Generally a crash is from low liquidity, so, maybe with lots of debt about, mortgages, student, household debt and fragile employment along with China tariffs, once the bearish movement takes hold, if volatility is high enough, algo's get turned off and all the big whales on ET stop buying.
I did borrow money in mid-2009 to buy rental property in my area. I also bought a basket of stocks in Feb 2009 (a month before the final low) but sold most of it in mid-2010. Live and learn...
Have you looked at your history to see what percentage of your trades are profitable and what your expectancy is? I'm always curious about statements like this. My best strategy has a win rate of just over 50%. Also of note is that the hedge fund Renaissance generates profits on just over 50% of its trades as well.
Minus the stupid countertrend trades, my win rate is around 60-70%. But that's not necessarily the best stat to be concerned. What I'm working on is holding onto my winners so I can have a bigger R multiple. 2R or 3R would be nice. I'm no where near Rentech. Just a daytrader here. lol
Well many here do not even know what R is, so you are already ahead SR 60-70 is very good. What is your expectancy?
Nobody can predict, but.... small recent S&P candles show buying pressure is slowing. I'm deeply skeptical about an upside continuation continuing up to 3200 without a pullback or reversal soon; we're right under 3100 resistance. + I will start heavily buying SQQQ TVIX SOXS VXX etc once S&P loses support under 3030. (I'm currently long small size in several; I took small stops scaling out on recent move down). + I will add to inverse winners at 2day high breakouts & above minor upside gaps. + imo the VIX is way overdone here at 12; MACD almost crossing back up. The S&P may be on thin ice; when selling inevitably comes back it'll move fast.
The SPY currently yields a 1.8% dividend. That's the only return that you can kind of count on and even then it's not guaranteed. Forward P/E has not been realized. It's just a guess.
10 year Treasury is also yielding 1.8%. The risk of 10 year Treasury/medium term bonds losing principal is non zero.
New Market High. Huge Sell Off. Who cares? Only traders trying to predict a market move. That’s cute. I bet you still get butterflies when your SL is going to get hit and get mad when you lose trades