Largest retailer in the world, will be an amazing buy at some point. No idea when and in no hurry. 

WMT cuts guidance , stock down 6.55%

HD raises guidance, stock up 3.05%

Cathie finally pivoting to more risk off for her style in context is a good signal that we may have upside now in the exact names she refused to get away from and the markets in general (risk on). That means we have a good chance of rallying now. She needed these names prior to the fund crashing, it would have been much less severe. Oil, tobacco, and guns. Very telling. Her forecast before this was that we didn't have an inflation issue and that oil topped at $70. Nothing wrong with being wrong, though something wrong with not being willing to change when markets tell you that you are wrong. 

#1 rule-Be flexible when markets change

Your on it Steve, thanks for the great posts here

SPX the 3,854 (20% decline from highs) and 3,815 Fib which aligns with the pivot point are now in view. I posted these prior as some targets for hedges. Will continue to play levels. Still traveling, seeing my Mom in the nursing home. Setting notifications and not watching every tick as usual. 

Good to see the bear long system with an entry here. Hoping for a good flush to that bottom pivot and deep oversold. Was speaking with some derivative guys and they want to see contracts go from 40s to 60s million for the capitulation. Thanks for the great coverage and conversation here. 

Markets are pretty oversold after the recent decline Steve showed in the newsletter. The chances for a reversion to mean rally to happen have gone up a lot. The market is used to just selling and shorting at will now. I bet if we saw the Rydex bear fund data, it is right around an inflection point here for a rally. Not saying it can't go down, just that the risk/reward is to retrace and rally at some point for at least a reversion to mean. There is a gap at 4,123 and supply zone at 4,150s shown to start. 

I posted prior that she would pay for taking on big oil, big auto, etc. and that she needed them, they don't need her. She was calling their businesses the "real bubble" not innovation. Well yesterday she capitulated and sold some TSLA to buy, drum roll...GM, that's right General Motors. So she refused to pivot when wrong for many months when the fund collapsed from $159 to $39. And now she wants to own GM. She also tossed in that she thinks we are in a global recession. I've never seen a fund manager behave this way. Totally upside down. Historic

There was a time when she owned some relatively speaking wise more defensive healthcare names when the fund was in the triple digits still, though she sold them to buy more of the non cash flowing businesses. Pointing this out because I was watching for this as another indicator for a rally near some lows and it has aligned. 

We’re in a similar environment to the first half of 1994, says Canaccord’s Tony Dwyer

https://www.cnbc.com/video/2022/05/10/short-atodayas-rally-is-not-fundamentally-drivena-says-canaccordas-tony-dwyer.html

Great calls today and charting

$VIX just hit lows of day. If bulls can't rally off this after a massive move down and new lows of pivots, then I don't know when you can. At least go to the 4,123 gap..have a heart lol 

Pulled off another great hedge trade this morning when we went to 4,060s, and sold it when we hit that support at 3,970 area. Sooner or later the regular shorting will get corrected and that is when a face ripper comes. No idea when it is, but its very overdone here for one or at least a few days of rally or more. Grateful for hedges. 

Thanks for sharing, very important for the space. 

$SPX Bear markets can have powerful rallies in between. Look at some of the history in markets overtime. Some waves can be really powerful, 5%, 8%, 10%, 12%, 15%, and 20% all examples. 

We are now at the bottom of the channel and deeply oversold. Just like when stocks get too positive in bull markets they can get too negative in patches during bear markets. I'm taking it one level at a time though keeping an open mind each day. 

Here's a note pointing to a possible 8-15%. That would be almost shocking at this point given the depth of the negativity. I don't even believe it is possible when I type it, though I need to be careful of recency bias on both sides: https://www.morningstar.com/news/marketwatch/20220507240/this-market-strategist-says-stocks-could-gain-8-to-15-from-here-giving-anxious-investors-a-perfect-opportunity-to-sell

A few more references: https://seekingalpha.com/news/3835815-stocks-oversold-enough-to-suggest-a-summer-rally

https://seekingalpha.com/news/3835711-jp-morgans-kolanovic-still-overweight-stocks

Based on this from early April, that means Saylor's fund is now in the red on all of its Bitcoin. Pretty amazing considering Bitcoin used to be at 68k+. Looks like he and Cathie manage money together. 

I think this is the most complacency in market history. The investing public is used to things bouncing back and is being told to stay the course no matter what by traditional firms. The accommodations through monetary policy and liquidity have been majorly changed. It is very concerning for retirees and in general 

No doubt

Some fair points made here in comparing this period to the dot com era: https://www.cnbc.com/video/2022/05/09/compared-to-dot-com-bubble-this-sell-off-is-more-fundamentally-driven-says-leutholds-paulsen.html

Thanks Matt, seems comparable to one analyst saying 8-15% is possible and would allow for a great chance to sell: https://www.morningstar.com/news/marketwatch/20220507240/this-market-strategist-says-stocks-could-gain-8-to-15-from-here-giving-anxious-investors-a-perfect-opportunity-to-sell

Any idea on the average percentage gain of indexes during a bear market rally? ..sell the rallies target estimate in terms of a swing trade? I'm still looking at areas to sell current hedges, trade a long rally, and then put on shorts again at higher prices. 

Waiting on that signal to close my hedges or a stop out above a daily resistance. So glad we can hedge in these times

SPX market got into the gap 4,031 and bounced, didn't fill it completely so far. Gap is 4,020-34. I'm considering closing out some of my hedges.