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Wednesday, November 22, 2023

Best Decision I Ever Made

 A few weeks/ months ago I blogged about how I was going to start trading commodities more, and that has turned out to be one of the best decisions I ever made! 

To give you some idea, I closed that trade up 25%, and by diversifying into some commodities trades, I'm up 50% in the past 3 months.   

Meanwhile: Fast Money has remained bullish energy all year 

Guy Adami didn't read my tweet on the show, but the very same day, he did own up to being totally wrong on oil drillers, yet, he still doubled down on $OIH, and that was good for a 3 day rally. 

You can catch the whole show at this link, if you're dumb enough to pay for CNBC Pro

One of the reasons Oil is falling off a cliff:  

Biden Breaks Campaign Promise in Allowing New Offshore Drilling wsj.cm 


I suspect another reason Oil, and Natural Gas are getting killed is due to the coming economic crisis, because copper is also falling.  

This morning, the broader market continues to trade like crap, yet Oil is falling off a cliff.

Oil futures - 1 min. chart view, as it's being reported that a decision by OPEX... may be postponed. Yeah, a lot of good these so-called "production cuts" have done for the price of oil! 


In related news, Carter Worth covered his oil short, weeks ago, once again proving he isn't the chart master, CNBC claims he is.  

You can catch that free video here: Chart Master: What's next for oil and energy stocks?

The reason Carter Worth gives for covering his oil short, is that oil was down $20. 

Word of caution: We routinely see big moves in commodities - in either direction - and that carries with it, added risk, and especially when trading on margin, or trading leveraged ETF's. 

Take care, and have a Happy Thanksgiving! 

AA 


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Tuesday, August 8, 2023

AI Bubble Already at or "Near It's Peak" says Morgan Stanley

It was only a couple months ago, when a boom in AI technology spending was credited with a historic short squeeze in NVIDIA $NVDA shares, and now Morgan Stanley is already calling it a bubble? 
 

If Nvidia Is a Proxy for the AI Bubble, It’s Nearing Its Peak, Morgan Stanley Says yahoo.com


 Of course I've been pounding my fist on the table on this for several weeks, and I even called the recent reversal in AI stocks. Morgan Stanley is a little late to the party!  

$UBOT (2X leveraged AI BULL ETF) Too bad there isn't a bear ETF to match this fund! 

Judging by the volume on that chart, the AI pump began to take shape just before short covering ahead of the Memorial Day holiday, and that's really what this rally was all about. 

Of course once the hedge fund managers return from their summer homes, they're probably going to take this market back down, just as they drove it up, and I'm already seeing several micro-sectors crushed - for example Airlines.    

China Bubble Bursting 

China actually led this entire tech rally, with reports that the China reopening was going to lead a recovery. Then only a few weeks ago, Chinese stocks were once again being pumped, with talk of "stimulus"? Another fortune cookie crumbles. 




Energy and commodity prices falling 



Actually the bubble - after all the covid (excuse) spending -  is still unwinding. This is the price you pay for over-printing in order to try to avoid a recession. All the money printers have managed to do is to temporarily inflate prices; on everything from cars, to equities.  

Now comes deflation, and a natural wave of contraction, after an artificially created boom. 

When? 

 It seems like it takes several weeks for the powers that be to engineer a sell-off. 

Just look at how long it took for them to take Apple down. 

Speaking of Apple 

The lame stream media is trying to make a big deal out of the pullback in $AAPL shares, but what they fail to mention is that tech is not selling off. Most big tech stocks were up again yesterday, as the marketeers continue to play a game of Whac-A-Mole. 

I refuse to play that game. I can't sit in a leveraged bear ETF for weeks at a time waiting for a market to correct, when Wall Street sharks would rather play a game of cat and mouse, than take profits.

In certain situations you can hold a leveraged ETF long term, but leveraged funds do not retain their value in a sideways market, and if you happen to get caught on the wrong side of a nasty reversal, you can forget about ever getting back to even. 

Thankfully, I saw the short squeeze coming, after memorial day, but until tech enters a real corrective wave, the short trade is going to be a waste of time.

The Broader Market 

This morning market futures are weak, as expected: 



Yesterday's rally was only to a lower high, so I suspect we aren't finished building a base, 

Take Care, 
AA 







  
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Tuesday, July 25, 2023

$VIX DOES SOMETHING IT HASN'T DONE SINCE 2015!

 Since CNBC likes to report a lot of fake stats (as I pointed out in yesterday's blog); I thought I'd reveal a real historic move we're seeing on the $VIX.

What is the $VIX? The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market Source CBOE.com 

The $VIX predicts future volatility, by monitoring the options market, but more and more the $VIX is continually beaten down on a daily, weekly, and monthly basis, in order to ensure that the bullish Options pay. Of course when the market is made up of 90% bulls, it's quite easy to overpower the bears, and especially during periods of light volume, as we've seen again this summer. 

