Capitulation bottoms looks like what you just saw.
I rode into today with 20% of my book in DRIP and at the lows I was still down 280bps. It was hell and we might not be out of it yet, as SCAM WICKS have a way of popping up and dropping down those red candles. Nevertheless, it appears the panic selling has abated for the moment in spite of some harsh volatility still underway. The selling was indiscriminate — but there was strength in biotech and of course old man dividend stocks. The worst hit were in oil and tech and the tech debacle reached a crescendo of absurdity with stocks like MTTR off another 10% following a 60% rout the past month. It appears there are bids in the tape now and it’s tempting to want to believe. After all, hope is infectious and speaks to our aspirations. But how would you feel if this was 3:30pm barreling into the weekend ahead of the Putin led invasion of Ukraine?
Perhaps hedges are still preferred. Although if you hedge you miss out on a FUCK YOU SHORTS YOU’RE DEAD rally that can still happen. Whatever happens today will be forgotten and if you slept in you did yourselves an immense favor. The larger picture here is pain and this pain is pan-market across the entire industry and that negative wealth effect has consequences.
More later.
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The reversal faded just as hard. Crazy ass market.
Calling for a market bottom on a Friday AM? NFW.
More distribution as the big boys lighten their positions.
Margin calls this afternoon.
A lot of traders going into the weekend flat.
Bitcoin down 10% will be triggering margin calls.
Way too much negatives for a capitulation reversal yet.
My bet is that the markets also fall on Monday.
Tuesday is possible to have a capitulation bottom. Or maybe Wednesday.
Any strength right now is just knife catchers.
We’ll have some bounces to be sure. But we haven’t seen anything close to “capitulation.” I expect that to happen around 1100 -1300 S &P. More pain is in works for the average investor and millennials who have no idea what a bear market looks like or can do to their investment portfoiol.
For quite some time the Fed and others have been doing unnatural things to markets, those who check the O box (M, F, O) and small animals.
Sooner or later there could be unfathomable results.
Speaking of the unexpected,
Hong Kong health authorities could not trace a Delta variant case.
How did a pet store employee catch the virus?
So they tested 178 hamsters, chinchillas, and rabbits associated with the store.
11 hamsters showed traces of COVID.
Hong Kong’s health secretary acknowledged that there is no proof hamsters transmitted COVID.
But to be safe, she decided to round up and execute 2,000 of the children’s pets (sold since Dec 22) and received on Christmas morning.
Rumor has it the pets were not masking; so they probably deserved to die.
Around 2 weeks ago, I said alright this price action sucks and I don’t want to get tricked into buying. Told myself, only buy positions at end of day, in case the early morning pops had the rug pulled out. Pretty good strategy – I’ve had zero positions for 2 weeks now, but I haven’t lost anything! One of these days the selling will stop and I will have cash ready to go to work
Oh hey, everyone just realized Disney has to be in the same boat Netflix is.
Oh man. Good thing they don’t have like a 135x PE ratio in a negative real rate environment or their shareholders could get really hurt here.
Probably nothing but Disney Cruises had required all kids 5 and up to be vaxed.
No problem, little kids don’t go on cruises, do they?
Oh hey, Amazon just entered a technical bear market.
Oh man. Good thing they don’t have like a 56x PE ratio in a negative real rate environment or their shareholders could get really hurt here.
I guess we will just have to wait to hear from Cramer and Trader Stewie to find out what to do next..,