bearcrusade

[bearcrusade]

Day 3

So far so good. The week closed and I hold 40 VXXB ETN’s and plan to substantially scale this position up over time.

Position 2 is in profit:

20 Shares 13/01/2021 +‎2.90%‎ Opening Rate 16.58 Current Rate 17.06 Opening Value$‪331.60‬ Current Value$‪341‬

Position 1 needs time but is getting there. 

20 Shares 06/01/2021 ‎-3.83%‎ Opening Rate 17.74 Current Rate 17.06 Opening Value $‪354.80‬ Current Value $‪341‬

I was a lil too early I think with position 1 but I have plenty of margin and will get there presuming I’m right about the direction the markets will move over this year.

I have a full map of what’s going on in the markets now I believe and I’ll break this down. 

A Brief Introduction To The S&P500

So for those not in the know, the S&P500 is a American index which has an enormous weight towards big tech.

In fact it has an enormous weight towards about half a dozen companies which is never a recipe for success.

The companies I’m most interested in are: AAPL (Apple), GOOG/GOOGLE (Google), FB (Facebook), TWTR (Twitter), Microsoft (MSFT), Amazon (AMZN)

The reason we’re targeting the likes of AAPL, and AMZN, and GOOG and FB and TWTR is because these are the primary companies responsible for pressing big-tech’s censorious agenda.

Now, when we look at the weighting of these companies within the S&P500, it demonstrates that the S&P has basically been cornered by big tech.

# Company - Symbol - Weight 1 Apple Inc. (AAPL) 6.43551% 2 Microsoft Corporation (MSFT) 5.03088% 3 Amazon.com Inc  (AMZN) 4.16654%

5 Facebook Inc. Class A (FB) 1.84459% 6 Alphabet Inc. Class A (GOOGL) 1.62560% 7 Alphabet Inc. Class C (GOOG) 1.57793%

178 Twitter (TWTR)  0.11378%

The combined weighting of these 8 companies within the S&P500 means that as just 7 out of 500 companies, they actually occupy  around 20% of the S&P500′s valuations.

So in other words, if big tech goes down, the S&P likely goes down with them.

In other words, the S&P has been largely cornered by big tech and this is why I’m singling it out

A Map Of The Forces At Play In The S&P500

So I’ll break this down.

Red Arrows are indicative of trends for sellers (resistance).

Green Arrows are indicative of trends for buyers (support).

The Top Chart shows the S&P’s raw price and the trends at play within it. 

The middle chart shows the RSI - the relative strength index of S&P price movement.

The bottom chart, most significantly (And which I’ll explain) shows the relative purchasing power of the US Dollar.

Now a few things will stick out on this and I’ll break it down and explain it.

Firstly, the most obvious thing is that the S&P price is on an enormous bull run and I think we have to ask ourselves why this should be the case considering the chaos going on in the world.

Secondly, pay attention to the Red Arrow on the top chart.This represents another fundamental market force known as “resistance” and this represents sellers who are looking to sell positions and exit the markets taking their profits with them. The red arrow shows that sellers/resistance have been gaining confidence over the last 10 years.

Thirdly, pay attention to the Green Arrow on the top chart. This represents a fundamental market force known as “support” and is an illustration of the willingness of buyers prop up the market during downturns. The fact that the arrow which represents the trend of support is declining shows that the confidence of buyers to buy on big downturns is declining. And in short, this means downturns are in principle actually getting worse.

So, what we have is a situation where the S&P is at all-time highs, but where the potential bottom-of-the-market has shifted to a much lower point.

Additionally, notice the middle pink indicator.

This is an indicator called RSI (Relative Strength Index) which shows the force of the movements in the market. 

As we will see from the trendline, the RSI has been gradually bleeding strength for the past 5 years and, despite divergence in price/rsi in terms of the highs, In fact, the movement of it’s lows correlate to the movement of lows on the price of the S&P500 and this seems to explain some of where the lower-lows on the price of the S&P500 have originated from. Additionally, notice that a downturn has usually struck whenever the RSI reaches the top trendline in red. This suggests that a downturn could be imminent. 

Also look at the orange indicator. This is a mini-chart of the US Dollar Index which weights relative dollar strength.

The dollar has been on a multi-decade bull-run since 2008 and the latest dip in the dollar can be seen to be responsible for some of the gains in the stock market this year.

Here’s a close up of the movements of the S&P500 relative to the dollar index over the past year.

So it’s therefore my hypothesis that, after the COVID crisis, the dollar decline was responsible for much of the S&P500 movements.

What this could imply is that a dollar rally will basically crash the stock market.

[bearcrusade]

Day 1

So, here we go, my first trades on this blog are are buying Barclays VXXB Volatility notes. I will aim to buy some of these every week as going forward and just keep accumulating irrespective of what happens. 

For the uninitiated, VXX is an exchange traded note which is indexed to CBOE Volatility Index (The VIX) which itself tracks the volatility (Which can be described in terms of how much the price moves over a unit of time) of the S&P500 index.

VXX notes function in a similar manner to a bond or a simple IOU. They are a “paper asset” much like familiar government treasury notes and even simply money-notes are.

 However, the prices of VXX Exchange-traded Notes are index-linked to the underlying performance of the VIX.

This means that VXX (and the underlying index, the VIX) are designed to move in accordance with market volatility. That is, they gain or lose value, depending on how unstable the markets are within a unit of time.

This is important to remember because this isn’t a traditional short-sell. Rather than an outright crash, what I’m forecasting over the next 5 years or so is lots of market volatility and I’ll explain why.

In a nutshell, the S&P500 is full of crap multinational companies who do not know how to behave themselves.

Some S&P500 companies, despite being some of the most popular investments in the world have debt profiles of over 100% of their equity as an obvious first point of interest (this is relevant for lots of reasons which I’ll outline in further posts) and of course lots of these companies are big-hitters like Amazon, Facebook and Apple who are behaving in an abusive and censorious way towards the public and have run lots of various antitrust rackets and so on and so forth. 

So in a nutshell, not just are these companies very weak in financial terms (I’ll build the further case for this over the course of this blog) but they are also very poor citizens who don’t believe they hold any responsibilities to society. 

Therefore, as well as the obvious profit potential I plan to outline and describe over the course of this blog, there is also a moral case for speculative attacks to both further and make the case for divestment drives upon them.

I will be attempting exactly this and describing the case for this within this blog from both an ethical point of view, but also a financial-economic point of view.

DISCLAIMER: I fully accept that I may lose money doing this and this isn’t a dick-waving contest. I am not risking anything I cannot afford to lose and nobody else should risk what they cannot afford to lose either. This blog is not financial advice, don’t be a dick, etc. etc.

[bearcrusade]

So it begins.

Okay as an introduction, I’m a marketing/web dev professional and I live in the UK.

When I noticed certain things taking place regarding the economy worldwide I decided that it was time to get back into the markets again. 

Naturally, because we’re at all time highs, I’ll be playing a bearish position on the markets and I’ll outline this as we go along. 

My interest here is also because lots of prominent companies have also attracted a significant backlash due to their actions with respect to what we might call “censorship” (which is actually an antitrust issue in some respects). 

These prominent companies are all members of the S&P500 (sorry Americans) and, to summarise:

I am focusing on these because I believe them to be fundamentally vulnerable and I will use this blog to build a case for this.

I believe that there is a moral case to launch speculative attacks upon them in order to encourage people to divest from them.

I am using this blog to describe my trades both as a useful diary tool for myself and also as a point of interest for anyone else who’s interested.