BELIEVOORS PLEASE STEP FORWARD

Please do not misconstrue my incessant bearshitting commentary. I often say one thing and do another.

FOR EXAMPLE:

I hate stocks and wished they’d go to zero, probably due to some not so deep seated psychosis going on with me, but permit my Quant and Algo accounts to be 100% long. My trading is most often long and only bearish for short durations. I hedge my losses and find safe havens and then jump in when blood flows through the streets. I would of course PREFER to only see downward spiraling tapes. But, I imagine, after awhile it might get redundant.

The NASDAQ is +260 and today’s action is as boring as yesterday’s inaction.

I am quite pleased with my results, 55% cash +190bps in trading — much bigger returns in my other accounts. I have been hammered down in a FAZ position that makes up 10% of my holdings, now off by 8.5% or so. I could’ve closed it out without an issue many times during the day but I didn’t because the XLF isn’t known for such big one days moves. My best move, in all likelihood, will be to TRIPLE DOWN in FAZ — because nothing says stubborn like betting thricely on a positions that is not behaving nicely.

See what a poet I am?

Listen to me.

Bear markets are not your friend. They seek to destroy you and you can never rest your guard. Think of a bear market as a really bad neighborhood. Would you walk thru said hood with gold chains, fancy shoes, and no gun? Why, you’re liable to get raped out there looking like that.

When in a bear market one must assume there are criminal elements everywhere and you must carry your gun and be prepared to shoot. I always say, shoot first and ask questions later.

This entails selling winners when they present themselves and not loitering around for too long with them wanting more. Again, if you loiter around with your gains, someone is likely to take them from you.

Standard stuff.

Lastly, sometimes it makes sense to be on the offensive instead of always looking over one’s shoulder. This means you too can rob others of their valuables, providing you’re armed. If you see someone with a fancy watch or hat, feel free to take it. Do as you like, this is a bear market.

I’m +135bps early going, defensive but yet also on the move.

No Sir — I will not chase.

The Stocklabs 4000 Index is higher by 1.6% this morning, led by all of the nefarious scoundrel stocks that knifed lower yesterday. There is of course a chance the wall of worry is scaled higher for more than just 1 day. But I err on the side of caution in bear markets, which is why I am at recourd highs and you’re still trying to dig out from your own grave.

I went to cash this morning, only leaving my underwater FAZ position intact for the time being. I will close that out too and be 100% cash, up around 1-1.25%.

My algo driven account gets closed out tomorrow and that fucker is +7% today, fully long via TQQQ based off the Stocklabs oversold signal. That account has been used exclusively for oversold signals in 2022 and is now +18.5% for the year. My quant is also up 1%.

But this isn’t about me. You’re either reading for enjoyment or to glean into my warped mind for financial advice; but I will provide you with neither.

Good day Sir!

The NASDAQ closed down 155 and I know many of you are fixing to toss yourselves into lit fireplaces, unwilling to withstand the fires of the market and the general economy. But before you do, perhaps look at the silver lining of today’s tape. Although Elon Musk is predicting recession for 12-18mos (that’s called a depression fucked face), we enjoyed 50% breadth and numerous commodity stocks closed at session highs.

I shed 60bps in an underwhelming session but feel good being fully invested heading into what may very well be a truly horrendous session. I say this because, like all good things, it’s over. War and famine are all but assured and the notion of higher stocks in an era such as this is fanciful nonsense.

NEVERTHELESS, all we require is perhaps a single day or two to sort things out and make some more coin to fund elaborate and ornate libraries in our newly purchased overvalued homes.

Let’s not mince words here. Musk is trying to get the price to acquire Twitter way down by making these accusations about SPAM and how prevalent it might be on the Twitter platform. On that point, the valuation of Twitter almost entirely depends on active users, so if the company knowingly ignored the bots and counted them as users — they’d be guilty of fraud.

The CEO went on a long winded tirade on Twitter trying to extol the virtues of the piece of shits who work at his company.

Some headlines/statements on this matter:

So how do advertisers know what they’re getting for their money? This is fundamental to the financial health of Twitter.

MUSK ASKS RHETORICALLY, IS TWITTER POTENTIALLY 80%-90% BOTS

MUSK SAYS HIS LOWEST ESTIMATE OF TWITTER BOTS WOULD BE 20%

MUSK SAYS `NO WAY’ TO KNOW NUMBER OF BOTS ON TWITTER

MUSK STILL AWAITS `SOME SORT OF LOGICAL EXPLANATION’ FOR BOTS

Shares of Twitter have careened lower again, now below where the stock was before the Musk bid.

For the past several weeks markets got so spooked over the recession to come and be enjoyed, it forget all about the supply disruptions that will keep the cost of goods way up.

Thankfully today this is being revoked and we are once again safe inside commodity plays.

Conversely, SHOP, NET and anything remotely related to the consumer are having their brains blown out. I’m down 13bps for the session, mostly due to my bank short going awry alongside longs In biotech and solar. You’d think risk would be distributed evenly, but not today. For today is a day we celebrate the $30 bag of coffee and $10 tomato.

Hard times hasten behind us and I’m afraid we’ll run out of printing presses before it catches up.

Meanwhile, Turkey said they’d veto both Swedecucks and Finland from joining NATO, which makes sense. Why should Turkey be forced into an alliance with such pussies? Look at what the Swede’s willingly do to their nation. Siding with Finland over Russia gets you what exactly? Good will from the great satan?

