Mania Unleashed: Interim Update - May 27

[AstuteShift]

What I see currently short term is certain stocks like Apple, NVDA etc who ran up extremely will cool down on the basis of the daily charts

What’s interesting is that, if the FED makes a vague announcement short term on inflation coming back or they’re behind the curve on their next FOMC then it’s perfect excuse for the market to let off steam, short term.

Usually historically, June is a bad month for the market.

Another interesting point I’ve noticed is that this manflation nonsense is losing steam.

Once the FED states they got inflation controlled etc then I can see the market take off like a rocket.

So be prepared for super wild swings.

[MarkD]

Here's an interesting pair of charts for folks to assess.

First, two year treasury

https://ibb.co/9w0FDhB

IDU (utilites proxy)

https://ibb.co/3Nwjgkh

IDU (during GFC)

https://ibb.co/4JsbXMB

The two year has started to climb again, indicating market participants are expecting further rate hikes. Utes during the GFC dropped a lot further than it's current position, which is weak (lines are simple MAs for reference with RS vs SPX at the bottom.

[Yodean]

https://youtu.be/DmqWrOxRg7g?t=1

*****

Harryg's mentioned Larry Williams to me several times - pretty decorated, successful trader, but prolly best known to the masses as the father of American actress Michelle Williams, who was pretty hot in her prime.

The above clip is awesome. Larry goes over this past year's headlines in the first five minutes or so, then discusses the impact of disinflation - decrease in the rate of inflation (as opposed to outright deflation, which is decrease in nominal prices) - on stock market prices.

Also goes over stocks like Apple, Tesla, MSFT, Moody's, and gold.

Learned a fair amount of value from this clip.

Larry's got a pretty impressive track record.

[AstuteShift]

SOL mentioned about inflation being just manflation, before, while talking heads were so concerned about it lol


Tbh these dinosaurs are relying on old market models and ways of thinking too much, saying you can’t predict the future etc etc

Despite the intermediate trend being neutral, the long term trend is bullish.

I’d say, it will just take one FOMC meeting to make the market pivot . However it will screw the bears, bulls and the neutrals will be too chicken to do anything.

That leads only the very few to grab massive gains. Certain things I can’t ignore, such as monthly bullish patterns, 1month or even better a 3 month to 6 month bullish confirmation. You don’t need talking heads or experts for that

[Yodean]

Despite the intermediate trend being neutral, the long term trend is bullish.

That leads only the very few to grab massive gains. Certain things I can’t ignore, such as monthly bullish patterns, 1month or even better a 3 month to 6 month bullish confirmation.

As you mentioned many moons ago, trading is, at the end of the day, a solo sport.

All kinds of talk, discussion, and drawing lines on charts are fine and good, but at the end of the day, each trader has to push the buy or sell button, or stand aside.

At a certain level, I don't really think elite trading can be taught - not really.

It can be learned, but not taught.

Currently, there are some interesting parallels to 1967 and also 2009, post-GFC low. A dude I respect immensely in the investing world and has stood the test of time trading - since pre-1987 - pointed out recently that in the first year of a nascent bull market after a bear market, earnings are often down, while the markets move up.

You won't hear this kind of insight on mainstream media.

[MarkD]

That's why fundamentals don't matter. Unless 40 P/S and PE >100 is your idea of value. Lots of value atm awaiting to be plucked from the market.

[AstuteShift]

Despite the intermediate trend being neutral, the long term trend is bullish.

That leads only the very few to grab massive gains. Certain things I can’t ignore, such as monthly bullish patterns, 1month or even better a 3 month to 6 month bullish confirmation.

As you mentioned many moons ago, trading is, at the end of the day, a solo sport.

All kinds of talk, discussion, and drawing lines on charts are fine and good, but at the end of the day, each trader has to push the buy or sell button, or stand aside.

At a certain level, I don't really think elite trading can be taught - not really.

It can be learned, but not taught.

Currently, there are some interesting parallels to 1967 and also 2009, post-GFC low. A dude I respect immensely in the investing world and has stood the test of time trading - since pre-1987 - pointed out recently that in the first year of a nascent bull market after a bear market, earnings are often down, while the markets move up.

You won't hear this kind of insight on mainstream media.

