Behold: This 52 Week Low List is Going to Make You Soil Your Pantaloons

Markets have recovered sharply off the lows. Fuck all of that. I wouldn’t buy this rip with my neighbors lotto money. It’s very nice to see stocks rebound. After all, we’re oversold. But that doesn’t mean shit for tomorrow or the day after. I’m just trying to survive the great market calamity of 2018. Once we bottom, they’ll be plenty of time to get in.

Here’s some data for you.

1,300+ stocks at or near their 52 week lows.

Here are some prominent names starring on the list.

FB, BAC, GS, WFC, CVX, BUD, TM, IBM, MMM, ABEV, TXN, BIDU, MS, ASML, KFC, LFC, BLK, RIO, UBS, SCHW, GD, CL, FDX, JD, ABB, MU, MET, HOG, YY, and on and on it goes.

But I’m sure there’s a bull market somewhere.

I encourage anyone who’s ever wanted to gain access to Exodus to do so now. Click on that link and sign up for a free trial.

Here’s the data. We’re oversold for 12 of the past 14 trading days — a new record. Mind you, these algorithms were measuring fear dating back to 2008. This is worse than those spates of downside pin action.

The lowest score we have on record occurred on 5/6/10 — the date of the flash crash. I remember it well, having been under a general anesthetic for an endoscopy. I had an astounding 25% of my book in VIX and ended up making $5 million on the ordeal. My play was for the lows to be retested and they soon were achieved. As a matter of fact, markets did not recover until October of 2010, a full 5 months after the crash.

After the lowest score was hit, prices dropped again, but quickly recovered. However, the rally was short term and new lows were quickly endured.

On purely a technical basis, this is the 7th lowest score. The first occurred on 9/22/11.

Look below and bear witness to the price action after that OS signal. It was a tepid bounce, followed by more selling. However, in a little less than two weeks from that date, markets had taken off to the upside again.

Bottom line: The selling isn’t done yet. When we bounce, based on historical precedence, you should probably look to fade it.

In spite of being largely in cash in my trading account, I’ve managed to make such big blunders, it practically rendered my defensive posture moot.

This all started last week during my triple dipping of the cannabis stocks. I ended up chasing them and stopping out the same day for ~10% losses. Then I bought some Chinese stock, CPHI, because micro crappers were gapping. I missed multiple opportunities to sell for +20% and ended up booking a solid loss of 34% today. The reason why that fell below my 10% stop is because I was out all day yesterday. I don’t like excuses — but that’s the reason.

Then I saw shippers heading up yesterday, so I took 10% of my assets in my trading account, which is 25% of my overall investments, and bought 6 stocks. One of them, ESEA, was up 66% from my basis within an hour of purchasing it.

Did I sell it?

Of course not, otherwise I wouldn’t be writing this post.

Instead of stopping out of them yesterday, I held and then sold during this morning’s blood bath for a collective 16.7% loss.

What have I learned?

Nothing at all.

What can you learn from this?

Quit buying and selling micro cap pieces of shit. You’ll make 100% on 5 of them and then end up blowing up, eventually, in a few errant ones gone sour. I knew the risks and the idiocy of these trades, having made these mistakes before, but I still erred.

The Exodus OS cycle from 10 days ago is over and I closed out the SPY trade I took, for a 6.9% loss on 20% of my Quant account.

Presently, I am ~80% cash in trading account, with 5% long ABX. Gold has been very impressive during this sell off. I have no intentions of buying into this afternoon’s bloodbath, especially after blundering so badly. And that’s the real sin in all this. My mistakes have denied me the ability to act aggressively and might cost me a surreal moment to profit from the panic. But I’ve been reckless enough and that behavior must be moderated, so here I am watching markets reel, lamenting over mistakes that should’ve been avoided.

I did warn you about the retest the lowFAGS. I don’t quite understand what the fuck their problem is — but they’re malicious when it comes to market sell offs and always need the lows to be retested.

Here we are now, retesting like good little monkeys.

According to my handy stock market almanac, when the lows are retested, especially on a morning gap down, apathy and misery circumvent the market, which often leads to bottoms. The issue I have with buying now is the specter of a weak close. There are several ways this can play out.

The best case scenario us morning bottom, followed by a furious face ripping rally.

Worst case is tepid rally, followed by a full face collapse at 3pm.

Either way, you have no business buying in size here. The technicals are weak. If you insist on buying, do so in moderation and try to avoid getting raped in momentum stocks — sort of like me in these fucking shippers this morning.

Futures are lower by more than 400. The session was doomed to begin with, starting with the overnight session. Things went from bad to worse this morning, following some downgrades in the semis and the CAT earnings miss.

While earnings are important, the key to stopping any market squall is psychology. As of this moment, there is a mania about to set hold in the marketplace. If this persists, anything could happen: shattered windows, broken elevators, men without wings flying in the air.

I made two errors yesterday and for that I am deeply regretful this morning.

Because I’ve been managing some personal affairs, I have been busy, and at times, unable to trade. I didn’t stop out of CPHI, which I should not own in the first place. Secondly, I sold my Nasdaq hedge, SQQQ. There was a third mistake, which was going long 6 shippers, but we won’t talk about that now. Overall, I think my measured tone, heading into today 65% cash, has been good. However, after speaking to a few dozen Exodus members during live conferences, I get the feeling that, at times, you ignore my cash position and instead barrel into my picks with full retarded vigor.

You can’t keep behaving the way you do and think you could get away with it.

Best thing you can do before a trading day like this is to prepare. Have yourselves a hearty breakfast. I suggest listening to WQXR- classical NY, two 6 minute soft boiled eggs, a piece of toast, and some earl grey tea with a teaspoon filled with local honey. If you’re unable to be a gymFAG and build muscles, the least you can do it eat well and good.

