Hey trader,
Marcus Aurelius once told his people that a time would come when they would have forgotten everything. And a time would come when all would have forgotten them.
I put that quote on screen Thursday morning because the market needs to hear it right now.
The market does not need urgency right now. It needs reflection.
The S&P 500 has gone from a 4,800 handle to 7,000. That is a 30% move in a single year.
Now it pulls back 4%, and traders are lining up to buy the dip as if the whole correction is already over.
I have been doing this for 39 years. I have lost more money than most of you will ever see trying to buy dips like this one.
It gave me gray hair and vitiligo. It took years of pain before I learned one truth.
When the weekly MACD bends and goes waterfall, you are never getting out.
The Genesis Cog Scanner identifies when these weekly cycles roll over while the daily charts still look calm.
Stop. Sit Down. Reflect.
I told my members that "time is at hand" carries three meanings for traders right now.
The first is to reflect on where we have been, where we are, and where we could be going.
A true correction is 10%. You have barely scratched the surface of one.
The second is to ask yourself how you protect what you have. You hedge off your long positions and let them play out.
The third is the Aroon indicator, which measures time by price instead of price by time. The Aroon down is getting higher, and the Aroon up is getting lower.
We have a long way to go before this is over.
The Economy Is Talking. Listen.
The US economy lost 92,000 jobs in February versus a consensus gain of 50,000. Oil surged above $90 a barrel.
Home sellers are relisting their properties at the fastest pace in a decade. The average person is flat out broke and living on credit cards.
The Fed has been neutered. You cannot cut interest rates when oil is surging and inflation is taking a second wind.
I said it plainly on Thursday. You buy when the tailwinds are at your back.
You do not step in when every macro indicator is blowing straight into your face.
In a Correction, They Get Them All
My friend Jerry lives in Hawaii. She is one of the best oil traders I have ever known.
She used to tell me something I never forgot. Honey, in a correction, they get them all.
Microsoft has already crashed. Salesforce has already crashed.
Nvidia is next.
Meanwhile, Marvell reported strong earnings Thursday and rallied while everything else fell apart. The stock had already crashed 75% before reporting.
Expectations were cautious and the company out-delivered.
- Marvell rallied because its punishment was already behind it. Low expectations plus solid earnings equals upside.
- Nvidia sits on the edge because the market has not taken it down yet. Government permission slips to do business with China add regulatory risk nobody is pricing in.
- Where a stock sits in its cycle of expectations determines everything about how it responds to news.
A Hundred Times Before It Sinks In
Thursday morning, my 12-year-old daughter had a dentist appointment and a parent-teacher conference. My wife and I reminded her a hundred times to get dressed.
By the time they needed to catch the train, she was still in her pajamas.
That is why I repeat myself every single day on this broadcast. Sometimes the lesson does not land the first time, or the tenth, or the fiftieth.
My job is to protect you people. I am the paternal figure here.
Treat the market as it is and not as what you think it should be. It is a machine that humbles you.
A lot of you are getting humbled right now.
The Genesis COG System tracks when cycles complete and when risk shifts from manageable to dangerous.
We do not manage reward at the Genesis COG. We manage risk.
The reward comes if you manage the risk correctly.
Time is at hand. Sit back, watch, and wait.
Have a good weekend. Monday comes fast. Be ready.
Professor Jeffrey Bierman
Creator of the Genesis COG System