🚨 I’ll be live at with Geof at 2:30 p.m. ET🚨
Geopolitical tensions are heating up, and me and Geof Smith are breaking down the specific flows moving the market. Tune in to see where we’re finding an edge in the volatile oil markets, and get my top ticker to play ahead of the SpaceX IPO this week! [tap to join us for Profit Panel]
The market just handed us a sudden 300 point drop in the S&P 500 over roughly four days, and it’s moving with the kind of violence you’d normally see in a penny stock.
If you’ve been holding short-dated options through this, you’re feeling it.
Even traders sitting on July contracts are deep in the red. Longer-dated positions are hurting too — just not as brutally.
It’s the kind of moment that reminds you of a simple piece of market wisdom: The market is a mechanism that transfers wealth from the impatient to the patient.
The Blip That Destroys Accounts
Pull up a longer-term chart of the S&P 500 and this sell-off looks like nothing. On a larger time frame, this is just a blip — a small wiggle after a massive run-up.
But most traders weren’t positioned for a wiggle. They were positioned for continuation and loaded with shorter expirations that don’t survive shocks.
What makes this different is the statistical violence behind the move. We’ve now seen back-to-back Six Sigma days — the kind of black swan volatility that has only shown up around 28 times in the last 20 years.
Moves this extreme fall far outside what standard risk models or options pricing assume, which is why short-dated contracts have been blown to pieces. The velocity alone was enough to shred theta-heavy positioning.
Yet despite the magnitude, the selling has been structured. A chart of SPX shows that the drop has respected key support zones.
We haven’t seen the chaotic violation of support that usually defines panic-driven crashes. Instead, the move has been orderly, with price reacting cleanly to major levels on the way down.
That’s not bullish, but it does mean recovery potential is higher than it would be in a freefall.
What I’m Doing and What Comes Next
I’ve got plenty of open positions that are hurting, and I’m not opening anything new. This isn’t the moment for revenge trading or forcing entries.
Everything I’m holding is longer dated, so the only smart move is to let them breathe and allow this to play out. Even pros with longer expirations are sitting on heavy drawdowns right now.
The difference is survival odds, not immunity.
Historically, when the market moves this far this fast, new lows often follow during the next week. It doesn’t guarantee continuation, but it’s common enough to matter.
So when we do get a rally — and we will — that bounce becomes an opportunity. High-flying names that surged during the last leg up will face profit-taking, and longer-dated bearish plays on those names can set up cleanly for the next cycle of mean reversion.
This isn’t about being fearless. It’s about being patient, disciplined, and aware that not every movement is tradable.
Sometimes the smartest trade is no trade at all.
The market doesn’t care about your time frame. But your time frame determines whether you survive moves like this or get wiped out by them.
To better trading,
Alex Reid
WealthPin
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. The SpaceX Halo Trade Event Is About to Go Live on Zoom
If you plan to load up on SpaceX stocks, you’ll be missing out on a huge opportunity.
Because as we speak — 3 public space stocks are setting up pretty well right now.
And according to my research, they could be the best bet to ride the IPO mania.
I’m not making a random conclusion here. Capital is already rotating into anything connected to the new space economy.
I believe these 3 companies are perfectly positioned to ride the mania.
And at 3 p.m. ET…
I’ll give you the details, including the ticker names, for free.
I won’t make reckless guarantees about the stock market. But would you rather join the crowd and fall for the SpaceX IPO hype?
Or get the three public space stocks that could ride the IPO mania instead?
If you’re going for the latter…
