WE CANNOT STOP THE BUYING ###

You fools. You had time to adjust and dive into all of the deals that were provided to you this morning, but you chose to be a bear and now you’re penniless, completely broke.

Markets are busting loose here and risk is 100% on. We are seeing $BTC surge, dragging the retarded miners with it by their feminine hair. I have been leaning into the market with a fixation on AI chip, higher by 82 bps for the session. My monthly allocated quant portfolio, which is long only, is up nearly 2%.

The important message of this blog is to inform you that risk is back on the table. Avoid shorting here — as we are likely to squeeze into the close — castrating all of the permanent bears in the process.

A little cheat sheet tip for you: whenever you see SAAS stocks legging higher — a rally isn’t too far in the future. At the open of trade this morning, several things were made abundantly clear. Oil stocks were out and tech was in. Also, the $BTC soared, but the miners COLLAPSED — on the false assumption that the BTC ETF will somehow displace the miners and $MSTR. I do not believe this to be the case. People can’t fucking think straight while eating breakfast, apparently.

At any rate, this tape appears tricky, but it really isn’t.

Retail, tech, industrials, semis and just about everything in between are going up, save the entire basic material space, tankers/shippers etc. The rotation is clear: back into stocks that went down the past 2 weeks.

I closed out my shorts and went long, but remain 75% cash. I will likely add more exposure but do not want to chase a rally that might not go much further than already has.

It was an abysmal week for stocks — leading industries trashed and tossed aside into flaming barrels of trash. But there was rotation, so let’s have a look.

138 stocks with market caps above $5b traded up more than 2% last week. There were some outliers, biotech related news spikes, merger rumors etc. But were there any trends of note?

Of the 138 stocks, here is the breakdown per sector.

Basic Materials: 16
Consumer Goods: 12
Financials: 34
Healthcare: 33
Industrials: 1
Services: 10
Tech: 14
Utility: 18

The best performers were $CYTK, $MRNA, $VTRS, $CIB, $TEVA (TRANS-DRUGS), $MRK, $CRBG, $ALL, $VZ, $TCOM, $IBKR, $BNTX, $GSK, C, $SU, $NVS, $EC, $AMGN, $WRB, $SWAB, $EG, $WYNN

I think it’s fair to say the most boring stocks in America trended up for the first week of January, highlighted by BIG PHARMA and a myriad of low growth banks. We should assume these are temporary placeholders that will be discarded at the first sign of a bounce in risk stocks. I would not lean heavily into this rotation and prefer to long normal stocks with downside hedges. Downside hedges are tricky because gap ups can be sold. In my opinion, the best strategy is to have a balance of longs and shorts that will net out a gain, at which point you should sell everything before 10am.

For example: if you are 100% long, you need to have an additional 30% leverage into $SQQQ or $TZA to be net short. If you have 75% long, 25% inverse ETFs will produce a net short position. You can get lucky if volatility blows out and long $UVIX.

Here are the inverse BETA stats for some bearish ETFs.

$UVXY -5.2
$SOXS -4.9
$FNGD -4.3
$TZA -4.1
$LABD -3.8
$SQQQ -3.5
$FAZ -2.7
$ERY -0.94

If attempting to hedge a portfolio, you want to make sure to avoid outlier events, which is why it’s a bad idea to hedge with industry specific ETFs like $ERY, $FAZ or $LABD. The market can be down 3% and a buyout in a specific industry can completely ruin your hedge, which has happened to me before. In my experience, $SQQQ or $TZA are preferred but in recent months we’ve seen some serious divergence between small and large cap — with a distinct bias to the downside for the smalls. Ergo, $TZA has been a better hedge, lest the market is rising fast. Then you’re fucked with $TZA.

As sure as I am sitting here laughing at the transgendered bulls for their unceremonious losses to kick off 2024, many in the comments section will talk shit — attempting to make hay of it all — trying to convince themselves markets didn’t crash for the first week of 2024.

