Beware When Swimming in Feces

Markets are fine this morning, but I am down more than 200bps. Reason being: I’m knee deep in shit stocks. I sort of knew this could happen but only wanted 1 more day. I figured, if I could get just one more day then I’d stop being such a gambler and play it safe again.

Unfortunately, for me and those mirrored to me, today is an outlier day, markedly to the downside.

First order of business is to stop the bleeding and regroup. This time, as God is my witness, I’ll be good. I’m also feeling very fresh, in good health, and very smart.

I will once again, likely in vain, attempt to help you help yourselves.

How did I turn $100k into $1m since late 2020?

I am able to scan the market with perfect alacrity thanks to the software I built — Stocklabs. Without it, there is no way in hell I could’ve done it.

Yes this is an endorsement and yes you should join and if you’re asking me seriously — no you should not only depend upon my picks but instead develop your own skills, which will take a lot of time and set backs and unending experiments. Providing you are always in the game, you should be ok. The way to stay in the game is by avoiding overly concentrated positions (greater than 10%) and sector allocations. If you have 20 positions at 5% weight each and they’re all in tech — are you not egregiously over-concentrated?

If you want to know the secret to my success in trading — here it is.

I use our dynamic screens to find fast movers. The best way to find runners is by analyzing the volume. If XYZ trades 1 million shares per day, but has 900,000 shares trade by 10am, ordinary screeners will not show a volume spike. What I have done is pro-rated the volume of a stock by the minute — using a 30 day average. I named it “volume delta” and I use these screens to help me find stocks moving higher on aggressive volume.

During the bear, the delta screens were useless. I resorted to other screens for my ideas, such as finding mega cap stocks near session highs, in an attempt to squeeze out 2 or 3 percent. But with this market, I am able to find 10% runners inside minutes and it’s important to capitalize on this now, whilst the times are good.

I have a wide array of screens that I made and keep in the default screener for members, in a drop down.

Another thing I utilize frequently is thematic trend analysis. This is best achieved by creating baskets of stocks in a certain genre, in addition to micro-managing industries.  I have over 100 watchlists of stocks created that can be viewed upon to analyze movements over timeframes ranging from 30 seconds to 30 minutes, same with industries (198) and sectors (8). If Artificial Intelligence stocks are moving higher with aggressive volume, I am able to see it via % change 5 min and volume surge analyzer (5 min) tools inside my watchlists tab.

The volume surge analyzer (VSA 5m) measures the volume in a stock over the past 5 mins compared to previous. We provide this information ranging from 30 seconds to 30 mins.

(VD=volume delta)

I rarely buy runners down more than 10% in any given session. Some people have success in buying dips — but I prefer momentum. I find it easier to extricate a little more from a runner blasting at session highs on aggressive volume than one knifing lower amidst panic selling.

This might all end next week and we might be back in a bear rape tape. For that, I analyze what I call an “Alpha ETF” screen, which produces ETF runners over a 5 min times frame (my preferred time frame to view). I often use ETFs to hedge my longs and take quick rips. The trick, I have found, is to take very large positions — sometimes as much as 40% of assets. While this might seem reckless — it’s not. If you have a 100% long book — anything less than 40% is still a net long position. I often take 10% weighted positions in SQQQ or TZA or UVIX or LABD in an attempt to slow down the losses I am enduring in my longs. Many times these hedges end up as losses,  and that’s 100% acceptable. If markets look to be turning back up, I simply close out the hedges and sit on the my existing longs for recovery. In many cases, I close out my hedges for small percentage gains, anywhere from 0.5 to 2% is my goal. While 1% gain might seem like nothing, when you have 20% of your book in it, that is on par with booking a 4% winner in an ordinary sized position. At any rate, the whole point of a hedge isn’t to “make money” but to slow down the losses and/or make small gains in an attempt to eventually make the greater sum on the long side.

I didn’t possess the eternal fortitude to close green today. I had flirted with down 0.6% twice and twice went back to -2% — and ended up somewhere in the middle down 99bps. I was UP 4.5% for the week, +26.6% YTD. But I feel depressed by missing out on today’s somewhat tradeable tape and I also cannot shake the feeling of apprehension, especially since the market is overdue for a drubbing and I’m 138% leveraged long without a hedge.

