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Monthly Digest | December 2020

Analyzing the key trends, events, and factors that drove market behavior in December 2020. Let's explore the pages of December 2020's trading chronicle together, unlocking the secrets that unfolded in the realm of stocks and investments.


December 01 2020

2 things to be said about this


One and this is the most important. There is 272736272627252735386 things to trade. Thinking in all stocks, gold, ag, bonds, crypto is a waste


Most of the time when commodity cycles are trending they will flow back to the lagging commodity class


This seemed like a sentiment washout. I’ll continue to hold my crypto positions because bitcoin could pass 20k and never look back, But to go all in when we have a lot of great values out here...


Sentiment wash out. I’ll be paying attention and looking for our buy signals in the miners this week




Tips and gold major divergence


Gold and real yields inverted


Yields 30-40%less than expected. Ice storm also hurt more than people realized. Farmers are going to sell this crop cheap sadly. Cotton




NYAD at a new high today. Lets see where it closes


There was this terrible song that use to play at the bike park when we were kids. It said something like beauty in the breakdown. Finally I get it


The dollar breaking down


Because we bought X... am I now a value investor.


Silver up almost 7% today. It looks like a bottom. And we all know I’m an ass man so we like bottoms in here. But it also might not be a bottom. Anyone remember the story with the girl I called “tricking” with the 4 bra’s


Tricks can happen that also make bottoms 👀 💯


But then you pull everything off and you are left with... nothing.


I have some news and the market has been saying it all along. We will have a vaccine soon and it will be public by early next year. At least 7 of them


December 02 2020

What was the best part of the gold move today. Bonds went the opposite way. We need that correlation to break down


What if I said I know bitcoin will hit 37k. Will it look like I know some shit - I don’t. That is the projected move though. Night all lol


First week of December is famously known for tax loss selling. Prepare for turbulence in the short term


Oil bouncing off of its break out zone.


Cotton may look large but it’s not very volatile. Sugar put in a major reversal today



Turn around Tuesday


A mistake I made earlier this year was being too bearish in April. I said I would not make that same mistake again. If the right opportunity presents itself. As short term traders the best we get sometime is when everything links up well for a trade. Heavy short interest. Oversold to long term support levels. Election catalyst. Strong seasonality. Hated rally.


All of this made november a good month.


Look for natural gas to make a higher low right here. Stop at the November low.


December 03 2020

On price action and 3 push rule



New high for inflation expectations


On Futures


Amzn continues to consolidate but if it gets going it’s not going to stop



December 04 2020

Added a new one for diversification this month. Canola


Cotton. We have been talking about the fundamentals this month. But when to buy?


Soon. Very soon


Platinum broke out. Don’t be afraid to buy strength


Platinum was the first mover weeks ago. It’s continued to outperform ever since. Holding from the flag break out. I guess you can’t call that a flag. Long from the ugly base thing lol


Speaking of 39 inches


Rotations, pull backs and new leaders. Nice flag break out in small caps today



Strong Friday’s can lead to strong Monday’s



OIH put in one hell of a week. 7.26% up on the day


December 05 2020

Something that the bears aren’t saying


I don’t see a ton of sell off potential to the end of the year. Actually I could easily see us rallying to 4000 by year end or near it. (I hate even numbers) if the potential for the market was dulled down because of covid. Then why wouldn’t it open up?


Fundamentally I see this rally as artificial but anyone would say that. It does not matter. Inflation expectations continue to move higher. One day that will be very bad for the market but right now we are in melt up mode


Positioning on a longer horizon isn’t extreme. Some systematic funds could be adding new index’s. IE energy, small caps, banks as well as Asian and European index’s


The dollar is fucked. That’s the technical term. Unless we have a black swan. We are in a low risk market. The only risk is, risk is low.


This usually leads to a melt up


Here’s the Soros story I talked about last week


Implementation and flexibility. You need to implement a trade in a way that limits your losses when you are wrong, and you also need to be able to recognize when a trade is wrong. George Soros has the least regret of anyone I have ever met. Even though he will sometimes play up to his public image as a guru who knows what is going on, it is in no sense what he does as a money manager. He has no emotional attachment to an idea. When a trade is wrong, he will just cut it, move on, and do something else. I remember one time he had this huge FX position. He made something like $250 million on it one day. He was quoted in the financial press talking about the position. It sounded like a major strategic veiw he had. Then the market went the other way, and the position just disappeared. It was gone. He didn’t like the price action, so he got out. He doesn’t let his structural views on how he believes the market will play out get in the way of his trading. That is what strikes me about really good money managers —- they don’t get attached to their ideas.





