Author: Lawrence Chan

Biggest financial news this week is not about the stock market – it is about Bitcoin. After spending months near its low at 16000, a breakout above the 18000 resistance gave it a chance to shoot up to 23000. All the HODLRs went into euphoria and claim that Bitcoin new all time high is coming … well, the breakout was a tradable setup but it has not done anything to convince me the long term bottom is in.

Howard Marks on Bloomberg TV commented about the current market environment. I believe he has summarized the current global environment perfectly and it will be a tough road ahead for businesses, both big corporations and small companies, to navigate through the coming years.

One of the hottest debate (or fight) among investors is that whether the inflation high prints we saw last year is now gone thanks to the fastest rate hike in US Federal Reserve’s history. The bulls think the Fed is done as inflation will subside “soon” while the bears think that inflation is here to stay.

All these discussions are a waste of time. Michael Burry already told the world what will happen and it is unfolding exactly as he said – the bullwhip effect will continue to cause waves after waves of inflation in various areas in the economy. The Fed is cornered and can’t raise rate high enough to stop the inflation. As explained by Howard Marks and anyone who really understand how the world works, the effective interest rate is still negative. To stop inflation, the Fed needs to push the rate to 8-9%. However, doing that will bankrupt many banks and zombie companies immediately.

So this year and the next will be a super roller coaster ride in many financial markets until “the great reset” is here.

Since it is Chinese New Year later today, here is a funny bunny video for this year of the rabbit.

Why the Chinese New Year has not happened yet? It is another technical detail of the Chinese solar-lunar calendar. The start of a lunar month happens at the exact time when new moon happens. For the Chinese New Year, it will be January 21, 2023 at around 4 pm Eastern Time.

And so all these people who line up overnight in various Asian cities to be the first in line to give their prayers at temples and other worship places on the first day of the year … have done it wrong. Maybe that’s the reason why it never works for them.

For those of you interested in feng shui, here is a video about the feng shui setup for the year of the rabbit. It may not be the best but it is easy to follow.

Almost time.

Happy Chinese New Year!

The US stock market made a powerful comeback by Friday close even after the nothing burger of CPI and disappointing earning result from one of the major banks. Could this be the start of much higher prices for the indices? Well, that all depends on the line up of earnings coming out these two weeks.

My best guess is that earnings will be bad for majority of the big techs and large banks. For the never making money companies in the S&P500, which are majority of the components now, they will disappoint further because they will easily go bankrupt as raising money through cheap junk bonds is no longer possible. Does that implies the indices will go much lower? Not necessary either as idiots will continue to buy with the expectations that free money from the Fed will return soon.

In short, I think the US stock market is stuck and have very limited upside for the year unless something dramatic hits the world like sudden world peace … However, there are so many potential disruptive developments around the world that just one of them materializes and we can forget about the current financial system. It is existential risk of the whole financial system that we should pay attention to. As long as the disruptive events do not happen, the downside will also be limited.

A very powerful speech by Konstanin Kisin at the Oxford Union. If you like the message he is giving about what really has to be done if the so-called climate change issues is true. What he said is effectively what Jordan Peterson explained for years but obviously a comedian delivering the message has a better chance to reach the woke communities.

The talk of the town lately must be OpenAI’s ChatGPT. From Ryan Reynolds’ funny video to speculations that it can be something dangerous to many people if the technology is used for exploitation by evil people.

I won’t speculate on where AI will take us. I just want to point out that if you have proprietary / secret knowledge of any kind in any field, you would not allow any internet connected AI platform near your work in a thousand miles. The moment you put your stuff into the platform, it is taken and it will no longer be your secret.

For those of you concerns about your portfolio, Jeff Gundlach’s latest webcast is now made available to everyone. Great summary of year 2022 with discussion of developing trends going into year 2023.

For those of you do not pay attention much about Asian culture, coming January 22nd is Chinese New Year. Many Asian countries celebrate Chinese New Year for many days. Thus, Asian financial markets will go into holiday mode in coming weeks and will not return to normal liquidity until early February.

Here is a tidbit on Chinese solar-lunar calendar. The regular Chinese New Year always happens on new moon. However, Chinese New Year is not the day that marks the turn from one Chinese zodiac year to the next. Currently, we are in the year of the tiger and by February 4, 2023 it will change to the year of the rabbit.

Have a great weekend all!

Another NFP week is over and the mainstream media can now boast that year 2023 will be a great year for the stock markets because of the “January Effect” (the first week version) and the positive bias of third year in the US election cycle. Well, I am not so sure about that.

When everyone was paddling that we would get a “Christmas Rally” last year, I called out on Twitter that they are wrong because they failed to account for what happened in November actually has more significance on what would happen in December. I am right and they are wrong. This time on year 2023 stock market performance, I am calling the cheerleaders out again. I am not saying the year will be a big down year. Based on my analysis, I am saying year 2023 will likely be the most volatile year in many financial markets in recent history.