More than that, I own shit — such as LTRY, SOUN, AI, RGTI, WTI, TELL, OCG and even OPRA.

On this issue of Opera. One could say this is a shot in the dark. The thesis is as follows:

Google is under pressure due to a competing search engine in Bing applying superior AI tech. Opera, a piece of shit browser, might be tempted to partake in the AI bonanza. If so, and I do declare this to be a prediction, the stock will STEAM the fuck higher. The issue is, OPRA is illiquid and generally a piece of shit.

I had a good thing going today, trading inside the garbage cans, up until I got greedy and got my brains blown out in VLON — losing 18% in a matter of minutes. These things happen and I am surprised I was able to close down just 99bps — given how stupid I was all day.

If I had to guess about my prospects, I’d say grim. I went on a nice run and had a lot of fun — but it’s probably over.

This weekend let’s all root for Russia to win and hopefully cause a nice great big spike in WTI-Brent. You should also be looking at the WTI-Brent spread, which is BOOOOOLISH for refiners. I have many ideas, most are fanciful and rarely turn out to be anything but extensions of my vivid imagination. I attribute my recent success to trading inside of the trash can. If you have been trading real stocks with real businesses — not too much fun. The big moves are in AI, LIDAR, autonomous tech, short squeezes etc.

I’d like very much for stocks, especially the ones that I own, to gap higher on Monday. I do believe in my heart of hearts that I am deserving of such grandeur and hopefully all of you will say a prayer for me this weekend — asking God to grant me a little more profit than what I presently have.

Although I was hoping for a complete crashing of the market, it doesn’t look like I will receive it today. We are down 95 NASDAQs, but breadth is 46% and, generally speaking, things look stable.

The big story is Russia cut oil production by 500,000 per day. Don’t look now — but we are heading into the seasonally strong time of year for crude and we are one good week away from WTI approaching $100. I would presume under those conditions a plethora of SHIT OIL will sky rocket in value. I have NINE and BORR on my books now and hope to see oil trade up into the many hundreds of dollars in the not-too-distant future.

I am hedged at the moment but might cast them aside from more risk. I do feeeeeel that I deserve more gains and although I am down 1.3% for the session, thanks to a varietal of black clouds, I do not believe those losses can sustain themselves, as I have been able to write my own story for some time now.

I told you to prepare yourselves for this eventuality. We were NARROWING and WEAKENING over the past week — yet you did nothing.

I will now proceed to boast, which doesn’t serve you any good other than perhaps a sentence or two which might remotely amuse you.

I started the session +230bps because I was King. I then weakened and before I went to walk the fucking dogs — I errantly closed out my 4x SQQQ position when I was +80bps. Upon returning, I had weakened again to +10bps as the market dragged lower amidst a flurry of sell tickets.

I viewed the drop as part and parcel of what had been occurring — weakening breadth and pervasive strength in the worst stocks known to mankind.

I later took an 8x position in TZA — because I felt the Russell had no muscle — and was richly rewarded for it.

I then took a floater in LTRY and it jacked higher into the close — placing me +80bps for the session with a 143% leveraged book — 40% short via TZA.

This is where you might gain insight.

We are on the cusp of decisive action, and it looks to be lower. Markets have enjoyed a rather handsome start, led higher by the biggest steaming pile of shits for 2022. This is not a sustainable breakout and it won’t be long until we at least revert back to the mean and draw some serious consternation from the permanent bull class of investor who have been lavishing themselves with deals since late 2022.

Perhaps I am wrong here — but I hate stocks now. Understand the backdrop of my hatred and know that I cannot, BY LAW, sell my 100% long book. These are strict rules that I imposed unto myself and because of this — I have been afforded with the opportunity and luxury of only having to day and swing trade — hedge and do other things to boost returns.

It’s important that I explain this to you, so that when you read me and think “oh that’s just more fly garbage, permanent bear talk” — you’ll shut your trap BEFORE it opens with lies and innuendo. I am a very smart person and I do things methodically and I am pretty sure I am not afflicted with Dunning Krueger — although one never really knows these things. Do I have actual intelligence or perhaps a skill that I perfected after bashing my head against the wall for 30 years?

The jury is out!