Fuck off.

Markets have picked up in the past few minutes, but breadth is still weak and we have pronounced weakness in various consumer sectors while strength is most abundant in commodities and anything related to agriculture. Due to soaring commodity prices, natty, coffee and wheat are all up 5%, investors have a hankering for beaten down commodity stocks.

My quant, which is almost all oil, is flying up 3.75%. My trading is having a more muted reception, up just 0.26%.

I’m only 50% invested at the moment with a position in FAZ as a hedge. I’m trading defensively because, well, I feel like it god damn it.

Markets appear to want higher now, stagflation or not. I chased all I felt like chasing this morning, but will chase no more.

The theme is: deglobalization.

Due to the war and scarcity, nations more and more will begin to prioritize their supplies, with exception to the United States who could give a fuck about its own people. The rueful dollar is all that matters here and if it means more people grow poor because of it, so be it.

Before this export ban, India was expected to export 10 million tonnes of wheat. This quite literally was the world’s only hope at resolving the wheat shortages to come, due to drought and war, as India is the #2 producer of wheat world wide.

Wheat is up more than 5% for the day. I’d fix my attention on ag stocks, particularly any company who helps increase the yield on crops, such as any potash play.

Worst come to worst, we can always eat the bugs.

I tested NEGATIVE for COVID but admittedly felt sick. Everyone in my house has had COVID but my paranoid daughter, so I chose to quarantine last week just in case. I’m down here in this dark cold walk out amidst the couches and the boxes (I’m moving soon) watching Coen Brothers movies. I had never known about how good of a film maker those two fuckers were until now. I saw Burn After Reading and then Hail Caesar, both masterpieces. I will continue with another one today. Aside from that, I haven’t been doing much of anything. Quarantine isn’t bad actually. Food and coffee is sent down and my responsibilities to the outside world is zero. I haven’t had a fever the whole time, a slight cough and minor congestion. If this is COVID, I like it. I’d get it again, willingly.

NASDAQ futures are +95 and I am now listening to Basque music, an odd sounding genre of music in a language that is completely unfamiliar to me.

The news is grim — shooters all over the country in crazy as fuck America. As for the fucker in Buffalo worried about white people going extinct: how about making some babies you piece of shit? Every life is precious and if we begin to believe it isn’t — we become subhuman animals. If you are concerned about your community, do constructive things to help them not destructive things to destroy others. We all love the sounds of summer, the sweet scents of flowers and how the sun sets on a perfect day. Don’t rob that from others just trying to live and be happy on this god damned prison planet.

On the war front, same old same old. Russians fighting Ukrainians and NATO is sending every single weapon in their stores. On paper, NATO should prevail here. It doesn’t look great for the Russians now. But if they pull it off, NATO is fucked. Honestly, the evil empire is too strong to be defeated. We have trillions at our disposal and our people aren’t all trannies yet. Perhaps if Russia attacked in say 30 years — they’d steamroll right into Kiev unopposed. Alas, late empire Pax Americana is violent and viscous and will not cede power without killing all of the Ukrainians first.

On the issue of Finland and Sweden joining NATO — poor choice for them but I can see why they might want protection. At this point, Russia doesn’t have many strategic allies in Europe and will be hard pressed fighting everyone, even with the indomitable Alexander Lukashenko at their side. If NATO can pull it off and drive Russia out of Ukraine, which I doubt, then this market will celebrate in a big way higher. I have no context as to when we might learn when the war will end, but I suspect it will last through the Summer and perhaps even into the winter. It might even end up being Syria 2.0, as NATO attempts to drain Russia of resources by making the war expensive.

I’m sure Ukraine won’t mind.

Pardon yesterday’s blog — I must’ve had COVID of the brains to speak in such a manner. Those aren’t my true feelings, as I do enjoy helping others achieve financial independence. What more can I say, other than I believe Mr. Hyde is back in his cold basement cage now.

I was perusing NASDAQ returns for 2002, as it is my analog for 2022, and came upon May 6th, 2002 a day which saw the NASDAQ +10.7% for the session. By the way, it should be noted that all of the very biggest one day gains have occurred in the worst of markets.

May 6th, like May 13th, was a Friday so the next trading day was May 9th.

Date/Returns

5/9: -2.58%

5/10: -4.5%

5/11:  +4%

5/12: +5.8%

And then we went on with a slew of small gains followed up with larger losses, making for a miserable tape.

This is precisely what I expect to happen now. We will likely dump out Monday and Tuesday, providing enough fear and panic to get another mean reversion trade and then up we go again and that’s it — bear market trading the whole way. The best word to describe bear markets is “cruel.” It never seems fair and you’ll always feel as if the game is rigged against you.

The truth is, markets are trying to discovery a price that can be called a “bottom” based upon valuations. Presently the market s trading 14.5x earnings on a median basis. This is not including the potential 40% decline in earnings. If we factor that in, the market would need to trade about 35% lower in order to be considered “cheap” on a historical basis. This of course is predicated on recession and high unemployment, none of those things are present today. If the economy doesn’t slow to a degree that would reduce earnings by 40% (I am using CSCO’s earnings drawdown in 2002, 2008 as my base case) then markets are 25% cheap right now.

So which is it? I have my assumptions, but like you, I haven’t the slightest fucking idea.