Postcards: Time to Show the Receipts (Signal Red)

"And the heat goes on. I got time. And the heat goes on. And the heat goes on and the heat goes on. And the heat goes on, where the hand has been. And the heat goes on and the heat goes on." -Byrne.                                                                                                                                                                                                                                                                                                                                                                                                                 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: Time to Show the Receipts (Signal Red)]( "And the heat goes on. I got time. And the heat goes on. And the heat goes on and the heat goes on. And the heat goes on, where the hand has been. And the heat goes on and the heat goes on." -Byrne. [Garrett {NAME}]( Jan 17   [READ IN APP](   Dear Fellow Expat: I called this market top three weeks ago. I explained that when selling pressure increases to the magnitude we’ve seen in the last two weeks, we typically see a bigger selloff. And it wasn’t just the most recent selloff after the Fed minutes on January 3. This is what we do. I played goalie in every sport. I love defense, and I love to see the entire field. People were asking how I did this… So I answered... It’s time to show the receipts of the last 12 months. Because this could get ugly into the Fed meeting in two weeks, and I don’t want ANY confusion. Italics are documented editorial. [Upgrade to paid]( February 22, 2023 We’re now officially red in this market - and a wall of institutional capital has left the party. Markets have shed about half of the 2023 rally, and remember that higher interest rates should knock out the rest at some point. All that short squeezing must come to an end. And while short-term, low-volume rallies will occur, the undercurrent of this market has been selling hard since Thursday.  With momentum in the Red, we now take direct aim at the junk companies with high price-to-sales multiples, the ETFs full of frothy crap, and the broader indices. There are various ways that we do this. Narrator’s Voice: “From February 22nd to March 13th the IWM was down 8.4% while the RWM went up nearly 10%.” August 8, 2023 “We’re coming off the longest stretch of positive inflows and price gains for the S&P 500 and the Russell 2000 since late 2021. So, now is a great time to discuss some important rules for trading in negative momentum. We have had three straight days where intraday momentum has turned negative before a surprise bounce back. But that is the trend when things go sideways. There is a trend of lower highs and lower lows. With energy prices surging in recent weeks, we could see a surprise CPI reading on inflation.” Now, if we go negative tomorrow… and we stay there, you need to be prepared. Narrator’s Voice: “Between August 8th and August 28th the IWM was down roughly 4.6% while the RWM went up 5.6%.” September 6 , 2023 Equity momentum has been under pressure for two days as we move into an ugly seasonal pattern. Time to play the rules of negative momentum as the month accelerates. Narrator’s Voice: “From Sept 6th to October 30th the IWM went down 13% while the RWM went up 14%.” The Last Three Weeks January 2, 2024 - Risk Letter - An ominous silence starts for 2024, and futures are tumbling in the premarket hours. A significant offloading of 1 month of T-bills occurred while many were fast asleep, awaiting the first trading day of 2024. A spike of this size hasn't been seen since the Silicon Valley Bank debacle in March 2023. Gold is roaring, oil is moving higher, and Bitcoin is surging. In addition, we ended the year with the S&P 500, and many sector signals suggest that we hit near-term tops on our final trading day. This is a time to be VERY cautious with a wall of critical data emerging this week. We have the Fed minutes tomorrow, manufacturing updates, and a vital jobs report on Friday. At the bottom of today’s article, you’ll find information on using covered calls for long-term positions in your portfolios.  January 3, 2024 - Risk Letter - Two weeks ago, dozens of companies were in that 10% breakout territory, and only one or two were falling (because of downgrades). So, last night, I scanned this on video, thinking that we’d still have a lot of companies in that breakout territory. Whoops. Just ONE S&P 500 company is up 10% in the last week (And of all things, it’s Moderna - MRNA). There’s one that’s down (NCLH). The rally has stalled, and the MACD on the daily S&P 500 ETF (SPY) is starting to tick into negative territory. Buying pressure has cooled, but selling pressure hasn’t kicked in yet. We’re not YELLOW yet… but we’re certainly on Alert. January 3, 2024 - Postcards - [Time to Break Out the Kayaks?]( the selloff over the last three sessions (an early signal of a possible negative event coming in the next week or so) - shows a pattern that looks like a descending staircase. This isn’t a Rorschach test. It’s incredibly common. You can look back to the start of previous 2021 and 2022 selloffs and see similar price activity. January 4, 2024 - Risk Letter Update - The selling pressure on the Russell has greatly increased over the last few trading days. It’s uncertain if this is profit taking… Red Sea related… or positioning against the jobs report. We just know we had the strongest buying stretch in a long time, and it’s taking time to unwind. Support levels are very critical right now. I encouraged hedging for a solid week… and it’s time for the market to correct. Join Us… Want to protect what’s yours? Mind the Net… Join [Republic Risk Letter](. Know when the probabilities and technicals are telling you that it’s time to hedge, short, buy, bid, [Upgrade to paid]( Finally - if you’re looking for an action plan, remember I’ve given this away for free for a year. [Know your six rules for this selloff.]( Stay positive, Garrett {NAME} 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]()