This move is unsustainable. You will not believe me tomorrow, when the most retarded stocks known to mankind are off to the races. However, as sure as I am sitting here, you will believe me soon.
I’m long banks because there is a real value proposition in BAC/C. But this market is not being fueled by banks or retail stocks or tech stocks. It is being propped up by a new class of stocks, that trade separate to industry, logic, and far away from traditional valuation metrics. Just like people said the dot coms can keep going higher in 2000 and the banks could all soar to $300 and split 5 for 1, due to momentum, degenerate momentum traders are out and about saying the same shit about this new class of stocks—as if we haven’t seen this shit before.
Truth be told, momo stocks are incredibly hard to break and I do not suggest shorting them, since the laws of reason to not exist there. It’s sort of like trying to discern the difference between smoking three viles of crack or 10. You done fucked up with the first, no need to get snooty now. Ya dig?
One day, the following names, if not acquired by HPQ, will fuck up this market something awful:
AMZN, BIDU, LVS, CRM, VMW, NFLX, MELI, PXD, EGO, LULU, IOC, RAX, ARMH, ARUN, SNDK, CTXS, CMG etc.
Remember, earnings and growth look great until they don’t anymore. The proverbial rug is often pulled from companies when they least expect it. The simple truth of the matter is: money managers have been piling into the same stocks, in order to avoid risk. As odd as it sounds, from a macro perspective, there is far less risk buying AMZN at 50x, than a bank with billions in toxic assets. We are at a point where the bubble in momentum stocks is so egregious, no one dares bet against them. For the love of broken X-mas presents, NFLX just sprinted $40 past $100 in a few short months. Hello!? That’s a 40% increase in market cap. That my friends is what I call “fucktarded.” But who is gonna bet against them? Not me.
Look at the VIX–near new lows. That tells me we are awfully complacent with the current arrangement of things, which entails a woefully weak jobs market, high commodity prices and a banking system that continues to suck the tits of the Federal Reserve. All the while, the housing market remains mired in the biggest slump since Greece was burned down by barbarian hordes.
Here is my advice, condensed in a short few sentences:
Know the market you are investing in and do not bitch and complain when it goes against you. I am opting to play this tape, which I deem to be “bubblelicious” via a large cash position (40%). If I had conviction to short names, I would do so. Hell, during 2008, that’s pretty much all I did (short stocks). However, until the hypnotic spell is broken from the small brains of hedge fund managers, I will remain exceedingly cautious and play both sides of the tape, as I expect this market to remain range-bound, although buoyed by the most overvalued large cap stocks since the 2007 banking bubble.
If you enjoy the content at iBankCoin, please follow us on Twitter
fig
http://finance.yahoo.com/q?s=open Don’t get this POS at all.
My neighbor just finished a freeware version of OpenTable, interestingly enough. He also built a freeware ticketmaster solution for small venues (I guess gifted programmers do this stuff for fun).
That’s another bubble stock.
I demand a 3x etf of bubble stocks!
Ticker symbol SPAZ
BBBL
WAZZ
So ride the rally in short term, that’s what I’m hearing… ?
When did the ibankcoin pyramid start spinning around like that? First time I noticed it.
I am hypnotizing you with it, as we speak!
Okay, I thought it was just me. Very hypnotiq.
All in good time.
Carefull about bubble stocks – they always run much longer and farther than anyone can imagine. The 1993-2000 run was classified and vilified by many like Doug Kass, Fleckenstein and Barron’s as bubbles in 1995 and they lost their shirts trying to short them. They were eventually right in the long run…eventually.
Are you saying he’s going to need a bigger boat?
_________
Fly,
Congrats on your best post, regarding the market, I have ever read from you.
PPT FTW.
Lots of Cash, some quality longs but patiently waiting for our swan dive to commence.
Total props to you Fly. It is nice when you break it own, Did you look at the video I sent u thru email? It was my first time viewing him. I thought it was spectacular. Cheers Fly,,,,,,,,,ur a one of a kind <——– JH
Hmmmmm, so I’m going to sucking the TZA bone is what I hear until the law of gravity reemerges? Is that what I hear?
