Interim Update Oct 7, 2022

[outof thebox]

Yodean what are your thoughts on GOOGL, TSM and AMD. Will you invest equally in them?

I'll preface this by saying that I'm not particularly good at assessing individual companies - I don't find it all that interesting.

I do find TrendForce analysis - the narratives behind the fundamentals behind the trends - interesting, and this is where I spend a bit of time, since I enjoy doing this, win or lose.

In terms of technical analysis, I consider myself "half-assed," but would like to think I've improved a lot in the last 2.5 years, so perhaps I am now a "3/4-assed" technical analyst. Adding COT data has helped immensely.

Wrt to Herd Psychology, I think I am decent.

Going back to your question, there was a bit of a discussion on the AITT forum about best assets to own awhile back - I think this was when BTC dropped below 18k and ETH dropped below 1k.

At that time, I posted that the best 6 assets I would (and do) own for the long-term would be, in no particular order: google, tsm, intc, btc, eth, urnm;

some of those have gone down since that post, others have gone up; those 6 i do not worry about very much, long-term; i have large positions in all of them;

the only others I would add to that top 6 at this point (and have been doing so) would be tmf, gld, slv, labu ... as much for a bit of diversification as anything else ... i always feel a bit "naked" without some gold assets ...

Hats off to you for the ability to brutally Self analyze and critique yourself; very few are capable of that.
I feel uranium could drop a bit more, I have some limit orders for URA at 16.50, 15.00 and so forth
Gold looks okay (have a position in it) but Silver looks better. However, with my luck Gold will probably rally first
LABU; you have some cahones mate, buying more of this when the markets are still correcting Is that a swing trade or a long term play

[harryg]

What I am learning right now about shorting is: I can Buy a Put, or Sell a Call Spread.
I might paper trade this first, as I have only margin to do these things with right now.
I like the idea of spreads and Iron Condors and Iron Butterflies.
I am watching a guy who buys Calls and Puts on the $SPX by the minute.
There is soooooo much money in the market, we just have to learn how to make it come our way, rather than let the big guys take it like bullies.

Lori - I admire your enthiusiasm and positive attitude. I mean that sincerely.

BUT

(you knew it was coming)

Please be wary of jumping from one "great idea" to the next. The internet is full of gurus who make a million dollars a week, and not only that, they have time to make videos about it so you can join in.

I am not a cynic, but I am a sceptic. That's an Englishman's way of saying that these people are full of it.

There is a HUGE amount of useful info on this forum, spouted out by people doing it, living it, losing 000,000's of $$$ along the way.

Of course look out for and embrace new ideas, but don't disregard the old guard because what they are saying is boring.

Trading, if you are doing it properly, is boring.







Boring Harry

[outof thebox]

The Bank of England battled a renewed sell-off in UK government bonds on Wednesday after its vow to end its emergency gilt-buying programme unsettled markets already unnerved by the fiscal plans of prime minister Liz Truss.

The central bank bought £4.4bn of gilts from investors, its biggest intervention since it entered the market last month to prevent “fire sales” by UK pension funds in the wake of government plans for unfunded tax cut

s.

https://finance.yahoo.com/m/199bad1b-04 ... -bond.html

The article goes on to state that the BOE said they wold publicly end the programme this friday but then they told lenders in private that if necessary they would extend it. Talk about double talk. So far they have spent 10 billion and besides a small drop, rates are back to where they were before the intervention,

The bank’s plan was that a temporary 65 billion pound bond-buying scheme would stabilise bond prices and allow funds to smoothly sell down their holdings. The fact that 30-year bond yields are now near 5%, around the September peak of the crisis, suggests they may still be struggling to offload debt or are wary of doing so for fear of losses. So far, the bank has bought less than 10 billion pounds of bonds. Hence Bailey’s intervention on Tuesday, in which he exhorted the UK pension industry to “get this done”.

https://www.nasdaq.com/articles/bailey- ... ting-tools

I am thinking the Fed might be forced to do something. Lots of articles appearing stating that liquidity in the bond markets is drying up.

Despite the broad market expectation for further 75 basis point hikes, Prins – a global economist and outspoken advocate for economic reform – said the Fed would likely pivot away from its hawkish trajectory in three stages as the disconnect between wealthy investors and institutions and the “real economy” widens.

Having firstly reduced the pace of rate hikes to 50 basis points and then neutralized policy, Prins expects the Fed to begin reversing course and becoming “accommodative,” with the U.S. already having recorded two consecutive quarters of negative GDP growth.

“Whether that’s to cut rates or to increase the size of its book again, that still remains to be seen,” Prins added.

