Time is running out on a number of our trade suggestions. Six trades were winners, and three trades were losers. Not surprisingly, all the winners were bearish trades and two of the losers were bullish trades.
The equity market, and indeed all risk assets, are in meltdown mode. We have been anticipating this for quite some time now, and we hope our readers take our opinion analysis at face value. If you did not watch our latest video, we suggest you do so. We think the next 12 months will not be fun for bullish investors.
The chart above shows a breakdown in the S&P 500. The trend is down. Higher interest rates driven by higher inflation suggest the bear market in stock prices has more to go.
High-yield bonds are showing more stress than equities. This is a decidedly bearish development and it makes us quite nervous.
Bitcoin is getting some headlines, and not the good kind. It is a bearish trend. Celsius, a firm that lends out people’s cryptos so they can earn some interest, halted trading today. This is not a good sign as it suggests people might want to sell not and ask questions later. To liquidate its position, Celsius must call in loans. A classic mismatch between borrowing short and lending long. We thought they were running a matched book with the locked-in people’s investment and rate of return for the duration of the loans.
The chart above is a summary of the trade suggestions coming due this week.
- BIDU: Biadu was a super bullish structure that did not work out. Take away the Chinese government crackdown on tech stocks and we are confident Baidu, the Google of China, would be trading much higher. Since we think the CCP is lightening up, we are going to stick with the trade by having the stock put to the trader. We are looking for a protracted bull move in this name.
- EWZ: Brazil is a natural resource driven economy. We thought they would do well in this inflationary period where commodity prices rise. Turns out we were wrong. Close the trade and recover what you can.
- UUP: We have been bearish the dollar and this was a little chip shot to sell the currency. It did not work out as well.
- GLD: This trade expires at the end of the month. However, we do not like the way gold is trading and we would close it right away and take profits.
- MA & SYY: These short spreads should expire worthlessly.
- PLNT: Planet Fitness has a bit of life left in it. Trade this one close to the vest and take your profits.
- SHW: Sherwin Williams should expire worthlessly.
- DDOG: Datadog trade is at a cusp. If the stock contriuses to sell off, the spread will expire worthlessly. If it pops, it could be problematic. We suggest closing the trade at the best level possible.
