Though the topic may seem a bit unusual, it may end up being the most important chapter in the book for many of you. The information contained is crucial. Indeed, recognizing the pattern I will show you may very well end up saving your career as a trader. It may also make your career as a trader if the pattern unfolds, and you take aggressive positions for a smash. In fact, in 1994, this model gave a signal that I relayed to my fund manager. He took immediate action in the OEX Put market and saved the fund millions of dollars over the next month. The subject of this report is panic liquidation of the stock market, when it has happened, how to predict it, and how to profit from it.
My crash filter pattern does not get tripped too often. Usually the market goes up. In fact, on only 235 days has the trade called for a short position in the market since 1986. Even when the pattern does occur, there have been times when no panic liquidation has taken place. Do not panic yourself when the pattern appears imminent. No market move can be called inevitable. However, taking protective measures with your money and making a speculation in put options seem warranted.
Many commentators have theorized that drops in the price of Treasury instruments such as bonds, notes or bills can be very negative for stocks. Similarly, other researchers have found a link between the U.S. dollar's price momentum and stock prices. A falling dollar normally is negative for stocks while a rising dollar is positive.
What this report will show you is a completely mechanical method for gauging the weakness of Treasury notes and the trade-weighted U.S. dollar for use in S&P trading. My studies show conclusively that panic liquidation of stocks occurs most readily when a simultaneous deterioration of intermediate/long term government bonds and the tradeweighted dollar is taking place. Sometimes just one of these conditions can be met and stocks drop, but the combined meltdown has carried more dire consequences.
My crash filter pattern does not get tripped too often. Usually the market goes up. In fact, on only 235 days has the trade called for a short position in the market since 1986. Even when the pattern does occur, there have been times when no panic liquidation has taken place. Do not panic yourself when the pattern appears imminent. No market move can be called inevitable. However, taking protective measures with your money and making a speculation in put options seem warranted.
Many commentators have theorized that drops in the price of Treasury instruments such as bonds, notes or bills can be very negative for stocks. Similarly, other researchers have found a link between the U.S. dollar's price momentum and stock prices. A falling dollar normally is negative for stocks while a rising dollar is positive.
What this report will show you is a completely mechanical method for gauging the weakness of Treasury notes and the trade-weighted U.S. dollar for use in S&P trading. My studies show conclusively that panic liquidation of stocks occurs most readily when a simultaneous deterioration of intermediate/long term government bonds and the tradeweighted dollar is taking place. Sometimes just one of these conditions can be met and stocks drop, but the combined meltdown has carried more dire consequences.
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