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Get Ready For Rough Seas, Then Smoother Sailing Mid-Week; Also The Plan Of The Week



  • The Market has yet to discount +3% interest on the 10-year.
  • The market is also discounting the possibility of .75% rate rise.
  • The highly elevated VIX of +30 is telling us that we should expect 1% to +2% swings every day.
  • All this is going to be compacted into just 3 days. We could see the S&P 500 break 4000 this week.
  • Don't let the sharp selling push you to panic and sell. I believe that Powell's tough talk and rate rise will bring clarity to the market and begin to rally again. Though, I can't say that this is THE rally.
  • Looking for a helping hand in the market? Members of Dual Mind Research get exclusive ideas and guidance to navigate any climate. Learn More »
ocean wave during storm

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The 3% Solution; Market Participants are still discounting 0.75% and a +3% 10-Year

I suspect that your weekend reading of financial media has already told you that Friday's close near the bottom was a terrible harbinger for this first week

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This article was written by

David H. Lerner profile picture

David H. Lerner is an analyst with a decade of experience utilizing his professional background in software consulting and technology to identify market trends and provide long and short trade ideas. David employs a combination of technical analysis and market psychology to capitalize on narratives for outsized returns. He also utilizes “Cash Management Discipline,” a simple trading style to hedge against the volatility of today’s market climate.

He leads the investing group Learn more .

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

UPST, I have Put options on DWAC, SBUX, FDX.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (29)

Chillbizzee profile picture
I had the same thoughts regarding the markets this week so not sure how Monday being an up day will effect things but still assume Wednesday afternoon rises.
Legacy Legends, LLC profile picture
AMZN and UPST are good picks and have definitely been on my radar.

You forgot the best, T E S L A
Keep the rate hikes coming,get the tightening going and keep the market down for a few years,now that sounds good to me.
If Amazon is going to compete head to head with UPS and FedEx I may well short Amazon. Been a customer of Amazon since the beginning, but the one thing that I absolutely hate is Amazon's Delivery service. It sucks. I have had so many delivery issues with the idiots they hire for drivers. Same issues over and over again for years now. It never gets fixed. Amazon would be better off buying UPS or FedEx if they really want to compete in this space...
@Vegas Dude
You are inadvertently correct. After all who hires idiots?
BTW I don't really believe the employees are the idiots. The fault is always (99.99%) at the top.
@Vegas Dude Within my experience, they are all neck to neck. What you say touches the poor quality of American workforce. Education is the only solution; unfortunately, both the public and the Hill pay little attention to it and show little intention to pay for it.
You said "The S&P may even break under 4,000, in reaction to the speed at which both the VIX and the 10-year move up."

With a downside Monday already in futures, we could be there today.
sgt.red.blue.red profile picture
Lows Tuesday and Wednesday ahead of FED. Maybe I can accumulate a few more shares in tech, semi’s, growth.

We’ll see.
Thanks for sharing your thoughts on this. Your thought process seems sound.
PonziPat profile picture
If ever there was a week to sit out and watch the madness unfold...then surely it's this one
I would agree if I were also a coward
@omarakthar I saw too many people brave enough to lose everythimg including wife and become proudly homeless.
Your timing has not been excellent through the decline of the past 4 months, and yet you're now somehow able to discern what's going to happen over just the next 3 days or so, with your forecast being turbidity shall transform to clarity after 72 hours? As a thought experiment, imagine a serious investor such as Warren Buffett or Carl Icahn explaining that he's going to execute any investment decision to which you're aware because he envisions rough seas will be followed by "smoother sailing mid-week". If anyone was truly able to consistently forecast "rough seas settling into smoother sailing by mid-afternoon tomorrow", much less within 3 days, he'd have no need to share his forecast here. What's interesting to me, however, is I'm not aware of a single successful investor who thinks in such a manner.
bluescorpion0 profile picture
The author has clearly shown in this article he is no investor but a gambler like the rest of the meme crowd. Even if he is right, his process is terribly wrong. And that process will get you into trouble eventually, leading to underperformance. Macro is not an easy game and is not even a game worth playing. But only when you get smart do you realize this fact. Until then you harbor under the illusion you have a timing edge.
@SJDSinSD Anything can happen and nothing to be accused of. As I read it, he never pretended he is rubbing crystal ball; he is just portraying his own view and plan. If you don’t find it convincing, stop further reading and look for elsewhere.
SPXS or SPXL profile picture
@scorpionblue He doesn't trade his core long term holdings. David has said repeatedly that the trading he does is with a portion of his investments not his core holdings. He's indicated one criterial for a core holding is it pays dividends.
Incomeiam profile picture
Google and fb are very reasonably priced at the moment. Amzn is still too expensive for me personally.
David H. Lerner profile picture
We are excited to announce the launch of Dual Mind Research to join click on the link at my Profile. The first two weeks are a free trial. Our chat room is finally open.
Serop Elmayan profile picture
@David H. Lerner we’re more than excited to get you in, we already posted our first trades😉
@David H. Lerner I wanted to short dwac for obvious reasons but the IV is like 150% so the move would have to be crazy for profitability but I’m with you 100% on fdx I’m just waiting for the resistance level to be approached before I grab the puts.
@David H. Lerner what vix ticker do you purchase options on?
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