Market Churns — My Overall Market Position and Feel

Iatrogenics comes to mind when viewing today’s tape. Last night, in a hurried panic, I sold SOXL in the after-hours, alongside NVDA — thinking both would trade lower. I ended up correct about NVDA — but SOXL made up much of its losses and rallied hard into the close. When referring to iatrogenics, it is the process of doing something just for the sake of doing it — thinking it’d be beneficial — when in fact it hurts you, or the patient.

Sometimes the best thing to do is nothing. But please observe my overall position so you can make a better assessment. I am repeatedly telling you this — because my hyperbole often gets in the way of my overall investment philosophy.

My trading account is 25% of my overall investable money. The balance is in my quant fund, which was up 32bps today and +1.26% for the week.

So my SOXL mishap was 5% of an account that was 25% of my total. These details make the difference between a winning strategy and a losing.

In the close, I had 15% cash in my trading account, with one hedge: SOXS. My other defensive positions, TMF and NUGT, seem to be doing well even with equity reflation. All in all, I consider my position to be good and I should make money if the market rallies next week.

If we head lower, which, admittedly, is my hunch, I’ll quickly sell some longs and add to my shorts.

Have a great weekend.

Comments »

Pay attention to the market very carefully. Like I said earlier, the bulls have two magic bullets in the chamber left.

1. Trump-China deal.
2. Fed pause

Aside from that, the market will run up or lower on earnings.

Here’s Trump trying to defy the laws of nature that say “MARKETS DO NOT BOTTOM ON FRIDAY’S” talking nonsense about a Chinese trade deal. This, my friends, was done on purpose to move markets.

“China wants to make a deal,” Trump said, adding that the tarrifs the United States imposed on a range of Chinese products have put pressure on that country to agree to a trade pact.

“I think we’ll have a deal. We’ll find out very soon,” he said.

Eventually, he has to make a deal. These press releases are going to be faded soon and markets will get tired of the talk and actually punish stocks whenever the President talks. That’s what happened in 2008.

If you sense frustration in my tone, you’d be correct. About 5 mins before that statement, I bought SOXS — based on several factors, one of which is white candles and how they lead to more white candles.

Observe.

Without an outlier news event, SOXS should trade sharply higher next week.

Bear in mind, the economy is the issue here — not this other stuff. It’s noise. Pay attention to what Cramer and Faber say in the clip below. Really listen to it and understand that you might be early if you’re bearish on markets now — but you might be correct if we’re heading towards a very fast slowdown.

Comments »

Both the Dow and the SPY look fine. The Nasdaq is weak, mostly semis related. My best position is NUGT and it was my highest conviction trade. I don’t have many high conviction trades now — but that’s one of them.

I suppose this is constructive action, all things considered. Big up day yesterday, followed by a milquetoast decline. It could’ve been a lot worse.

I’m flat for the day in my Quant, and still down more than 1% due to my losses in NVDA and SOXL last night. God willing, and I hope that he reads my blog, some of my positions will take the fuck off by the end of the day and I can rest easy tonight knowing all is well.

THIS IS FRIDAY, MOTHERFUCKERS. Don’t expect stocks to bottom.

Comments »

The bulls have two bullets in the chamber.

1. Trump-China trade talks ahead of G20
2. Possibility of Fed pausing

Looks like we might start to hear more of this, neutral policy shit, from the Fed.

“As you move in the range of policy that by some estimates is close to neutral, then with the economy doing well it’s appropriate to sort of shift the emphasis toward being more data dependent,” Clarida said during a “Squawk Box” interview.

He spoke at a time when the markets are watching Fed speakers closely for what happens next with rates. Fed Chairman Jerome Powell helped stoke market volatility in mid-October when he said the central bank remains “a long way” from neutral, an indication that it would be more aggressive with policy than investors had anticipated.

With his comments Friday, Clarida becomes the second central banker in as many days to suggest that neutral isn’t so far away. Atlanta Fed President Raphael Bostic, in a speech delivered in Barcelona, said Thursday that the federal funds rate is “not too far” from neutral.

Clarida noted that the most recent projections from Federal Open Market Committee members indicate that the long-run funds rate projection is 3 percent. The current funds rate target range is 2 percent to 2.25 percent, with markets widely expecting the FOMC to approve another quarter-point increase in December.

“I think being at neutral would make sense,” he said.

These headlines are, arguably, designed to manipulate investor psyche and soften the decline. If in fact the economy is slowing, we will not enjoy a bull market. We’ll get back into the disarray endured in 2014-2016, where selective stocks went up and the earnings season was littered with dead bodies post reporting rancid numbers. If the economy is slowing, mind you, these levels will not hold and we’re likely to fall by another 10% before reassessing.

Comments »

This is what we don’t want to learn about on a chilled Friday morning, less than a week to national festival.

Cramer says CEOs, in private, are telling him the economy is slowing and the Fed is out of touch with reality.

Fine. But the Fed knows exactly what it’s doing — consolidating banks into the hands of the strong, washing the country of the weak. Opening up the labor pool to our most productive companies by disjointing it and casting aside the marginal players. The only way to do that is to slow the economy and cause unemployment.

Boom, bust cycles, all managed by the Fed.

Shares of NVDA are meeting their maker this morning, after missing a whole lot. They blamed weakness on crypto mining. Oddly enough, when they were smashing numbers, I vividly recall them saying it had nothing to do with cryptos.

Fuck off.

Let us remember, inexorably, markets do not bottom on Friday’s — not now, not ever.

