18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,408 Blog Posts

It’s Over

The US 10yr has collapsed in yield to 1.30%. Small caps have been bludgeoned to the tune of -2%. Everything but NEGG, AMZN, and AAPL is getting hammered. Each and every morning — gains fade and dissipate in a whirring and repetitive process designed to cause disillusionment and despair. Confidence is waning.

We perceive things based on recency bias mostly. Six months ago I would have and probably did suggest we were in a new era, a dawn, of great intellectualism forged by a wave of innovation and technology. I willingly ignored social strife and all of the bad things because markets were going up. When markets go up, the perception of greatness is overwhelming, which is why more people buy into tops than at the bottom or on the way up. When prices are high — the advertise themselves and normies pile into the riskiest stocks because they’re mostly ribald caricatures of what humans should do with their investment income.

This morning, as always, I sold everything (save 1 stock) and booked 200bps in gains in my YOLO account and I am about break-even on my trading. The Quant is still fully invested and I will not touch that until the first of every month. The way it works is Stocklabs chooses, via a quantitative process, 20 stocks to buy all equal weighted. I buy all 20 without offering my own opinion and rinse and repeat the first of each month. YTD, it is +22%.

The YOLO account chooses 1 ETF to buy per day, based on the SL Intelligence Algos. Yesterday it chose QLD.

As for my trading, I do not feel like ebbing into this fire. When I see stocks like NEGG +155% while small caps are down by 2% and breadth is 25%, I am immediately reminded of 2014 — a year which will always live in infamy with me. We are seeing the same sort of pin action in 2021 and if we are to follow that path — the NASDAQ should do fine — but the breadth will be narrow and the trading favorites dispatched into hell.

More later.

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