My brethren, greetings from California.
Shout out to /u/BroBro18070/ for his excellent story from Turkey in masculinity and dumb gorillas.
He mentioned he wanted to see more finance content and I'm happy to oblige.
Briefly, my credentials:
-34 male, single, double major in religious studies and finance.
-Professional background: real estate property management, sales, marketing, DJ
-started trading stocks at 18 and built up a 25¢ candy vending machine route (my high school, college, many local businesses) — I buy gumballs for 1¢ and sell them for 25¢
-21, first 100 oz silver bar, became a total silver addict. Thank you Robert Kiyosaki.
-22, cashed out my vending route, sold it in chunks and snowballed quarters into learning to trade options, mainly to make $SLV pay weekly premiums, was a lot easier than driving around picking up quarters and pissing off tellers.
-25, cashed out all silver at $45/oz — right at the top, thank you Michael Maloney + David Morgan
-24, helped launch Macau's first wine investment trust fund — selected the first cohorts of premier crus and Burgandies (2 of my aunts are sommeliers)
-28, became a corporate officer to the largest option trading club in the US. Registered California non-profit corporation and all.
-Current positions: 88% physical silver, 1% physical gold, 7% options trading for selling premium, 4% long stock positions miners ($AG and $GOLD)
I've been extremely concerned about the irrational market exuberance. This is not like 2006-2008 at all, this is far far worse. Nor is it like the dot com boom.
I've been anticipating a post-covid substantial crash since October 2020. The correction did not come, no worries. Gold took off last fall and winter, killed it with miners and spreads on $GDX, $GDXJ, $NEM, $GOLD. Saw the metals futures market start collapsing ahead of the ETFs and mining stocks, unwound my positions.
Generally I take a top-down approach, I look at the biggest gambling tables first and foremost before I worry about what an individual stock and instrument is doing.
I've been tracking the bullish/bearish sentiment via the put/call ratio on the big 4 indexes (S&P, Dow, Russell, Nasdaq) since late January:
So let's back up, that's a lot of numbers I know many brothers and zoning out.
I've listed key categories to watch: Indexes, Currencies, Metals
Hell, this could be a 3 week master class let alone one post, but let me explain why this is important.
You, as a normal person, have no idea how Wall Street works. I mean $GME shed some light, but you really don't know the shady shit that goes on between big trading desks for investment banks. They are fucking the little guy ever chance they get. From your 401k's, 403b's, Roth, IRAs... that all comes from the 1986 ERISA Act. How many of ya'll read the fine print? Ya none? Okay. Did you know that if your income doesn't go down upon retirement, your tax deferral status disappears? You'll be taxed at ordinary tax rates. This is a book unto itself, go read Prophecy by Robert Kiyosaki.
Back to the show, so ya, you have no idea how to fight the big boys consistently. Well, here's the secret, you can see their wagers. It's like looking at your sport's bookie's books and seeing where all the money is. You can watch them change the odds and so forth. That's what the two screenshots above are.
Let's start with S&P 500. These are the top 500 companies of the US market. It's indirectly pegged to crypto thanks to Elon and a few other firms like Paypal. I don't give a shit. Not into crypto but I'm supportive and $NVDA has paid my rent a few times, so I get my cut of the action, don't you worry. Now S&P is traded effectively 24/7 through its own futures contract. I always check this before I sleep and before 6:30am PST to get a sense of where the market is going. While the US market is the dominant player, it's good to know what international markets are doing.
Example 1 : 2006-2008 — I saw coming because of a Zerohedge article on drastically reduced electricity consumption in China. This was an excellent leading indicator and one that is relatively not doctored by the dirty C-C-Pee.
Example 2: Covid crash I saw coming because China had it's Lunar New Years in February last year, it's a 2 week shut down roughly for the whole country, their stock exchanges shut down for a full week. Then COVID in Wuhan blew up. All those fake videos of people pancaking onto the pavement..remember that bullshit? But people were dying. You couldn't get accurate death reports so ya, I looked at orders for funeral urns. Tens of thousands were being shipped into Wuhan every week. 24/7 incinerators. If you dug deeply enough, you probably found out Wuhan hospital spikes in traffic actually goes back to August of 2019, but that's a different conversation.
Sorry, I digress, stock exchange opened back up, market collapsed like never before. I was like shit, it's coming. Loaded up on big shorts. Cash money. $SLV collapses to $11. =) Gold silver ratio hits breaks 100 for the first time. I swapped all my gold for silver. This is an enhancement strategy, even between similar assets, they have a value cycle and you can trade between gold and silver and collect free ounces with each optimization period.
Okay, I'm meandering a lot here, sorry. I'm a little high.
