Market Crash Update
StatsEdgeTrading
1. The Market Recap
Bitcoin: The $100K level continues to be a battleground. The market has seen massive swings, with traders buying and selling aggressively around this psychological milestone. Until Bitcoin either holds firmly above $100K or decisively drops below $90K, expect more chop in this area.
Ethereum: After being the laggard in the crypto space for months, Ethereum showed a bit of relative strength this week. It’s still struggling to reclaim its all-time highs, but any breakout above those levels could lead to a significant move.
S&P 500: Following a sharp sell-off after the Fed decision, the market staged a strong intraday bounce, hinting at potential support around current levels. Watch closely to see if this area holds or if the next leg down materializes.
RSP (Equal-Weight S&P 500): The average stock had a better day than the large caps, signaling strength under the surface despite the chaos.
2. Key Sectors and Trades to Watch
Energy: Oil prices are consolidating tightly, signaling a potential breakout in either direction. XLE (Energy ETF) has seen a significant pullback, presenting a possible opportunity if support holds.
Natural Gas: This week, natural gas hit a significant support level. I took a position here, using the $14 area as a stop-loss. The upside potential makes this a compelling trade, even with the added volatility.
Banks (KRE/XLF): Both regional (KRE) and large-cap banks (XLF) have pulled back to prior support levels. These areas will be critical to watch for potential bounces or further declines.
3. Discretionary Pick of the Week
Jets (Airlines ETF): While airlines are typically a tough sector to trade, the relative strength in JETS over the past few months is worth noting. A strong bounce after the Fed decision, combined with individual names like ALK (Alaska Air)breaking out, makes this an interesting space to watch next week.
4. StatsEdgePro Update
For StatsEdgePro members, I’m running millions of backtests over the weekend to prepare for the upcoming trading week. If you’re looking for:
30 algorithmically selected symbols with backtested probabilities.
Insights into mean reversion and pullback systems that performed exceptionally well during this week’s volatility.
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5. Closing Thoughts
This week’s market action was a reminder that volatility can create both challenges and opportunities. The key is to approach it with a plan:
Identify levels of interest (support/resistance).
Use tested strategies to guide your decisions.
Don’t chase; let the market come to you.