Let’s me illuminate what happened.

Markets called bullshit on the Fed and demanded more clarity on the specter of all of those rate cuts that were priced into markets since November. Yields shot higher by 5% to 4.05%, at a level that isn’t a danger to markets yet — but at the point of concern. Incidentally, markets fell almost in lockstep with bonds — off by 4% for the week — capping off one of the worst beginnings to a New Year that I could remember.

Over 150 notable stocks traded down more than 10% for the week. Some faired even worse, such as $UPST -26%, $HUT -24%, $RIVN -19%, $SEDG -17% and $SQ -14%.

Looking ahead, I envision a landscape strewn with blackened fields and abandoned buildings with moss growing inside what was once a busy lobby.

Will we bounce next week?

Absolutely not.

These are the opening stages of COLLAPSE and Joe Biden is the oldest person in the world — leading the nation directly into the grave where he belongs.

I closed the week +65bps, demonstrating a professional acumen that is expected of a man in my station. I had difficulty mid-day with the volatility, tricked and fooled several times — but eventually got bailed out with a little luck (wink).

What’s interested to note is the ruinous behavior in the VIX index, a byproduct of FOMC intervention — directly into the instrument. They are attempting to suppress volatility for reasons that are so childish, I cannot help but to laugh. Time is up fuckers and the VIX is going to spike right through your hands and into your brain stems. People are buying puts and you cannot stop the whirlwind that is coming.

That being said, I do have longs and I am prepared to be wrong — as I am keenly aware of the power of the riggers to rig, loot and steal, cajole and kill, all for the sake of retaining power. But they are old and weak — their minds have deteriorated from decades of decadence and liberal rot. The country is going to be saved — but first it will need to be up-ended.

Have a pleasant weekend.

Good day —

This morning we were entreated to a garden varietal market bounce, starring all of the usual suspects save crypto miners and biotech. Although breadth is at 67% upside, the rally is somewhat selective. Nevertheless, a rally is a rally and the banks are very happy in this environ and continue to trade up.

I haven’t given up on my shorts yet — because I have faith that all will collapse. This assumption of mine is rooted in the idea that you, the weak hobbled long, will have second and third doubts the second chinks in the armor present themselves — causing a cascade and rush out of risk and back into my inverse ETFs.

Perhaps I’ll end up wrong. It certainly wouldn’t be the first time and the idea of rallying after diving 3% to start the year isn’t exactly novel. We are supposed to rally. After all, why not? This is as far as I can go to explain the bull case logically.

But in the off-chance you do get scared into the afternoon hours, thinking about the weekend to come and your losses stacked heavily for the week, I will be here like an usher at church to collect your donations.

All sorts of things can happen: Houthis and their rockets, Russia and their missiles, Gazans and their RPGs.

For the session, I am down 43bps, which is acceptable given the fact I am +32bps for the week and didn’t succumb to the small fires that sprouted up to begin 2024.

Ladies and Gentlemen — here at the RMS Titanic we want you to enjoy your ride on this voyage to New York — providing you with all of the comforts and accoutrements befitting of men in your station — save the cabin’d class. Because of our formidable and indestructible hull and state of the art coal powered engines — we have increased the speed of our vessel to recoud highs, as we race into the arctic regions of the Atlantic in order to provide you with things to discuss when you’re dining with society friends and they ask you “How was your trip on the RMS Titanic?”

We hope you do enjoy the trip and consider joining us again on what is sure to be a most memorable adventure.

I’d like to point out the disastrous and ruinous rout of the semiconductor index for 2024 and then follow up with some advice to BE WARNED about chasing them down the sewer hole with shorts. This index has a proclivity of bouncing back. HOWEVER, we are barely into January and the -5.5% drubbing is somewhat profound — placing is on pace to have the worst fucking January ever for the index.

Here are instances when the $SMH plunged by more than 5% for January and then how it did in February.

