Smalls Left Behind

Just like all of last year, save the last two months of the year, the degenerate small cap sector filled with scam stock is once again underperforming. I think it makes sense to never believe in the small caps again. What are you buying into with the small, at any rate? You are opting for financially weak companies whose business is constantly undermined and threatened by those bigger than them.

Feeling sick, I didn’t feel like scanning for stocks so I sorted for technicals inside Stockalabs for stocks over $200 per share. That’s all I did and I’m +102bps for the session. The short cut logic in this is to buy expensive stocks with strong technicals is to buy into the hegemony and those powerful companies seeking to uproot and destroy the small cap index.

Into the close, I don’t see why we can’t jimmy even higher. There doesn’t appear to be a reason for not rallying so we might as well do it and get it over with already.

I went to bed feeling sick last night, perhaps I got myself another round of the old COVID. This is what I get for not vaccinating myself or wearing a mask. If COVID, I am literally a walking time bomb against Grandma and her death will be on my conscience. When I get good and better, I’ll visit my local $WBA to inquire about their latest vaccines — perhaps get a two for oner — injecting my person with both the COVID shot and maybe I’ll throw in the flu one to boot.

I cleaned out of my stocks this morning — since I was feeling bad. I have gains of +65bps on the books, thanks in large part of my large brain and shorts against the fucking semiconductors. I have only 1 position now and sort of like the peace and tranquility of not having to deal with the god damned roller coaster for one day.

I haven’t been watching the market, so I offer nothing of great insight, other than to suggest commodities are dead and SAAS is alive. It’s all so tiresome.

Into the final hours I’ll pick myself up and buy some stocks for tomorrow. Hopefully I’ll pick some good ones again, because I much prefer making money when sick than losing it.

Rough trading day, sort of a mixed bag of nuts — cross-currents designed specifically to fool the plebeian class back into foolhardy sojourns. I made it a point to ignore my emotions and to think clearly about the task ahead. This being a consolidation day, we can either collapse to surge ahead. There will not be a sideways trading action in the weeks ahead. We will either trade up a lot or down. That’s my call, so brave and yet so based.

I positioned in expensive stocks that are out of the grasp of the poors, mostly out of novelty. I did see some money flowing into these higher priced securities but didn’t investigate too deeply into the narrative, as I am prone to changing my mind at a moments notice.

I traded well, as all professionals should. With the $IWM down 1% of the session, I managed to limit my losses to just 4bps, keeping me +150bps for 2024.

I am leveraged at 137% of equity, mostly to accommodate some hedges — via $SOXS and $TZA. My convictions are limited to the tides and the winds, as I am merely an instrument of money making abilities and try not to get emotional about my job.

The stated goal here, especially early going in the year: DON’T BLOW UP. In order to achieve this you need to set aside your child-like opinions and emotional outbursts and wait for a direction to be decided upon. You might feeeeeeel stocks are going up or down tomorrow — but the markets doesn’t give a fuck about your bad upbringing in the housing tenements and how you were never able to get girlfriends by tricking and fooling the easiest people on the planet — which led you to make small dicked decisions in the stocked market — rooted in the idea that money is going to solve all of your problems.

Go to the gym you pathetically flaccid troglodyte.

Over the past few months we’ve enjoyed a resurgence in the small cap Russell 2000 index, which led stocks higher from November. Prior to that, the $IWM had woefully underperformed the larger caps — with the NASDAQ up 50% vs the Russell barely up 5%.

We are seeing that divergence assert itself today, as small caps dive lower by 0.9% against a higher NASDAQ. While it’s tempting to believe the opposite will occur — it is more likely the trend of the past year will continue. If stocks do trade up in 2024, it’ll likely be led higher by mega cap monopolies. The case for small caps is best rooted in lower interest rates and higher growth. At the earliest, rates will not be cut until Q3, so the case for small caps will need to come in 2025.

The morning drop was quickly bought and now we’re rolling higher. Breadth is a paltry 51% and gains are concentrated in biotech and tech. I am +13bps looking for more risk into the close.

