I’m almost never out of reach of the Internet, especially if I’m expecting market fireworks. That’s because I’m a market junkie, I have super important newsletter subscribers I love to communicate with, and I am a trader.
But yesterday I was off the grid. And, boy do I regret it. It wasn’t my fault, but that doesn’t matter. Almost 16 hours of travel without Internet (you can bet British Airlines will be hearing from me about that) is painful.
Not only do I regret not getting your Capital Wave Forecast to you yesterday morning, I regret not being able to take profits off the table on shorts, on put positions my newsletter subscribers have on, and not being able to put on new trades.
Thank goodness today’s another day.
For Sure Ugly, But Not Unexpected
Last week in your Capital Wave Forecast on Tuesday, I said, “Capital is going to move on whatever it interprets will happen after hearing what the Fed says. That movement won’t be based directly on what the Fed says, it will be based on what the psychology of investors will be down the road.”
I pointed out, “It’s going to be an interesting week of ‘positioning,'” And I want to reiterate saying, “I have a feeling, there might be some fireworks if something out of the Fed is interpreted as coming out of left field.”
All that came to pass.
Investors reacted to the less than desired 25-basis point cut, to the “mid-cycle” adjustment rubbish coming out of Jerome Powell, to the two dissenting votes who didn’t want any cut, and to less than dovish doting the markets wanted to hear.
Investors sure positioned themselves accordingly.
They took profits off the table.
I jumped in on this trading frenzy as well! I alerted my subscribers of 10X Trader to make two trades with possibilities for a quick 50% returns.
Based on our rigorous backtesting, if you’d had the benefit when I started sharing my secret, you could have had a shot at 38 quadruple-digit winners in just two weeks, including gains of 2,250%, 4,400%, and even 6,700%.
Rare and exceptional plays, no doubt. But there’s no denying my secret could change your life fast. You won’t want to miss this!
So with capital rushed out of equities across the board, volume over the selling days – both yesterday and last week – amounted to almost 65% more, on average, than what it’s been since the start of June.
We follow capital here, and it is very telling.
It’s going into safe-haven bonds in the Treasuries, not corporates and certainly not junk.
Unless the rest of this week proves the latest round of selling was a “hiccup” we’re going down more, across the board for equities, and up in price and lower for yields in the Treasury market.
Volume on any rebound days this week will be critical to watch.
If there are up-days, even significant up-days, unaccompanied by significant capital inflows (bargain hunting you could call it), then we’re headed lower.
Because this is such an important week, I’m sending you a Capital Wave Forecast on Friday with support and resistance levels to watch in the near future.
Like I said before, futures were higher this morning, but that’s not unusual after a big sell down day.
How we open and trade today, and, of course, how we close, is what matters.
The forecast is for volatility this week accompanied by net selling. How much net capital flows out will determine how low we can go, how acidic this hiccup turns out to be, meaning that it could be the first bout of stomach acid about to reflux and burn benchmarks.
If there’s anything monumental that can’t wait until Friday, you’ll hear from me.