HaiKhuu Daily Report 5/17/2023
Good morning and happy Wednesday! Markets are looking alright during this pre-market session, with $SPY up slightly from close yesterday. I hope you all are doing alright and are ready for what should be an interesting time for the general markets. Historically, today is a bearish day for the markets (Via the Almanac), so be careful as we are hovering in the $SPY $410 range, and markets are looking primed to fall, so prepare for this accordingly with your current allocations, and make sure you have a game plan on how you personally are wanting to tackle this summer session in the general markets. This will be an interesting couple of weeks in the near future as a result of a lack of volume and momentum during the summer session.
Market conditions today are going to be an interesting toss-up, so be smart, take risks off the table, and protect your bottom line, but capitalize on any and all of the opportunities that are presented to you.
Good luck trading today, this should be an interesting one today.
Thoughts & Comments from 5/16/2023
Yesterday was a tough day for the general markets that negatively impacted the large majority of individuals. $SPY opened the day trading at $411.88, down from the previous close of $413.01. The initial movement down was not too significant in the grand scheme of things and provided us with false hopes and optimism. We quickly moved up from open to making the official high of the day trading at $412.81, up about $1 from open, but did not have the confidence or sustain it. Markets quickly came down as a result of this lack of volume, where we made our first low-of-day trading right under $411. The quick movement down hurt, but it did not provide enough bearish momentum to cause pain. We quickly recovered from the drop though, providing us a scalping opportunity back to $SPY $412.
$SPY continued to sustain this $412~ range with relatively minimal intraday movement for the large majority of the day, not providing much momentum or opportunities to trade but allowing for antsy traders to continually get chopped out in the process of everything.
This sentiment did hold true until the last half hour of the day when we watched as the markets and equities alike took a small nose dive into close. The movement down again was not significant, but it did not do well for the general confidence in the markets. $SPY went from trading right below $412 to officially ending the day trading at $410.25, making an official low of the day into the market close.
We did sustain that $410 support level, but the selling into the close was not a sign of confidence in the markets. $SPY ended up dropping $2.76 from the previous close, or approximately down 0.67%, with an intraday bearish movement of -0.39%. It was a difficult day for the markets, and lots of people incurred realized losses, myself included. If you were able to realize some gains while trading yesterday, great job because you were able to capitalize on an opportunity that was difficult to navigate! If you unfortunately lost, hopefully, the losses were not significant, and you can make them all back today with ease!
Thoughts & Comments for Today, 5/17/2023
Today will be another interesting time for the general markets. I will warn you all again to please be careful and safe in these market conditions. Historically, both today and tomorrow are bearish days for the markets, and with the current conditions, I would advise the majority of traders to simply sit back and not attempt to trade or overtrade today. A lot of people are going to have an extremely difficult time navigating today, where I would rather you all sit back, and the markets move up substantially where we miss out on the movement than recommending high-risk allocations and watching the markets fall heavily.
Continue to watch out for the summer session in the markets, and market momentum has continued to slow down over the previous couple of weeks, signaling that people are preparing for the summer session themselves and are preparing for lower volatility and momentum in the shortcoming. I personally am expecting to see a small, and grand scheme of things, insignificant movement in the markets, resulting in between a 5-10% drop in the overall markets, but is lead by some overpriced equities in the short term to sell off significantly more than that, in some cases, we can see upwards of a 20-25% drop in the price of certain equities, that at the current standards are “fairly valued” but in reality are heavily overvalued in the short term.
I know I’ve been saying this a lot recently, but I personally believe that the semiconductor market in the short term is heavily overvalued and will be a catalyst in the drop we see in the markets here in the near future as the hype behind AI starts to fade out of existence. I don’t know when this will happen realistically, but I believe that we could see this type of sell-off happen with relative ease in the near short term, impacting the majority of the major caps. One organization that I believe is too late to enter into but will be a safe haven during the AI hype bubble popping will be $GOOGL. They have been so undervalued in the short term that the movements that will impact the semiconductor and AI stocks will not impact $GOOGL heavily this summer.
Cash will continue to be king during this time, and make sure that you personally have confidence in any and all allocations that you do decide on holding. If you believe your average is too high in the short term and that your organization will fall during the summer session, look to either sell your equity position or look to hedge your position accordingly, assuring that you are minimizing your downside risk for these general positions in the markets.