Yesterday’s declarative blog “The Bull is Back” might’ve been a bit presumptuous of me. I tend to get easily excited and sentimental about the halcyon days when I’d throw my trader/servant down very steep flights of stairs for messing up my sell tickets. Nowadays, I get mad at just about anything and when I see the market, my true love, I tend to romanticize about it and always root for her success.

While it’s true, I also want the market to fucking COLLAPSE — that has nothing to do with the market itself, per se, as I view the market an extension of the criminal regime ruling over my country now. To see the market fail is to see them fail, which would then lead to their collapse and eventual transition of power to American patriots. I feel the same way about this regimes current wars.

At any rate, the US 10yr is FLAT and markets opened sharply lower.

But we have to remember the answers and markets love to bid up after it gets marked down at the open. This doesn’t mean it’ll go straight back up, however. It’s worth nothing, breadth is ok at 45% and SAAS stocks are up 65bps. They were down about 0.3% at the open, which is a key tell. That index I speak of is exclusive to Stocklabs — but you layman’s out there can concoct one on your own using stocks like CRM, HUBS, DDOG and others.

I’m very cautious here into this bounce, down just 17bps, 65% cash, keenly positioned both smartly and acutely because I am a professional and that’s what professionals do.

Good afternoon plebs —

Last week the world was ending. Today the market is back to throwing old bears down flights of stairs. You have to understand the nature of risk to appreciate the candor of this type of tape. Risk, unlike genders, is on a spectrum and when it’s low we are prone to extreme risk off characteristic traits, such as spiraling lower stocks. But when it’s up, you should expect to see stocks bust loose — even though Joe Biden is President and even with GLOBOHOMO at the apex of its power — gripping Europe’s nuts in its homosexual claws.

I traded well and made 85bps for the session, wholly intent on receiving moar. I closed fully long and without hedges — partial to biotech and tech — the riskiest part of the spectrum.

If you’re confused about how I can say last week “stocks are heading lower” and today profess we’re on the verge of busting the fuck loose — it is my prerogative to do so. As such, I can once again change my opinion tomorrow — perhaps exalting the renewed bear market accompanied by a picture of the Titanic in a nice blog post. I do not offer you or anyone else explanation and can do as I like when I prefer doing it. Who can stop me?

You fools. You had time to adjust and dive into all of the deals that were provided to you this morning, but you chose to be a bear and now you’re penniless, completely broke.

Markets are busting loose here and risk is 100% on. We are seeing $BTC surge, dragging the retarded miners with it by their feminine hair. I have been leaning into the market with a fixation on AI chip, higher by 82 bps for the session. My monthly allocated quant portfolio, which is long only, is up nearly 2%.

The important message of this blog is to inform you that risk is back on the table. Avoid shorting here — as we are likely to squeeze into the close — castrating all of the permanent bears in the process.

A little cheat sheet tip for you: whenever you see SAAS stocks legging higher — a rally isn’t too far in the future. At the open of trade this morning, several things were made abundantly clear. Oil stocks were out and tech was in. Also, the $BTC soared, but the miners COLLAPSED — on the false assumption that the BTC ETF will somehow displace the miners and $MSTR. I do not believe this to be the case. People can’t fucking think straight while eating breakfast, apparently.

At any rate, this tape appears tricky, but it really isn’t.

Retail, tech, industrials, semis and just about everything in between are going up, save the entire basic material space, tankers/shippers etc. The rotation is clear: back into stocks that went down the past 2 weeks.

I closed out my shorts and went long, but remain 75% cash. I will likely add more exposure but do not want to chase a rally that might not go much further than already has.

It was an abysmal week for stocks — leading industries trashed and tossed aside into flaming barrels of trash. But there was rotation, so let’s have a look.

138 stocks with market caps above $5b traded up more than 2% last week. There were some outliers, biotech related news spikes, merger rumors etc. But were there any trends of note?

