Excel Spread Sheet Statistics and the IWM

With calculating expected earning on a stock by calculating the mean profits per day for a certain term we know where we expect the price to be based on history. Now you also can only add the positive days, or for the sake of this exercise take only negative days, and we receive what I call worst case scenarios. Then we can also calculate the Average True Range of an asset and generate a 4 week price target of that. When you look at AFTER 4 WEEKS in the image we have three prices. Then we generate the average of this and have a price target where the stock SHOULD NOT BE within 4 weeks! Then we subtract the current price of the underlaying from that and we get the Deviation from the price. We then look up how many times in the past year a deviation of 18 from the price was hit within 4 weeks and calculate the probability of those occurrences. The calculated deviation of the STRIKE of the short call was hit 3.08%. This means that when you write a call option at that level your win ratio is about 97%!

More Signs of a Recession, Short the Market

When we take a look at the past 22 years we can see when ever the 10 Year Treasury Note hit a certain level and the yield curve reversed and inverted the crisis hit. The QQQ like other ETFs dropped significantly. The reason this did not happen in late 2018 was because of the implementation the QE, Quantitative Easing, after the financial crisis. Increasing debt, is like printing money for Covid Stimmies and “Free Government Money” or excessive social programs by buying Mortgage Backed Assets and Bonds with it. This increases the Money Stock M2 and leads to inflation. Why? Because more money is chasing fewer goods. Money stock increase should only walk along GDP increase, nationally or globally for the USD. Now that the 10 Year Note is about to hit 2.4% in my opinion the chances are great to trigger the market crash we are all waiting for.

US is in a Recession - Keep Shorting the Market

But one of the most important is the INVERTED YIELD CURVE. Every time you can get more interests for short term assets than for long term assets you invert the interest curve. The only thing is that we call the interest paid on bonds and notes YIELDS. So the yield curve inverts. Below you see what I mean by that.