Newsletter - 6/2/2024
UPCOMING WEEK:
Opex is over. Summer has begun. And yet I believe this week will be pivotal, pun not intended. Either price stops farting around and breaks to new highs or the reversal on the QQQs is confirmed by the $SPY and the $RUT. But I do not think we will have to wait long.
They are trying to use the Mag 7 to drag the rest of the market upward. So far, it is not working since the overall market has moved opposite the Mag 7 the past couple of days.
No matter - we will know this week.
Week in Review
Model Portfolio - since 5/9/2023
This Week:
Last Week:
Sectors
SPX and NDX
The HCD that confirmed early in the week was negated by Friday's stick save. Whether the late day pump was fake or not no longer matters because the candle has printed and the market is moving on. And yes, that's a very bullish hammer from Friday. Oddly it happened at the same time Mag 7 was weak.
I said this last week and it has not changed: "I would not be surprised to see a drop before the final blow off top and if that happens, I will get stopped out on a number of call positions."
QQQ:
Freaking $DELL and $CRM. Actually, the market was looking for a reason to pullback a bit. And when it got it did not disappoint.
But I do not think this is going to last and I think the Mag7 have one more pull in them.
Small Caps might try again to break resistance that they haven't been able to, all the past year.
I don't think they will do it this time and I don't think small caps as a group participate in a blow off top.
Bitcoin & Miners
BTC is consolidating. I mean, what more can I say? Until price decides which direction short term it wants to go (and I think mid and long term is up) nothing really to comment on.
$CIFR is respecting the downtrend line of it's pennant formation, unfortunately. Unless BTC breaks higher the beginning of this week, I will be out.
$BITF turned down an offer to be bought out at $2.30 by $RIOT and that has set a floor. Price stick saved me by moving up and since I own August calls, I have time.
Doom Trades
Am I worried that the stock prices of my DOOM trades are going up?
NOPE
Why am I not worried?
Because NEWS WILL LEAD PRICE lower.
Price on these DOOM trades can go up 10%, 20% or even 100% and it will not concern me because the underlying fundamentals are deteriorating so quickly.
Until the market "breaks" I watch patiently until I get a reversal on the Weekly chart.
Also, I still have enough for two more scale-in trades which will lower my basis on the original trades significantly.
$KRE
Because of last weeks candle, I am going to wait until the original entry of $45.65 break on the weekly. I no longer have enough pricing advantage due to the HCD confirmation candle being so big.
$BAC:
From two weeks ago: "$BAC broke resistance and is headed to the 41 level. If that level were to break I would be interested in taking a swing trade long."
$TQQQ:
The $QQQs are in a weekly and a daily sell. Barring a green day on Monday, I will be out.
$VNQ
From two weeks ago: "If price prints a HCD on the weekly I will add to my DOOM position." It did not so I wait.
$HYG:
$HYG price ended where it started last week. Boring.
FROM TWO WEEKS AGO:
Am I worried that the stock prices of my DOOM trades are going up?
NOPE
Why am I not worried?
Because NEWS WILL LEAD PRICE lower.
Price on these DOOM trades can go up 10%, 20% or even 100% and it will not concern me because the underlying fundamentals are deteriorating so quickly.
Until the market "breaks" I watch patiently until I get a reversal on the Weekly chart.
Also, I still have enough for two more scale-in trades which will lower my basis on the original trades significantly.
Current Open Positions
$FNGR Jun 4C for $.68 - VIP Only
HCD printed on 5/23. I will give it to Wednesday or Thursday before I exit.
$INMD Jun 19C for $1.00 - VIP Only
I raised the stop from $17.98 to $18.34. Also, Price moved well above my stop and reclosed above the break level.
$ENVX Jul 12c for $1.07 - FREE Trade
Higher Highs and Lows as price is stuck in a rising channel. MACDHisto is weak but not sell yet. MCDX is still on buy, just not strongly yet. TBH, I am also holding into this trade because I expect more good news releases this week and next. If they know what they are doing finally.
$HOOD July 23C $1.93 - VIP Only
HCD printed on Friday but it did that two weeks ago. Either price moves higher tomorrow or I get flat.
$NU Jul 13C $.26 - FREE Trade
This was from two weeks ago: "Even though price is not yet at the stop If price closes below Friday's low i will exit the trade." Well, price never did and I am still holding.
Closed Positions
NONE
Doom
It seems every week I say the same thing: "The morons in DC can't get any dumber."
And every week they surpass even my expectations.
This week was no different. And it was worse.
Biden, while everyone was paying attention to the Trump verdict, secretly gave the green light to Ukraine to hit targets inside of Russia with American weapons. This is very provocative for obvious reasons and continues to push Putin into a corner. In addition, Russia's early warning radar for part of the country was hit by Ukraine this week. While the US has not said they were complicit, they also have not said they were not. Couple all of this with Germany and the UK preparing to reinstitute military conscription, and it is fairly easy to see what they are planning for.
This is very bad.
Not because it will happen, because the fact that any of the above is even being considered tells you where the elite are willing to go.
It's not Tinfoil if it's proven true
Ok, here is how I think the rest of 2024 could play out:
1. Bird Flu becomes a localized pandemic in only certain areas. I will give you one guess what those areas will be. I do not believe this will be national.
2. If the market drops sufficiently this and the next couple of weeks I believe it gives room for the Fed to emergency cut. The Fed has been told to cut and I doubt they disappoint POTUS. This will cause the emergency cut. This is where it gets tricky though.
3. Trump will get sentenced on July 11 and the Republican National Convention is July 14th. I do believe that the judge will try and prevent Trump from attending but I see no effect on the market.
4. If the market rallies this week and makes a new high, the blow off top has begun.
5. The only way to prevent Trump from winning is to either kill him or delay the election and the market action at least until November will ultimately be focused on that.
6. If Trump wins the market will rally. But the macro picture will be so bad that the hope is he will be blamed for it.
7. If Biden wins the market will crash.
8. All of the above is without the impending #CRE collapse.
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theBoss
Nothing above is investment advice nor should it be construed as investment advice. It is offerred for entertainment purposes only. Always consult your advisors before investing any money. Do not "follow" or "mirror" any trade ideas provided. Mr.NotAdvice is not a licensed or registered investment advisor. Do your own research.