3.18.

20

We are limit and not even at the low.

DAX, when a market has more than 7 closes on 5 SSMA, doesn’t mean high prob trade that it will keep
trending. 50 will continue, 50 will not. Stat is not profound. But when trending 5 SMA, for example on
day seven. We blindly shorted this market on day 7, and look 2 weeks, 3 weeks. And what we will see, if
this was the low in the DAX, pretty rare that it makes a V. 50% percent of time a small loss, but 50% it
will be a lower. When these trends do persist, people will get into trouble that buying and waiting for a
reaction. People need to be mindful of the fact that market can grind lower (or higher). DAX is in day 9
of 5 SMA closes below. Need to be very respectful of this trend. These end in a few different ways. (1)
the market comes into balance, if we didn’t continue to make higher highs and higher lows, market
could equally break to the downside; (2) or a wide range reversal, v spike.

Last night we had a bear flag in the DAX, waiting for a third push down. Watch for this when S&P opens.

In the bunds, we had a pause (points to retracement in down trend).

30yr—looking for a bull flag on the 30 minute. The volatility breakout system went short. We had range
expansion, then the play is to buy the test of the previous low. This already happened overnight, so we
are looking to make a long trade after yesterday’s correction down. We need to see somekind of
structure.

Soybeans, had a U turn pattern. I don’t think we will be able to play these today. The play was a buy
divergence—we were looking for a trade up to 5 SMA, but we already tested this overnight .

Big pixture dollar chart. We made it above 100 (trading around 134). We did make it back above 100. If
we look in monthly perspective, no reason why can’t continue up. Adding pressure to other currency.
Euro is primary inverse of dollar because it is the biggest component.

Aussie dollar. We have a channeling market. We are “one time framing” which is the strongest type of
trend. Called ths because making successive higher highs and higher lows. We already looked at MRCI
charts. If you go to, my source of longterm data (best out there). Go to MRCI and scroll to free
commodity charts. Look at the 2008 low, because passing through the previous low, if you fall straight
through, or spike through and then come back up, or rotate. Linda says more likely either to consolidate
around or push through. Look at the fact that we are pushing very strong down. Look at all the damage
on the 360 minute chart. If there is a reaction it will lead to selling. Even though there is divergence, it is
oversold on 360 minute. But nothing to show that market has come into balance yet—this is the real
problem for trading. It is tradable from the long side, but long term there is a low of pressure (looking at
strong daily downtrend). Each time we have a consolidation in the downtrend (looking at the 30 min). it
is one of the ugly charts. If you look at the copper market, this is a sad market as well—bascially saying
not enough econ activity over next 6 to 9 months (which is the time frame people look at).

If you draw a zigzag function—the important thing is that you have a stron down trend, and the length
down was larger than the previous down swing—but if you were trading a strict mechanical system on
cooper 60,--proposde rule that you can only tade long trade in an uptrading channel. A 5 minute copper
is very different than a hourly copper. S&P 5 min chart is very different than S&P hourly chart.

When the SPs are locked down limit, we can still trade the DAX.
There are spots where you can pick off stuff at higher confidence.

In the DAX, the best thing is that the bulls could say is that no limit. The DAX is still within its 2 day rnage.
Remains to be seen if it stays there. But it could help the S&P keep a range. With our DAX, we see same
down trending channel. With these green consolidation, people are trapped. If it was more balanced
along the down channel, there would be more green zones. But this market has not given people a
chance to get out—this is exactly what makes the market very dangerous. Because it is down trend, test
this low, and either consolidate or blast through it. The DAX does have a gap area, so the e0mini gap
could be in play. But we can rule out that the market makes a V recovery. Because there was an
incredible freefall has a lot of people trapped. Maybe DAX is waiting to see if Emin tests the 120 min
low. Over the last two weeks we could SHORT THE DAX WHILE WAITING FOR THE S&P to open.

These moves are so extreme. Looking at the crude monthly chart, we are down to the 2008 level.
Sometimes when we look at long-term continuation charts, may not be correct. But the charts from
MRCI are real rpices from the front month where they traded. Very educational to look at where the
previous swing highs and swing lows were.

How linda trade the volatility breakout system: for example, if price breakouts and goes above the 20
EMA and passes Buran’s longBO number, then Linda would buy. Or if price breakouts and goes below
the 20 EMA and passes Buran’s shortBO number, then Linda would sell. The 20 EMA cuts down on the
number of trades that are made.

Damon

Limit down, probably open up at second limit down when time to go.

