Interim Update Feb 24, 2022

[RogueKoiFish]

Sol,

Fantastic advice. I would have wound up with too many partial positions. Great idea on only using profits to get into high risk plays.

I need to dial back to the moderate portfolio low risk more for now and build up my war chest for more opportunities later on.

Thank you

[bpcw]

Sol, can you please clarify what you mean by "relief rally and then a drop to new lows and then sideways action, then a stronger rally?"

What is your estimate on the timing of each of these moves? Is the relief rally the euphoria rally you mention in the latest MU, or is it an interim rally which doesn't go to new highs (much like the one we experienced from around January 24 to February 9) and then we drop to new lower lows than what we have now?

Is the drop to new lows the 4th quarter event you've mentioned before? I just can't tell if your outlook here is short or intermediate term.

As Astute pointed I was discussing the short term action. The relief rally could take place anytime, then a move to new lows (that's possible), then some sideways action and then the stronger rally towards the 4th quarter. For anything serious to occur in the 4th quarter, the masses have to be very happy. There are no free markets forces left. Everything now is based on manipulating or massaging the data to generate the desired outcome. However, the trend is positive and central bankers cannot stop printing no matter how vocal they are on this issue because this entire recovery is based on hot money. Take away the hot money and all hell breaks loose and that is not something the big players want. if they wanted that they should have intervened to stop the crash of 2008/2009.

Just remember that there could some variations in the projections because as stated there are no free market forces left. For example, the market tests its recent lows instead of dropping to new lows before the markets start a multi-week to multi-month rally.

My take on what Sol is alluding to over several months:

The top guy's/elites have tons of money, therefore they can and do manipulate the markets (along with the Fed) in their favour and will now do it on a new massive scale, why, because 1) they are greedy bastards 2) they get a kick out of fleecing the masses (majority). How does one make money in the markets, ideally you buy at correction lows and sell at highs.

The majority of people start buying into stocks or any other market once it has taken off and as it continues up they feel more and more positive and more people jump in, the elites measure the mass sentiment and decide when it's time to sell and realise their profitable positions, they need to keep the masses buying whilst they're selling by feeding positive information at the highs, like 'experts' predictng a market is going to the moon and all is well with the world, and the opposite to get them to sell at lows, such as covid (death, death, death), Europe is at war when it's just Russia invading Ukraine and the rest of the world will do zilch.

Sol uses the fact that the elites use mass psychology to predict how they are going to fool the masses, for example, the fact that a lot of small guys are learning to buy the dip means they will have to change tack in order to fool them, hence after this correction and the markets go to new highs, many will be convinced as with Bitcoin that you cannot lose by just keep buying the dip, so the elites need to bring a much bigger correction (crash) and feed a massive fear narrative to again get the majority to sell at the lows. So the game for us is to predict how the elites might go about fooling (MP) the masses and know that because the trend is still up that we are not to give into fear but to, yes, still buy the correction but at much lower points and to spread out the 3/4 lots to cost average down.

Sol's prediction of "relief rally and then a drop to new lows and then sideways action, then a stronger rally?", is not to be taken as gospel as he uses words such as might or probably but as just that, a prediction and example so we aren't surprised by the elites methods of manipulation to throw us off balance and lead to fear, because the golden rule still applies, whilst the trend is still up, the markets will bounce back and reach new highs.

I remember that during the covid correction, after a relief rally, Sol and another guy who I follow, both predicted that the market will drop back near the low before the bounce fully takes off, it never happened, if you had traded (and I did with spread betting) on this prediction it wouldn't have worked out but if you had just struck to trend playing (long term) you would have been fine either way. I made all the money back and some by just playing the long term trend and reducing my lot size.

[bpcw]

Sol,

Fantastic advice. I would have wound up with too many partial positions. Great idea on only using profits to get into high risk plays.

I need to dial back to the moderate portfolio low risk more for now and build up my war chest for more opportunities later on.

Thank you

I agree with the fantastic advice!

I didn't expect the current correction to come so soon and a lot of the plays had already crashed before the index's fell so wasn't so ready for it but I believe am in a good position to regain and even profit from the bounce back into the 3rd/4th quarter.

I was mainly in cash when covid struck so made big gains.

[spasovid]

Thanks everyone for all of the advice. I'm somewhat new to MU and have been following Sol and another service for advice. I get what you say, as my portfolio was down 23% from peak to trough of this latest (> 2 months downturn when looking at the QQQ's). This was due to my going too big on position lots and buying some positions on margin as I didn't have any non-margin funds to get into new positions. Lesson learned, as I've reduced my lot sizes, % of total funds I'll invest in any stock, and reduced my allocations of total funds to the Moderate to High Risk Portfolio.

[SOL]

Thanks everyone for all of the advice. I'm somewhat new to MU and have been following Sol and another service for advice. I get what you say, as my portfolio was down 23% from peak to trough of this latest (> 2 months downturn when looking at the QQQ's). This was due to my going too big on position lots and buying some positions on margin as I didn't have any non-margin funds to get into new positions. Lesson learned, as I've reduced my lot sizes, % of total funds I'll invest in any stock, and reduced my allocations of total funds to the Moderate to High Risk Portfolio.