Gareth Soloway on Kitco News again on his views of many markets for the year 2023. His take on BTC may upset a lot of people who are die hard fans of Bitcoin.

Zeihan has been very busy and added more parts to the demographic talk series. If you like the first three parts, make sure you check out the rest. And this 2023 New Year video pretty much summarized all the chaos we are about to see this year.

A very interesting interview of David Sacks, paypal co-founder, at UnHerd. It is amazing that Freddie Sayers manages to get someone like Sacks to go onto his podcast, allowing normal people to see the world from the eyes of these “insiders”.

Some of you asked why I am always very busy. Ever since I decided to build our proprietary trading firm from scratch, I know it is a tough road. And the crazy thing is that I chose to start at a time when the stock market experienced its most volatile years. But we pull it through. Our hard work pays off. I am very excited that our new trading models are getting ready for deployment for more markets soon.

Hence I am going to keep pushing.

Have a great weekend all!

Can’t believe this is the last day of the year 2022 yet here we are.

As someone interested in astrology, I did a non-scientific survey on various predictions made by astrologers and psychics on what will happen in year 2023. The consensus is that 2023 will be a year easier for majority of people and things will get better in general. That’s the consensus and I don’t agree.

In Chinese astrology, year 2023, that actually starts from Feb 2-4, is the last year of a 20-year cycle of the “9-star” feng shui system. After that, it will be the start of the next 20-year cycle. Next 20-year cycle is also the end of the 180-year grand cycle. As I am not here to discuss the technical details of these cycles since I am not here to showcase my astrology ability, it is better to just sum it up in one statement – year 2023 will be an extremely disruptive year for most people in the world. It is the start of chaos and destruction for many years to come.

But isn’t that obvious given the geopolitical tension everyway that something will go wrong? And the earthquake cycle has entered its phase of rising number of earthquakes, that some of them will be major disasters? Buckle up.

Zeihan just did a 3 part series on Demographics. Here is part 1 that I think many people should watch the whole series to learn about how demographics is going to impact us in the coming years. It is a theme implied in my article on this dysfunctional future – without enough younger people working, all societies with an aging population will suffer.

Brent Johnson is back on Blockworks Macro with an update to his view on US dollar. Because the swings in US dollar is indeed, the biggest driver of price in all markets this year, we should pay attention to the direction of US dollar to ensure we are standing at the right side of the markets we are trading. Brent’s words on future redraw of the borders among (and within) countries match my view based on Chinese astrology …

For those of you who love to hear the mainstream media narrative of 2023, look no further. Here is The Economist’s year end video on what to pay attention to for year 2023.

As usual, this last day of the year I will continue to work on my projects and keep going all weekend.

Wish You All a Safe, Healthy and Prosperous Year 2023!

Writing this in late night Christmas Eve here in Toronto while my friends from Asia already sending out their Merry Christmas messages. Very grateful that friends and family are doing alright in this tough year of 2022.

A good video on the various astro cycles and their effects on Earth. There are other shorter term cycles that I used to generate accurate long term cyclical forecast and they have worked perfectly all these years. Given what we know about these cycles, the world will need a lot more carbon dioxide, not less.

I watched an interesting video on FTX blowup that I think bitcoin fans should all watch it. The guest’s deep understanding of the financial industry makes her opinion very valuable to anyone interested in investing in BTC.

In this video Peter Zeihan discussed one of their biggest problems China is facing right now. And could that be the reason for China to, first, employ the zero covid policy, and now, let go of all measures? Just imagine the problem described by Zeihan is going to be resolved in just a few months … another economic wonder that only China can pull off (sarcasm).

I ended up not able to finish writing this post until Christmas.

Merry Christmas and Happy New Year!

The last option expiration Friday did not disappoint. Everyone calling it to go lower yet by the end of the day, the damage done in the morning were erased. A surprise? Hardly unless you keep listening to idiots out there telling you bullshit day after day on how clueless they are with their imaginary reasons behind every market moves.

Watch this video about Logan Paul and his CryptoZoo “project”. I still don’t understand how dumb many of these people are in believing in something so stupid. Until these scams are all cleansed out of the crypto space, it will be very difficult for the real world to accept crypto as a viable technology going forward.

I like this video much because I get to send this to a friend who is moving out of New York City to retire somewhere much more normal. He is laughing to the bank because he took my advice and planned to move out of NYC several years ago. Glad that things are working out for him and his family.

Here is a good video that I think we all have to reflect on before the end of this year. If you want success in life and have no idea how to get things started, this video is one of the best starting points you can just watch and take actions right after.

Last two weeks of year 2022 and I am still way behind with my work projects. Looking back, we’ve accomplished a lot this year and our proprietary trading will be opening a new chapter in trading more markets and taking on major expansion. It is a good time to be in the day trading business!

Have a great weekend all!

