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
22,140 Blog Posts

CPI DATA LOOMS

Let’s assess the situation.

The bubble has popped. All of the 30x sales stocks are back down below 10x, some a lot cheaper. This is a traditional valuation level for growth, pre 2016.

The economy is slowing but the Fed can’t help due to high inflation, measured by the CPI.

Therefore, if tomorrow’s CPI numbers comes in even a little bit better than expected, markets are going to absolutely  rip to the upside. We should soon enter a period of stability, where inflation is waning as the economy slows. To avoid earnings disasters like UPST, one could not buy stocks ahead of their results. Markets might improve during a slower inflationary period based on the notion the Fed can get less hawkish. HOWEVER, by the time summer swings around, the entire focus of the market will be on employment and economic growth. The major major concern isn’t inflation — because plunging share prices and growth rates solves that. The bigger issue down the road is economic prosperity in an environment that is deleterious to anything on par with scaleable globalized growth.

War looms and relations with east worsens daily. Ergo, take profits fast and don’t believe in bottoms.

 

I made 0.35% for the session, closed with 60% cash the rest long.

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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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Tiger Global Castrated in March — Giant “Hedgefund” Now Down 44% For Year

If Tiger Global goes out of business, everyone is going out of business. The once $95b hedge fund that does not hedge but goes long lunatic tech stocks only reported a loss of 15% in March ($17b), like morons. YTD, their STACKED LOSSES are 44%, representing 2/3rds of ALL OF THEIR GAINS dating back to 2001.

Let me clarify.

The last 4 months of trading caused the gurus running Tiger to allow the market to abscond with 66% of 21 years of capital gains. DARE I SAY ‘GOING OUT OF BUSINESS SOON?’

Judging by today’s action, once again a fierce reversal and plunge, we have liquidations taking place en masse. I would not be surprised to see the likes of Chase Coleman III on the soup line over the next 3 months, as clients withdraw funds and those businesses and their losses become so obscene, it would BEHOOVE them to continue it any longer.

I have been 100% cash since 9:35am, +48bps for session.

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Feels Bottomy — Still Selling

Last night there was a heart attack panic session in cryptos, thanks to a stable coin breaking peg. BTC-ETH have since recovered. Also with it, NASDAQ futs are up 232 and part of the alleviation is the fact that Russia’s Victory Day came and went without note.

Now this morning US interest rates are plunging, down 11BPS and natural gas is down another 7%. If I didn’t know any better, I’d say this looks like it might be a short term bottom, all praise to Stocklabs for once again nailing the bottom.

I had bought TQQQ yesterday for a trade and will keep it in my algo driven account for 5 days, but am likely to sell it in my trading account. I understand why some of you might want to hold stocks, hoping this is the bottom and the upside is oh so grande. But I just can’t accept the fact that markets might be bottoming before we got the chance to see some bad unemployment numbers.

That said, PFE bought BHVN today and that might help rally biotechs. Then again, NVAX is down 25% today.

It’s a hard tape and expect more earnings shortfalls, like UPST and GDRX to unravel and have you call into question the existence of God.

For now, I’ll fade the opens and play the closes and seek to make gentlemanly returns, in this environment of stock toxicity.

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TERRA STABLECOIN DECOUPLED FROM DOLLAR PEG; LEHMAN MOMENT FAST APPROACHES FOR CRYPTOS

TerraUSD is supposed to remain “stable” to the dollar, as part of one of many crypto funding schemes that I will not pretend to even begin to understand. What I can relay to you now is a massive crisis happening in cryptos, stemming from this stable coin decoupling to Mr. Saylor’s MSTR now underwater on his BTC, and rumors of margin calls at his company.

THIS IS NOT A GOOD LOOK FOR CRYPTOS.

This all harkens back to Tether funding schemes and now one wonders if this could happen to TerraUSD — can it happen to others?

LUNAUSD is also in collapse mode, not to mention just about every other crypto out there.

People parked money in this so called “stable coin” for security and it turned out to be a scam, on par with money markets breaking the buck. Unless they get a bailout, which I doubt, this will have lasting effects on the entire crypto space and the stable coin concept forever.

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MAJOR MOVE TO THE UPSIDE LOOMS *

I do believe the next big move is up. But even though I feel this way, I am not bold enough to commit much to the long side — because of the possibility of a legitimate crashing of the markets, as Pax Americana comes to an end.

