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.
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.
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.