I had traded masterfully until the last 15 mins of trade, when markets — out of the fucking blue — melted the fuck higher, escaping the wrath of a down 300 NASDAQ session.
It makes no difference to me, as I traded off by just 36bps for the session when most of my colleagues clung to their holy books today, off by more than 150bps. There was a very noticeable rotation out of risk and back into value. I cannot stress to you how many times I’ve been fooled by this rotation — as I am biased towards believing in the circular motion of money out from growth and into value and back into growth as markets cycle through economic ups and downs.
It is my belief we are at the precipice of economic collapse. But it should be noted, I’ve been believing in this since 2009. Nevertheless, a man is nothing without his dreams and I tend to get carried away with my machinations — creating hellscapes out of bull markets and apocalyptic doom forged at record highs.
It’s going to be a long year and we’ll have plenty of time to make great trades. One potential great trade is the ANTI DEFLATION varietal, as consensus opinion now states flatly “inflation has been defeated”, giving an all in signal to bond longs to keep leveraging in and buying since the FOMC is going to cleave rates by a hundred times in 2024.
But what if none of that shit happened and rates jimmied back to 5%? We had the US 10yr +8bps today for no reason at all. Dare I say, you’d be foolish to lean into stocks heavily today, providing all of the news regarding Apple’s downgrade and the fanciful stocks you and your homosexual friends traded so eagerly in 2023 tanking through the fucking floorboards and beyond. It’s very possible, the January Effect in 2024 will be a deleterious one — given the circumstances and candor of the tape.
I closed long risk averse names, hedged short small caps, biotechs and long volatility.
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