Newsletter - 6/22/2024
$NVDA had its first moderate down week in over two months.
$NDX printed a weekly Doji.
$SPY printed a weekly Doji.
But. . . .
$NDX Advance Decline is negative and trending down.
$SPY Advance Decline is positive and trending up.
Just a sample of the conflicting data that is present making any directional read of the overall market difficult.
Or is it?
As my VIPs know, when faced with conflicting data it is important to look to longer timeframes:
Monthly trend acts a "magnet" for the Weekly trend. Weekly trend acts a "magnet" for the Daily trend. Therefore, the trend is still up for the markets and will remain so unless the Weekly trend confirms to the downside.
For now, there are two possibilities:
1. The market is consolidating for a move higher.
2. The market is reversing and losing momentum.
Since I am a trend trader, I believe the market is still currently bullish and this is a "pause that refreshes." Why? Because the Monthly and Weekly are still in an uptrend.
I made a comment this week to my Discord members that Retail is only concerned about calling the right direction, but they ignore which direction is more probable. We do not do that.
This week will be very telling as it will either confirm a HCD on the weekly which would change the next two weeks outlook to bearish or it will continue to be bullish and print more consolidation or go up.
As a reminder, I said this last week:
"Finally, I suspect the $Yen will be back in focus this week as once again, it is pushing the 158 level which is $2 below where the JCB intervened previously. Don't forget that the JCB sold US Treasuries to raise capital to defend the Yen - they will probably do so again this week. This would put upward pressure on US yields which is bad for the market. It's something to watch."
Well, the Yen is currently at 159.838 to the USD. Remember that the JCB's (fourth) "line in the sand" was 160 before they intervened previously. When they intervene again, they will be doing what they did last time: selling UST to buy Yen to try and push the Yen higher. Selling UST should put upward pressure on yields which is bad for the stock market. While a single intervention will cause waves, a sustained intervention by the JCB will push US equities lower. It's what I will be watching this week.,
ANNOUNCEMENT:
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Week in Review
Model Portfolio - since 5/9/2023
This Week:
Last Week:
The Model Portfolio lost 10% this week not due to any recent trades but instead due to three "legacy" positions that I had held in $CIFR and $KRE, which also were oversized positions. In addition, because I had held these positions for 129 - 177 - 274 days they also increased the Average Days Held from 12.70 to just under 15 days. These are outliers and are not of a concern to me because I KNOW if I keep to my methodology I will continue to profit and the return will continue its upward march and the average timeframe will fall back to the long term average of 12 days.
Sectors
SPY
Another new ATH this week but with a caveat: price also printed a HCD on the daily which hasn't occurred since 5/9. The result of that HCD was a whopping 2% drop.
As I said above, the bullish trend is still intact but let's just say it might be running "out of steam."
I think not but we shall see.
The weekly candle was moderately ugly but even still, price was bullish closing higher than the previous week.
The trend is up.
QQQ
Same as the $SPY, the $QQQ printed a new ATH this week. And same as the $SPY, price also confirmed a HCD, which it hadn't done since 4/29. But the $QQQ also had an extra day of downward price pressure follow through so it would be fair to say it is weaker.
The 4/29 HCD resulted in a 3% pullback and that is the maximum amount this pullback will produce, if even that.
Doom Trades
$KRE
FROM FIVE WEEKS AGO:
"Am I worried that the stock prices of my DOOM trades are going up?
NOPE
Why am I not worried?
Because NEWS WILL LEAD PRICE lower.
Price on these DOOM trades can go up 10%, 20% or even 100% and it will not concern me because the underlying fundamentals are deteriorating so quickly."
Price once again came within pennies of the break and enter level. It is just a matter of time before it finally breaks and I can establish my DOOM position.
$BAC:
Since price did not close above the previous week's high, the trend is still down. Also $BAC was one of four banks whose "Living Will" was deemed insufficient by the FDIC. It's just a complicated way to say they are in trouble if the banking sector erodes, which they will.
$VNQ
Waiting. Waiting. Waiting. Waiting.
I have removed $HYG for this reason: while I am confidant that yields are going to go up I am also cognizant that the Central Bank's of the world are incredibly active in keeping rates down. This fact added an extra level of risk that I am unwilling to take since there is no way for me to quantify and measure that risk. First rule of trading: Protect Capital. Second rule: only trade when probabilities are in your favor.
Closed Positions
As I mentioned above I closed three long term positions. I had opened $KRE (8% of total) as a starter position for my DOOM thesis in September of 2023. It was a "starter" position because I expect to eventually have 20% of my total portfolios in a short $KRE position. My reasoning was it was a "just in case" trade - in case some outlier - "Black Swan" event happened. My mistake was not starting with 4%. But even still, it only resulted in a 7.5% drop in the total portfolio.
In addition, I had two positions in $CIFR with a total allocation of 8% resulting in a -13% drop in the total portfolio. In hindsight, I suppose I could have gone longer in duration but given that I have made at least 10x on my other miner trades, I really am ambivalent about it.
Current Open Positions
$FXI AUG 26P for .75 - VIP Only
Classic "Stick Save" on the daily. This is when price triggers a stop but since I only use daily closes and enter the actual stop trade the next day, sometimes price will reverse back into the direction of the trade thesis and therefore "save" the trade.
