No Fair? Way Fair

I stopped buying puts on Wayfair very early this year because they became too expensive, but it was a great plain vanilla short all the way down. If you like straight short-selling, the tech space remains a shooting gallery. With the caveat I posted this weekend. There's substantial rally risk and BTC has yet to break its support.

Very Dead Cats

Some of the tech funds have almost no bounce, Meta among them. Here are four others, familiar names here. They should implode once the bear market resumes.

Wayfair Update

Most of the market will go back to the March 2020 lows eventually. What I like about charts like Wayfair is the symmetry. Very easy to trade. I'm not currently shorting W though because the puts have been too expensive since February.

Don't Let Them See You Cry

Content made on Kapwing

Wayfair Again

Wayfair is ready to go into the abyss right now. Waiting on the broader market. Many retailers look terrible.

Wayfair, You Got Nuked From Orrr-bit

Crude Oil Closes in on $91 $93 Per Barrel as Federal Reserve Abandons Taper Plan

Market Manipulation Goes Viral

Note: The headline is hyperbolic. I don't know if the Fed has unofficially abandoned their taper plan. All I know is they aren't tapering.

The Federal Reserve's balance sheet data is published weekly. It is available at the Federal Reserve website (it is in section 5) and at FRED. The Federal Reserve should have bought around $45 billion in treasuries and MBS the past month. Instead, it purchased $116 billion. At the peak, it was buying $120 billion. It bought less in December, but had to sell (or roll off) $33 billion to get down from a ridiculous $140 billion monthly increase in December. Crude oil is closing in on $91 per barrel and there isn't much resistance up here except for the psychological level of $100 per barrel. The Federal Reserve claims to fight inflation, it claims to be tightening, but there is absolutely no tightening as the economy and middle/lower class families suffer under high inflation. It won't be long until the bond market starts suffering too, and that's when mortgages will become more expensive and economic activity will quickly swing into a recession.

We have a crooked, corrupt, sycophantish media staffed by journalists whose understanding of economics only slightly exceeds that of a cave dweller who recently emerged from the primordial morass. The politicians in Washington are corrupt criminals probably selling hand over fist along with the Wall Street banks propping up this sham market. Why is it that almost every moment the Nasdaq is ready to break lower, miraculous dip buyers arrive in force to push the market higher? By itself you could argue it's the Pavlovian dip-buyers who have been trained by the Federal Reserve for the past 12 years, but then riddle me this: why are a litany of second-tier growth stocks like ROKU, TWLO, W and so forth, exemplified by the ARK Investment ETF (ARKK), getting blasted by near double-digits the past two days? Who is furiously dumping technology stocks while the major stocks and the indexes, via futures trading, are propped up so as to keep the bottom from dropping out on the market? All while the Federal Reserve is jamming crude oil higher with it's non-taper?

As a trader, their efforts allow me to get more and cheaper put options by dragging out the process. The Federal Reserve's actions will cause greater stock market damage when they suddenly stop buying assets in March or April. Or if they don't stop, they'll unleash inflation that will sink stocks by at least 50-percent before adjusting for that inflation. The more damage they do, the more the assets I've purchased will outperform. I expect some level of disaster because they've already made such a mess.

Yet I wonder, why are they continuing these policies in direct contradiction of their policy statement, reducing the Fed's credibility to zero? They can do the same thing with interest rates by the way. They set the rate when they transact with banks. They could say "we're raising rates 5 percent" and continue giving banks zero-percent loans. There's nothing stopping them from doing that, particularly when they said "we'll reduce asset purchases by $15 billion per month" and they're not doing it, and nobody calls them on it.

There are no pleasant answers. The "good" explanations are some variation of "they have to do it to save the market," but that also argues for dumping all your financial holdings now, before something nasty comes crawling out of the woodwork. The "bad" explanations are worse because it leads to a total loss of faith in the central bank.

If you've been reading here awhile, you know I've been looking for a drop in crude oil tied to the taper. Except there's no taper. So now we're at the point where the charts I follow are screaming breakout. And to get a breakout in something like offshore oil drilling takes much higher oil prices. To get a surge in fertilizer stocks takes much higher natural gas prices, and it will be followed by much higher food prices. Yes, many people have been predicting those moves and yes, the fundamentals argue for it over the longer-term. Which again raises the question: why is the Federal Reserve risking an explosion in these prices by undermining its own credibility? What made them turn their policy statements into toilet paper? It isn't the stock market, too small. The problem we are looking for is probably in the bond market.

Waaaayyyylower

This looks like a crash situation if it loses support around $135. It did lose on the 24th before reversing with the market.

Wayfair Plunges

Yesterday I posted: Wayfair Plunges Tomorrow

This is why I drill into stocks and don't worry about the indexes as much. The indexes have to turn for a real bear market to get going, for the big profits that I expect down the road, but for now, taking precise shots on weak stocks continues paying off.

Wayfair Plunges Tomorrow

I think Tesla could get to $900 too, if Biden has hinted at a higher-than-expected CPI number.

Reuters: Biden says inflation data due Friday will not reflect recent drop in some prices

President Joe Biden sought to reassure Americans on Thursday that rises in consumer prices were easing somewhat, saying that inflation data for November due out on Friday would not reflect a recent drop in some prices including energy costs.

Maker forecast is 0.7 percent. I don't know if it is worse or not. That would raise the 12-month, but it'll take 0.9 percent to get a 7-handle.

Wayfair and Tesla are at support. The Russell 2000 futures crosses below the 1-year moving average again. IWM hasn't yet. If CPI comes in high tomorrow, I'm expecting a big down day for tech and related growth/momentum.

BTC looking ugly too.

This could be a bear trap. Maybe it's a dip and stocsk rip higher tomorrow or next week. I just want that caveat there to anyone taking on risk. I take on risks I can live with. I can reverse position at any time and do. But right now, I am betting the correction resumes tomorrow. XLY, TWLO, AAPL, UUP (calls) are my 4 largest positions. I have weekly options expiring tomorrow on ROKU, W, and XLE because I do think tomorrow could have some fireworks.

Wayfair

Could be a quick trip to $170 area or even $130 area if the market breaks down.

Some Charts

ATVI bounced at very LT support. I have been short HUBS and added puts on SIVB today. No other positions. EDZ looks like a nice base, it is a 3x short of EEM.