So yes, international markets are important clues. The stock market is an excellent news source, it discounts events and prices in trends and all kinds of important data. It predicts a lot of things too from elections, Tweets, all kinds of stuff.
Back to the screenshots. More people need to learn about options. Even if you don't trade them, it gives you such an edge for stocks. There's so much data you don't realize even exists for free. For example, the put/call ratio which is the point of this post. (Just trying to lay ground work for brothers who don't trade but want to get some background context.)
In short, options are just agreements for a certain asset for a certain fixed price at a future date. It's a derivative. It's the same family of financial instruments beyond just common stock, it's related to futures, warrants, convertible stock, etc. How big is the derivative market? Notional value of 1000 trillion plus. No one really knows. But it affects everyone. We just had the big LIBOR to SOFR switch (change in overnight lending rates for banks, changed it from a London based fixed rate to a NY based ARM style)...guess what was the stress test for that? $GME baby. Melvin Capital's bailout. Not one in a million people realize what was happening that week. You could basically call $GME a financial false flag for what they really wanted to one to notice. That's another huge topic. Moving on.
Sooooooooo option contracts expire. Generally you have only 2 kinds of options: Calls (bullish) and puts (bearish). You can trade pure calls or puts exclusively, but that's mainly for newbies or advanced players. The general litmus test to measure the success of an options trader is: do you buy options or sell them? 95% of people buy options and lose large sums of money, quickly. They don't understand theta decay and volatility crush. You can pick the right direction, watch the stock go up and still lose money. Most people do not learn from this nor process it. Their journey typically ends here sadly. All the veterans of my trading club sell options. 90% of my option trades are selling vertical spreads. We have maybe one outlier who has gone back to pure calls or puts, but he has written trading plans with clean rules for every eventuality.
So I've been writing down the split between the calls and puts. Traders call this a ratio, the put/call ratio. That's typically a number. 1 = 100% even parity between calls and puts. That's very bad. It rarely gets that bearish for anything. 2 = 200% more puts over calls. 3 = 300% more puts vs calls. 4? You catch on quick ;)
The indexes are NEVER this bearish without a major drawdown around the corner. I always glance at the options data for the put/call ratio when trading, but I've been so concerned that I started writing it down for our club's private discord server. This past week I cleaned up like a mofo while a mere 4% drawdown undressed most of my fellow traders. These fools had no hedge on and thought going bullish on $TSLA would last forever. Well, this emperor wears all their clothes now, I was long VIX, the volatility index for SPX. They called me Chicken Little and now I'm printing tendies with their tears. ;)
So let me talk about all the entires you're not seeing since I've been posting in January. The 4 indexes are not equal. By order of importance.. I'd say:
1) S&P 500 (top 500 companies of the US)
2) Nasdaq (very tech heavy)
3) Russell 2000 (top 2000 companies of the US — this is the best major index because it isn't just the trillion dollar companies like Apple, but it is far closer to Main Street and Mom & Pop's due to the top 2000 companies. This is the same reason why this is SO MUCH more bearish. I've seen 300% and 400% more puts than calls several times over the last 40 days.)
4) Dow.. sometimes called the Diamonds because the ETF ticker is $DIA. This is a worthless index in my opinion. It tracks the top 30. It's weighting is a bit different than the S&P. It's a poor representation of anything. And it's ETF is traded in relatively low volume. I just track it any way, but I think I'd retire it soonish. The Dow is really optimistic at times, it can go more net more calls probably 10 times in the last 40 days. I call this the Dunce of the big 4 indexes.
So yea, that's basically it. I list the # of contracts executed on the bullish or bearish side.
Generally.. put/call ratio:
>1 (greater than 1) = TROUBLE. More puts (bearish bets) than calls (bullish bets)
>2 = holy shit
>3 = fuck
>4 = wtf^10000000 — The Russell index has done this half a dozen times
0.00-0.20 = very bullish
0.20-0.6 = normal mixed bag
0.6-1.0 = getting bearish
This is really fun to look at before earnings. You can also look at order flow and see what time big bets are made and for how many contracts. Wall Street and Main Street traders trade different hours and take different lunch breaks. There's definitely a pace to the trading day. There's seasonality (historical trends) for everything: the first 4 trading days of the month, each month itself, each month in the context of the political calendar — each month performs differently if it's say.. an incumbent president going into his 2nd term).
So yea, the futures market is generally further down the line and gives you a hit of what's to come, which is why I track it for gold and silver which I trade heavily.
Why track BTC? Cause it's in the S&P for better or worse. Crypto crashes, it's taking $TSLA with it and Tesla is a major component of the S&P now.
