I’d Rather Die Than Trade Bad

I’d Rather Die Than Trade Bad

Another session and another closed at my session lows, down 57bps. This is getting sort of ridiculous, as I grasp in desperation for anything to rescue me for whatever fucking stupidity I am trapped in. I see no matrix, no lines of code. This must be how you people feel all of the time and it’s horrible. If markets were like this all the time I’d never trade. I’d rather die a horrible death than come to work and have to endure this. Seriously, death would be a reward over drawing down 57bps in a flat and slow tape.

My last loss was in a fucking African stock, lost $2k in 30mins in $JMIA. My bags were literally stolen by African savages into the bell, looted.

I even bought $GME back, only to see it immediately trade lower. It’s almost as if a dark fucking cloud filled with nothing but lightening bolts is following me around and whenever I make a move, it strikes down at me. I’ve been hit with so many bolts the past week, I feel like my fucking brains are cooked.

I finished another day fully long and eagerly await another GAP LOWER in the morning. I had driven my losses from down 55bps at the open to green and then watched it slowly drip lower, 5bps here, 10bps there, into a down 20bps close to cap off my day.

It really is the worst. It’s hard for me to express my feelings, other than to compare me losing like this to let’s say Babe Ruth going to bat and striking out 30 times in a row without a single homer. I am not accustomed to mediocrity and always took pride in the fact that I was exceptional when it came to this. I could fuck up any number of things but if you placed me in front of a trading turret I’d crush. And now even that is gone.

I swear to fucking everything holy, things better change around here soon.

In the context of the greater move that was just made off the lows, this is normal pin action. We now have indecision in the tape, as people figure out how to navigate between being permanently bullish and dodging earnings minefields.

I dubbed the term “fag box” more than a decade ago to eloquently describe being trapped in a trading range without purpose. We are just sort of drifting out into space wondering how this all plays out. I will tell you exactly how it plays out, with markets shooting the fuck higher. But before we get there, we might have some brief sojourns lower and estimable scares along the way.

Bear in mind, America still has currency reserve status and whilst we have it, it is impossible to dislodge markets for any extended periods of time.

That said, we are trading here and this isn’t a blog about macro events or long term holds. In the immediate term, I suspect we drift up. The tape is very boring and in my experience when shorting boring tapes, bears are typically enlivened by the scent of their flesh being scorched alive.

I don’t want to reverse my bullish position, but there are some pressing issues in this tape. For example: the earnings suck. We have misses from $UBER, $SHOP, yesterday $DIS, a week or so ago $META in addition to absolute fucking train wrecks in $TRIP, $DV, $ZI, and $GO just to name a few.

Luckily I wasn’t stupid enough to hold a lot of high beta stocks, only minutely stupid enough to lose 28bps at the open. I had to ditch a few things, but got attracted to the strength in both $META and $NFLX. And now after being them, I feel like I am being set up for a trap, a grande fucking piano collapse onto my head.

We have no discernible areas of strength, other than periphery defensiveness in secular and/or low beta stocks. When I say ‘low beta’, I mean stocks that do not correlate 1:1 with the $SPY. These are your defensive names like $PEP, $KO and $KR. On the higher beta side, we have absolutely bloodshed, down 1.47%.

In other words, if you went out there today with a loaded up portfolio of risk, you’re getting your fucking brains blown out this morning and hoping to God for respite.

But no one is coming to save you.

Due to my obstinance, I managed a +25bps gain into a 43bps loss. Some might argue that to do that is stupid. However, I am firmly of the belief that I want to believe something good might arise from this tape, and soon.

Case in point, about midday I stepped into a 6% position in $GME, a seemingly idiotic company filled with retarded shareholders. But because I saw the movie and thought it funny, playing with the morons in a market foray, I held the stock into tomorrow. The notable thing about that is I SQUANDERED an easy 3.5% win and watched it slink away into the hands of greasy dysgenic gamers, closing out the session with a loss of 1.8% in the stock. In my head, I think it’s funny to hold it because “DIAMOND HANDS BRO” and all of the indecorous nonsense that accompanies holding onto a meme stock in a series manner. Nevertheless, here I am beholden to some of you fuckers to get it into your low IQ brains to borrow some more money against your obligations to increase your holdings, so that I might exit with a profit.

All that aside, delving into more serious matter, I am bullish into tomorrow, mostly because of rates and the prevailing trends, which of course is helped by my recency bias.

For May, the month of my birth, I have losses of 2% and this cannot and will not stand. I promise you this, I will sacrifice all of the chickens and all of the goats if need be, in order to increase my net worth during the month of May. For me to trade down in two consecutive months is akin to a black swan event and shall not happen.

Here is the daily action in my high beta index inside Stocklabs. There are ostensibly all of your higher profile trading stocks, the stuff made of nightmares and dreams.

As you can see today’s drawdown, although unfortunate, could be construed as a minor pullback following a fast rip. The fact that yields are coming in has me in an obstinate bullish position without hedges, taking on a bit of water here, now down 30bps.

We have moderate levels of derisking today, as low beta and commodity related stocks trend whilst the high beta garbage pulls back by 65bps. The spread is large enough to warrant attention, especially with the overall markets up for the session. We are looking at a 100bps spread between low and high beta, suggestive of a rotation back to safety.

This is odd, especially since bond yields are lower. Perhaps this has something to do with $DIS horrible numbers, sending its shares wildly lower by nearly 10%.

I had many longs in the premarket and sold all of them before 10am and have been nibbling back for the past hour. Instead of risk, I have been allocating into lower beta names first, in order to see how this develops.

