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What did we learn during this decline?
This time was different. Please remember this and know that these squalls, or market panics, are unique and rare. In the future, when markets drop, you might be inclined to think this will happen again. You’ll be wrong and you’ll also lose a fuck load of money betting on a crash.
What did we do?
I bet on the Exodus oversold signal because it had worked well in the past. At the same time, I respect my stops. The net result was me losing money, but with only 35% of my account exposed to the tape. In other words, my losses were very muted, in comparison to what could’ve been.
At the close of trade, I did two things — went long TQQQ and OKTA, reducing my cash to 50%.
I can promise you two things, drawing from my deep reservoir of experience, markets will either drop fantastically at the open tomorrow or scream higher. There will not be a milquetoast response. Please ignore the futures tonight and definitely ignore the immediate after-hours buzz, which will be dreadful.
Keep an eye on Asia. Should China trade up, that will improve US futures. Should European markets drop by only 1 or 2%, we might get a feverish rally going in the AM. One thing is for certain, the Fed needs to back off from hiking rates and respect the risk off tone to markets.
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Jerome needs to kiss Trump’s ring!!!
Humpty Dumpty’s ring
In April, the sidle above 3% 10yr was pushed back quick
In May, the sidle above 3% 10yr was clearly pushed back
In August, 3% 10yr was briefly teased
Into September, a march to 3% 10yr
Zero-pullback-intervention
so far. this crack was coming. this crack was coming.
Anybody remember the hurricane and crash ten years ago ?
Tip of the hat to you ‘it is showtime.’
Every dog has its day.
Well-played, Fly. You’ve been pretty spot-on with the psychology of this sell-off.
What do u do in quant ac?
Still 120% long off os signal?
What is it about October?
Are you joking? Elections dude. The controllers control.
first off, the breakout in interest rates narrative is totally and completely played out and now consensus view driven by your everyday media outlets (not to mention the record net short position in bonds). I’d like to blame rising rates on this market plunge, but something tells me that the market is front running something else. perhaps a peak of the expansion cycle? can’t say definitively, but what we do know is that the Fed is always the most hawkish on rates, just as the cycle is about to slow – and furthermore, the Fed operates on a lag and are reactive as opposed to proactive to economic cycles.
Mr. Fly! I’m getting scared again. Wooo… I missed this feeling.
Where does the current Exodus oversold reading of 2.28 weigh in on a historical level?
I don’t remember seeing it this low in years.