Friday’s Shock Sell Off: How Deep Can This Go (and What I’m Watching)

At a glance

• Friday was a confidence break. When confidence gets shattered, markets often shift into volatile, stop start conditions.
• Labels do not help. I explain what likely fuelled the cascade, but the key is your process, not the story.
• No quick “V” is the base case. Rallies can happen, but they can also get sold into as nervous money tries to exit.
• Resets create opportunity. When markets go too far, too fast, the pullback can improve reward versus risk for the next leg higher.
• The bigger trends still matter. The structural drivers behind precious metals, critical minerals, AI and electrification do not vanish because of one brutal session.

What you’ll learn

• How I think about probabilities in volatile markets (without pretending to predict the future).
• Why confidence breaks can lead to choppy, whipsaw conditions rather than a clean bounce.
• What a quality entry looks like when prices are falling fast.
• Why exits and position sizing matter more than ever when the market is moving violently.

The thinking shift (in plain English)

Most people react to volatility by hunting for explanations. That feels productive, but it usually creates the wrong outcome: expectations. I would rather keep it simple. When the market does X, we do Y. That process keeps you out of panic decisions and helps you act when opportunity shows up.

I do not do predictions. I work with probabilities and weight my decisions accordingly. In a market like this, that means respecting the volatility, keeping risk tight, and waiting for the chart to prove the buyers are returning.

What history shows (with important caveats)

Historically, sharp breaks in confidence can create volatility that lasts longer than most people expect. Big down days often get followed by sharp rallies, then another flush, then another rally. That back and forth is why discipline matters. It is also why “news chasing” can be expensive, because markets often move before the headlines feel obvious.

The upside is that resets can create the best opportunity sets, because the reward versus risk improves for anyone who can stay calm, stay selective, and execute a plan.

Where I’m focused now

• Price action first: I want to see where selling exhausts and where buyers start winning again.
• Risk control: Smaller sizing, wider decision making timeframes, and exits based on the balance between buyers and sellers.
• Leadership: Which sectors bounce with strength, and which bounce weakly and get sold immediately.
• Structural themes: The longer term drivers behind precious metals, critical minerals, electrification and AI remain the backdrop. The question is timing and entry, not whether the trends exist.

Important information

_{Any advice in this video is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Garry Davis (AR No:317590) is an authorised representative of Primary Securities Ltd (AFSL No. 224107).}

_{Note to traders: The publishers of this article/information/promotion wish to disclose that they may hold securities discussed in their portfolios. Any decision to act should be made after you have done your own research and considered your risk profile.}

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