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Newsletter - 7/8/2023

Summer doldrums.  We are just at the beginning of the "Summer doldrums" phase of the market.  This happens every year when the market usually gets range bound and boring.  

WE, however, will continue to learn and hunt for good opportunities.  

I am making a few changes to Trade Ideas as well and reducing the number of ideas.  Details below.

Stay safe and be well!

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PREVIOUS WEEK MARKET:

With a shortened week and a half day Monday, the markets were ripe for a strong move and we got one when the ADP jobs report came in too hot.  Think about how dumb this is.  Job growth was stronger than expected (which is suspect anyway) so the market took that as making it MORE likely that the Fed raises interest rates.  How STUPID.  The Fed IS going to raise rates - they have said it and they keep repeating it.  And I would think more Americans working is GOOD.  This is an excellent example at how the markets are manipulated higher and lower,  I am not saying "they" have a meeting and decide "Hey, let's drop the market today."  What I mean is the market participants generally do not make money in range bound markets - volatility is a trader's friend.  That's why I said the market was ripe for a strong move.  

Even with the drop midweek, there really wasn't any follow through, nor was there a recovery.  The markets are in a short term Bearish trend but as I have said, I will wait until the weekly confirms a reversal to get short the market.  Also, I still see the overhead resistance being taken out.  Let's look at the charts.

SPY keeps being rejected at the 444ish level.  I still believe it will breakthrough and take out the 450 and 460 levels. 

 

Short Term: Bearish

Mid Term: Bullish

Long Term: Bullish

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CLOSED TRADES THIS WEEK:

We closed the following trades this week:

  • NKE: stopped out for -87% (20 days)

  • NKLA: stopped out for -22% (20 days)

  • OHI: stopped out for -57% (14 days)

  • PANW: +49% (12 days)

  • RIVN: +167% (1 day)

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MODEL 5K PORTFOLIO:

Since May 9, here are the numbers:

  • Total Return: +91%

  • Average Return: 55%

  • Average Hold: 7.6 days

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TRADE IDEAS:

I added some solid Core trades this week and caught the RIVN move!

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If you are not a Member and want to see these, become one here.

TRADE UPDATE:

ANF

Small gap on daily that could get filled before heading down.  Momentum is to the downside

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Self Talk:

We talked about this briefly in the room - what you say to yourself matters.  How you phrase and what words you use can have a drastic affect on your overall thought process.  I often say to my kids : "When you say something it gives it life."  Why say negative things or emotional statements - they do nothing to help trading.  We aren't robots, yet, but we can control the self speak.  Remember that the core of what I am trying to do is create muscle memory and to feed that part of you that relies upon facts and prodbability, not emotion.  Its why you never see me celebrating wins or being despondant over losers, even a string of them.  If you are here because you are relying upon my experience, then trust that experience when I tell you that self speak matters.  Work on it and of course, be careful how you speak in the room.  It matters.

Losses:

I will be doing a post on down markets and down portfolios this week so I won't belabor this point here: losses are part of trading.  Strings of losses are part of trading.  Trust that I am constantly evaluating what I am doing to see if I need to tighten things up. I think the recent string of losses was due to me not being as stringent about trade ideas as I usually am.  I have fixed this and will be more picky about ideas I share.  A small tweak but in my pursuit of the first goal of trading, a necessary one.  

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Going forward, there will be LESS trade ideas because the bar is now a little higher.  I will explain more in the blog post. 

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Even with the losses the portfolio is up 91%.  In two months.  My goal is 100% over 12 months.  Ther is no where else that type of performance can be found.  I've checked.  And certainly not with trade receipts and real time call outs.  I/we got a little spoiled and I DID talk about the fact that there would be losses.  More to come in the Blog post this week.

Trade Ideas Changes:

VIPs, Traders and Insiders will continue to receive ALL trade ideas but Free Members will only receive CORE trade ideas.  Lottery and earnings plays will not be sent to Free Members although they can still track them via the site.

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MY logic behind this change is that Lottery and earnings ideas are high risk and 50/50 probability and only those members that I am confident are taking ALL of the trade ideas are able to "smooth" out the risk.  More importantly, I can be confident that paid members are learning also and not just trading ideas as signals.

