The paper-thin wall that could CRASH this market

Don Kaufman here.

Let me tell you a story about walls.

There's a wall over here, okay? It's block construction. You'd need a 20-pound sledgehammer to get through it because there's something substantial behind it — liquidity.

Then there's the wall in today's marketplace. Paper thin. You could literally poke your finger right through it.

Why? Because market making firms don't want to come in right now. They don't want to make tight markets.

And it's not because they want to rip people off. That whole thought process is ridiculous.

It's because a few of them got their butt handed to them in the last couple weeks.

When you make a really tight market and the server is driving this marketplace boom-boom-boom, all of a sudden a tweet comes out and you get picked off.

The liquidity remains thin. Relatively thin. And that thinner liquidity means there's nothing solid behind the market.

So what happens when real size comes in? It pushes right through like butter.

This is why you need to be careful with your position sizing right now. When I say there's no size, like price is still moving but without size behind it, it would only take one trader to come in with some substantiation and this marketplace looks completely different.

I'm telling you this because I see too many people taking unnecessary risks in this environment. When you see a lack of size like we're seeing now, you gotta sit on your hands a little.

Volume is gonna come back basically out of nowhere. And it is gonna rock this marketplace.

By the way, check the VVIX — volatility is picking its head back up. There's definitely traders positioning right now for the unknown.

So be patient. Size appropriately. And keep those volatility helmets strapped on tight.

To your success,

Don Kaufman

P.S. I'll be blunt - most traders are getting slaughtered in this low-volume environment. If you're tired of being on the wrong side of every move, click here to join us. But only if you can handle the truth about what's really happening out there. The rest can keep donating to market makers.

The paper-thin wall that could CRASH this market

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