering each contract trades at roughly 0.2–0.3, 300,000 contracts would represent nearly $10 million. Things are starting to get eerie — the answer to this mystery will likely only be revealed after earnings.
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