iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
22,168 Blog Posts

CHECKING IN: MARKETS LOOK CONSTRUCTIVE

I can only offer instinctive analysis since I’m half dead on a couch in a cold foreboding basement.

Markets collapsed at the open and have since recovered. This is a textbook capitulation trade and I see many hard hit stocks, like my SE, ripping.

I also see the Ruble at new highs vs the dollar +6%.

I also see Finland is concerned that by joining NATO Russia will turn off their gas. This leads me to believe the best trade here isn’t the beaten down techs but the beaten down commodities. Stocks like MOS have 20 points in them.

It’s also good to see ETH back above $2k. The whole thing looks good, but I’m not buying.

I’ll keep what I have and if I’m around by 3:30, I’ll allocate for tomorrow.

Presently I’m up 25bps for the session.

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Orderly Dumping of the Markets

I’m feeling terrible this morning, but grateful for not being vaccinated.

Last night cryptos just completely liquidated. Most are now worth zero. This morning stocks are tricking people left and right into believing a bottom is in. The sell off is once again ORDERLY and I ended up selling my hedge for profit and several longs at a loss. As of now I am half cash and half refiners, ag, and SE.

SE is the perfect stock to embody this market, always has been. It went from $40 to $400 in the recent bubble and now back into the 50s, clownishly. There are major institutions who own it and buried by it and it’s the perfect stock to bounce, if there even is such a thing.

Since I’m not feeling well, perhaps it’s allergies or perhaps something a bit more, I’ll be trading light, but checking in every now and then in between nightmares.

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Are We Cheap Enough Yet?

I’m feeling under the weather and may very well be DYING of COVID-19. If I do die, just know that I was grateful for not having been vaccinated, seeing the FDA just approved booster number 5. I’m here alone in my dark cold basement, sleeping on a very uncomfortable chair with moving boxes all around me.

There was some data I wanted to share and some of it looks good for potential upside buying action soon. Basically, the bull case is stocks are down and normally when the mood is this grim bottoms are put in. The argument against a bottom is the fact that we’ve yet to see massive unemployment numbers, which are coming soon and in a big way.

Ok, here’s the stuff I wanted to share.

NASDAQ FUTS are up 80. If we gap up, I’ll likely just move to cash and take what I can get and then reload at the close.

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THE CLOSE WAS CRASHED, ALL HOPE LOST

I thought it was funny until it wasn’t anymore. I was barely down all session and then we STEAMED lower into the close. I closed down 1.7%, a formidable loss — but not my concern at least intraday. I am worried about tomorrow, which is why I sold out of my 2x TQQQ position and replaced it with a 2x UVIX hedge. I am in a 17% cash position and certainly exposed on the long side. In the event we violently flush in the morning, I will close out the UVIX and go long. If we gap the open, I will close out the UVIX and probably most of my longs.

I permitted myself to be comfortable today and didn’t take the selling seriously. There was immense damage done to the tape, in a number of stocks.

Irrespective of what the market does tomorrow, the next phase of this bursting of the bubble will be job losses, millions of them. By Fall we will be discussing how best to jumpstart an economy barreling into depression.

Perhaps a world war will save us, financially speaking.

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TAKING A STAND HERE: A NICE HILL TO DIE UPON

After so many accounts have been emblazoned with losses and the margin call telephone festooned with the guts of all of the zeroes out there, I have decided to bulk up long here. I doubled down in all of my positions and even started one in UPST, now trading 2.3x sales — an absurd valuation all things considered.

I am cognizant of the fact that Tiger Global, Ark Funds and many others are getting their brains blown the fuck out — but I am old enough to remember all of the previous fires and how they burned the brightest when they were just about to be extinguished. Shorting here is on par with believing “this time is different.” In many ways the dynamics of the market IS different, with the Fed fixing to screw us. Also, this is merely the opening salvo into what will likely become a depression. That being said, I am not in this for the long term and I am merely trading to and fro. I was up 1% earlier and then after I doubled down my losses accelerated to 1.6%. Right now I am down 40bps, basically a giant nothing burger, with 13% cash.

The temptation is take quick profits is always lurking. However, there are times and places when you must take a shot and seeing so many stocks down more than 10% today (390) has me believing in a capitulation near term bottom trade might be happening today.

With 1 hr left to trade and stocks back to selling down, it looks like we might CRASH THE FUCKING CLOSE. I will reserve the rest of my cash and margin for an opening flush out tomorrow.

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STAGGERING LOSSES BEFALL STOCKS IN SESSION FROM HELL

As hard as stocks have been hit YTD, today is really adding insult to injury with absolutely mind boggling declines.

Here is a look at the bloodshed.

