Risk Happens Fast

“Success breeds complacency. Complacency breeds failure.” – Andy Grove
As we have be warning, the risk of ‘velocity of move’ is to the downside. Not going to go on about how complacent markets are but simply highlight the FaceBook chart today. Our base-case following the whole #DeleteFacebook debacle was that it had put in a substantial top and that is was going to be very hard for FB to recover in the near future as the dynamics and underlying business was going to have to change. Obviously, we were wrong as the market had other plans but that’s not the lesson here (btw, we did not short it as we know better than to short single stock names, especially tech). The key point and one that we continually stress is that these low liquidity machine fueled ramps have a strong tendency to give back the move in a fraction of the time it took the ramp to complete.
It is going to be very interesting to see if this GDP print on Friday is really going to be the cycle top and as good as it can get. Furthermore, don’t forget that we still have a lot of earnings out. Most notably, Tesla (another accident waiting to happen) and Amazon (can it buy the market some more time).
Reminder > don’t forget it’s Super Mario Day (focus on guidance), keep an eye on USDCNH (key for USD and more importantly for GOLD/metals) and don’t forget to keep the Bonds on your radar.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Wishing you a great day ahead.

2 thoughts on “Risk Happens Fast

  1. Pulling on the heart strings with the quote today. 🙂 Attention to detail always pertinent. Appropriately they report today as well.

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