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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InWednesday's trading session witnessed a short-covering rally as technology stocks rebounded from record-high put buying levels. This recovery was significantly bolstered by a geopolitical breakthrough, as the U.S. and Iran agreed to a two-week ceasefire, easing global tensions. New data highlights that buying ratios in 2X and 3X ProShares short (inverse) funds compared to long funds have reached historically high levels. Specifically, the 2X short-to-long buying ratio reached approximately 1.4, a level that has historically marked market bottoms over the past 15 years. The market shift comes as investors gear up for the upcoming earnings season, providing a fundamental backdrop for major ETFs like QQQ to extend gains. However, analysts remain cautious, warning that the sustainability of the rally hinges on continued fundamental support and geopolitical stability.