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How To Fade CNBC for Fun and Trading Profits 12/16/22

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The 5 day cycle projection for the ES 24 hour S&P futures is 3775, from the hourly chart. But the conventional measured move projection of the breakdown from the big top is 3700. Take your pick. Either is possible, if not likely, today. We're due for a 5 day cycle low at some point today, and weakness is often greatest at the end of a cycle. 

Of course, the longer cycles are just starting to roll over

I'll start with a view of the two hour bars. The chart speaks for itself. 

zui28

Here it is on the hourly. 

zuib4

Yesterday, I got to play the age old game of fade the CNBC tout. I came into the day 70% short in my personal trading account and got to 90% after peeling off a couple of longs in the early carnage. My account was growing by leaps and bounds, recovering from the skinhead haircut I got in Tuesday morning's bear slaughter.

Then suddenly, around 11:30 AM ET, I saw that my daily P&L was cut by two thirds. WTF! One of my shorts, that had started out great was suddenly up 10%. Again I say, WTF! 

Back in the old days when I started trading from the customers' gallery at the old Walston and Co. office in Center City Philly, whenever something like that would happen, the old traders I sat with would murmur, "Was there some news?" And I mean they were old. These guys had all been through the 29 crash. What did they know!

They knew.

So one would be appointed to shuffle up to the news ticker machine, sorting through reams of paper until they found the item that had triggered the move. 

"Yeah, there was news!" he would exclaim. 

So yesterday, when I saw my POS short blow through the roof I remembered the prophetic words, "Was there some news?" and off to the news ticker I went. Buy I didn't have to shuffle through any paper. I right clicked on the stock symbol in my list and clicked the menu item "News" and there it was. "STREET ANALCYST TOUTS STOCK XXXX on CNBC, leading to price surge." The blurb summarized, not an analcyst, but a fartpolio manager, who liked the stock. She liked it purportedly because it was selling at only 22 times earnings, and because China was reopening and the company had lots of sales in China. Never mind that half the company's customers are dying now that the country has re-opened, with a horseshit Chinese vaccine that doesn't work. But I digress.  

The point to me was that the stock had been trending down for 15 months, had lost 70% of its price, and was just approaching its 100 day MA, which was still trending down, well below its 200 day MA, still trending down also of course. So, on the basis of Rule Number Two, "The trend is your friend." This looked like a good short to me. Not to mention that the short term setup looked ready too.

But why would a fartpolio manager tout such an obvious POS? Clearly, this tout was from a holder of the stock who was praying to lighten up. So she got the opportunity to go on CNBC to market her book to tens of thousands of sheep, uh, I mean, investors through the magic of live teevee.  How that process works, of getting to go on CNBC when you have wares to sell, is a mystery. Oh right, it's like QVC. It's the Wall Street Infomercial Network. WSIN. Wall Street wins, you lose.  They pay the bills. They win. You lose. 

The price spike, as vicious as it was, missed hitting the underside of the 100 day MA by a hair. I'm watching this travesty unfold, seeing my overall profit for the day decimated, and I thought, "Sons of bitches, I'll show them." So, seeing that the spike had reached to within a hair of the falling 100 day MA, I doubled up my position once the spike ran out of steam. I didn't get the top, but I didn't have to. The price fell relentlessly until the last hour, when buyers reappeared. I covered that trade for a 3% profit (6 points) in a couple of hours (I'm from the low and slow school of Barbecue and Trading).  And since the price had held above the 30 day average on the pullback, I decided I had enough of the manipulation and moved on to greener pastures. 

The nice thing about running a mass screen every day is that there's always another streetcar. If one takes a detour, I get off and catch the next one. 

One day, I'll catch the 33 and head home for good, but for now, I got lots more riding to do. 

In the meantime, I have a new personal trading strategy, one that the more savvy among us have been using for years. Fade CNBC. But then that would require me to watch it, something that I have refused to do for 20 years. I can't stomach it. I hate infomercials. 

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JFC, I just got hit with another tout. In Barrons this time. This looks really bad. I had a trailing stop on this profitable short, which I now must cancel, else I lock in a huge loss. The only prudent thing here is probably to fade the tout, by doubling up again. I'll have to see where it opens. What a goddam joke. 

I mean, this shit goes on ALL THE TIME, but you notice it when you have an opposite position and you start feeling big red welts on your ass for no reason. 

The stock started moving up yesterday in the last 90 minutes as the market was cratering. 

This morning, a market maker in this pos, Cowen, has an analcyst touting the stock in Barrons. It will open, much, much higher than yesterday's close. Do you think that they were accumulating a position ahead of this scheduled news item? 

Whoda thunk. 

The criminality is breathtaking. This is no accident. It's the Street's business model. 

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Just got a notice that Twitter's newsletter service, Revue, which no one ever heard of is shutting down. 

Hopefully, Musk's days as a business magnate are numbered too. He's another conman, malignant narcissist fraud, like Trump. Is it any mystery how people like this gain so many adherents? No. Hitler did it. Mussolini did it. Trump did it. Musk did it, but at least didn't run for office. 

Yet. 

Please go away, Elon.  

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4 hours ago, DrStool said:

Just got a notice that Twitter's newsletter service, Revue, which no one ever heard of is shutting down. 

Hopefully, Musk's days as a business magnate are numbered too. He's another conman, malignant narcissist fraud, like Trump. Is it any mystery how people like this gain so many adherents? No. Hitler did it. Mussolini did it. Trump did it. Musk did it, but at least didn't run for office. 

Yet. 

Please go away, Elon.  

That asshole was only possible with other assholes who funded him.

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I highly doubt that there EVER was a time when the stock market was something like a „true price finding mechanism“. Thru all the decades there was massive fraud, one Ponzi scheme after another. It was even FAR worse 50 or 100 years ago.

The thing is: You can not expect to get more out of stocks than the annual growth rate of the economy with a little stock risk premium on top. That‘s it. If you want more, you start playing a game you can‘t win over the long haul. They get you one day. They get EVERYONE. They would have also get Buffet, but then he became a part of the club. He knew that, hes no idiot. That‘s why he saved Salomon Brothers. Since then hes part of the club.

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24 minutes ago, SiP said:

Pretty big. Most peope bet that bonds have build the low and tlt and other will go up in terms of prices.

Bond yields will end up much higher than they are today. This is an interim bull move. 

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My bet is that yields bottomed this week. 

Keep in mind that the Treasury is suppressing yields at the moment, and that this program does not have an indefinite shelf life, unless the Fed joins in. 

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