In partnership with

VOLATILITY IS A SUPER MOUSE TRAP…

It is widely known that institutions use volatility to exploit markets; what’s not commonly discussed are the methods, tools, and common practices.

The retail investor has emerged as a force accounting for 10% to 25% of the daily volume. The stock market, on any given day, will trade between 200 to 300 billion dollars a day.

This equates to 20 billion to 75 billion dollars in daily retail volume. To institutional traders, this is a pure mouth-salivating opportunity. Yearly, between the top 10 institutional firms, they produce approximately 70 billion to 80 billion in trading revenue. Approximately 30% to 50% of this revenue can be attributed to the retail investor.

It’s strategically a game of Art of War.

First, you must understand there is nothing that you know that an institutional trader doesn’t know or wants you to know.

So, supply and demand as well as support and resistance and price action signals can be disturbed at a moment’s notice when the institutional bread wants to be buttered.

In other words, price doesn’t tell the entire story when money action controls the theme.

So, if they want to lean on the offer or ask to make it seem like the stock is on the move, they will do it to draw you in, only to hit the bid, sending the stock down past your stop loss.

Unbeknownst to you, when you took the bait, they shorted on the first uptick and followed the stock down to your stop loss, making your position a source of liquidity and profit.

Secondly, you must know their preferred method of manipulation and the difference between insider trading and insightful trading.

Although market-making activities are very complex and highly monitored, they have insight based on live data—although insider trading is illegal, based on experience, it doesn’t stop them from designing algorithms to take advantage of the market.

High-frequency traders like Kenneth Griffin’s firm Citadel make markets but they are known as a quant firm, which in plain English means they use computer programs to facilitate trading.

And although there is a separation between their market-making and proprietary trading activities, there is plenty of data that a retail investor is just not privy to. The biggest source of market manipulation based on volatility is spinning the news cycles; although not illegal, institutional traders use event-driven algorithms, such as earnings or pivotal news releases.

Though they are prohibited from using insider information, it doesn’t stop the shape-shifting of narratives by various talking heads, such as prominent analysts or hedge fund managers on national syndicated financial news outlets like CNBC, from giving misdirection.

For example, during the pandemic, Bill Ackerman, CEO of Pershing Square Capital, a widely known and respected hedge fund manager, appeared on CNBC just before the pandemic, hysterically screaming bloody murder that the government had to take action, and how the impact of the potential pandemic could be devastating to the public and the markets.

And while there is nothing wrong with his passionate outcry, in February 2020 and March 2020, his firm Pershing Square Capital took out an enormous short position against the market just before the it cracked and scored a 2.6 billion dollar profit windfall.

This is a perfect example of using your influence on the public markets. Although it was public information, he obviously had insight into what was happening based on first-hand information that informed his trading decision to place the bet. The use of social and Wall Street clout or celebrity to profit is extremely common.

In 2023, Bill Ackerman shorted bond under the guise that the Feds would continue to raise rates—again while nothing illegally was done, he was extremely vocal on outlets and social media drumming the inflation fears, attempting to move the needle.

In fact, Michael Burry also joined in on the trade as he was also shorting treasuries as well. I distinctly remember Bill Ackerman announcing that yields could not stay at peak levels, signaling he had covered his short and potentially taking the other side of the trade.

The news cycle is very instrumental in pushing false narratives and misdirection but a very intricate function is the implied theme of trading. Wall Street needs the retail investor to respond to volatility; this is the way profits are made.

Listen to your everyday pundits on CNBC. They use the volatility of the news and their positions as experts to frequently justify the “Trade”.

The reality is if they don’t keep the money moving, they can’t justify their commission.

Unfortunately, the retail public lacks access to the research, the data, and the technology because, by the time the retail investor reacts to the volatility, the smart money has already made its money and taken advantage of their ignorance.

BE CAREFUL WHAT YOU WISH FOR…

With deregulation illuminating the boardrooms of Wall Street, one can’t help but think be careful what you wish for. While free enterprise is a magnificent thing and a pro-deregulation president is even better, like candy, too much of a great thing could be a bad thing.

Here’s my point.

