How to Spot a Market Fake Out
Before I get started, I have a special announcement.
Bryan and I want to meet you in person and buy you a drink.
No strings attached and at no charge to you.
To learn more about our upcoming meet-up, check out the note at the end of this article for more information.
Hope to see you there!
– Karim
Last week, the market tanked hard over a couple of sessions, only to recover even harder.
If you joined us at Monument Traders Live for my emergency session on the morning of the selloff, you would’ve heard me tell 2,000 people on the call, “not to panic.”
My reasoning for staying calm was not just to reassure members that we were not in a “crash scenario.” It was also to give them ideas on how to profit from the market’s reaction to the bearish employment data.
That morning, the VIX or Volatility Index jumped to 65 – a level we saw during the 2008 Financial Crisis and the 2020 Pandemic.
That was the first clue that something was off.
You see, in a wholesale market correction, everything is red and volume is sky high. But there should be some pockets of green as well.
The reason there’s green is because bad economic data is good news for interest sensitive stocks and stocks that are meant to do well in a low rate, weak US dollar environment.
I looked at interest rates and saw the 10-year yield fall dramatically. That checked a box that should have resulted in fixed income types of stocks and precious metals stocks moving up or staying the same at worst.
But that wasn’t the case.
Fixed income and precious metals sectors were going down as well. But, and this was important, they were not going down as much as the market. Also, the volume wasn’t there.
That was the tip-off.
This sell-off was not precipitated by news that was bad for the general market. It was bad for the big institutions and hedge funds that made some bad bets that they needed to exit from quickly. Those bets were losing money and they had to make up those losses by selling other assets quickly… and that’s what hit the market hard and fast.
YOUR ACTION PLAN
When a sell-off happens, you must do some more digging so you are not panicked out of your investments. It’s also the time to be prepared to buy stocks on your wish list, just in case prices fall even harder.
In The War Room, I’ve outlined all the potential green stocks I want to buy at specific prices. I call it my wish list. It’s the type of thing I share with members well ahead of when they may need it just for situations like last week.
P.S. Now for something very special:
You’re Invited to Come Meet Bryan, myself and your Fellow Monument Trader’s Alliance Members – For Free!
Meet-Ups are your chance to meet, collaborate, and engage with your connections and our friends with Monument Trader’s Alliance! Come meet your tacticians and fellow members – and your first drink is on us! Just tell us you’re coming – and you’re in!
This is for members of MTA services only: Trade of the Day, Catalyst Cashouts, War Room, Daly Profits Live, Profit Surge Trader, Daily Profits Scanner and Profitsight.
We are sorry, but no guests allowed as we pilot this series of events and want to maximize interaction with our members.
Register with Your Email Below & You’re Confirmed
Yes! RSVP For the Upcoming Monument Trader’s Alliance Meet Up!
This is an In-Person event only.
There will not be a livestream or zoom option.
Details
- When: Thursday, September 26th from 6:00 PM to 9:00 PM CST
- Where: Rivers Casino, 3000 S. River Road Des Plaines, IL 6001
*NOTE: A VIP Concierge will be attending to help answer membership questions and ensure that you’re in the right trading service to fit your performance goals.
If you have any questions prior to the event, email us directly at: dharris@theagora.com.
More from Trade of the Day
Why I’m Bullish on Metals Heading into 2025
Nov 27, 2024
“Here’s Why I’m Not Taking December Off”
Nov 26, 2024
Time Sensitive: These Sectors Are About to Surge
Nov 25, 2024