Capitalize on the opportunities that are available to you in the short term, look to hedge accounts where possible, and start to look into organizations that you believe are overvalued in the short term, and attempt to capitalize on the opportunities that are presented to us now. If a company is highly overvalued, look to short into the hype that is currently in the markets.
I personally am not anticipating entering into many positions today as a result of getting burnt attempting to short $AMD yesterday, but if I do decide to enter into any position, I will let you all know in real-time on the HaiKhuu Discord.
HaiKhuu Proprietary Algorithm Report:
Yesterday was an interesting time for the algorithm, our sector-neutral strategy continued to outperform the markets by a rather large margin, providing us with a great opportunity to actively hedge against the losses in the general markets. The long-term portfolio underperformed significantly as it was impacted by the larger movements in the markets. Our technical analysis outperformed both our fundamental analysis and the markets, which is a win, as the portfolio it was built on unfortunately underperformed by a large margin. I am very happy to see this being the outcome of our algorithm, but not the happiest with the performance of the long-term portfolio. Days like yesterday were difficult, though, and one bad day of results from the LTP does not cause any major concern, mostly as the majority of the losses were derived from one organization specifically, $AES, which was not recommended via the algorithm.
To get an in-depth analysis of our algorithms' performance, check out Asher’s Report!
The results of yesterday are as followed:
Baseline:
$SPY: -0.39%
Our Results:
Sector Neutral: +0.39%
Market Neutral: +0.07%
Variable Sector Neutral: +0.06%
Variable Market Neutral: -0.03%
Base Algorithm: -0.21%
Long Term Portfolio: -1.18%
With the market conditions not being optimal, I would highly advise against blindly entering into any position at this point. This is not due to a lack of confidence in the algorithm or the systems we have in place, but more of a lack of confidence in the current market conditions, mostly with the momentum in the markets being relatively minimal. Please just be smart if you decide to actively trade today, and if you decide to take on any allocations, make sure to do your own due diligence and set stop losses to limit your downside risk where possible.
DISCLAIMER - This is not financial advice. Utilize these trades with caution. These predictions are generated via our proprietary trading algorithm without taking into account market conditions, news, or any external biases. This is not a signal to buy or sell any equities, and we do not guarantee success. Take these at your own risk.
Algorithmic Alerts for 5/17/2023
My Personal Watchlist :
Note, just because something is on my watchlist does not mean it is a signal to buy or sell any equities
Watchlist:
$SPY , $TSLA, $AAPL , $MSFT , $NVDA, $GOOGL
Position Opportunities:
Hedge the positions you want to hold
Set stops in guaranteed profit for any position you are in profit in
Start exiting positions you are comfortable taking profit in
Cut all positions you are not comfortable holding
LONG OPPORTUNITIES:
Long-Term Dividend - $GAIN
Long-Term Riskier EV Play - $RIVN
Economic News for 5/17/2023
Housing starts - 8:30 AM ET
Building permits - 8:30 AM ET
Notable Earnings for 5/17/2023
Pre-Market Earnings:
TJX Companies (TJX)
Target (TGT)
Dynatrace (DT)
Wix.com (WIX)
RLX Technology (RLX)
Jack In The Box (JACK)
Arcos Dorados Holdings (ARCO)
Triumph Group, Inc (TGI)
WalkMe (WKME)
Riskfield (RSKD)
After-Market Earnings:
Cisco Systems (CSCO)
Synopsys (SNPS)
ZTO Express (ZTO)
Take-Two Interactive Software (TTWO)
Sociedad Quimica y Minera (SQM)
DLocal Limited (DLO)
StoneCo Ltd (STNE)
Bowlero Corp (BOWL)
FinVolution Group (FINV)
Hawkins (HWKN)
Wrap up
Overall, be smart and safe in these current market conditions. This is NOT the time to increase risk and take on liabilities in the markets. Look to capitalize on the opportunities presented to you, but minimize risk where possible. A lot of people will have a difficult time in the markets over the next couple of days, so allocate accordingly and realize some gains when given an opportunity to do so. Remember that today and tomorrow are historically bearish days via the almanac.
Good luck trading, and I hope you all realize some gains trading today!