Let’s Try This Again

Here is the ultimate dilemma with my quant. Last year it made me money only because of the war and the early gains in oil and gas stocks. Had it been an ordinary recession, I’d be totally at the mercy of markets. My dilemma is: how do I automate a trigger to either hedge or establish risk averse positions?

I think I stumbled upon an easy solution. I have another screen that fishes out low beta, fundamentally strong stocks. This screen produces stocks like CHD, PEP and SBUX — more or less risk averse names with betas under 1. Since the final arbiter of my quant picks is our technical algo, I’ve decided to edit my quant strategy to include this low beta pool of stocks too. I will first choose the strongest stocks from the growth quant and then when I run out of stocks ranked above 3 tech score, move over to the low beta. This way, in an environment where all stocks tethered to the health of the economy are getting REKT, I will automate into the comforts and safety of low beta Grandpa stocks.

I’ll keep you apprised how this plays out.

Early going BIG ZUCK over at META is saving the day. However important you might think that is, have a look at the fucking semis steered lower by LSCC. We have a pastiche of cross currents, earnings pops and drops, that is making this tape EXCEEDINGLY arduous.

Even though I am slumping, I remain steadfast in my methods and will continue to use them without deviation until the Gods favour me again. As you know, it’s only a matter of time when I appear here in my odious visage to declare “LOOK WHO’S BACK AT RECOURD HIGHS.”

Earnings season can be a wonder or an absolute train-wreck. My trading account is 100% directed quantitatively — mixed with leveraged positions and hedges. For the week I have been de-balled in ENPH and CALM — with only a small favor done in DDOG. In all, I am being fleeced in a very automated way and I am not sure that I like it.

It wasn’t supposed to be like this. EVEN WITH ENPH IN HELL, I had been up 50bps today, more or less enjoying life. And then the last few hours rained down fury upon me — with the utter and sheer calamity unfolding in BTC, with the coin dropping THOUSANDS — and then worse, much much worse, was my sole hedge SOXS dropping with the market.

I shed another 1.36% today, now down 6.47% for April — still +31.25% for the year. To say that I am over is an understatement. The way I’ve let these losses creep up on me and control my thinking is disgusting. I was supposed to make money during April, and every other month of the year — but instead I get this.

I didn’t trade to lose and I certainly do not like losing via the quant. Part of me wants to punch the quant into its robot face and self direct. The issue I have with that — I am very bearish. But maybe that’s a good thing. Perhaps it’s time to take the fucking training wheels off and ride again.

As May approaches I will make a determination.

Oil and gas shattered. The Microsoft induced rally has turned to ash, with the NASDAQ at session lows — but still +80. The IWM is off by 0.7% and a wide doomed net has been cast over the markets. I will say this to you: I hope it happens and it ends and the collapse cleanses away all of the excesses we see in front of us.

I am trading reactionary, presently hedged via TZA. My gains have been canceled out and I am now -0.10% for the session. However difficult the market is now, I’d like to point out many larger dividend yielding stocks like SBUX, MCD and KMB are pinned to 52 week highs. I think it’s important to be on guard, but also do not fall for obvious tricks and maintain an allocation into what is working, as opposed to what isn’t.

This sounds simple enough — but most of you fucking retards load up on CVNA instead of CHD and then wonder where your money went.

Into the close, I am leveraging up into risk averse names — maintaining a hedge — but I’m open to taking profits to see if stocks can redeem themselves.

We flagged oversold for our 3 month algo yesterday and I had a massive TZA position into what I viewed were risk earnings out of MSFT. That risk appeared to be overstated and the stock is off to the races. I closed out TZA and now remain unhedged and that might be a mistake. However, given the success of the 3 mo oversold this year, I am willing to give the market a little time to continue higher — maybe an hour or two.

Each OS has led to a rally in 2023 and today should be no different, give we have solid results out of BIG TECH.

Keep your eyes on breadth, currently at 68%. Should that number sink into the 50s, we might get a downside reversal. However, if we remain above 65% and edge higher — I am thinking we get a ripper into the rest of the week.

I’d hate to stand before you and change my mind again. I was going to declare the market to be bearish — but refrained in the last minute before I started to blog because MSFT is up in the after-hours and that might shift things a bit.

You must admit, seeing the NASDAQ -200 feels good in spite of personal injury. Sure, in a perfect world I’d be up today and not in the quant generated picks — but instead perfectly wagoned to hitch the ride lower. But I haven’t and for those of you bitching and moaning about the quant picking BOWSERS — you need to shut the fuck up at once and stick to ze plan.

The muscle in the Russell had dissipated and the summer swoons fast approaches. We better pray to the Gods for profound earnings to extract us from this slump — for it is foreboding and evil. I do not like the measure of this tape and would prefer another one.

I closed -179bps for the session, all but powerful under the weight of a long only book of tech and oil — a recipe for catastrophe on this day.

