iBankCoin
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
21,906 Blog Posts

This is One of the Most Oversold Tapes in Recent History

SIRS —

Because I built my time machine, aka Stocklabs, during the market meltdown of 2008, I can tell you with clarity how oversold we are now in comparison to then. At the session lows today, this was the 7th lowest technical reading since inception. We were nestled right around 1.00, now with the market rising we are at 1.20.

What does it all mean?

 

It all but guarantees a face ripping rally just around the bend. My issue with this idea, naturally, is that it’s too damn scary. I prefer the comforts of cash and view bargains as a cause for concern. This of course is psychological warfare and I am accustomed to seeing carnage on Wall Street and have been victim to heinous losses in the past, so of course I am reticent to jump right in. Nevertheless, I am comfortable with several approaches here.

  1. NO HEDGES. DO NOT SHORT INTO OS
  2. Buy the closes for morning bump
  3. Opt for ETFs over stocks in order to avoid earnings and/or dilutive secondaries after the bell

My preferred ETF is TQQQ, but TNA, LABU or SOXL work too. I am of the belief that markets should be avoided intraday, unless of course you enjoy babysitting brimstone. I will be buying the close, with the vast majority of my money in cash and perhaps a small allocation into consumer staples.

As for energy, I am extremely gun-shy to buy the dips in commodities. The price action is suggesting the economic fallout to come will cause a complete reversal in inflationary pressures, irrespective of Russian supply disruptions. This makes no sense to me, but this is what the market is saying.

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2 comments

  1. txchick57

    speaking of ETFs there was a $20 trade today in BOIL from usual morning fuckover.

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  2. roguewave

    I just listened to a podcast from last week where the guy predicted the algorithmic stable coins such as UST (Terra) are flawed as currently constructed. Specifics were beyond me but 2 things he said seem simple enough. Last week UST was paying 20% but you could borrow at 13%. – Mother market will fix that at some point.
    He said a $9B cap for UST made more sense. With a current (today) cap of $17B; $8B needs to find a home – elsewhere.
    Net: stay clear. Don’t own anything you don’t understand. That hasn’t changed.

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