Breadth is good at 61% and there isn’t anything of note that would hold me back from further allocations to the long side. Simply put, after last week’s debacle I am careful not to drawdown and trying to calibrate my moves to maximize returns whilst also minimizing the downside.

I’m +19bps early going, 65% cash.

Very Bullish, but Reticent of Earnings Gambles

Let this be the one millionth reminder since I’ve started blogging here in 2007: if you’re playing earnings you better have an edge, such as insider information that can land you in prison, otherwise you’re not really investing but gambling. If you know anything about gambling, the house always wins. Statistically you’re guaranteed to lose money, providing you stay inside the casino long enough. Many of you retards cope with statements, such as “I lost what I could afford” or “I had a good time.”

Really?

Is that the measurement you want to be placed against, whether or not you had money to lose and did or enjoyed losing money because it was fun? How about you fucking win and make money, and build wealth and pass it down to future generations so they can have a jump-start on life, do important and meaningful things while young and not have to wait until they grinded their way into money by 50?

Some of you think selfishly, which is why you make errors. You are not in a fucking casino and the object isn’t to have fun. As a point in fact, if your overall life’s goal is to have fun, you should be prepared for disappointment. Leading a hedonist and vacuous existence will never fulfill you and eventually the parties get old and the champagne stale. What is evergreen is leaving behind a legacy built brick by brick and securing a family that is both happy and financially stable.

We are lucky enough having been born in America, provided with ample opportunities to ride the coattails of what seems like the very peak of western society, as far as cultural dominance is concerned. We cannot predict too far ahead into the future and anyone who says “all is lost” is merely projecting his own weaknesses and insecurities onto others, largely an internal conflict dealing with mortality.

As black pilled as I might appear, and I’ve said this here before many times, I am bullish on humanity and believe all of the problems we have now can be fixed. These are small issues logistically, but much larger on a spiritually level.

I’m getting way ahead of myself for a finance blogger. I am bullish into tomorrow, 100% long, made +117bps for the session and I appear to have my swimming legs back.

I was wrong when I said on Friday “Meme Monday” would resume on Monday, but right in a general sense. Secular or defensive stocks are down today while high beta or risky stocks are up 2%. The overall tenor of the market is favoring small caps. Couple with with a very strong showing in the semis and it would behoove you if you decided to sell short into the close.

The idea of the market trading higher is mostly hated by market purists, who largely believe the overall system is rigged. But that isn’t your job, to get mad and draw from emotional angst. I am the last person to lecture about emotional angst, especially when considering my X feed. But when it comes to trading, I am disciplined. I wasn’t always this way, but was taught by the market to obey or forfeit my money.

That is the great thing about the market, similar to engineering. You might not like it, but you must accept the rules and how things are, otherwise enjoy failing.

In recent hours, markets have tempered their returns and have traded sideways. I am now positioned 95% long and might tweak a few things for tomorrow’s open. Barring some sort of news event, I see no reason not to be fully long here.

One of my core portfolios is the quant, which is selected using the Stocklabs algorithms. I have no input whatsoever other than to update it once per month. For the month of May, the quant is almost all oil and gas stocks, which is extremely rare. I’ve been doing this portfolio for years and have never seen it so unbalanced.

I used to force things, such as allocation and market cap, but then later regretted it due to missing out on big rallies. So far in 2024, the quant is up more than 8% with pretty consistent performance. Let’s see how this oil trade works out.

For my trading, I just moved it into 100% cash, at session highs of +125bps. This is a sufficient daily return and I will reenter later on when volatility increases.

The reason why I like to sell and go to cash is due to the fact that the positions I build for overnight trades, in this case the weekend, were not intended for a longer duration. They’re more or less day trades with a specific goal, unlike my strategic portfolio which is meant for longer durations.

All in all, I like the tape. There isn’t anything about the action to give me pause, aside from my habitual belief that market collapses loom around every corner.

We often default to Mag 7 or other large capped tech stocks when we think markets are bullish. But in recent weeks, there has been a broadening out of markets, presenting new and interesting areas of investment.

Here are some broad brushes.

ETF / Stocklabs score (0 to 5 best)
$FXI (China): 4.71
$SVIX (inverse volatility) 4.44
$XLU (utilities) 4.37
$XLP (staples) 4.09
$WEAT (wheat) 3.74
$XLF (financials): 3.36

The defensive nature of those sectors could in fact be lagging indicators, a market that might’ve passed. Reason being: markets spiked on Friday with some outsized returns in your traditional tech names: $AAPL,$INTU, $SHOP, $NVDA, $MELI etc.

With $BTC sitting close to $64,000 and trending up, we may begin to see a rotation out of defensive into risk again. This is typical during earnings season. Stocks come under pressure when reality is unfolded and then go back to fantasyland once the ordeal is over. In many respects, we’ve been in a fantasyland over more than a decade now, with losses papered over, crises extended and delayed, FOMC intervention at the slightest sign of market turbulence etc. I have very strong opinions about all of this and nothing will change whilst times are good and why should they. Men will not mobilize when they have ample cigars in the humidor and the best bourbon money could buy in their at home bars. You might not like it, but that’s how society works.

Change only comes during hard times and hard times are never enjoyable to endure, same with bear markets. The novelty of the bear quickly wears off, giving way to panic and disquieting fear. I think it’s fair to assume the current trajectory is unsustainable but the timeline expiration is also undetermined. So we trade the tape in front of us and wait.