Just to put this morning’s rout into perspective, the Stocklabs oversold algos went oversold on our 10yr algo. The last time that occurred was COVID lows in 2020. We had just 3.5% of large cap stocks rated bullish and in the past anything below 10% marked a short term bottom. Bear in mind, we are mainly day trading or swing and these pivot points are important on short time frames, no more than 10 trading days.
The bullish outcome here would be an invasion of Ukraine limited only to Eastern Ukraine with zero response from NATO. If Russia fucks with Kiev, we might see this spilling into the Baltics and we might see actual missiles hitting Warsaw by February.
Let’s assume we have hit a point in the narrative that the damage done to stocks is so severe it might limit the Fed response to tightening, although I doubt it. Then again, REAL stocks are now getting hit, with AMZN down 20% the past month and NVDA off by 27%. There is an array of stocks we once loved down by half and although tempting to buy them all — they just keep fucking dropping. Shares of SHOP and SE and many others are very tempting — but instead of opting for stocks I am focused only on two ETFs — biotech via LABU and tech via WCLD.
At session lows I was down 1.6%, even though I had UVXY into the open. I am now +20bps but not taking for granted the fact that the close might be collapsed.If you enjoy the content at iBankCoin, please follow us on Twitter