The main thing we will talk about is the possible next leg in the dollar. CADUSD leading. Good for energy markets.





MXNUSD the wildcard


 In the short term it has been the best performer


The yen. The most boring trade in macro.


Asian led economic recovery. Yeah. I still see it


On to dollar sensitive areas. EEM


Metals and Mining. No one wants to pay attention to it but damn we are moving


This thing has been a monster. FCX


EWZ Brazil. Just getting started




We talked about the pull back in the majors in the uranium space to the 200 day MA. This week we closed over the 200 week MA as well. This is a major change in the uranium space







The aussie dollar isnt the only thing thats bullish in that area.



Copper we have been bullish on copper for awhile here. Everyone is saying this move will end soon. As long as the bears are out. This will and can keep moving higher. This environment is a great environment for copper.


oil. And the day I learned stock charts sensors bad words




OIH look at the big picture


Look at the bigger picture


Follow the price action


OVX oil volatility falling hard



sugar short term.


 natty. Fucking natty








JNK TLT a broke ass credit spread chart


I am still short the long bond. I think this is when this party really gets started.


30 year yield green and copper to gold ratio in white



 small cap AD line at a new high!


Bull bear indicator






 silver to gold in elders bars. Gold in white




December 06 2020


c




One thing I want to bring up here. So I mentioned that unless we saw consolidation. Bitcoin would be a grede C breakout. Meaning Ill stay long but I wouldnt be interested in buying the break out


Right now we are consolidating and building to a move higher. This would be a grade B break out. Much better



December 07 2020

Yen long term


Someone said that that isn’t significant. 512 points in the dow


Umm that was 1998 the Dow was 8000. The Dow’s over 30000 today


My main trading platform is on IB and it’s down this morning. Yay. Break time


Melt up. And up


Ags are perking up nicely. This is exactly why I really enjoy trading a diverse group. Equities can get hit but commodities can rise. Bonds can move. Currencies can move. Crypto can move. Energy can move and so on...


You’ll never know where your biggest winners will come from.


December 08 2020

Traders almanac


Small-cap stocks tend to outperform big caps in January. Known as the “January Effect,” the tendency is clearly revealed by the graph below. Forty years of daily data for the Russell 2000 index of smaller companies are divided by the Russell 1000 index of largest companies, and then compressed into a single year to show an idealized yearly pattern. When the graph is descending, big blue chips are outperforming smaller companies; when the graph is rising, smaller companies are moving up faster than their larger brethren. In a typical year, the smaller fry stay on the sidelines while the big boys are on the field. Then, around early November, small stocks begin to wake up, and in mid-December they take off. Anticipated year-end dividends, payouts and bonuses could be a factor. Other major moves are quite evident just before Labor Day—possibly because individual investors are back from vacation. Small caps hold the lead through the beginning of June, though the bulk of the move is complete by early March.


Market Value of Global Negative Yielding Debt


Silver outside day up close yesterday from a tight range. Very bullish. Could we break up now?


The ingredients are there. I had a long signal for platinum, then silver, then the silver miners, then the miners. Gold put in a catapult signal Monday morning


I think we are ready


Watch for a reversal higher today. Gotta love Tuesday’s



PFIZER VACCINE FOUND SAFE, NO CONCERNS THAT WOULD PREVENT EMERGENCY USE AUTHORIZATION: FDA




December 09 2020

I’m not a big gap fill person. But on futures bitcoin has a big gap to fill.



Lumber. Does a double top lead me to take profits? No


It is a point to be cautious of.


Turn around Tuesday to a fuck you Wednesday


December 10 2020


Are we seeing a pattern yet. Dollar...


Sensitive


Assets


BTC still bullish


Another ridiculous financial myth - The constant fights between growth vs value


Look inside that value ETF one day. It’s just a group of left for dead stocks. They have even said - They pick growth stocks and then value is what’s leftover





December 11 2020



Dollar dollar bills


Legendary



Adding to the 30 year bond short here


Bitcoin closed its futures gap. Let’s see how it reacts here. Russell already positive


Commodities are having a week. Russell fell. When 39 inching it goes wrong


Wheat is finally moving


NG has a buy signal. If you like torturing yourself




December 12 2020

The first of 7


Significant rainfall deficits


Good for soybean, coffee, sugar prices


Energy dividends much higher than utilities


December 13 2020

1 this week we are going to focus on actual trades


Wheat entered again this week


HE hogs feb. looking for a close over 66 to enter.


CC cocoa. Entered a half position on friday as we closed over the 10 EMA Ill add if we break out of the flag.



