SMALL CAPS RAMP — Can it Hold?

I believe it can. As such, I’ve taken my TNA position and made it larger, 15% of assets. If I am wrong here, I will take the vaccine and hope to perish with the lot of you, bedraggled by IQ lowering blood clots and harangued by sudden heart attacks.

May the glory of the stock market shine upon thee, but first on me.

Everything you loved and cherished yesterday has been destroyed today. Those oils and gold stocks, maybe even a dash of steel —- bogged and fuck out of the market. Now we have mixed divergences and trickery largess, so follow the bunny rabbit into the hole and see if you can make it out alive.

I am, of course, down 100bps, almost righted the ship for a minute or two but then quickly engulfed myself into 3 new buys and 3 new losses. I haven’t traded too much today — as I have resigned myself to fate, which probably wont last too long.

While we wait for markets to improve and for our lives to revert back to normal, I’ll eat a sandwich.

I cannot punch my way out from an open prison guarded only by cherry marines!

Pah, I fell victim to my own sword today, trading retardedly — buying high, selling low only to watch in horror it go back to highs. I am off by a second, by a minute, by a football field. I sell too fast, hold too long, rape myself without cause and generally muck up the whole trading art thing I coined many years ago. It’s so bad there are people who now tower over me inside Stocklabs as sages and oracles, who do nothing other than throw shit at their screens all day long.

I stand before you with my first monthly loss in nearly a year, off by 4.7%. I wish I had a plan, or a stratagem, but at this point the cortisol is running high and my desperation for some sort of trading equanimity is severe. I am now resorting on luck, hoping the Gods bail me out and throw a bone at me to chew on. I will be ever most grateful and forever your debt, if by chance you could parlay me a great win or two. Why, if such a win was afforded to me, I would do nearly anything at all to pay back this debt, including and not limited to murder.

I ended the session with 1.6% cash and a portfolio filled with hope and dreams.

WISH ME LUCK!

Due to my inability to trade well, I am reticent to stock pick here, down 70bps, mostly long upside ETFs. The direction of the market is higher, mostly in the SPY and Dow stocks — with small caps under-performing once again.

The Russell has done NOTHING since February, an absolute waste of time.

Today’s outlier is energy, whether it by nuclear, oil, or natty. I tried to play the energy stocks at the open, but they faded hard. And now they’re melting up again, but not nearly as much as uranium plays.

The interesting thing about uranium is the advent of a new ETF that takes supply off the market, into what is being described as a “perfect storm” for a cold and brutal winter in Europe, as they do not have enough fuel for the winter.

Enjoy your ESG friendly deaths.

I’m 80% cash, not really feeling this methodical stair step tape.

At the open of trade I was +55bps, smartly positioned in uranium stocks — pleased — quite pleased with being mostly cash and yet surgically positioned in the right areas of the market. As soon as markets opened we swooned but then recovered. I quickly sold all but one stock and then started to forage the grounds for fresh food — because I was invincible and knew what I was doing.

I chanced upon ATER. It just went from down big to green, so I figured I’d chance it and took down a 5% position. As soon as my order was filled, the man behind the levers quickly dropped the stock — and kept dropping it 10 cents at a clip for the next 10 minutes. Within 10 minutes I was down $1 on the stock, all but erasing my wonderfully surgical gain of 55bps. So then I figured “why not chance it again?” since often times when stocks drop fast they recover. And so I did — bought more at $10.5.

As soon as I got filled the man behind the levers continued to drop the stock by 10 cents per minute, until I finally forced the issue and took an 8.5% loss in 20 minutes on a 10% position — placing me down 50bps for the session.

So how’s your day going?

While everyone is fixated on the price of lemons at the grocery store, the 10yr is plunging in yield again, suggestive that a flight to quality and price deflation LOOMS just around the bend. I’d say this is a very very precarious tape. As such, I am 75% cash, shed 30bps for the session — only long a few uranium stocks and SPXL for an overnight hold in the event we bounce in the morning.

If we do bounce, SELL THE OPEN.

If we crash the open, buy the open and sell by 10am.

The market is seasonally weak in September and before you know it the Halloween scares will be here, and then it’s smooth sailing into National Festival Day.

While the mood is grim and the pestilence is heavy on the heart, find solace in knowing we will trade great again because we always do and always have. Our jobs from now until then is to trade smart and stay close to gains and avoid, at all costs, blowing up.

If you blow up now in a bad tape, you’ll never be able to profit in the great tapes.

