Tariff Ruling: Market Reaction Chess Move 🔽
When I lift weights is when I think through trading strategies. I was considering what the market might do over the next 2 days before the likely SCOTUS ruling on Friday & AFTER the ruling (assuming it happens Friday). It reminded me of the LTCM (Long Term Capital Management) debacle in the summer / fall of 1998. It was my first major complex trading experience as I was only 6 years into the game at that point.
Here's how it went down.
1. Aug 25, 1998 rumors swirl after the market closes on a new high that LTCM is in trouble & $SPX begins to sell off the next day. It drops from 1092 to 957 in 4 trading days, a 12% drop.
2. On Sept 10, 1998 rumors swirl after the market closes that the FED is going to bail out LTCM. $SPX rockets from 980 to 1029 on Sept 22. On Sept 23 the Fed announces the bail out before the market opens & it closes that day at 1066. An 11% rise from the LTCM induced closing low of 957 on August 31.
3. On Sept 24 (the day after the bailout announcement) $SPX falls from 1066 to a closing low of 959 on Oct 8, 1998. An 11% drop retesting the Aug 31 low of 957.
4. From October 9, 1998 to December 30 of 1998, $SPX rockets to 1231, a 22% leap.
In 1998 $SPX closes the year with a 26.7% gain, nearly 10% higher than 1999 & the third highest return of the dot com bubble.
So . . . lots of folks are looking at Polymarket & making bearish bets on $SPX thinking if the SCOTUS rules against the tariffs the market will plummet. The exact opposite might happen, but the selloff comes AFTER a pop higher on the news (the initial move is often not THE MOVE) just as occurred in 1998.
The players & situations change but the trading patterns don't. It's always Mr & Mrs Market trying to outwit the masses.
But you can win, it just takes patience & thinking through all the likely chess moves the market might take before the game starts.
Food for thought.
I’ve been asked what tools I use for trading. Just two. Yahoo finance (free) & Trading View (free version). I’ve been using Yahoo since 1998. I also use the Darvas Box method at times. Less is more, simple works better than complex. 💯
@market_sleuth you can pretend to follow Jesus properly, but don't be a hypocrite.. Jesus hated usury.. and tell me how you trade without being involved in that? what about the broader biblical concern for justice and compassion for the poor?
Luke 16:13 (NIV): "No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money."
May I submit for consideration a passage from Amos 8 which speaks to the eagerness to conduct commerce at the expense of the times that are set aside for God, and the obedience to his instructions (ie, love the Lord your God, love thy neighbor). As traders and Christians, we can conduct business, but we cannot serve God and mammon
@market_sleuth you can say what you wish. Or pretend to be a follower of jesus. but clearly you are one of the misguided. Luke 16:13: "No one can serve two masters. Either you will hate the one and love the other(...)you cannot serve both God and money."
How I start each trading day. 1. I awake at 5:30am & read God’s Word & pray before ANY other activity. 2. I journal. 3. I check overnight price action. I examine UST, BTC, Asia markets & futures. 4. I review past historical analogs of those environments. 5. I plan my trades. 6. I consider unforeseen trip hazards. 7. I write down what I will trade & why. I do this day in & day out. Week in & week out. Month in & month out. Year in & year out. Trading is a long game, not a hobby. Every trade is a business decision & a business expense. 💯
Wellness check on my brother Ayyad, who told us to go short all of 2023 to 2024... and renewed his short call again in 2025... please Ayyad, let us know you are OK. You are still paying for Twitter premium.... so we know you are reading this
@ozzy_livin Thanks for sharing @ozzy_livin ... can't really tell from the charts, but seems like slightly above average predictability? or am i mistaken? have you taken trades based on that, and is there a way to check entries/exits?
with some people, it's a mental issue... imagine thinking to go short when the market tells you to go long. feel bad for this guy, hope you recover from this mental derangement @market_sleuth my friend in christ