Newsletter - 5/28/2023
Hey Family! I hope you had a great week and are having a great holiday weekend! This past week continued to frustrate most, but not us. Because we know that "change is a comin."
PREVIOUS WEEK MARKET:
More of the same. Market goes up on NVDA et al and doesn't go down when there is actual bad economic news. As I have said before, the structure of the market is broken. What I mean is that because of the blatant Fed intervention with liquidity, "price discovery" or free trading is not working.
If you are worried about missing out on NVDA or the up move from last week, don't be. You will get another shot at NVDA, when its time to short it. It's happened before twice. Their CEO is a nut case. Every couple of years he spouts off about being the next best thing.
Take a look at these charts:
SPY opened the week at 420.17 and closed at 420.02. Nothingburger.
QQQ did better due to NVDA opening at 336.25 and closing at 348.4.
But still, a 3.6% gain for the week.
VIX appeared to break out before being monkeyhammered down by you know who. It opened the week at 17.45 and closed at 17.95.
For 2023:
SPY is 9.47%
QQQ is up 29.68%
NVDA CEO has a history of gunning the stock. I will agree that NVDA kills it in gaming but remember when he said NVDA was the next big thing in crypto mining in 2018 but then got caught by the SEC for NOT reporting that its growth was due to cryptomining and not totally gaming?
My point is this: don't worry about missing out on NVDA. It is a perfect example of what happens when euphoria takes over a space and all thought goes out the window.
But seriously, history says NVDA will drop, a lot eventually.
ECONOMIC COMMENTARY:
With the Debt Ceiling drama taking up every minute of market news, you might have missed some pretty important comments from our illustrious leaders:
I wrote about it also: Fed will RAISE rates.
Look, this is a big deal. Whether its one or two more rate hikes, ANY hikes will put to rest the thought that inflation is cooling. In fact, one rate hike alone will probably trigger a couple of more bank failures. Remember that Yellen said that she "told bank CEOs more mergers may be necessary."
Why would there be a need for bank mergers? Why let the largest bank's CEO's know? Because they will be the ones "merging" or rather as I call it, BAILING OUT other banks.
DEBT DEAL DRAMA:
I'm sorry but this is all so retarded. Everytime we hit the ceiling Washington puts on this song and dance show to show how hard they are at work (BS - they still went home for the long weekend) and to be able to fire up their bases. Look, as I have said repeatedly, there will be a debt deal. Here's what happened to the SPY the last couple of times:
I am not telling you to go and get screaming long this market, but I would not heavily short either. I currently am in 30% cash, 50% VIX calls, a lottery play and some SPY calls. Portfolio.
UPDATE:
Well. it appears they have a debt deal. At the same time, Yellen extended the date when the government would "run out of money (BS)" to June 5. Broad strokes of the deal:
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A cap on spending increases for 2 years - more kicking of the can NOT spending cuts.
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Defense and Medicaid untouched - BS because Defense budget next year will be $1 TRILLION. Wrap your head around that. The US has 750 military bases, not including black sites. Tell me why we need that many??
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A TOTAL OF 2% COST SAVINGS, or around $50 billion. - So those idiots in Washington for all of their "hard work" were only able to come up with 2%????
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And here's the big problem: A removal of spending caps in 2 years. Yup. No more spending limits. I am speechless.
UPDATE2:
AAAAAAND back to the circus: HOUSE REP. MINORITY LEADER JEFFRIES: I EXPECT A MAJORITY OF HOUSE REPUBLICANS TO VOTE AGAINST DEBT-CEILING BILL.
LOTTERY PLAY FOR MEMBERS:
Members got this earlier this week. This is purely a high risk high reward trade. I am NOT recommending this to anyone. It's what I am doing and as you know, I never recommend anyone do what I am doing.
I also closed out my BBBYQ lottery play for +26% to +48% in two weeks.
LIVE TRADE ROOM UPDATE:
I have not done a Live Trade room in a week. I made this decision because of the market structure: it's broken because of all of the manipulation going on. I am not going to get chopped up every day.
However, I will open up the room on Tuesday but will NOT SCALP the ES until we get a debt deal. I'm sorry but there is no way I am going to keep trading the ES when I know the market is being messed with. I WILL however do some live lessons as well as go over some stocks I am looking at. Make sure you let me know in Reddit that you want to Live Trade Room signup.
