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
23,329 Blog Posts

There Are Patterns to this Rally

A common misconception amongst the proles is that stocks go up randomly, or anointed by “powers that be” — information that cannot be gleaned from the uneducated swaths of public. This is not true and I have proven it over and over again.

I haven’t been in money management since 2017 and even when I was — I barely talked to anyone in my industry. I’d much prefer to talk to independent traders who dedicate their lives to trade and trade well than fucked for faces whose sole motivation is to make fees off their clients. This way, the way I prefer, I surround myself with people who want to excel at the very thing I want to excel at, instead of discussing schemes to raise more assets of fee structures by cocaine addled greed mongers.

Look at the winning themes and industries YTD.

While at first glance those winners might appear random — they are not. What do these groups have in common? If you were setting up a screen in Stocklabs based off that criteria — what would you look for? Let’s discuss what you wouldn’t look for.

You would not look for FCF winners or stocks with good EBITDA. You would not look for conservative revenues and earnings growth — or areas in commodities.

You’d look for heavily shorted, down big over the past 12 mos, high growth, high debt, small float, small cap, high volume, money losers, strong technicals.

After you’ve done all that, you’d then look for stocks in similar groups and if you see XYZ in LIDAR lift, you might want to look at other companies that do LIDAR. Trading well takes decades of refinement and I am sure for new traders it is daunting. But it’s fucking easy in markets like this and it’s easy to find winners when most stocks are lifting. The hard part is knowing when to stop. Sometimes, after a big run, the hubris and latent narcissism kicks in and you believe the market had topped because it had gone up big. You’ll take it a step further and sell short and after it goes up some more  — you’ll sell short again. Before you know it, you’re deeply embedded in a bear trade, not because you’re bearish — but only because you believed stocks had gone up too much and your feeeeeelings got in the way of stopping out.

DON’T BE FOOLED.

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4 comments

  1. Cricket

    Feels to me like a blow off top is forming.

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  2. flea

    Talking about your f’ing crypto derivative lost opportunity; SI got the sh1t kicked out of it on FTX contagion, but appears to be, and has been, quite sound – today f’ing +30% … might still get in ….

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