You Didn’t Think a Sharply Lower Market Would Stop Me, Did You?

See pal, there are two types of people in this world — writers and readers. What are you doing now?

I stepped into today with an 8x aka 40% position in TZA, not because I felt markets would collapse — but knew it. I also has some QUBT and MARK because the quantum computing and AI thesis trades were and still are pervasive.

The net result is go fuck yourself.

Any questions? Do you want to know how I do it and how I can teach you so that you can do it to?

FUCK OFF PAL. STATE’S SECRETS.

Markets look to be barreling lower. I am 100% cash until after 12:30, at which point I’ll turn on the Time Machine and start zig zagging through the market again.

One of my all time favorite trades is a cash burning story stock, pre-revenue. Wall Street loves a good story and hates to deal with reality, when it comes to concept stocks. You can apply this logic to the entire market during period of duress. Take for example right now: we have Chinese balloons traversing the country and a war raging in Ukraine, fully funded by the United States in what seems to be a quagmire for all parties. One must ask oneself from time to time: what exactly do we gain from siding with Ukraine, a nation of 30 million against an ancient power in Russia — whose resources are needed to fuel the global economy?

ANSWER: Nothing at all, unless you’re thinking about toppling the Russian govt in order to steal it from them.

This is simply yet another neocon failure. They are evil and smart people, but wholly incompetent and unable to operate without spite. They, as well as many in the west, have fallen from grace and now operate under a system of malevolence.

Back to the market.

The markets are going up now because there are several assumptions at play here.

1. The war will not be resolved any time soon.
2. Inflation is at bay.
3. Soft landing prospects are rising.
4. Housing market is down, but not so bad.
5. The Fed will pause and possibly ease in 2023.

These are the five pillars the market is operating under and because none of these things need to be resolved now — markets are free and pretend they are all true — bid stocks up to levels that correlate with growth and not recession.

Understand these things can change in an instant. All we need is an earnings warning, a missile fired into an aircraft carrier in the Pacific, rising rates crushing the proles, the Fed resurgent after a hot CPI print.

We have all taken for granted the specter of, seemingly so, WORLD FUCKING WAR. Since nukes aren’t real, you’re not gonna get off so easy and many of you will be mobilized and fighting inside two years. Under any news of world war, markets will be shattered into the tiniest of pieces.

So understand the risks associated with your debauchery and your wanton disregard for common sense, in this brave new world we find ourselves spilling into, sloppily and with the fattest intentions ever attempted by civil societies.

At the time of my previous post I had declared myself “done” and to put a fork in me. After getting up from the corner from which I was crying in, I ventured off to my laptop to talk to the people who subscribe to my service, Stocklabs, since I had ignored them all day in their abject annoyance. I know that when I am down, many of them are down, and there’s nothing worse than hanging out with a bunch of losers — even if you’re the one responsible.

I took a foray, if you will, back into the stock exchange, for just “one more trade”. Before I knew it, I ws headlong 160% leveraged into an array of micro-caps busting loose. I took my 4.5% loss and brought it all the way to -55bps. I did that, not out of luck or happenstance, but because I am a finely tuned engine for financial success.

Some of my doubters will say things, such as “well then El Midge, if you’re so successful — why bother SELLING YOUR WARES to a bunch of losers online?” The truth is very obvious, as it is simple.

BECAUSE I CAN.

The most obvious assumption is typically the most likely.

As such, I once again, interminably, stand before you victorious.

NOTE: I scraped back a bit towards the last 20 mins, ending -1.4%, but +9.7% for the week and +21.4% YTD. I am holding a 100% long book with a gigantic 41% hedge in TZA and a 4am runner in MARK.

I traded miserably all day up until 10 mins ago when I made $5k in downside ETF hedges. I closed them out fast and now I will sit back on this fucking raft I am on and let the seas take me where they will.

My run is now over and it was very nice to have had it. But now it’s over.

Come Monday I close out my weekly quant picks and go to cash. After that time, I will fully regroup and try really hard not to be FOOLED, as I am prone to do so after big runs. I always try to outsmart myself and everyone else and what ends up happening is not much of anything for months at a time, until which point I reassert my dominance and go on another run.

I guess you can say, if you chose to do so, my best trading trait is my ability NOT to blow up — which is why I am calling it a fucking day, with my only additional positions on my sheets are BOIL and APRN.

