In college, one of my basketball teammates had the skills to be a superstar.
A true raw talent. He could’ve been great.
But he didn’t work hard.
He went to parties when he should’ve been resting. Then he showed up to practice late, hungover.
Meanwhile, I worked relentlessly. I showed up early and stayed later than anyone else. I watched tape of my games at home, taking meticulous notes.
And I ended up Athlete of the Year.
Hungry discipline beats lazy talent … every single time.
You don’t get to avoid the “hard” parts of life. But you do get to choose which type of “hard” you want.
Easy life: no growth, limited potential.
Growth life: discomfort, challenges, volatility.
Trading is no different. And last week was a stark reminder.
Thursday was the worst single-day sell-off since October 10.
But this pullback is not what you think…
This Is Normal Market Behavior
Look at the SPDR S&P 500 ETF Trust (NYSE: SPY) weekly chart:
The price is simply pulling back to the 21 EMA (the mean).
Every time the market stretches too far, it must revert.
This is normal market behavior.
What would be abnormal is if stocks kept running vertically without a pullback.
Why Did We Get The Reversion Now?
Three reasons.
1. There’s still a lack of liquidity from the government shutdown. Liquidity is flowing back into the system, but gradually.
2. Fed rate cut uncertainty.
3. “AI bubble” concerns spooking retail investors.
But we just got a shift in one of these headwinds:
Fed rate cut probability is back to 70% from a low of 43% last week.
The Fed cares about inflation and jobs.
Verizon just announced 13,000 layoffs, its largest ever.
UPS announced 45,000 layoffs, its largest ever.
When sectors with reliable monthly billing begin cutting, the Fed takes note.
AI is starting to accelerate job displacement.
The market is repricing the probability of a December cut based on deteriorating employment conditions.
This may ultimately be a “bad for the real economy, good for the stock market” paradox.
The VIX Rule For Long Swings
Keep it simple:
Do not take long swings when the VIX is above 20.
Long positions should be planned with defined stops.
If you didn’t have a plan during the pullback, that’s a learning moment.
Not a failure.
But don’t make the same mistake again.
Revisit the core framework:
1. Be rigid in rules, flexible in expectations.
2. Price action is the truth.
3. Follow-through only exists when the VIX is calm.
4. Use if-this-then-that logic for all trades.
5. Adapt quickly. Don’t cling to any belief about what the market “should” do.
6. Size small (or even paper trade) until this mindset becomes natural.
The Choice Is Yours
You’re going to face difficulty no matter what.
Either…
The hard of disciplined trading: following your plan when emotions tell you to abandon it. Taking losses when your stop hits. Staying patient when setups take time to develop.
Or…
The hard of limited financial growth: working a 9-5 job without the unlimited upside potential that trading offers. (Trading time for money instead of building skills that can change your future.)
You know which one to choose…
How do you think I bagged these massive peak gains last month?
- +159% in 2 days on MRK*
- +49% in 1 day on GOOGL*
- +64% in 2 days on EOSE*
- +244% in 1 day on PYPL*
We’re about to cover all of this (and more) TONIGHT in my 2-Day Simpler Options Bootcamp…
THIS IS YOUR LAST CHANCE.
REGISTRATION ENDS THIS AFTERNOON.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results
