Intraday Ramblings – Don't Even Bother

I’m pretty sure that markets will take the 3rd and final “zig/zag” of this correction on the Fed statement tomorrow afternoon.

The Fed must align with the “already downward sloping projections” of both the IMF as well World Bank “admitting” – global growth ( and along with it – U.S growth ) is firmly on the decline.

I expect this to kick off the last little leg down, before ( god knows for what reason other than Central Bank intervention ) markets make one last shot for the highs – completing the “projected market direction” from last weeks report.

Investors may want to consider the next month even, as the last and final stop / place to consider taking serious steps towards portfolio liquidation / protection and a complete “changing of the guard” if you will.

Holding stocks after this final push higher will have you sitting in loss for much longer than it could possibly be worth ( short of the piddly dividends ) tieing up dollars that could easily produce much better returns “actively traded” on the short side so……please be warned. Buy and hold will not survive here. Period. You’re a complete and total idiot holding stocks past Sept – and I will mark this post / welcome you to look back and quote me in fact…..I’m marking it, and will look back to tell you so….

Traders can take a shot at it ( as I will be ) catching the next turn higher and taking it for what it is – a trade.

I will quite likely just “stop and reverse” on EUR/USD, GBP/USD ( re-enter short ) and USD/CHF at the bottom of this correction, sell USD/JPY as well the SP short  – and leave the JPY’s flat / re-evaluate the commodity currencies as……I don’t really expect these to “rocket ship higher” based on a crummy “last-ditch effort” in equity markets.

In any case……watch for another leg lower here in risk on “Fed admission” of lower projected growth in the U.S – then prepare for a quick turn and “last-ditch effort” ( which could still run for weeks if not months ) before markets turn for good late Aug / early Sept.

For members – Real time trades to follow in your inbox. I’m holding all now and will likely add short SP 500 to average in “after Fed” tomorrow, with plans to blow out this trade a few days later.

The Fed’s Admission: Your Signal to Prepare for the Final Act

When central banks start admitting reality, that’s when smart money gets ready to move. Tomorrow’s Fed statement isn’t going to surprise anyone paying attention – they’ll align with what the IMF and World Bank already know. Growth is slowing, projections are getting slashed, and the party is winding down. This isn’t doom and gloom – it’s opportunity for those who see it coming.

Why This Correction Pattern Matters More Than Most

This third leg down completes a textbook correction pattern that’s been building for weeks. The beauty of this setup is its predictability – central bank intervention will create one final push higher, giving late-comers their last chance to exit and smart traders their final long opportunity before the real decline begins. Markets love these manufactured rallies because they create the illusion that everything’s fine while institutions quietly distribute their positions to retail investors.

The currency implications here are massive. When equity markets start their final descent in late August or early September, safe haven flows will dominate. The USD will strengthen against risk currencies, but not uniformly. EUR/USD and GBP/USD will face additional pressure from their own economic headwinds, while USD weakness in specific pairs will create tactical opportunities for those positioned correctly.

Currency Positioning for the Turn

The stop-and-reverse strategy on major pairs makes perfect sense here. EUR/USD and GBP/USD shorts at the bottom of this correction offer excellent risk-reward, especially with European growth concerns mounting. USD/CHF longs become attractive as safe haven demand increases, and selling USD/JPY aligns with the broader risk-off environment that’s coming.

Don’t expect commodity currencies to rocket higher during any equity bounce. Australia and Canada are facing their own structural headwinds, and temporary risk-on sentiment won’t be enough to overcome fundamental weakness. The smart play is staying flat on these pairs until the direction becomes clearer post-correction.

The September Reality Check

September has historically been brutal for equity markets, and this year sets up for a particularly nasty reversal. The combination of seasonal weakness, Fed policy constraints, and deteriorating global growth creates a perfect storm for significant downside. Buy-and-hold investors clinging to hope will face months or years of underperformance while active traders capitalize on volatility.

This isn’t about being bearish for the sake of it – it’s about recognizing cycles and positioning accordingly. The market dynamics are shifting from growth-driven rallies to central bank-manufactured bounces, and those bounces get weaker and shorter over time. Smart money understands this transition and positions for both the temporary rallies and the inevitable decline.

Risk Management in Volatile Times

Adding to SP 500 shorts after the Fed statement makes tactical sense, but averaging in rather than going all-in protects against any surprise hawkish rhetoric. The plan to close these positions during the bounce shows proper trade management – taking profits when available rather than hoping for maximum theoretical gains.

The real money will be made on the short side once this correction runs its course. Markets that fall slowly and grind lower create the best short-selling environments because volatility stays elevated while direction remains consistently down. This isn’t a crash scenario – it’s a systematic repricing that could last months and create numerous trading opportunities for those positioned correctly.

Portfolio protection becomes critical over the next month. This final bounce higher represents the last good exit point for long-term equity positions before the serious decline begins. Missing this opportunity means accepting significant drawdowns and tying up capital that could generate better returns through active short-side trading strategies.