GLOBAL ENERGY CRISIS LOOMS

In recent years the world has tossed away traditional sources of energy in exchange for renewables and then the electric car came around and taxed an already feeble grid and push it even further. Now with winter looming, there is a growing crisis in Europe — due to lack of natural gas stocks. This shortage is positioned to ripple around the world, in turn forcing Chinese factories to limit steel production and likely cause people around the world to freeze.

Evert since the stimulus checks went out and the supply chain got bogged, inflation has been steadily fucking soaring. It was all fun and games up until the lights started to go out and now here were are on the edge of disaster, natural gas, oil, nuclear, lithium, coal and all spot energy markets fucking soaring thru the roof.

LNG shipments are booming and shipping rates are at the point of lunacy. LNG is your play for that.

Spot natural gas is trading at premium now in the Northeast and Southern California hubs, as much as $3 higher at the SoCal Gate and Ehrenberg hubs.

You will see energy emergencies declared within weeks and prices continue to surge. There are numerous ways to play this and you’d be wise to do so.

China cannot buy natural gas fast enough and has not filled its stockpiles. Imports are +100% over last year and numerous provinces in China are already rationing electricity. Prices for steel and aluminum will jump if China is forced to shut down factories in favor of heating civilian homes.

Also, there is a coal shortage in China.

EU natural gas prices are +500% YOY, at a new record.

Uranium

If you’re long FANG stocks into today you’re hating life. If by chance you own SHIT OILS, construction or anything in the commodity space — you are living fat and large.

Today is all about the seemingly out of control 10yr yield continuing to head up alongside oil and natty and the entire inflation narrative. This is receiving widespread allocations, as junior at the trading turret is booted from his tech plays and PM back from his cocained fueled sojourn into the Hamptons is positioning for $100 WTI.

Higher rates means wider spreads for banks, which is why you’re seeing regionals run fast.

I like them all here and believe this play has legs.

We haven’t updated the aesthetics of this clown-site since 2015. While blogging is not like it used to be and everyone now jerks themselves off on Twitter or for our readers inside The Pelican Room of Stocklabs — I regard this living testament of work here to be of the utmost importance. As such, I have shelved future SL development in favor of fixing up this shit-hole.

I am going to do away with the front page — fuck headlines — and also nuke mostly all other blogs. I will keep a few and maybe add one more — but the days of the Peanut Gallery are long over and I am not interested in driving page views. As you noticed, I haven’t run third party ads on the site for about a year. iBankcoin was never going to be and never could be mainstream to the point of being worth shilling for page views. Trust me when I tell you, I have tried almost every trick there is in the book — but the facts remain and they are unmoveable: I am who I am and being me also means extreme levels of love and hate. While I am a bit warmer in my 40s than I was in my 30s, I am very polarizing and as one fucked face once said “very off-putting.”

The new site design isn’t going to be revolutionary, but good enough to look modern and function better with mobile.

Thank you for visiting this shit-heap all these years and I am sorry (not really) for not making user experience better here. I have been HARANGUED by plagues in many different ways the past 2 or 3 years, maybe more. Often burnt down to a cinder and rejuvenated through the blood of the Gods, I hope you too will be reinvigorated in our site redesign, authored by our new tech TR$way, which should be completed by and no later than 2039.

Heavy selling in crypto miners, Chinese and biotech stocks — steep drawdowns in a slew of momo stocks but FANG saved the day and market closed basically UNCH in spite of the looming tumult that is to come in very short order.

I will have you know, I cannot recall the last time I have traded so poorly, missing trades as if I was new. I know the feeling in my gut and that feeling on more than one occasion has turned moderate losses into much larger ones — so pardon me if I tell you that I have to trade small and without much bravado, otherwise I am going to be routed.

No one likes to be routed, but it just happens when you’re no longer connected to the prevailing winds of the tape. This is not my tape, never has been. I prefer a rip roaring market filled with momo stocks and hedonistic glory. We have been in and still remain in a methodical tape rewarding larger hedge fund hotel type stocks and the old glory we enjoyed amidst the pennies and all of the EV and alt energy stocks are really really dead and those rallies are far and few in between. I am wise enough to know this but still get boondoggled into trades because fast money is addictive and I pine for it just like I pine for the days when I’d buy a stock +15% only to see it later in the day +35%.

This market is much more conducive with swing trading and positions that are accumulated over longer periods — larger capped — stocks with meaning and not just bullshit being mentioned on message boards — stocks like CELH, AFRM, and YOU.

I suspect markets will want lower next week. After all, we bounced this week off the bottom and the news flow isn’t finished and GDP growth is slowing, so we’ll see.

I ended net short, so this is my book talking, with an interest in a few runners. I like short small caps, China, and biotechs into next week.

As always, we’ll trade live inside Stocklabs.

CIAO

In the latest salvo against BTC-ETH, the nation of China for what seems like that 100th time banned cryptos, but this time for real.

#China central bank reiterates #virtualcurrency “does not have the same legal status as legal tender”. Says #Bitcoin, #ether, and #tether are not legal and “should not and cannot circulate as currency” in the Chinese market. (New part is naming specific #crypto currencies.)

