AND JUST LIKE THAT…IT’S OVER

It was a nice bull run we had there for a week — but I am sad to report to you all that’s it over. The Biden administration is now looking at a windfall tax for oil and gas companies, one of the few bastions of safety in this harangued market. The NASDAQ is breaking lower here, off by 234.

We do not need reasons or concerns to break lower. It is as simple as this: BEAR MARKET TRADING.

You’re never safe. No one is going to save you. You’re doomed.

I, on the other hand, was fortunate enough to have a 10% position in OKTA. I sold it around 4am and also had a 17% position in SOXS as my hedge. I sold that too and now preside over you +203bps for the session and in a 100% cash position. I’m up 4.25% for the week, +48% for 2022, and have no intention to “trade” the market today, on a Friday where all sorts of stuff can go wrong. I am busy today and doubt I’ll have the urge to splurge in a tape that is destined to fall.

So why did I close out my hedge?

Because the market has been shooting higher following morning gap downs. I simply sold all of my other longs first, whilst saving the SOXS for last, in order to get out.

Oh and there’s this:

Musk says Tesla needs to cut staff by 10% & pauses all hiring … RTRS

In the email titled “pause all hiring worldwide,” he said: “I have a super bad feeling about the economy.”

I gave back a little from my highs, but still made more than 2% for the session and now have a 10% position in OKTA STEAMING higher after the close.

Life is good for the gentry inside Stocklabs. They saunter about all day, are provided the world’s very best financial advice, and have enough time to clean their glocks during working hours — all independently wealthy and secure.

I closed with an awfully large hedge in SOXS because I’m up 45% for the year and do not want to give any of it back.

Tomorrow is Friday and I depart for NJ in the evening, but will also be busy throughout the trading day.

Markets wants higher, as evidenced by the non stop buying of dips. Even in the face of bad news, the market is rising. This doesn’t mean we bottomed. It just means it’s going higher now. It’s not that complicated.

SIRS —

I am at to lunch now with the family, as this is the last day of my younger son’s day at Highed School, which means all of my children are done with school and I no longer need to ferry them to and fro with my low powered Subaru.

I have been trading way more aggressively and have been placing 10% sized positions. This has helped me win bigger since I’m incredibly hot now.

For the session I am +3.4% and I have a hankering for more. I moved out from margin and into a 35% cash position with 10% allocated to SOXS. Since I’m out, with no idea when I’ll return, it’s possible I won’t do much for the balance of the session.

It looks like a poor open, but there is a lot of strength just below the surface.

My best sense is for a rally. I bought a bunch of stuff and then got worried about getting HOOKED so early, so I tossed on a 10% sized hedge in SOXS — which I will likely double again by the close of trade. If I slow my progress due to this hedge so be it. I am loaded up with tech and commodities and should participate if the market does what I think it will. I am tempted to buy more, but I only have 25% cash left, so I ought to go eat a sandwich and come back later.

Oil was lower but not bid. Almost every facet of this tape looks constructive to me for a rally. Whether this unravels later on today is another story. One can never trust a rally inside of a bear market.

UPDATE: I caved and bought more, 113% leveraged.

Microsoft came out with an earnings warning this morning citing FX losses. The ADP report showed a gain of 128k jobs in May, much less than expected. But much worse than that were the losses in small businesses.

Small businesses crushed pic.twitter.com/IJoR04sQrZ

— zerohedge (@zerohedge) June 2, 2022

Futures had been +70 NASDAQs but are now red and we are looking like a CRASH THE OPEN type of day. All of this gloom might, perhaps, lead to some sort of twisted thinking rally. Nothing surprises me anymore. Sometimes bad news is good news and other times it’s good news. It all depends on the framing of it and how well CNBC markets it.

Nevertheless, if you’re only concerned with the actual fundamentals — this is all bad.

