It’ll most likely be destroyed tomorrow. If you were long tech, you lost money today. You did little unless concentrated in commodity plays, which is nice but also a recipe for disaster.
I closed about flat for the session, after taking the morning off — but got lucky with my quant +4.34%. If commodities pull back tomorrow, that account will be down 3-4%. That’s just how the volatility works now.
There are rare occasions where people are able to meander and slither their way from one trade focus to the next. I will tell you, however, that the vast majority of people are unable to move from oils to tech in a seamless fashion and time it correctly every single time.
The best course of action for people out there is to either take a balanced approach to the market, 10% weightings in all sectors, or simply trade very small and keep more than 30% cash at all times.
The likelihood that we’ve seen the bottom is remote. The fact that you are expecting grandiose returns in a market that is temporarily dislodged from reality is a mistake. Trading with trends is correct. However fun it might be, at some point the trend will point towards the fundamentals again and last I checked that isn’t looking too hot.
In my opinion, I’d prefer a counter-correlation approach to the market here, in favor of slaving to the indices. There will be a day, some time soon, when markets will fucking plunge into the sand and all of your bear market bounce gains will be washed away. You will hold, or even double down into leverage, because nothing says “I have a small dick” like doubling down on a bad trade — and then you’ll descend back into anarchy with 30% losses. You do remember those losses just a month or two ago, yes?
Bottom line: It’s not a race and you don’t have to make 4% per day — only retards aim for returns like that. If by the end of the year you’re up 25% — you could consider yourself to be in the up 1% of investors on the planet.
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We are definitely starting to see demand destruction, but I’m still on the fence if it produces deflation. There is a distinct window open where we could get a shallow recession (to start with) and if that happens we could also have inflation in commodities and finished goods.
If that happens that is absolutely the worst case for asset classes. Every day will be an absolute clownfucking. Losses spilling out bulls eyes onto the pavement.
If that window closes that’s where that S&P 500 call for a bottom at 3,000 starts to play out Zerohedge is always on about these days. If that window doesn’t close (and it is admittedly more a long shot)…
*kaboom*
Worst case? Bah. With the stuff that our DC idiots have done, the worst case is that the place blows up.
The best case is that the planet slowly goes off of the dollar standard and we Americans have to work for our toys. The adjustment off of free lunches will be uncomfortable because the Victim Industrial Complex has trained a significant chunk of our population to believe that someone who looks different than them owes them. Our best case is worse than your worst.