 | Weekend |
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Don Kaufman doesn't chase headlines. He's positioned three days before they hit. |
The signal his team built flagged every major runner last month before the crowd knew they existed. |
Don's pulling back the curtain in a live session that won't be repeated. |
👉 Join Don November 11th at 2PM EST — see the signal before the story breaks. |
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Do You Want to Get Punched in the Face? |
By Prof. Jeffrey Bierman, CMT
I take my daughter to the dojo three nights a week. |
Monday, Tuesday, Thursday. Karate lessons. She's twelve now and getting serious about it. |
The sensei is a stud. Six foot four. Second degree black belt. Great guy. Really knows his stuff. |
Every month they give the kids a word to learn. A principle to carry through their training. Something bigger than just kicks and punches. |
November's word is respect. |
I drove home thinking about that word after Wednesday's class. Respect. Then I walked into Thursday's trading session and watched the market completely ignore every warning signal flashing red. |
No respect for technical systems. No respect for valuation limits. No respect for what happens when the people propping this thing up finally step away. |
That's when it clicked. |
Trading is exactly like martial arts. You can ignore the principles. You can fight the system. You can pretend the rules don't apply to you. |
Until you get punched in the face. |
What Alexander Elder Taught Me About Respect |
I spent this week teaching the Elder Impulse System. |
Alexander Elder is one of the five greatest technicians of all time. Created systems that made fortunes for people who actually followed them. |
The beauty of his system is simplicity. Green means buy. Red means sell. Blue means don't trade. |
That's it. |
But here's what kills me. Traders look at that red signal and think they're smarter than Elder. They see a stock screaming "sell me" and they buy anyway because they've got a hunch. They've got a feeling. They think this time is different. |
You know what I told my Genesis COG members this week? You've got to learn respect. |
Respect what these technicians have created. They're filthy rich. They know something you don't. |
When Elder's system says sell, you sell. You don't argue. You don't negotiate. You don't wait for confirmation from CNBC. |
The Genesis Cog Scanner works the same way. It's built on proven principles. Momentum thresholds that have worked for decades. Volume patterns that reveal algorithmic behavior before price confirms the move. |
But only if you respect what it's telling you. |
That's individual stocks though. Individual positions where ignoring the signal costs you money on that trade. But there's a bigger disrespect happening right now. One that affects every position. Every portfolio. Every account. |
The people running this market have no respect for what comes after them. |
The Flood That Always Follows |
There's a French phrase that perfectly captures what I'm watching unfold. Après moi, le déluge. |
After me, the flood. |
King Louis XV said it. Or maybe his mistress said it. History isn't sure. But the meaning is crystal clear. |
After my reign ends, after I'm gone, disaster will follow. But that's not my problem. I got mine. Let the next guy deal with the consequences. |
Fourteen years after Louis died, the French Revolution swept away everything. His son lost his head. The entire old order collapsed. The flood came exactly as predicted. |
That phrase keeps running through my head every time Jerome Powell speaks. |
Powell is the king of this market. Not Trump. Not Jensen Huang. Not Tim Cook. Powell runs this show. The Fed pumps money. The algorithms respond. That's the only game in town. |
But here's what nobody's asking: What happens after Powell? |
He's already cutting rates in a market 100% overvalued by every metric. He's stimulating into a bubble while claiming everything's fine. He's manipulating this market higher with no regard for the structural damage he's creating. |
Powell doesn't care what happens when he's gone. He doesn't care about the correction that follows. He'll be out. Retired. Writing books. Collecting speaking fees. |
The flood comes later. On someone else's shift. |
I give it through February maybe. The market sits here. Goes up a hundred. Down two hundred. Doesn't fall much because it's manipulated. But once Powell starts making his way out, once Trump replaces him with his own people, the whole thing unwinds. |
Après moi, le déluge. |
And the scary part? Powell's not alone in seeing it. Some of the smartest people on Wall Street are issuing the same warning. They're just using different words. |
When Bridgewater Calls It a Bubble |
Ray Dalio put out an interview this week that confirmed everything I've been saying. He annoys me sometimes. Acts like some religious prophet when he's not. |
But I respect the guy. He built Bridgewater Associates into the largest hedge fund in the world. You can't argue with that track record. You have to give respect where respect is earned. |
His interview was called "Stimulating Into a Bubble." |
Perfect title. That's exactly what Powell's doing. |
Dalio's warning is stark. The Fed halted quantitative tightening. They're not responding to economic weakness. They're creating weakness by inflating a bubble that has no fundamental support. |
When you stimulate into a bubble instead of responding to organic demand, you're building a structure with no foundation. The higher it goes, the harder it falls. |
This isn't some fringe theory. This is the largest hedge fund manager in the world telling you the Fed is creating the conditions for disaster. And the market's response? Rally another 70 points. |