Skogie
Ur banned
Who knows might we get some more oil platform or gas line explosions next week, or the drug cartel will take complete control of mexico’ s oil rigs all together really have to say the shit is starting to smell to strong for me to buy anything. Just remember one thing and don’t ever forget you are gonna pay for that fucking oil no matter what this stupid ass market does, Buying a no volume market =trading props not people, odds on the long side are better in Vegas, until the human investor comes back in, be very careful.
Have fun folks, hope everyone makes millions$$
Bears gonna get debo’d tomorrow, including me. How nice. Ask me if i am scared.
You put EGO in there to piss me off.
It was a good try, I’ll admit.
__________
EGO is to valuation what Obama is to Presidency.
Are you valuing assets in the ground or EPS? There’s no EPS in baseball (that’s ERA) or precious metal miners.
______________
That’s too clever not to appreciate.
WTF with Tom Brady’s hair? Does Giselle like to play “Beach Boys” now, or something?
_____
Ken & Barbie … 70’s stylin’ which is back in vogue supposedly ….
That’s what’s so great about this site…all the extra information you get…fun,fun,fun.
No disrespect to a fellow trader but
Say the same thing every day and you are bound to be right, then you can say fly’s wins again!
I can say were going down! and we go up for 10 days in a row and the 11th day we happen to go down , Then I can
Yell !!1See I told all you stupid shits we are going down!!!
Just using math you have a 50% chance of being correct on any giving day , so every other day you should be right without knowing jack shit.
Good luck this week ,
Mathematically speaking since you were wrong so many days consecutively in a row you should have a nice run of being right =).
For this week Obama killed the Fly
http://www.youtube.com/watch?v=m3bThUcE5EE
Inandout
Good Lord what are you talking about? Everything has a cost basis. I am not interested in nailing the timing of being “right”. I am only interested in my cost basis proving to be accurate. That, small pleb, takes time. Shut your mouth and just read. You will see how it all ends.
Fly thank you for the intelligent sophisticated sort of professional response , and for not banning/ cursing me out for my comment.
I feel timing is sometimes more important then being right eventually. I guess it does depend on cost basis in the end ,and your personal trading style in the long run.
for example I could have averaged in (C) at 2.00 , 1.50 bought more , and again at 1.00, with a cost basis of 1.50 , yeah it’s now at 3.50 0r 4.00 some days , but if I started buying at 2.00 my timing was terrible to me.
in the end I would have made money , but still in my book traded it poorly from 2.00.
I think we will be at 1050 or lower again soon , but to go heavy short at 1085-1095 with a large
% of one portfolio leaving little room(funds unless leveraged) to average down on shorts and not covering any to buy back cheaper seems like a reckless move, even if we had reversed at say 1095 and if it was the right choice hit right on the money to the point it would have been a good call (gamble)to me .
I shorted a assorted variety at 1090 covered at 1095 and shorted again at 1107 planning to average down with a stop to cover at 1132 or to go back in heavy short if we break our new short term channel up which is about 1100 or so today. I definitely don’t win all the time, but I’m a pretty good trader, not fantastic but pretty good and steady. We could reverse any minute i know and when we do it will as always be fast so I have to be on the move once we break short term momentum trends.
Not that my way is right or yours is right, each trader has his/her own style I respect that.
will we be around 1050 Friday could be?( who the hell knows really I could guess and 50/50 be right maybe even 70/30 since we came up fast and had a nice run up, but I won’t pretend to be a physic(I’m just a trader).
Good luck to you this week I hope to see that we are down so much that timing didn’t really matter much.
I don’t mean to come off as a dick , just constructive criticism from yes probably a peer .
Not everyone is below you I hope you know that, and try not to forget it , I’m really not saying I am at all or not , just talking in general. I am pretty sure you are better then me in one aspect and yes probably I then you in at least one aspect most likely.
Even when on a huge winning streak a little humble goes a long way.
