BUSTING LOOSE?

Let’s review the market.

Small caps: up
Commodities: up
Mega Caps: leading
Semis: leading
COVID stocks: trash
Natty: through the roof

Dare I say, following a month of tumult and uncertainty we are busting loose?

I all but blew today’s trade by remaining in cash, so now I prepare for tomorrow. My only conflict is whether to hedge or not — which I think not since all of the above.

I sold my positions too early and missed out on 1.5% gains, now up just 25bps — but that’s ok because I really don’t give a shit. I closed out my “best ideas” portfolio which ended up a disaster, down 25% because it was a combo of heavily overweight aggressive stocks into the teeth of the Q4 correction. I’m not sure what I want to do with that account yet.

My quant is higher by 200bps today and there is good reason to be impressed by the action, broad based gains and very little pullbacks.

Nevertheless, I’ll remain small till the end of day and likely buy a bunch of shit for the overnight ripper. All that matters to me is progress and as long as I’m making money, irrespective of missed opportunities, I’m happy.

It’s important to me that I judge others fairly and not imbue my opinions with unnecessary bias. As I judge others I always remind myself that although they are primitive creatures with banal desires and carnal lifestyles, I am only better than them in my head, since I am also cavorting amongst them like a good slave-cattle, sheepishly circumventing one shopping store to the next and to the next, drolling on infinitely until the authorities inform us the mall is in fact closed and all spending must cease immediately.

I walked amongst monsters of different assortments, some decorated with facial tattoos, others with blue and orange hair, knotted and twisted in braids — others savage in both demeanor and cadence — aggressively hunting for treasure and pleasure blind to boundaries or notions of elegance. This was an inelegant denizen and I assiduously made sure to avoid any formal contact with my fellow “shoppers”, as I too shifted from place to place in tow of Mrs. Fly like a package atop a conveyor belt. On the outside emotionless and stoic, but on the inside suffering and feeling dread, as I felt I did not belong there amongst the clownish fops clad in boorish outer-garments, all peacocking for one another in a race against time to secure more low quality goods to adorn themselves with in order to attract other triple vaccinated mindless slobs to fornicate and procreate with in a most grotesque fashion with the aim to infect this planet with their pre-historic IQs and indecorous bloodlines.

The conflict that I find myself toiling with is the idea I did not belong, when in fact I belong to them as much as they to me — the eternal tug of war between those willing to be circumspect and the rest who are perfectly content playing the lottery and buying cheap trinkets and spending all of their money on expertly marketed goods by people similar to me — who understand the timeless relationship between the shepherds and the sheep.

Fat slovenly bodies shifting almost automatically through liminal spaces into an array of overly perfumed shops manned by broken people in a whir of blinding stupidity was one of the most demoralizing and black pilled events of my life.

CRASH THE CLOSE has been a famous statement inside Stocklabs all year, as people scramble to sell their stocks or get liquidated under an avalanche of margin calls. This was the year of false promises and dashed hopes. We started off heading into space and we are ending shattered in many of those aspirational names like SPCE.

I’ll do a recap of 2021 later next week. For now I leave you with something to chew on this Xmas eve, ahead of gluttony and decadence.

If your hunch was to sell all opens, buy the lunch dip, sell the close — you are more right than you knew. Based on all of the data for 2021 for the Nasdaq 9am – 10am and 2pm to 3pm were the best times to be long stocks.

In other words, you would be best served to avoid the intra-day swings and possible CRASH THE CLOSE boggings by simply loading up near the close and then selling those securities on the morning rip.

Merry Christmas.

Christmas is easily my least favorite holiday and my only wish is that I had a more fervent belief in God in order to celebrate the holiday as it should be, not rife with needless and pointless consumerism. Do the kids really appreciate the presents? Absolutely not. I cannot tell you how many times my wife and I hauled ass to buy shit only to have them remain in their respective boxes, unopened by our children, forever. They only care about the opening of the presents, the sheer magnitude of the gifts, and the pageantry of Christmas. Most kids don’t even know it was the birthday of the son of God.

