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- Risk On/Off Update: Why I Adjusted My Hedges - 10/16
Risk On/Off Update: Why I Adjusted My Hedges - 10/16
Gold, 2YR, VOL keep chirping at me and yikes . . . . . . . check the action in KRE . . . . .
David Young
October 16, 2025
This Is Not Investment Advice
The Word “Fraud” Keeps Coming Up . . . . . . KRE Telling Me to Add Hedge . . . . . . . . Will This Derail the ‘Melt Up’?
Added SKRE this week.
I am not pointing fingers or even following closely any of the names or details related to recent bankruptcies and otherwise in the private lending space. I am well aware this is not representative of the entire space. However - from an investing and trading standpoint I keep hearing and seeing the word “fraud”. That is very bearish for the equity involved directly or indirectly potentially.
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Let’s look at the Daily Chart for KRE and we stretched it back to include the depths of the Trade War earlier in the year . . . . . . . . . note the absolutely massive difference in Volume today compared to anything recent to include April:
On the Weekly Chart you can see what happened the last time Volume picked up and kept building on the Weekly . . . . . . and that Regional Bank Crisis was not based on fraud . . . . . . if one is brewing that is then it is exponentially worse:
Thoughts and observations:
Added this hedge specifically for several reasons some of which are A) I don’t know and won’t know personally the real answers for a while but there very well could be fraud involved, B) fraud can lead to contagion especially in finance, C) KRE is telling me to add this hedge, D) already seeing and hearing about questioning of collateral and who owns what yikes, and E) Gold and UST particularly 2YR also telling me I should seek more protection
And we keep seeing and hearing about other finance and lending related fraud like mortgage fraud in DC politics, some investor rental loan issues, and otherwise . . . . . . why do we keep hearing about fraud in lending?
Though certainly an issue and one that seems to be building . . . . . . this alone I don’t see ultimately derailing the ‘Melt Up’ though on Lower Time Frames who knows what can happen
VOL has risen of late and not given back all of its gains and then some . . . . . potential trend change