One thing I will relay to you, my dear readers in post Pax Americana, the market is narrowing and weakening by the hour. I am now NET SHORT via a fuck you you’re dead 40% position in TZA. Before you get all crazy and declare me incompetent, understand (I like to condescend with that word) that to be NET SHORT with a 100% portfolio of growth nonsense, I need to be at greater than 35% in any number of leveraged ETFs. Ergo, my 40% TZA position is more or less a conservative allocation rooted in the idea that stocks fucking suck.

Again we are seeing divergence from most stocks to niche. In the niche we have 20% winners in any number of areas, mostly small cap. Overall, stocks are down 4 of the past 5 days. The declines are moderate, but pervasive. We are also seeing weakness in commodity names.

Basically if you’re not River boat gambling in stocks like LTRY and MARK, this rally is passing you up.

I can see it most obviously in my quant vs my trading — +0.28% for the week vs +5.7%.

Is the trash bubbling now as a foreshadowing of a great big implosion to come? We do often see crap rising before general collapses. If I had to guess, I’d say markets deserve to collapse but it doesn’t look like it’s ready to yet.

By last account, Google retained 85% market share of search, a monopoly. With the Microsoft integration of ChatGPT, even though it’s a biased leftist POS AI, there is a good chance Google will shed market share. Microsoft is calling this their biggest product innovation in 15yrs.

Shares of GOOGL shed 7.7% today, about $100b in market cap lost due to this excursion by Bill Gates and Co. The subsequent result of this disruption has been a legging in, if you will, into any stock AI related. I had been researching this area for sometime, mostly because Stocklabs uses its own AI for our algorithms.

The point here is this: in spite of the NASDAQ down 200 and the world crumbling beneath our feet, this sub-sector has taken off. I tried to lose money, but failed. I did close down 16bps with a fully long book in tow, now hedged with 20% weighting in SQQQ.

My booked PNL by day. Observe the excellence.

At any rate, just like in all feverish melt ups, there will be drama. But with drama, just like how we played the COVID stocks, there will be scams and companies taking this salient and pretending to be inside of it.

To be clear: there is no better trading area of the market than in stocks like SOUN, VERI, BBAI, AI, MARK, and RGTI — just to name a few. Moreover, these stocks might even double and triple from here, as people speculate how Google might fend off this Microsoft attack on their core business. The search wars have reopened, following 2 decades of Google supremacy. I do recall a time when Bing and Askjeeves and Looksmart tried to compete — but they ultimately failed. But this MSFT is different and now equipped with superior technology, so be on the lookout for major whips and saws — as people scramble around for the next AI play.

Jim Cramer said we were in a bull market yesterday. The semis are +22% this year and we haven’t had a bad week since the year began. Even if you’re the most astute and depraved bull, there is no excuse for this sort of market.The very idea of it going higher day in and day out, in spite of my magnanimous gains, makes me sick.

Ergo, I’ve decided to keep my hedges in place, and perhaps more.

Presently, I am 30% short via FNGD, SOXS and TZA. I realize there are redundancies in those ETFs — but fuck off for even thinking about telling me. It would be very easy for me to sell them now and then traverse the markets, light footed and gay, and purchase any number of stocks from which I could profit. But instead of doing that, I am going to set roots here and declare that my short bias is of a PERMANENT varietal. Why, I will sell the markets short every single day until I run out of money.

Also, and this goes without saying, I reserve the right to change my mind at any point and do the exact opposite. There’s not telling what I might do, as I am the definition of “unreliable narrator.”

What I offer you is my hopes and dreams. My skillset, if you really want to call trading stocks a skill, is finding numbers and letters before they move to my advantage, selling them at a profit, and then coming here to boast about it.

SIRS

At any moment this grande eloquence you see before you can rapidly trans morph into a nightmarish hellscape where Carl Quintellia (sp?, who gives a fuck) presides over a sharply lower tape, paired like a fine wine with disastrous news.

I’ve already conducted a billion trades this morning, mostly all profitable, on the long and short side, and am barely up 30bps. Out of the blue came a FUCK YOU red candle, followed by another and then another. Now we get a green one and everyone is back at it.

Last night Biden talked a lot of shit in the SOTU, none of which I paid any attention to. Do you remember 20 yrs ago when Bush was praising the virtues of his infrastructure plan, only to once again go nowhere. Face it, America WILL NEVER invest in itself, but instead far distant places that we like to destroy and then rebuild using no bid contractors.

It is over, but we are enjoying the last remnants of Pax Americana.