So here I am encroaching on my least favorite holiday. Markets closed with a “FUCK YOU” candle at the close, which shaved 40bps off my returns in 3 mins.

I closed leveraged at 118%, +133bps for the day, eager for more. I’d venture we bust loose next week and into the New Year’s, at which point I will most likely switch to bearish and prepare for a January swoon.

It’s important to note, especially for those struggling while trading, the Stocklabs mean reversion algos crushed again.

That represents a move in the SPY from $450 at the time of OS to $471 today.

Enough of me shilling my fucking platform. Have a pleasant time with your families. Do not drink and drive — but drink heavily and engorge yourselves to the best of your abilities. There is much work to be done and we will be busy in 2022 and God knows the toils and tumult we’ve been through and will continue to endure. Take this respite to disconnect from the world and focus on the people you love.

With grace,

Father Fly

I moved to 95% cash, kept only NCTY on the books because it’s a crypto miner and cryptos are running and this one is both thin and could short squeeze higher.

I’m +129bps in an unusually calm tape that has done nothing but go up since the open. Had I sold everything at the open my gains would’ve been +29bps. This is one of the rare times holding worked and I held because this is the last trading day ahead of Xmas and said fuck it.

Into the late hours I’ll allocate as I always do: buy the strongest stocks technically ranked by Stocklabs that are within 1% of session highs in all sectors for diversification.

My only reservation is whether to hedge or not. This doesn’t feel like a tape that wants lower.

What revelry! What stupendous audacity! After weeks of rolling around with small positions and hedges, I have finally manned up and allocated 90% of my book long without a hedge. I am certain this will result in high anxiety, especially during tomorrow’s opening tick when PTSD kicks in and once again I fear the rapish nature of the market. But for now, like the lads sleeping in the UK on the eve of the Normandy invasion, I am both relaxed and “super brave.”

Today’s market felt like back to normal, as is the panic had definitely subsided. It wasn’t overly bullish and there weren’t ribald gains to be enjoyed.

The momentum intelligence algorithms inside Stocklabs are pointing to clear sailing the next 10 days.

If there were ever a time when the market needed to quiet down and enjoy a reprieve, it is now. Once the New Year’s harkens and junior is tossed off the trading turret again and the masters are back to allocating, we will see some real volatility. I’d argue the very worst place to hedge now is via a VIX long. I am expecting moderate gains from now through end of year. If we should get some sort of evil fucked up collapse, well then, you might as well sell it all and wait for wholesale liquidations to ensue — because given the recent carnage and disposition of people — I fear that another leg lower would equate to a full blown rout.

Tricky tape for me this morning. My knee jerk was wrong, going long SAAS, which quickly weakened after 10am in favor of reopening stocks and oil. At the moment airlines, retail, casinos and cruise ships are bid, suggestive that Omicron might not ruin our planet after all.

I’m conflicted between being bullish and bearish and am keeping 15% weight in TZA until I’m sure. I’m losing money today, off by 120bps, mostly due to getting whipsawed early, I’ll likely lose money today, unless I’m able to catch a runner, which isn’t likely because I’m not trying to catch one.

The reason why I’m keeping the TZA hedge is due to weakness in small caps, overall.

My bias is to be bullish, but I’m just too much of a pussy right now, so early in the day, to take a bold position.

And just like that, one +360 point NASDAQ day, and everyone is bullish again.

Jog on

Earlier today I halfway fucked myself riding into morning with 20% long TZA. I went through a horrendous SOXL trade that shed coin during the morning malaise and almost missed out entirely on this rally. Lucky for me, there was MOAR to be had and I carpet bombed my trading account with 15 stocks in various sectors to ensure participation. The gambit worked and my 1% losses are now 0.8% gains. I know this is substantially underperforming buy and hold accounts — because I see my Quant +5.1%. However, and this goes without saying, unlike my Quant account — my trading account endured no losses over the past month and has been green.

So fuck off with your 5% gains and stick them with your 15% MTD losses up your ass.

I cashed out of all but 5 stocks and will hold these until after 3pm, at which point I will make a determination for tomorrow.