Why Your 20% Returns Must End

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You’re up 20% this year. 

You were up 20%+ last year too.

You think this is the new normal. 

You’re wrong.

The mathematical reality is brutal: your real inflation-adjusted return over 150 years is 6.8% annually.

Those extra 13% gains you’re pocketing don’t disappear.

They get paid back with interest through correction years that destroy accounts.

I learned this building systems at ThinkorSwim.

The machines controlling 90% of daily volume follow predictive patterns that reveal exactly when your hot streak turns into devastating losses.

Here’s how they work.

The 10-Month Moving Average Controls Everything

 

Take the S&P 500 total return and add a 10-month simple moving average.

What you see will shock you. Every major market move for 150 years follows this single indicator.

This is the logarithmic total return that adjusts for exponential movements.

When the S&P trades above the 10-month moving average with an upward slope, algorithms buy every dip.

When it breaks below with a downward slope, they systematically sell every bounce until accounts get destroyed.

This is how algorithmic programming works.

The machines calculate liquidity absorption rates and execute accordingly. They don’t trade emotions or headlines. They follow mathematical rules.

Your Hot Streak Is Borrowed Time

 

Right now, we’re so divorced from the 10-month moving average that this market is mathematically unsustainable.

The rubber band effect guarantees violent reversion.

You’re celebrating 20%+ gains for two consecutive years. The historical norm demands those excess returns get balanced through negative years.

Math doesn’t care about your feelings.

I guarantee this market will blow through 6,000 and probably hit 5,500 when that reversion happens.

The same algorithms pumping liquidity into sacred cows through September 30th will switch to systematic selling on October 1st when quarterly performance constraints disappear.

The Slope Determines Your Survival

 

The 10-month moving average isn’t just about position. It’s about slope direction.

Upward slope + price above the line = algorithmic buying pressure

Upward slope + price below the line = buyable dips with limited downside

Downward slope + price below the line = account destruction

That third scenario obliterates traders.

When the 10-month moving average turns down and you buy the break, you’re fighting programmed selling that won’t stop until the slope flattens.

The current vertical slope creates an “unsortable” market.

But when this slope eventually turns negative (and mathematical reversion guarantees it will), those same algorithms systematically drive prices lower.

Stop Living in Fantasy Land

 

Portfolio managers face quarterly performance reviews. They cannot show declining positions on September 30th statements.

This creates artificial buying pressure that ends October 1st.

After that date, different programming takes control. No more quarterly constraints. No more window dressing.

Just mathematical reversion working its way through the system.

You’re living on borrowed time thinking 20% annual returns are sustainable.

The 10-month moving average reveals when your party ends and the hangover begins.

The only question is whether you’ll position for the inevitable correction or get destroyed by it.

Ready to see how the Genesis Cog system tracks these algorithmic patterns before the reversion hits?

The 10-month moving average is just one component of a complete surveillance system that reveals machine behavior before it moves price.

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