Good luck again!
math and mathematically probability is now extremely on your side , my guess 1-4% upside Vs. 5 -10% downside short term.
Who knows Obama/Biden could resign tomorrow and we could be up 5% or more lol.
well said
except the use of “then” for “than” …
I envision a scenario where with the flood of liquidity from unprecedented low interest rate policy around the World, stocks will continue to rise and confound all the skeptics out there. There is no other reason than the massive liquidity out there with no place to go except stocks–especially the ones FLY has noted here. Remember: The market can stay irrational longer than you can stay solvent, so to the bears who are shorting this beast beware. Personally, I am staying very long…the indices can race up 8-10% from here in a flash.
P.S. With historically low corporate borrowing rates, all the M&A activity alone will keep this market propped up. The bears are going to be blindsided by this market.
Ironically, it’s the DAX that’s broken out the most, ovah heah. No wonder the DB’s feel it’s okay to float a tonne of stocke.
_________
BBubble doesn’t describe stocks en summe one bit right now. I dare say an insurance m&a spree ensues if sharesdont trade well higher for example… the overvalued stocks are few and wellloved, but bargains do abound.
I’m far from a long term bull just so you know , non-propped/fudged I think would be in the 800-900’s on S&P now, but lie/prop free is not the market or government we are faced with presently or ever have been faced with , now they just accelerated the level of which they do so .
Good luck to everyone in respect to trading this week.
Thanks for being a good sport so far Fly.
just posted my weekly article…even before I read this post….At least True Blood was really good…VMA awards a bit a bore…..China Govt didn’t act on the data and the world is a party. You know that “Flash Crash”, which happens each day around the same time at a lesser amount was a great “tell” of which names the “Bots” are in and will throw them over so fast when the bubble finally goes pop.
Jake
My eyes can’t roll more without falling out of my head. Don’t be so serious.
Inandout
Truth be told i was going to ban you. But you did’nt come across as some drive by moron. Glad i kept you to harrass me later, so far.
Some days I ask why I short the market. Other days I wonder why the heck the market going up on its great “fundamentals” and I am still long. Today, I just ask myself, why am I still awake, and when this market will head down. And my simple answer is: This after hours is simple the answer to both questions. While the weak sleep I am nevertheless unsurprised by the Fly’s ability to stay up late and it is without undue reason as to how he got to his current level. That being said….. this looks like a toppy after hours with possible marginal highs but nothing extreme from here. I think it could be safe to say my stop on an ESZ0 short could be 1120, but I would rather be short TF, YM, NQ as those look like prime meat to the constant buying ESZ0 from the government. Enough of my bantering, time to hit the gym in three hours and oh yeah sleep for three hours
This rally reminds me a lot of NASDAQ in December 1999. The market went up daily for the entire month in bubble fashion. We all know what happened to that bubble eventually. It took until March of 2001 for the bubble to burst however.
It looks to me like this bubble is just beginning, and it could sustain itself for at least 3 weeks. By then, TZA will be in the teens and VXX will be around 15. Fly has dug in his heels and will feel the pain for doing so this week and next and the week after.
I know this bubble will eventually pop, but since it will take a while, I am staying on the sidelines.
This is just a short term top that is in. Nothing more nothing less. Payback will be when bears feel helpless. Timewise this has time
Fig
Quit being so dramatic. You fucking clowns exaggerate everything.
The rally today looks a little dull and may be fadeable (sic).
That being said this doesn’t really look like 1999 because if it was we would be spiking pre-market with the mo mo stocks day after day and the public would be pouring money into this like no tomorrow.
It has more of a 1982 feel where everybody says unemployment will stay high for years and this country is screwed. Back then the public was completely out (like today) and the smart money kept saying why is this market going up- it shouldn’t be.
The market kept going higher in ’82 after a very bad recession (just a little better than todays).
Well today is similar. The public is out, bulls are at record low of 20%, cash is huge on sidelines and in corporate coffers, and market has not discounted the Nov. elections and a subsequent stalemate in DC (which is good for the USA).
