Get Some Sleep Before the Week Ahead

Postcards from the florida republic

An independent and profitable state of mind.

 

For years I didn't sleep well.

Doctors don't ask about sleep health today.

They don't ask about stress or exercise.

Neither diet nor crushing work-life balance.

Instead, they write scripts and offer pills to get you back to seven hours of sleep.

My doctor started with the "sleep aid" Ambien.

What an adventure. My dreams – a mishmash of frantic clichés.

First, I was back in high school. Then I was unprepared for a test as my plane flew under a bridge, plus my teeth fell out…

I stopped taking Ambien after a month. Next stop, Trazadone.

In a Trazadone dream, I'd be stuck in Evanston, Illinois (where I went to college). I'd need to get home – eight miles away.

There were no people, cars, cabs, or trains operating.

So, I'd walk. Eight miles.

And when I had my condo building in sight, I'd wake up – feeling, mentally and physically, like I'd walked eight miles.

That was the dream. I took myself off Trazadone after a week.

But then… things got worse. Insomnia became my closest hobby.

Today, I now have the words to describe the feeling of insomnia.

Let's "Blast Off"

Imagine you're an astronaut. You're sitting in your spaceship.

You're about to blast off into the peaceful orbit of sleep.

You've climbed the rocket tower. You're lying horizontally –

staring up into space to the stars. You're SO ready for sleep.

You check all the spaceship's buttons on the checklist, a metaphor for positioning your body for maximum comfort.

Your head cradles into the pillow. Your shoulders and arms sink

into the mattress. Your legs go from light to heavy.

Your back is comfortable, sinking – your eyelids get droopy.

It's time for rest.

For sleep, you've checked EVERY list off on the preparations.

Now, you're about to hit the button to shut the spaceship door.

You imagine watching the door shut as the countdown begins.

10... 9... 8... 7... 6... 5... 4...

But just before the door shuts, a hand swings into the frame.

And "Dave" appears – a hysterical voice in your head that sounds like Nathan Lane in The Birdcage.

He's pushing the spacecraft door open, flailing his arms…

He screams: "DID YOU FORGET TO SEND A FOLLOWUP EMAIL TO

[INSERT PERSON'S NAME] TO DISCUSS [THAT BIG THING]."

AAAHHHHHHH. Crap! You BET you forgot. You forgot BIG TIME…

ABORT MISSION!

You pull out a phone – take a shot of blue light to the eyes – and fire off the email – at 11:55 pm – because that's not nuts.

Then, you turn off the phone and take a deep breath. You start the countdown and checklist all over again. And as you drift, the "sleep" shuttle door closeS.

But – there's Dave, hysterical, black makeup dripping down his face like a teenage girl crying after prom, shouting: "WHAT DO YOU THINK IS THE IDEAL-SIZED SHED TO STORE YOUR GARDEN TOOLS?"

"Not right now!" you think.

Dave screams: "HOMEDEPOT.COM! IT'S ALWAYS BLACK FRIDAY PRICING!"

You pull out your phone again (or maybe your laptop this time.)

You check your email out of habit. You ensure the email you sent 15 minutes prior went through. Then, you visit Homedepot.com.

You've already forgotten what you went there to look for.

Dave has vanished. So, you sit there... for a few minutes.

"Was it fertilizer?"

No. It wasn't that, but you check fertilizer prices anyway because you heard about a nationwide shortage.

Was it soil tillers? No... come on. It was "sheds."

You hit the search bar as the computer's blue light hits you.

What's worse, you don't even buy anything on HomeDepot.com.

You stare at sheds and other random things for ten minutes and maybe put something in your cart. But you abandon the cart when you realize your credit card sits halfway across the house.

So, get back into the space shuttle… idiot!

Back to the checklist. Back to sleep, right?

Nope – Dave is there again, now wearing a bandleader's hat. He's

banging on a snare drum and blowing a whistle.

He's shouting something about your need to take advantage of the

declining cost of flying to Switzerland in August – because the U.S. dollar was strong compared to the Swiss Franc.

"You have friends over there," Dave screams. "Your daughter can

play with your friend's daughter. You'll be able to go back on

the Lake Zurich water taxi –an incredible ride!"

