Models are updated and back to neutral after flipping bullish last Sunday. Strong ‘Hybrid Chg %’ numbers drop off on Monday which gives bears an edge heading into the week. Trade wars are running hot, and my opinion is that they are going great but what do I know about the macroeconomic picture? Nothing and neither does anyone else. If anyone claims on the CNBC entertainment news channel to know how the global economies levers work, they are a liar.
The Federal Reserve doesn’t even know. They’re losing their might, believe it or not. The power of the hash has manifested. The whole archaic notion of money backed by nation states has been called into question. There is no backing to the money besides military might. Which I suppose is nothing to sneeze at. If the military wants to make you dead—they will.
But they cannot make to kill bitcoin. Which is nice, because maybe bitcoin will make to kill them.
Moving on from fantasies of anarchy…
Lots of my favorite twitter trader accounts seemed on tilt last week. There was a vibe of confusion—what with the rate cut introducing heavy selling, the new month flows erasing said selling, only to have a trade negotiation tweet from President Trump re-erase the erase-ment. Admittedly, it was a lot to digest. I was watching from afar, having committed to some side work instead of grinding out trades. And maybe I am sitting on a cloud thinking I am a better investor and trader than most, I don’t know maybe I am or maybe I am just a jerk—but this is my advice to anyone who felt a little rattled by last week’s action:
There is always another bus
If you start to feel off, or like your actions are based on emotion and not focused execution of your plan, the first step is to STOP.
This is often done most easily by removing your body from your desk. Outside work or home chores are helpful if you need a distraction. If you feel an itch or urge to take action because you catch a chart or news bit on your phone or some screen in the corner of your eye, put a wider space between you and the markets.
If you have a plan in place and feel calm and clear about what needs to be done, then re-engage. You likely need to reduce size given the increase in volatility. Be sure to keep track of how you feel.
The stock market was here long before us and will continue to function long after we are gone. Just like buses in the city, there is always another trade coming. Make sure your account is still liquid so you are ready when that next opportunity comes.
Anyways, it is nearly 1pm New York on this lovely Sunday and I need to go wrestle some iron up and down a few 50-60 times because if not I will want to make to kill. Why is my base instinct so violent? We don’t know. Raul says stay cool.
Raul Santos, August 4th, 2019
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