Are You Ready for a Big Recession?
Dear Traders,
Welcome to another episode of financial tightening volatility of the market. We have strange days for trading and there’s amazing volatility each day. As I am writing this newsletter, the market has gapped down another 2% and shows no sign of strength. This market has been a nightmare for investors but a paradise for active traders. It reminds me of the March 2020 pandemic volatility when trading on the exchanges was halted. I am writing today from the Azores islands in the mid-Atlantic Ocean. Thor and Jarad are trading at the Open and Thor is doing a recap of his trades every morning. You can watch his recaps on our main YouTube channel here. Make sure to also subscribe to our channel in order to be notified of our recaps. I traded TQQQ at the Open for some choppy scalp, which was not great.
Today’s Global News and Financial Recap
The market is extremely weak now as the fear of a coming recession is on the minds of all investors. The Dollar Index touched its strongest level in two decades because of still-surging Treasury yields. The hawkish Federal Reserve, with its commitment to a series of 0.5% rate hikes in coming months, is adding fuel to USD strength. Essentially, you can borrow money from any currency, such as the Japanese yen, and put it in US dollar treasuries, and you will make money with the difference in interest rates. Bill Gates said that interest rates are likely to rise enough to cause a global economic slowdown. That is what the Feds are trying to do. To control inflation, you need to control either supply or demand. The Feds cannot control supply chain disruptions in China, so the only thing they can do is to tighten the economy and financial markets. If they can do a soft landing, inflation will come down to reasonable rates, but if they cannot, it will send the economy into a recession, forcing businesses to lay off employees and incur heavy operating losses. It is still yet to be seen if they can manage a soft landing. Inflation must come down, either by the healthy growth of supply or by limiting demand on the economy by making everyone poorer.
The cryptocurrency sector is also weak. The asset class that was supposed to be the hedge against inflation, lost all of this dream narrative and only proved that it is a risk asset similar to the equity market. Bitcoin is now below $33,000, which is more than a 50% drop from its all-time high.
At Bear Bull Traders…
We are hosting several important webinars this week. Our Monday Onboarding session begins at 7pm ET. New traders and members are encouraged to join Carlos and Mike for this introduction to both trading and our community. For Monday Technology, at 8pm ET, Carlos will be leading a presentation entitled: Conducting Pre-Market Analysis. For Tuesday Strategy this week, Thor will be heading up the second part of his series on volume and price analysis. Thor’s webinar commences at 8pm ET.
At Peak Capital Trading…
Today we are launching our most comprehensive and complete boot camp since we began Peak Capital Trading in 2020. The orientation session for all boot camp traders is set for 7pm ET tonight. At 8pm ET, Peter will be reviewing his amazing Mountain Pass TradeBook for reversals. He’ll share how he has developed this TradeBook as well as how he executes it. On Tuesday, Aiman will be reviewing his ABCD Pattern TradeBook. These two key webinars will be extremely important in helping traders to build a successful strategy.
And Finally…
Along with a BBTFamily trader, Dan, I finished a trail running race of 65km (40 miles) with a 3100m (10,170 foot) vertical gain. This was Dan’s first ultra trail marathon and he loved it. I am happy that I can encourage members and friends to go beyond and give this sport a try. Ed Martin has also recently completed his first running race. In addition, Thor and I plan to run together soon. Thor has lost a lot of weight and is in very good shape. I am so amazed by his determination. Let’s all get ready to run together. You can reply to this email or DM me in Twitter @BEARBULLTRADERS to join me for the next run.
Dr. Katz recently sent me an article from The MIT Press Reader entitled: Running and the Science of Mental Toughness. Here is a link to the article. It is a very interesting read. The article discusses the research related to long distance running. There is more to running than just training your muscles and improving your stamina. It is also a mental sport, and maybe even more so than previously believed.
Dr. Katz said to me that if you insert “trading” for “running” in this article, many of the same principles hold true. I loved the article, and yes, he is correct. Similar to ultramarathon running, and many other professional athletic pursuits, trading is also a high-performing endeavor and your mental game is so important. I hope you have a chance to read it.
To your success,
Andrew
PS: If you have not already, I urge you to try out our free web-based trading simulator at stocktradingsimulator.com. It’s conveniently available 24/7, whenever you have time to practice honing your trading skills.
