It’s heartbreaking to consider how, in retrospect, June 16th would have been the ideal “well, 2022, thanks for a great year!” time to call it quits for this annum. My view at the time – – and, although it’s taking on some serious dissipation, but still my view – – is that the “Big One” hasn’t arrived. But maybe, as the past fourteen years have proved, bears get served nothing but disappointment in the end.
As I’m typing this, equities are blasting higher, although the topping patterns remain (BARELY) intact:
The /NQ in particular is still a rock solid textbook head and shoulders topping pattern. Still, having endured the grueling, exhausting, soul-crushing June 16-August 16 Wave Two counter-trend bounce, the LAST thing I need to deal with is market strength than lasts more than a day. This, frankly, is an unwelcome pain in the balls. Big time. Can you tell I’m getting pissed off?
The interesting thing about the above pattern is that it actually represents the “throw-over” into the much, much larger H&S top that the /NQ has on the weekly chart. In other words, the big H&S top should have held its neckline, but it failed to do so. Instead, prices banged around above the neckline and formed another, smaller H&S top which is, at the moment, still holding. I say again: barely.
The thing is, I’m finding myself flipping the bird at my screens at a pace I didn’t think I’d have to bother with for a while. The ol’ middle finger muscles are getting a workout, and I wish that weren’t the case. The widespread passion for Buying Stocks No Matter What seems to have roared back to life. The fact the economy is collapsing, interest rates are soaring, there’s war breaking out all over the world, and we’re still operating in a pandemic doesn’t matter. Triple digit P/E ratios are as welcome as the flowers in spring.
Suffering under all this resentment as I am, I decided even before the opening today to scale back. I would remind you that me pouring money INTO my account is usually at market tops, and me sucking money OUT of my account is equally ill-timed, so take this news however you like. The fact is that I took a full 25% of my entire account out, shoved it into my checking account where I have absolutely no need for it at all (AKA it will just collect dust), and I’ve scaled down my ambitions for the year. As this, point, getting back to my June peak profits would take a minor miracle.
My present portfolio configuration is:
- Twenty-nine January 2023 equity puts;
- One March 2023 equity put;
- One November 2022 SPY put (that’s the sprinkling of “aggressive” I’ve thrown in the mix)
Of course, if the CPI comes in hot tomorrow and the market stops puking all over itself, I’ll just have a different reason to be mad at myself. Still, I feel more at-ease with this huge wad of cash OUT of harm’s way, and with my cash so depleted, I have a mere 6% cash as “dry powder” just in case things improve tomorrow and I want to augment a position or two.
