Until Friday afternoon (3:00 p.m. London time), everything seemed calm—stocks were climbing, leverage was high, and optimism was rampant. But then came the storm:

• China announced export controls on rare earth metals early Friday morning.
• Trump tweeted threats of canceling a meeting with China, triggering a broad sell-off.
• S&P 500 dropped 200 points, and NASDAQ plunged.
• Post-close, Trump announced 100% tariffs on China, intensifying the panic.

The crypto market was hit hardest:

• Bitcoin fell from $115K to $105K.
• Altcoins dropped 10–50%.
• Liquidity dried up as ETF market makers were offline.
• Over 1.5 to 2 million retail traders lost money—many leveraged 5x or more.

“Crypto is still far from being a mature, regulated asset class.”

⚠️ The Leverage Trap

Massive use of options and leverage across asset classes has created a fragile environment. When assets drop even slightly, leveraged positions get wiped out.

• Retail traders are drawn to shiny, high-risk trades.
• Risk management is often ignored—but it’s crucial.
• If you’re leveraged 10x and the asset drops 10%, you’re out.

“Risk management isn’t sexy—but it’s what keeps you in the game.”

📊 Week-to-Date Performance Snapshot

Asset Classes

• Stocks: Down ~2% (except Japan, which rallied post-election).
• Crypto: Bitcoin -7%, Ethereum -15%.
• Commodities: WTI below $60, Copper weak, Gold & Silver strong.
• Currencies: USD strengthened, JPY weakened.

Industries

• Struggling: Oil services, home builders, retail, gaming.
• Resilient: Gold, silver, mining, utilities, treasuries.

Sectors

• Only Utilities & Consumer Staples held steady.
• Tech: Still leading, down just 2.2% vs. market’s 2.4%.

📉 Rates, Volatility & Fed Expectations

• Bond yields fell ~10 bps as investors fled to safety.
• Fed rate cuts expected: 25 bps in October and December.
• VIX spiked to 21.66%, signaling rising short-term fear.

📈 Technical Analysis Highlights

• S&P & NASDAQ: Sharp sell-offs, testing 50-day moving averages.
• WTI Crude: Below $60—pressure on producers.
• Gold & Silver: Strong inflows, potential new highs.
• USD/JPY: Divergence driven by dovish Japanese policy.

  

  USDJPY (lhs) vs U.S. 10y – JP 10y (rhs)

🧠 Macro & Earnings Season Preview

• Earnings kickoff: JP Morgan, Goldman Sachs, Citi.
• Volatility Watch: Last season saw realized volatility exceed implied—first time in 18 years.
• Retail flows: $100B into stocks last week—often a near-term top signal.

🧨 Catalysts to Watch

• Trump Tariffs: Expect headlines and potential softening of tone.
• China Relations: Crucial for market sentiment.
• CPI & Retail Sales: Delayed due to U.S. government shutdown.
• Earnings Season: Financials lead the way.

💬 Final Thoughts

“This week was a masterclass in why risk management matters. Leverage can amplify gains—but it can also wipe you out. If you want to learn more, join our Discord, subscribe to the 4×4 video series, or reach out for mentoring.”

If you’d like to join or explore our 30+ private trading channels for $74.99/month, now’s the time.

https://discord.com/invite/Yf42SgAx7f

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For any questions or to join our mentoring sessions, email us at

Greg📩 Contact: greg@duponttrading.com

Have a good Trading Week!