Some Quick Thoughts Regarding the Tape….

Hi folks. Im on vacation with the family and we’re having a brilliant time. 

Whenever I have the chance to spend a bit of time away from the tape, it gives me the opportunity to gain perspective so here’s a few thoughts in no particular order…

1. The most bullish factor out there is the fact that participants still have a tendency to get bearish very quickly and with even a moderate amount of selling. This is like a psychological put and i have written about it extensively. However, this is only one attribute in a complex dynamic that makes up the larger picture.

2. This tape is not well - Take a moment to back up the lens a bit and think about it. The strongest stocks are getting annihilated and the strongest industries like biotech are puking like freshmen pledges at a Greek kegger. Further, the tape is all over the map and some of the best companies are getting liquidated. Don’t be the guy riding that shit down please. thank u…

3. Candles - Take a quick look at a 3 or 6 month daily candlestick chart of any of the major indices, especially the NASDAQ or Russel 2k. Notice how many long red candles very recently. This recent tendency is telling us something. Multiple long red candles in a short period of time usually means correction and always means a real volatility uptick. 

4. I am observing some of the most seasoned traders I know getting torn apart. When I see people I respect on tilt it concerns me a lot on a personal level. Please, before the close today, recall that you are never obligated to take risk for the hell of it and the reason we set stops before entering a trade is because that is the last time we will have the capacity to be objective. If you are saying “fuck it” then you are on tilt, plain and simple.

5. Seasonality is not on your side - The second and third quarter of the second year of the presidential cycle are the 2 worst quarters collectively for the 16 quarter presidential cycle. We are early in this period right now.

6. We have not had a major correction since Doug Kass’ Bar Mitzvah  and for those of you who might not be aware - that was like, a fuckton years ago.

7. If you are a long term investor, these are the types of weekends where you will want to sharpen a pencil, pull out a calculator and do some serious math. There will be some bargains out there, stocks of great companies that are getting sold and buried by those who are writhing in pain Probably a bit early here but in general its usually good buying stocks from those who are suffering and drawing down if you have a longer time horizon…

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