Why are we going lower? Is it because the economy is weak? No. How about the Euro debt crisis? Nope, not that either. Are we trading lower on valuation? Funny, definitely not. Think for a second and tell me, why are we trading lower?
Is it the debt ceiling? NO.
I am sure you expected me to say yes. The truth of the matter is, even without the debt ceiling, we’d still be trading lower now, sans the added bonus of panic. The market is stuck in a range because we are digesting massive gains. That’s it. We need a catalyst to trade up to new highs and the economy is not good enough to provide one. Coupled with the dreadful earnings coming out of the tech sector, there are zero reasons to chase stocks. We keep continuing this circle of carnage, where big money sells to retail near tops and buy it back from them at bottoms. The sad truth is, the playing field is not equal, mostly due to resources.
Look, when you’re managing $10 billion, you have room for error. Retail guys with $500k in stocks can’t handle the extreme lower ranges and always opt out near the bottom. I would not be surprised to see people dump out here, ahead of a debt deal and miss out on an epic debt ceiling deal rally.
See, that’s what just happened today. If a deal got done last week, we’d sell off on that news. However, now that we are much lower, we have all but guaranteed a massive short squeeze rally upon confirmation of a deal. What you have to ask yourself now is “what is the high probability trade?” Granted, your bet may be wrong and you’re simply going to have to deal with the consequences. There is no room for mediocrity.
I will try my best and position wisely, with the intention of growing my +16% to 25% on the next upswing.
Remember, the market is uncertain until it isn’t. Everything is a mathematical equation. I try to focus less on the individual names these days, in favor of macro moves. If I sense we are going to spike higher, I have a handful of “go to” stocks that will get the job done for me, irrespective of underlying fundies.
My sense, an inflection point is coming soon. Stay light, but don’t get caught short, else end up on the receiving end of a “fuck you, you’re dead” funeral card.
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The market has been acting like shit since June – typical summer bullshit.
When the trend returns so will I but for now very lightly trading and waiting.
Can you say “JACKSON HOLE?”
Fly…DON’T EVEN say those words!!!! lol, OMG, I am sooooo sick of the Clam. BTW, I am still amazed how everyone is hiding in the Aussie and NZD..they can’t hide there for very much longer.
But people are drinking “green” coffee. Is that not enough to force markets soaring upwards.
Aside: If I have one more person ask me for a “natural” cure to something I will literally go nuts.
The Recession is Coming! The Recession is Coming!
Part Deux. This time, with higher interest rates.
_____________
I am not sure if you are joking. However, I’d put a recession at 70% probability within 1 year.
Pharmacy = Recession Proof
in my field they always ask about Natural Estrogen (and they refer to plant estrogen or phytoestrogens.) and in reply I tell the fuckers, what is so natural about a stupid plant making mammalian hormone. But just the fucker comes from a plant then it is better.
A hormone is a hormone.
dont tell me, tell them.
plus what is a plant doing making animal hormone?
I wish a plant made phyto-testerone.
Depends on the plant and how much the client paid. For example, is it a banana or a cucumber?
It is manufactured because spending cuts will OBVIOUSLY impact on economic growth.
So…
Do you prefer to look towards relative strength winners or losers (from the current downturn) in a potential debt ceiling spike?
I look at stocks that tend to outperform on a historical basis, coming from down periods to up. Data is provided in The PPT
tomorrow they are going to come up with some bull shit that a deal is in sight and the MF market will rally.
the macro news will get the market where it wants to go faster. it is a catalyst and not a cause – effect
Trade the ranges. That’s all.
I got caught with some day trades and got the “fuck you, you are dead” card today. But not as bad. I was lucky I had bought some Chinnese burrito yesterday and they did pretty good.
Cut the bs.
The market is going to trade up from here bc the PPT range is calling it oversold.
Are you a PPT member? If so, email me now.
flybroker at gmail .com
busted
that was obvious when Fly sold his TZA and bot VXX puts wasn’t it?
Quality post fly
Dr. Fly,
Do you approve of the following PPT screen? Monthly change as appropriate.
http://ppt.ibankcoin.com/screener.php?fundamental_score=o3.5&hybrid_score=Any&technical_score=u2&num_up_months=o4&custom_win_ratio=o75&month_num=7&min_vol=on&ex_china
I do not think that hyper-linked correctly. See HalfBloodPope – Down Now July Seasonality.
Thank you.
Suggestions from PPT members welcome.
I would suggest you not post PPT screens on this site. Paying customers might take offense.
___________________
As well, here’s a gentle reminder about panicking.
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I assume no PPT members can not see such a screen.
non
Correct. Jake is drunk
Wrong, just tired.
++++++
Coffee is good for you and chocolate too.
i usually prescribe a reach around twice a week, its very healthy and keeps the lining of the heart fresh and elastic.
Doesn’t a ‘reach-around’ infer you’re taking it up the arse?
I have to agree with you Fly. It’s been a nice ride down in PUTS on the homebuilders and financials.
I expect a bounce on the debt deal. However, if its a piece of shit bill that does nothing to fix the debt issue I think the rally wil be small and short because the street will worry about a downgrade from are clueless ratings agencies.
If the deal has some teeth then I could see a moon shot higher.
I think we head much lower by year end.
It is great to see that the USA is finally getting serious about dealing with it’s deficit. However, whatever plan is finally passed, the US economy is going to see maybe a trillion dollars a year not being spent; taken out of the economy. That is a lot of money and it is bound to be a drag on the markets. Turning off the Reagan/Bush deficit firehose of borrowed money will be good for the financial health of the government but will cause a huge upheaval in the broader economy as payrolls are reduced drastically. When those tea-partier start losing their jobs they may regret focusing so much on spending cuts instead of a more balanced approach.
Liberal Fuck…
Right, I don’t know why we have a private economy at all. Heck, why not let the Gobmint pay EVERYONE’s salary?
You haven’t had much economics, I’m assuming.
Start w. Basquiat.
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You’ve had 30 years of right wing supply side economics and look where it has landed you. The definition of insanity is doing something over and over and somehow expecting a different result.
I think a little common sense is in order.
The operative word is “balanced”.
You are about to enter a period of reverse quantitative easing. The economy will contract and the issue for investors/traders is how do you position yourself for it.
You are a smart mofo Fly
Respekt
Once again The Fly shows the true meaning of “entitlements”. Soon the white robes and sandals will be upon us. Well done sir. Well done.
Well said, FLY.
Any thoughts on how DECK and WNR will do when they report after the bell?
Hopefully Exxon just carries the S&P higher and we begin to squeeze those who short a genetically enhanced bull market infused with Bernankeian DNA
It’s all becoming more nebulous. Drop into an air conditioned oubliette and wait until Jake’s recession comes and goes. It will happen, Minerva never lies.
It is an issue I must find more information about, thanks for the posting.