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Newsletter - 5/5/2024



tick tock.

The fuse is lit and it is only a matter of time.  

CRE, KRE, the economy - it's all coming down.  

Do not be fooled by the current market because the foundations upon what it's bull run is built on is deteriorating, quickly.

I believe I will be proven correct that this will be the last quarter that banks and CRE will be able to hide their toxic assets.  Is it a 100%?  Of course not.  But it is, in my opinion, a foregone conclusion.  

Week in Review

From TRowePrice:

"Late rally lifts small-caps back into positive territory for 2024

Stocks ended higher following a volatile week featuring a raft of economic and earnings data. Growth stocks outperformed value shares, which were flat overall for the week. Small-caps outpaced large-caps, helping lift the small-cap Russell 2000 Index back into slightly positive territory for the year-to-date period.

It was the second-busiest week of first-quarter earnings reports, and a positive reception to Apple’s earnings release after the close of trading on Thursday seemed to help drive a rebound in overall sentiment. The company beat consensus revenue expectations, but investors also appeared enthused by Apple’s announcement that it would buy back USD 110 billion of its own shares, the largest such repurchase in history. Another notable mover for the week was Tesla, which surged over 15% on Monday after founder Elon Musk made a surprise appearance in China following news of the government’s tentative approval of the self-driving technology the company has under development.

Stocks rally on signs that wage pressures are easing

The main driver of the week’s gains appeared to be Friday morning’s nonfarm payrolls report, which showed that employers added 175,000 jobs in April, less than expected and the lowest number since November. While the miss signaled a cooldown in the labor market, and thus lower inflationary pressures, investors may have been more pleased by a surprise slowdown in monthly wage increases, from 0.3% in March to 0.2% in April. The year-over-year gain fell to 3.9%, the slowest increase in almost two years. Similarly, average weekly hours worked fell back slightly, while the unemployment rate climbed slightly to 3.9%.

The news may have been particularly welcome because it followed some upside inflation and (more distinct) downward growth surprises earlier in the week—a combination that added to recent worries over emerging “stagflation” trends. Stocks fell sharply on Tuesday after the Labor Department reported that employment costs rose 1.2% in the first quarter—or an annual rate of nearly 5%—which was above expectations and the fastest pace in a year. A separate report showed home prices rising in February at their fastest pace in eight months.

Meanwhile, a gauge of business activity in the Chicago area fell to its lowest level since November 2022, and the Conference Board’s measure of consumer confidence declined in April to its lowest point in nearly two years. The Labor Department’s tally of March job openings, reported Wednesday, fell more than expected to 8.5 million, the lowest level in over three years. On Friday, the Institute for Supply Management reported that its gauge of services sector activity had fallen back into contraction territory for the first time since December 2022.

Powell pushes back on stagflation worries

Investors seemed to take some encouragement the following day from Federal Reserve Chair Jerome Powell’s response to the data. In his press conference following the Fed’s two-day policy meeting, Powell pushed back against stagflation worries, stating that “I don't really understand where that's coming from” and citing current growth and inflation rates of around 3%. Powell also stressed that while policymakers were not prepared to cut rates—and rates were left steady at the meeting, as was widely expected—neither did they see the need to increase rates given the “sufficiently restrictive” current stance of monetary policy.

The evidence of a cooling jobs market helped push the yield on the benchmark 10-year U.S. Treasury note to an intraday low of around 4.45% on Friday morning, its lowest level in nearly a month. (Bond prices and yields move in opposite directions.) A subdued primary calendar further helped returns in the tax-exempt municipal bond market.

Issuance was relatively light in the investment-grade corporate bond market, and all issues were oversubscribed. T. Rowe Price traders reported that, following a somewhat mixed start to the week, high yield bonds traded higher alongside equities in response to Powell’s relatively dovish press conference. Meanwhile, earnings reports continued to play a role in returns, while new deals that came to the market were generally met with solid demand."


Model Portfolio - since 5/9/2023

This Week:


Last Week:






Yes, the $SPX has broken on the daily and the weekly.

No I am not concerned about the market making new highs - it won't last.  

The market rallied last week because unemployment came in lighter than expected.  One period.  After a barrage of negative economic numbers.  So yeah, I'm not thinking this "rally" is the start of something new.

In fact, the higher the market goes the faster it goes down because it will be more over extended and precarious to more bad news.

Note the support and resistance levels on the weekly chart because that's what the bulls and bears will be fighting over this week.



Same as the $SPX, the $NDX has broken out.  

But are you really going to get long aggressively this market?

I didn't think so - neither am I.

The only thing that could provide some support is the fact that the corporate buyback window is now open.  


Looks like Small Caps are going to try yet AGAIN to break out and join and confirm the bull party.

