Damn Ramp, Back At It Again

I apologize for being slothful in the past few weeks.  I promised some updated February Ramp stats and here they are, 10 days into March.

As you can see, I crushed it again *shocker*.

3:30-3:45 continues to outperform 3:30-4pm and buying and holding.

Compare my +1.61% return with the indices for the month of February:

S&P 500 = -0.41%

Dow = +0.30%

Nasdaq = -1.21%

I’m back at it again with the new Ramps.

It’s midday and stocks are slowly melting up as we thought they would, on their way to a date with the magical round 2000.  The put/call ratio is currently at 130% which means everyone is too beared up and they will eventually have to cover their shorts.  Clearly, the hardest trade right now is to BTFD.  If you struggle with this concept, may I suggest holding your nose and closing your eyes.

It’s also the last day of the month and I’m looking forward to another successful Ramp (I’ll post the February returns later this week).  If for whatever reason something goes wrong I will just blame it on racism.  That seemed to work for Chris Rock last night at the Oscars.  Talk about awkward.  Since when did award shows become the main platform to push every social issue known to man?  I just want to see who wins the damn awards, not get shamed into being a racist who hits women and hates the gay community…but I digress.

It’s about 2 hours until showtime.  You all should be blessed that the stock gods have given us an extra day of Ramping.  Hope to see you all there.

How many times are we going to hear about global risks?  As I pointed out earlier, there will ALWAYS be global risks.  Yet, we will continue to beat the same drum that global risks will somehow take down our economy if we ever hike rates again.  We Ramped initially on the news but have now closed that entire Ramp.  Remember: The first move is always wrong.  So I expect some selling pressure this afternoon and tomorrow.  Nothing that I can’t handle though.

We are up over 100 handles in less than a week.  While I fully support that move, we need to come off a little bit so everyone can reload and the short squeeze can continue higher.  Don’t be surprised if we make an attempt at 2000 before the end of February.

Below is a word cloud of January’s minutes.  Foreign, bank, time, and swap stick out the most to me.  Inflation is always in there.  Just ignore that shit.

Let’s face it, I’m becoming too popular.  Usually when something becomes too well known it becomes long in the tooth.  See FANG stocks.

CNBC is starting to notice my late day Ramping skills in 2016.  Notice how the 3:30-3:45 Ramp is the most bullish 15 minutes of the day.  As if that was news to you guys…

I should be the frontrunner for Time’s Person Of The Year, a Medal Of Honor, and a Nobel Peace Prize this year.

We could be navigating through rough waters soon as more people catch on.

Right after 2:30 today we were sitting at LOD, contemplating suicide.  The magical 1812 line in the sand that everyone and their grandmother was watching finally broke.  Sure enough, after a massive tweetstorm freakout of breaking 1812 we Ramped higher, ripping faces and sexual reproductive organs off in the process.  We Ramped 26 handles in a matter of 15 minutes off the Wall Street Journal reporting that OPEC members might be ready to cooperate on a cut, citing comments UAE Energy Minister Suhail bin Mohammed al-Mazrouei gave to Sky News Arabia.

Thankfully this happened before my daily Ramp as it gave traders a chance to digest the truthfulness behind this rumor.  Then, true to style, I Ramped us another 9-10 handles from 3:30-3:45.  And guess what, we are still ending down 1% on the day.

This is a classic bear market as I’ve said it before.  We gap down in the morning, Ramp in the afternoon, then close with half of our opening losses.  The only people making money in this market are short sellers and people buying the daily Ramp.  You will continue to get killed if you buy and hold.

I really don’t like all this talk about a “Tax On Wall Street Speculation”.   Please, enlighten me on how this tax is going to help you pay for a free art history degree.  This famous phrase was repeated again by the senile socialist crank named Bernard “Bernie” Sanders during his victory speech in the New Hampshire Primary last night.

My question is: Why should I be punished because I only want to hold my stocks for 15 minutes a day because math tells me to do so?

An argument can be made that buying any stock is speculation.  Just because you try to add a tax on something doesn’t mean it will fix things.  People will adapt, find a loophole in the system, and mess up things worse than they originally were.  If you see a train coming towards you and you are standing on the track do you not get out of the way?  If you have the foresight to get out of the way of a bear market you shouldn’t be taxed even more by selling.

