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Showing posts from May, 2020

Is The Stock Market Hurricane Over?

It sure feels like the seas have calmed and our first hurricane in over 10 years is over. However, before we "float all boats" going all in on this ocean, let's take a look at a these two key points from previous hurricanes:
1. Does being up 38% from the bottom, 2192 on March 23, 2020, mean that the hurricane is over? As stated earlier, both previous hurricanes had multiple High Tide moves greater than 20%. The Tide we are either in or just ended is up 23%. This is right in line with 5 tides in the previous hurricanes that were up 22%, 23%, 24% (twice) and 25%.2. Does being only down 10% since 3394, the start of the hurricane on February 28, 2020, mean that the hurricane is over?
At the current 3036 level, the S&P is down 10% since the start of the hurricane (98 days before today). The Great Recession was down only 9% at the 221 day mark and the Dot-Com Bubble was also down 11% on day 313. Deciding when to sail (buy) is a challenge but hopefully history helps us manage o…

Hurricane Corona Tide Watch

Hurricane CoronaTide comparisons so far (as of May 27, 2020):Fifth High Tide of each hurricane:Dot-Com Bubble ↑ 22% over 60 days (day 424, ↓ 15% overall)Great Recession ↑ 12% over 1 day (day 344, ↓ 20% overall)Corona: ↑ 24% over 55 days (day 97, ↓ 10% overall) ACTIVE NOW?Fifth Low Tide of each hurricane:Dot-Com Bubble↓ 22% over 41 days (day 364, ↓ 30% overall)Great Recession↓ 14% over 38 days (day 343, ↓ 28% overall)Corona: ↓ 7% over 1 days (day 42, ↓ 27% overall)Fourth High Tide of each hurricane:Dot-Com Bubble ↑ 10% over 41 days (day 313, ↓ 11% overall)Great Recession ↑ 9% over 27 days (day 305, ↓ 17% overall)Corona: ↑ 21% over 8 days (day 41, ↓ 22% overall)Fourth Low Tide of each hurricane:Dot-Com Bubble↓ 13% over 45 days (day 272, ↓ 19% overall)Great Recession↓ 17% over 57 days (day 278, ↓ 24% overall)Corona: ↓ 11% over 4 days (day 33, ↓ 35% overall) WAS THIS THE END?Third High Tide of each hurricane:Dot-Com Bubble ↑ 10% over 19 days (day 227 of the hurricane)Great Recession ↑ 15%…

Stock Market Course And Heading 05/25/20

Today we honor the heroes who died protecting our freedom.
Each week feels like we are moving further away from Hurricane Corona and we are now up 22% since the April 1 Low Tide of 2447. However, both previous hurricanes had multiple High Tide moves greater than 20% so we might not be out of the hurricane yet.
If Hurricane Corona is over then: we could be rising again in a possible High Tide and we could rise to around the 3000 level. A possible 150 point range for the week is 2875 - 3030.
If Hurricane Corona is not over then: we are still either in High Tide #5 and we could rise to around the 3000 level or we are about to start Low Tide #6 which could take us all the way down to the 2400 level over the next few months based on Tide research.
Therefore, here is the Captain's Log entry:No new positions planned. Continue sailing boats already at sea (about 43% of the fleet is sailing), hoping to call some back to port around the 3000 to 3100 Tide Level. Preparing some boats (up to 60% o…

Stock Market Course And Heading 05/18/20

Last week had some tough to read tide movement as we were on the brink of reaching a High Tide and then a squall developed dropping the S&P 179 points to 2767. The sea has been commonly moving about 150 points between the high and the low each calendar week (a reflection of the high VIX.) The 179 point squall last week, however, was a very abrupt and concentrated move. During the squall, we launched a few small boats.
If Hurricane Corona is over then: we could be rising again in a possible High Tide and it could be safe (although the winds remain dangerous) to float some boats for short trips as we could rise to around the 3000 level. A possible 150 point range for the week is 2800 - 2950. 
If Hurricane Corona is not over then: we are still either in High Tide #5 or Low Tide #6 which could take us all the way down to the 2400 level over the next few months based on Tide research.
Therefore, here is the Captain's Log entry:Continue sailing boats already at sea (about 48% of the fl…

Tricky Tides

We sail according to the tides. We prefer to launch during stormy weather (falling tides) knowing we might get battered around a little at first but hopeful the storm is almost over so we can enjoy the rest of our voyage.
Today is a classic example of the importance of discipline and patience and sticking to the plan. On Monday, May 4, 2020, if we are not still in Hurricane Corona, we established a Low Tide at 2797.85.Over the last 11 days we've been rising toward the 3000 level, the weather has been good and the Tide rose to 2945.82, not quite a High Tide, but it looked like a sure thing.Then, boom, a storm suddenly erupted and pulled the seas all the way down to the 2767 level.We had been in a Low Tide the entire time!
A couple of days ago, we could have launched some boats around 2900, thinking we were in a fairly young, rising High Tide, hoping to take short cruises up to around 2950 - 3000. But, as part of the strategy to only launch during storms or in receding tides, we held o…

