TLC Weekly Update April 15, 2023

image

US stock market again pushing higher this week, even though so many financial pundits calling for the stock market to go much lower with their magical turning dates. Personally I know for a fact that major downturn is coming to the US stock market no matter what the bulls believe in. But I don’t have an exact date for a top because I am not talking about all these market timing stuff or macro play based on the financial conditions worldwide.

All I need to know is that majority of baby boomers are now well passed their retirement age. It is just a matter of time they will continuously sell their stock holdings from their retirement accounts year after year while their children would never be able to offset the outflow. This one factor alone will limit any more upside for the stock market until majority of the stock market holdings owned by the boomers are drained.

Demographic dictates the real trend underlying majority of the swings in political and financial scenes. I mentioned this multiple times in my newsletters over the years. Interesting enough, on Friday Jeff Gundlach mentioned a new book coming out from Neil Howe, “The Fourth Turning Is Here”. You can look up his name for various podcasts featuring his talks. Here is a short video of him talking about US Federal Reserve. It is very insightful.

Of course what I expect is not set in stone. All it takes is the US government somehow find a way to kill like half of all their boomers in a short period of time … then those stocks they own will most likely be tied up in government audits for decades to come. Sorry for spreading another conspiracy theory.

Lately I watched a video mentioning that there are some 7 million young male adults (20-40s) in US are not working at all. Yet, they are reportedly spending 2000+ hours a year on screen time. And majority of them are taking some form of pain medications. And they don’t work. This is kind of scary.

I came across this video about bees that makes me think – things like this usually happens over a long period of time and at the end, when the tipping point is reached, the exponential disastrous outcome will hit. Be ready for major worldwide food shortage in a few years.

Since Howard Marks wrote about the changing landscape a while back, he hasn’t provided any updates on his view. This new video offers some more insights from him about the world.

This week in Toronto we have some exceptionally warm days well above 20C. That’s rare. It’s nice to get some sunshine though.

Have a great weekend all!

TLC Weekly Update April 8, 2023

image

After the spectacular first quarter rally in the stock market, things suddenly look not as bullish anymore. For some mysterious reasons, quite a number of large financial firms came out calling for lower price levels in coming months. This sudden change of tune, of course, upset many bulls.

For the die-hard bull fans, they think they have found an angle that can’t be disputed. Namely, such strong first quarter performance always lead to a strong year in the past. Well, just like what I have warned last year that there would be no Christmas rally while all these so called “objective” analysis saying that 100% we would, I think they are again, wrong.

I said this again and again to people that, volatility is not the same as direction change. When you can’t distinguish whether we are just seeing a rise in volatility (which is the case right now) from actual directional change (like the major market bottom in the past), you have no idea what you are talking about.

I can actually use the exact same argument the bulls use – because we just got a six month of high volatility rally, a crash is imminent. In fact, it is also true 100% in the past.

So what do I think? It will be a messy high volatility environment. All it takes is aliens suddenly invade Earth or any other one-second event to end our financial markets (and the world). No point guessing.

Jim Bianco’s take on the current financial landscape and the threats on US dollar’s reserve currency status. His position is a reasonable one.

Here is another video from Jeffrey Snider whom I find willing to say what everyone else already know but choose to say nothing because they fear that one day they may have burnt the bridge somehow.

There is really no point pointing fingers at the Fed for doing what it is tasked to do. Hugh Hendry makes this point very clear – Powell is at a place that he has limited options and all of them are bad. So be ready if the unthinkable happens.

I just made a statement about the future of daytradingbias.com. For those of you who are members of the site, you may want to check it out.

Happy Easter!

TLC Weekly Update April 1, 2023

image

End of first quarter of 2023 gave us a rally that destroyed most of the bears, just like what happened last year, multiple times. The signs of the squeeze was coming are there – very bearish sentiment, hedge funds all loaded up on the short side, etc. So it is not a surprise at all if you truly understand how the financial markets really work. It is just a game that the major players trying their best to mess with the gullible ones.

Haven’t seen Robert Shiller for a long while. Here is his take on US housing market.

This podcast with Darius Dale on the macro outlook for the near term is very interesting and on point thanks to Darius’ articulate narrative of all the areas he covered.

Another great interview by David Lin with E.B. Tucker. Tucker raised a few important points that everyone should pay attention to. Here is the latest article wrote by Tucker. It is a fun read.

For those of you asking what the outlook for this quarter will be, my take is that real risk is not priced into the stock market at all. I even mentioned that on my twitter. Real risk means major natural disaster, alien invasion, etc. If such risks are priced in, as in the ancient past in human history, the stock market would not be parking at the current level at all.

