HIDDEN BEAR MARKET? Cem Karsan on Momentum's 40% Drawdown | MONDAY Oct 26 Live Trading

Market dynamics and uncertainty

• –Global markets never sleep
• –Explore them with Forex on Tasty Trade
• –80 plus Forex pairs 24 hours a day
• –Midterms and earnings are intertwined
• –Prepare for uncertainty

Elections and market uncertainty

• –Midterms are unpredictable
• –Brazil elections add uncertainty
• –Polls are unreliable
• –Tail risk is significant
• –Be prepared for unexpected outcomes

Tail risk and options strategy

• –Tail risk is not the same as volatility
• –Own tail convexity
• –Tail risk is dramatically underpriced
• –Be long on the tail
• –Options land is an opportunity

Market surprises and risk management

• –Surprises are part of the season
• –Tail risk is not a black swan
• –Be prepared for potential risk
• –Market flows are supportive
• –Seasonally positive time

Earnings and market divergence

• –Earnings are diverging
• –Apple is not in the same week as others
• –Chip names are up
• –Apple is down
• –Read between the lines

Market sentiment and Fed meeting

• –Fed meeting is a risk
• –Sentiment is negative
• –VA is well split
• –Prepare for potential outcomes
• –Fundamental realities haven't changed

Market outcomes and preparation

• –Two outcomes to be mindful of
• –Tail event or stair step down
• –Prepare for low cost
• –Stair step down is base case
• –Fat left tail distribution

Tech market decline and rotation

• –Tech market decline is a topic of discussion
• –Rotation into other sectors
• –SanDisk and Micron rally
• –Stair step down is a possibility
• –Market dispersion is increasing

Historical market decline and rotation

• –NASDAQ decline before S&P
• –Leadership shot first
• –Rotation into healthcare and energy
• –Tech decline is not the whole market
• –Beta one is not the outcome

Market decline and sector performance

• –Tech down 50%
• –Healthcare up 37%
• –Dispersion is mind-blowing
• –Enron bankruptcy in 2000
• –Rotation into other sectors

Market recovery and opportunities

• –Tech down 50%
• –Healthcare up 37%
• –Rotation into other sectors
• –Energy and utilities perform well
• –Consumer staples may underperform

Market recovery and opportunities

Market decline and dispersion

• –Large swaps of the market could perform well
• –First 20% decline is an opportunity
• –Dispersion is reinforced
• –Negative beta in S&P 500
• –Market is starting to show signs

Market fragility and tectonic pressure

• –Fragility on the system
• –Massive pressure under the hood
• –Minsky moment is possible
• –One grain of sand can collapse
• –Be prepared for tail outcomes

Market fragility and tectonic pressure

• –Fragility on the system
• –Massive pressure under the hood
• –Minsky moment is possible
• –One grain of sand can collapse
• –Be prepared for tail outcomes

Busy week ahead with earnings and meetings

• –Very busy week ahead
• –Fed and ECB meetings
• –Bank of Japan meeting
• –GDP and PCE readings
• –Earnings from major companies