There is going to be lots or markets to trade. We are in a position, volatility create opportunity. Again,
becareful when we get in and out. There is a decent or great moves. At least 6 of the markets, I do look
at the indexs, gold, crude. I excepted a sell off, but these are crazy levels now, like 2000.

Bonds are out of control. It adds a lot of fear too. We are going to keep our heads cool.

2342.50 is the second limit. Good guess that we are going to get there. SPYs are just at the 2 day low.
SPYs are 237 and trading currently. Won’t be excited if the market has a huge rally, because there may
be resistance.

DAMON ON TWEETS/PICS -- I attached 2 charts: The 1st is a big picture look at a weekly chart with a
yearly volume overlay. This is where I think the major areas are. The 2nd is my usual MP chart. We
will open limit down & may reopen to the 2nd limit down. 2275 may be tested today. 2400=pivot
#ES_F $...

Market opened and we are waiting for ES to get back to first limit down. Opened down and watching
price move back up to the limit down price.

Doesn’t get more volatile than this. 72 handle range in 5 minutes. Has got a lot to shake out.

When the market opens, the orders come in, and there is a lot of shaking out that has to be done.

This is definitely history that we are watching together. 72 handle range in 5 minutes.
We came within a handle of the 2nd limit down. But I would wait because we have all kinds of currents
here to deal with. (6:40am comment)

Damon—we got up to 2442 which was yesterday’s pivot. We are not turning back. Price was rejected at
that point.

Damon went long crude, and then got stopped out, made a tick or 2. Inventory came out and damon
wanted to close out before inventory report. We probably put in a short term bottom. If we got above
42 we could have a slow trend up, but we may also return to the other side. Two major levels are above
42 and below 96. Damon put up a box on his market profile.

I we get back below the limit level, we will probably go lower.

Short term, limit down is going to be a short term support. Get back below it, work done and maybe test
the low.

Leon: here is a crazy dislocation - the 30 yr interest rate swap rate is currently 90 basis points lower than
treasury bonds. in the old days, swap rates used to be higher than treasuries because you are taking the
counterparty risk of the bank.
that moved 60bps in the last week or so. this is the kind of stuff that is killing investment bank and
hedge fund desks behind the scenes. I actually don't think this is even about the virus any more although
I am sure good news on that front would get stocks to bounce. I think this is more about massive
deleveraging in the fund space.
until that is firesold out, I don't think markets can stabilize

Linda believes that if the CL does a V, then ES has a wide range reversal.

One thesis, is that if you have a major down morning, and then a reversal for the afternoon. But could
lead to a short term bottom. The DAX made me thing about a false trade from.

Market internals, -2800. Vix is well off highs, but not high valid it is, considering VIX expiration this
morning.

So far tail has been holding in indices (10:50, just prior).

Leon: “feels right for a flash crash into close”

Damon—now that crude cash market closed, downward pressure in ES may be relieved.

Linda-while watching the rally in ES, Linda was watching the rally in $TICKs. Its better when these things
take off in the last 30mins (rather than 1 hour to go). Also, noted that CL and GC had both rallied quite a
bit…which may hinder /ES

Linda-VIX broke through a key level of support established earlier on the day, followed by /ES rallying
back above opening price of 2352, this all happened in the last 30 mins. Following steep rally, ES then
sold off.

Best type of action, down morning, then rally in afternoon. This makes the best type of bottom,
intermediate bottom. When you see all asset classes making selling climax. In the correspondening gold,
copper, eu currency, ES, extreme correlation, coming off of that. Very powerful thing. Lowts of damage
has been done. You have so many trapped longs.
On ym 60K tick chart. You can see the damage from the top. So on the 120 min chart, you can see the
extent of the down draft, we did a test reject. Drama of gap opening, when people start throwing out
targest to the downside, people are pulling out their bear shit now. You need to look what is the change
in the thesis. I don’t think there was any more negative news that could come out. Look at the V spike
reversal on the 120 chart. We probably are not coming back to the previous swing high from yesterday.
We still have these overhead gaps that could 2548, which is the gap up here. Starting to fill out this
range. Right when people start get super hopeful on rally, we may get tradeable swings. If you look at all
the markets correlated to the dowing side. We have drama of people going into cash…selling gold,
treasuries, every single asset class getting nailed. Happens when we get a black swaw…felt like it was
what happened at this point.

See how all these markets limited up to that V point. May be a ratchet move.

We have great levels. Need to see where the levels to upside, if we are going to have cave fills. As a
trader I love nothing more than charts, like this Gold chart, where we had all these different levels. We
started to get lots of play (looking at a TPO chart in gold).

Looked at the levels in the euro, nice bounce off lows, we can start to develop here. It starts 2 way
trading.