In 1999, the grocery chain store, Kroger, attempted to acquire the larger rival, Albertsons. It was a deal valued at 8 billion dollars. Kroger wants to expand its geographic footprint, increase market share, and become a formidable competitor against the likes of Walmart, Costco, and Target.

A merger could increase purchasing power, streamline operations, and lead to lower pricing. This would have created higher margins and attracted a broader customer base.

The FTC expressed strong opposition to it, due to the fact that it would limit choices for consumers and reduce competition in the grocery market, especially in regions where both chains had a strong presence. Eventually, the deal was abandoned due to the expressed opposition to the merger by the FTC, as fewer choices create higher consumer prices.

Now imagine…a world where the FTC let anything go and Whole Foods decided to take over Stop and Shop, Publix, and Food Lion, simultaneously.

This would not only put Whole Foods in the catbird seat when it comes to positioning and pricing, but it would significantly cut the competition off at their knees, while simultaneously hurting the lower-end consumer as they don’t call Whole Foods, Whole Paycheck, for nothing.

The impact would be no different from instituting tariffs in Trump’s pro-American agenda because if Americans have very few choices, there is very little incentive for companies to innovate or lower prices, which would create inflation. This has been the gift and curse surrounding Trump’s presidency.

On the one hand, the market cheers the back-to-business of IPOs, mergers, and acquisitions as usual. On the other hand, the uncertainty of not knowing which Trump we are going to get creates volatility.

Will he and his merry men of Billionaires trim the fat and run the government like an efficient corporation, or will they make narcissistic decisions that create hyperinflation and instability?

The 30-year bond is pressing up against 5% and this 10-year bond is following suit. This has made the yields more appealing and stocks less attractive. The bond market is always in a constant battle for capital and an investor seeking safety will gladly jump at the chance of a 5% yield while they sit out the chaos.

Meanwhile, the traders shorting bonds are pushing fear as a narrative putting downside pressure on bond prices. Remember, the inverse relationship between bond yields and bond prices.

Investors shorting bond prices benefit from higher yields since higher yields signal uncertainty and inflation instability. As a trader pushing fear and chaos as a narrative—it is a money maker in the short term because the market hates uncertainty. Not to mention, higher rates are restrictive and carry the same impact as the Feds raising rates.

This means higher mortgage rates, higher debt-carrying costs, and higher credit card rates for customers. This will put a drag on the economy and slow down economic activity as consumers pull back and businesses feel the pinch firsthand.

The combination of all these factors and the macro data, plus a paused Fed will be closely watched as the first year of Trump’s presidency takes shape. Prepare for a volatile 2025.

THE GREAT AMERICAN SCHEME…

Decades ago, America was seen as the land of opportunity and prosperity. Today, it’s the dismal facsimile of a once bustling society, which now, unfortunately, feels enslaved by corporations and the inability to get ahead financially.

According to the Bureau of Statistics, 33.8% of the U.S. gets paid weekly, 42.2% of the population gets on a bi-weekly basis, and 18.6% are paid semi-monthly.

The sad news is that more than one in three Americans are living paycheck to paycheck, which means 34% of the population goes broke every Friday with little or no money left for future expenses.

According to Bankrate’s financial freedom survey, 75% of Americans say they are not completely financially secure, and 30% never expect to be. I have learned that if a company is to be successful, everyone in it, including the maintenance department, has a part in its success.

The same can be said about a country. America is only as good as its people, and if its people are feeling impoverished, enslaved, and trapped with little financial hope, the heartbeat of the nation is going to need a pacemaker.

It’s truly the rat race where even if you get to the end, the cheese isn’t enough to take care of your family. It’s a cycle of hard choices that dictates that in order to make an abundance of money, you must sacrifice time with your family.

The average college-educated mother spends 120 minutes a day with their children. The average college-educated dad just 85 minutes a day. If the parents lack a college degree, it’s approximately 20 percent less, which gives light to the phrase, misguided youth.

The sacrifices are great but one has to question, how did we get to a place where life became a factory?

Approximately 83% of Americans are overspending and living over their means, and most are using credit cards to do it monthly. For those who have a budget, approximately 44% are going over budget.

Although inflation has come down from its peak, inflation is still 20% higher than pre-pandemic. No one escapes—not even high earners; about 20% of households making over 150k live paycheck to paycheck.

