CHINA LOCKS DOWN CITY OF SHENZHEN AFTER COVID BREAKOUT; WAR IN UKRAINE ESCALATES

In case you wondered what happened to COVID, it’s making a comeback in China with over 3,000 reported cases yesterday forcing China to lockdown the tech hub city of Shenzhen thru 3/20, a move that will only make supply chain issues worse, and it should be noted there are nearly 18 million residents in the city.

In Ukraine, Russian missile strikes destroyed a NATO weapons training and transfer center, killing more than 100 according to Russia. Who knows, they’re all lying. But one thing is for sure, this is an escalation against NATO weapons spilling into the country. Russia has warned that any convoy of ships with weapons to Ukraine will be viewed as legitimate military targets. They have no choice, and if you’re a war hawk in the US — this is how you start WW3. Get the Poles to send weapons and have Russia attack the Poles and then trigger Article 5 and voila.

Peace talks between Russia and Ukraine are expected to continue Monday, so headlines out of that meeting might greatly affect futures.

Some other noteworthy developments

TURKEY WILL NOT JOIN IN SANCTIONS AGAINST RUSSIA, JOINING MEXICO AND BRAZIL

RUSSIA SAYS THEY WILL INCREASE COOPERATION WITH CHINA

WESTERN SANCTIONS HAVE FROZEN MORE THAN $300B IN RUSSIAN CASH AND GOLD, CAUSING RUSSIA TO PAY DEBT IN RUBLES UNTIL ASSETS ARE UNFROZEN

RUSSIA IS TARGETING FOREIGN MERCENARIES IN UKRAINE

Maybe this is the road paved by Putin, drag both Syria and Iran into the conflict to keep America busy. Or, perhaps these reports that 6 missiles hitting a US consulate in Erbil Iraq are inaccurate? We do not know for sure yet. Either way, this is an escalation.

Reports of multiple Iranian Fateh-110 short-range ballistic missiles striking the US base in Erbil, Iraq

FATAH 110 MISSILES EN ROUTE FROM TABRIZ, IRAN TOWARDS US CONSULATE IN ERBIL IRAQ
pic.twitter.com/wad9T8MEEA

— The_Real_Fly (@The_Real_Fly) March 12, 2022

MULTIPLE LONG RANGE MISSILES FIRED AT US CONSULATE IN ERBIL, IRAQ

pic.twitter.com/YwGIVxCvmF

— The_Real_Fly (@The_Real_Fly) March 12, 2022

People believe this strike was in response to two Iranian officers killed last week by an Israeli strike in Damascus.

UPDATES:

U.S. OFFICIAL CONFIRMS NO U.S. MILITARY CASUALTIES FOLLOWING ATTACK IN ERBIL – REUTERS

“Iran reports that this is revenge for the elimination of two Iranian officers in Syria by Israeli Air Force forces, and that Erbil launched a missile strike on the headquarters of the Israeli Mossad.”

US CONSULATE IN IRAQ HIT WITH WHAT IS BELIEVED TO BE IRANIAN MISSILESpic.twitter.com/3T3HEYLtvs

— The_Real_Fly (@The_Real_Fly) March 12, 2022

geolocation of a video showing missiles launched from Khasabad https://t.co/vChFIzfNcX https://t.co/gShLvpArI0 pic.twitter.com/iDWucRCdeM

— Samir (@obretix) March 12, 2022

Chinese billionaire Xiang Guangda, head of Chinese pig iron maker Tsingshan Holding Group, made some awful trades selling short nickel and STACKED LOSSES of greater than $8b according to some people familiar with the matter. As a result, the LME hasn’t traded nickel since last Tuesday in order for him to secure financing and preventing even greater losses, in what can be viewed as one of the biggest short squeezes of all time.

Since the LME stopped worldwide trading for him, Tsingshan secured financing from JP Morgan and China Construction Bank.

LME’s reasoning:

“Clearly these are unprecedented times and they have called for us to take action we would not wish to have taken,” LME Chief Executive Matthew Chamberlain said. “We faced a choice between ensuring the overall and longer-term financial stability of the market, and the shorter-term trading profits of those participants who had traded on Tuesday morning.” In a statement, the U.K.’s Financial Conduct Authority said it was in close contact with the LME and other relevant parties.

If this doesn’t convince you that markets are rigged in favor of the very rich then nothing will. Think of all the plebs who went long nickel on the legitimate concerns that the war in Ukraine and sanctions on Russia would cause a severe supply shock and now think how he feels right now knowing the LME and several major institutions are actively trying to walk the price of nickel down in order to protect an idiot billionaire speculator.

In the totally non rigged Shanghai markets on Friday, nickel traded limit down 17% to $35,000. The last trade on the LME was $48,078/mt, down from a session high $101,000. Trading was supposed to resume on Friday, but didn’t happen likely due to fears of another short squeeze.

Disgusting.

