Generational Dynamics Forum - New Site

I took it up to $4,387 on 51 turns, then went to bed before the 40 point flush down to 3091 on the S&P futures after Europe opened. The futures are now trading 3136, up 3.50 and the Russell and Nasdaq futures are also up. My guess is that a low could have been made for the time being and there can be at least a day or two of recovery.

As mentioned here previously, during the 2015 mini crash, I doubled my account 5 times in 6 weeks, taking it up 30 fold.

If I had started with a 7K account last night, I probably could have taken it to 14K in one night for the first doubling. After that, it gets more difficult. During the above-mentioned, I took the account up 5 fold the first week, and it took 5 more weeks to do the next 6 fold.

Also, once the manipulators regain control of the market, as may be the case now, it becomes more difficult to make any headway. Situations like last night are rare, but like I said in a post a couple weeks ago if control of the market is lost on a sustained basis it should be possible for a skilled trader to multiply an account a thousand fold.

book four closed on open
you are correct
RDS-A if oils slips again
added to modest $gut
seventy percent cash

My final tally for the session is $6,200 on 79 round turns. The only easy money was last night. Today became difficult as usual.

The higher probability to me still seems that the market will shake this off and make an attempt at the all time high later in the year.

My big picture is that, after the market started running late last year, I was expecting the market to turn either around the first of this year or around mid year. Since it didn't turn around the first of this year, I am now aiming for mid year, but with some volatility.

What last night was about is continuing to work on getting my account in better shape so I can withstand any drawdown on short positions taken around mid year, provided my big picture is correct. In other words, it's motivated by fear. Fear that I will be unable to withstand the final run in this market if I get short too soon. I had recently made a comment about holding 10 lots short until the market drops to fair value or below, but changed my mind and decided to wait on that.

** 26-Feb-2020 World View: Chain reaction

Higgenbotham wrote: > The reason this is working is because the book is thin, people are
> nervous, and big traders are trapped because there is no liquidity
> in the book. One big trader tonight drove the market down 8 points
> to get out of approximately 1000 lots. I covered a short right at
> the low of that move.

Words like "trapped" raise a red flag for me.

A couple of days ago, I heard an analyst on TV say something about
airline stocks falling because they were owned by hedge funds that had
to sell them off to cover shorts.

I favor the "chain reaction" theory of when a stock market panic
occurs. It happens when many traders simultaneously are forced to
sell to cover shorts or loans. When one trader is forced to sell, the
stock prices go down, resulting in a margin call for other traders,
creating a chain reaction and vicious cycle.

The Fed is prepared to flood the banks with liquidity when something
like that is happening, but if the chain reaction is international,
the the Fed won't be able to stop it.

John wrote:** 26-Feb-2020 World View: Chain reaction

Higgenbotham wrote: > The reason this is working is because the book is thin, people are
> nervous, and big traders are trapped because there is no liquidity
> in the book. One big trader tonight drove the market down 8 points
> to get out of approximately 1000 lots. I covered a short right at
> the low of that move.

Words like "trapped" raise a red flag for me.

A couple of days ago, I heard an analyst on TV say something about
airline stocks falling because they were owned by hedge funds that had
to sell them off to cover shorts.

I favor the "chain reaction" theory of when a stock market panic
occurs. It happens when many traders simultaneously are forced to
sell to cover shorts or loans. When one trader is forced to sell, the
stock prices go down, resulting in a margin call for other traders,
creating a chain reaction and vicious cycle.

The Fed is prepared to flood the banks with liquidity when something
like that is happening, but if the chain reaction is international,
the the Fed won't be able to stop it.

Speaking of international, I've been reading something interesting from Gundlach and Armstrong which seems credible because I've been watching the action at night and it just isn't credible to see the US stock index futures tanking at night if it's really coronavirus that is the problem for the market. The reason for this is if coronavirus is really what Asia and Europe fear, the US futures would be getting more support at night than during the day and that has not been the case, and it isn't the case again this evening.

What Armstrong was saying this past weekend is watch out for a panic in the US market because with Sanders pulling ahead in the polls Asia and Europe will want out of US stocks. Armstrong says his contacts in other countries think Trump is fantastic and they really fear what a Sanders presidency would do to our economy.

Gundlach was interviewed by email by CNBC and the story is there and on Marketwatch. Armstrong's comments are on his blog.

These comments on the US stock market from last week might interest people.

https://youtu.be/-sfCnRHq1pw?t=400

This is about the same situation as last night. The market has been open 5 hours and I've taken out $3,925 on 45 round turns. The book is very thin again tonight and the market is ping ponging all over the place.

I'm ending the night with $5,075 on 60 round turns.



If I had started last night with a 7K account using day trading margins, it could have been approximately doubled to 14K by the end of yesterday's session. Then if tonight I had traded 2 lots at a pop instead of 1, the account could have increased another 70% or so tonight and perhaps even doubled again by the end of this session. And so on. It's not easy but it can be done given the right conditions. I'm not planning to get aggressive at this time, just trying to pad my account for an attempt at shorting the end of the bull market later this year if it turns out that way.

I took an occasional loss on a trade. The past couple days I would estimate somewhere around 95% of my trades were profitable, with maybe 2% losers and 3% approximately break even.