Last week we have a surprise from US PPI for being stronger than expected and that sent the stock market lower a bit. Next thing we know, people talking about all these bullshit that where the CPI should be this coming week. Seriously, 99.99% of people out there including that remaining 0.01% are pretty clueless what the CPI is let alone understanding how it is calculated and more importantly, manipulated by the government to do whatever they like the figure to be. That’s why it is so funny to look at people trash talking each other as if they are some expert of the subject …

So this week we have FOMC decision and CPI reporting. It will for sure swing the markets hard but it is hard to say which way it will go.

The most interesting change in tune is BoA’s Hartnett who changed his long standing position of the US stock market to go lower in Q1 next year to a new low to 180 degree flip to a run higher to as high as SPX 4400 before a fall in 2nd half of the year to a new low. As the most accurate analyst in year 2022, will he be right again in 2023?

Here is a video with Gareth Soloway on 2023 outlook. He made some good points and can help one to put things in perspective.

I know everybody has been quite bearish on BTC lately except those HODLR. Max Keiser presented his view on BTC in this video. He believes BTC is going much higher in 2023. Maybe he is right. I am just a trader and I do not have all these fundamental thoughts on BTC because I am not smart enough to understand why BTC is not scam. But can BTC gives us a tradable setup? Sure and I will stick with my charts only.

One important note on the video – the shoulder twitch the guy kept having whenever he has to make a bold statement about BTC. What does that imply? I will leave it to you guys.

Here is a great summary video of a collective of thoughts from several great minds on antifragility. If you are looking to improve your financial well being, this video a good reminder for you that you if you do not change yourself to overcome these biases, you will never be able to exponentially grow your wealth.

Back to do my chores. Have a great weekend all!

Another Non-Farm Payroll week ended with a surprise bearish shock from NFP but then S&P shake that off later to close higher. This should not be a surprise given Tuesday was the week low and that Powell’s speech timed to the T to test the daily up trend line from above and then took off. Another NFP week wonder.

Going forward, we are now inside the holiday season and majority of the firm traders and pros will wind down their trading. Only those who did not make it to the bonus requirements will try hard to push for their year end bonus. As a retail trader, there is no point to force yourself to trade in the coming weeks. It is better used for reflecting and improving your trading approach such that you are better prepared by next year.

Here is a video from someone who is more optimistic than most other videos I linked to in this blog. Good to take a look at someone who holds a very different view from your own to keep our egos in check.

Of course, I don’t think they understand what is really going to happen in 2023. And one of such risks is well explained in this interview of John Mearsheimer. It is not about the economy for 2023, it is the split up of the world that will produce total chaos worldwide.

For what is explained in this video, I actually experience this first hand on the investors’ front. For example, many venture capitals and private equity firms are burnt bad by the FTX fallout. They literally have guns pointing at their back on how they are going to make their investors’ whole. I told quite a number of firms that the crypto stuff their are chasing do not add up, way back in 2021 and early 2022 when we were doing our fund raising round. I was laughed at back then and now, they are “chicken little” asking what I think will happen next.

I don’t think they are ready to accept what I think will happen next so no point to further the discussion.

I got sick again thanks to many of my friends are sick with flu or whatever they like to call it nowadays. The usual routine of body ache, fever, phlegm, etc. It is manageable just not the usual efficiency in getting things done. I guess I need to slow down and get some rest.

Have a great weekend all!

US Thanksgiving week ended with the US stock markets edged higher a little, just like most of the past Thanksgiving weeks. What is interesting is that next week we will get early reporting on retail sales figures over the Black Friday weekend which can set the tone for the stock market or create a rush higher that turns out to be an important swing top. Powell will speak next week so volatility will return. I think this December will be a very interesting one for the financial markets.

As someone who has been telling the climate change crowds that they are being used by politicians and large companies, it is interesting to see this video available on YouTube. I wonder if it will be taken down soon …

I told my team working on our trading algos that I will update our core engine with C++ myself so that the performance can be many times better. Most people do not understand how important it is when one is doing intensive computations to research on any subject, the performance of the algos will directly affect the productivity. Here is a video talking about a friendly competition among coders and the difference in performance they can made. I tried to hire C++ programmers with experience working with several common trading platforms for like months now and every single one of them turns out to be not qualified.

Some idiots with fancy degrees even claim that what I am trying to do will not have much performance gain. Seriously? I wonder if they cheated to get their degrees in the first place …

Since we are so close to the end of year 2022, inevitably people ask what’s my outlook for year 2023. The outlook is that chaos is coming whether you are prepared for that or not. A new multi-polar world is very different from the single polar one we lived in over the past two decades. This video provides a good overview of the problems surfacing right now.

A nice change of pace as we enter the year-end holiday season. We all know it has already started because the radio stations here are playing Christmas songs 24 hours a day. Time to do all kinds of chores to wrap up this hectic year and prepare for the next.

Have a great weekend all!