— Eunice Yoon (@onlyyoontv) September 24, 2021

As such, BTC-ETH and the rest of the gang have fallen thru the floorboards and are now sinking even lower. This isn’t earth shattering news, but instead a renewed hatred by the centrally controlled economy of China against the decentralized world of cryptos. I’d imagine this will, at some point, lead to a great buying op.

Futures are off by 100 NASDAQs, as we descend into the weekend without comfort and nothing but angst.

Look at the bond market for signs of real fear. Presently rates are slightly higher, suggestive this pullback os horseshit.

Yes.

The way these things work follows a strict script.

Stage 1: rumor mill it. Only a few pay attention and cry Chicken Little
Stage 2: It’s happening. Main stream news discusses it incessantly, increasing discussion amongst conspiracy theorist of chicken vs egg current simulation mode.
Stage 3: RESCUED! But not really. But RESCUED. Market short squeezes higher.
Stage 4: Oh no, it’s not over. Panic doubles.
Stage 5: Crisis.
Stage 6: Bailout.
Stage 7: Lift off, pretend it never happened.

I’d say we’re at stage 3 now. I do not have a timeline on when the Chinese debt bubble will re-emerge, but it’s not over.

That being said, we had a strong oversold bounce and we might gap higher again tomorrow, especially since the last 3-4hours of the day was sideways poorly traded slop. I’d bet many a shorts edge-lorded in hoping for some sort of fuckery tonight. I doubt you’ll get that and I doubt the Chinese are eager to create credit drama.

Ergo, we trade higher in the morning.

The Stocklabs mean reversion algorithms told you we’d ramp and now we’re flying high and all of you dick suckers want in. You can get in — but you missed much of the move, since the fear has abated and the end of the world is no longer on the calendar.

Typically on very OS conditions we always get a follow though day and this is it. In regards to day 3, I cannot offer much advice, other than to suggest more of the same chop — misdirection and confusion abounds.

I was relegated to cash in my trading yesterday, but still very long in other accounts, all up handsomely. I took the morning off since I was burning the fuck out and now I am back to trading again, both strongly and resolute. I am up in the order of 0.45% but just getting started.

These past few months have turned Le Fly into an austere investor. The back and forth has melded me into steel, iron ingots and my resolve is to survive. I am cognizant of the fact this is NOT a good market by traditional definition, which is even an idiot can bank. I survived today’s FOMC day with +1.4%, in spite of it looking dicey after Powell began talking. My gains shrunk to only 30bps before ramping and I took that opportune to liquidate everything.

I am fixated on ETFs and not really interested in individual stocks unless they are specific to an industry I want exposure to, such as cryptos. If I wanted to play cryptos in stocks I’d buy MARA, RIOT, HIVE, BITF or HUT. I segment stocks and make innumerable lists in order to best pounce on a micro idea. Admittedly, I am still adjusting to the massive amount of data and capabilities inside Stocklabs. It could be said that perhaps my trading could be better with just a laptop and instincts. Truthfully, I never doubted my instincts but I am embarking on something unique with SL — in that I am building systems that can operate on their own and this AI can one day invest money on my behalf — with me being dead.

I liken this to driving a race car for the first time — fast and unusual and it’ll take some time to get used to.

I have three portfolios running now — trading, best ideas, and Quant. The purpose for them is as follows.

Trading: in the moment
Best Ideas: longer term
Quant: Machine learned investing using software

We all are good at times, terrible and great during rare occasions. The market, on a long enough time frame, is conducive with capital gains, providing you’re invested in REAL stocks with larger market caps. I am just looking for others ways of doing this — and my work continues.

100% cash, but a bias for more gains tomorrow.

Fuck the tension is real. We are up, but markets haven’t done shit in hours. We all want to run and dance — yet we wait.

The FOMC just said they’d taper and markets are frozen, more or less waiting for resolution. My sense is we RUN HARD into the close — but you never know.

The fucks at the Fed will not hurt markets. The Fed’s only job is to maintain high asset prices — because that is all we have.

Powell talks at 2:30pm — but this looks good because the reaction has been positive.

Current headlines via Stocklabs

This wasn’t hard to forecast. We live in an era of bailouts. There wasn’t any tangible pressure on high yield or even junk. As a matter of fact, the LTSA index is at record highs. This does not mean the markets are great and will keep going up — but it does mean we are NOT on the verge of a systemic collapse due to Evergrande — who of course will be bailed out if needed.

I sold out of my leveraged ETF positions at the open and switched to mostly stocks, up 150bps with 55% cash. We have the FOMC talking at 2:30pm and they’ll be talking taper — so this can hurt markets if words are now to the liking of those with the levers.

Presently there is a lot of sideways movement after the initial burst higher. The Dow is +350, Nasdaq +100 and I suspect we will remain range-bound until Powell gets on the mic.

NOTE: We have been in an extremely oversold range in Stocklabs for a week and our Intelligence algos suggest higher prices lie ahead. This is not a holy grail — but data based upon our technical readings during previous tapes similar to this. Whether this plays out like before is up for debate.