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
23,154 Blog Posts

Bull Market Action

We had a banking crisis that never materialized into panic, aside from the afflicted banks. We have been on the verge of WW3 for over a year. We have jacked up rates so high, the poors cannot afford to buy homes or cars anymore.

And yet, here we are styling higher again without a care in the world.

The news is one thing, but the price action is another. We have collapsing natural gas prices, moderate WTI, and a strong consumer base — seemingly foaming at the mouth to buy a new $115k Tesla.

The price action is bullish, but I remain highly skeptical and look at the price action with furrowed brows.

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I’d like you to think about what I am about to ask you over the weekend and then formulate a plan in the event it happens.

As you know the banks are under pressure now, not because the underlying assets of their govt backed bond have gone sour — but because the fucking Fed has gone from 0-5.25% in a year. For those new out there, when rates go up, prices of the bonds go down. So the bonds SVB was buying at 100 are now trading in the 70s, all thanks to Powell.

The important aspect of this entire scenario is — no one is talking about the underlying assets underneath those MBS bonds. Pray tell me, what do you think will happen to the price of those bonds if, for example, delinquencies rise to 5 or 6%? Would they sink again to $50, or maybe lower? How confident are you in the notion, if you will, the average pleb can afford a high interest rate car and home loan?

MOREOVER, and this goes without saying, what will you do when these pressures causes mass layoffs — the type of layoffs not seen since 2008?

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There Are No Killer Trades Now

Are you feeling comfortable long banks or biotech into the fires? Or, do you feeeeeeel good selling short into what you know will be govt rigging?

Understand something, your subjective thinking is by definition subject to inputs — ruined by emotions. Maybe you were beaten as a kid or maybe you bullied others and have a false sense of superiority. Either way, the answer to every single investment malady lies in the emotions you produce when in front of the screen.

The answer: objective analysis using computers.

I only use my core holdings via the Stocklabs quant now. I buy what it tells me and to be honest — I never even look at those stocks for the time period I hold them — which is 1 month for regular quant and 1 week for my trading. This way, I find, again, I circumvent my feeeeeeeelings and can simply trade the tape in front of me — falling back on quantitative approved picks.

I gained 5.5% for the week, +35% YTD. The vast majority of my gains are via trading profits — the hedges I use during bad tapes. However, unlike 2022, I do not miss out on big rallies now due to my PERMANENT 100% long book.

That is my secret and you are welcomed to join me — you cheap sons a bitches.

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Unhedged and Nothing to Do

I covered all of my hedges this morning and then ventured off for some tennis and brunch with Mrs. Fly. I am now afflicted with a bout of allergies and hiding inside the darkest corner of my house. Markets are range bound and boring, which is surprising since this morning DB was going bust and the market was anticipating another fun day of bank runs, notably SCHW and DB.

But that didn’t pan out, at least not yet, and now we have runners in the smallest capped stocks — nothing really work exploring. At the same time, since markets aren’t cascading lower in what is bad news — I am hesitant to step in here and apply hedges to what some might describe a “boring tape.”

Nevertheless, I remain obstinately vigilant in my pursuit to sell short stocks and look forward to another occasion to do so.

Presently -25bps with a 100% long book, unhedged.

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HEY! Maybe the REITs Can Really Crash Next!

It was a frustrating day for civilians out there. But let it be noted here in these halls — professionals prospered. I am not referring to hedge fund faggots or advisoooors who rip people off for a living. I am referring to bloggers like me — folks with time machines and who have highly calibrated data platforms — like Stocklabs — under their tutelage.

It also should be noted that markets look SCARY. Ooh — be careful out there. We have a grim scenario playing out and all are in danger. Danger is, as some people suggest, ahead.

I managed to trade well around a 100% long portfolio to achieve a return of +2.4%. My gains have been so prolific, even Mrs. Fly has begun to take note. She’s even tried to convince me to “open a YouTube” and teach layman’s — such as herself — how to invest. Presently, she learns about investing via Tik Tok.

Regrettably, I had to inform her that I had no desire to teach anyone, including herself, how to do anything at all. As a matter of fact, I much prefer to trick people.

