Before I begin this is not a post declaring everyone to buy the dip and get max long all the riskiest of things.

David Rosenberg tweeted this morning about the US10y breaking the 200D Moving Average. Now I had to make these charts this morning because I don't use moving averages.

USD crossed the 200d MA in the last week of March and made a local high 31/3 in the following 6weeks it fell -4.17%. If your trend following algo triggered a buy on the first close above(white dash line) still just a smidge underwater 3.5 months later.

Gold closed above the 200d on 17/5 peaked 1/6 and then proceeded to close out June down -8.66%. Again if your trend follower triggered you are still red on this trade.

I am in no way saying that the bond market is wrong and you should be shorting bonds with full leverage. What I am saying is based on the examples above, if you were not positioned for this move in yields you could do yourself an injustice to panic sell/buy carte blanche change allocations based on this move today.

Now I will admit I wish it started Friday and we didn't have this washout today but I have commented recently about where the pain trade is with @Petr Pinkhasov 

  1. Lots of those that thought they missed it on Friday have had stops triggered today.
  2. People who perhaps missed the last 200pt SP500 move will feel vindicated "see we told you this didn't make sense" and push any risk-off trades they have long bonds long dollar shorts maybe.

A bounce over the next few days will hurt those that added to risk-off and those that had risk-on stop losses triggered.

Do not override your trading plan on a panic day.