Crazy Ivan
Corona Del Mar, CA
Howdy Friend!
I started trading in 1997. In October that year, I was treated to my first “Crazy Ivan”…that's when the markets suddenly crater from some unexpected crisis…only to resume its upwards trend in short order.
I learned the term from the movie “The Hunt for Red October.”
A “Crazy Ivan” is a maneuver used by submarines, particularly during the Cold War by Soviet submarines. This maneuver involves a sudden and sharp turn, typically 180 degrees, to check the rear of the submarine for enemy vessels or trailing torpedoes.
In October, 1997 I watched as the S&P 500 fell fast and hard, breaking “support.”
The next morning it gapped down several percent. I recall being fearful because of the “Asian Contagion” was threatening to collapse South Korea.
It turned out to be a learning experience about mean reversion because stocks rallied hard afterwards. That support break was more like a trampoline.
In fact, the days with the biggest gains come after the days with the biggest losses. That should be obvious, but for some reason, most traders do everything backwards. I know I certainly did in the beginning.
A lot of folks are still bearish on the markets despite the large rally and a great reason to be bullish (AGI and super-intelligence is coming fast).
This Tweet on X pretty much sums it up:
Stick to the plan. Only trade what you test. Ignore news. Hope it helps!
Trade smart,
Dan “Prince of Proof” Murphy
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