Fear Building Up | 2023-10-29

Hey, welcome back. My portfolio is flat this week, despite a very strong performance from Bitcoin. So I've lost the most from IBM, Shopify and Enphase Energy.

So I've cut GDX gold miner ETF. Despite a fairly strong gold price in this week, I think the miner has been lagging behind. So I've just took profit from this position.

And I've also cut a bunch of short positions like IBM Ford Motor and

CCL

but for Ford Motor, I've cut this position too early. Basically, one day after I cut this position, it had a big drop following the poor earning results.

And I've cut my long position on Lockheed Martin as well, just on the portfolio level risk management. I don't like being too long the markets at the moment.

And finally, I've added a long PLTR, AXON / RCL. And finally, short Tesla.

So overall my portfolio is long delta at the moment,

but the positive Delta is really coming from Bitcoin and bond position.

And I'm also long SPX Delta as well.

And the biggest risks from Bitcoin and Meta. And we have got a bit of sell off after the meta earning results, but I'm still bullish in AI and cloud in general.

And this is my actual option position. So the biggest risk by market value is still Bitcoin.

And I have a fairly high excess liquidity as well. So enough for like three to four new positions, but the, but the excess liquidity also means that I'm not really confident in predicting the market right now.

So this is the chart of the broader market, so obviously a lot of fear right now. But I don't think we should add more shorts at the moment. I think there's a risk that we could see some rebounds.

And this is why I'm having a bit of a cash reserve to try to add some more long positions going forward.

So that's for the portfolio review. As for the market review, I think there is a bit of mixed signal in the market right now. But I think ultimately I do see more upside risk for the market for the rest of this year.

So let's start with some economic data. So this week we have a bunch of positive surprise for the U. S. macro data, for example, PMI. So we have, so we have both the U.

S. manufacturing and service PMI better than expectation.

So we have the chart of the PMIs that are basically going up since the start of this year. And also we have a positive GDP surprise.

So it's basically a 4. 9 percent of rise. It's better than the expectation of 4. 5%.

However, despite all of the data, the market is still selling off this week.

I think it's due to the stronger economic performance means higher inflation means high interest rate.

So the market is crashing and is the fixed volatility index of the S& P 500. And it's also rising, meaning there is a bit of fear building up in the markets. And this gold, I think it's not just related to the market crash. It's also related to the Middle East conflict. And this KRE, Regional Banking ETF

it's not really crashing in this week, but I think the risk is due to the downside. And finally, it's the US Treasury bond ETF.

I think technically it looks like it's bottoming, so there is less risk to the downside and more risk to the upside, meaning falling yield.

And this is the US dollar index. We have also seen that it seems like it's not really that strong anymore. So there is a risk that the dollar may go to the downside.

And this, the dollar Yen chart, we can see that the Japanese Yen fail to fall below 150. So I think the intervention is kind of working right now.

So in summary, I feel that we are at a inflection point in the markets right now.

In the past few months, we have been trading a theme of higher inflation, higher yield, stronger U. S. dollar, and weaker stock markets. But but I think for the rest of this year, we may actually see the opposite happening. Meaning that we could see a weaker yield, weaker U. S. dollar, and higher stock markets.

And especially right now, we are seeing fear in the equity markets. So if the market crash rapidly, like in the next months, we could see some more expectation for easing monetary policy.

So this is why I really think the risk is to the upside for big technology stocks, defense stocks, and some risk off hedges(Bond/Gold/BTC),

but it is just my opinion and I could be wrong so in case we have the broader market keeps selling off, I want to have a stock that is going to fall much further than the broader market. So Tesla, for example,

so that's the summary of my market view. So I will just go for some random stuff right now and starting with Tesla.

So I basically see Tesla as a hedge for a broader market crash. I don't really expect it to happen. I would love to see the market just go up for the rest of this year and just lose off my money on Tesla and make much more money for my other long positions.

But in case of a market sell off, my target is 100 for Tesla.

And this is the structure of my portfolio. So I just shot a strike 150 put