𝗣𝗢𝗦𝗜𝗧𝗜𝗢𝗡𝗜𝗡𝗚: 𝗧𝗛𝗘 𝗠𝗢𝗦𝗧 𝗜𝗠𝗣𝗢𝗥𝗧𝗔𝗡𝗧 𝗧𝗛𝗜𝗡𝗚 𝗬𝗢𝗨 𝗡𝗘𝗘𝗗 𝗧𝗢 𝗨𝗡𝗗𝗘𝗥𝗦𝗧𝗔𝗡𝗗 The most important thing to understand about a stock, an event, or the entire market is positioning. Where are all the players already positioned? This does not mean the event isn’t real. It doesn’t mean the macro situation isn’t bad or that the war with Iran isn’t dangerous. It means markets do not move based only on whether the news is good or bad. Markets move based on whether there are still buyers or sellers left to act on that news. We saw it at peak fear during the war with Iran. We saw it during the financial crisis. And we see it every day in individual stocks. You don’t even have to go that far. Look at the current obsession with a 10% drawdown. Everyone keeps repeating that every midterm-election year had a 10% drawdown. That fear has already pushed hedge-fund exposure to extremely low levels. That positioning is more important than the prediction itself. If positioning is already extremely bearish, much of the fear is already reflected in the market. This does not mean the market cannot fall another 2%, 3%, or 4%. It means many potential sellers have already sold. The supply of new sellers is becoming exhausted. At the end of the day, markets fall because people sell and rise because people buy. If almost everyone who wanted to sell has already sold, even terrible news may struggle to push the market much lower. You need new sellers, not another person on television repeating the same bearish argument. The opposite is equally important. If everyone is optimistic and already positioned max long, who is left to buy? $TSLA is a great example. Tesla may be a great company, and we have been hearing that robotics are coming for the past four years, yet the stock has gone nowhere. Why? Because everyone who loves Tesla is already in the stock. Everyone who believes in robotics is already in the stock. The story may eventually be right, but if everyone is already positioned for it, there are very few new buyers left to push the stock higher. The entire market cycle can be explained through positioning: 𝗕𝘂𝗹𝗹 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗮𝗿𝗲 𝗯𝗼𝗿𝗻 𝗶𝗻 𝗽𝗲𝘀𝘀𝗶𝗺𝗶𝘀𝗺, when almost everyone has already sold. 𝗧𝗵𝗲𝘆 𝗴𝗿𝗼𝘄 𝗼𝗻 𝘀𝗸𝗲𝗽𝘁𝗶𝗰𝗶𝘀𝗺, as cautious investors slowly begin buying. 𝗧𝗵𝗲𝘆 𝗺𝗮𝘁𝘂𝗿𝗲 𝗼𝗻 𝗼𝗽𝘁𝗶𝗺𝗶𝘀𝗺, when the majority is already invested. 𝗔𝗻𝗱 𝘁𝗵𝗲𝘆 𝗱𝗶𝗲 𝗶𝗻 𝗲𝘂𝗽𝗵𝗼𝗿𝗶𝗮, when everyone is positioned max long and there is nobody left to buy. So, if there is one thing you should learn to understand, it is this: 𝗣𝗢𝗦𝗜𝗧𝗜𝗢𝗡𝗜𝗡𝗚. 𝗡𝗢𝗧 𝗝𝗨𝗦𝗧 𝗪𝗛𝗔𝗧 𝗜𝗦 𝗛𝗔𝗣𝗣𝗘𝗡𝗜𝗡𝗚, 𝗕𝗨𝗧 𝗪𝗛𝗢 𝗛𝗔𝗦 𝗔𝗟𝗥𝗘𝗔𝗗𝗬 𝗔𝗖𝗧𝗘𝗗 𝗢𝗡 𝗜𝗧.