Crazy Batshit Tape

Let’s observe for a moment.

US 10yr -11bps – bullish
Nasdaq up – bullish
$BTC above $43,000 – bullish
Large Cap tech up — bullish

Small caps -1.2% – bearish
Every sector is red – bearish
Breadth 36% – bearish
Over 200 stocks down 3% or more – bearish

Early going I was bogged and switched my positions to large capped and 10% weighted in an effort to capture back my lost coin. Initially it worked, as markets legged higher. But I didn’t take profits. I had reduced losses from -2.3% to 1.25% and then cannon balled the fuck lower back to session lows on the renewed downswing. I now stand before you entirely defeated -2.8%.

What should I do now?

I should shut the fuck up is what I ought to do — but I won’t. Because of my greed, I am now down 0.47% for December. This is the important perspective worth remembering. It’s a bad day and it can only get worse if I let it. What I am likely to do is greatly reduce my positions sizes and call it a day. I tried a gambit — but failed. I now risk taking a bad day into a much worse day, providing we cascade lower into the close.

It is very possible we have seen the highs for the year. It’s also possible the market isn’t done going higher. When markets are running on pure adrenalin it’s always guess work and that’s exactly what the market has been doing. We only default to long because market, over time, always trade up. But there are chasms in between that can ruin people and those ruinous events almost always happen when greed goes unchecked and risk aversion is discarded for grandiose visions of a deluded man.

The best course of action, at least in my experience, is t err on the side of caution — even if it means missing out on a rally you felt entitled to.