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EDITOR'S NOTE: |
I'm going live today at 2 PM ET for Shadow Clocks. This is where you'll see the exact timing signals that separate the insiders from the retail crowd - the stuff I used to help win a $230,000 courtroom case. We're talking about spotting when the clocks flip flows from retail to insiders so you can stop trading against the timers and finally line up with them. |
Shadow Clocks
Thursday September 4, 2025
2 PM ET |
JOIN ROOM HERE
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Don Kaufman here. |
You know what I witnessed this morning? Mass stupidity in the marketplace. |
Meta was up in pre-market, so what happens? |
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Traders identified it and here they come - ripping in to buy calls like it's some brilliant discovery. Amazon's doing the same thing. |
Broadcom too. It's up in pre-market, so we're going to buy some calls. Let's do this. |
That's what is going on. And it's really hard to make money on the retail side because of the speed of this. |
Here's why you're getting crushed: You're trading one contract, maybe 10 at most. You make 5 cents and you're like, "whatever man, it's five bucks." Even on a 10-lot, it's 50 bucks after transaction costs. And the risk you took? It was a lot. |
Now imagine having an algorithm. The algorithm attacks and buys, I don't know, 10,000 calls. It only has to make a few pennies to make the trade worthwhile. That's tens of thousands of dollars of profitability in a given day. |
The Circle of Ridiculous Life |
But here's what most retail traders don't understand about these squeezes - and this is where it gets really interesting. |
When you buy calls as retail, you think: I buy, I make money, I sell that instrument, I'm out. That's not how it works with algorithmic squeezes. |
They're buying calls AND sometimes selling shares of stock to hedge. As they buy calls, it forces market makers to sell them calls and then buy stock. Since market makers are buying stock, the monkeys that bought the calls in the first place are obviously on the other side of it. |
It's one big circle of ridiculous life. |
If you sell the calls, it could actually cause the stock to turn around and go back down. So they don't. They hedge differently. They think differently. They operate with advantages you'll never have. |
Why Technical Analysis Misses the Point |
People get all caught up in MACDs and Fibonacci's and Bollinger bands. In the end, a couple of monkeys with algorithms are going hog wild, doing exactly this process. |
You'll see people looking at these charts trying to extrapolate meaning. There's nothing there. |
Amazon just added to its squeeze this morning - not because of some technical setup, but because the algorithm identified pre-market movement and attacked. |
Holy crap, Amazon could absolutely clip its highs in the days to come. Not because of chart patterns, but because of this mechanical process most retail traders don't even know exists. |
The First Time in Years |
You know what's crazy? Yesterday I didn't execute one trade in any of my accounts. That's the first time I can recall not executing a trade in years. YEARS. |
I was looking at earnings trades, thinking about setups, and I'm like, "Nope. We're in the middle of maybe a transition back to volatility. Not gonna do this, not gonna do that." |
This morning I'm looking at the same algorithm game - let's buy what's hot - and I'm not jumping into the middle of traffic. That's all this really is. You're gonna play Frogger and you may very well lose a limb. |
Your Retail Advantages (Yes, They Exist) |
So what do we do? In this business, we as retail have advantages and disadvantages. |
The algorithms need massive volume to make their pennies work. You don't. |
You can wait for real setups instead of chasing pre-market gaps. You can hold positions longer than algorithmic scalping allows. You can take advantage of the volatility they create rather than trying to compete with their speed. |
Most importantly, you can recognize when you're watching algorithm games versus real market movement. |
When you see that "mass stupidity" pattern - pre-market movement leading to immediate call buying - you know what you're looking at. |
The Reality Check |
Look, I've been doing this for over 20 years. When someone with my experience chooses not to trade because "this is crap," that should tell you something about the current environment. |
It is what it is. But at least now you know what "it" actually is. |
To your success, |
Don Kaufman |
P.S. I'll see you at 2pm ET, Shadow Clocks. I promise you've never seen this before. |
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