I sold both NVDA and SOXL in the after hour’s last night and hold 10% cash. I also have another 10% in defensive stocks, like NUGT, and TMF. But, like you, I expect to bleed today, nourish the earth with my energy and pain. Hopefully, it’ll be enough to give reason for a Turkey Day respite, although it’s not looking like a promising eventuality.

Comments »

Last year I got possessed and wrote and published two short stories, one ~60 pages and the other ~160. They were accurate tales of when I got into the business and the shit I endured and the success I enjoyed during the dot com era. Part two was about my complete annihilation — something you might be able to relate to, given the recent foray into hell.

If you like my writing and enjoy the blog, I promise you’ll like these two fucking books. I make like $2 per book — so fuck yourselves.

Great Xmas gifts, believe me. At some point, I’ll write a part three, or maybe something totally different. I have an idea about an Irishman getting cold called by a boiler room broker and he can’t help but stumble upon outrageous returns, all the while hiding it from his very conservative wife. Or maybe I’ll go dark and write about a broker who kills his clients for ACATing on him. We’ll see.

The other thing you should do is start an Exodus free trial. Join the Pelican Room and take in the grandeur of top tier traders acting like degenerates throughout the day.

Lastly, if you’re unable to access the trial, because you’ve already taken one or you’re somewhat retarded and can’t figure out how to do it — access our algorithms whenever you want for free at FreeStockAlgos.com.

You can pass that site onto friends and family for Xmas too. As a matter of fact, you should be barging into the homes of your neighbors and showing them this god damned website.

Ok, enough shilling. I have a gimlet waiting for me.

Cheers.

Comments »

I was long both NVDA and SOXL heading into these numbers and I sold both in the after hours, a very rare thing for me because I believe both are heading much lower. The possibility that analysts will not downgrade NVDA is zero. Ergo, I’m fairly certain you’ll see further downside by tomorrow morning.

This is unfortunate, since I had a nice gain in SOXL and ended up selling for a 1% loss. My loss in NVDA was ~15%, an unacceptable drawdown, which prompted an immediate sale.

NVIDIA beats by $0.05, misses revenue estimates on gaming and datacenter; guides Q4 EPS and revenue well below consensus; adds to share buyback, raises dividend 7% (202.39 +5.20)

Reports Q3 (Oct) earnings of $1.97 per share, excluding non-recurring items, $0.05 better than the S&P Capital IQ Consensus of $1.92; revenues rose 20.7% year/year to $3.18 bln vs the $3.24 bln S&P Capital IQ Consensus. Three market platforms – Professional Visualization, Datacenter, and Automotive – posted record revenue.

Gaming revenue was short of their expectations, and fourth quarter outlook is impacted by excess channel inventory of midrange Pascal products. They believe this is a near-term issue that will be corrected in one to two quarters, and remain confident in competitive position and market opportunities. Gaming revenue was $1.76 billion vs. $1.9 bln estimates, up 13 percent from a year ago driven by growth in gaming GPUs, and down 2 percent sequentially as gaming GPU growth was more than offset by a seasonal decline in SOC modules for Nintendo Switch.

Datacenter revenue was a record $792 million vs. $820 mln estimates, up 58% from a year ago and up 4 percent sequentially

Co issues downside guidance for Q4, sees EPS of ~$1.32-1.49, excluding non-recurring items, vs. $2.01 S&P Capital IQ Consensus; sees Q4 revs of $2.65-2.75 bln vs. $3.4 bln S&P Capital IQ Consensus.

In November 2018, the board of directors authorized an additional $7 billion under the company’s share repurchase program for a total of $7.94 billion available through the end of December 2022.

NVIDIA announced a 7 percent increase in its quarterly cash dividend to $0.16 per share. NVIDIA intends to return an additional $3 billion to shareholders by the end of fiscal 2020, which may begin in the fourth quarter of fiscal 2019

Whether this miss derails the rally remains to be seen. My hunch says semis will lead tech lower today. We’re past the China trade war narrative, and the Fed. Now we’re talking about fundamental weakness in some key names, such as NVDA and AAPL.

I had a great day — but I’m already in the hole by ~1.5% in the AHs for tomorrow’s session.

Comments »

Don’t get salty, motherfuckers.

The purpose of Exodus is to gauge investor psyche and how they respond to levels of stress. Today, and not since 10/24, we were oversold on the 3 mo algo — the only algorithm that knows the present tape.

The results? Nothing less than staggering. Bottoming out action.

Markets are strong AF. I’m fine, 100% long, into the teeth of the beast.

Top picks: SOXL, SOXL, SOXL

Comments »

I’ve made it a point to take maximum risk during market meltdowns in order to test my mettle. Grow thicker beards and stronger muscles. I bought BILI, my final addition to a portfolio wrought with hazard.

I don’t give a shit — because we’ll be bottoming soon and all of you bear-holes killed dead.

I still have a few defensive positions, namely NUGT and TMF — but I’m mostly alpha, spread across various industries. I have a mind for this sort of thing — invested since a small child — pre-puberty. While all of you played hop-scotch and ring-o-leavio, Le Fly was partaking in the stock exchange.

This is why I’m better than you.

Cheers to future success and all that comes with it. May the tree of prosperity bear its delicious fruit for the next thousand years.

Comments »

I’m back to all in again, like a fucking lunatic. I have just 5% cash and a mind to see this fucker rally. In Exodus, we just flashed oversold on our 3 mo algo. Last time we were oversold on the 3mo was 10/24, the day before the monstrous 10/25 rally.

I bought AYX and ACB to complete my journey into fear (plug!).

Semis are leading the way and my SOXL has been a great gauge of risk. As long as WTI remains higher and semis strong, we should see this rally continue.

Comments »