Inflation worldwide has been driven skyward by supply chain bottlenecks in the aftermath of the Covid-19 pandemic, lingering supply blockages in China due to recurring lockdowns, and Russia

https://www.cnbc.com/2022/09/13/the-fed ... -says.html

it appears increasingly likely that the Federal Reserve will pivot away from its currently hawkish monetary policy as global US dollar liquidity is now in the "danger zone where bad stuff happens," Morgan Stanley's Mike Wilson said in a Monday note.

Just like the Bank of England had to intervene last week by purchasing long-dated bonds to stem soaring gilt yields, the Fed will also likely have to intervene in a similar fashion, whether that means a pause in rate hikes or full-out quantitative easing.

"The first question to ask is, when does the US dollar become a US problem? Nobody knows, but more price action of the kind we've been experiencing will eventually get the Fed to back off," Wilson said.

https://news.yahoo.com/soaring-us-dolla ... 09285.html

[jonnyfrank]

SOL, the key take away is definitely do not overstay your welcome when it comes to shorting. I started nibbling at it a few months ago and it is as fun as playing with a box of matches, but, of course, can lead to disaster if you get greedy. My strategy is not overly scientific but I have made some money as of late and will continue to take my profits and run for the hills like a coward when things slightly trend up.

I am going to buy some TVM later today and as a play for the CPI tomorrow morning. Not too much, but just enough to take some acceptable risk.

[harryg]

Hats off to you for the ability to brutally Self analyze and critique yourself; very few are capable of that.

If I was Yodean I would brutally analyse myself as well.

[outof thebox]

I have not made an art or science out of shorting. I am simply applying SOLs philosophy here that the POBs are greedy and will manipulate the markets and data to get their pile of cash and bags of power.

My thinking is who is to say that they can't short hard while they dictate that the markets plummet? If they have that much influence why would they not shoot to make lots of cash going down and then reverse course and make money when the FOAB comes along and ride it up? By doing this, they wipe out the common man and have even more power.

I have come to short on Fridays and often through the weekend. I simply use some of the Direxion 3x short ETFs. I ride the short through the weekend because if you think about it the elites know that the common man is powerless to sell over the weekend and they could be wiped out come Monday AM. My feeling is this is when a military black swan event will happen--over the weekend.

There is not a lot of science in my approach, granted. But I remember the gist of what SOL has said--all of the so-called "experts" will be wrong. That said, perhaps now is not the time to be embracing TA since floors continue to be taken out. The POB can simply stop demand for everything with continued interest rate rises and create a currency crisis beyond Satan's imagination. And let's face it--Biden is not simply senile, he is insane, especially in light of the fact that he is talking about nuclear weapons and armageddon at fundraisers while glowingly talking about his son. As for his cabinet, they are all drinking the same kool aid cocktail of insanity. I am not a spring rooster, and I can tell you I have never seen such a world nor have I seen such denial coming from the general population.

So....this is why I am playing with shorting and using stops to lock in profits as I go. I am sorry I do not have a scientific formula or chart to share, but let's face it-- a lot of the charts being posted are nothing more than farts in the wind 10 days later.

What I am learning right now about shorting is: I can Buy a Put, or Sell a Call Spread.
I might paper trade this first, as I have only margin to do these things with right now.
I like the idea of spreads and Iron Condors and Iron Butterflies.
I am watching a guy who buys Calls and Puts on the $SPX by the minute.
There is soooooo much money in the market, we just have to learn how to make it come our way, rather than let the big guys take it like bullies.

Harryg already provided some good information

My 1 cent
I have never found anyone that claims they found the holy grail in anything to be good at it. The individuals that are usually good at what they do, don't have too much time to push out many videos or talk about how great this or that strategy is and they never try to act like experts.
If a strategy is good, it usually revolves around a set of conditions, and unless those conditions are met, it won't work. In simple terms, the strategy appears to be boring because you have to wait.

For anything to work one has to start slowly and be cautious. I remember how enthusiastic you were when you jumped onto options, calling it almost too easy. Take that as a warning signal, anytime I thought anything was to easy, I was in store for a big hard slap.

The worst thing and best thing about trading is that you have to be patient, disciplined and stick to one game plan. If you keep changing, you will never know which one works. Harry sums it up nicely. When trading is boring you are doing the right thing.

I don't know how much experience you have, but if it less than 3 solid years of trading experience then you should start slowly. Additionally you should have one crash under your belt, meaning you went through one very strong correction/crash almost felt like crying and giving up in the process, only to find out that miraculously the crash ended when it looked like it should continue based on all the negative news coming out. It is at that point you learn something wonderful. However, you need to experience it in order to understand it.

