I Might’ve Exercised Too Much Zeal in My Latest Purchases

Yesterday I went dumpster diving under the auspices of a strong market — buoyed by my desire to accumulate more gains. This is a never-ending conquest of mine that does not age, or whither, bend, or fold. It grows, exponentially, in both desire and method. Sometimes I wonder why I trade at all, when I could happily live out the rest of my days, independently ignorant to the whims of the market, write essays and concoct schemes inside Exodus to make investing better, cleaner. I suppose my passion is rooted in the idea of immortality, being able to leave a legacy, having constructed to impress upon the world ideas that make life better.

Why else live, if not to contribute and improve the world?

Without money, only time is valuable. I’ve never been charitable with my time — because I’m selfish in that regard.

Early going, markets are weak, as well as oil, and bonds are strong. Up until last week, markets did not bottom on Fridays. We’re butting up against what I called “the FAGbox”, which is a crude and heavy handed way of saying upward resistance of the chop varietal. It’s entirely possible markets might not trade a single point higher from yesterday’s close for the balance of 2019. If this is a bear market, we should be prepared for disappointment, only hedged by a coldness in emotion and mechanical disciplines to extricate us from risky investments.

I’m prepared to liquidate fast, and with regularity. I do intend to become the DRIP God once again — and presently look forward to another squall in markets to make the pigs squeal.

Our overbought signal has been running at an 85% success ratio clip the past 36mos. Due to the recent dislocation of markets, I was hesitant to accept this indication as something to rely upon. Alas, a few days following the most recent signal and it has proven to be invaluable once again.

What does this mean?

The mood of investors is brightened during periods of excessive bullishness to the point that is builds upon itself and causes V shaped rallies. This might not last forever; but has been the case recently and now, which also lends to the idea that this market isn’t done going higher.

I allocated 25% of my trading account into the names mentioned in the title. I did so because price action demanded it from me.

They are trash and underserving of my attention, but markets like them, so I am buying them.

WHO AM I TO ARGUE WITH PRICE ACTION?

I head out into the sun 40% cash, fully ready to charge into the market with all of it — should prices continue higher.

Remember, watch USO, HYG, SRLN to get a sense of where risk is and if you need to be long, short, or in cash.

Still stupid? Subscribe to Exodus or Capstone.

Good day.

It was a dry, humorous interview at the Economic Club of DC, which included gratuitous laughter and nonsensical reveals about Jerome Powell, such as his uncanny ability, bestowed upon him from birth, to automatically pronounce any word said to him backwards.

PRONOUNCE THIS BACKWARDS POWELL: ECAF KCUF

— The_Real_Fly (@The_Real_Fly) January 10, 2019

The Dow turned lower after Powell made those balance sheet comments.

Highlight: Stocks take a turn for the worse after Fed Chair Jerome Powell says, "We don't know the exact level the balance sheet will end up at once quantitative tightening is over." @scottgamm reports from the floor of the @NYSE.https://t.co/ObzMOMFjVy pic.twitter.com/dojgNsZAYW

— Yahoo Finance (@YahooFinance) January 10, 2019

Why is this a concern? Because it’s deflationary and, in theory, should hurt equity prices.

#Fed's Powell: We want to have the balance sheet return to a more normal level… no larger than it needs to be to conduct monetary policy effectively. Dow Jones turns negative an Powell's remark about balance sheet at Economic Club of Washington. pic.twitter.com/e6sYstYMbV

— Holger Zschaepitz (@Schuldensuehner) January 10, 2019

That being said, there is very change in bond and commodity markets. I’d like to see market go lower with some energy before initiating some short positions.

Sheila Bair, former FDIC chair, went on CNBC today and talked very greasy about the banks. Essentially, she declared they were not adequately capitalized, needed counter-cyclical capital buffer — something the Fed is not likely to impose at this time.

In true bearshitter fashion, she warned about leveraged loans, capital buffers, ballooning corporate debt, and even retorted to Faber’s suggestion that the banks were better off now than before 2008 as ‘fake news.’

A must watch for all trader, especially perma-bulls

I sold 13 stocks and made money on just about all of them, with UXIN and JD being my biggest winners. Most were small gains, one as small as +0.2%. Often times people stop themselves from booking small gains, believing they’re too small to book, and then later end up taking small losses. Ever notice how fucking stupid that is?

Book the small gains and the large.

