In case you missed it, I blogged in detail about my investing methodology and highlighted my top short bet heading into spring/summer. Click Here to check it out!
Here we are again. The end of April. The IRS has been informed of the finances of all citizens. The middle east is heating up, displacing millions of sapiens who cannot support their tribes without water. As they wander into their neighbor’s territory, base animal instincts flare up and violence ensues. All thanks to global warming.
May usually brings out the bearish commentary and sometimes some broad market weakness. Our good robot friends inside Exodus show us that historically May and June are a coin toss for $QQQ, a popular NASDAQ ETF:
The model we hand build every Sunday when preparing the Strategy Session is neutral for a third week. That means we have no solid signal to forecast a directional bias for the next five trading days. We have to rely on other context, in particular the PHLX semiconductor index. It could be in a topping process. It could also be in balanace. The main thing to keep an eye on is where buyers and sellers ‘should’ be, and how the index actually behaves when we visit those levels. This type of market observation is useful because it does not require you to try and make trading decisions based off noisy factors like politicians, Arabian conflict, or stock market gurus.
::takes a long kombucha sip, swishing the SCOBY::
It was the weakness seen in the semiconductor index last Thursday that had us initiating bearish bets ahead of Friday’s trend down. To see my favorite bearish bet, Click Here!
Aside from contextual cues, we have no way of confidently predicting what may occur next week. But ready yourself for noise and distraction. Do not let the heavy flow of negative news knock you off your feet. Ground yourself by taking a few minutes each day to watch bird behavior, or the way a wave of people fill up the queues at a super market—only for it to be slow moments later. This human phenomenon can be observed especially well at Costco.
Then, as you develop a deeper understanding of human nature, step outside of it and improve your intuitive ability to be a contrarian. But not just a contrarian for the sake of being different. Instead joining nature as it seeks to restore balance. To reach homeostasis.
Cheers lads, it appears spring has finally come to the north. May the season bring to light many prosperous new beginnings.
RAUL SANTOS, April 22nd, 2018
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