Trading the “Crash”

Wow, the people giving the “advice” about markets in our modern “enlightened” times – these people are idiots, almost every one of them. Jeff Gundlach and a few others are true professionals, but the rest of them – total clowns, and so toxic to even listen to. For years I have “listened’ to these fools, like the ones running gold websites, but purely 100% for sentiment. Last week every single one of them was totally bearish – every one of them. But really at this point, I’m not sure I can even deal with them anymore. And why bother, we know they all use rear view mirrors to “analyze”. One genius claims he can “spot bubbles better than anyone else”, like you get a prize for that or something. He’s been spotting the “bubble” in the stock market for over 8 years.

Late last year, I was warning how the volatility will be (not may be) picking up with the bond selloff, especially when the 10 year yield pushed thru 2.65%. And yes, I’m still short bonds (long March 125 TLT puts), but we are closing in on some areas:

So in the face of all of the incompetent amateurs blowing hot air, this is/was my view this week:

 

In the meantime, I do not remotely believe the bull market in stocks is over, not even close, but I do believe volatilty is here to stay, and I do believe in opportunities being more available going forward.  And I do not believe in the very amateurish gold permabull theory that the “crashing stock market” will cause gold to soar….

As to stocks, for the last few days I have not given symbols. Since starting this website, I have given this advice at times – don’t “press it”. But I’m looking thru some of the wreckage, strong stocks which haven’t “broken down” like ABBV or IMMU (long), or former strong stocks which have broken down like OSTK (long), or stocks in accumulation like IOVA , or stocks which have recently broken out like INTC. I have given out numerous stocks which fit these categories.

I talked about this idea yesterday – “Turn Around Tuesday”  – an old Wall Street saying.

It is the low rates, especially the last few years, which has smothered volatilty. That is history….Mondays after a big Friday selloff can often be a turn around day. And the retest on Tuesday.”

I believe stocks are in a major bull market, nothing changed there. The stock market will continue to be volatile. I believe this whole area, is reaccum, meaning what – more new lows ahead, and “not at all easy – not at all”.

 

I gave subscribers a long list of stocks for the opportunities this week. I love strong stocks (into weakness). And I started some positions there this week. This whole thing will not be easy, but it’s the “not easy” (public perception) which are the best opportunities.

So like usual to me, the volatility creates the opportunities. And when the volatility picks up a lot, I “cut way back”. How? One or a combination of – time-frame, position size, trade setups. For instance, if the volatility really picks up, then we need to give trades “much more room” and “cut back” position size. Because? Logic, more volatility – widen stops, more volatility – more probability of a big move in your favor. So a smaller position size can work as well (actually better, think about it).

I am extremely stubborn about the trend, and focused on “the trend that I’m trading – time-frame”, be it one minute or monthly. On Friday there was a spring in the QQQ, the following is a QQQ call option trade from Friday. What was the setup? The trend was up then, it had a #1 EA, selloff on not huge volume, reaccum, retest and spring, I bought the spring of reaccum, then I sold it back into the top of the range. And I sold it way too early, tho it did react back down to the top of the range, the fifth chart.

 

Why do people waste their time with all of the crap spouted by the incompetents? Do you think I learned this stuff by sitting around and pontificating?

 

 

 

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About traderscott 1097 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

4 Comments

  1. “I believe stocks are in a major bull market, nothing changed there. The stock market will continue to be volatile. I believe this whole area, is reaccum, meaning what – more new lows ahead, and “not at all easy – not at all”.

    Having a little struggle with your prose.
    By “whole area” do you mean an reaccumulation area that will be setting up in the stock market from the high to the recent low?

    • Let me re-word that – the reasons I said that were, and remember this thing to me is making the probability judgement, because the volume coming off the high, and into the PS was relatively in line, the PS was an explosion out of there, I am stubborn about the trend, and continue to believe all selloffs, even bigger ones, are within the secular bull, so therefore what forms in here overall “this area” will ultimately be reaccum with springs. So by this area, I mean as this thing progresses, the whole structure will be a reaccum area of the overall bull market. Just like with BTC, just not nearly as volatile. So the overall structure is forming, and the point counts are forming. And tomorrow in premarket I will discuss what would get me more concerned – only probabilities.

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