In this video, we’ll revisit the 5 observations that we made about the current market volatility in last weekend’s video, and observe how those patterns repeated themselves again.
We’ll take a look at Thursday and Friday’s activity, with each of our lessons in mind – and continue to do our weekend homework, to keep dominating the markets.
The first observation that we’ll start with is the idea that the Nasdaq should really be called the nascrack. Now, we proved why the Nasdaq tends to move much more, from a % basis, in a previous research video.
We notice, that same pattern starting to preface itself again this week. In particular, when only the Nasdaq triggered an entry using our volatility models, whereas the S&P and DOW did not come nearly as close to any sort of edge.
That should make you automatically sit back and think… why is the Nasdaq moving so much more than any of the other markets currently. And that’s a hint. So let’s think through the logical scenarios that could be occurring here:
- Win – Nasdaq is the only market giving us an edge, and short is great
- Loss – It’s a bull trap trade – Nasdaq is actually going to go full nas-crack mode and stop us out
- Info – Nasdaq is leading the market, and will pull S&P higher, which will be better short, and then DOW
And that last one, is where we want to focus, right. We have our risk put on in Nasdaq, but we also want to try and account for a potential #2 door, and participate in other markets where we may not be experiencing as much volatility.
That’s where the second observation comes in – the fact that gold has been our safe haven, in terms of giving us hints as to what the indices will do next, and acting as a contained volatility market.
So with those two hints, let’s take a look at each market’s activity, starting with Thursday.