Markets. Risk. Humanity. History. ex-SDE/SDM turned trader. An aspiring flaneur looking for optionality. "Freedom is not free".
Canada, Lebanon
Joined November 2010
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Consider the COVID crash, when SPY fell roughly 34%. SPXL dropped about 77% rather than the 100% that a simple 3x calculation would suggest.
Of course, this is an extreme example of a relatively sustained decline. In reality, markets often experience more sideways chop and sharp reversals, where daily compounding can work against leveraged ETFs and erode returns over time.
What I find interesting about the current #NDX correction, which began on Oct 6, is that it started just two weeks after the index hit a new ATH on Sep 22. We haven't seen a correction begin so soon after a new ATH in the past five years. The last time this happened was in 2019.
Even more interesting, this is the 3rd correction in the #NDX in just one year! $QQQ $SPY
I had to go to 2019 to find a similar occurrence. $QQQ hit a new ATH on April 17 that year, marking the end of the previous correction, then went on to make another ATH just days later, only to enter another correction shortly thereafter!
Hedging with puts is tough. Very tough. After all, it's a trade designed to lose money most of the time. The best edge is usually finding cheap puts. But when Mike mentions puts, I tend to double down.
Bought $SPY 06Nov 330 puts at $0.48 2 days ago. Sold 1/2 too early this morning at $0.97. Still holding the rest, but will likely close them by EOD. They're now at $2.40, after hitting $3.25 earlier!!!
I'm one of those subs that @priceactionlab is referring to!
#gold -3%, below key support levels. Our subscribers know what we expected, and some knew already what to do. All others continue to do what you are doing. 😂
Canadian banks could be setting up for a major short opportunity. For yrs, they've benefited from mass immigration, a booming housing market, ZIRP, and rising asset prices that fueled wealth management profits. Many of these tailwinds have been fading, yet valuations remain elevated.
To be fair, these are highly profitable, well capitalized businesses with diversified revenue streams. But how much future growth is already priced in, and where will the next decade of earnings growth come from?
$RY $TD $BNS
$GOOGL is down -13.35% - the worst single day drop in its 22 yr history! The only two comparable times it was down this much were during the GFC and Covid crashes!
Ok bought some $GOOGL at $283. Based on its history, this selloff is overdone. I see potential for a quick +5% bounce today or tomorrow and will reassess the position as the day's price action unfolds.
