A quick summary of the Hunt Brothers and Silver Thursday:

In 1980, after the Hunt brothers cornered the silver market, having accumulated approx 1/3 of supply via heavy leverage, COMEX created Silver Rule 7 which placed aggressive limits on said leverage. Prices began to fall. Silver fell 50%+ in just four days (after increasing over 700%), leading to a $100M margin call for the Hunts. They were facing a $1.7B loss. The fear was that this inability to cover the margin debt would lead to brokerage and bank failures, and that spread through all markets.

More reasonable thinking amongst the melodramatic antagonistic bullshit being spewed at a thousand gallons an hour on twitter right now

https://twitter.com/wallstcynic/status/1354998065393000449

These explanations about the plumbing and real underpinnings of what makes a market work (especially w Dodd Frank) are thankfully all over twitter now, however most will skip right past and prefer to stay outraged at the “system” despite experiencing the best bull run ever.

This is correct. There is no way to hedge the options they’ve sold when the market moves like this. Yes they may be at fault for taking on too much short gamma exposure, but this is self preservation rather than collusion IMO.

(Unpopular take I know)

https://twitter.com/GerberKawasaki/status/1354958566969335823

The range of outcomes into the 1/29 option expiration when the open interest is so high and price moves hundreds of % a day is impossible to forecast or manage. It’s not just hedge funds it’s the entire system at risk.

If they rescue the 20d again (currently 3784 on $ES) then we might be able to consider this a stick save. Continue to keep hedges on IMO. I closed my $VXX calls, but still have $VIX call spreads and I added $XRT puts today. Still got some OTM $IWM and $TSLA puts running too. That said I also bought quite a few dips pretty aggressively.

Okay! Last bit of review for now; run through macro & futures.

First up, King Dollar - the f*cking SQUEEZE is on!

Holding 94 like a champ and sending shockwaves through the markets. $ES 1hr - holding the VPOC so far. 3215 is strong support as that would mark a lower low and a bearish continuation.

But anything can happen...

struggling with the VWAP

< 109 - look at that gap on the right... now <108.50

The lack of fear right now is what makes this market so dangerous. If this was more sudden, maybe caused by an actual event/headline, instead of being an "expected and healthy pullback," we could actually hit some oversold levels and squeeze out of it.

(cont..) Instead people will keep trying to buy the dip until these critical stocks we've been looking at all week lose key levels, and then we get a real drop. Apple and Amazon are in very similar situations, and together make up 22.5% of and 10.5% of .

(cont..)

New watch list adds for today: - nice pop today coming off a 5 week consolidation. If it can clear 185 it looks pretty good to 200. Stayed over the 50dma

This can't be overstated. The biggest cap weightings are on a knife edge right now. Any real intra day weakness could kick off some serious consequences

@voliswell has been noting this all week as well

https://twitter.com/hereforthefin/status/1306597144917286916

in danger zone:

Nazsty. 11175 didn't stand a chance. Paused on long term trend support though. Needs to break 11k to really break out the bazookas

93.51

update - popped over 11505, bounced off 11350, deciding next move

https://twitter.com/hereforthefin/status/1306010718542667777

Crash Diary, Day 10:

The zoo animals failed to break through the fences at 11505. Head Zookeeper Powell doled out the appropriate punishment, relegating the elephants to zone 11250, posting the lions at 11175 to try to end this selling nonsense.

FANG check -

still failing. below 109 is a quick drop to 99...not saying that happens, bc it's apple...but the gap is there another fail so far

A few new watch list adds for today;

- air/last mile freight; just ripped pretty hard and has been consolidating to work off some of that heat. Could get some Fedex sympathy action and has regained some solid support - Tanger Outlet (physical retail REIT). News out today that August was cash flow positive. Can't remember who but a follower recommended this a while back. GFC low was 12.33, currently $6.30. Been in a decline since summer '16 though.

Death of retail overblown?

5G Fever is Here (1/x) -

Broadcom just happily bull flagging its way to new all time highs. Looks like it wants to keep going too. same thing

Longs Added Today (1/x):

- found a floor at 109 for now. 25% upside to previous ATH. Stop at 109 Longs Added Today (2/x):

- 1020 support/stop. 22% upside to previous ATH

backtest backtest as well

Despite the ridiculous run from this year (71% from low to high), it's really up "only" 60% in the last two years. Same case could be made for other companies that traded sideways for multiple years since mid 2018, that this is all "catch up" rallying. With Friday's close, the small cap index Russell 2000 is now down 14% since the "real" cycle peak in August 2018. With lower lows and lower highs throughout, it's been in early onset bear market for 2 years.

watch continues. Could just consolidate sideways till Wed/Thursday before the next move.

No idea which way. Lots of people out there already making predictions, I'll just wait and see.

Up = sell it all, Down = BTFD.

"Simple" Also key for gold of course. Right now I'm about 33% cash, 33% long, and 33% gold/miners.

This chart is just gorgeous. I've been buying every time we hold 1920. It also can't stay over 1960 tho...the triangle break is about 1980. Will likely decide this week.

Wish List - a few top picks I'm watching during this sell-off. Writing these down/sharing them forces me to truly narrow this down to my highest conviction but hopefully it will give one of you an idea or two.

1/x 2/ - essentially the amazon, shopify, and sqare of Latin America. Returned over 110% in 2019 and 830% since 2015. I wouldn't mind grabbing some here but trying to be patient. 945 next area of support below that

Daily Macro Update:
1/ King Dollar

Showed some life today, backtested its recent down trend. Again this needs to break 94 for a meaningful trend change, but breaking out of the channel is leaning risk off as of now 2/ Gold

Held up very well despite the sell off. Still can't get over the 20 dma, so 1920-1960 is the range right now. Need a break in either direction to be meaningful, but till then just buy some at 1920 and sell some at 1960, rinse/repeat

Same for GDX >39.60