Boats And Fleet Management

Everyone has their own personality and preferences. Some like to feel the exhilarating g-force from the sharp acceleration of a jet ski and others like to slowly cruise around like on a pontoon, relaxing, perhaps even barbecuing or fishing along the way.
My personality outside of trading (for the most part), has been one of a thrill seeker. I love the reward of taking on risk. Early in my sailing (trading) career, I took the same approach, seeking out high-flying boats and ignoring the diversity of having a fleet. I put everything into one boat that sunk. As you can guess, this was an expensive approach and it was absolutely no fun either!
Today, I have about 73 boats, in several Watch Lists, in my fleetClick here to read about boat selection from July 22, 2019 (Interestingly we were in a High Tide at the time of that post with the S&P sitting near an all-time high (at the time) of 2976.
One of the important questions you should ask yourself is: how much time can I dedicate to mana…

Course And Heading 05/11/20

Happy Mother's Day to all the wonderful women that made us who we are!
Tides are governed by many factors and emotions are certainly one of them. Tides flow toward optimism (sometimes unsustainable) and pessimism (sometimes unjustified). The last two weeks the S&P started simlarly at 2837 and 2830 and today the seas are at around 2930, a more optimistic tide by 100 points or 3.5% and only 25 points below the last High Tide recognized about 12 days ago on April 29.
As you know, the higher the tide, the less likely I am to sail as returns become more difficult to achieve. A 3.5% return in a week is a beautiful voyage and I did bring back some boats on Friday (one boat, $AUY 12, was at sea for nearly 4 years), however, that does not mean I will call the entire fleet back to the harbor, it just means I have less exposure (fewer boats sailing) preparing for the inevitable Low Tide that is coming.
If Hurricane Corona is over then: we are rising in a possible High Tide and it could be s…

Dead Calm

While sailing, there are days and periods of time during the day that are good timess to do NOTHING!
This morning, with the exception of the Nasdaq, the seas are generally calm, the Tide action is neutral to slightly rising and it might be one of those days to just be patient and enjoy the day.
However, the VIX remains elevated, the probability of a storm is high, and the weather can change quickly so always be at the ready.
Click here for an update on Hurricane Corona

Fair winds and following seas!

Trading Tide Levels (at the time of the post):
Rising Tide (S&P at 2882)Rip Tide (VIX around 32)Subscribe to 10KT Newsletter Learn More About 10KT Facebook
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This is for informational purposes only and the information provided does not encompass all possible or probable outcomes and nothing posted here is an indication of future results. Nothing in this blog is a guarantee or promise of future investment returns and investing in stocks or bonds carries risks including losing your entire in…

April 2020 Returns

As of the end of April, 2020:
YTD Return: -6%1 Year Return 16%3 Year Return 6% average annual return5 Year Return 10% average annual return10 Year Return 12% average annual returnLifetime Return -18% (-1% average annual return - see $WCOM Trade #4)Click here for an update on Hurricane Corona

Fair winds and following seas!

Trading Tide Levels (at the time of the post):
High Tide (S&P at 2954)Rip Tide (dangerous winds, VIX around 29 knots)Subscribe to 10KT Newsletter Learn More About 10KT Facebook
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This is for informational purposes only and the information provided does not encompass all possible or probable outcomes and nothing posted here is an indication of future results. Nothing in this blog is a guarantee or promise of future investment returns and investing in stocks or bonds carries risks including losing your entire investment. I do not recommend, advocate or endorse any third-party links, resources or advertisements of any kind. Any investment decisions are recommended to …

Course And Heading 05/04/20

Last week started with the S&P at 2837 and beautiful weather that gave way to storms on Thursday and Friday, pulling the S&P down to 2830.

If Hurricane Corona is over then we established a new Low Tide and it is safe to float some boats.
If Hurricane Corona is not over then:
We are either in High Tide #5 or Low Tide #6 which could take us all the way down to the 2400 level over the next few months based on Tide research. Therefore, here is the strategy: Continue sailing boats already at sea (about 49% of the fleet), hoping to call some back to port around the 3000 to 3100 Tide Level.Preparing some boats (up to 60% of the fleet) to depart around the 2500 Tide Level. Also planing a few short trips around 2725.Preparing some boats (up to the entire fleet) to depart around the 2200 Tide Level.No short positions planned.Click here for an update on Hurricane Corona

Fair winds and following seas!

Trading Tide Levels (at the time of the post):
Lowering Tide (S&P at 2830)Rip Tide (VIX …