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
21,309 Blog Posts

Buy the Dip or Short into the Hole?

I believe a little of both will do. The semis are right on the edge of COLLAPSE and should bounce here, else they’re fucked. One has to imagine these supply chain issues getting in the way of business at some point. When do we begin to price this shit in?

I have been insulated from the carnage, mostly in cash — sitting in the tall grass waiting for a zebra to devour. I am inclined to sell short into the hole — only because I like to do it. However, even if we close miserably, we are likely to bounce tomorrow, maybe at the open and then collapse.

Important to note: remember to sell opening rips and trade with tight stops throughout the day. The reason why I am down 7% for September is because I let some positions marinate for a few hours — very few but larger trades constituted the bulk of my losses.

Right now I am 21 for my last 22 trades, so perhaps the spell has ended and I am back to trading great again.

Whether I will short into the hole or buy more wholly depends on how I close the day. If with a big cushion — maybe I go for it long. If marginally higher by less than 2%, I will likely hedge my longs with a short against tech. Worst case scenario would be tech bounces tomorrow and oils trade off. It can happen, so I have to think about that too.

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MARKETS COLLAPSE *

The pressures of runaway inflation is causing the 10yr to spike through the roof, now up 7bps to 1.56%. This is NOT a big deal until it hits 2%. Natty was up 10% and now selling off hard, alongside many oil/natty stocks. I sold out of most my oils and SOXS hedge this morning and am up 90bps as we speak. The overall tone of the market is terrible, and I don’t like it, but I cannot short into the hole with the NASDAQ off nearly 300.

Can we bounce?

Maybe.

The point is, cash is king and there isn’t a reason to play every move. The smart move might be to take small nibbles and trades throughout the day and position into the close for tomorrow.

The fear now is inflation, energy crisis, and a COVID winter. In my opinion, none of these are real reasons for a market calamity. Nevertheless, ‘tis the season for marker corrections and September always brings the drama. Perhaps this blood letting is setting us up for a more predictable and industrious October.

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Mixed Signals into the Bell — Doom Might Still Be Around the Bend

I was all the way into the oils well into the 3pm hour and then decided to pull the trigger on most of my gains — booking profits and locking them in and then watched as the market got hit with red candle after red candle.

Mixed bag, on the whole. Tech stocks were sold off while commodities were sharply higher. As a point in fact, many oil sectors hit 30 yr overbought levels in Stocklabs today. The data is mixed, not too bullish or bearish. Nevertheless, it’s important to note the technical condition and what it can mean.

It can mean we squeeze the brains out of the shorts here, or perhaps if the markets gets dicey enough there will be extreme profit taking. Because of this apprehension, I removed myself from margin and raised cash to 40% and also sold short semis via SOXS to hedge against eventualities.

I am long SHIT OILS and I sense they can really lift and I really really want to press the metal and gas it; but I cannot because I am having a bad month and when in slumps it’s important to operate slowly until I am seeing the ball better.

At my best, I see the seams spinning and winding as the ball approaches me. For the past month or so, I have been wildly swinging and missing — because for me this pitcher is hard and I having difficulty hitting him. But I’ve been doing this a long long time and will start learn these patterns and before you know it — I am rifling line drives right at his fucking head — knocking all of his stupid teeth out.

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GLOBAL ENERGY CRISIS LOOMS

In recent years the world has tossed away traditional sources of energy in exchange for renewables and then the electric car came around and taxed an already feeble grid and push it even further. Now with winter looming, there is a growing crisis in Europe — due to lack of natural gas stocks. This shortage is positioned to ripple around the world, in turn forcing Chinese factories to limit steel production and likely cause people around the world to freeze.

Evert since the stimulus checks went out and the supply chain got bogged, inflation has been steadily fucking soaring. It was all fun and games up until the lights started to go out and now here were are on the edge of disaster, natural gas, oil, nuclear, lithium, coal and all spot energy markets fucking soaring thru the roof.

LNG shipments are booming and shipping rates are at the point of lunacy. LNG is your play for that.

Spot natural gas is trading at premium now in the Northeast and Southern California hubs, as much as $3 higher at the SoCal Gate and Ehrenberg hubs.

You will see energy emergencies declared within weeks and prices continue to surge. There are numerous ways to play this and you’d be wise to do so.

China cannot buy natural gas fast enough and has not filled its stockpiles. Imports are +100% over last year and numerous provinces in China are already rationing electricity. Prices for steel and aluminum will jump if China is forced to shut down factories in favor of heating civilian homes.

Also, there is a coal shortage in China.

EU natural gas prices are +500% YOY, at a new record.

Uranium

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Commodities, Banks Break Out — Tech Lags

If you’re long FANG stocks into today you’re hating life. If by chance you own SHIT OILS, construction or anything in the commodity space — you are living fat and large.

Today is all about the seemingly out of control 10yr yield continuing to head up alongside oil and natty and the entire inflation narrative. This is receiving widespread allocations, as junior at the trading turret is booted from his tech plays and PM back from his cocained fueled sojourn into the Hamptons is positioning for $100 WTI.

Higher rates means wider spreads for banks, which is why you’re seeing regionals run fast.

I like them all here and believe this play has legs.

