Stocklabs Oversold Works Again?

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.

We can revisit this blog in about 5 years and see how well it aged.

The Biden administration instructed the FHFA to REDUCE rates by 1.75% for those with shit credit scores of 620 and lower while at the same time INCREASING it by 1% for people above 680. Most attacked are those with scores of 680+ who put down between 15-20%, aka the middled class.

It will equate to, on average, about $500 to $1200 per annum in additional fees for the middled class — while only delaying the inevitable FORECLOSURE for the morons with low scores — which will severely hurt everyone years down the road in what is sure to be MORE govt bailouts.

The problem with idealogues is they’re stupid and let their perverted little communist brains get in the way of sound logic. If you reward the weakness amongst your populace, you will become a dysgenic society of spend-thrifts and grifters — encouraging those who put their shopping carts back in the parking lot of their local grocery stores to say “fuck it” and throw it into oncoming traffic.

The pigs in DC claim this is to settle the score for equity and permit PERSONS OF COLOUR to get in at the bargain basement discount rates. The average credit score for the whites is 727, Hispanics 667, and the blacks 627. If you’r wondering about the asians — that would be 745.

Whilst we do not believe in crazy theorems such as intelligence quotients or credit scores, it would BEHOOVE you to not see the correlation — if only for a brief moment.

The appropriate course of action would be to send 1 or 2 less missile systems to Ukraine and let the poors get their discounts without making up for it by taxing those paying their water bills on time.

I squeezed out a 0.02% gain for the session. I had a good start and then squandered it in a series of poorly timed trades. Ironically, I’d be much better off had I not sold LABU yesterday, up 6% today.

I’m no damn good at these listless tired and slow tapes. I need an electrifying market with trends shifting quick in order to really hone in and crush. I’m now down nearly 4% for the month — and -4% from my all time recourd highs. In the big scheme of things, this isn’t a big deal. But larger slumps start someplace. For everyone down 90% now staring out into the oblivion wondering where it all went wrong — that fucker at some point was -4% too.

It’s important for me to remember the true purpose of all of this — which is to wantonly collect money without an apparent goal or reason. I just endeavor to stow away cash, and then hope for societal collapse — and then die. This cycle has repeated itself in aging men since the beginning of time.

NEVERTHELESS, we still have work to do and enemies to destroy. Although I got bogged out this week without much delay, next week could be a complete different story. The tape is sort of evil, with slow moves followed by massive out of the blue pops and drops, followed by more inaction. Then you get the occasional 15 down red candles to really fuck with your day trading religion, offset only by a mean reversion 10 candle upside to close flat for the NASDAQ.

If I just did nothing, my results would’ve been better. But this isn’t always the case.

Good morning Sirs —

It’s important for you to understand a few things about the market. For one, it always likes to go up, eventually. You’ll know it’s in a feverish bull run when themes start emerging. We are not in that type of tape yet — the sort of tape that causes you to trade at 7pm and 4am in your WeBull accounts.

However, and this goes without saying — all morning dips should be bought and hedges closed out. This is exactly what I did today and so far so good.

Inside Stocklabs we measure the returns per stock by the hour and you can see below — for the month of April buying at 10-11am has been a dunk shot. I can also tell you this has been the case all year round.

Now this doesn’t mean we can’t knife the fuck down amidst panic and mayhem. It only means — if you hedged overnight — you should take profits before 10am and wait to see how the market develops.

So far, I am feeling very strong and powerful. My health is good, mood fantastic.