ATE OATMEAL; GOT REKT

I ate multiple bowls of oatmeal and avoided any semblance of sugar or milk too. I just ate the oats, like a fucking horse — because I am austere and conservative and I do not use fouled language or make fun of people for going on ski trips and cavorting inside decorative ski lifts.

For that, I got the following:

-14% in ATTU
-9.6% in SOXL
-2% in CLF
-5.5% in NIO
wash in SMAR (double sized position)
wash in SHOP

That was 35% of assets. Total loss was around ~1.5% on those fuckers.

On the plus side was the following.

MDB +4.1%
GWRE +2.6%
NTNX +5.6%
NEWR +4.2%
TDOC +0.4%

That was 25% of assets. Total gain was ~0.80%.

I have a few positions left, but not much. I am 85% cash, only represented in the market by my long term Quant portfolio, which is higher by 3.8% for the month. Net net, my trading account resulted in a circle jerk — not much happening after a lot of shuffling of the decks. The reason why I decided to clean house is multi-layered, but it had a lot to do with the exogenous losses in SOXL and ATTU. Both those stocks truly pressed the ram against the wall for me, so I decided to clean house and start fresh — an effort to take control of my money and not permit the gains that I still had whither away and fall into loss.

The bear narrative is well defined and I think it will eventually come back into play. My only trepidation is shorting too early, as was the case on January 3rd, before the melt up.

See that red candle on the 3rd and major white candle on the 4th? That was a paradigm shift for markets and the reason why I went long. It was a fine trade to go short on the 3rd, but stupid to have held it on the 4th and going forward. Today’s red candle is a significant red flag, even more so now than on the 3rd, since we bellied up so much since then. However, the prudent trade would be to wait until tomorrow to get clarity and confirmation — that’s what an austere man, such as myself would do. That’s what a conservative pipe smoking book toller, like myself, must do. Sit and watch, become a voyer of stocks in the interim, culminating to a tipping point — at which point, I dive all in and savagely brutalize my enemies.

The Nasdaq is +12% over the past month. Pardon me if I got fetch a gigantic bowl of oatmeal, earl gray tea, and watch markets for the first 3-4 hours of trade before deciding to do anything about lower prices. We should expect a pullback and we don’t need an excuse to trade lower. People take profits and if you bought late, expect to lose some money.

Are we topping out?

Keep an eye on WTI, treasuries, and be on the lookout for long black candles.

My gut tells me this dip will be bought. Crude is barely down and bears are still salty AF, refreshing ZH and trying to scare people on twitter with tales from the crypt.

Chill out and wait before deciding a bias.

This is something that 90% of you need to understand and accept. Trading for a living is not an ideal way to earn money, and it also is, simultaneously, a sublime way to ruin your life and embed yourselves into a permanent state of frantic misery.

Accept the notion that to trade for a living requires a certain fortitude. If you haven’t demonstrated these qualities by the age of 35, give or take a few years, you’re better off focusing on long term capital appreciation. Even if you’re a talented and skilled trader, you should still opt for long term capital appreciation, for the sake of your own sanity and quality of life.

Case in point, the best trader to have ever walked the earth, Jesse Livermore, killed himself after going broke for the thousandth time.

In the end, greed wins and the house capsizes your flotilla.

Consider the following.

Over the past century, markets have traded higher, on an annual basis, 75% of the time.

Let’s say you invested $100k and added an additional $1,000 per month to that account for the next 30 years. Let’s assume you could achieve a very reasonable 10% return over said timeframe. By the time you’re ready to retire, you will have ~$3.7m in your account.

You won’t hear or read many stock gurus telling you this, because it works against their marketing schemes. The truth is, and I’ve always believed in this, the older you get the more serious you should become with your money — leaning towards preservation of wealth. Even if you’re 40 years old, this investment stratagem should apply to you. As a matter of act, 50 years olds can do it too, planning out a 20 year strategy.

The death-knell to long term capital growth is, of course, drawdowns. To avoid them, you must not trade with emotion and you must be diversified. In Exodus, I outline how I do it in my Quant portfolio — which is left untouched and only managed once per month.

Keep exposure to all sectors. Model your portfolios against the S&P. Ensure that you’re growing with America and taking advantage of recent trends by assessing your portfolio on a regular basis. Avoid the pitfalls of concentration and be sure to harvest gains to balance out weightings.

When I talk about this shit in Capstone to some of you, I hear nothing but agreement and firm noddings of the head — but then you go out and fuck it all up by trading in dastardly 3x ETFs and ignore all of the things I try to teach you to do. Your worst enemy is yourself and it’s because you’re addicted to winning and greed. Extricate yourselves from the process and live a happier life.

We all want to relive the dastardly days of doom, mostly due to unhappiness, but partly for a desire to buy really cheap stocks. Too bad life doesn’t work out that way, fucked face. Only with the benefit of hindsight do we learn of great bargains and opportunities.

Is there a credit crisis brewing like in 2007-2008?

Definitively, no.

I haven’t seen any notable banks going bust, or industries, aside from retail, in utter disrepair.

Have we imposed some wounds upon ourselves, similar to 2011 when Germany refused to bail out Greece?

Yes!

With Trump’s trade wars, government shut down, and lack of coherent policy to stimulate the economy for 2019, it appears this is the real reason for lower stocks. I can prove it if you want me to. Trump escalated the trade war in September of 2018, and the market topped out on October 1st, 2018.

If we are traveling along the 2011 timeline, what should be expect next?