UPCOMING WEEK:
There are a couple of scenarios that could play out:
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Deal gets signed this Wednesday, as planned.
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Since the deal is garbage, I don't think it gets passed in its current form. So, more drama. But more importantly, more VOLATILITY.
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Default - not going to happen.
I AM expecting a real blow off top - not seven stocks leading higher. I mean full participation by all sectors. Let's look at some charts:
SPY cleared some pretty significant resistance. Next target is 431.68 UNLESS we get a confirmed reversal on the daily chart.
NOTHING says get short yet.
QQQ is breaking out. Do NOT be fooled if it retraces a bit - next target is 371.24.
I am not looking to get short yet.
UPCOMING WEEK contnd:
SO this next week I will be waiting for the drama to be done so the market can celebrate. But as I said up top, I will not be getting short, YET. There will be plenty of time.
Many investors have the right idea, the right direction but the wrong timing. It's not a hard fix if you learn to wait for confirmation on the daily charts. I mean, who cares if you miss out on the first 1-2%??? We are not picking up pennies in front of a steamroller here.
I want +50% minimum returns on anything I do. I am dead serious. Otherwise, why the heck would I work so hard?
POSSIBLE BLACK SWANS:
A "Black Swan" is rare and the market uses this phrase to describe risks that come out of nowhere. Usually they have always been there but the market just chose to ignore them.
Here's a couple I am watching:
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Russia moving tactical battlefield nukes near the Ukranian border: Ukraine says Russia moved nukes near border as raid stretches into second day - This is not good. The margin of error is getting smaller and smaller.
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OPEC+ warns that more "Ouching" is coming for those artificially keeping oil down. While I want the Fed to stop suppressing volatility (here) using oil, etc., I do not want to see more drastic measures taken by OPEC. If the US cannot accomplish what they want in the markets they often turn to war. No thank you.
WHAT I AM LOOKING AT:
While everyone is looking at the next big thing, AI, I am looking beyond it already. I am looking for Quantum Computing companies that are publicly traded. The first commercially available one is supposed to hit the markt in 2028. It will absolutely change everything.
If you think VR is crazy now wait until the hardware can process data at 100 TRILLION TIMES the speed of today' hardware. It will completely transform the world we live in.
If you've ever seen Ender's Game, I predict that that is exactly where we are headed. If you don't like your real life, you can be whomever you want in the VR world. And QC will make it so real that many will not be able to tell the difference between reality and VR.
So I am researching and looking. Because while I do not hold long term, I do find companies I really like and trade in and out of them. This was a response I made on Reddit to one of our Family members about long term investing and how I do it:
"Here’s the thing. When you say long term understand a change in mindset I’m driving. Over the years, you will have hundreds if not thousands of opportunities. Buy and hold for years should still be driven by adding and subtracting to shares. I did that with AAPL for over a decade. I buy. It goes up and gets over extended. Sell half. It inevitably falls back to the mean. I add back. All along I’m extracting money from the stock and locking in profits. It’s a thing of freaking beauty. Yes, I’m annoyed by NVDA - not getting it. But you will get another shot. When it’s time to short. And you will have much less company. And you will smile every day. Because you are smarter. Trust me. It WILL happen. Look at a monthly chart of it 24 months at a time. The ceo has pulled this shit before."
CLOSING COMMENTS:
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Hey, if there are phrases or words I use that don't make sense, put them up here in the comments.
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If there are any stocks or investments you want me to look at, send the to me at info@MrNotAdvice.com. I will answer them in next week's newsletter.
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Don't forget the Discord live chat is always open and free: Discord - come and join us!
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If there's an interest, I will do a live training session next Saturday. Let me know if your interested and what a good time is here info@MrNotAdvice.com or in the Discord chat.
Thanks and stay safe out there. I hope to have some new trades next week for you all.
theBoss
Nothing above is investment advice nor should it be construed as investment advice. It is offerred for entertainment purposes only. Always consult your advisors before investing any money. Do not "follow" or "mirror" any trade ideas provided. Mr.NotAdvice is not a licensed or registered investment advisor. Do your own research.