I am now 65% cash, waiting once again in the tall grass. Trades will be executed and communicated in real time, inside the hallowed halls of Exodus. I want confirmation of a break lower before shorting. Truth is, I am just as likely to buy stock than to short them. The reasoning for my sales was to HARVEST MY CROPS, regroup, take another look at the market, in order to effectively allocate. While that might seem like a lot of circle jerking for very little benefit, truth is, we’re up against the resistance point of 6,650 that I’ve been targeting, so I am staying true to that.

Markets were down a lot more today, following the best 10 day run in the markets since 2009. Ergo, and this goes without saying, it’s not a terrible idea to book profits here, AND MOVE TO CASH.

That’s right, Bottle Nose — move to cash.

I’m gonna post a video later today of the former FDIC chair talking greasy about stocks. When I see people like that getting bearish, it makes me nervous — because in previous downturns, fuckers like her foreshadowed grim days ahead.

Powell is going to make a speech soon and the market looks okay. But one was never hurt by harvesting his crops. It’s an easy thing to do, so get out there and do it.

Some of you have gone wayward this evening, after gazing into your computer screens and bearing witness to Dow futures down 150. These same people have given up drink for drugs, in the name of avoiding hangovers and calories, and dare stare into the mirror, with their figurine bodies, and call themselves men.

It doesn’t matter what futures are saying tonight, or what the opening tick might be tomorrow morning.

Truth is, I just wanted an excuse to talk shit. Let me tell you what I really think.

I think we’re now first entering the Fagbox — the indelible situation that I forewarned you about — exclaiming 6650 on the NDX was no more or less than a foregone conclusion.

Now that we’re butting up against it and attempting to defy the laws of reason, it’s very likely we might fail at or around these levels, give or take 50 points from here — bechancing a grave concern led to the downside by oil stocks and the fucking barrels they came into this rally with.

My chart.

I created that chart weeks ago and haven’t altered a single line on it. Bear markets are brutal affairs, cruel mistresses and dangerous bedfellows. They’ll give you aids and make sure to ruin your families and cast everyone you love into the poorhouse.

Bottom line: let the rally fail before reversing course. If we’re heading back lower, we’ll retest the lows and there will be ample time to become DRIP Gods again.

About those PPI numbers.

Today's China PPI result showed a much sharper deceleration than expected. Nomura's Lu Ting sees further evidence that the economy is slowing"at a worrying pace."https://t.co/w8TVbZ9Jgu pic.twitter.com/jfe6pi9AgC

— Jeff Black (@Jeffrey_Black) January 10, 2019

It was a fine close. Let it be noted that not only have you exceeded your authority to comment on financial matters, but you also have offended and injured me deeply with your ignorance. This is precisely the type of close one likes to see.

One enjoys the tinder to cast an orange hue just before roasting the flesh of the uninitiated. You’ve never traded in markets like this, because you were born a short while ago, and have zero life experience in bear markets. Let me educate you how this works — FUCKED FACE.

Markets will sashay, even glide, higher for the balance of January. LateFAGS will then Bogart in fast, hoping to catch a quick score, only to be horrifically executed by a fast and sloppy blade.

You’d be wise to refrain from shorting stocks until the charts break lower. That’s all you have to do is wait. Quit trying to anticipate where stocks are going and simply look at them now.

This is the sort of bullshit one should expect from the Fed. Remember this always: it is their job to make stocks go higher. Without a positive wealth effect, pensions get defunded, budgets disjointed, chaos reigns supreme. If you’re shorting stocks and betting on a black swan, just know you’re taking on a low probability trade.

Source: CNBC

“With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier,” the meeting summary stated.

The indecision was reflected in rate forecasts among individual members. Officials cut their expected moves this year from four to two, citing a range of concerns about growth and volatility in the financial markets.

“Concerns over escalating trade tensions, global growth prospects, and the sustainability of corporate earnings growth were among the factors that appeared to contribute to a significant drop in U.S. equity prices,” the minutes said.

The statement after the December meeting replaced the phrase “the Committee expects that further gradual increases” would be appropriate, to “judges that some further gradual increases” are coming. Using “judges,” the minutes noted, was a signal to markets of the data-dependency the Fed will employ. Also, “some” was meant to imply a “relatively limited amount” of hikes would be coming.

WTI is +5%. Junk bonds are green, and stocks are ripping to session highs. If I can teach you but one thing it is this: THERE ARE ENDLESS POOLS OF GENIUSES WHO KNEW MORE, BROKE AND DISHEVELED, AT THE BOTTOM OF THE SEA, WHO BET AGAINST PROSPERITY. It’s a hard gamble, and you have to be hard boiled and belligerent to pull it off. You’re better off going with the sheep.