The chop is pretty wild.
Yesterday almost every name and sector I track went red, some much heavier than others. Then we get a big gap up across the board like it never happened.
If you stuck to basic breakout techniques, aka, buying the breakout with stops at LOD you’re getting fucking wrecked, there’s no polite way of putting it.
China chasers have been destroyed, there are posts proliferating everywhere of hideous losses. The massive stimulus, so far, isn’t enough. Fund managers continue to massively under-perform as they buy the local top and follow each other like lost 3 legged sheep. As long as they’re all wrong they can tell their investors “not to worry, everybody is red, it’s just the market, thanks for your fee”.
This kind of whipsawing creates huge frustration, frustration amongst large money can create big opportunities. As always, patience is the key.
XBI is now technically back in a downtrend, as is IWM, the market is not responding how it “normally does” to rate cuts. The longer this goes on for the better, small caps as a whole are still expected to see huge revenue growth over the next 24 months; if we can see a huge disconnect between revenue and price, the opportunity will only increase.
Honestly, there’s still very little I like today, names like BMY etc continue to show relative strength, yet there’s very little sign of momentum in the sector. I could list 10-15 breakout setups below, however as has been the case the past few weeks, most have failed. You have two small sectors which worked, one of which I missed.
It’s so easy to convince yourself that all specific setups are equal. They’re not, situational awareness is the key to increased R/R and probability. The more you NEED the money, the easier it is to convince yourself to get involved. The less you NEED the money the easier it is to wait for better opportunities. The market does not care which bracket you fall into, it’s in-discriminative.
So what’s leading? Space, Quantum, Uranium, Utilities.
I still like all the names I’m in and the opportunity they present, problem is, a lot of other setups I like only add to my existing risk.
The Israeli idea from yesterday still remains at the forefront of my mind, it’s a political headache for a lot of funds to support right now, even though they’re the leader in innovation and spend most of the GDP on research & development. The consensus on this will change on a 6-pence, when? Well that’s the big money question. Who on earth wants to buy into a country with the current headlines the media is pushing. There are practically zero OI on all contracts, best way to play this is just lowball and see if an algo fills it. This is what we did on BNTX for nose bleeding gains, I am looking to do the same again here.
Again, I still like the OIL long idea, massive short positions open and traders chasing the nuclear narrative (which I agree with). Problem is that does not answer nor fulfil the current demand of huge power output. I’m already reasonably heavy yet if we do get one more final flush I’ll make it my largest position, I doubt we do otherwise I wouldn’t already be heavily long.
NTLA will either set the Genomic idea into motion in two hours.. or not. Nothing else to do today except let things play out.
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