GOOD AFTERNOON.

It was an epic run, surreal even. But now it’s over — at least for me. The magic touch I had was REJECTED today, amidst a flurry of events that led me to -2.8% for the session.

It all started with the announcement that the DOJ would investigate SI last night, causing me to sell it down 20%. That stock came all the way back this morning, rendering my sale a big mistake. Also, I had a slew of stocks margined that I sold at the open — mostly because I had recovered from a grim open of -4.3% to -2.7%. Those stocks all came back too, after I sold them.

Then I tried what looked like easy trades and the strong ISM numbers caused the market to spill over a bit, forcing me out for small losses.

I now sit with a fully long book, hedged with SQQQ at 15% and nothing going on, sad even. I might as well go walk the dogs for an hour and be grateful that I am +20% and +8% for the week.

But before I do, I’ll try just 1 more stock…the last one I promise.

Let me make this abundantly clear for all of those reading and following me. I am now prepared to lose a great sum of money in my efforts to extract maximum coin from this tape. Opportunities such as now do not come often. It’d be a shame to miss out just because you let some news and emotions get in the way of all the fun.

We are ENTREATED to a fantastical rally. Earlier today we saw 13 red candles lower on the 5min charts, from which I deduced would be a good time to step in long. I entered in and then doubled down and sold for profit, knowing full well that I was jeopardizing my 3.5% returns, which shrunk to +90bps at the low point of the swoon.

I did not hedge and shall not hedge because I am not fearful. I have gains of +23% YTD and I have a comfort in a tape such as this one — sharp moves to the upside — knockout blows to all those in the way.

I closed at session highs +332bps, leveraged at 139% of equity — fully prepared to draw down 5% in a single session in my pursuit of greatness.

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.

I sold all of my margined positions at the open, many of which soared higher. I have a feeling of uneasiness about a market like this, extreme exuberance supported by retail. This almost always leads to some great big collapse. It doesn’t mean once we fall we are done. It only means, once we fall and the momo halts, those caught leaning will hate life for a day or two.

I’m still leveraged, although I also have a hedge now. I can see how the open was sold by most and now we are in the middle ground of greed and fear. I had been up 2.7% at 9:31 and as if write this now at 10:06, I’m merely up 0.93%.

Some new additions include JMIA, HOOD. I had to stop myself from buying more, remembering that I already had a fully long book. You can’t buy everything and you’re never gonna trade perfectly. With gains of +20% in early Feb, I really should shut the fuck up and be content. But I want more. I feeeeeeel as if I need just 1 more trade, just one more before I’m careful again. The market might collapse headlong into concrete cinder blocks. But if I could just have one more day of ebullience to grab more gains and more money, that’d be great too.

After all, I’m a good person, great even at times.

At the apex of my glory today, I was +4.6%, in frantic trading. I felt, if being honest here, that I could not be stopped and that it was my right to make more. I wanted more; therefore I had more. I leveraged up and gambled heavily and it paid off — probably because I am a good person. In the after hours my position is LOTTERY DOT COM $LTRY is exploring new highs and my GAME is also partaking in a little extravaganza.

META and ALGN smashed estimates and it’s fair to see, in spite of all the bad news, the bull market is back.

This might be hard for many of you to grasp — but get a look at this.

I am +19% YTD and although you’d like to believe it wasn’t true — I trade live inside Stocklabs with a proper pnl for all to revel in my glory.

I have hedges and I am keen on the idea of waking up at 4am to trade again, as we did regularly back in the COVID era. At the end of the day, we all get what we deserve and I most assuredly deserve more.

In spite of the late morning COLLAPSE and subsequent pull back in many of the SHIT names which were running earlier, I do not believe we are done with the extravagance.

There is a risk on aspect to this tape that you can’t just turn off. We aren’t just getting oversold stocks bounce, but thematic runs in specific areas of the market that speaks to energy and spirit amongst traders. People are actively hunting for names and through that hunt are ganging up and boosting share prices of the biggest pieces of shit known to mankind.

It’s very easy to be a bear, especially since the world is ending. Aside from that, stocks want higher.

I pulled back from session highs of +2.6%, now up +0.82% without hedges. I will now progress into said market in search for sport.

NOTE: The Feb quant is now up in Stocklabs.