Dramatic Rally is Right Around the Corner

Once again, I am playing the higher probability outcome, by positioning long into the carnage. With today’s GDP numbers, the asshats in Congress cannot afford to tip the ancient scales of reason into the crevasse.  A deal must be made, which in turn will lead to a sharp snap back rally. About 3-5 days into said rally, I shall liquidate again and spend the remainder of my summer at the beach.

As told weeks earlier, 15% of my book is in DECK common and calls. As you can see, it is having a grand day. I knew the stock would rally hard because idiots were selling ahead of imminent analyst upgrades. How did I know? Well, Q2 is always a light quarter for DECK, as no one buys winter boots in the summer. The novice saw a big build of 210mill in inventories as a net negative. However, I viewed it as DECK planning to sell a shitload of boots this fall. Needless to say, I was right and my position is a winner.

In my personal account, I am heavily long WNR calls, VXX puts, DECK calls and common and some GSVC. For managed, I bought monster positions in FLS, TEX, WNR and a little SWK. I reduced my cash position to 40% and will hold that line until the debt ceiling issue is resolved.

Also, with Q1 GDP revised down to 0.4%, look for THE BEARDED CLAM to have a word of two, during this years summit at Jackson Hole, regarding Qe3. The tepid growth is no longer benign and it poses a grave threat to this economy. It is the responsibility of policy makers and Mr. Clam to provide free money and lots of cocaine.

Trade accordingly.

NOTE: Should QE3 stay off the table and American austerity takes hold, I will be net short by Fall.

NOTE II: I added to GSVC.