U -36%
KRNT -32%
COIN -30%
RCUS -28%
FVRR -25%
MSTR -23%
ADV -23%
UPST -22%
BRP -21%
TXMD -19%
NVAX -19%
CVNA -18%
AFRM -18%
RYI -17%
DISH -17%
BGNE -17%
SG -15%
SI -15%
SQ -15%
AMC -15%
BSY -14%

IN ALL, MORE THAN 390 STOCKS ARE DOWN 10% OR MORE TODAY.

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BELIEVOORS BTFO AGAIN: STOCKS CAREEN LOWER

I would have to admit, I fell for the imaginary bottom. I could see it all, me walking on it and then propelling myself upwards to the sky, perhaps a sojourn to the moon with some cheese and champagne. But it was not meant to be. My losses pale in comparison to yours, but they hurt just as much! I had been, earlier today, a genius. I had 100bps of gains whilst being 80% in cash, safe and secure. Feeling a bit under the weather, perhaps infected with COVID or more likely some seasonal allergies, I went to take a nap and dreamt of the Dow being +400. It felt so real. When I was awoken by dogs needing to be walked, I discovered, sadly, the market had reversed and careened lower. My aspirations were castles of sand and my dreams retarded.

I am presently down 40bps, a 1.4% reversal in fortune, because I believed. Also, I bought shit stocks in the hopes of miracles.

I’ve committed numerous errors today and it always happens from a position of comfort. I must remember the pain and how it feels to be pressed up against the swords of Damocles. My intention is to hold, only because of stubbornness. What I should be doing is liquidating now — because nothing is redeemable and everything is rot.

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CPI DATA CAME IN HOT; NO ONE GIVES A FUCK

It was one of those economic stats that could do no wrong. We already knew inflation was hot, but in the offchance it came in light — we’d moon.

But the data didn’t come in light and we reverse mooned into the grave. However, upon opening of the markets, we are once again rallying.

No one should care about the CPI data because it’s backward looking. At this point only three things matter.

1. The war

2. Economic growth or lack thereof

3. Commodities

The absence of sharply higher oil prices was beginning to wane on people in recent days. The idea oil could trade lower without Russian oil on the markets would equal some sort of economic apocalypse around the bend. Now with WTI +5%, we all feeeel better.

We are extremely oversold and markets act weird during periods like this, since so many people are getting wiped out. It’s rare to see markets V shape recover from such carnage. I would expect a process to take place, but at some point all of the pent up fear and loathing to turn into a different kind of fear of missing out and loathing for not buying when everyone else was selling.

 

 

 

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CPI DATA LOOMS

Let’s assess the situation.

The bubble has popped. All of the 30x sales stocks are back down below 10x, some a lot cheaper. This is a traditional valuation level for growth, pre 2016.

The economy is slowing but the Fed can’t help due to high inflation, measured by the CPI.

Therefore, if tomorrow’s CPI numbers comes in even a little bit better than expected, markets are going to absolutely  rip to the upside. We should soon enter a period of stability, where inflation is waning as the economy slows. To avoid earnings disasters like UPST, one could not buy stocks ahead of their results. Markets might improve during a slower inflationary period based on the notion the Fed can get less hawkish. HOWEVER, by the time summer swings around, the entire focus of the market will be on employment and economic growth. The major major concern isn’t inflation — because plunging share prices and growth rates solves that. The bigger issue down the road is economic prosperity in an environment that is deleterious to anything on par with scaleable globalized growth.

War looms and relations with east worsens daily. Ergo, take profits fast and don’t believe in bottoms.

 

I made 0.35% for the session, closed with 60% cash the rest long.

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This is One of the Most Oversold Tapes in Recent History

SIRS —

Because I built my time machine, aka Stocklabs, during the market meltdown of 2008, I can tell you with clarity how oversold we are now in comparison to then. At the session lows today, this was the 7th lowest technical reading since inception. We were nestled right around 1.00, now with the market rising we are at 1.20.

What does it all mean?

 

It all but guarantees a face ripping rally just around the bend. My issue with this idea, naturally, is that it’s too damn scary. I prefer the comforts of cash and view bargains as a cause for concern. This of course is psychological warfare and I am accustomed to seeing carnage on Wall Street and have been victim to heinous losses in the past, so of course I am reticent to jump right in. Nevertheless, I am comfortable with several approaches here.

  1. NO HEDGES. DO NOT SHORT INTO OS
  2. Buy the closes for morning bump
  3. Opt for ETFs over stocks in order to avoid earnings and/or dilutive secondaries after the bell

My preferred ETF is TQQQ, but TNA, LABU or SOXL work too. I am of the belief that markets should be avoided intraday, unless of course you enjoy babysitting brimstone. I will be buying the close, with the vast majority of my money in cash and perhaps a small allocation into consumer staples.

As for energy, I am extremely gun-shy to buy the dips in commodities. The price action is suggesting the economic fallout to come will cause a complete reversal in inflationary pressures, irrespective of Russian supply disruptions. This makes no sense to me, but this is what the market is saying.

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