On this momentous morning, which could either be one of the most important inflection points in market history or another Taco-driven bore-fest, I’d like to discuss an important phenomenon that I’ve experienced more than once in my life. It is best described in steps:
- I uncover a spectacular opportunity by way of my charts
- I write about it and position myself in that investment
- I am expecting it to “behave” perfectly, but it moves against me to a small degree
- I become disillusioned and frustrated that it is not doing what it “should” do
- I dump it at a loss out of exasperation
- It moves against for me a little while longer, making me feel good I’ve made the right choice
- It then proceeds to make precisely the kind of magnificent move I predicted the entire time
It is step #6 that is the poison. That brief, “phew, sure glad I’m so smart I got outta that one!” stage feels good for a little while, providing assurance that one has saved himself by outsmarting his former, less-smart self, when in fact he has committed a financial pratfall. Watching a given financial instrument make the precise kind of mega-move that my own charts predicted while sitting like an idiot on the sidelines is NOT worth that little dose of dopamine that step six creates.
It happened with me in 2012 with Tesla. It happened with me in 2025 with platinum. And I’ve got the sinking feeling it is happening to me this very second with Bitcoin.
Yesterday morning, I was long BITI (the inverse Bitcoin fund) and owned September puts against IBIT: two obviously bearish positions. Bitcoin, as you probably know, was strong on Sunday night and Monday morning, and I just couldn’t stomach the defiance anymore. I dumped both of them in a fit of pique (green arrow), and as usual, step #6 came right along as I watched BTC continue to move higher for a few hours before, yep, it began to fall to pieces.
Now, as I stand here on this Tuesday morning, a much wiser Tim would realize the error of his ways and get RIGHT back into at least one of those positions, but some of you probably realize how tough psychologically that is. Added to which, I can’t remember a day in recent memory with so much binary risk. Still, I’ve got a very strong hunch I’m going to be screaming into a pillow in the very new future with Bitcoin makes the exact kind of move which my lovingly crafted charts predicted.
And now we can return to the clinically psychotic simulation in which we all reside.
I believe at this point a person walking into a restaurant named Hacienda de Las Flores would probably have a lower chance of encountering tacos than we are about to experience today. That is why, even with the bombing of Kharg Island already happening, the market is down all of a half a percent (as opposed to, let’s say, crashing) and has spent almost a week going positively nowhere.
Having said that, I honestly have nothing at all to add to my own observations about the market. It’s like asking my opinion on an oil painting covered in an inch of mud. There’s something under there worthy of interpretation, but since I can’t see a thing, I have nothing to say.
My positioning remains the same as twenty-four hours ago: quite light. Among my five portfolios:
- 1: all cash
- 2: long QID (double-inverse QQQ)
- 3: 9 shorts (77% commitment level)
- 4: 10 shorts (87% commitment level)
- 5: 8 puts (29% commitment level)
If the market absolutely crumbles, the amount of money I’m leaving on the table will be vast, but I’m not a degenerate gambler at heart, so I am trying to keep things prudent. The worst outcome is actually yet another Taco, because it’s all this uncertainty which makes it untradeable. In the meanwhile, we all just watch and wait.
