The Traders Stock Market

The LongVol Report - Newsletter & Podcast

This is episode 63 of The LongVol Newsletter & Podcast.

We’ve been publishing the article of the week/podcast for nearly two years now each and every Thursday the free archive is here.

The podcast/video cast is published on Saturday morning covering part of this article, other stock market commentary and members Q&A.

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The last two weeks were unlike anything in the 2008/2009 GFC or the 2020 pandemic in terms of volatility, liquidations and panic selling and to be fair, it’s warranted - anyone that tries to play the pragmatist here is just lying to you.

It’s alarming when the markets are held hostage like they were and there was a more pragmatic approach to this - maybe even starting with a 90-day approach at the original 10% discussed could have worked instead of panicking the markets.

My views this week are not going to dissect inflation, whether tariffs are good or bad, or even why they did it but rather to get into my views (really reiterated) as we go forward here in Q2.

To start here are some of my views of what NOT to expect:

• Solving restoring in 1 week or even one year

• Mag 7 earnings growth is NOT going back to where it was despite the delusions of such

• Going to be in a low volatility environment - in other words, stop expecting new highs or a trend to form again like we had in prior years.

For those that pay attention and digest things, and I mean those that really actually think through the tough subjects, then you know I’ve been discussing this for the last quarter - maybe not the extent of the tariffs, but for sure the BOJ carry trade unwind, slowing growth and crowded trades.

What I do think is reasonable to EXPECT are the following:

• That $VFC ( ▼ 3.82% ) at $10-$15 is still a compounder in coming years we’re just tacking on more time now given tariffs in China, Mexico & Vietnam

• That names like $INTC ( ▼ 2.27% ) are still poised (and in a great position given comments about re-shoring) to perform in the coming year

• That housing and housing names are going to get shaken-up in the near future meaning while there may be some pain there will be opportunity to begin buying builders and other ancillary names in the space

And finally, that the volatility will remain - the ranges and whipsaws will stay this way for at least the next 90 days and for those in our DeltaOne investment community I’ve shared this view that I actually think it’s going to be this way all year.

I know many are out here trying to frame some of us sounding the alarm as “panicans” or fear-mongers and I understand it - it’s the same thing that happened when Carvana was at $160 and I warned of a big issue coming - nobody likes bad news but it’s better to face it an act accordingly v. putting your head in the sand as so many financial advisors and CFPs want their clients to do in the times in hopes that their AUM doesn’t get pulled - sorry but not sorry!

There is money to be made in all of this, on the short side, and certainly on the long side by purchasing companies that are NOT Mag 7 at discounts and “white knuckling” it as it happens.

So, that’s my intro for you all this week and I am going to expand on this on the podcast/videocast to give more in-depth commentary.

The Topics This Week

• BROAD MARKET: It’s not a bottom - stop looking for that and start looking at trading the ranges or taking a vacation for the foreseeable futures.

• HEDGE FUND POSITIONING: Discussions on exposures in the L/S space and what I’ve been doing the last two weeks to our portfolios

• THREE THEMES TO TRADEA: This week in Issue 15 of The PDF Report I talked about three tradable themes - a quick review.

• QUICK LOOK AT LAST WEEKS ARTICLE - Last week was busy so no podcast, a quick look at last weeks article.

• D.I.T.C. - Dive Into The Charts: $ES_F ( 0.0% ) Monthly $NQ_F ( 0.0% ) Monthly and $GC_F ( 0.0% ) Futures chart

• LONG TERM IDEA REVIEW: Review of $BA ( ▼ 2.36% ) $VFC ( ▼ 3.82% ) $NKE ( ▼ 1.05% ) $PYPL ( ▼ 0.43% ) and a few other names……

• PREMIUM MEMBERS OPEN Q&A SESSION: Open Q&A for Members

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