The key is to have a system and plan to execute

Also what is your risk tolerance. Risk to reward ratio on a trade.

Certain parameters on when to execute the trade, for example, market structure, location, indicator confirmation, and some fundamentals but with an MP lens. Also the risk to be low while reward is high etc

Usually if you have all of that then you got one hell of a trade. However it requires some work, research.

The key to it is it should not feel like work, you should have creative ideas flowing through you. If you’re stressed then take a break

Sometimes the market gives you nothing so you just sit and wait.

A lot of SOLs trades are interesting since they’re not the traditional way of trading and you have to decifer what his mindset is on the trade. He has a unique way of pattern recognition

However, the goal is not to copy him but it’s ok to emulate.

[Yodean]

The key is to have a system and plan to execute

Also what is your risk tolerance. Risk to reward ratio on a trade.

Certain parameters on when to execute the trade, for example, market structure, location, indicator confirmation, and some fundamentals but with an MP lens. Also the risk to be low while reward is high etc

Definitely. You need to be disciplined and stick to some sort of a system. That's hard enough - it's also challenging to decipher if a given system is actually profitable or not, over time (years/decades).

In a raging bull market, as long as you are not short, a lot of systems will appear to "work," but upon closer analysis, after several cycles of big and small bulls and bears, and hundreds to thousands of trades over several years, many systems reveal severe weaknesses.

Ultimately, long-term CAGR, risk-adjusted or nominal, is still my personal benchmark. IMHO, lol ...

One has to perform forensic audits on one's trades using any given system over time and keep a trading journal, and see what really works. Takes time and experience, years.

Risk tolerance assessment is important, as well as risk-reward asymmetry, but this needs to be examined on a portfolio basis, not just on a singular trade basis.

E.g. One has to determine the cumulative risk over the entire portfolio, and look at correlation between assets in the portfolio. So you might think you have diversification of risk because you have 66 different stocks in the "low risk" category, but if they are highly correlated, you really just have one huge position with 66x the risk you thought you had. So even though you may own "low risk" stocks, you have a "high risk" portfolio.

Over the very long-term, it is said that your asset allocation will ultimately determine your CAGR, for most investors.

[AstuteShift]

I’ve been going back to the drawing board and learning historical patterns but with my own twist.

I personally been enjoying swing trading recently with leverage ETFs and stocks with volume, or even some penny stocks with a catalyst
I find these a ton more fun and easier than options or futures

2022 changed my game plan, more based on MP and momentum trading but with strict discipline and rules

The results are pretty good, I win about 60 percent of the time but the payout is a lot larger since I try to capture the big portion of the move, sell half on certain price parameters and let the rest ride.

This style works well with crypto also. However with crypto, I invest when the crypto influencers scream bear markets and saying it’s going to zero. Yes one day it will but not now, quantum computing not mainstream yet lol.

[Budge]

Consider this: several years ago, I read an article discussing the benefits or otherwise of being included in periodic index rebalancing. The conclusion countered perceived wisdom. On average the "outs" perform better than the "ins".

Just happened to open a spreadsheet of the December 2022 NDX rebalance. Average return for the 6 "ins" 3.2%. Average return for the 7 "outs" 15.1%.

[MarkD]

The end is nigh.

Thought this would never occur again in my lifetime.

https://amp.theguardian.com/us-news/202 ... uction-act

https://ibb.co/gytQ17p

[outof thebox]

The end is nigh.

Thought this would never occur again in my lifetime.

https://amp.theguardian.com/us-news/202 ... uction-act

https://ibb.co/gytQ17p

From the chart you posted on Oil, adjusted for inflation its still trending downwards. It would need to move past 120 to break the down trend line.

Re Biden plan to lower the affects of Inflation, he should have moved a year ago if not earlier. A lot of the problems are result of the COVID fiasco of printing an inhumane sum of 5 trillion. Regarding electricity and energy costs, the green dream agenda is to blame


Te defense production act was before my time, so I am curious as to why you stated the end is nigh. Was that a satirical comment or a reflection of reality

[MarkD]

The result of price controls is inflation. They are aware deflation occurs as technology reduces the cost of goods and services (material and labor). Only course of action to prevent it is the IRA (Inflation Reduction Act) and now, price controls. Covid bailounts count also. All money supply manipulation.