I was out there naked just buying shit, acting like it was April of 2020 and Chamath was on top of his Twitter game. Then in dawned on me — “what the fuck are you doing Fly?” You’re in a motherfucking BEAR MARKET — trust nothing. So I quickly leveraged up my account and bought a 25% position in SQQQ and a 10% position in UVIX — which should stabilize me in the event of harrowing opens.

I closed the day down 180bps, off my lows but still a poor start to a new month. I judge myself on a month by month basis and the success I had last month is now gone and in its place is loss. I will now fight against this adversity and do everything I can to prevent the 1.8% loss to widen and then become untenable for me to achieve a positive return for June.

It is my instinctive belief the market wants higher. But that’s me believing again, a habit of all humans to aspire for something greater — part of our productive genetic coding that has creating all of the wonders in this world.

As we embark on this new journey, into fear, let me remind you that everything you see and hear in a bear market is a lie. The only thing that matters now is the fundamentals. Technicals count for nothing.

I’ve decided to stick to my original instinct and avoid getting chopped into pieces. It’s ok to be wrong and one can accept that. It’s another thing to be right about something, get weak and cave, and then end up on the receiving end of a shit sandwich.

I will not sell my longs and acquiesce to the market forces.

This is an interesting graphic taken from Stocklabs, one that is repeated nearly every single day. We jump at the open only to collapse sloppily all day.

None of that matters now, however, since we fast approach the 3pm magic hour. My hope, and this is all I have now, is for a nonsensical bull run predicated on nothing other than fantasy.

Wish me luck!

I was supposed to be bullish due to the CRM earnings and then the reality of the situation set in once again. This time I was caught hooked long — a believer of sorts — pretending to be optimistic in a world on the precipice of collapse. I am still hooked, long with 85% of my assets and down 2.3%. In an odd sort of way, I am happy to have some variety in my daily routine. Some adversity is good for the soul and should help me feel under pressure, which is when I operate best.

Natural gas is soaring, up 7%, and the war in the Ukraine is looking bleak for the west. The outcome to this ordeal might go as follows:

The West thew all of their wonder weapons and support at the war and still lost.
Russia cedes control over the region, places their puppets in charge.
Russia gains an economic stronghold on both food and energy and use that power to cajole European nations.
Pax Americana ends.

FIN.

This is what we are looking at now — a spiraling economy with supply shock along the way to keep prices ARTIFICIALLY HIGH. In a sense, they aren’t truly artificial, but based upon economic output the price of oil should be coming down. The fact that we are at war with the largest producer of oil, grain, and fertilizer places the west in the inexorable position of having to either produce more on our own and risk the ESG mafia getting angered — or simply do without.

Into the final hours of trade, I am going to hold tight to my longs and hope for the best! I will of course hedge the close.

Futures are sharply higher this morning, led by shares of CRM who beat earnings last night. This is especially notable because analysts said they’d miss and also because they’re the largest SAAS company and that sector has led the tech sector to the downside with horrific consequences.

Salesforce beats by $0.04, reports revs in-line; guides Q2 EPS below consensus, revs below consensus; raises FY23 EPS guidance above consensus, raises non-GAAP operating margin guidance, lowers revenue guidance below consensus

Energy is also up across the board, with Natty +4%. Yesterday we had constructive action in some of the FANG stocks and today we are seeing CRM +9%. If I wasn’t so biased to the downside, I’d argue the possibility for a rally.

NEVERTHELESS, I will not be fooled or tricked into a fall sense of optimism. I will of course play the long side and hopefully profit from the new found ebullience of growth stocks.

C2 does a great job managing the Stocklabs Youtube channel. He doesn’t shill the product non-stop but instead does some pretty kick ass reviews of the market. However, in this video, we are shilling like a motherfucker; but for good reason.

The fact of the matter is, not only is my Algo and trading accounts crushing, but so is my automated quant strategy, which is updated once per month and left alone.  The strategy is up greater than 20% for the year so far, mostly passive, only managed on the first of each month.