Just yesterday I was fooled into believing Pax Americana was back, if only for 1 more day. I had plummed visions of fat people dancing in their trans-gendered costumes celebrating their stocked market gains via popping rainbow colored corks right into each others cocks. There would be fun an excess for all — drugs and free items from Target and CVS — and we’d all generally ENJOY ourselves at the expense of others.

But today’s tape has reminded me of the evils that lurk not too far under the surface. It is a sober reminder to never relax and never succumb to the alluring nature of free items from CVS.

I have been trading well today, but still find myself down 1.75% in a long only book. My hedges have been intermittent and I wished I had done them yesterday — but I didn’t.

Today we have KNIFE TO FACE action in FRC, PACW, TENB, CVNA, UPS, ZS, NTES, CRWD, ADM — the whole fucking kit and caboodle has gone wayward and overboard. We are in the midst of a rout and the Stocklabs mean reversion algorithms are not oversold.

Let me clarify, we are OS on the 3mos, but not on the 6 or 12 — and with breadth at 25% and 11% of large capped stocks rated strongly inside the platform — it would BEHOOVE me to not tell you we probably have lower prices to achieve.

How can I get away with saying that — when just yesterday I declared on this very blog I was bullish? Well, I just did. Who will stop me?

I just closed out my TZA hedge and will try to give the market a chance to rally from now until 3pm — but I am likely to heavily hedge into the close — given this catastrophe unfolding.

FRC is getting its brains blown out this morning, OFF BY 27% on news they lost 40% of their deposits in last month’s great big bank run. If you’re still banking at a regional, your money is likely safe. However, if you’re investing in KRE or regionals directly — you are a fool and should be shot.

Sure, being shot for mal-investments is a bit crude and probably a tad extreme. But how else will you people learn? The JPM oligarchy is sucking in all of the money from the regionals — because there are ZERO incentives to leave deposits at a regional in this fast paced globalized banking world.

Pray tell me why I should keep my money at FRC instead of JPM?

Markets are SOFT early on — led lower by regionals and commodities. I am not fooled, but down 1.25% because, well, I am a bit fooled early on. Nevertheless, I remain CALM and collected and look forward to the rally that is sure to come.

I will now sit here and wait for the rally.

Do the charts of GOOGL and SBUX look bearish to you?

It pains me to say this — but we’re in a bull market again and the bull have this on auto-pilot. I view the chances of an imminent downside move to be zero. I’ve leveraged up 135% long amongst a pastiche of well to do larger capped stocks ranked highly by the Stocklabs ranking system — attached to an already 100% long book from quantitative picks — many of which are in the oils.

I do not wish a bullish market on my worst enemies. But alas, this is what we’re facing and it would BEHOOVE me to not take free money, when presented in such an easy fashion.

I gained 52bps for the session, in a very easy and delightful afternoon. I am once again feeling excellent and my mood is coming around to being acceptably cheerful.

I should probably avoid trading anything until after 1. I am trying to address an over-trading issue I have in order to better hone in on the high probability trades — casting aside the small piece of shit trades that spend up much of my time.

I spend a lot of time chasing around small returns, toiling in the stock market fields mostly for the joy of the hunt. Alas, as I age and my body withers to dust, it doesn’t seem like a long term plan worth continuing. I just need to figure out how to only get the BIG trades and to eschew the small ones and also forgo the occasional bogging — which seems to happen when I least expect it.

Today you might’ve learned TUCKER CARLSON has been fired at Fox News. I am surprised he was allowed to speak so freely, in a country such as this — authoritative oligarchy oppressively divisive group of evil catamites.

Back to the hourly data — would ya have a look at this now (written in an Irish brogue).

Well well well. Just buy at 1pm and sell the next morning ya cunts.

At any rate, I haven’t traded a lick today, only reallocated my weekly quant and closed out all of my positions at the open. I’m up 56bps and trying now to do anything that might disturb my gains.

Last year the oversold signals were popping off with alacrity. The way the algos work is to constantly adapt to the present and because of that — we’ve seen ZERO oversold signals since 9/23/22.

At the moment, our short dated (3mo) algo is the active one — registering 3 OS signals for the year so far.

It’s worth noting, ALL THREE made money for those adhering to the discipline.

Above are the mean reversion OS for the technology sector. We are currently in an OS cycle, as the system flagged it two days ago for the 3mo.  It’s worth noting for those who have no idea what the fuck I am talking about — this has been my time machine to buy the blood since 2008. The mean reversion algos have been excellent in picking up on panic and discerning whether the levels of panic are sufficient to consider it to be oversold or not. Since we haven’t had a 12mo signal in quite some time, we are definitely in a period of adjustment — some might call it a bull market. Even so, soon the average scores will increase to the point that the OS will be shallow enough to start spitting out signals on a regular basis again.

My best guess — this should happen by summer.