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Site Redesign Coming Soon

We haven’t updated the aesthetics of this clown-site since 2015. While blogging is not like it used to be and everyone now jerks themselves off on Twitter or for our readers inside The Pelican Room of Stocklabs — I regard this living testament of work here to be of the utmost importance. As such, I have shelved future SL development in favor of fixing up this shit-hole.

I am going to do away with the front page — fuck headlines — and also nuke mostly all other blogs. I will keep a few and maybe add one more — but the days of the Peanut Gallery are long over and I am not interested in driving page views. As you noticed, I haven’t run third party ads on the site for about a year. iBankcoin was never going to be and never could be mainstream to the point of being worth shilling for page views. Trust me when I tell you, I have tried almost every trick there is in the book — but the facts remain and they are unmoveable: I am who I am and being me also means extreme levels of love and hate. While I am a bit warmer in my 40s than I was in my 30s, I am very polarizing and as one fucked face once said “very off-putting.”

The new site design isn’t going to be revolutionary, but good enough to look modern and function better with mobile.

Thank you for visiting this shit-heap all these years and I am sorry (not really) for not making user experience better here. I have been HARANGUED by plagues in many different ways the past 2 or 3 years, maybe more. Often burnt down to a cinder and rejuvenated through the blood of the Gods, I hope you too will be reinvigorated in our site redesign, authored by our new tech TR$way, which should be completed by and no later than 2039.

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MONDAY LOOMS

Heavy selling in crypto miners, Chinese and biotech stocks — steep drawdowns in a slew of momo stocks but FANG saved the day and market closed basically UNCH in spite of the looming tumult that is to come in very short order.

I will have you know, I cannot recall the last time I have traded so poorly, missing trades as if I was new. I know the feeling in my gut and that feeling on more than one occasion has turned moderate losses into much larger ones — so pardon me if I tell you that I have to trade small and without much bravado, otherwise I am going to be routed.

No one likes to be routed, but it just happens when you’re no longer connected to the prevailing winds of the tape. This is not my tape, never has been. I prefer a rip roaring market filled with momo stocks and hedonistic glory. We have been in and still remain in a methodical tape rewarding larger hedge fund hotel type stocks and the old glory we enjoyed amidst the pennies and all of the EV and alt energy stocks are really really dead and those rallies are far and few in between. I am wise enough to know this but still get boondoggled into trades because fast money is addictive and I pine for it just like I pine for the days when I’d buy a stock +15% only to see it later in the day +35%.

This market is much more conducive with swing trading and positions that are accumulated over longer periods — larger capped — stocks with meaning and not just bullshit being mentioned on message boards — stocks like CELH, AFRM, and YOU.

I suspect markets will want lower next week. After all, we bounced this week off the bottom and the news flow isn’t finished and GDP growth is slowing, so we’ll see.

I ended net short, so this is my book talking, with an interest in a few runners. I like short small caps, China, and biotechs into next week.

As always, we’ll trade live inside Stocklabs.

CIAO

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CHINA BANS CRYPTOS AGAIN — FUTURES SLIDE

In the latest salvo against BTC-ETH, the nation of China for what seems like that 100th time banned cryptos, but this time for real.

As such, BTC-ETH and the rest of the gang have fallen thru the floorboards and are now sinking even lower. This isn’t earth shattering news, but instead a renewed hatred by the centrally controlled economy of China against the decentralized world of cryptos. I’d imagine this will, at some point, lead to a great buying op.

Futures are off by 100 NASDAQs, as we descend into the weekend without comfort and nothing but angst.

Look at the bond market for signs of real fear. Presently rates are slightly higher, suggestive this pullback os horseshit.

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Will Credit Fears Re-Emerge?

Yes.

The way these things work follows a strict script.

Stage 1: rumor mill it. Only a few pay attention and cry Chicken Little
Stage 2: It’s happening. Main stream news discusses it incessantly, increasing discussion amongst conspiracy theorist of chicken vs egg current simulation mode.
Stage 3: RESCUED! But not really. But RESCUED. Market short squeezes higher.
Stage 4: Oh no, it’s not over. Panic doubles.
Stage 5: Crisis.
Stage 6: Bailout.
Stage 7: Lift off, pretend it never happened.

I’d say we’re at stage 3 now. I do not have a timeline on when the Chinese debt bubble will re-emerge, but it’s not over.

That being said, we had a strong oversold bounce and we might gap higher again tomorrow, especially since the last 3-4hours of the day was sideways poorly traded slop. I’d bet many a shorts edge-lorded in hoping for some sort of fuckery tonight. I doubt you’ll get that and I doubt the Chinese are eager to create credit drama.

Ergo, we trade higher in the morning.

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SUCCESS

The Stocklabs mean reversion algorithms told you we’d ramp and now we’re flying high and all of you dick suckers want in. You can get in — but you missed much of the move, since the fear has abated and the end of the world is no longer on the calendar.

Typically on very OS conditions we always get a follow though day and this is it. In regards to day 3, I cannot offer much advice, other than to suggest more of the same chop — misdirection and confusion abounds.

I was relegated to cash in my trading yesterday, but still very long in other accounts, all up handsomely. I took the morning off since I was burning the fuck out and now I am back to trading again, both strongly and resolute. I am up in the order of 0.45% but just getting started.

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