Markets are beginning to price in a western LOSS in Ukraine, make no mistake about it. If not a loss, then a kinetic escalation that will be RUINOUS to EU growth. That being said, I took a 5% position in TQQQ — having gained 41bps for the session I am afforded the luxury.

I trade well during crashes because I am not naive and rarely fooled. These are the best of times for me, but my money will eventually be made on the UPSIDE of this debacle not the downside. I prefer to wade in slowly and then all at once for a great big fucking gain.

Safe havens have been eliminated in the commodity sector, which is now subjugated to the bearish winds. The only respites left are found in stocks like SJM, CLX and MDLZ.

The market is pricing in harsh economic decline. Although I am prone to agree to any and all bad news, I will admit the prognostications are PRE-MATURE and this pin action we saw today felt more forced, if anything else, as rookie son of a bitches got liquidated en masse and sent back to their mansions in the Hampton’s where they can rot out the rest of their meaningless lives high on cocaine and adderall.

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HODLers IN SHOCK: CRYPTOS EVISCERATED

There is nothing left of your imaginary world you intended to live in. You had grande scheme to live in a virtual world, date virtual girls, wear virtual clothes. But you are now rudely awakening to the deafening sound of artillery fire and the notice of it all being over.

BTC is below $31,000 and ETH is under $2,300 and the world is in ruins.

The soft sounds of chubby bodies hitting the pavement is comforting to me, as I am well position to buy the blood and take advantage of these heart attack drops. The crypto miners that we so beloved by all, MARA, HUT, HIVE, RIOT, have gone back to whence they came and the market is telling you cryptos as an asset class is meaningless rabble. You knew it was trash when a segment of the Stocklabs ecosystem branched off like fools to talk amongst themselves about NFTs. How are your collective works of art now, pray tell me?

See, The Fly is many things, but loser isn’t one of them. Actually, I might be a loser in some departments of life, come to think of it. But when it comes to being right or wrong about investments, I reign supreme.

I do not find comfort in your pain. I would advise you to seek the counsel of others who know more, are better prepared for the fires. Men who have wrapped themselves in burlap to withstand the storms and enjoy the smell of black smoke.

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The Moment of Truth Fast Approaches

Listen to me.

The idea was Russia was going to withhold its precious oil and gas and we’d starve because we didn’t have any wheat or fertilizer. That’s what our brains said, but the market is saying something else. The market is saying you’ll eat bugs in the cold dark trench and enjoy it. Perhaps the supply shock is going to MORE THAN OFFSET with mind numbing depression. Perhaps that’s what the market is trying to say with oil down 5% and Natty down 8% and everything else getting hammered.

Or, maybe I’m being overly dramatic.

But one thing is indelibly true, basic material stocks are down 10% the past month and your favorite ag plays like IPI, MOS and CF have been de-balled, down anywhere from 20-42% over a 1 month time period.

It’s over.

The same PIN ACTION can be seen in the oils and today truly is a pivotal day in the history of stocks. Our mean reversion algorithms encroach on historical low readings and it would behoove us not to rally sometime soon, preferably tomorrow.

Plainly, I no long have the stomach for the intra-day racket and have opted for a more austere approach — leaning on swing trades. I have only a handful of old man stocks left, having closed out my UVIX position. I would think the only trade into the close is to be long something, based on these oversold readings. But to do so would mean we dive into the concrete pool hoping enough water will be there in the morning to protect our skulls. My best sense is to get long in the afternoon to a small degree and average down in a potential gap down tomorrow.

On the issue of commodities, they will bounce too. But it seems, and this goes without saying, they no longer act defensively and are just like any other sector now. The sole safe haven is now in consumer staples alone.

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Is it Too Late to Sell?

I get this question all the time during market sell offs: “Is it too late to sell?”

But the question people should be asking is: “do I deserve to hold?”

If you’re investing and still adding to your accounts every month, you can weather through any storm via dollar cost averaging. If, by chance, you made the bulk of your money and no longer contribute to your accounts and simply sit there waiting for a miracle, ask yourself: do you feel in control?

Let me show you two things.

