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Yes, I told you so. . . . .



Huh - amazing how things change so quickly. For those of you who do not participate in the lovely discourse of the Discord chat, here is a summary of thoughts that I just posted there. They are in no particular order and do contain some self congratulations, but humbly so.

  • Ahem: last week "experts" said oil going to $90. MRNA says oil going down.

  • For those keeping score, I did post on Monday that hedge funds were rushing into oil shorts -now why did I close my long oil position for a nice profit and BEFORE the "experts" rushed into shorts?

  • I closed my XOP long almost at the top. How??? Because my analysis is sound.


  • KRE is finally structurally breaking down - we are merely at the 20yd line with 80 yards to go - structurally speaking the CRE market needed two things to occur: markets to stay up (mission accomplished Powell) AND for rates to come down. Fail.

  • The chances for an outlier event in the CRE market are rising everyday because every day we get closer to the end of the year and when a crap ton of CRE must be refi'd.

  • Bailout??? Nah - no political appetite for that. Plus, it won't be the banks that need bailing out - it will be a private equity or hedge fund. Who wants to help fat cats get fatter in an election year and when they are not systematically important? Right no - one.


  • Last week: experts said inflation was cooling. I said no its not - looks like the FOMC doesn't think so either with the release of the most recent minutes.

  • Publicly, the market is still expecting rate CUTS. That doesn't matter because the market is usually, and I mean always, wrong.

  • Bond yields are the indicator - the bond market dwarfs the equities market and always is the tell and guess that they are saying? Yields go up and market goes down. I will give you one guess which way yields are moving.

Buy? Sell? Hold?

  • Mid term and longer term - this market is going down

  • Getting long tech names is going to be very difficult because the market is starting to trade on traditional metrics ie fundamentals

  • I still would not be surprised to see the market make a blow off top to suck in more retail dollars

  • Cannot get long TSLA - cannot get long NVDA or AMD or any tech - if I am right and valuation metrics are starting to matter again, then those stocks are going to get hammered

  • Lack of trades this week has proven to be very smart - look at how quickly the market outlook is changing

  • From a technical perspective, I have only one tech name I would consider getting long. See below.


Blah Blah Blah - what am I buying?

If I absolutely had to position for a blow off top, I would be using only one cvompany. Not TSLA, not AMD, not GOOGL. not even NVDA.


MSFT.


Also:

  • I am looking at three specific categories for investing: small banks and credit unions with strong deposit bases and little to no exposure to CRE.

  • Biotech

  • Grocery stores


Seasonality: The Fall is not the market's friend. You know what I am talking about. Therefore, the above three industries are the only broad categories I am looking LONG on. Individual stocks will be more risky because just as a rising tide carries all ships, do does a falling tide.


Odds and Ends: Just in time to fulfill the NeoCon desire to go to war with China, China is a big fat mess. First perfectly in the narrative that China bad, US good. What's better than the "bad guy" causing a global economic collapse? Not much.


  • One more hike in rates.

  • Oil headed lower.

  • Market headed lower.

  • Pandemic 2.0 is next on the menu.

Look, I've had no new trades this past week. That has been by design. As I shared in my Sunday Newsletter, the market is in a confirmed reversal and downtrend. I am not standing in front of that train wreck.


In closing, allow me to say "I told you so." Humbly of course. But do not forget that experience trumps skill and I have a LOT of experience. I am not a genius nor can I tell the future - but believe me when I say to you "I have seen this act before."


As the Bible and the Byrds say: "There is a time for everything."


It's not time to be aggressively long. It's time to remember my first rule of trading: protect capital.


I will continue to be strategic in my trades and will not take on outsized risk. I WILL remember and pursue my first rule of trading. I cannot give you advice and won't but at least you know what I am doing and thinking.


Forgive me for any spelling or grammar errors - I am working off of about 3 hours of sleep.


theBoss




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