Postcards: GET OUT of Florida!

Before you check out of the Florida Republic for a few days, there's a checklist you need to complete. Also, weakness in the energy sector, strength in the shipping sector, and madness on the Russell                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: GET OUT of Florida!]( Before you check out of the Florida Republic for a few days, there's a checklist you need to complete. Also, weakness in the energy sector, strength in the shipping sector, and madness on the Russell [Garrett {NAME}]( Jan 4   [READ IN APP](   Market Update: Did you see it happen again today? A small morning squeeze, and then plenty of low volume selling into the end of the day that took us lower than the open? It keeps happening. That’s how this works as we barrel lower. The energy sector is back under stress (good time to take any recent profits), and technology and cyclical stocks are negative. We’ll get the jobs report tomorrow. Fridays have been great for the market in the last 12 months. In one of the more insane things I’ve seen in a while, the S&P 500 is hovering near its 20-day moving average, yet technology stocks are almost oversold. Based on these metrics, I wouldn’t be shocked by a squeeze tomorrow across the board. But don’t be mistaken, when we see this level of selling pressure, it tends to take us lower over six weeks. We’re in the middle of a no-man’s land everywhere between the 20-day and 50-day. Dear Fellow Expat: Southwest Airlines flies direct from Fort Myers Airport to Baltimore-Washington International. It’s the only airline to do so. When you get in line to fly north, there is no [20-minute line of hobbled pre-boarders seeking to exploit the system]( - and experience a medical miracle at 30,000 feet. Heading north - on the late flight - it’s usually college kids returning home or the people who overslept an earlier flight or spent the afternoon at the pool bar. Leaving the Florida Republic is an experience. It’s not the packing, the drive, or dragging a six-year-old along the way. It’s the mental gymnastics required as we head back to the State of Maryland. There are three things that you must do before leaving the Florida Republic. [Upgrade to paid]( One - Bite the Hell Out of Your Tongue When visiting strange lands that have odd customs - like not sweeping the streets or [fixing the roads]( - be sure to keep any feelings of uncertainty to yourself. It is not your job to criticize the people for tolerating the failures of their officials. They voted for these officials - and they believed that this time would be different when it came to the leadership from the City Council up to the Governor’s office. So, criticize the potholes]( of Baltimore City or surrounding areas to those who live there. They’ll roll their eyes at you… at worst. Or yell at you! Instead, remind the residents that the potholes are STRONG… just like them. Two - Suspend All Temptation to Use Common Sense When traveling outside the Florida Republic, avoid the temptation to point out the insane contradictions of local policies. Ignore anything contradictory to its mission, for you must understand that the local officials are VERY BURDENED with the need to raise money for the next election cycle. They don’t have time to think through the policies they implement that end up punishing and inconveniencing their people, especially those that won’t work. They don’t speak of unintended consequences. They must “move forward” … “together” … or something. Remember - intention is more important than results to these leaders. For example, don’t complain about [the new Paper Bag tax at grocery stores]( (but not liquor stores) in Baltimore County grocery stores. You don’t need to get angry at the person making $8 an hour behind the counter, and they’re just as confused as you are when they must demand five cents per paper bag to package up your groceries. Don’t think about it too much. Don’t consider the simple fact that when you’re in Maryland - even if you are buying products (like a 24-pack of water bottles) with enough plastic packaging to choke the entire ecosystem of the Chesapeake Bay - you should pay 5 cents for your bag to carry out all this plastic - because YOU’RE DOING SOMETHING ABOUT THE EN-VI-RON-MENT. Remember. Doing “something”… Anything… is the most important thing… you can do. I think Vice President Kamala Harris said that once… And if she didn’t say it one time… she still probably did. Three - Remember, You’re the Problem! When you travel back to a place like Illinois, New York, or Maryland, it’s important to remember that the people in charge of these territories are incredibly bright and have everything under control. Don’t feel the temptation to fight this. Don’t smile. Don’t smirk. Bask in their brilliance. The earth revolves around the Sun… and the Sun around them. Just remember - if only they had more of your tax money and you would be willing to do more - could their utopia be possible? Don’t bother considering that Maryland's top state income tax is 8.25%, while it’s zero percent in Florida. Or that New York demands 10.9%. Did you not understand that it’s impossible to run a state responsibly and give people all they need without raiding the taxpayers' pockets? Don’t you see, Florida Republic, expat? You’re backward... “You don’t even have pencils in schools, do you?” they snicker. Actually, Florida has the No. 1 college education system in the nation. Meanwhile, Baltimore has a school system that spends more per pupil than anywhere in the nation - but “only 10 percent of fourth-graders and 15 percent of eighth-graders in Baltimore's public schools are proficient in reading.” Do you know what I hear solves a problem like children being unable to read? Giving more tax money to the teacher’s union leadership. [See Chicago’s brilliant leadership]( and 50 years of failure as a perfect case study. Buckle up… we’re heading back to the pencil pusher’s paradise. The Market’s Ugly Week I have to ask a question about investors in this market. Why have they believed “this time is different” five times in the last 18 months? The ongoing saga of wild stock market rides and overemphasis on the Federal Reserve has fueled massive selloffs back to January 2022. We’re seeing the same topping pattern and aggressive selloff-style events in January 2022, April 2022, August 2022, February 2023, and August 2023. But here we are. The whole market stops listening to the Fed, gets way out of in front of the Fed, and suddenly has to move back in line with expectations. It makes me wonder a few things. First, how severe are these short squeezes becoming, and what is the role of algorithms in driving these types of aggressive moves? Second, the continued role of gamma on Zero DTE options and how their explosion in use impacts the severity of market rallies and declines after sentiment shifts on policy. And third - where the hell are the regulators? Does anyone believe that any of this is standard price action? Does anyone outside of academia believe that markets are rational in any way and that machines aren’t exploiting narratives… but overextending them in overtly irrational ways? I hadn’t seen buying pressure like we witnessed in the last two months like this before. And now, that rally was so strong that technology stocks are almost oversold right now, but it still looks like they are maintaining strong momentum on a six-month trailing analysis. It feels like we’ll wake up… and because of algos and FOMO, we’ll have five days of Limit Up… Limit Up… Limit Up… Limit Down. Limit Down. And then the music will play, and the trading screens will all fade to black… And each will say, “Executive Producer: Dick Wolf.” How to Make Sense of It If you want to learn how to opt out of all this nonsense. Out of the insane taxes, out of the wild market events… out of the constant battering of your sanity by the mainstream financial press, then join us in the Florida Republic. [Upgrade to paid]( As I’ve said, you’re always welcome here. As always, your letter to Postcards is free. But if you want to understand how to manage risk… and avoid or manage the selloffs like we’ve experienced this week… then check out the [Republic Risk Letter yourself for a month.]( We’ll launch a trial in the future for non-members so they can see the value that investors and traders are getting from our daily analysis. If you’ll excuse me, I must prepare myself to exit Florida Republic airspace. Stay positive, Garrett {NAME} Secretary of Defense Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()