Above are hourly returns of QQQ from April 1st to now. As you can see the bulk of the losses occurs in the morning. This is because markets tend to gap down, attempt to bottom and recover after 11am, and then tank again into the close. What would stop you, for example, from buying an SQQQ hedge into the final hour of trade heading into the next day and closing that hedge each and every morning until markets improved? If you’re frozen from selling, out of stubbornness or fear, why not do something that can reduce the losses?

Secondly I wanted to show you an alternative market happening during this bear run. Those returns you see above all happened during the very worst of times — this terrible market. Some call them consumer staples. I call them “old man stocks.” Whatever they are called, they’re making people money — because their businesses sustain bad times and managers flock to them during times of duress. If you sold 30-40% of your tech shit and bought some defensive stocks — would it be the end of the world for you?

The money you once had in the market isn’t yours anymore. Accept the fact the market took it and it’s never coming back. You invest for the now and for tomorrow, not for yesterday. Your present account value is all that matters and your investment approach must be refreshed all the time to conform with the tape.

Here is my portfolio heading into today. I do not post this to boast of my +26% YTD gains, but instead show you how defensive I am now into a tape I was afraid of touching on Friday.

I am not likely to keep many of those stocks after today — because I prefer to reset all the time. If you do not have time to constantly manage your account, consider cash as an option until things get better. Or, structure your portfolios in a way that is defensive and can withstand recession. You need to start thinking ahead and understand that although markets bounce during periods of oversold, if we are heading into recession — none of those bounces will stick.

I really hate to see people suffer in the market and the reason why I started this blog many years ago was to offer some insight into how to navigate markets. I suck at many things, but have always been proficient at this.

It is never too late to sell and you can and will make your money back. You just need a plan.

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The Pain Has Only Just Begun

A very common coping mechanism for the permanent bull class these days is to show long term charts of the SPY and mocking the recent pullback as something so inconsequential it would behoove them to even acknowledge it’s existence.

Perhaps if you’re comparing account values from 2016 until now, the setbacks aren’t that damaging, but who said we’re done going lower? Isn’t it important to recognize danger when you see it?

That being said, the vast majority of new traders who entered this tape during the COVID lockdown and subsequent meme stock era where retards took to Reddit and Twitter to make fun of others who actively traded because their “Diamond hands” of buy it and forget it stratagems were so much better —- those people are all now destroyed.

I was perusing the carnage from 52 week highs in Stocklabs today and felt like sharing some of the results. As for the direction of the market, expect lower prices for the balance of 2022.

MMAT -94%
TAL -94%
BKKT -93%
NEGG -93%
SKLZ -92%
ARVL -91%
FUBO -91%
CLOV -91%
BLI -90%
PRPL -90%
BBIO -89%
WISH -89%
GRWG -89%
API -89%
VLDR -89%
TSP -88%
ROOT -88%
OTLY -88%
HOOD -88%
SPCE -88%
CVAC -88%
PTON -88%
RIDE -88%
CVNA -88%
TIGR -88%
NVTA -87%
TMC -86%
MTTR -86%
INMD -86%
PLBY -86%
SFIX -86%
PRCH -86%
AFRM -85%
APPH -85%
YALA -85%
BAND -85%
SDC -85%
WKHS -85%
HNST -84%
AMWL -84%
RIVN -84%
BILI -83%
BIRD -83%
FUTU -83%
DNA -83%
ASAN -82%
TDOC -82%
VMEO -82%
FTCH -82%
FVRR -82%
MARA -81%
FSLY -81%
LMND -81%
EDIT -81%
RCKT -81%
PATH -80%
JMIA -80%
CHGG -80%
AMC -80%
BFLY -80%
DIBS -80%
W -80%
BZUN -80%
RBLX -80%
AMPL -80%
ROKU -80%
TDUP -80%
REAL -79%
DKNG -79%
SE -79%
ANET -79%
TLRY -79%
NVAX -79%
UPST -79%
RIOT -79%
DAVE -78%
MQ -78%
POSH -78%
OLO -78%
TWOU -78%
SHOP -78%
ABCL -78%
BEKE -78%
TWST -78%
TOST -78%
BYND -77%
RNG -77%
BLZE -77%
NTLA -77%
ZM -76%
NRDS -76%
TXG -76%
NFLX -75%

This is exactly like the dot com implosion.

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