If memory serves me correctly, oil futures were priced double digit negative in June (?) of 2020. They bottomed when the Rothschilds decided to no longer invest in dirty fossil fuel development. All in my historical record.

I suspect they knew the price would soar as TINA (there is no other alternative) hit the energy markets. Coal rose even more than oil (check out BTU). It's classic misdirection. And so are the poliicies in play via the administration.

As prices are capped, supply will drop, and prices will increase. Expect another run on TP to ensue.

Wealthy folks want all the marbles like the did following the crash of '29. They are likely big investors in gubmint backed luxury apartment buildings. Those rents don't look very attractive atm. Inflation is necessary to justify the EV transition also. Why buy one when gas is cheap and it's not a true contributor to climate change?

Mind numbing how folks are still watching shadows on the wall of the cave.

[MarkD]

https://americaspower.org/reliability-c ... acing-pjm/

[SOL]

This illustrates how the current leadership in the US seems to be more focused on dreaming rather than taking tangible action. It's time for them to wake up and smell the coffee or at least snap out of the coma of stupor.




Coal and Gas Retirements:

Since 2000, 268 gigawatts (GW) of coal-fired power capacity has been retired across the EU and U.S.
An additional 213 GW of coal capacity is already set to retire, with 19 countries planning a complete coal phaseout.
In 2023 alone, operators plan to retire 15.6 GW of capacity in the U.S., with 8.9 GW being coal-fired and 6.2 GW being natural gas-fired.

Renewable Energy Capacity Additions:


In 2019, wind (9.1 GW) and solar (5.3 GW) represented 62% of all new generating capacity added in the U.S., totaling 14.4 GW.
Global renewable power capacity is expected to grow by 2,400 GW over the 2022-2027 period.
The U.S. Energy Information Administration (EIA) projects that most new electric generation added in the U.S. in 2023 will come from wind and solar, with renewables accounting for 24% of total U.S. power generation.

While significant coal and gas capacity has been retired, renewable energy additions have not yet fully replaced this lost capacity. The 268 GW of coal retirements since 2000 exceeds the 14.4 GW of wind and solar added in 2019 alone. However, the projected growth of 2,400 GW in global renewable capacity over the next five years suggests that renewables may eventually surpass the 213 GW of additional coal retirements planned.




1. Coal Plant Retirements:
- According to the U.S. Energy Information Administration (EIA), between 2011 and 2020, around 121 gigawatts (GW) of coal-fired capacity was retired in the United States. (Source: https://www.eia.gov/todayinenergy/detail.php?id=51978)
- The Sierra Club reports that an additional 213 GW of coal capacity across 19 countries, including the U.S., Germany, and the U.K., is already set to retire. (Source: https://coal.sierraclub.org/the-issue/c ... etirements)

2. Renewable Energy Capacity Additions:
- In 2019, wind (9.1 GW) and solar (5.3 GW) represented 62% of all new generating capacity added in the U.S., totaling 14.4 GW, according to the EIA. (Source: https://www.eia.gov/todayinenergy/detail.php?id=42495)
- The International Energy Agency (IEA) projects that global renewable power capacity will grow by 2,400 GW over the 2022-2027 period. (Source: https://www.iea.org/reports/renewable-e ... pdate-2022)
- The EIA's Annual Energy Outlook 2023 projects that most new electric generation added in the U.S. in 2023 will come from wind and solar, with renewables accounting for 24% of total U.S. power generation. (Source: https://www.eia.gov/outlooks/aeo/pdf/AE ... tation.pdf)

3. Meeting Energy Demands:
- A report by the American Council for an Energy-Efficient Economy (ACEEE) suggests that demand-side management and generation-side solutions can help maintain reliability, but the interconnection process for new projects is currently clogged. (Source: https://www.aceee.org/blog/2022/08/can- ... ing-demand)
- The Inflation Reduction Act (IRA) is expected to accelerate the growth of renewable energy projects in the U.S., but concerns remain about whether new capacity additions can keep up with growing demand from AI and data centers. (Source: https://www.utilitydive.com/news/inflat ... on/631350/)