Hey, it’s Gianni.
Friday wasn't just another volatile day.
It was the largest cryptocurrency liquidation in history. Bigger than FTX. Bigger than the Luna/Sol collapse. Bigger than every crypto catastrophe you've heard about combined.
And here's what nobody's talking about: this is exactly what bull markets need.
When Liquidations Hit Records, Bottoms Follow
I've been saying this for weeks - we needed a reset. The market was getting too comfortable, VIX was too low, and everyone was getting cocky.
Friday delivered that reset in spectacular fashion.
People blew up, guys. Leverage traders who thought they were invincible got absolutely demolished in a single session. The kind of one-day wipeouts that separate trading from gambling.
But here's the thing about massive liquidation events: they happen at important market bottoms.
Look at the data.
When you see liquidations this extreme - when the leverage gets completely flushed out of the system…
It's historically been a contrarian signal that the worst is behind us.
The VIX Told Us This Was Coming
From one of the biggest contangos in volatility futures history to near-backwardation in a few hours. That's record-breaking stuff that normally takes weeks to develop.
We almost flipped the entire volatility structure in one trading session. That shows you the seriousness of the leverage that just got eliminated.
Today?
We're already bouncing back. Tech is leading, semiconductors are ripping, and the fear that was so thick on Friday you could cut it with a knife is starting to dissipate.
What Comes After the Reset
Here's what the history books tell us about days like Friday:
After the S&P drops 2.5% following a new all-time high, you're up significantly more often than not - especially once you get a month out. We're talking double-digit gains one year later.
The bull market that started from the 2022 lows is only up about 89% so far. The average bull market rally? 194%.
There's still room to run.
The 80% Probability
I'm assigning an 80% probability that Friday's low was THE low. Twenty percent chance we retest it after some chop this week.
But if we get past Wednesday without rolling over? I'm bumping that to 90% that we've seen the worst.
The sentiment reset is complete. The leverage is flushed. The VIX spiked exactly like it needed to.
This is what opportunity looks like when everyone else is still scared.
Why I'm Not Worried
You know what I did over the weekend?
I spent hours scanning the market, screening the tape, looking for setups.
The amount of stocks I added to my watch list was incredible. I couldn't believe how many quality names are setting up for the next leg higher.
Trinity Trade members know exactly what we're looking for coming into this week.
We came into Friday over 20% cash, ended it over 40% cash, and we're ready to deploy.
Because when the market hands you a gift like Friday's liquidation event, you don't waste it worrying about what might happen next.
You position for what history says comes next.
Stay Sharp,
Gianni Di Poce