Today’s Upside Breadth Strongest Since January 2016

The last time breadth was above 85% for the day was 1/29/16. The good news is stocks went on a two year rip afterwards. The bad news is, stocks sold off that following week.

My sense: we are being lured in on the long side. We can rally 5% from here.

This is a rational trading thesis. What’s irrational is to believe we will continue to chop indefinitely. Day traders need to STFU. Eventually, markets move resolutely, absolutely.

I bought both WB and JD, based on the premise the Chinese FAGBOX will be breached to the upside soon.

Happy Friday. It appears, for the first time in months, we bottomed on a Friday.

KUDLOW: NO RECESSION IN SIGHT

"There is no recession in sight," says White House's Larry Kudlow after strong jobs report https://t.co/ujmxZeJCFp pic.twitter.com/HrcMX9U1qZ

— Bloomberg TV (@BloombergTV) January 4, 2019

Here are my closed trades for 2019.

DRIP +2.8% on double sized position
GUSH +11%
SLCA +1.8%
OSTK -6%
CLF -5%
HUBS -2.7%
TNA -3.8%
BRZU +2.5%
SOXS -1.7%
DRIP -13%
LABD -8%
JNUG — breakeven
DRV -1.6% on double sized position
AG +5%

End result: -0.8%

Current positions in NUGT and TLT are higher and all of the stocks purchased today are up too. I am UP for 2019, so please…

SHUT THE FUCK UP.

I’ll eat crow.

My positions as of yesterday were good and profitable. Today, things are different and I am adjusting to what I see as a new narrative. Now I could be proven wrong again, should things revert on Monday; but if I’m being honest with my workflow — this is what I see now.

Oil higher
Oil stocks higher
High yield bonds higher
Leverage loans bonds higher
Small caps higher

With all of that being real and tangible, I had no choice but to close out all of my shorts.

Here were my losses:

DRV -1.6%
SOXS -1.7%
LABD -8%
DRIP -13%

The only outsized position there was DRV — at 10% of holdings. Total loss on portfolio was 1.26% on these holdings.

My gold positions are down too — but I will hold those until next week.

NOTE: With cash, I bought ZEN, MDB, BL, SIVB, BRZU and FCX. Cash is now 5%.

Markets look really strong this morning, also supported by higher yields, strong job numbers, higher crude, and lower gold. All of the signs of a market rally, a sustainable rally, are present.

Except one thing.

MARKETS DO NOT BOTTOM ON FRIDAYS, dumb ass.

Have the FANG stocks bottomed? Will the NFLX upgrade help? Will the market offer respite to desperate bulls.

NO.

We can get into the technicals if you want; but the information I am about to impart to you is most important. You’re like a dumb child with dumb parents and cannot invest money with any degree of responsibility. If you’re thinking the market is going to bounce — you have to be stupid.

The flood-gates are open.

Today marked the first day down in a downward channel that was recently trading up. The counter-trend move is over.

Prepare for a fresh leg lower — led down by the semis.

Top picks: SOXS, DRIP, LABD, NUGT, JNUG, TLT.

NAND prices in decline. China trade war menacing supply chain. Apple gravy train OVER. Bitcoin rigs dead. Stocks like NVDA trading 9x sales while historical median is just 3x.

STICK SANDWICH REGISTERED TODAY ON SMH

It’s over.

Long SOXS.

*** START OFF THE NEW YEAR WITH CLASS. GAINS ACCESS TO Exodus — FREE FOR 7 DAYS ***

I added to my gold position by buying JNUG today. Right now I have a 10% holding in NUGT, 5% holdings in EGO, and AG. In other words, ~25% of my portfolio is long gold/silver, with an actual exposure level of much more than that — given the levered nature of the ETFs under ownership.

On a 1yr scale, unsure if it’s all that meaningful to be honest, the 50 is about to cross the 200, producing a ‘golden cross’ for GLD.

I feel like I’m spinning my wheels, vacillating and meandering wildly as markets gyrate. My best positions are the ones that build steam and climb walls of worry. I do believe the market can break lower tomorrow and we’ll see resolution in many of the technical theories floating out there now. Apple has not rebounded at all today and semis are still on the mat.

On the plus side is crude, HYG, and SRLN — all higher. Under different conditions, I’d use those elements as purpose to go long. However, the overarching dominant factor, at least in my eyes, is the poor technical set up for stocks here. Additionally, should crude reverse lower and drag down oil stocks, that house of cards will collapse and we’ll have a full blown rout on our hands.

FOOD FOR THOUGHT!

The ark is loaded, brimming with wild giraffes, snakes, and also tigers. We’re adrift now, safely floating atop of the waters that aim to drown the rest of you.

I bought TLT again, increasing it to a max 15% position.

While the daily swings in stocks are violent and often severe, making fools of everyone — bonds of the government sort persist higher, uninterrupted.

Today’s breakdown will produce wretched technicals and that will affect investor psyche, causing stocks to tailspin lower for the balance of January.

This is my god damned channel and I’m sticking to it.

The fulcrum of losses will be enjoyed in semis and oil. As such, I am long DRIP and SOXS. I also took a position in LABD today, betting on a decline in biotechs.

Another area of concern is government bonds. We have US yields plunging lower, as people take flight into the ark. Unbelievably, over in Europe, the PIGS are diverging from stronger Euro countries like Germany and Switzerland.

Again, in the US, the 10yr bond is lower by an astounding 8BPS to 2.58%.

What does that mean? It simply is a measure of stress. There are liquidity concerns, as evidenced by last night’s 3% move in the Yen.

We’ll post a big ass black marubozu candle today, no doubt.

As such, I sold SLCA, BRZU, HUBS, and TNA and bought SOXS and DRIP. I booked gains in SLCA and BRZU, marginal losses in both TNA and HUBS.

THIS IS NOT A MARKET YOU BUY INTO. We are at the top end of a downward channel.

As you were.