I honestly am ambivalent about it and if they fail to break out, the bull case becomes even more weak.

Fund Flows




Bitcoin & Miners

BTC could get some legs this week and a close above $70k would be great.

However, with news this past week that now Pension Funds are considering to buy into BTC, I do not see the demand side slowing.

I remain long the miners and will have to do something this week with $BITO but the others, I am giving some more time to see if BTC is truly bouncing off of support.

Additionally, $MARA will be added to the S&P Small Cap Index so that will be some good news for the miners.

I am constructing a trade plan for $BITO and $BTIF and will share this week.


Doom Trades 



Remember what I have said, in down markets NEWS precedes PRICE ACTION.  You are about to see that in action.  You all know what my plan is - I have not changed it.  I will not hold your hands if you are in this trade because YOU either believe or you do not.  If you do not, you should not be in the trade.  I fully expect that once this breaks the first calls I bought will be more than made up for.  I would encourage you to look at your holdings as a porfoltio, not a single position.



See above



See above



See above



See above

Closed Positions



Breakout trade worked to perfection.



Another good Breakout trade.



Breakout trade and some members even sold for +100%.

Current Open Positions



I am still holding this because it is still back below the break level.  Interestingly, the options aren't really moving down - probably due to the longer duration of the contracts.  I suspect this week I will be taking a loss or cashing in.

Doom Update 




This is what I would call stimulus, vote buying, whatever.  But this "idea" would most certainly be stimulative.

Home Equity Loans, or HELOCs, allow borrowers to borrow against any remaining equity in their home, after their mortgages.  

If the Treasury relaxes qualification rules by either lowering the credit needed by the borrower or increasing the amount that can be borrowed beyond 100% Loan to Value, or LTV, then they will have effectively created a new market called "Sub Prime HELOCs."

Sub-prime anything is not good.  

The way this is also more of you getting screwedis that I am sure that the government will step in to "subsidize" or "backstop" the credit risks and defaults, thereby once again allowing private banks to lend irresponsibly, and when they lose money, as they will, that will be "covered" by your tax dollars.

It's complete theft.

Then you have this chart which shows how much Collateralized Loan Obligations or as I call them, the worst of the crap, is currently now in "Watchlist" status.  What's funny to me is geez, what did you expect?  You can't buy crap and expect it to shine like a diamond.


To be honest, this section of the newsletter is always hard to write about because until there is actionable news and as along as the news flow and data keeps supporting my thesis, all I can do is wait for price to get to the level I want.

Just because price goes opposite of a longer term thesis does not mean that the thesis is wrong.  Do not be fooled by short term price movements when the longer term trend is down and the macro flow is very down.

As for the last pic, what more can I say tabout how big and how bad the #CRE and $KRE mess is becoming?



So the JCB has finally gone full in.  Here's the problem: they are now on the radar of currency traders as "Soft Target #1."  The JCB is screwed: The only way to support the Yen is to sell dollars and buy Yen.  But doing that makes the costs of exports from Japan to the US as imports go up.  That is inflationary.  

I am not a currency trader but I do not believe the JCB will be successful in holding the Yen below 160 and in fact I see the Yen going to over 200 within 12 months.


But the real battle royale is happening behind the scenes and is between the Dollar-Pound-Euro-Peso-Yen and the Yuan.  This is a full blown currency war as the US attempts to hobble China's economy by force devaluing their currency.  For a country that is export driven, driving down the currency which will compress margins is part of the larger asymmetric warfare that is going on with China.


The Podcast library is here.


The Video library is here.

Paid Memberships:

Look, there are a LOT of scammers out there on FinTwit.  99.99% of them care only about selling packages of crap.  SOME OF THEM ARE CHARGING AS MUCH AS $5,000 PER MONTH!  None of them include what helped make me a better trader: having a mentor.  Having someone who will be your PERSONAL TEACHER, COACH AND ACCOUNTABILITY PARTNER.  A Mentor that has over 90,000 hours of screen time.  That by itself is invaluable.

People ask why I charge.  First, I want only VIPs that are committed and "having skin in the game" guarantees this.  Second, because my time is valuable.

See what others are saying:

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Don't forget the Discord live chat is STILL FREE but it will be closing to new members soon.  In fact, we have already started removing non-active members. 

  • In the meantime, come and join us - its the best community out there: Discord.

  • Also, be sure to check out the new page for Daytrading on the website, run by the fine gents @BaconTurkeyClub and @Juggernaut.  If you ever wanted to learn or just watch two pros daytrade live, they are at it every day here: DiscordFuturesChannel.

  • Finally, be sure to check out VampireTrades and his amazing penny stock trades.

Thankyou Family!


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.

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