$BYON JUL26th 12P for $.80
And another Stick Save.
$AVPT SEPT 10C for $.70
Took the break of $9.59 resistance. The calls are currently at $.90.
$JD AUG 27P for $.99
The break of $29.24 support triggered me into the trade. The puts are now $1.12.
$CELH AUG 75C for $2.59
Entered on the confirmed LCD. The calls are currently $2.84.
Doom
Well that Global warmongers continue to try and expand any war they can and this past week Israel and Lebanon appear ready to go at it. Of course, the US promised full support because, why not?
This has nothing to do with anything noble or just. This is all about money.
Here's how that works:
The US supplies weapons to it's proxy, in this case Israel. In order to supply those weapons, the US has to PAY for them so the weapons manufacturers benefit, greatly. But that money has to come from somewhere and that somewhere is from you and me - via increased defense spending which is paid for via taxes. So effectively war is a way for the government to launder your money to defense companies.
In addition to a coming expansion in the ME, Putin visited North Korea this week and Russia and NK executed a joint security agreement. This means if either is attacked, the other will help defend. This is NOT good and is the result of the weakness that the US currently is portraying to the rest of the world via our incompetent President.
The world leaders of the war Cabal are moving closer and closer to WWIII and no one seems to care. While I don't think Russia or the US wants to use nuclear weapons, what about NK or if Iran were to get the capability to deliver a nuclear bomb on US soil - neither of those countries care about their own populace enough to not do something stupid. Unfortunately, our current US leaders seem to be caring less and less also.
My Hat is Not Made of Tinfoil
Every week I have to come up with a topic to write about and with some topics I vacillate between sharing something that might offend or cause people to think I am crazy or writing more commentary about the market. Well, this week I am saying "screw it" because in the same way I trade, I believe the data points are rising to support an attempt to subvert the upcoming POTUS election. I am not going to waste my time arguing that the last election was effectively manipulated through bogus mail in ballots and all of that (it was and there are multiple court cases working through the system) because no one seems to care. Instead, I want to give you the evidence that one of the methods that will be used to stop Trump from being elected (I am not a MAGA guy).
What's more important than WHO is elected is the fact that when the MSM and "experts" use false or misleading statements that are not based in facts, they are SUBVERTING YOUR RIGHTS to choose who you want to elect; they are attempting once again to ignore the will of the people and instead put who they want in the Oval Office. If this doesn't anger you then you can stop reading and get back to your entertainment.
Let me get right to the point: there is a concerted effort to prepare and scare the public about the next pandemic - the Bird Flu. Why would they want to do this? To suppress voting in the upcoming POTUS election. In fact, due to recent events and trends, "they" are getting more and more desperate. This past week while the average American was busy trying to live and afford to eat, three things occurred that all but insure we are going to see a repeat of 2020 in terms of election illegalities:
1. Polls showing that Democratic support from people of color is falling, fast. This could be catastrophic for Dems as that has been the one constituent group that steadfastly has been Democratic.
2. The Supreme Court issued a ruling that criminal convictions must be UNANIMOUS which was directed at the ridiculous "conviction" of Trump where the judge allowed that a guilty vote was valid even if not all of the jurors were in agreement. The jurors were able to cast their guilty vote on any of the 36 bogus charges and the judge would count it as a guilty verdict for conviction purposes. With the SCOTUS ruling, those "convictions" now have a legal basis to be thrown out.
3. The MSM and the "experts" are ramping up the Bird Flu narrative. If you don't think that "pandemics" are used to inflict fear among the populace around election time, take a look at the following past elections:
- 2004: SARS
- 2008: AVIAN
- 2010: SWINE
- 2012: MERS
- 2014: EBLOA
- 2016: ZIKA
- 2018: EBOLA
- 2020: CORONA
- 2024: BIRD FLU
If that doesn't convince you then how about this:
Corona has a Contagion Factor of 2. SARS was 4. Measles is 18.
Still don't think Bird Flu is coming? Ok, how about this:
Or this:
Look, this is not a Dem thing or a Republican thing - this is about FEAR MONGERING in order to lay the groundwork for more possible lockdowns and its happening globally. If you think that idea is crazy then you have not been paying attention. If you think an attempt at lockdowns cannot happen again, then you are willfully ignoring actual events happening right now.
If you think I am crazy or a conspiracy theorist I really don't care. I treat this the same way as I treat trading: examine the facts and then compute probabilities. The probability of lockdowns due to "Bird Flu" is rising, quickly. Whether or not you give in is up to you.
Finally, I think that most people don' want to consider this as a possibility because they don't want to intellectually accept that there is real evil in the world, no matter what your Faith leaning is. And real evil does really evil things. Like force lockdowns for a pandemic (Covid) that had less than 2% fatality rate.
The Bird Flu is pneumonia that has an even lower mortality rate. It is not the Black Plague II.
And if you think the timing is a coincidence, I have to ask about your understanding of correlation and probability.
If lockdowns are attempted again, the markets will crater. This would also provide a "reason" for the mother of all stimulus packages - GLOBALLY. And we all know who benefits from stimulus - not you and I.
And no, I did not get the Covid vaccines - not any of the 8 of them. And I won't be getting the Bird Flu ones either.
If you think I am crazy all I ask is to remember you read this when the Bird Flu Pandemic becomes "serious."
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Thankyou Family!
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.