From Grandpa Bernard’s website concerning a “Tax on Wall Street Speculation”:

Stock markets are intended to be an exchange where a company can sell ownership in return for working capital. In other words, it’s meant for companies to sell shares for cash that they then invest back in the business. But increasingly, the markets are used as an instrument to gain short-term profits by quickly trading stocks with tiny price differences and using other high-risk trading methods to make a quick return.

An FTT, also known as a Tobin Tax or Robin Hood Tax, is a small tax applied each time a financial security (e.g., a stock, bond, or similar financial instrument) is traded.

The 2008 financial crisis has been both a lesson in the dangers of excessively risky financial behavior and a tremendous expense for the American taxpayers. Many studies show (as cited in this report) that implementing an FTT would both dissuade high-risk and high-frequency trading and generate revenue — to rebuild our infrastructure, improve our social safety net, and make higher education more affordable. Here is an illustration of how FFTs could be applied on a global scale:

http://tcktcktck.org/2012/05/highlights-from-robin-hoods-global-week-of-action-for-a-tiny-tax/

Taxing a financial transfer does disincentivize selling a stock or bond. However, the small percentage of the tax means that only trading on the smallest of margins is no longer profitable. This tax would target the high-frequency trading that uses these tiny margins for profit without having meaningfully invested in a company.

Simply, a well-crafted FTT would only affect sophisticated stock brokers trying to make a quick buck. If done correctly, it would not discourage meaningful investments. See here and here for in-depth discussions on different ways of implementing an FTT.

News flash: Stocks are worthless pieces of paper unless you are a majority shareholder.  You are speculating by buying stocks.

How can 1/3 of the pollsters be voting for Fed Funds to be greater than 1%? Are you god damned psychopaths?  Do you never want to retire?  Have you not witnessed the absolute carnage that hath engulfed our markets since the initial Fed hike back in December?  At least half of you got it right by voting for negative interest rates which would force people into riskier investments (stocks) and we would hit new highs every day until retirement.

The system is flawed. We have a group of 12 “economists” who get to say when we should bail someone out and when we should change interest rates. I vote for power to the people. Let the people decide on interest rates. God knows everyone on Finance Twitter is already an economist anyways.

Markets are down 2% this morning.

$CHK is going bankrupt.

The world is ending.

Have a nice day.

We are getting smoked again today.  This morning’s job’s number was trash unless you look solely at wage growth.  And I sure as hell didn’t get a raise even though I know I am well deserving of one.

There is still no way we are going to hike again in March unless the Fed seriously wants the S&P to go to 1500.  One data point is not enough to hike.  If anything we should know that is the case from the Fed kicking the can the last 2 years before their first hike.   I think we will hit negative rates before we even think about hitting 1% fed funds.

Check out the Google Trends searches for unemployment and negative interest rates.

Are we really going to raise rates into the looming recession and 6 month high layoffs?  I think not.

January was atrocious for the bulls.  Some 93% of investors are down on the year and rightfully so.  And February has already followed in the footsteps as we are down a cool 40 handles as I write this.

Have no fear though as I come bearing solace.  I’ve found the place to hide, and no it isn’t on the Ark.  You do not deserve a spot on the Ark.

Without further ado I present the Ramp returns from January.  Please note why my office hours have been reduced by 50% this year.  Over the long run holding until the close isn’t the best option.

Compare my +0.66% return with the indices.

S&P 500 = -5.07%

Dow = -5.5%

Nasdaq = -7.86%

Russell 2000 = -8.85%

Janet hath saved us from the biblical flooding by not hiking rates and striking a dovish tone for Fed policy in 2016.

The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

Risk on while we muddle through this earnings season, giving excuses about softness in China and currencies, all whilst awaiting further dovishness from the next Fed meeting in March.  It’s cute how earnings used to matter.

Below is the December dot plot.  It will be interesting to see how the January dot plot overlays:

Taking the lower bounds of the 0.25% ranges for each year, the estimates for Fed Funds rates are as follows from the December meeting:

2016 = 1.16%

2017 = 2.29%

2018 = 3.07%

Longer Run = 3.41%

We are up 100 handles since a week ago.  Everyone who is looking to short here will be forced to cover as we take a shot at getting back to even on the year.  Don’t think we can’t go up another quick 100 just to catch everyone off guard.

P.S. The first move on FOMC Minutes days are always wrong.  Appears we are tanking on the dovish news.  Looking forward to the massive rally to close at the highs.