That's passengers ordering another round of drinks while the engine room floods. |
The evidence Dalio's pointing to is showing up everywhere now. Airbnb just guided lower. People aren't traveling. The consumer is tapped out. |
Even the budget travelers who use Airbnb instead of hotels are cutting back. That's not a recession warning. That's a recession confirmation. |
The bifurcation Dalio talks about is real. Tech rips higher. Financials go nowhere. Everything else bleeds. That's not a healthy market. That's a K-shaped economy where the top one percent does great while everyone else drowns. |
And here's what really gets me: the next generation of investors is walking straight into this with no preparation whatsoever. |
What I'm Seeing in the Classroom |
Friday mornings I teach corporate finance at Loyola. This semester they threw 28 students at me. |
Normally I teach ten. Ten is perfect. I know everyone's name. I can challenge them individually. We dig deep into applied portfolio management. Real work. Not theory. |
Twenty-eight is chaos. I'm walking in there trying to scare ten of them out of the class because the workload is massive. |
But here's what really bothers me about teaching right now. These kids are inheriting the exact bubble Dalio just warned about. And nobody's preparing them for what's coming. |
They've never seen a real correction. They don't know what 2008 looked like. They weren't trading in 2000. They thought Friday's 227-point drop was a big deal. |
It wasn't. It was day one. |
I show them the data. The average annual drawdown hits 16.3%. Not the median. The average. Which means we're mathematically owed at least 15% more pain from current levels just to hit normal. |
And we're not in normal territory. We're in historic overvaluation territory. |
They stare at me like I'm speaking a foreign language. |
That's the problem. Everyone's been conditioned. Buy every dip. Anchor to recent highs. Think 6,500 is a bargain because we were at 6,700 last week. |
The algorithms don't anchor. They calculate probability every millisecond. While you're married to your cost basis, the machines are preparing for mean reversion. |
I look at these students and think about what they're walking into. A market held up entirely by Fed manipulation. Consumer spending concentrated among the wealthy. Discretionary sectors already bleeding. And nobody teaching them respect for what happens when bubbles pop. |
They're learning portfolio theory in a market that has nothing to do with fundamentals. That's like teaching someone to swim in calm water and then pushing them into a hurricane. |
The Consumer Stress Nobody Wants to Acknowledge |
The cracks are everywhere once you start looking. Every day I hear people complain. At the gym. At the supermarket. My students mention it. Everybody tells me the same thing. |
Prices aren't coming down. Anywhere. |
It's called affordability. And it's breaking people. |
Home Depot missed earnings. Travelers and Progressive are getting destroyed because people are dropping insurance they can't afford. Airlines are cutting staff. |
The Chipotle indicator is at 52-week lows. Think about that. Even the budget-conscious consumers who choose Chipotle over sit-down restaurants are pulling back. |
When people at every income level are cutting discretionary spending simultaneously, that's not a soft patch. That's structural damage. |
Powell tells us everything's fine. Just uneven strength. Spending concentrated among higher-income households. |
Translation: The one percent is doing great. Everyone else is drowning. And Powell doesn't care because that's not his problem. He got his. Let someone else deal with the flood. |
This is what happens when the people running the system have no respect for consequences. No respect for what comes after their reign ends. No respect for the millions of investors who'll get wiped out when this unwinds. |
What Respect Actually Means in This Market |
My daughter's sensei doesn't teach respect as some abstract virtue. |
He teaches it as survival. You respect your opponent's ability. You respect your own limitations. You respect the techniques that work even when you don't understand why they work. |
Trading requires the same discipline. |
Respect the Elder Impulse System when it says sell. Respect Dalio's warnings about stimulating into bubbles. Respect the consumer stress showing up in every sector that depends on discretionary spending. |
Most importantly, respect your own capital enough to protect it. |
I'm raising cash. Lightening long exposure. Holding shorts in expensive names that have no business trading at these valuations. |
That doesn't mean I'm predicting the exact day this breaks. Nobody can. I can't predict the hour. |
But I know what happens after Powell runs out of bullets. After his crew gets replaced. After the last rate cut gets priced in and the market realizes there's no more support coming. |
Après moi, le déluge. |
The difference between getting caught in the flood and being prepared for it comes down to respect. |
Respect for proven systems. Respect for warning signs. Respect for risk management that protects capital when everyone else is chasing returns. |
The Genesis COG System tracks these systematic breakdowns before they cascade. It monitors momentum thresholds that reveal when algorithmic support weakens. It identifies the exact levels where machines shift from defending positions to attacking them. |
When the flood comes, the algorithms position ahead of the break. They always do. |
The question is whether you'll respect the warnings enough to position with them instead of against them. |
Have a good weekend. Monday's coming fast. |
Professor Jeffrey Bierman
Creator of the Genesis COG System |
