To The Moon

Today serves as a reminder on the importance of weakening breadth and diversified ideas—it will eventually catch up.

Yesterday's post-FOMC Q&A sell-off likely split most swing traders' unrealized P&L into two camps: those ignoring $Invesco S&P 500 Equal Weight ETF(RSP)$ 's divergence from $SPDR S&P 500 ETF Trust(SPY)$ , marking its 13th consecutive loss with declining daily Net High-Lows, while chasing December's high-flying gappers such as $Alphabet(GOOG)$ $Alphabet(GOOGL)$ $Credo Technology Group Holding Ltd(CRDO)$ $Broadcom(AVGO)$ $Marvell Technology(MRVL)$;

versus

those staying on the sidelines while managing existing early positions, and seizing opportunities & setups in alternative or inverse asset classes beyond correlated equities (e.g., $ProShares Ultra VIX Short-Term Futures ETF(UVXY)$ $Direxion Daily Real Estate Bear 3X Shares(DRV)$ $Direxion Daily Gold Miners Index Bear 2X Shares(DUST)$ $Direxion Daily Junior Gold Miners Index Bear 2X Shares(JDST)$ $ProShares UltraShort Silver(ZSL)$ $ProShares UltraShort Gold(GLL)$ $Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2X Shares(DRIP)$).

If the market opens with a further breakdown of the opening range low, most of my October/November positions will likely be taken out, realising a reduced unrealized profit prior to FOMC. In the meantime, I’ll also be rewarded for prioritizing breadth, recognizing divergences, avoiding overextended chases, and positioning into inverse/uncorreleated setup confirmation.

This week should be highly profitable for swing traders amidst the volatility spike—provided the right processes are in place.

"Exploring ideas in tradable asset classes beyond correlated equities can provide a valuable edge."

— Stanley Druckenmiller