January

2024 -5.5%
2022 -10.5%
2016 -6.5%
2010 -11.3%
2008 -13.2%
2005 -6.5%

February

2022 -2.8%
2016 +1.4%
2010 +6.5%
2008 +1.4%
2005 +8.9%

The first thing that stands out is the median loss is -10.5% for bad January’s. The second thing is — should be comport ourselves down another 5% from present levels on the $SMH — by God I will dip buy with both testicles and cock in tow.

Now with the fires kindling we want to encourage them to burn bright, fiercer — taking in more oxygen and tinder so that is can amass to a great fire — burning down everything in its path.

I remain steadfast and patient, +35bps short the semis, NASDAQ — hedged with longs and cash of 45%.

The US 10 year bottomed on 12/27 at 3.77% and markets haven’t gone up since. Nearly done for the first week of stocks January 2024, it’s safe to assume, barring a miraculous rally, we have flopped.

Indices are off by 3% for 2024 with many leadership names, such as $AMD, $AMAT, $BA and $AAPL fairing far worse.

Today we have a divergence between the Dow and everything else — mostly due to a risk averse tape and gains in major Pharma. I’m barely up today, +12bps, because I haven’t been aggressive in my trading — mostly because I don’t trust the tape or my assumptions.

At the present, I am 65% cash, hedged with $SQQQ — thinking about how to position into Friday.

OFF TO LUNCH.

All of the bulls pranced into 2024 naked and boastful about the year before — drinking from large goblets brimming with chardonnay. Much to their chagrin, they walked right into a trap — glasses punched into their faces — legs and arms cleaved off clean from their weak bodies.

Ladies and Gentlemen, the great doom of 2024 is here and with it comes fantastical stock market losses. Aware of this and unfooled by the transgendered bulls, I escaped the melee and gained 79bps for the day, session highs for yours truly.

There are two types of traders in this market: those who can trade in a bull market and those who can trade in all markets. You might do well in the bull — but can you stand the fires — when the heat rises to the point of combustion and emotions disconnect from reality causing people to behave irrationally?

This is what you need to understand about 2024, thus far.

High beta stocks have been castrated — largess losses of a horrific varietal can be seen in names such as Square, Affirm, Upstart and Caravana. All of the winners of 2023 have morphed, almost suddenly, into murder holes. I am of the belief that these occurrences might be cause for action, as I am not convinced it’s entirely over — at least not yet.

Into the close, I outfitted myself with a directionally bullish position — betting on the cabals power to see it through. I did take a barbell trade long SQQQ and long TNA — based on my belief that high beta small caps might surge at the open of trade tomorrow.

This is a frightful trade, betting long in the face of harrowing horrors. But this is what us bloggers get paid the BIG BUCKS for, making contrarian calls for the sake of nothing — fleeting and feeble praise by a catamite class of reader — hobbled easily by tradewinds and small flurries.

At some point in 2024, I assure you the fires will burn assiduously and the foundations of Pax Americana will be cracked asunder and all will be lost. But I do not believe that to be the case now and have staked a modest sum at risk for this excursion.

All trades are executed in real time inside Stocklabs.

Good day.

New year, new you. Gone are the days of being harassed by markets, tricked and fooled into folly. Your adventures inside of the labyrinth of the market is over. To achieve this, just stop behaving like yourself and act more like me, or a person such as myself.

I glance over at this market today and see nothing but traps. The US 10yr yield is now lower, which is good. Oil is soaring +3%. Have you tried chasing oil stocks the past year? Ordinary stocks of high beta value are CRUSHED lower by 3%. Cryptos are hammered and all appears to be lost.

Or is it?

If the logic was “stocks are under pressure when rates are higher” then stocks should rally when rates come back down. No?

This is most likely a buying opportunity. I am not bullishly retarded and do not prostrate myself at the feet of the transgendered bull. But we have seen this complete bullshit many times before with the bulls rope a doping, pretending to be weak but only yo later on knock out the bears and all of their teeth with one great magnanimous blow.