It’s looking like a good day, but let’s start with the one bit of ugliness: oil. It shot up instantly on Sunday, all thanks to Biden’s parting shot of more Russian sanctions, which will tighten energy supplies.
Looking at the daily chart (as opposed to the minutes bars, above) one can see how potent this breakout has been. The unfortunate thing is that I’ve got a bunch of oil producers as bearish positions. Since this is a political move, and since all-our-troubles-get-solved-on-day-one is just a week away, I suspect this oil rally will be ephemeral. I’ll adjust my positions this morning, if necessary, but I’m not particularly concerned.
On a happier note, the erosion of stocks continues apace. Here’s the /ES over the past week. This is definitely the kind of market that I prefer: a slow erosion, as opposed to a mighty crash. The latter wakes politicians out of their stupor so they can trot out a new bailout. The frogs-boiling-in-a-pot situation works better for me, since I’d rather “set it and forget it” with respect to put positions.
It’s particularly remarkable to me how swiftly the Trump Mega-Rally has been laid waste. The Russell 2000 futures, shown below, roared higher following the election and went on to reach its highest point in the thirteen-billion-year history of Earth. Within weeks, the entire rally was obliterated, and we are well below levels we were at when the election was still up in the air.
It’s also encouraging to see the semiconductor absurdity, which really peaked last July, continue to get firebombed. I am maintaining my long position on AMD puts (May $135). You may not know this, but there was a time that the elderly woman who runs AMD was a meme, much like Michael Saylor or Elon Musk. The fan-boys would create images like the one I’ve embedded below. Well, fellas, you’ve been done wrong.
Lastly, I am just delighted not only to see the religion zealots who believe in Bitcoin get a fresh surprise this morning, but also to see that BTC is finishing up an epic topic which could easily send it back to $77,000.
I don’t speak much publicly about crypto anymore, because these delusional crypto freaks are more zealous than the most fervent religious pilgrim alloyed with a political extremist. They aren’t rational, and they don’t want to hear anything except HODL and The Halvening.
In any case, I am but a humble chartist, and I can only celebrate the demise of this risible experiment with a smirk at a safe distance.
Anyway, this is the first full trading week we’ve had in a couple of years, so let’s make the most of it. Keep the sand out of your weapons, and I’ll see you on the beach.