Remember that as you segue into moronic penny stocks with zero prospects other than the next 15 minutes.

I sold the open and left. I just got up and went out and now I am back, ready and willing to invest. But first I have to walk the fucking dogs.

My overnight holds netted me 38bps and my Quant is +105bps, so I am banking in spite of this poor tape. While the NASDAQ is barely down, there are murderholes everywhere.

Since we are in a period of OVERSOLD, I have no choice but to get long for the overnight session. My big question is — do I buy early and trade or simply wait until 3:50 and remove all Intra day risk and play it that way?

The Dow was up more than 200, NASDAQ off by 9 but it ran 80 handles in the last hour of trade. I ended the session +145bps and made another 30bps in the AHs by selling LIFE. It appears we are heading higher tomorrow, led by energy — but nothing is written in stone.

I am now down 3.6% for September and find myself increasingly black pilled about current events and the timeline I find myself in. I am pretty sure, for my own interests, I need to stop hyper-fixating on the COVID news and get back to hyper-fixating on stocks. We are entering a very important period for the market and it’d be shameful if I spent my time and energy on things beyond my control. Although informative and perhaps enlightening for people on my Twitter feed, it offers me nothing but gloomy outcasts and I tend to really fixate on things for long periods of time until proven right. I do not want to be proven right and I certainly do not want to think about the worst case scenario. I do hate many of you, truly, and could never feign that — but here I am writing to an audience of mutes who’d prefer to speak to me inside The Pelican Room and make me appear here like a court jester writing to no one at all.

Life consists of going to the gym, playing tennis, dining out a few times a week, and entertaining myself via the teevee. With two of three of my children out of the house now, I must admit for the first time in my life I am beginning to feeeeeel old. People have always said I’ve acted old, much older than my age — but now I am filling into the role — at 45 and barreling towards an empty nest. There is nothing sanguine about your babies growing old and not needing you as much anymore, other than their own success in life — which as a parent you always hope for. The emptiness of their rooms reminds of you gentler days playing with blocks or dolls and how you regret not spending more time with them. I can vividly recall times when my daughter wanted to play and asked me to and I chose to do something else and it grates at me now and there is nothing to be done about it, other than to warn younger parents reading me to cherish every moment and to try your best to live a full life absent of regrets.

Not sure how this blog traveled down that road — sometimes with a stream of consciousness such as mine it happens.

Until tomorrow,

Ciao

Like I said, fade the opens, fade the closes. I was up 230bps this morning off the backs of uranium and then bore witness to it sell off and went back to cash +175bps. I placed a few more tracers out there, but am 70% cash, still +170bps. It was tempting for a long time to buy more — basically go all in with visions of grandeur. Good thing I hadn’t since market have done little — but we’re barreling into the afternoon hours and Stocklabs is of course in an OVERSOLD state, so I am tempted once again.

The plays are in basic materials, especially with the UK electricity crisis underway and the overall shortage of gas set to plague the entire continent.

??BREAKING: This is simply incredible. ??

UK day-ahead baseload electricity prices jump to a fresh all-time high of £354 per MWh on N2EX. Intraday prices for peak demand are much, much higher.

To put into perspective, that's 700% higher than the ~£45 average 2010-2020 price pic.twitter.com/iJqQJysaHu

— Javier Blas (@JavierBlas) September 13, 2021

Into the final hours, I am likely to allocate more long — no matter how fucked the market looks. Oversold conditions never feel good but usually end up heading right back up.

The launch of Stocklabs brought with it an array of big upgrades, one of which included our mean reversion algorithms. We can now backtest and apply our technical algos decades into the past, providing users with greater insights into the stress points of the market.

Today we are flagging oversold on our 12 mo algo, which is rare. It does not mean we are assured to trade higher, because conditions are always different and things could be different this time — but it speaks to the way humans have behaved in the past during such a stress point and it has been good for stocks. We are tech OS, not hybrid and that’s worth noting because the hybrid includes fundamentals and tends to be a much more severe and reliable OS signal.

As for me, heavily long uranium stocks, leveraged long and +200bps pre-market. I am likely to fade the open, regroup, and then revisit around noon in a small way and finally and lastly prep for tomorrow’s open. If you’re up 2% for the day and want more — you are being greedy. If, like so many of the users inside SL, are up 8% or 10% in any given day — you are too concentrated and taking on too much risk. Let me remind you once again, the stress of being heavily concentrated isn’t worth the money and you’re bound to get blown up once you get cold and/or the market tricks you into a severe drawdown. We all have them, so don’t think you’re immune.