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Trading System Signals on 10-16-2025 Drawdown Entry Alert

The stock indexes traded today like they are fighting for their life even though they are not very far from all-time highs. There is an extreme amount of back and forth in this market to maintain constant all time highs with a very contentious tape. Last week we saw some margin selling and flash moves in crypto at Friday's close. Will we see more of this tomorrow in crypto and stock index futures? Friday could get wild based on some of the moves we are seeing in the market and the accumulation of the news flow as well as a parabolic move in Gold.


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Typically, markets need to sell off into much deeper pullbacks to trigger margin calls. Leverage may be at all-time highs and a simple 5% move off the highs could trigger a cascade of selling similar to August of 2024. We seem to be in an environment that requires an acceleration of liquidity to maintain the uptrend in assets. Maybe this is why the Fed is ending its QT program. In August of 2024, some in the financial media called for Fed action after only a 10% drop in stock indexes.


Gold continues to soar and was the top market for the trading system signals today. Bitcoin is bouncing along last week's lows and margin call levels that we saw in the after-hours last Friday.


We still ask the question, Which market is fibbing? Will stocks follow crypto lower or will crypto rebound while precious metals sell off.


It was one of the more challenging days across the board with all portfolios down and many algorithms down on the day trading both the long and short side. We saw stock indexes generating new trends in after stop running and reversing many times. The benefit of a down day is that it gives us a drawdown entry point to start or increase contracts.


Hypothetical Trading System Portfolio Signals and Results:

Two System Portfolio NQ = -$1,900

50K Portfolio = -$635.50 on Micros, or -$1,161 when mapping Minis to Micros

Stock Index Portfolio 18 = -$11,535

Stock Index Portfolio 37 = -$21,020

Diversified Portfolio 57 = -$17,075

Silver Portfolio = -$1,800

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Trading System Signals on 11-05-2025

I certainly thought we were due for some more follow through to the downside today. The dip buying today in stock indexes was strong but was more "habitual" and more of a counter trend bounce (after o

 
 
 

1 Comment

Mike
Mike
Oct 16

Yes that's what I was thinking, only bright side is we are drawing down off the highs of the portfolio, otherwise rough day for SI 37.

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