Of the 138 stocks, here is the breakdown per sector.

Basic Materials: 16
Consumer Goods: 12
Financials: 34
Healthcare: 33
Industrials: 1
Services: 10
Tech: 14
Utility: 18

The best performers were $CYTK, $MRNA, $VTRS, $CIB, $TEVA (TRANS-DRUGS), $MRK, $CRBG, $ALL, $VZ, $TCOM, $IBKR, $BNTX, $GSK, C, $SU, $NVS, $EC, $AMGN, $WRB, $SWAB, $EG, $WYNN

I think it’s fair to say the most boring stocks in America trended up for the first week of January, highlighted by BIG PHARMA and a myriad of low growth banks. We should assume these are temporary placeholders that will be discarded at the first sign of a bounce in risk stocks. I would not lean heavily into this rotation and prefer to long normal stocks with downside hedges. Downside hedges are tricky because gap ups can be sold. In my opinion, the best strategy is to have a balance of longs and shorts that will net out a gain, at which point you should sell everything before 10am.

For example: if you are 100% long, you need to have an additional 30% leverage into $SQQQ or $TZA to be net short. If you have 75% long, 25% inverse ETFs will produce a net short position. You can get lucky if volatility blows out and long $UVIX.

Here are the inverse BETA stats for some bearish ETFs.

$UVXY -5.2
$SOXS -4.9
$FNGD -4.3
$TZA -4.1
$LABD -3.8
$SQQQ -3.5
$FAZ -2.7
$ERY -0.94

If attempting to hedge a portfolio, you want to make sure to avoid outlier events, which is why it’s a bad idea to hedge with industry specific ETFs like $ERY, $FAZ or $LABD. The market can be down 3% and a buyout in a specific industry can completely ruin your hedge, which has happened to me before. In my experience, $SQQQ or $TZA are preferred but in recent months we’ve seen some serious divergence between small and large cap — with a distinct bias to the downside for the smalls. Ergo, $TZA has been a better hedge, lest the market is rising fast. Then you’re fucked with $TZA.

As sure as I am sitting here laughing at the transgendered bulls for their unceremonious losses to kick off 2024, many in the comments section will talk shit — attempting to make hay of it all — trying to convince themselves markets didn’t crash for the first week of 2024.

Let’s me illuminate what happened.

Markets called bullshit on the Fed and demanded more clarity on the specter of all of those rate cuts that were priced into markets since November. Yields shot higher by 5% to 4.05%, at a level that isn’t a danger to markets yet — but at the point of concern. Incidentally, markets fell almost in lockstep with bonds — off by 4% for the week — capping off one of the worst beginnings to a New Year that I could remember.

Over 150 notable stocks traded down more than 10% for the week. Some faired even worse, such as $UPST -26%, $HUT -24%, $RIVN -19%, $SEDG -17% and $SQ -14%.

Looking ahead, I envision a landscape strewn with blackened fields and abandoned buildings with moss growing inside what was once a busy lobby.

Will we bounce next week?

Absolutely not.

These are the opening stages of COLLAPSE and Joe Biden is the oldest person in the world — leading the nation directly into the grave where he belongs.

I closed the week +65bps, demonstrating a professional acumen that is expected of a man in my station. I had difficulty mid-day with the volatility, tricked and fooled several times — but eventually got bailed out with a little luck (wink).

What’s interested to note is the ruinous behavior in the VIX index, a byproduct of FOMC intervention — directly into the instrument. They are attempting to suppress volatility for reasons that are so childish, I cannot help but to laugh. Time is up fuckers and the VIX is going to spike right through your hands and into your brain stems. People are buying puts and you cannot stop the whirlwind that is coming.

That being said, I do have longs and I am prepared to be wrong — as I am keenly aware of the power of the riggers to rig, loot and steal, cajole and kill, all for the sake of retaining power. But they are old and weak — their minds have deteriorated from decades of decadence and liberal rot. The country is going to be saved — but first it will need to be up-ended.

Have a pleasant weekend.