Fucking natural gas


Sugar in the buy zone


bond spread trade.  Shorting th long end and long the short end


 oil still long


Oil targeting 50 still. Bullish


Copper as much as I have enjoyed this position I have to admit that there are some issues. I am still long with a trailing stop at 3.25


as much as everyone keeps talking about stretched dollar positioning... Im not seeing it


2 weeks ago I wrote that we were in the red zone so I wouldnt look for any crazy reversals. We certainly saw a nasty break down. Right now we are in a flag


Weekly in the red zone, all time frames bearish.



BTCUSD both systems bullish. No closes below the bottom of the bband






If santa claus should fail to call, bears may come to broad and wall.


we have just got in to the santa rally part of december


inflation










Small caps on top







Silver to gold ratio








December 14 2020

“My financial success stands in stark contrast with my ability to forecast events...in predicting financial markets, my record is less than impressive.”

- George Soros




For you stock pickers - Transports!


Entered hogs this morning


MRNA is most likely the next vaccine to get approval


Silver is in a major squeeze. But some March calls and walk the fuck away. Only use money you can afford to lose easily. But this could be a 5-15x trade ITM. OTM 20x.


Commodities are literally murdering the stock market


Silver. Feb ATM calls are trading at 1.61 In SLV


HL


December 15 2020

In futures I’m in the silver feb monthlies. Aggressive at 25 dollar calls.


Let’s go over buying options allocations really fast. How I set it up is if I have a 100k account I want to use 1% of the account per option trade knowing that it can go to zero


5% would be the most aggressive I would go. If you’re buying some yolo calls in an account you don’t care about. Feel free to do what you’d like. But I personally try to risk 1-3% of the account on a trade. That gap up in bitcoin futures was very strong. It’s gained the energy to break 20 and never look back.


From the weekend we were looking for a great buy point this week. It think it’s here


Short term buy for a swing. Broad stock market.


Our brains make trading really complex and difficult. Which is why an idiot with a plan will outperform the PHDs consistently in this business. Knowing yourself is key



That’s an everything day



As the ten and 30year commodity cycles come to an end. Commodities are insanely undervalued



Vietnam. Still long Vietnam


My ETF choice for uranium is URNM. I own some of the majors that we have talked about before. CCJ being the main one. You don’t have to buy The Whole sector but I do think it’s important to have uranium exposure.


December 16 2020

Our fixed income allocation is only made up of tips and IVOL now




Gotta diversify



Bitcoin with a beautiful break out today


The ag cycle is getting pushed and pushed. 2021 should have severe weather in both sides. La Niña does not just mean cold. It means extremes



Coffee is on its way


We have a perfect storm in the coffee market. Central America, Vietnam and Brazil are all having extraordinary weather issues. We have been seeing flooding in Vietnam and Central America and we should expect disease to spread that could significantly impair coffee production which would dampen supply coming out of those areas. All while Brazil has had significant dry weather. Of course this all leads to spoilage which means that a lot of coffee can’t even be used. We have NEVER seen the amount of rain that we are seeing in Central America in the last 50 years.


This is why my target is 150


NG still long but I really do see some bring fundamentals here. COT price weather...


Very solid break out today. Anyone who’s using the system to stay long. Give yourself a pay on the back for strong hands

Updates to the charts from last week


What do we need to see now. Celebrating is happening all over. And yes we are long as well and you all know me I love a break out. I upgraded this break out to a buy as well. We have to see this hold.





Yield curve at 3 year high


One thing we have to always admit is what we don’t know.


I’d like to think that I understand the fed action and how it affects the market. But I know that on a fed day. Trying to trade around fed action is pointless. Unless you want whiplash.



Doing my journal today... I realized we haven’t put on one short since September. Every commodity signal is neutral to bullish


Silver calls 78% in 2 days.


December 17 2020

Silver calls doubled. Bitcoin can easily have a throw over here to 25k.


Winners for today


People always talk about gold and silver price and they forget where the alpha is - The miners


10% today around 30% this week. This year has been fucking mental. The most legendary year of trading ever. Biggest crash to the biggest rally. Negative oil to 50 dollar oil. Silver running from 11 to 30





Wheat at a 5 year high


And our favorite monster



I could go on but the point is - 2020 was crazy. I really do not expect anywhere near the same returns next year


You can see the entries during the weekend reports on all of these markets if you want to take the time to dig. I don’t want to social media you guys and say “nailed it” when we didn’t lol.


No one gets everything right and certainly not me but we can attempt to get the general flows right. The big money