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May 30, 2022

MarketMap #13

Ignore at your own risk, I could not be more serious in the conclusions of my research

Pulling money out of risk and putting it into short-term savings for the next few months to see how it goes is worth a “little embarrassment” if the Contrary Thinker’s advice is wrong.
P.S the risk of a missed opportunity is a false equivalent for proper risk management.
Eight Weeks Down According to History the Market is Bearish

Aniversary Dates

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May 21, 2022

Volatility Reports 5/23/22

Black swan events are a metaphor for an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact.


Back in 2013 when the Fukushima earthquake hit Japan there was a market incident where implied volatility on the Nikkei Dow jumped as high as 45 intraday in April of 2013. During that event the Nikkei Dow sold off with the Japanese government bonds selling off as well, hitting a 1% yield to maturity.

These jumps or spikes in volatility are short-covering rallies in the majority because the industry and public do not venture into trading for a bear market or a black swan event.

Rather the institutional types find a way to achieve a higher than average return by selling risk, they sell short the VX futures or the call options on the futures or some combination.

Add to that the dealer community being extremely short in volatility exposure and they have to buy it all back at once causing the spike.

The “bulletproof” mob that promotes the 60/40 split portfolio, they are faced with an interesting and inconvenient truth regarding modern portfolio theory (MPT). That is bond prices do not always move in the opposite direction as a stock market MPT has been built on the basis of an anti-correlation between bonds and stocks, which historically has proven untrue.

It is possible, if not likely, to enter an environment where stocks and bonds

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May 9, 2022

Volatility Reports 5/9/22 Risk Assessment

Fidelity Investments TV Spot, ‘The Planning Effect: Future Generations’

Feature this scene: A couple enjoys a gathering with loved ones. An ad reader comes in to explain that the event represents how it feels to have financial assurance and a wealth plan with the right balance of risk and reward will get you there.

Traditional thinking by the industry purporting risk and reward are somehow a balancing act. The higher the risk the higher the potential reward, which is a bunch of tripe While I can’t expect everyone I contact to understand this, not everyone sees like Paul Tudor Jones or George Soros or Stanley Druckenmiller.

But, I can expect a few of you to get it, break out of the envelope the industry has made for you to understand you can take 10% of your investment account – for one tactical example – invest it with timing in low-risk high reward trades. Make 300% plus on that 10% of your account therefore 30% on your entire account, beating the market’s average buy and hold return of 11% per year where you will need to ride out bear markets.

Select trading ideas on your smartphone that finds lower risk higher reward trades with the above policy in mind.  Only $10/month plus incentives for winning trades that exceed a predetermined threshold.

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