Why track the US Dollar Strength Index? Cause I short bonds. Diversify yo bonds niGG@!
Traditional strategems on a falling dollar are: long commodities, short bonds and long emerging markets (SHOUT OUT TO BRASSSSSIIIILLLLLLLLLLLLLLL. $EWZ. God damn. The land of jiu jitsu, acai bowls and QWEENZ lol).
And by short, I mean go bearish. Long = trade bullishly.
Short can also mean, I'm selling X. Like, I'm doing short vertical spreads on Nvidia means I'm selling vertical spreads on Nvidia. I sell high, let time pass or get the directional bias I wanted, and I buy back it cheaply. Then do it again.
I welcome any questions, I'm sure there's a lot.
What does this mean for YOU?
Wall Street has spent a lot of money buying hedges and bearish positions that you aren't paying attention to. Are you buying S&P futures? No? Hell, I'm not even doing that. SPX? Nah, that's for big money dogs. SPY? Hell yea.
I also track OnBalanceVolume, this is my FAVORITE indicator for charting. It tells you if money is flowing in or out of the underlying asset. Isn't that cool? Makes sense right? Money flowing in = high demand, limited supply of shares, stock should go up. This is like gravity. You can fight it only for so long, gravity always wins. (Which is why I train jiu jitsu.) Math and gravity always win. You might as well make it a powerful and trusted ally. Flying arm bars for everyone! God I need to get to BRASIL porrah.
So yea, long story short on inflows/outflows. MASSIVE outflows for S&P, Russell and Nasdaq. But if you and your mom are buying up all the Gamestop and random meme bullshit, why the sell off and who is doing that? Easy. Wall Street. They're unloading their shares to retail. And then buying big bearish bets.
They can't unload it all so fast, it would crash the market. So they need to do it bit by bit.
So yea, you heard it here first. A giant correct event is coming. 10-40% easy. Jerome Powell will fire up the presses just like in April 2020, but he wont' be able to do it same business day, hell, same business week is a stretch. By then, the damage is done. This V-shaped recovery will reveal it's true pattern: the F U shaped recovery cause it was always designed to transfer money from Main Street to Wall Street. And yours truly and homies are the vanguard cavalry to fuck up their shit all day every day. Shoutout to /r/wallstreetsilver and the GATA crew. Buy physical silver, crash JP Morgan. :)
If I may make a recommendation, avoid /r/wallstreetbets and for vijayjay's sake, stop trading on your phone. At best, use It to glance at your positions and modify existing orders, but ALWAYS go for the fullscreen desktop experience to see charts and data.
And stop using Robinhood. Jesus. Don't use WeBull. That's a Chyna owned company. And stop buying $AMC. Chyna owns that shit. They're laughing at all you mofos trading your hard-earned, overtaxed fiat dollars for their worthless shares. It was going bankrupt by June, even with the 600 mill credit line they got. Cinemark was gonna buy up their dead carcass.
You wonder, "But OP, what's with the Commie hate?" First off, F. U. You don't know wtf Communism is. I do. I have dead family members thanks to Chyna Comms. I keep 30 cals nearby just in case, ESPECIALLY my Garand.
From my research, the short squeeze of $GME was organic. Honestly, it was mainly Dr. Michael Burry, my patron saint, that led the wave, not deepfuckingvalue.
Phase 2 of the short squeeze became a cluster F. People piling into AMC, BB, NOK, and... bed bath and freakin beyond? What the crack!?!? AMC became the dominant ticker. Silver popped in for a second, more on that later.
Why AMC...? Let's see... Reddit is CH-yna owned... AMC is CH-yna owned... gee whiz... you think there's a connection? Ch-yna is a paper tiger, they're broke as shit. They're in serious trouble. Winnie the Pooh there is fighting insurrection on the daily. He only just purged 30k officers in the People's Liberation Army...because reasons. And please stop asking questions about non-existent China inner turmoil. ;)
And the silver post on /r/wallstreetbets uh... BANNED by the moderators. REaaaallllyyyyy. PLUS censorship of silver analysts on Twitter, Youtube and Facebook. What the actual F?
So you're telling me, JP Morgan can issue a 6 figure price target for Bitcoin.
Bank of America can issue a $3000 price target for gold by year end.
And for silver... you get digital book burning and censorship?!
Show me a society where book burning led to prosperity. Don't worry, I'LL WAIT.
deadskeleton.jpg
Oh man, I am too high. Edibles ftw.
Sorry, so long. Peace out homies. Keep stacking rocks like Colorado. Stay strapped, buy your kevlar plates cause that shit is gonna be priceless.
Love you guys, help your brothers out. Peace.
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