It’s almost as if there was a secret meeting, where corporations, banks, social media, and all media outlets colluded in a plan backed by the government—to squeeze every American citizen like lemons for every ounce of juice, while they make off like bandits with all the lemonade.

Big corporations made it so you couldn’t retire, by offering a 401k with limited investment options—pushing the responsibility of retiring onto the employee, as opposed to pension plans, which had to be funded by the corporation.

According to the Bureau of Statistics, only 15% of private industries offer a pension plan, and the average person at the retirement age of 65, has $272,588 in their 401k.

Meanwhile, banks sold the American dream of home ownership, which is more like a daydream—where even after you pay off the house, you’re still paying property taxes. Which makes you ask…who really owns the home?

They like to say home ownership is one of the biggest sources of wealth in America and while that might be true, I think financial literacy is the biggest source of wealth.

For example, today the average house costs $420,400.

Let’s say you pay off your home in 30 years with a 7% interest rate; by the time you finish paying off the home, you will have paid approximately $1,017,999.

But if you take that same $420,400 or $2,800 a month and place it in the S&P 500 for the same time frame, which averaged 10.6% over the last 100 years—there is a big difference between paying a million dollars for a home that will be taxed every single year in perpetuity, and earning $6,783,631.40 over the same period and paying long term capital gains of 20% only once.

Even after giving up $1,356,726.28 to taxes, you still walk away with $5,426,905.12.

The way I see it—that’s five houses for the price of one. Now granted, the tax shelters provided in real estate are unmatched, but first, you must make enough money to feel the need to shelter it.

The real winner in this example is the bank with a total interest income of $597,599. So, you be the judge, American dream or great American scheme?

Now, let’s not leave out the biggest marketing engine in the world, social media and media outlets. They provide the conduit that makes it possible for the American scheme to be administered.

You see it all over social media, television, and billboards, constantly putting psychological pressure on your desires to live the life they want you to live that profits them. It’s the classic consumer versus the producer relationship, and every Friday there is a producer ready to take every feeble dollar you generate.

It’s only when you become a minimalist and strip down to your basic needs that you realize…the love of things fails in comparison to the love from your family and the moments you spend building a life worth living, instead of the life they want you to keep competing to have—buying the things you don’t need for a false sense of acceptance that leaves you empty in the American scheme.

WHY BLAME THE GREEDY CAPITALIST?…

What part of capitalism don’t you agree with? People are quick to call corporate America greedy, but it seems that they are in a love-and-hate relationship with their abuser.

You can’t be mad at Steve Jobs of Apple or Howard Shultz of Starbucks, because they created a product you couldn’t live without. Apple didn’t break into your home and place an iPhone to your head and scream, your money or your life! And I’m sure Starbucks didn’t press your face against the cup and say, drink or die.

These were your decisions, but now you regret them because you are disgusted with the price of their products. You do know this is America and the land of free enterprise; you can create your own product and/or service and compete.

And if all else fails, you do have free will. Simply vote with your wallet; if you don’t patronize, they can’t monetize. But wait, this means running from the arms of one attacker to another. Now, if this is not an option, it seems to me that your only choice is to become a student of history.

History dictates that if you see a problem, create a competing product or service to solve the problem. Don’t just sit there and complain. Whiners never win and winners never whine.

In the late 1800s and early 1900s, they had what was called cottage industries. They were a bunch of small micro businesses that individuals formed in their homes to service the existing neighborhoods or areas.

This was the start of entrepreneurialism and was a great benefit to the community until the Industrial Revolution came about and put these beginner capitalists out of business.

The rise of big factories and the invention of the steam engine proved to be too difficult for the solo entrepreneur.

Now, I know what you’re thinking…how can you compete in a big game on such a small level?

Well, unless you have been living in a cave, there is this invention (invented by Al Gore, just kidding) called the internet. Where people create storefronts and sell products, software, and services—and it’s worldwide.

In fact, they call it the World Wide Web.

I would like to refer to it as the new cottage industry, but you can think of it as the world’s biggest technology marketplace for sales— on steroids.