Oh... the water taxi and your mind picture the crystal water of Lake Zurich and the calm, brisk wind from the north.

Dave is then whispering in your ear.

"Do you remember the water taxi? What were the stops? What was the name of the beer garden where you wrote that poem? Do you think they still have ice sculptures behind the bar?"

Now, these are valid questions for insomnia-addled brains.

Dave continues: "Go to Expedia! Give them your email address so

you can get emails in the middle of the night and then explore those deals repeatedly – so you may never sleep again!"

And this goes on... for hours...

Ever wondered about the current exchange rate of Swiss francs to

Tibetan currency?

Ever asked, "How much Paprika should I put in chili?"

Ever wondered how many people died at the Battle of the Alamo?

All these thoughts came to me while trying to sleep.

And I now know the answers to these questions...

Anyway...

I'm now taking Ativan to sleep. It's better.

It'll help me be prepared for the week ahead.

Momentum 

From a momentum perspective, we have had three straight days of declining buying pressure and rising selling pressure.

This is our "early warning." If you look at the chart below, you know we have not missed when it comes to getting out of the way of severe selloffs. Last year, we bailed on June 8, 2022 – and we avoided the biggest hedge fund selloff in 15 years (this was something we didn't know for another two weeks).

As I said… I give this reading away every single day. If it goes red, just get out of the way. Yes, there has been a chop this year, but if it goes positive again, just lift your hedges. No one knows where this market is heading. Few people understand the impact of global liquidity. People have biases in their own gut. They'll tell you they were right about the long-term trend, but behavioral bias will crush them in the short term.

Look at this chart. You can see we didn't call the selloffs at the top. We called it a few days after we got confirmation. We didn't dump on August 15. We dumped a week later. That's okay because our positive momentum switch in the previous cycle happened on July 18. We killed it, and we gave back a pittance compared to what our signal offered us the month prior.

This is how you trade and invest. We went positive on July 1 after the China central bank eased. We're in a negative cycle that looks like it started on July 13, but we still are waiting to ensure this isn't a fake-out.

If momentum goes negative on Monday or Tuesday, I'll be shorting. So should you. But in the meantime, let's get a confirmation signal. We have our early "negative" signal. It's enough to bet small on a selloff. If it goes, we sell calls on our long-term positions and short this into the ground.

Forget timing… and focus on conviction.

The Week Ahead

The world is watching Palantir Technologies (PLTR) earnings on Monday. How many times will they say AI during the call? Holy cow… is Monday boring. So, let's spice it up a little.

Did you notice how many AAA-Rated companies are left on the S&P 500? Back in 1980, there were 60. By 2008, there were only eight. Let me show you the state of debt status: We lost – since then - ExxonMobil (XOM), General Electric (GE), Pfizer (PFE), and Automatic Data Processing (ADP). Yeah, so… anyway. I'm still long Exxon after the Jeffrey Ubban buy… but just be aware of liquidity… right?

On Tuesday, oil prices will get some attention with the EIA short-term energy outlook. Oil prices have been on fire thanks to the ongoing cuts from Saudi Arabia. Pay very close attention to momentum stock Apache (APA).

On Wednesday, Disney (DIS) reports earnings. So, get ready to hear "Woke" from Fox Business. I suppose you should also be interested in the investor day from Kellogg (K).

On Thursday, Alibaba (BABA) reports earnings. We should get a clearer understanding of consumer spending in China. It should be a good day for day traders if the stock bounces off its third-standard deviation line. I was just saying. Meanwhile, the market will be closely monitoring the Consumer Price Index, which drops at 8:30 am.

On Friday, I speculate. Sotherly Hotels (SOHO) reports earnings that morning. I don't know what is happening to this company. It has excellent financial discipline. It's at 78 cents on the dollar. I don't think this $2.08 stock will cost $3.00. But I certainly don't think it's heading to… $1.50. So, to use volatility to my advantage, I will buy this stock above $2.00. And I'll set a stop at $2.00. There is no options chain here, but this feels undervalued to me.

Old Girl

 

Elsie’s not feeling well…

She also doesn’t like the thunder.

She’s been following me around all day – from room to room.

Adhering to the new rule of the Republic:

Take more pictures. Know where you’re going… but remember where you’ve been.

 

 

Stay positive,

Garrett Baldwin