Today sucked.
I can deal with a day that starts off badly and gets worse. But there’s something extra-terrible about a day which starts off with so much promise and winds up being just a horrific shit-show.
The charts below illustrate how, leading up to the opening bell, things looked like up to be fantastic, and maybe even a major breakdown day. Then, hocus-pocus, all the world’s problems were solved based on NO new information whatsoever.
The lynchpin to this whole thing was Ethereum, the world’s biggest cock-tease. It got THIS close to a failure last night, but nope, you’re gonna have to rub one out now, because ain’t nothin’ happening there.
Indeed, the ONLY market which is steadfastly moving lower is VOLATILITY, as the VIX makes its way steadily toward 0.00 since obviously every problem in the financial world has been totally solved, our $31 trillion in debt is irrelevant, and out nation’s catastrophic economic matrix is neither here nor there.
Oh, you think this is funny, huh? You think a mean old bear deserves a day like this? Well, my friend, that was a serious mistake on your part. Because now you have to spend five solid days alone in a room with Kamala Harris and Amber Heard. There is no appeal.
So what am I doing about this situation? Well, I’ll start off by saying that in spite of my trading account constituting literally 1% of my net worth, its gyrations affect my emotions MASSIVELY. For example, I could find out that the value of our house has gone down by seven figures (and this has happened more than once!) and it doesn’t faze me at all. But if I lose $10,000 in my trading account, I am ready to jump off the Golden Gate Bridge, since I’m so filled with self-loathing and a destroyed confidence. It’s economically irrational, but, well, that’s how they assembled me.
So for my own sake, instead of boldly increasing my risk in this environment (which is almost certain the profitable choice) I am running with terror. Specifically:
- I continue to purchase only VERY far-out options with respect to expiration (ranging these days from no earlier than September 16th to as far out as January of 2023);
- I also keep the options rather deeply in-the-money;
- Even though I have absolutely nothing to do with the cash, I already extracted 22% of my trading account and shoved it into my checking account. I am going to go even farther tomorrow morning and reduce my account once again, leaving it with about 60% of its peak size. Again, I have NO use for the cash at all, but – – and this is just sad, but I’ll admit it right here in front of God and everybody – – by shrinking the cash balance, at least my percentage gains this year will improve, so I won’t feel like QUITE as big a jackass.
Self-pity aside, I honestly believe once we get past next week, things are going to get vastly easier for the bears. I am simply trying to preserve whatever figment of my own sanity I have left by taking this very conservative measures which, to be honest, is probably a great short signal.
