Thursday, November 16th, 2017

Why the Current stock market is crushed ?

It wasn’t GREECE. It was GREED. It wasn’t the dollar carry trade it was sheer anger and revenge on our President.

The climax of a heated battle between President Obama and the 50 or so FAT CAT Bankers who are now in jeopardy and  whose vagrant and irresponsible lifestyles  should soon be history. Greed on Wall Street shouldn’t surprise you one iota. Its a tradition, its a culture. No one is ready to give up on greed anytime soon.

If you didn’t know by now, stock market is a zero sum game. I win you lose, Its that simple. If I am bigger, I will take your money. If you happen to trade against BIG BOYS and well armed traders, you will lose and that is a fact of life in this business. Stock market is not only a zero sum game, but a brutal zero sum game, and the last 2 weeks have shown me the kind of brutality that some people are capable of.

Here is my personal trading account.

I woke up Thursday morning and soon I was in the trading session NDX plunged from 1790 to 1750 in 30 minutes  by far a record time. It was barely 7:00 AM on West coast and here we saw a horrendous onslaught of selling never seen before since 2008.  The volumes were so heavy, lower strike puts were exploding like fire crackers on July the fourth. It was  a sight to see. This completely surprised me, and that day I didn’t have any protection to the downside.  I have outlined a  week ago to all our newsletter subscribers to keep protection and buy puts below certain strikes. Those who listened perhaps made money in this, and those who didn’t pay attention, were sitting there and and ready to capitulate on Friday morning. I was one of them. I, for one, sure didn’t take my own advice, and paid a price .

In the middle of Friday’s  brutal sell off  on February 5, 2010 I simply capitulated. Something which I never ever do. I gave up and gave in to these dogs of Wall Street to these hyena pups whose main business is to nab your right financial artery. Within minutes I lost $900 while my account almost got hit with a margin call. Dazed and wounded, I recovered quickly and bought   2 March SPX at the money puts. That gave me some comfort for half an hour as the market continued its  downslide. Than to my surprise I found out, I still owned a single NDX put which  never got sold, since the orders were  not being properly executed for days . That NDX put was now worth its weight in gold in this brutal sell off and NDX was now at 1714 down from 1800 levels !  That was few thousand dollars in it.

At that point Bob Pasani of CNBC was mouthing off  how the rally in dollar is the causing  this sell off and the minute his words ended SPX started rising like a  tide coming into the harbor. The rally to the upside was starting after making a spiked bottom on the charts. I sold my SPX puts at 1050  and took a $280 loss, and than realizing that $NDX was also racing up to 1735 I sold my single put for a $900 profit.  Quick and sharp decisions and lots of experience in seeing market bottoms and sharp reversals, saved me from a sudden loss. I think I will never do that again. This is how brutal things can get in a sell off. If you give in, you can lose your shirt to these hyena pups, they will beat you into a red pulp. Its called Capitulation.

Apart from personal account I shared with you, here is a link you should click and see why this sell off still continues.

Wall Street is still angry and its ferocious acts are shaping up the markets. On the other hand there is  mounting evidence that our economy is improving.  Jobless report came in better than expected only 20,000 jobs were lost compared to 700,000 last January when Bush was President, and the jobless rate dropped to 9.7% from 10.5 % a month ago. Last quarter GDP also rose to 5.7% and this earning season 70% of S&P companies beat the earnings ! Go figure why this market is selling off like there is no tomorrow !

Think about it, with improving fundamentals this kind of ferocity in the market ? Only the Vampires can do this to you.

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