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
23,478 Blog Posts

Rotation into Risk

I was wrong when I said on Friday “Meme Monday” would resume on Monday, but right in a general sense. Secular or defensive stocks are down today while high beta or risky stocks are up 2%. The overall tenor of the market is favoring small caps. Couple with with a very strong showing in the semis and it would behoove you if you decided to sell short into the close.

The idea of the market trading higher is mostly hated by market purists, who largely believe the overall system is rigged. But that isn’t your job, to get mad and draw from emotional angst. I am the last person to lecture about emotional angst, especially when considering my X feed. But when it comes to trading, I am disciplined. I wasn’t always this way, but was taught by the market to obey or forfeit my money.

That is the great thing about the market, similar to engineering. You might not like it, but you must accept the rules and how things are, otherwise enjoy failing.

In recent hours, markets have tempered their returns and have traded sideways. I am now positioned 95% long and might tweak a few things for tomorrow’s open. Barring some sort of news event, I see no reason not to be fully long here.

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Stocklabs Quant is Extremely Bullish on Oil

One of my core portfolios is the quant, which is selected using the Stocklabs algorithms. I have no input whatsoever other than to update it once per month. For the month of May, the quant is almost all oil and gas stocks, which is extremely rare. I’ve been doing this portfolio for years and have never seen it so unbalanced.

I used to force things, such as allocation and market cap, but then later regretted it due to missing out on big rallies. So far in 2024, the quant is up more than 8% with pretty consistent performance. Let’s see how this oil trade works out.

For my trading, I just moved it into 100% cash, at session highs of +125bps. This is a sufficient daily return and I will reenter later on when volatility increases.

The reason why I like to sell and go to cash is due to the fact that the positions I build for overnight trades, in this case the weekend, were not intended for a longer duration. They’re more or less day trades with a specific goal, unlike my strategic portfolio which is meant for longer durations.

All in all, I like the tape. There isn’t anything about the action to give me pause, aside from my habitual belief that market collapses loom around every corner.

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Bullish Areas of the Market

We often default to Mag 7 or other large capped tech stocks when we think markets are bullish. But in recent weeks, there has been a broadening out of markets, presenting new and interesting areas of investment.

Here are some broad brushes.

ETF / Stocklabs score (0 to 5 best)
$FXI (China): 4.71
$SVIX (inverse volatility) 4.44
$XLU (utilities) 4.37
$XLP (staples) 4.09
$WEAT (wheat) 3.74
$XLF (financials): 3.36

The defensive nature of those sectors could in fact be lagging indicators, a market that might’ve passed. Reason being: markets spiked on Friday with some outsized returns in your traditional tech names: $AAPL,$INTU, $SHOP, $NVDA, $MELI etc.

With $BTC sitting close to $64,000 and trending up, we may begin to see a rotation out of defensive into risk again. This is typical during earnings season. Stocks come under pressure when reality is unfolded and then go back to fantasyland once the ordeal is over. In many respects, we’ve been in a fantasyland over more than a decade now, with losses papered over, crises extended and delayed, FOMC intervention at the slightest sign of market turbulence etc. I have very strong opinions about all of this and nothing will change whilst times are good and why should they. Men will not mobilize when they have ample cigars in the humidor and the best bourbon money could buy in their at home bars. You might not like it, but that’s how society works.

Change only comes during hard times and hard times are never enjoyable to endure, same with bear markets. The novelty of the bear quickly wears off, giving way to panic and disquieting fear. I think it’s fair to assume the current trajectory is unsustainable but the timeline expiration is also undetermined. So we trade the tape in front of us and wait.

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Late afternoon the run in $GME became perverse, with shares cresting above +30% for the session. In tow were a sundry of like minded stocks, held indomitably by diamond handed fellows in search of fortune. Shares of $KOSS, $AMC, $BYND, $BYON took the fuck off. The idea, of course, is to make a tremendous amount of money before anyone finds out. The shares held a nice glow into the final minutes and I am cheering them on for Monday, mainly because I am long $AMC.

