What's Important

I chose to forgo the A.M. Update in part because I think there's something much more important to your financial future than a morning update and if this site is about anything, it's about giving you the tools, the concepts and anything else I can so you can succeed in the market without the typical newsletter "Guru" site, telling you what to do at every step. I've never wanted that for Wolf on Wall Street firstly because there's no such thing as a guru, it's a simple thing to be one, just make your readers believe everything you say with 100% conviction and it doesn't matter how often you are wrong (Look at Cramer), it's the certainty that traders crave. I'd prefer you were filled with knowledge that you can use without gurus, understanding the market is NEVER about certainty, it's about probabilities. This is what separates us from common gamblers.

I went to bed last night and woke up this morning to a flood of emails of thanks, or in some cases amazement, stories of members who have taken the information of the last several days of this week and made a pile of money off yesterday's move which are my favorite emails, when members use the information and apply it toward their chosen trading method and profit from it rather than just listening to what we expect to happen.

Thank you all for the kind emails and comments, it renews my purpose in doing what I do to see so many appreciate it and it lifts the spirits so I do thank you.

However after sleeping on it, this is my job and what I'm suppose to do. What is of greater concern to me right now is that we not pass this moment by with amazement at how well it worked as we forecasted, but why.

Since the first day I put the theory forward of what I expected the market to do next last Friday and started fleshing out the scenario Saturday and then started collecting proof like HYG accumulation Monday and Tuesday, I have said one thing about where we are going and why, even which index to watch as a gauge of where we are...

ABOVE IWM $118 and look where we are this morning...

to the right is the 6 week range which was the initial "CONCEPT" behind everything that followed. The forecast was for a head fake move ABOVE the range around IWM $118, that does not mean right at IWM $118, it means it must move above that level, that is why I have always said either "Above IWM $118" or " > $118" or "$118 +". Just as the very last sentence I wrote yesterday in Beating the market takes "Considerable Patience"...

"If anything pops up in futures tonight (Which I don't expect), I'll post it and let you know, otherwise, keep your eye on IWM $118+ that's the finish line for this head fake move."

This is just part of the point I'm trying to illustrate. 

There was news last night that is being credited in some places with the market's move higher in the overnight session, the Swiss Central Bank's move toward NIRP or negative interest deposit rates. However the same source concluded in their own sort of amazement at this move,

"Whatever the reason behind the latest epic, V-shaped move in stocks, US equity futures are now some 70 points higher from where they were just 48 hours ago,"

Indeed, whatever the reason, as I often say, 3C shows us the money flow, not the reasons, but whatever the reason, we knew since late last week the IWM was going above the range and thus above IWM $118. By the time the reason is clear, which likely has little to do with the Swiss Central Bank, it's too late to profit from the move. The IWM was going to that level no matter what happened overnight which was Friday's forecast, 5 days in advance of the actual move and all based on our concepts, no proof at that point.

We also know "V" reversals , a reversal EVENT rather than a reversal process are much more rare, there was a reason this occurred.

Yesterday was the STRONGEST  Small Cap Short Squeeze in 3 years! What are the small caps ? The Russell 2000 or IWM.

Looking back on the forecasting of this entire move, there's one thing I want to be sure you understand so we don't just look at this as a great forecasting call, but so we understand why it was so easy to call when so many others missed it completely, it's one of our strongest concepts that we use to make many calls including what comes AFTER the IWM breaks above $118 on a HEAD FAKE MOVE.

Instead of going through every post of the last 5-days that almost all carried the reason or parts of it, I'll just go to one of the simpler ones that has the reason this was a "V" shaped move, the reason HYG is no longer needed (we are already seeing the ramping lever see distribution) and what will come next which was always a part of the forecast (we've only seen the first part of the forecast)...

Monday, December 15th's forecast in the post, IWM Crazy Ivan

Monday the IWM for the first time in 6 trading weeks broke a range that had only moved about +0.38%  from the start of the range to the close on Friday, AS FLAT AS YOU GET AND AS OBVIOUS A RANGE AS YOU CAN ASK FOR. Yet the very next day after we put out the expectation of what was to come this week in the IWM, over more than 30 days of staying in the range, the IWM broke below it looking like this as of Monday's close.

A break below the range on increasing volume as shorts saw the range as well as anyone else, the range was the entire idea of our forecast first based on mass psychology and then on evidence we collected that supported the forecast, but this move below was very important as 6 weeks of range bound trade was broken and if we know anything of technical traders it is that they chase price confirmation meaning a whole slew of long stops were hit and a whole slew of new IWM shorts entered the market. 

What will the market do with these new shorts who chased price with their stops just inside or above the range? It's the Crazy Ivan concept. It's also why I offered few short trades last week as the signals weren't there, although we didn't know why at the time, we just knew the signals weren't there and looking back, had you entered a short last week it would have been near the lows, only to see it at a large loss as of yesterday's close.

I'll leave the article to you, it explains the concept very well, but as pointed out in the post, IWM Crazy Ivan,

"If you understand how a false breakout of a stop-run, head fake move produces reversal momentum, than you'll understand how a break below the IWM's range support would give it the momentum to make an upside reversal and breakout, just like a Crazy Ivan (shakeout) , a turn 180 degrees opposite the intended direction and then another turn 180 degrees again back toward intended direction.

We've only talked about an upside head fake move in the IWM above the range which is meant to serve as downside reversal momentum, but we didn't address the inherent weakness in IWM that has kept it from making such a breakout for 6 trading weeks. A Crazy Ivan, initial downside head fake would help IWM get the momentum to make the upside breakout"

I unfortunately don't have the time to explain the entire thing again and don't need to as the entire article is right there, with the reasons we were to see the strongest short squeeze in small caps in 3 years as market volatility ALWAYS picks up on a breaking top and why this head fake move to the downside was so instrumental in yesterday's move that just needed a few levers like HYG, TLT/Yields, VIX and USD/JPY to get the upside move going just long enough for the short squeeze to take over, in fact it was posted in  Levers In Action. This post showed why HYG, TLT, VIX and USD/JPY were needed to ignite momentum and after, the short squeeze which was already set up with the Crazy Ivan head fake below the range, would take over upside momentum after the levers ignited it.

I hope you investigate the articles more for yourself because they'll tell you what's coming next.

I never wanted this site to be a "I'm a guru , follow me" which is exactly why I explain every thing in detail with the objective evidence/charts to back it up. I want you to understand the concepts so you may apply them as tools in your trading tool box as you see fit. I'm not a guru, and I don't want this site to be anything like that. This is why I have spent the time this morning making sure you know where to look to understand not only why we are here, but where we are going next.

As for the morning update, I'll post what's important next. I just feel for your long term success in the market, this post far outweighs anything I could post in the morning update and I hope you find the answers, if you need help in understanding, as always, email me and I'll do my best to make the concepts clear. 

Congratulations to those of you who made a bunch of money yesterday and to those of you who will use this move to make a lot more. Thanks again for all of the emails of support.