Hi guys,
Hope everyone has been good and healthy...and weathering down the storm.
Just a couple notes from me;
Macro:
There seems to be a lot of fear around the market. Lots of market crashing calls I dont think we (U.S.A/DOW) are there yet, unless somehow I'm blind-sighted by a crash of complete new scale I can't find much empirical evidence to suggest we are in that territory yet.
Link to video in point 8:
https://www.ccmmarketmodel.com/short-takes/2018/10/27/why-a-really-big-move-could-still-be-coming-in-stocksThis video I think is quite important, one of the most balanced I've seen. Shows how important it is to be flexible with your thesis.
End of the day markets like these its more important than ever for each person to do their research, form their thesis and play according to their risk.
I'm playing a game of consolidation which means
Selling/Lighten: "punt" or "gamble" like positions, management that have been lazy or disconnected from shareholders, very long opportunity costs (wait time) without the potential 6-10bagger rewards visible to me etc.
Buying/Adding: High conviction plays, asking myself the question "what will I not be able to buy at these prices if market strengthens a little bit", tight registers, good management, Low EV (With exception to one company).
Perhaps will go into bit more detail in near future, whats been sold and whats been doubled down on.
Overall net cash position has been increasing but only slightly. I've always been very offensive with growing my portfolio, as I haven't started with much and its really the only way to catch up to the big money. Something I look to improve on in the future is just changing from the offensive stance into defensive a bit faster as market tide turns. Greed always gets me giving back profits (I've given a chunk back this October), or maybe it's lack of fear.
Something to watch will be if yields invert and contract. The yield return for 10year shouldn't be less than 2year unless of course markets expectation is significantly lower interest rates in the future...which is consequence of "deflationary" or "recessive" environment. Historically yields inverting significantly, and then contracting has always been followed by recession.
DOW has bounced well of that support zone. Lets see if it holds into elections.
Emerging Markets:
Brazils market has rallied into elections and new president.
Argentina's currency stabilized and they look to have come to a productive solution.
Zinc/Base Metals:
Most were looking good a presenting the same pattern...double bottom - bounce - consolidation but have broken down from consol. recently. China will have a bunch of Zinc smelters go offline during Winter in December so will be interesting to see how spot price reacts to supply constraint.
Vanadium:
Has gone absolutely bezerk. Australia yet to wake up really, we have a good run in some companies earlier but no follow through despite the rapid increase in spot.
Canada has caught on however...also noting TSX listed companies are more conservative with mining valuations than we are on spec end of Aus.
Leader in Vanadium Largo has 12bagged.
Spec Vanadium plays similar to what we have here, shells that do acquisitions that have hopped on the trend has provided greater returns. Example First Vanadium
Gold:
Great rally on XAU/AUD into resistance. Got rejected now to watch for a pivot or Lower High.
XEC;
Freefall, lets see if it finds support around here. It hasn't been this oversold for last 4years, so I've loaded on conviction plays.
Biotechs as we all know have gone vertical, although I see no fundamental thematic driving them other than the very long disparity of valuations between American Biotechs vs how cheap Aus biotechs are/were. I've decided not to take part in the frenzy, I feel its mostly traders playing pass the parcel and most will end up dead in short term from these quick spikes unless a thematic driver comes in.
OIL:
Rolling over here, still a pattern which is incredibly effective "Shortening of Thrust" I use. Second strongest sign of weakness stated by Wyckoff after Buying Climax.
Starting to see very early signs "Shortening of Thrust" on lithium ETF but still work to do.
Sectors I'm watching Gold and oversold base/battery metals (exclusion of lithium for ST). Seeing when they'll eventually catch a bid from lethargy.
Cheers
(20min delay)