In 2024, e-commerce globally reached $6.33 trillion in sales, with an estimated $1.2 trillion in the U.S. alone. And it gets better. 2.77 billion of the world’s population or 33% of people will shop online in 2025, with estimated revenue between 6.8 trillion and 7 trillion split amongst over 28 million e-commerce stores globally, so I think there’s room for a few more.

Now, here’s the rhetorical question for you. When did we stop being entrepreneurs and transition to proletariats? Answer—during the mid-19th century America shifted from a putting-out system of labor (a fancy title for independent contractors) to a factory system of labor.

The government took action to promote the expansion of the U.S. industry, and the population slowly converted from entrepreneurs to employees.

Now, there is nothing wrong with a job, if it provides handsomely for your family, but there’s a big difference between the check you are given on Friday and the check you create from a business you broke your back to build.

In my opinion, a job kills the creative juice of the entrepreneurial spirit, by subtly whispering in your ear…conformity…everyday…all workday…40 hours a week.

It’s no wonder people carry great disdain for their employers, and it is this pressure that creates a society motivated by money

If only they knew to monetize what they patronized at the start of each Industrial Revolution, working would be a matter of choice instead of survival.

Just imagine, if your parents noticed back in the 1960s that all the kids in the neighborhood loved McDonald’s and decided to grab 100 shares or $2,250.00 worth of the initial public offering in April 1965.

This tidy investment would have netted 74,000 shares and would have been worth 20.6 million dollars. 59 years later after 12 stock splits, with a profit like this perhaps you would still be eating Mickey D’s, and the anger that made you feel powerless in the claws of corporate America would inspire you to create a product that changed society.

The moral here is, if you don’t like something create something you love, but also put your money to work in the companies you patronize, so at least instead of the company using you—they become the financier of your dreams.

BORN A HUMAN DIE A SHEEP…

Have you noticed how people have been reduced to free-range economic sheep, being prepped for financial slaughter?

It’s like the object of the corporate and government game is to make your life so economically dependent on the system for your basic needs— to the point where one day you will need permission to breathe on a subscription basis.

We have gone from subsistence living or foraging to a great dependency which simply means—from living off the land to the corporate and government structure living off of us.

We used to grow our own fruit and vegetables; now, it’s industrialized and if you are being very honest with yourself, do you truly know what chemicals are on or in the food you are consuming?

Here’s a clearer example to illustrate the point—corporate America has made a multi-billion dollar business by making society pay for free resources.

When I was a child, I drank free water from the faucet, ate vegetables and fruit grown in our backyard, and picked grapes from a tree. Today you will find it hard-pressed to find grapes with seeds in them.

Everything from our food to our education is being genetically modified.

The food source has become a byproduct of profit that answers the question, what’s the fastest way to market? Instead of, what’s the healthiest food we can deliver to the consumer?

Our educational system hasn’t changed with the times and has been the same for over 100 years.

Financial literacy is not taught as a collective—only today we see some high schools rolling out financial literacy programs, but not in a truly comprehensive way that gives the end user a set of tools that give them the confidence to invest in the stock market or real estate.

Learning about credit and how to obtain a mortgage is important but honestly feeds the system of debt.

According to a new report on household debt, credit card debt rose to 1.17 trillion in 2024—up 8.1% from 2023. That’s what I call invisible slavery. And everyone in the nation no matter what their nationality is affected.

The school system is designed to create students with a vocational education that prepares them for the factory (workforce), which bleeds over to the fact that the average person only completes 12 years of school.

The average lifetime earnings of a person without a college degree is $1.3 million, and with a college degree, it is $2.3 million. And lastly, the average lifetime earnings of a person with a doctoral degree is $3.6 million.

Another way to frame it is that a person without a college degree will earn an average of $30,232 a year until the age of 65. The average yearly income of a person with a college degree is $53,488. And with a doctoral degree, the average yearly income is $83,721.

Now keep in mind these are averages until the age of 65 and it doesn’t take into account—above average wage earners, gender, geographical location, and wage increases against the cost of living.

Entrepreneur concepts like multiple streams of income are non-existent in the early stages of education so it’s almost assured that people miss every Industrial Revolution and the entrepreneurial opportunities that come with it.

The populace is manipulated into thinking one income is how you define your financial existence. The average worker only finds out they need a second job or hustle when the cost of living becomes outrageous, and the burden is too much to bear.