Does this mean the $VIX is broken? In a way it does... but I prefer to call the $VIX rigged, in that it's continually broken, on purpose, yet it is also allowed to occasionally run; in order to cause panic selling, and reset the options market. 

For Example: Think back to the Trump crash (AKA the Covid Crash). The $VIX was allowed to run for exactly 1 month - from the end of  February OPEX, until March OPEX (precisely). Also notice the setup - seen on the chart below - for the previous 3 years. 


I'm convinced the whole crisis was staged in order to help get rid of Boris Johnson, and Donald Trump, just as 9/11 was used for nefarious purposes.

 See: Unusual Options Market Activity and the Terrorist Attacks of September 11, 2001. introduction jstor.org 

Jon Najarian is mentioned in the above article, as a someone who concluded - from the trading activity - that someone knew that 9/11 was going to occur.  

I wasn't actively trading during the time of 9/11, but it's a fascinating study!  

$VIX DOES SOMETHING IT HASN'T DONE SINCE 2011! 

$VIX - Monthly Candlestick Chart - 16 year view - The $VIX continues to trade below the 48 level for the longest run since 2015. 


Yesterday, I incorrectly stated on twitter that the $VIX had stayed below 50, for the same length of time, but on closer inspection, 48 was the actual pivot in 2011.

If you look at even longer historical $VIX charts 45 was the magic number, but it seems that over the more recent past higher levels of volatility have become the norm. We're also seeing a crisis that requires larger amounts of liquidity to reflate the bubble, and we seem to be overdue for one. 

No doubt the $VIX will once again be allowed to break above the 48 level, but if history is a guide, it may not be until early next year, in 2024. 

Market Update: 

Turns out the long awaited $NDX rebalance was much to do about nothing! 
 

This morning we see money flow back into the tech sector. I saw this coming a mile away. 

  

Take care, 

AA 



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Wednesday, July 19, 2023

Everything that's wrong with this Market

 Be sure to catch yesterday's 2 (count 'em) 2 market updates; the second of which included updated Dow, and $SPY charts.    

Everything that's wrong with this rigged Stock Market

I could easily do a top 10 things that are wrong with this market, but let's try to keep it to 5....  

1. Cryptocurrency - The ridiculous crypto currency market is a perfect example of everything that's wrong with this market, and proves that valuation is not an indication of real value. Crypto is worth whatever someone is willing to pay for it, and estimates range from 0, to $1 million, depending on who you talk to. Crypto has become just one more sector to pump and dump. 

Speaking of Crypto

I recently called Bitcoin a sell, as it continued to retest the top of the range it's been trading in for the past several months, and today we see it trading back near the bottom of the range. 



Most everything - except tech & trash -seems to be trading in a similar pattern - a topic for another day  

2. Foreign Investors 

I think allowing foreign investors to drive US equities is a recipe for disaster. 

Do we really want to rely on the Saudis and China for future earnings growth? This seems to be a conflict of interest, when national security runs counter to investment strategy. 

When Global Markets collapse you're going to see forced selling of US assets, and the Fed has been forced to bailout foreign entities, more than once. 

3. Corrupt Financial Institutions Run The Table

Just Yesterday: Deutsche Bank Draws Fresh ECB Scrutiny Over FX Sales

How many times have the banks been caught red handed... and all they receive is a slap on the wrist? 

Of course the powers that be go easy on the banksters, because they have campaigns to finance. Politicians know where their bread and butter comes from. 

Related 

Hillary Clinton Struggles to Explain $600K in Goldman Sachs Speaking Fees (many sources) 



4. Upgrades, Downgrades, and Rumor, all being reported in real time. 

You can also add to that the endless media hype, and Earnings, reported in after hours trading. Whose brilliant idea was this? I suspect whoever likes driving stocks in 10% increments, on light volume, is behind it, and the AI which makes Options trades in milliseconds. 




5. Insider Trading by Government Insiders Continues 

78 members of Congress caught violating law on stock trades businessinsider.com 

Fed Restrictions on Employee Stock Trading Not Strict Enough, Says Watchdog WSJ 


In short, the whole system is corrupt, including the corporate owned lame stream media that covers it.

Market Update: 

I don't like energy here, and I tweeted that yesterday.  
Goldman Sachs just reported lackluster earnings, but we're not going to see any panic selling, until the appropriate time. I can't say when that's going to be, but take a look at what just happened to bitcoin. The short sellers were shaken out above the 31k level, before it was dumped. 

I would either sell into strength, or just wait until you see panic return to the market. 

In the meantime: Watching the Dow 35k level

Take Care, AA


  

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