I could’ve sold $AMC when I had a 3% profit, but instead held because A. people like the moves and B. I want at least +30%, if not much much more.

If you think about it, my week has been really bad and I deserve respite. Some of you might believe you “deserve” money, but I really do. I lost more than 5% for the week, due to a series of unfortunate events. I am, pretty much, the laughing stock of finance at the moment, with people jeering me in the streets, asking me if I had any tax loss situations to recommend.

But I don’t let any of my haters get me down because I know God himself is a fan. I am pretty sure he reads my blogs daily and tilts the scales my way whenever possible. With that in mind, I have an idea that both $BTC and $AMC will skyrocket soon and frown will soon be turned upside down!

Into the weekend, I look forward to the gym and fine dining, gardening, and perhaps an artisanal cocktail or two. It all depends on my mood. I also have plenty of studying ahead of me, as I am getting 76s on my practice exams. If just tuning in, I am getting back into money management, which might lead to the complete destruction and annihilation of this here blog.


+89bps for the day, fully long and optimistic into Meme Monday.

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We enjoyed a big splash at the open higher and if you didn’t sell, you’re insane. If the NASDAQ jumps +300 at the open of trade, consider it a gift. But more importantly, think of the potential upside left in a single session. How many fucking NASDAQS do you want in a sitting: 400, 500, 600 points?

Since the open we have faded.

Here are some of the casualties if you chose to chase.

Even low beta stocks are down 0.95% from the open.

Breadth has gone from 72% to 51%. Basically everyone is selling and this selling must end soon, or you might find yourselves in a middle of a fucking rout.

I am 94% cash, only holding $BABA, +90bps for the session. I do like the move in $BTC and might consider another long position into the weekend.

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Surveying the Battlefield

We are accustomed to seeing stocks trade up after brief periods of being down. Today we saw a titanic move higher in China related stocks, with the $FXI up 5.6%. Leaders included $BABA $BILI $BEKE $NTES and many others. But China, like so many things in Asia, is complete fake, made of straw. All Chinese rallies are to be sold. To think not is to pretend.

We also saw strength in retail names like $M, $AMZN, $W and $JWN. The core consensus the consumer is still consuming and stagflation is nonsense, as per Powell.

In general, it was a very risk appropriate day, as high beta stocks jumped more than 2.6%. But we saw a little weakness into the final hour. As a matter of fact, this trend is persistent and we measure it inside Stocklabs.

Sell the open, fade the close. This makes for a miserable tape for those who prefer to adjust towards the end of the day. You are quite literally buying into a vat of nothingness, sellers dominating the tape and lethargy rules dominion. Then you get the open dip at 9:30 and next thing you know your buy the close, sell the open gambit is a disaster. This calls for a change in buying patterns.

Everyone is waiting on $AAPL earnings and I am not excited for them, due to their lack of innovation and momentum. The simple fact of the matter is, the great Apple run happened but now it’s over.

Some notable earnings winners in the AHs include: $SQ $PCTY $BKNG $DKNG

downside action in $NET $AAON $EXPE $COIN $FND

If you can, avoid all earnings plays, unless you have some insider trading information that you can act upon without going straight to jail. Pro tip: avoid using options for your schemes.

I ended +88bps, 19% cash with a pretty conservative allocation.

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Small Recovery; Changes to iBankCoin Blog Soon

Before I update you on my trading room drama, I am pretty close to changing the overall theme of the blog, just to change it up. It would entail more of a macro look at the economy and markets, diving into sectors and focusing on key parts of the market instead of personal trading. I think it’s well established here that I trade a lot and have better than average skills. It would help me if I was tasked with some headier research, perhaps getting back into listening to conference call and leaving notes here for the blog.

I recovered part of my losses from yesterday, +111bps at midday and in a 100% cash position. I went to cash because I was fortunate to land some solid trades whilst in traveling from Boston. I am home now and need to get situated.

