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Don Kaufman here. |
What a slop fest… |
We opened down 50 handles. I was a little bit excited about the prospect. And then what do we got right now? Absolutely nothing. |
You're up 0.2%. Don't even bother talking about a rally or a sell off till you're moving like 0.4% becomes any significance whatsoever, right? What you're really seeing is just some noise in the market, okay? |
But here's what I'm watching, and this is what should scare the shit out of you - the entire NASDAQ is being held together by Tesla. It's up today. Is there a reason? |
Not really. Yes, they launched Robo taxis, which is a Model Y with nobody driving it. What a bait and switch, man. At least if there's gonna be Robo Taxis, put a couple bucks behind it. Wrap the cyber truck yellow and make it a cyber cab, okay? |
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The one-stock market nobody's talking about |
Right now the entire NASDAQ is being held together by Tesla. If Tesla stalls, which it eventually will, the S&P's don't have any more fuel. What else do you have today? |
Meta's really not propagating gains. Microsoft is down, Google is still down on the day, NVIDIA's flat. These things just feel like they can't get out of their own way. |
It's a one stock market, okay? And this is fever pitch. Be careful because if Tesla were to pull back or flatten out, there's nothing to fuel the marketplace. The financials aren't doing it, the energy sector is actually seeing sell side activity, and the volatility is still kind of hanging out. |
This is what you don't want to see in volatility - flatline. Volatility flattens out with the market trying to propagate gains, it basically implies that at any point in time, the marketplace still foresees that risk could come in. And that's what's gonna happen. |
Outright scams in the open |
But let me tell you what really pisses me off. There are scams in the freaking open, okay? And people are too stupid to see it. |
Take HIMS. This company was accused by Hindenberg Research of mass fraud. Stock not only recovered, continued to move higher. Today it's down 32%. You know why? Because Novo Nordisk - that's a massive Danish company - called them outright criminals. |
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What they found HIMS doing is taking the weight loss drug after even signing a deal with Novo Nordisk, and they basically were undercutting Novo Nordisk, mass producing the weight loss drug and selling it on their site. Sometimes under the wrong brand name. You can't even believe the crap that this company is doing, okay? |
And the fact that they're only down 26%? Holy crap, I am amazed that it ain't down 50 or 60%. |
The regulatory vacuum |
Here's another one - Super Micro. This company was also accused by Hindenberg of literally running a scam where their families were investors and they were propagating stock. Their own accounting firm left. They were almost delisted for not actually filing on time. |
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And what do they do today? A $2 billion convertible senior note offering. They're just gathering money, okay? And the scam goes on. |
There's nobody really running the SEC. There just isn't. They're not taking any actions against some of these companies. There's no FEC, no FCC, no FTC right now. |
There's definitely no SEC. All your alphabet soup regulatory firms have been put on the back burner. Ain't nobody driving the bus. |
It's Mr. Toad's wild ride of regulation right now. It doesn't exist. |
Stop wasting brain power on geopolitics |
And here's my final thought - when it comes to geopolitical risk, stop wasting brain power on it. I really do mean that. It's fine to think about geopolitical risk, but try not to translate that into what you think is going to happen in the marketplace. |
I am telling you over 27 years and umpteen conflicts - you ain't gonna handicap that. Nobody does. Not the biggest trading firms on the planet. You can't really trade the news because they're faster than you. |
Even if you had known that the US was gonna bomb this weekend, you still would not have made money on it. You would've shorted and gotten killed. People lose money trying to handicap geopolitics, okay? |
The volatility warning nobody's heeding |
Here's what you need to watch - the volatility needs to come down, it needs to calm down, and it can't. Which leaves us trading kind of on pins and needles throughout the course of the day. |
The volatility is all wrong for this marketplace rallying. If that is all you got out of this morning session, you're way ahead of the curve because most people don't even look that direction. |
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And while markets are trying to rally, what's driving it? Tesla having a bit of a rally on Robo taxis. But there's a pretty good probability they're gonna have an incident in their little taxi thing in the days to come. The first time they actually crash one of these things, that's gonna be a rough day too. |
The real market structure |
Look at the expected move - $52 for today. Actual move in the SPX right now? About $30. You ain't got a damn thing when you're getting a $30 move when you're expecting a $50 move. |
We are effectively trading right now towards the upper edge of this tight little volatility box we've been in for a month and a half. Same range since May. It's very hard to continue to want to allocate in a marketplace that doesn't wanna move. |
Movement is life, especially in trading. Not moving or being very confined in a range is impossibly difficult to allocate to. |
What this really means |
This is froth in a marketplace, okay? |
There are outright scams in the open right now. This is where we start to look for stuff like liquidity issues. I think crypto's where it's probably gonna be felt first if we're going to see the unraveling of some of that froth. |
When you see stuff like this going on, as a retail trader, you should probably shy away from the underlyings. What are they gonna do, send me a cease and desist letter? Should I send them a letter back - cease and desist being a scam? |
Because when somebody like Novo Nordisk comes up and says companies are criminals, and Super Micro waits a couple weeks after the dust settles and offers a $2 billion note offering to try to harvest more capital before everything goes into the crap, that's shocking. |
It doesn't represent just two companies. It represents everything in the S&P's. If they're doing it, there's companies like Apple doing financial engineering at its greatest right now. |
So be careful. That's my point. There's nobody driving the bus, scams are running in the open, and you're trying to trade geopolitical noise in a one-stock market. |
It is what it is, okay? |
To your success, |
Don Kaufman |
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