Don Kaufman here. 

While everyone's celebrating Nasdaq near all-time highs, I'm telling you to drastically reduce your allocation. 

And this isn't some doom-and-gloom bearish rant - it's cold allocation math that could save your ass.

Look at this Nasdaq chart. 

We've been trapped in the exact same box for 10 weeks. July, August, and half of September - same damn territory, day in and day out. 

We're trading at 579 today, and the midpoint of this entire range has been 570. 

That's not a bull market - that's a sideways grind that's about to explode in one direction or another.

The Correlation Trap Nobody Talks About

Here's the thing most retail traders miss: when you're range-bound like this for months, you start accumulating too many positions on the same side. 

I'm well aware you can find some piece of crap stock that moves autonomously. 

But when you substantiate real positions in five or six different underlyings, there's one thing you cannot avoid: you belong to the index. 

Period. 

And when this box breaks, that $50k you spread across 'different' tech names? It all bleeds the same color.

I grew up as an index trader, and I'm telling you - this is when you want to be grossly under-allocated. 

Not 90% invested, not 70% invested. Grossly under-allocated. 

Why? Because you can't control whether this thing bursts to the upside or cracks lower. What you can control is your allocation.

This is the shit CNBC will never tell you because every money manager that comes on TV wants you 100% invested 100% of the time. 

They only get paid for assets under management and don't want your capital freed up.

What Actually Works When Nothing Works

So what do you do? I start trading products that don't have great correlation to the S&P. Christmas trees will continue to grind out profitability even if we don't move. 

Volatility calendars work beautifully because the longer you stagnate and volatility doesn't do much, the more money you're gonna make.

The directional stuff most retail traders love - that's where people get eaten alive at a time like this. Don't get eaten alive. Don't press right now because you got a hunch. 

If you're bullish, cool, use spreads. If you're bearish, great, use spreads. 

But when you're in a very tight, level-driven marketplace like we are, this is as binary as it gets.

The Bottom Line

This is not a bullish or bearish conversation. This is curb allocation. Be very, very careful. The range defines us all.

You still gotta trade. You still gotta earn a living. But there's times where you literally have to downshift allocation, knowing that a substantiated move could be days away. 

When this range finally explodes, you want to be the trader with cash, not the guy watching his entire portfolio move in perfect, painful harmony.

Be grossly under-allocated. Not because I'm bearish - because I'm not stupid.

There’s a better way to play this market, and that’s not with individual stocks…

It’s by playing volatility.

Make sure to join me tomorrow live at 1 PM ET, where I break down how this strategy works. 

To your success,

Don Kaufman