Whilst you preview your portfolios cascading lower into the pits of hell, content and elated to pay $10 gas at the pump in order to show solidarity with our good friends, The Fucking Ukrainians, Le Fly sashayed ever so gently +40bps for the session by way of professional miracle.

I started down bogged out for 1.7% and then, because I am a professional, traded back to green and even got up to more than 100bps before the fucking bottom began to fall out from this shit filled tape. Upon seeing this, because I am a professional, I reduced my longs and pared down losers and hedged via TZA and UVXY. This is what pros do. They don’t just sit there with dicks in hands gawking at themselves through the reflection in their monitors crying like pussies because they got the market wrong.

INCORRECT.

Winners act upon and against their emotions and do the right thing, the professional thing.

I am +16.5% for the year, not due to luck or an ideology that eventually made me money — but because I know what I am doing. Sure, I was down early and like you diving into moron stocks like SHOP and HUBS until I came to terms with the indelible truth that we are in, as a matter of fact, a bear market and there is nothing to stop stocks from steaming lower other than an unconditional surrender from Zelensky.

BEHOLD: NEW MUG DROP

I am sure they’re bluffing. But you never can tell with those sneaky Russians — always up to no good. They might just leave an American space traveler in the fucking space station — which would be a great opportunity for Elon Musk to be a champion — savior forever known in the annuls of time for being a genius.

The plan is for astronaut Mark Vande Hei to land in Kazakhstan with two Russian cosmonauts on a Russian spacecraft.

In other news, uranium stocks are selling off today, namely LEU, UEC, UUUU, DNN, CCJ, URG, NXE — post LEU earnings. It had been up 15% earlier and I was lucky enough to sell it there (actually it’s not luck but common sense) and now it’s hammered lower on Russian supply concerns.

TD securities is out with a report today highlighting the grave concerns and how the price of U308 might just break the fuck out soon, should Russia restrict delivery of their supplies.

I managed to trade myself green today and still hold 4 nuke stocks, easily my highest conviction trade heading into next week.

It’s almost comical if the stakes weren’t so high.

UKRAINE’S FOREIGN MINISTER KULEBA: THE RUSSIAN POSITION CHANGES ALL THE TIME.
UKRAINE’S FOREIGN MINISTER KULEBA: THERE WAS NO PROGRESS IN TALKS WITH RUSSIA YESTERDAY
SEN. MURKOWSKI: US OIL PRODUCTION WILL NOT INCREASE WITHOUT BIDEN’S BACKING.

This is where we are now, totally dependent on rumors of peace and energy deals. Nothing has changed apparently, ergo, down we go.

The NASDAQ is now racing lower -137, WTI is +3%. The war trade is back on.

I’m going to show you some hourly returns for CRM for March. Tell me if you see a trend.

It certainly feels bad to see 200 NASDAQs wiped out in 35 mins. Then again, it’s almost par for the course.

CRASH ALL OPENS; CRASH ALL CLOSES.

Everything is getting hit even energy. I do suspect the energy complex will be bid soon however. I had some good fortune in LEU and sold when it was +16%, yet I’m still down 0.8% for the session.

I don’t feeeeeel like running thru the ringer today, but I’ll end up doing so nevertheless because I’m an addict.

We are not on the absurd point of watching each and every news headline out of Ukraine and reacting to them with fierce pops and drops, making it almost impossible to trade. Check out these dueling headlines.

PUTIN: CERTAIN POSITIVE SHIFTS IN TALKS WITH UKRAINE: IFX
UKRAINE PRESIDENT SAYS RUSSIA IS DEPLOYING SYRIAN MERCENARIES

Talks are going well — but in the meanwhile Putin is delaying 16,000 Syrians into Ukraine in order to help Donbass.

The DAX is higher by 3.4% and oil is about flat, with large selling in gold — down 1.7%. The highlight for me is the US 10yr now above 2%. Nevertheless, markets want to rally and have been bogged for months, so we are +150 on the NASDAQ

2008 Bear Market

2022 Bear Market

There are two ways to play this tape.

1. Fast intra-day rips, which is predicated on knowing the market well and having tools like Stocklabs to help you scout. It also requires a modicum of skill, which is either innate or taught over thousands of hours of toil.

2. Formulate a well reasoned and balanced approach to equities. If you’re in it for the long term and taking losses — you have no choice but to dollar cost average into a down tape. If you are retired and cannot add to your account — YOU MUST CHANGE YOUR HOLDINGS to reflect the current environment. If you’re long growth and down 50% waiting for them to come back — you are taking the wrong approach to this tape. From an economic standpoint, the Fed is now working against you. Thus, high growth is only reasonable in commodities now.

In the past I suggested a zero allocation into commodities. Now if I was putting together a portfolio my advice would be inverse — no tech, all in on commodities.

You will see volatility and if you’re micro-managing your account you might get shook and forced to sell during a bad tape. But ultimately, and until we see demand destruction reduce the price of oil, the only game in town is in commodities.

Having said that, I think we’re in a bear market so I am always always hedged for downside protection.

I finished the day +230bps and all of the lads inside the Pelican Room banked.