That being said, markets are mired in panic over the banks and soon we might fixate on OFFICE REITS — because no one is going back to work — not now not ever.

I have begun to think about life after stocks and what I might do for a career after the market ceases to exist. Maybe I’ll get into the propaganda business or become a rancher — maybe both!

I closed hedged at around 24% via inverses on top of a 100% quant driven long book. Very simple, very clean.

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It was supposed to be a boolish day — but now we are ENTREATED by another bank collapse. Luckily, or might I say fortunately, I had a 15% UVIX hedge from an hour or so ago. I booked that trade a short while ago for +6.2%. My gains remain constant. My market hand furiously hot.

Under the auspices of a total collapse of the western banking system, you’d be wise, smart even, to own some GLD and BTC. Those two asset classes have proven to be defensive during RISK AVERSE periods, such as RIGHT NOW.

That being said, do not be fooled by the NASDAQ +200. The actual market is only +0.3%, as indicated by the Stocklabs 4000. I am now hedged via DRV and FAZ — and will most likely hold off on any additional hedged until the close.

In short, bulls were TRAPPED but they were armed and now the bears are being picked off one by one.



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Markets Trap Bears

Another part of trading Fed days I forgot to mention yesterday is the next day, which would be today, the exact opposite usually happens. I use the word “usually” very liberally here and have no data to back me up. It’s just a feeling after many decades of experience. Truth is, I bet I’m wrong about the “usually” part — but it’s important to note that big down days can sometimes be met with an inverse trend day — which if looking at today’s +260 NASDAQ is today.

Have you learned anything since reading me? Of course not. You’re too enamored with yourselves and how great a trader you all are — aren’t you?

This is the point of the day where you might want to place some hedges — but not because you’re bearish but to lock in the days gains.

I am +260bps for the session after realizing very early today was not going to slip away into the clutches of the bears. There were too many growth stocks trending. Right now, however, the bulls are fat and happy and might let profit taking commence before they ramp the close on your faces again.

If you’re net bearish — get the hell out now while you still can. You might take today’s lumps but can you take tomorrow’s?

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A Brief Lesson on Trading Fed Days

I had 15% UVIX on top of a 100% long book heading into Fed. I had been perfectly balanced up 1.6% prior to the decision. The Fed hiked and the initial move was up, which I knew was a scam. Powell’s comments were hawkish and down we went. As the session progressed I lost balance since my longs began to outpace my UVIX hedge and I lost about 120bps from the meeting.

I booked $20k in trading profits, via SQQQ, FAZ, and UVIX. Seeing the regionals get hammered, I figured my bias deserved to be bearish with 5 mins left to trade. I was 45% short, bear’d up and eager. However, muscle memory kicked in and I recalled the innumerable Fed days where markets rebounded the next day after some spin.

I closed out most of my shorts, keeping a 10% UVIX just in case.

I did lose some balance in my hedging — but still closed up 43bps on a day that most of you, without doubt, got your brains blown out clean.

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The Fed Hikes Will Continue Until You’re Dead

All of the smartest men said the Fed would pause, maybe even cut. But they spiked rates another 25bps and spoke hawkishly. Inside Stocklabs, I warned the proles against responding to the initial move. Once again… I was right.

I added to my UVIX position and now sit like a King atop gains of 1.6% — due to highly proficient, highly skilled trading.

You can never trade as good as me — but you can copy me for free inside Stocklabs.

My sense is, auto loans at 20% for sub prime is reason enough to believe in the worst case scenario.

Batten down the hatches for a great doom has been cast.

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Long Volatility Hedge Just in Case of Fed Fuckery

For the recourd, I hate the Fed and everything is stands for. Some of you might hate it too — but trust me I hate it more. The evil empire only exists due to the banking system and all of its hand wringing. The banks as a cabal are bad enough — but to have a central bank doing fucked up shit like the FOMC is deserving of punishments being doled out.

Alas I am not naive and understand the power of them and know “nothing will happen.” But one can dream. They haven’t figured out how to stop dreaming yet.

Into the FOMC decision, I have a 10% hedge in UVIX — because any chicanery will be met with profound put buying protection.

I had hedged coming into today, which were sold as per usual. I am now +55bps waiting for the ax to fall.

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