Well, for one, the 2011 narrative led to stocks dropping by 17% from May, 2011 to September, 2011. I recall being in Turks and Caicos getting my brains blown out, having to quickly move to cash and buy puts on the market, which saved me. We rallied sharply in October by 11%, similar to how we’re moving now, and then consolidated for the next two months before blasting off for good. More to that point, after the 11% melt-up, we dropped by 3% in the next subsequent months. It was apathetic and demoralizing.

Here’s the chop-boxes of 2011.

It’s not likely that we V-shape up from here and recapture record highs. As a matter of fact, in all of the bear markets dating back to WWII, the average time to recovery is 39 months.

If forced to guess a likely narrative, I’d say up another 2-3% from here, running into a wall of sellers — then consolidate for the next 3 months in a frustrating and dizzying whir of fuckery — coming to resolution by Q2 amidst earnings announcements. I think it’s fair to say we don’t know what the extent of the weakness is now, especially with AAPL. If AAPL pre-announces in March, markets are going to steam lower and not come up for air until summer.

You come here to laugh, but now I’m going to make you cry.

Look at this chart, fucked face.

See all of those ‘downs’? That’s when I was bearish. By the third “up” I switched to bullish, because only morons look at something dead to rights and deny its existence.

Will markets top out and barrel lower again? How the fuck am I to know, without the benefit of a time machine? Your job, as a trader, is to follow trends, not to counter them. Your job is to make money, not to fight metaphysical forces and pine for political change. It’s all well and good to crave for an equal playing field and to eat the rich — but consider the last time it happened, French Revolution 19th century, it led to Napoleon seizing power and barreling thru Europe like a rabid storm of aids, killing all the way to Moscow.

I sold out of my entire TLT position — 20% weighting. With some of the proceeds, I stepped in hard and bought SOXL. It might seem to you, the untrained DNA junkyard, like a dastardly move — with the broader indices pressing +350 for the session, following a fantastic move higher for the month.

Listen to me now: markets will be higher by 10%+ for January. Meaning: we have MOAR to go before we’re done giving it to the bears. You’ve got to admit, very few people saw this coming and now that it’s here, very few people accept the reality.

This is not December, fucked face. Follow those god damned long white candles to Elysium.

As for Le Fly, perhaps a foray into the mountains for some skiing this weekend. Perhaps not, being that I spied someone casing out my house this morning. One thing is for sure, winship reverberates around House Fly, the infectious feeling of dominion over wide swaths of morons shall, forever, be the legacy of Le Fly.

Why are you not accepting of this rally? Why do you care if stocks trade up or down?

Be the sailboat and accept the winds into your sails; sit back, relax, and let it take you to wherever it needs to go.

Long until wrong.

Get used to the new normal. We used to never bottom on Fridays. More recently, we never trade down.

I sold BZUN for a quick 7% win, bought some MDB and more SMAR.

Seriously, I cannot be stopped. All of your efforts have failed. I made coin on the downside and now on the upside, incredulously. It would please you to see me fail, but I only disappoint you with my unbridled success. I am, quite seriously and severely, the best god damned stock market trade of the past 250 years.

It’s tempting to sell everything and become a hermit isn’t it? But before you do that, consider the following.

You’re an idiot.

Here is your workflow.

Is oil up?
Is HYG up?
How is SRLN doing?
How about oil stocks? Are debt/eq levels improving?

If you answered yes to all 4 questions, you must remain long, until wrong. You’ll know when to get out after seeing one of those dastardly black candles. Sure, you’ll give back some gains and likely be mad for not selling the top — but only retards sell tops. Real men enjoy the fat middle.

What stocks to buy?

That’s simple — whatever works.

Let me walk you through my work flow using Exodus.

I like tech, so I look at what areas in tech look good, based upon returns.

Then I sort by our proprietary tech algorithm and also view Sharpes to gather a firm view of the best stocks in space.

After that I view what stocks are within 1% of intra-day high. We have a screen for that too, and then revenue growth. I don’t want to be caught dead with stocks not growing at least 20% per quarter.

See how easy?

Even a god damned idiot can do it.

I did warn you about the buying and your inability to stop it.

Futures are +150.
WTI higher.
High yield higher.
Trump did shady stuff with Cohen.
TSLA is laying off 7% of workforce.
TEAM is hitting all time highs in pre-market following results.
SAAS stocks should catch fire today.

Now get to work.

Stocks were bad in December, but it isn’t December any more — now is it?

Now you might be over there eating marmalade all day, sipping from your faggotry bags of tea — eagerly and viciously awaiting stocks to reverse lower. You keep refreshing Zerohedge to read some negative news about pending upheaval, in order to placate yourselves whilst devouring pistachio muffins and rubbery panned cakes.

But I have news for you now and severely.

It doesn’t matter what you think. Your opinions are meaningless refuse, a trash heap set upon piles of rancid shit.

For the session, I bargained my way into ATTU, CLF, and BZUN. Your hatred for progress is duly noted. But just know, Le Fly is a captain of industry, a man moulded from sturdier stuff, strong, and powerful, able to shatter your jaw bones with one sweeping blow. I am both invincible and incredulous, swiftly and vaingloriously moving thru these markets with alacrity and precision. You cannot stop me; but I hope that you will try.

It seems the news about Trump and China might’ve been fake and the people who issued that leak evil; but it doesn’t change the fact that the snowball of greed is rolling very fast downhill and nothing can stop it now — not even fake news or bad news.

For the moment, prices are strongly biased to the upside.