If you are long any high beta growth stock which is green today, rest assured, that number is a fake and you soon will return to your regularly scheduled bloodletting. The gods are agitated, mere mortals. You were given sufficient reparations for your dutiful market participation these last two years. But you demand more. The moon was painted red multiple times as a clear message to humble your ego. Yet there you were, nibbling incessantly from the forbidden giblets of our most holy tree without keeping an eye on your arse, your risk.
Now you have been fixed to a proper boiling chair in the furnaces of hell and Beelzebub is your only friend. He has advice like, “cut that flap of skin between your pointer and middle finger” and “channel your rage into moar trades”.
Your soul now resides inside the third ring of middle earth and it’s your job to retrieve it. Fortunately these stories of ghouls are as fake as the ‘value’ transfixed to four letter acronyms across the financial complex. Real work, adding value in a palatable and tangible way, continues to thrive. Know this, the market could head into another crisis (GMAFB, fake) and there will be virtuous men and women who emerge from the ashes as brilliant innovators. Are you going to do what it takes, risking everything you have to produce the next note in our grande symphony? Or will you try paying someone else to do it for you?
The dead days of the summer were a swell time to check yourself, an offseason of sorts in the warm southern breeze. Now it is cold, the days are short, and the rain is heavy. Have you built your hut? Your mind? Use it now, at this very moment, to be objective in your judgment.
That sack of skin you inhabit, or those old fermented grapes you cherish, see them right now. The market is no more complex, nor any commenter less bullshit then a sommelier. See it for how simply it truly is.
Then observe how a farmer sells two train cars full of cantaloupe. Now we can begin to talk about the movement of price.
When a market moves lower it is seeking information. It wants to know where it needs to advertise price to entice a motivated reaction from buyers. Once it does so we see an abnormal rotation. Something like today’s in the Nasdaq. However, the evidence suggests we have not done enough to thwart off the tide of supply. Rallies are suspect and to be observed for signs of liquidation. Until buying demand creates an event that sickens the lot of yous, the bigger punches are being landed by the sellers.
I side with the heaviest and most consistent puncher. I sit on their back and hold the reigns as they buck and thrash. Such is the life of following order flow.
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I’m expecting more weakness and lower prices soon.