Back when I was younger I’d feel obligated to get all of my losses back right away, take risk to win and lucky for me that would happen most of the time. But this is not the proper way to recover losses, lest you have insider information and sure thing trades.

I have reset myself and will now work at making incremental gains, trading carefully, being mindful of the earnings season and the potential pitfalls that can harangue me.

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Some blogs of mine are dripping with sarcasm, invectives foisted at my enemies both real and pretend. But I won’t do that today. I could offer an excuse for my poor trading, especially since I was in a plane and then moving furniture to storage when the FOMC meeting occurred.  While they are reasons for my disconnected nature of today’s -478bps debacle, it it certainly not an excuse.

I give others harsh criticisms when they do poorly and brook zero quarter for weaknesses. I do not expect any given to me now. I won’t cope and explain how I’m still up almost 5% for the year. It’s all shit tiered thinking and I should know better. I pride myself in my profession and feel comfortable enough to tell others to look towards me as an authority of what to do in the market.

This is me losing badly. It doesn’t happen often but it does happen. In the past I traded myself back and lived happily ever after. But past results are not indicative of the future and I only say that as a warning to myself to not rest on laurels, with the mindset of thinking “it’ll all work out in the end.”

No one is coming to save me and not a single one of you reading owe me anything, in spite of my excellence over the years. Finance is a “what have you done for me lately” sort of business. We mock and deride former stars who fell and collapsed into ruin. I will do better and offer my sincerity apologies for this inexcusable performance.

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Entire Year Nearly Blown Up

I’m on an airplane now to Boston and I’m long with a hedge and down 3.3%, on top of the 2.4% yesterday — making this one of my singular drawdowns in perhaps decades.

Into the Fed, I have a feeling markets will rally but cannot take my hedge off for fear of a rout. I shouldn’t be long anything now and ought to be in cash — but here I am.

Into the closing hours I’ll likely pare down my positions for a much smaller footprint, as I’ll need to hit a few singles before even thinking about homeruns. Today’s albatross was a combo of $AMD $EL $PYPL and $SOXL — all great long term investments just having a really bad session.

My YTD gains sit under 7% now.

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I’d invite you to join Stocklabs, but then I’d be doing injury to you, trading with the worst people on the planet. Fuckers watching every move you make, pointing out all of the losses and inadequacies. And on good days, they’re all up 10%, perfect traders. On bad days, they’re flat, leaving them with enough comfort and time to make a spectacle of your losses, especially when they occur in the after hour’s session.

I entered the close long $SBUX and $AMD and doubled sized $SOXL all because I enjoy holding onto stocks before they miss earnings and see their fucking shares COLLAPSE onto my head, cracking it open and letting my brains leak out onto the garage floor.

My losses were already horrendous for the day and really for the past 2 weeks, going from +6% in April to DOWN 2.5%. My YTD returns are now under 10% and I am all but buried in a grave that I dug for myself. I am paired nicely with some $TZA and $UVIX tonight, but not enough to stem the tide and withdraw from the horrors I am about to face. All of my bad deeds throughout life are coming into the fray now and I will soon pay for my transgressions, in front of an audience of bastards who enjoy to see me suffer.

What have I done in my life of 47 years to deserve such treatment?

Like I said earlier, I just wanted everything to work out in my favor, come to work, make a few trades, add zeroes to my net worth. But now my net worth is heading in reverse and at this rate, I’ll never make money again, perhaps en route to zero. Who knows when or how the losses will stop? I might need to sacrifice something or someone. All I know is, these sort of catastrophes afflict me from time to time and I really wasn’t taking my bad trading serious until now. I just figured it’d sort out somehow and I’d magically reappear online again at RECOURD highs, talk a bunch of shit, and then do whatever the fuck I do every night.

But instead of that happening, I am trapped in the after hours session from hell, DOWN ANOTHER 130BPS facing the pangs of error and weak minded allocations. I felt that my luck was due to reverse but apparently I am just getting started.

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