There are some great traders here, and I don't see one of them pushing the next miracle to riches.

[MarkD]

The Bank of England battled a renewed sell-off in UK government bonds on Wednesday after its vow to end its emergency gilt-buying programme unsettled markets already unnerved by the fiscal plans of prime minister Liz Truss.

The central bank bought £4.4bn of gilts from investors, its biggest intervention since it entered the market last month to prevent “fire sales” by UK pension funds in the wake of government plans for unfunded tax cut

s.

https://finance.yahoo.com/m/199bad1b-04 ... -bond.html

The article goes on to state that the BOE said they wold publicly end the programme this friday but then they told lenders in private that if necessary they would extend it. Talk about double talk. So far they have spent 10 billion and besides a small drop, rates are back to where they were before the intervention,

The bank’s plan was that a temporary 65 billion pound bond-buying scheme would stabilise bond prices and allow funds to smoothly sell down their holdings. The fact that 30-year bond yields are now near 5%, around the September peak of the crisis, suggests they may still be struggling to offload debt or are wary of doing so for fear of losses. So far, the bank has bought less than 10 billion pounds of bonds. Hence Bailey’s intervention on Tuesday, in which he exhorted the UK pension industry to “get this done”.

https://www.nasdaq.com/articles/bailey- ... ting-tools

I am thinking the Fed might be forced to do something. Lots of articles appearing stating that liquidity in the bond markets is drying up.

Despite the broad market expectation for further 75 basis point hikes, Prins – a global economist and outspoken advocate for economic reform – said the Fed would likely pivot away from its hawkish trajectory in three stages as the disconnect between wealthy investors and institutions and the “real economy” widens.

Having firstly reduced the pace of rate hikes to 50 basis points and then neutralized policy, Prins expects the Fed to begin reversing course and becoming “accommodative,” with the U.S. already having recorded two consecutive quarters of negative GDP growth.

“Whether that’s to cut rates or to increase the size of its book again, that still remains to be seen,” Prins added.

Inflation worldwide has been driven skyward by supply chain bottlenecks in the aftermath of the Covid-19 pandemic, lingering supply blockages in China due to recurring lockdowns, and Russia

https://www.cnbc.com/2022/09/13/the-fed ... -says.html

it appears increasingly likely that the Federal Reserve will pivot away from its currently hawkish monetary policy as global US dollar liquidity is now in the "danger zone where bad stuff happens," Morgan Stanley's Mike Wilson said in a Monday note.

Just like the Bank of England had to intervene last week by purchasing long-dated bonds to stem soaring gilt yields, the Fed will also likely have to intervene in a similar fashion, whether that means a pause in rate hikes or full-out quantitative easing.

"The first question to ask is, when does the US dollar become a US problem? Nobody knows, but more price action of the kind we've been experiencing will eventually get the Fed to back off," Wilson said.

https://news.yahoo.com/soaring-us-dolla ... 09285.html

First Japan, England, now this. Who's next?

https://globalintelhub.com/funding-pani ... zerohedge/

[outof thebox]

SOL, the key take away is definitely do not overstay your welcome when it comes to shorting. I started nibbling at it a few months ago and it is as fun as playing with a box of matches, but, of course, can lead to disaster if you get greedy. My strategy is not overly scientific but I have made some money as of late and will continue to take my profits and run for the hills like a coward when things slightly trend up.

I am going to buy some TVM later today and as a play for the CPI tomorrow morning. Not too much, but just enough to take some acceptable risk.

If you are comfortable with a given strategy and have plan in place if things don't work out, I say go for it.

[outof thebox]

Hats off to you for the ability to brutally Self analyze and critique yourself; very few are capable of that.

If I was Yodean I would brutally analyse myself as well.

With emphasis on the ANAL Part?.

[LoriPrecisely]

For anything to work one has to start slowly and be cautious. I remember how enthusiastic you were when you jumped onto options, calling it almost too easy. Take that as a warning signal, anytime I thought anything was to easy, I was in store for a big hard slap.

The worst thing and best thing about trading is that you have to be patient, disciplined and stick to one game plan. If you keep changing, you will never know which one works. Harry sums it up nicely. When trading is boring you are doing the right thing.

I don't know how much experience you have, but if it less than 3 solid years of trading experience then you should start slowly. Additionally you should have one crash under your belt, meaning you went through one very strong correction/crash almost felt like crying and giving up in the process, only to find out that miraculously the crash ended when it looked like it should continue based on all the negative news coming out. It is at that point you learn something wonderful. However, you need to experience it in order to understand it.

