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Market has not been "free" for a while. It has been under great control by the central banks. See how they burst the bubble in 2015 and is on track to inflate it again with the latest move. Market will make new high. So if you are shorting, you better be controlling size.
I would not touch any biotech. This relates to today's move by FOMC. Money and politics go hands in hands. Below is why:
As said before, market will be making new high. This paves the way for Hillary. Economy is good, everyone is happy, fewer reason go for the controversial candidates like Trump and Sanders? Hillary is market-friendly (Fed-friendly). People heard the media that if Trump win, market will dump 50%. Connect the dots and see how everyone is working together for a Hillary win.
What this means:
- If you are short, you better manage risk (control size).
- If you are long biotech, rethink strategy as Hillary has vowed to go after corrupted biotech. If she wins, biotech will enter the greatest bear market.
As for Valeant, you should not touch, long or short. Too many bombs in both direction, nobody knows what the fuck is going on. Remember the lowest option strike was 40 the day before. Nobody anticipated such a drop. Yes, nobody knows what's going on. Stay out, there are other way to make money.
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