Epic Bear Market Unfolding and Adding to McDonald's Short

I've filled out my put position on McDonald's today. Full caveat: it has room to go up another 10 percent. If it gets up there, then I'm going to make far more than I will lose if I'm wrong at this spot.

The stock market is entering month 11 of a bear market and yet. Look at this pattern on XLY. I was bearish on XLY and I was early, but that pattern eventually broke.

Look at McDonald's and auto parts in this context. If this is a bear market, do you think these stocks already at relative all-time highs, or near those highs, versus the S&P 500 Index are going to explode higher from all-time highs?

There are scenarios where stocks such as McDonald's and Autozone, trading at or near all-time highs and at or near relative all-time highs versus the S&P 500 Index somehow lead a new bull market. I don't know what they are outside of something like a hyperinflation scenario, but they're out there. The bear market scenario looks more compelling though. Here are patterns that look like technology a year ago. This isn't like 2000 though, when there was a 2-year stealth bear market in value stocks as the tech sector kept soaring higher. There are some examples such as FedEx and Boeing, sitting at lifetime support, where you could make a case for them not going lower. If the market rallies, they could bounce a lot. The stocks above have ignored the bear market and they benefited from 2020 to 2022. If this is a bear market, these are the types of stocks that might outperform technology as short candidates for 2023.

Updated: Auto Parts

The sector is popping on positive analyst comments and higher price targets. They haven't ever avoided the fallout of recession.

Update: GPC went all the way to the top of the wedge. I bought puts near the close. the resistance line is my mental stop. I will allow an overthrow if I think the market will reverse, otherwise it'll get pitched out of the portfolio quickly if it goes through beacuse there is a secondary resistance line around $185. If it somehow got there, I'm probably very wrong about where the market is going near term, but I'd also plow into puts.

Really

I like those daily candles yesterday and today. The day isn't out yet, but I had closed my puts on ORLY this week as I cleaned up some small positions. I'm back in now.

All My Positions

I have short positions of varying size on all of these. In terms of number of options, XLP is by far the largest position. By dollar size, CME, APPL, MCD, SHW are relatively large. If I group together all my energy positions XLE, COP and USO, that would be larger than everything, but some of these are weekly puts that I may take off early next week if crude doesn't dip quickly. XLP puts are cheaper though, and thus I anticipate they could be my largest position at the conclusion.

Update: I forgot to list BITI calls, a short position on BTC.

Put Buying Spree

I have massive OTM puts on all of these. Plan on adding to XLE and XLI. I didn't buy puts on FXI, but included it because it is important for emerging markets. It looks like the same setup as in October 2008. I still have cash left and am looking to add more on one final pop in the market.

Oh Really?