Today's action must have helped a bit in lifting your portfolio higher. In the end, use all the information provided here to create a custom plan that works for you. No standardized plan can work for everyone. We are all different and we have different levels of risk. Even high-risk players fall into different categories.

One thing I have found that helps, is this if you don't worry about the small downturns and the current so-called correction is not even a hiccup, then you will be fine. Individuals focus on the tree and forget the forest. The forest is the long term trend (it's up) and the trees are the short term aberrations. if you place too much emphasis on the aberrations which the masses are famous for, and if you nitpick the small details but conveniently forget our main focus, you will always miss out on the big gains. The trend is your friend and everything else is your foe

[TRADERJEJ]

I personally rely on VIX numbers to gauge short term market timing. In regards to this I am curious about the lack of a sizable VIX spike, as compared to RONA crash, in this current correction. Obviously the market makers are not in a panic as they were in 2020. At the moment VIX has not dropped enough for a long trigger, that may or may not occur. I am holding my long put spreads on ultra high PE techies for another day.

[bpcw]

Notice anything interesting?

[SOL]

Notice anything interesting?

Yes, but I will let others answer that question.

However, around the same time, this headline appeared on Yahoo . The exact date March 30, 2020, Proving that fear pays poorly and that mass media is full of rubbish.

Why the Dow's best week in 82 years is no reason to get bullish

After stocks were pretty much in free-fall the first there weeks of March, the Dow staged its best week in more than 80 years as Congress passed its historic coronavirus relief package in hopes to bolster an economy crushed by COVID-19.

This past week, the Dow Jones Industrial Average (^DJI) ended up 12.8%, its best weekly gain since 1938, while the S&P 500 (^GSPC) climbed 10.3% for its best week since 2009.

However, Wall Street experts are cautioning that this might not be a sustained rally and warning investors to prepare for what could be a bumpy road ahead.

In a March 27 note to clients, Goldman Sachs’ U.S. chief equity strategist David Kostin wrote that “bear markets are often punctuated by sharp bounces before resuming their downward trajectory.”

Looking back, Kostin pointed to six distinct bounces of 9% or more between September 2008 and December 2008.

“Most bounces involved optimism around monetary or fiscal policy support. However, the market low did not occur until March 2009, when the pace of economic contraction began to slow,” Kostin added.
https://finance.yahoo.com/news/dows-bes ... 03747.html

[Centeron631]

the Yodean is using margin now to a degree even tho he has 5 months to live on vs i have 5 years put away albeit im much older and cannot got to work and im much less a risk taker)

Are we in a crash or are we in the correction talked about in the last official update?

To be fair, I am only using <3% of the margin limit my brokerage account gave me. I never thought I would ever use margin.

But, to some extent I am kind of a YOLO type of guy, so I thought now might be as good a time as any to lose my "margin virginity." It didn't hurt too much, so far.

We'll see.

I try not to get caught up in emotionally-charged words like "crash" or "correction."

Assets are on sale - buy companies you always wanted but thought were too expensive. Buy a little if you think there's more downside, buy more if you think downside is limited. I mean, it's hard to imagine FB at <200, for example, yet here we are.

Focus on what you think the price of that asset will be, 6.66 to 66.6 months from now.

Or if you don't want to have to assess individual companies but you are overall bullish on the technology sector, consider IGM - it's pretty "safe," and should do well in the long-term.

Thanks for that Yodean. Yes taking into cosideration most of my big losses have occured in the AI portfolio and in fact in my core portfolio i already have loads of QQQ and XLK this is a wake up call for me that i really do not need to commit as much into my TI AI portfolio so i will cut my lot size considerably there and go more for the green recos. Of those 2 etf's and the IGM i think that i favor XLK as it has not gone down as much in the current correction.

One thing ive been trying to figure is that Sol keeps saying from original committed cash to limit oneself to 10 original positions (unless 2 lots of a position-do not get that?) that one spends 50% of One's total committed monies on and then 25% on newcos which equals 15 positions or co's BUT the rest for levels 2 and 3 in the 10 original postions AND not sure if that 25% will cover them all which imputes the total # of L2 and L3 has to be 5 if equal $'s in each level? - does the Math work?.

Another piece of advice U recently gave which i really like - that whatever one thinks their personal risk level is then one should actually go one level lower - seems to ring somewhat in my mind altho probably seeing at this point thru the filter of the Sea of Red.

"Focus on what you think the price of that asset will be, 6.66 to 66.6 months from now" begs ? where or what to focus on to determine one's thinking on this.

[Cinnamon]

@centeron. Are you sure you have lost that much on the AI trend portfolio. Looking at the Main portfolio in that Service. Looking at all the positions open and closed which amount to roughly 25, only about 5 are underwater. I still remember the massive gains I locked from getting into the Google Calls. That trade alone will pay for years upon years of the AI service. Also, the SIEB trade on the higher risk portfolio was a winner, and looking at all the winning trades in the higher risk portfolio, overall the whole portfolio is overall still showing large gains.

Did you join later? How did you invest your money? I focussed on the main portfolio and only invested smaller amounts in the higher risk portfolio but as profits rolled in I took part in more plays in the higher risk portfolio

As for all the information posted by TI. I view it as a guideline that we should be willing to adjust to match our needs. I don't think even if Sol and histeam wrote 100 pages on investing it would satisfy everyone.