Another Reason to Be Cautious on Spacey
Position: Short SPCX (VS)
The Bull Market in Complacency and Rationalization
* Increasingly market participants know less and less about value and more and more about price…
Half of the bullish cabal ignores valuation in the belief that S&P EPS will grow into an all-time high in the measurement of an assortment of traditional valuation metrics, which include cash flow-to-enterprise value, the price earnings/sales/book value ratios, return on equity, the Buffett Ratio (total market cap to GDP), the CAPE Ratio, etc.Â
The other half just cares about price momentum.
Position: Short SPY (M)
Tweet of the Day
Position: None
My Impulse to More Aggressively Short the Indices at 4 AM
When I awoke at 3:30 AM I saw S&P futures +20 handles and the Nasdaq futures +255 handles.
What caught my eye was the outsized gain in the Nasdaq — even though Mag 7 stocks were flat to slightly lower at around 4 AM — it was all due to gaps in semi and memory stocks (especially $MU, $AMD and $SNDK):Â
I shorted $SPY and $QQQ because I don’t think that outsized influence and divergence continue for a host of reasons.Â
Position: Short SPY (M), QQQ (M)
S&P Oscillator Remains Overbought
The S&P Short Range Oscillator remains overbought at 1.64% vs. 1.59%.
Position: Short SPY (M)Â
Early Wednesday Morning Trading (4:05 AM)
I am back adding to index shorts with S&P futures +20 handles and Nasdaq futures +260 handles:
* $SPY $752.33
* $QQQ $736.17
Position: Short SPY (M), QQQ (M)
Tuesday’s After-Hours Advancers and Decliners
After-Hours % Advancers
After-Hours % Decliners
Position: None
Tuesday’s Closing Market Data
Closing Volume
– NYSE volume 12% below its one-month averageÂ
– NASDAQ volume 11% above its one-month averageÂ
– VIX index: up 0.74% to 16.32
Breadth
S&P 500 Sectors
% Movers
Nasdaq 100 Heat Map
Closing S&P 500 Heat Map
Position: None
Basket of Shorts Covered
Housekeeping item.
Into the afternoon swoon I have covered the basket of high-octane/beta shorts I recently put on.
Some of the stocks in the basket include $MU, $AMAT, $SNDK, $AVGO, $MRVL and $TSM.
As I have noted in the Comments Section, this strategy is not recommended for home gamers!
Position: None
That’s All There IsÂ
And when I was twelve years old
My daddy took me to the circus
The greatest show on Earth
There were clowns and elephants, dancing bears
And a beautiful lady in pink
Tights flew high above our heads
And as I sat there watching
I had the feeling that something was missing
I don’t know what, but
When it was over
I said to myself
Is that all there is to the circus?
– Peggy Lee, Is That All There Is? Peggy Lee — Is That All There Is? 1969
Yesterday we all saw a constant parade of interviews on Fin TV with interested (and biased) SpaceX ($SPCX) parties (founders, long-time private market investors, board members, management and those that got stock in the IPO – even a few Wall Street firms that were launching leveraged ETFs on SpaceX). To a person they waxed enthusiastically (but vaguely with glittering generalities) about the almost insane TAM (total addressable markets) that the company faces.
To Mars and beyond…. was the prevailing mantra.
There was not one interview with a skeptical analyst/observer. Key man risk, execution risk, etc. were glossed over.
But there is another thing that was not emphasized… that is a key reason why the shares are currently trading more than 50% higher than the IPO price of $135/share.
I am sorry to break this news to the business media and to investors/traders but one of the most important reasons that SpaceX is trading anywhere near its current level is that the float is extremely small — in absolute terms and relative to the index inclusions, volume of options trading, hype and other choreography.
Is that all there is
Is that all there is?
If that’s all there is my friends
Then let’s keep dancing
Let’s break out the booze and have a ball
If that’s all there is
Position: Short SPCX (VS)