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Free members will still receive Core ideas.  Lottery and earnings ideas will not be emailed      out to Free members - they will have access to them on the site though.  My first goal is to preserve capital and this policy change helps me have confidence that no one is gambling and is not taking on too much risk.

Second Half of 2023 - Time to go down:

I like making macro predictions.  It's a mental challenge I do daily but especially at the start of the year and the midpoint.  So without firther ado, here are my predictions for 2023 2H with my probability estimate:

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  1. Biden will be forced to step aside: 50%

  2. Kamala Harris becomes first female President, briefly and Hillary Clinton's head explodes but not before a full court press of negativity is launched against Harris: 50%

  3. Gavin Newsome becomes Dem frontrunner for President: 90%

  4. Ukraine will lose and it will become publicly known: 75%

  5. NATO will directly engage Russia on the battlefield: 90%

  6. A bank, PE or Hedge fund will fail due to CRE losses, more likely in the 4th quarter when the bulk of the debt that needs to be redone in 2023 comes due: 75%

  7. Fed will hike by .50 bps: 100%

  8. Fed will hike by .75 bps: 60%

  9. SPY and QQQ will take out their highs but end the year lower than current (SPY-438.55, QQQ-366.24): 80%

  10. Hunter Biden goes to jail for doing coke in the WH: 0%

  11. Meta's new Threads becomes the Left's version of TWTR and at the same time becomes the Metaverse 2.0: 90%

  12. CPI jumps to 6%: 75%

  13. PPI jumps to a new annual high of 142: 75%

  14. VIX hits 20: 75%

  15. Oil drops to 60bbl: 75%

  16. Trump is found guilty of enough charges that he is offered a deal: don't run in 2024 and avoid jail: 75%

  17. Trump says Cram it, announces he's still running, and a "Constitutional Crisis" is announced: 100%

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And finally, an early 2024 prediction: the 2024 Presidential Election is delayed.

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UPCOMING WEEK:

Tuesday and Thursday have important economic news and of course, Powell is slated to jawbone a couple of times this week:

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  • Monday: Wholesale Inventories

  • Monday: Fed speakers

  • Monday: Consumer Credit

  • Wednesday: CPI, Core CPI

  • Tuesday: Consumer confidence

  • Tuesday: Fed Beige Book

  • Tuesday: More talking Fed heads

  • Thursday: Initial Jobless Claims

  • Thursday: PPI, Core PPI

  • Friday: Consumer sentiment

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WELCOME NEW PAID MEMBERS!

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Thanks for all of you that took advantage of the special 6 month pricing!

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BLOG POSTS:

I did a new blog post on boring markets and EOQ Window Dressing.  Check it out HERE!

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The Blog post library is here.

VIDEOS:

​The Video library is here.

WHAT I AM LOOKING AT:

I have about 20 stocks I am watching but many are counter trend trades so until the overall market either confirms on the weekly or it makes new highs, I will be very choosy in taking them.  The same goes for Earnings Plays.  Most of our recent losers were Earnings Plays and I was not as rigorous as I need to be.  I apologize and it won't happen again. 

 

I will say that I am starting to see weakness in stock prices across industries, at the same time internals such as breadth and put and call ratios are improving.  This tells me that the trend is still bullish and that we will see a blow off top.  Blow off tops are characterized by EVERYTHING going up, even dog shit stocks.

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CLOSING COMMENTS:​

  • If there are any stocks or investments you want me to look at, send the to me at info@MrNotAdvice.com.  I will answer them in next week's newsletter.

  • Don't forget the Discord live chat is STILL FREE but it will be closing to new members soon.  In the meantime, come and join us - its the best community out there: Discord.

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Thankyou Family!

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theBoss

Nothing above is investment advice nor should it be construed as investment advice.  It is offerred for entertainment purposes only.  Always consult your advisors before investing any money.  Do not "follow" or "mirror" any trade ideas provided.  Mr.NotAdvice is not a licensed or registered investment advisor.  Do your own research.

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