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
23,412 Blog Posts

2023 Trend in 2024

Over the past few months we’ve enjoyed a resurgence in the small cap Russell 2000 index, which led stocks higher from November. Prior to that, the $IWM had woefully underperformed the larger caps — with the NASDAQ up 50% vs the Russell barely up 5%.

We are seeing that divergence assert itself today, as small caps dive lower by 0.9% against a higher NASDAQ. While it’s tempting to believe the opposite will occur — it is more likely the trend of the past year will continue. If stocks do trade up in 2024, it’ll likely be led higher by mega cap monopolies. The case for small caps is best rooted in lower interest rates and higher growth. At the earliest, rates will not be cut until Q3, so the case for small caps will need to come in 2025.

The morning drop was quickly bought and now we’re rolling higher. Breadth is a paltry 51% and gains are concentrated in biotech and tech. I am +13bps looking for more risk into the close.

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The Bull is Paused

Yesterday’s declarative blog “The Bull is Back” might’ve been a bit presumptuous of me. I tend to get easily excited and sentimental about the halcyon days when I’d throw my trader/servant down very steep flights of stairs for messing up my sell tickets. Nowadays, I get mad at just about anything and when I see the market, my true love, I tend to romanticize about it and always root for her success.

While it’s true, I also want the market to fucking COLLAPSE — that has nothing to do with the market itself, per se, as I view the market an extension of the criminal regime ruling over my country now. To see the market fail is to see them fail, which would then lead to their collapse and eventual transition of power to American patriots. I feel the same way about this regimes current wars.

At any rate, the US 10yr is FLAT and markets opened sharply lower.

But we have to remember the answers and markets love to bid up after it gets marked down at the open. This doesn’t mean it’ll go straight back up, however. It’s worth nothing, breadth is ok at 45% and SAAS stocks are up 65bps. They were down about 0.3% at the open, which is a key tell. That index I speak of is exclusive to Stocklabs — but you layman’s out there can concoct one on your own using stocks like CRM, HUBS, DDOG and others.

I’m very cautious here into this bounce, down just 17bps, 65% cash, keenly positioned both smartly and acutely because I am a professional and that’s what professionals do.

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THE BULL MARKET IS BACK

Good afternoon plebs —

Last week the world was ending. Today the market is back to throwing old bears down flights of stairs. You have to understand the nature of risk to appreciate the candor of this type of tape. Risk, unlike genders, is on a spectrum and when it’s low we are prone to extreme risk off characteristic traits, such as spiraling lower stocks. But when it’s up, you should expect to see stocks bust loose — even though Joe Biden is President and even with GLOBOHOMO at the apex of its power — gripping Europe’s nuts in its homosexual claws.

I traded well and made 85bps for the session, wholly intent on receiving moar. I closed fully long and without hedges — partial to biotech and tech — the riskiest part of the spectrum.

If you’re confused about how I can say last week “stocks are heading lower” and today profess we’re on the verge of busting the fuck loose — it is my prerogative to do so. As such, I can once again change my opinion tomorrow — perhaps exalting the renewed bear market accompanied by a picture of the Titanic in a nice blog post. I do not offer you or anyone else explanation and can do as I like when I prefer doing it. Who can stop me?

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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.

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Risk is On — The Bounce is Here

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.

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Here Are the Stocks That Traded Up Last Week

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.

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MARKETS CRASH TO KICK OFF 2024

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.

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Modest Bounce — Not Giving Up on the Doom

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.

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DOOM

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.

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THE SEMICONDUCTOR INDEX COLLAPSES *

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%.

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