This leads to a poor quality of life, and this is also where the American dream fades.

The concepts of the American dream were introduced into society in a book called, “The Epic of America” by James Truslow. It spoke of the concept of opportunity and prosperity balanced by spiritual fulfillment regardless of a person’s background, as a theme.

And while these concepts may make you feel warm and fuzzy, what’s cold is that corporate America uses any and every government loophole to squeeze the maximum profit out of society.

The average income of a working American in the United States is $65,470, which means as a single person, the take-home pay, give or take on an annual basis after taxes, is approximately $48,344—which means you pay $17,126 between federal and state taxes and social security annually.

This breaks down to Federal taxes - $8843 State taxes - $3273 Social Security $5019 and a Net take-home pay monthly of $4028.66. When you take a look at the average monthly cost of living, in terms of expenses, you see how much pressure is on the American worker.

The average expense list of a single person with no children.

After all is said and done, the average person has no money to invest, which guarantees them a ride on the treadmill.

To top it off, car insurance premiums increased by 25% nationwide and in some states 40%.

1 bedroom apartment rents increased by 5.3%.

Food prices at home are expected to increase in 2025 by 1.9%, and food away from home will increase by 3.5% on top of 2.3% and 4.1%, respectively in 2024. The percentages may seem small, but a 5.3% move on the average rent of $1,554 is $83 a month or $988.34 yearly.

If invested $83 monthly in the S&P 500 at 10.6% over 30 years, it amounts to $203164.12.

So, this is how they do it—in what is perceived to be small incremental increases, but instead of it being one cylinder, they are attacking from all sides.

They know your back is against the wall, so they keep feeding you credit, and when the holidays roll around they advertise subliminal themes, like how much better would your life be if you had the product they are selling or the implied undertone that he or she will love you more if you purchased happiness wrapped in a nice Gucci box.

The producers understand your habits and why not, they have years of data.

Americans spent 25.8 billion on Valentine’s Day or $185.81 per person, and then they piled another 22.4 billion into Easter. And you didn’t skip a beat on the 4th of July.

You spent 9.4 billion dollars to celebrate your independence. And because they know you love your children, they knew you would spend 38.8 billion or $875 per household on back-to-school shopping.

And what’s scary is that Americans spent 11.6 billion on Halloween in 2024.

Next up is a three for; Americans spent 33.6 billion on Thanksgiving and then turned around the next day and spent another 10.8 billion on Black Friday. And if that wasn’t insane, they hit the vein with a Cyber Monday sale, and you responded in kind with another 13.3 billion dollars.

And now the Godfather of manipulative holidays, Christmas…Americans spent between 979.5 billion and 989 billion on Christmas.

This totals 1.154.7 trillion dollars on the high end spent on holidays in 2024, not to mention all the flash sales and forgotten 30-day trials that became activated, which 40% to 50% of the people forgot to cancel.

The one thing that’s undeniable is that Americans love to consume, and it’s built into their subconsciousness so they are powerless to resist the corporate assault on their wallets.

Corporations are so ignorant to think that we don’t know anything different, so they raise their already oppressive prices.

We don’t create any competing products, control our food or energy sources, or make our own clothing, so they know we will accept it. And the government is also complicit in these strong-arm tactics.

Bureaucracy is their superpower, and their laws and taxes hold back many— constrained in the backseat of the American dream.

The educational system’s standardization over personalization is a great example of the ropes that resist change in a bureaucratic ball of red tape, that assures your child will be taught in useless classes that are designed to move the sheep from one low station to another.

While there are above-standard educational systems—show me where the average family can afford them and have the comfort that they will not be on the systematic conveyor belt built to keep them segregated from the 1% of the nation that controls the other 98%.

And although many Americans escape the grip or temptation of the herd many will be born a human and die a sheep.

Thank you for reading, we appreciate your feedback—sharing is caring

Kevin Davis Founder of Investment Dojo and Author of The C.R.E.A.M. Report

Read The Daily Upside. Stay Ahead of the Markets. Invest Smarter.

Most financial news is full of noise. The Daily Upside delivers real insights—clear, concise, and free. No clickbait, no fear-mongering. Just expert analysis that helps you make smarter investing decisions.

Join 1M+ readers today.