The Week Ahead
More blood to come?
I am sorry it has been a fortnight or so since my last post. I was on a weekend away last weekend and have just been feeling burnt out. This year has been the toughest year to manage money in my career.
When I wrote my last post “The Week, Month and Year Ahead” I had become more market neutral. After the Fed decision/ramp, I became net short. The pump we saw off the back of the fed decision allowed me to cut some longs and add to/enter some shorts. After being down 8% in April I needed to change something as it wasn’t working.
I gave a few stocks in that post and mentioned some positions I had added to;
HLF NOW SQ CRWD ULTA MAR INMD BRK.B GME CHK BA CPI.L KIE.L TPK.L KGF.L OCDO.L.- From these I cut SQ and INMD completely and cut CRWD in half. I am adding to CRWD if/when we move a bit higher. HLF I started writing puts against the position and the same with GME.
I gave DKNG as a long (very long) term position @ 13.7 which now trades @ 12 ½. The main equity I gave was Buzzi Unicem which is still trading at the same price (17.72 EUR). I mentioned I had added to HOOD that week which was ~$9.00 I added slightly last week in the low 8’s but sold nearly the whole position on Friday after news broke out about the FTX chief taking a stake. I gave a short position which was ESTC which was trading @ 76.3 - that is now trading for 63.9, last week we saw it trade for mid 51s.
Moving forward… This week… Do I think the “bottom is in” or if this is the “dip before the rip”? For now no. I think selling continues and multiples continue to compress. Last week I got short more names and remain net short. The long side of the book is in defensive names like VZ.
At the time of this post the ES is trading @ 4015 with Williams due later and Powell on Tuesday. I expect a choppy week with the potential for us to see 4100 and 3850. There is a possibility to see some sort of bounce, but for now, I remain short and cautious with the expectation of more downside. 3900, 4000 & 4050 are the levels I am watching this week.
Oil I have no position equity wise other than a short in CHK. Last week I had short positions in MRO and OXY but covered. At the time of this post, we are trading around 110. I have opened a 1,000 lot short in CL this morning @ an avg of 109.98. The 100-111 range has been robust, if 111 was to break with force I’d consider flipping long or just watching.