The Black Swan World Series

One of my fondest memories I have of growing up is watching the Cubs with my Dad right before bed.

He would lay down on the floor below our old tube TV (which was on sat about 3 feet off the ground not WAY up high like the Wall TV’s do now) with his head laying on a folded up couch pillow.

I would lay on his right arm watching the game. knowing that Shawon Dunston was going to strike out to a curve ball low and away.  

As my bed time loomed, he would say to me “you can go to bed at 9 or at the end of the inning,  whichever comes 1st.”  

I would always root for 9, cause invariably he would let me finish the inning any way (I think mostly cause he wanted to finish the inning uninterrupted).  

Needless to say, I became a lifelong Cubs fan.  Every year, I would be so hopeful for the year. I would think ‘maybe this year!’  

But in the back of my head…I always knew…They were going to stink.

Once a decade or so the Cubs would really get my hopes up and threaten to or even MAKE the playoffs.

Invariably, they would blow it.  In fact, in 2003 when the Cubs were up 3-1 against the Marlins,  the ‘odds’ said the Cubs had over 80% odds to win the series.  

Yet, in my heart and head, I knew the odds were WAY worse.  I fully expected the Cubs to lose, and they did.

Then 2016 happened.  The Cubs turned it around and won a series that they were down 3-1 against long odds.

As a fan, I had a Black Swan event.

Markets are almost exactly the same.  

It’s now been over 10 years since we had a really protracted sell off.  Many of the traders that are in the business now were not TRADING in 2008.

We have had some real threats of a crazy sell off.  

We got real close to one in 2011,  when the VIX was backward for almost 2 months.  But did not have a true ‘crash’ in any way.

In 2015, the market had a ‘flash crash’ and a lot of people got beat BAD, but there was no follow through.

2018 saw a market that had a ‘volpocolypse’ but the S&P 500 only had a mild tanking.

Basically, the market is like “Mark the Cub fan”.

“Sure a Black Swan event COULD happen, but it almost certainly won’t.”

“The Cubs will blow it!….Buy the Dip!”

Even with how good the Cubs were in 2016, I did NOT expect them to win…right now,  despite how bad things are…

I do not think this market is ready for a Black Swan event…It probably won’t happen.

But, in the past 12 years I have seen 3 occasions with the potential for a real giant 2008 like market correction, including THIS selloff.

Will it happen?  The Cubs probably won’t win the world series…

but they could.

Your Only Option,

Mark

PS:  Stay tuned for a HUGE upcoming announcement from me

PPS:  In my next Blog I will discuss trading in VIX

PPPS:  Expect something imminent over the weekend

PPPPS:  If you are reading this  Love you Dad, thanks!

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