A low is being made in Aug. -Oct. time frame and then it is a huge MFer rally and people will be saying this market can’t be right.
I said this a week or so ago when I told Trading Nymph to say out of FAS.
I don’t read charts any more (I did years ago when it was considered voodoo-now everybody reads them) and I may be wrong but I would bet on a multi month rally coming up.
Look in the mirror and ask -Am I turning into Tim Knight?
I like that analysis and thinking…I need to focus on your comments more…I’m looking for 12k by March ’11.
TC – I think you may be right. The next few weeks should be interesting.
You are right about the underlying economy not supporting a 1999 comparison. I didn’t know about 1982 going up daily like this.
I am just saying that this market feels like it won’t go down at all. That is until that one day when it not only goes down, but crashes.
Back in April the same thing happened, and then came the flash crash.
You mean told Nymph to stay out of “FAZ”
TC it makes sense….the old market stays irrational longer then you can stay solvent play….
Correct.
I did mean to say FAZ and realized it when it was posted but alas no edit button.
Kind of like the time a few years ago I entered a trade and realized I hit a wrong letter and it turned out I bought a bank in New Orleans called Algeria Bank (or something like that). It had a spread of almost 1% and had an average daily volume of about 2,000 shares.
Scott had a conference with all of his Create Capital Advisors in the Board room this weekend and they agree pretty much with Fly.
If oricle reports good numbers tomorrow we will be up another 10 percent for the rest of the week punching the bears in the mouth.
Ouch i just punched myself
‘this market just can’t keep going up, this is like the dot-com bubble, I know we’re going down (soon)… you guys been reading SOH again?
will merlin get out of his closet soon Sir Fly?
The market was pricing in a much deeper decline in the economy. Say a 50 percent we double dip, to a now maybe 20 percent we have a double dip. Either way I’m letting my longs ride.
Oh ride like the wind
If one wanted to get out of tza seems like each day last week toward the end of the day, the market pulled back and created a better exit. Less pain.
Fly you look kind of ridiculous with 75% in your TZA and 20%VXX after today’s rally. And you’re still bearish? You’re not going to adjust your portfolio?
Hard as they try, Bears cannot break this market.
Everybody sell there “Puts” yet? I can see the witch just off in the distance…
Shu.. obama will be admired by all, greeted by kings, he’ll put on the bling, and the stock market will ring. That’s how crazy things seem, know what i mean?
FIG!
FRICK’IN FIG!
vix is low but three months out vix is implied to be fairly high. Article here talks about this:
http://noir.bloomberg.com/apps/news?pid=20601010&sid=aPt60Uq4dQBU
“Concern that stocks will plunge has never been higher in global options markets, and that may mean it’s time to buy. ”
Also have been many articles about how retail investors have been withdrawing their money from the market for months. I don’t see how retail ever becomes the smart money.
1130 would snap one verterbra on the bears backs. (Tim Knight said he’d be out if this happened.) 1150 would snap another – and we’d probably hit that if 1130 goes down. 1200 will snap 2-3 verterbrae. And if we go through 1230 that breaks the back of the bears and they’re done.
We may need to do that before a big swing down. Move like that brings back in retails, crushes the vix, and drives bears off ledges. It’ll also give some time for structural deficiencies to come to the surface, which is what we really need for a market collapse.
Once again The Fly says it best!
Amazing!
The next Fly’s post will be: I am still up today while you fuckers know shit as I sold all my VXX and TZA last week…. 🙂
yeah, I wonder how he will spin this one. I dont think he can spin this to show that he wins. This market is truly in bubble mode, but it wont stop till most shorts have lost any faith in their positions. The time to short will probably be over 1150, if not even 1200.
Indeed.
http://money.cnn.com/2010/09/13/pf/college/student_loan_default_rate/index.htm?source=cnn_bin&hpt=Sbin
The stars are aligning. Stay out of STU.
one of the best posts in the history of IBC (and your blogspot page, for that matter)