There are an equal number of blue marbles and red marbles in a jar. You start pulling out marbles one at a time. If you pull out 30 marbles and 25 are blue and only 5 are red, then you know that eventually things have to return to the mean and more red marbles are going to have to start coming out. How fast that happens depends to some extent on how many marbles are in the jar, but we still know with certainty that mean regression is coming. That is kinda where the stock market is right now.

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The market can only go so long without consecutive red candles, or without a 3% correction, or with too much a preponderance of green candles to red over an extended period of time. So we know a regression to the mean in the stock market is coming, we can’t know exactly when, but we can decide that we don’t want to be caught long when it does. Hence I took a profit on Delta Air calls on Friday. I won’t be adding any more longs for now in the stock market. I am still holding long in MARA which is crypto, and a different (and also nicely profitable) situation. Remember Patience Pays!