Buy the Blood

I do not like to play the intra-day machinations during a sell-off — because there’s no way to accurately predict when the selling will stop. Today after the close is earnings from NVDA.You should not expect the stock to rise after earnings, since it’s already +100 the past month. There is a good chance today’s weakness permeates into the opening tick tomorrow, at which point you’ll want cash to buy the blood.

This is a shake-out — predicated upon an overbought nature. I am 90% cash, with two positions, one in BITO calls and another in NEGG — which I view as a Blackened Friday play and intend to double down on it if down 10%.

I have a list of stocks performing well today and might allocated 40% of my cash into them. But I will not do so without hedging it. It is tempting to short the IWM, since weakness is more prevalent there. However, if NVDA tanks tomorrow — you will see more weakness in the larger caps — mostly semis. The trends have been chaotic, almost unpredictable — with strong technicals persisting in mega caps for weeks at a time, accentuated by spurts of wild upside movements in the smaller ones seemingly out of the blue.

How to contend?

Avoid the urge to market time with perfection.

I am +65bps with 1 hr to go.