Here’s the problem with stocks — the fucking SOX.

In order to stocks to bottom, the semis needs to stabilize and recover. But it’s real hard to do that in the middle of a trade war with China.

Welcome to the new paradigm.

I was doing some diligent research into Exodus to examine the extent of the recent sell off. First, let me explain what Exodus does for those unfamiliar. It is a measurement tool for greed and fear, juxtaposed against price action, that provides actionable intelligence thru predictive analytics. In other words, the AI watches and measures how traders respond to pain and greed thresholds, via sophisticated grading system, and then draws conclusions based on historical precedence.

I feel like I’m not communicating that well enough. I’ve had a punitive day, barely enough time to sit down and relax over a boiling cup of black coffee. Throughout the trading day, I cowered behind my 65% cash position, taking on new positions in the degenerate shipping sector.

What can I say? I’m a glutton for pain.

And here’s the point.

I went back to look at the stress levels in Exodus back in the most stressful time for stocks, perhaps ever — February of 2009, when the SPY bottomed at 666.

And now.

The big difference between then and now, of course, is that was end of world trading action — total and complete capitulation — the annihilation of western finance. This drop is methodic, yet relentless. These minor drops only make it worse, as it provides the weak with too much hope and keeps marginal players in the game. The only way we can truly bottom, once and for all, is for a hair razing decline to the downside, one that halts trading, and fucking breaks machines — men accidentally falling out windows, and buses crashing into fire hydrants.

Until that happens, I’m staying 50%+ cash.

Stock prices continue to weaken and because I’ve taken a more conservative and sanguine view of the price action, absolute morons are giving me shit on the Twitter. This is a key tell in the pain being felt out there — weaker men in ugly cloth folding under the pressure, mountains of sell orders and small rivulets of income to withstand the barrage. This makes for a venomous combination and I wouldn’t be surprised to see some brand of falling off the cliff pin action, and soon.

Bear in mind, all charts look like this now. How does one buy into that?

As of August 2018, margin debt stands at record levels, more than $650 billion.

How does that juxtapose against previous market calamities? Poorly.

There’s nothing telling me to buy into this shit. The cannabis stocks I got lured into on Friday and stopped out of the same day are all sharply lower today. In a desperate attempt at having fun, I stepped into 6 shippers today, 5 of which are now below my basis. Be careful barreling into a market like this — for you might find yourself barreling towards a god damned waterfall with sharp rocks at the bottom of the pass.

This is a bit unfair, as I made some purchases this morning in Exodus and only now get to tell you about them. One of them is up 65% from my purchase price and I don’t want you chasing in after me. So take these buys with a grain of salt.

I bought two tranches of shipper stocks, each 5% of total portfolio.

First tranche.

ESEA ($2.10)
EGLE ($5.28)
EDRY ($12.43)

The second tranche.

TOPS ($2.62)
PXS ($1.54)
ANW ($1.29)

Here is the news, Trump pulling out of 144 year old postal treaty that gave China super low shipping rates. Those days are, essentially, over. I believe this isn’t being digested by the market yet and higher prices are just around the bend.

President Trump plans to withdraw from a 144-year-old postal treaty that has allowed Chinese companies to ship small packages to the United States at a steeply discounted rate, undercutting American competitors and flooding the market with cheap consumer goods.

The withdrawal, announced by the White House on Wednesday, is part of a concerted push by Mr. Trump to counter China’s dominance and punish it for what the administration says is a pattern of unfair trade practices. The White House, in a statement, said “sufficient progress has not been made on reforming terms” of the postal treaty and that it would begin the withdrawal process while seeking to “negotiate bilateral and multilateral agreements that resolve the problems.”

The Universal Postal Union treaty, first drafted in 1874, sets fees that national postal services charge to deliver mail and small parcels to countries around the world. Since 1969, poor and developing countries — including China — have been assessed lower rates than wealthier countries in Europe and North America.

Here are the movers in the sector.

Separately, the BDI rates have been steadily improving since 2016. I don’t want to make a fundamental case for the shippers just yet, however. That would make me cringe. This is a trade.

This is precisely what you don’t want to see in a tape — bullish open followed by sharp turn downward. It leaves nothing to be desired, a sense of apathy that turns good men evil.

We find ourselves in the midst of a very classic October sell off, a time of year when previous market crashes were made famous. Everyone is familiar with 1987 and 1929 market meltdowns — both occurring in October. What many do not know is they occurred when markets were already in a weakened state, sort of like now. Investors gave into their inner fears and stampeded for the exits, causing a crescendo of selling that made headlines.

Now I’m not implying that could happen here; but we really cannot remain oversold forever and eventually something has to give.

In spite of the tone, I’m optimistic we’ll bounce soon and will be looking to deploy my cash shortly, praying to the Gods for a bounce.

Axios is reporting from their sources, Trump has no plans to end the trade war with China, at least not until they’ve suffered more. Now saddled with the worst performing market in the world to date, China seems to be on the losing end go this war of trade. After all, with very little importation of American goods into China, roughly $115b in 2017, China has much to lose.

Just a little back of the envelope math here, at $520b of Chinese imports into the country at a 25% traffic, US consumers also get dinged with a potential $130b+ in high costs for their cheap Chinese wares. In other words, that shit you buy in Target for $19.99 might now retail at $25.

The bottom line, as per Axios.

All signs suggest the trade war between the U.S. and China is just getting started. I’ve asked sources close to Trump whether he’s ever expressed any private concerns over whether his tariffs could backfire due to Chinese retaliation against American consumers or companies. Nobody I’ve spoken to has heard Trump express anything along these lines. He’s all in.

Nasdaq futs are only -4 now, up from -50.