Thus it is not the serial outlook or trend that matters. Because one second ago, your holding was valued at certain price. But by this second, it is worthless already due to the “long predicted disaster” finally happened. How can any valuation method provide the correct price at the moment?

Got to get back to work.

Have a great weekend all!

TLC Weekly Update March 25, 2023

image

Another eventful week where the stock market rallied into FOMC rate decision and dropped hard right after. Yet, by Friday, magic buying came back and S&P successfully go back to the middle zone of this year’s range.

Blockworks’ Alfonso Peccatiello sees a recession coming quickly and that can take down the stock market too.

An opposite view of where the S&P is heading by a guest of the one and only Hugh Hendry. You may not agree with the guest’s opinion but understanding the views from all sides of the market can help one making sound judgement in this complex market environment.

Personally, I like to use simple common sense to look at the situation. We have some regional banks scr#wed by the Fed. We have Credit Suisse taken down suddenly. By Friday there is rumor that Deutsche Bank is next one in trouble. What does that tell us? It means more uncertainties and news shocks are coming. That translate to S&P will swing two ways crazily but it may not go far either way until there is clarity. So trade accordingly.

One thing worth mentioning here is the geopolitical risk is rising again with even more countries are engaged in “hot” wars. This looks very much like the environment right before WWI. As inflation is getting out of hand, more people are facing hardship. When this reaches certain level, it will provide a platform for madmen to rise in power.

That’s something I don’t want to see happening.

Time for a bunny video to ease the negative thoughts.

Have a great weekend all!

TLC Weekly Update March 18, 2023

image

This quarterly option expiration Friday facing all kinds of twist and turns from bank runs on US regional banks and Credit Suisse getting worse and worse with its situation. Yet, S&P500 has shown the world that it is not ready to go lower, even under sure pressure on the banking sector. Maybe, the actual damage to the broad market index from the financials is not as important as many thinks?

The whole world is still discussing the ongoing crisis on youtube, twitter, etc.

Here is CNBC’s interview with Jim Grant on the situation.

And the sarcastic take on Credit Suisse by Patrick Boyle is well worth your time.

DoubleLine has released its latest webcast from March 7, 2023. Remember it is an internal webcast for DoubleLine’s clients. Having the chance to see what Gundlach has to say to its clients can help one to keep tap on the current financial environment.

My take on the situation is that the US regional bank problem is now partially contained by Powell and the US government. What we don’t know is that there can be unintended consequences after the US government, US Federal Reserve and Swiss National Bank all acting at the same time with such bold actions. My guess is that we may see yet another shock taking the US stock market lower in coming 1-2 weeks but as long as no more serious side effects are felt, at least not immediately, we will see at least a sizable bounce thanks to brave investors picking the bottom.

Until the unintended consequences surface, all is well.

I am going back to work after my lunch break.

Have a great weekend all!

TLC Weekly Update March 11, 2023

image

Next week is going to be a very difficult option expiration week not only because it is a quarterly option expiration, but that we have major economic data like US CPI, PPI, and then ECB rate decision, etc. It will be a mess to deal with …

The biggest news for this week was the “sudden” shutdown of the Silicon Valley Bank. Here is the latest take on the event by Chris Whalen on Blockworks Macro. It’s just half an hour and obviously it represents the view of majority of those in the financial industry.

So, everyone is pointing their fingers at Fed and Powell. Next is how the US government will weaponize the event to force the Fed to stop raising rate or even start to do QE forever. More drama is ensured as US is also heading to the standoff game of debt ceiling in coming months.

One thing I don’t agree with these financial industry insiders is that SVB fails because of bad practice encouraged by bad policies put in place since year 2008. There should never be multiple boom and bust crisis since. By punishing bad behaviours like sending those bank executives to jail for their reckless behaviours back then you would have a very healthy economy built on organic growth from there, instead of the massive bubble we are seeing now.

At this point most of the people in the financial industry all playing along the bubble game because if they don’t, they need really good understand how trading really works to make money. For example, Renaissance Tech’s Medallion Fund will continue to do fine, so are the other few firms like Jump Trading. Since almost everyone is guilty, they would blame anyone who ends the gravy train.

Here is a different take on the subject by Patrick Boyle. He talks about Silvergate situation in details. As usual, I find his sarcasm on these subjects quite funny but it may hurt the feelings of those crypto fans.

Instead of keep talking about this heavy topic, let’s watch a happy desert making video.

Lately, I find posting on twitter with my charts on longer term trading outlook much easier than doing it through the blog or in an article within daytradingbias website. For those of you interested in these updates, you can check it out.