There are some great traders here, and I don't see one of them pushing the next miracle to riches.

I have been in the market as long as I have been in this group, since April 2022.
I was in during the crash of 1987 and 2008, but someone else was managing my money, and it was not nearly as much as I started with this year.

You are correct about this group having solid experience and wisdom and skill.
I appreciate everyone's contribution very much. I have learned a lot here!!
Sol and Eric and ExcelNinja and Yodean and a few others are my teachers on the "Selling a Put" to get into a position, Selling Covered Calls, and buying Calls.

Options are a great way to hedge my position, or lower my cost basis on my position.

I really like trading options, and want to learn all I can about that way of trading.
I was enjoying myself very much just selling Puts and Covered Calls, until I was informed a rally was incoming. I decided to shift my technique in order to be prepared for a rally. I closed all of my Calls so I could sell my shares at an expected higher price. I bought more shares for the same reason. I also sold more Puts expecting them to expire worthless.

Just as others have said, I see this as a learning opportunity.
It is putting pressure on me to find other ways to trade options, because there are so many!

I know the market is unusually crazy right now.
I enjoy a good challenge.
I will tread a little more carefully now.

[bpcw]

One possible scenario tomorrow, cpi comes in a little higher than expected, markets start to drop but suddenly turn around and soar higher. Not saying this is my expectation but that if the PTB can manipulate the markets short term then this is one way they can trick all the short traders adding to their positions and we could have a short squeeze, will happen at some point anyway.

I remember during the covid correction, was chatting with a few on another forum, one guy was leveraged 20 x short and was 400% up, others were saying that they thought the markets would go down 75% when they were already near 40%, it turned around very sharply and I think he probably lost everything.

Anyway, don't get caught with your pants down analysing yourself!

[jonnyfrank]

If you short, you must be a cheetah. If you are long, a snail is what you should be.

I think the spin will matter regarding the CPI number. As long as Biden doesn't come out and say "we have zero inflation and our green and equity plan is working because chocolate cake and Hunter" if it comes in at 8.3% we might be ok.

[MarkD]

Update:
Both Yahoo and Stockcharts apparently had a data error that has been corrected.

Original Post:
Not sure if this will load properly as I am mobile. but the Dow had an outrageous print per stockcharts.com. error? Fund blowing up? Dunno. Check today' volume.

[nicolas]

Nicolas: do you think its time to buy Uranium or should I wait a bit longer

Short term, I really can't say. It's going to be volatile. There could be dips to accumulate, or it could take off next week.
What I can say is I'd feel very naked having zero exposure to uranium right now.
We're getting positive news after positive news.
A particularity in this tiny market is that there's a mechanism in place to squeeze the price of uranium higher. By permanently removing physical from the spot market, SPUT (a closed-end fund, not an ETF) creates a feedback loop where money pouring into the fund drives the price, thereby attracting more capital. Kind of like how GBTC was driving the price of BTC higher when it was trading at a premium to NAV (forcing Greyscale to buy more BTC, driving the price up, and increasing the interest in GBTC in a positive feedback loop.)
The takeaway is when it moves, it moves fast.

I'm adding a bit when it pulls back, but I am already pretty much at the position size I want to have since accumulating between 2018 and 2020.

A reliable source of news on uranium is Justin Huhn https://www.youtube.com/c/UraniumInsider.

[outof thebox]

Nicolas: do you think its time to buy Uranium or should I wait a bit longer

Short term, I really can't say. It's going to be volatile. There could be dips to accumulate, or it could take off next week.
What I can say is I'd feel very naked having zero exposure to uranium right now.
We're getting positive news after positive news.
A particularity in this tiny market is that there's a mechanism in place to squeeze the price of uranium higher. By permanently removing physical from the spot market, SPUT (a closed-end fund, not an ETF) creates a feedback loop where money pouring into the fund drives the price, thereby attracting more capital. Kind of like how GBTC was driving the price of BTC higher when it was trading at a premium to NAV (forcing Greyscale to buy more BTC, driving the price up, and increasing the interest in GBTC in a positive feedback loop.)
The takeaway is when it moves, it moves fast.

I'm adding a bit when it pulls back, but I am already pretty much at the position size I want to have since accumulating between 2018 and 2020.

A reliable source of news on uranium is Justin Huhn https://www.youtube.com/c/UraniumInsider.

Thank you for taking the time to share your views. Decided to add some URA at 18.50 today, but will leave the lower limit orders in. If they don't get filled I will raise the entry.

Looks like a nice reversal today