Back to work for me.

Have a nice weekend all!

TLC Weekly Update March 4, 2023

image

This month we do not have Non-Farm Payroll report on the first week. Instead it will be next week due to February being a shorter month than the other months. The usual NFP week bias, however, will face a serious challenge this coming week with Powell going to speak for 2 days in a row. I am sure we will see more extreme intraday swings thanks to that.

Very interesting take of Warren Buffett’s annual letter that is just released. The explanation of the good and bad of share buybacks is a great lesson for everyone. I do not agree to many things Warren Buffett says but that’s because of my view on risk management is very different from his “empire building” mentality.

For those of you who are long term investors interested in figuring out a strategy to navigate the current market environment, here is an updated talk from Howard Marks. Great lessons from Marks as usual. If you prefer, you can choose to read the pdf instead of listening to the audio.

I find this youtube channel quite interesting because the way how intense the guy is with his presentation on global economic topics. His conclusion is a much more useful take on the current financial market environment. If he manages to find someone or a team to improve his production, his channel should gain a lot more subscribers.

Have a great weekend all!

TLC Weekly Update February 25, 2023

image

We just witnessed a week of intense bull bear fight for control of the stock market narrative that ended, again, indecisive. The animal spirit of the retail investors is very clear that they want a piece of this new bull market while the bears are cashing out.

Which side is right? Well, the answer is way more sarcastic than many of you think.

Both sides are wrong to think that they are right. It is really a bet that there is no WW3 or other major natural disasters such that Fed will be the only deciding factor for the future of this world. At best, both sides are blind by their own flawed reasoning.

Jeffrey Gundlach talks about the current investment environment. He’s not that upfront about the near term outlook and his takes on how to solve the economic problems US facing is asking for normal people to hate him.

Chamath Palihapitiya was interviewed by the Wharton Private Equity and Venture Capital Club. It is a long video with half of the session being question and answer from the audience. I find it very interesting that the event was recorded back in October 25, 2022 for which he mentioned his upside target of S&P500 and what will happen after.

Here is an interesting video of Warren Buffett talking about private equity. I agree with him that the current size of the capital the PEs have, makes it very difficult for PEs to find great businesses to acquire. Hence, the quality of the investments made by the PEs tend to decline. If one chooses to invest with PEs, one has to be careful.

For those of you who are into astrology, someone sent me an older post by Jessica Adams on Pluto in Aquarius. She listed out the past major events in history when Pluto stays in Aquarius. It provides a more comprehensive view of what may happen this time.

Back to my marathon meetings.

Have a great weekend all!

TLC Weekly Update February 18, 2023

image

The option expiration Friday yesterday was a perfect example how the MSMs always bullshit their way to put a story on what happened after the fact. There is really no need to do so. But then if all they do are telling the truth, there is no need of them at all, right?

Charlie Munger spoke at the Annual Shareholders Meeting of the Daily Journal Corporation. It is a long video of 2.5 hours. He answered many questions and if you are an investor, you will want to know what he thinks. At 99 years old, his mind is sharp and his ability to answer questions with maximum clarity is just amazing. You may not agree with everything he says though …

Thinking of Charlie Munger’s old age, here is a video on broad overview of anti-aging methods. If you want to see the hardcore testings he has done on himself, you can watch this.

Many people do not know about this simple fact that US Department of Defense has a very serious audit issue. I’ve seen many people condemning CCP of China for pillaging the country. Well, no matter how much they actually took, it is a peanut compare to what happens in the United States. Maybe that’s why US politicians are so mad at CCP – they are looking at a mirror of themselves.

Back to work as usual. And I have a long weekend to catch up too.

Have a great long weekend all!

TLC Weekly Update February 11, 2023

image

When every single guru out there calling for higher prices in stocks, the CPI figures from past few months all revised higher. In shock, many people sold their stocks and in turn took the indices lower. But seriously, isn’t that obvious since it was the midterm election? I am not saying “someone” intentionally distorted those figures. I am saying many working together to distort those figures.

Next week we have another CPI report coming. Then, it is monthly option expiration by Friday. Another roller coaster ride is guaranteed.

Someone sent me this video of a cute bunny whose best bud is a bunny doll.

A short clip on the moon landing. Was it fake?

From Lex Fridman, here is another one of his podcast. In this episode his guest is Andrew Bustamante, an ex-CIA agent. This is a good (and very long) video for anyone who has no idea how CIA functions. After you watch the whole video, you need to ask yourself this question – is he still working for CIA as a PR front?

Back to work for me as usual.

Happy Valentine’s Day!