If May is to Be Down, Then…

Everyone is cockiest at the top of the range. Men in bowed ties are feeling their oats and pikers across Wall St. think they’re Gordon Gekko, minus the visit to Rape-Me University for 8 years.

As I’ve stated numerous times before, the month of May has been unforgiving to bulls over the past 3 years. Have a look at the data for the Q’s (nasdaq).

If the nasdaq drops by 7% in May, what will happen to your high beta dice roll? Will it drop by 15%, 20%, maybe 30%?

If I’m right about May, this is the last trading week until the month of dastardly corrections is set to begin. You should all humble yourselves, take a few steps back, and dial it down.

Recently, I blew a few fingers off playing the “silver roulette” wheel, coming out the other end a fantastic loser. Some of you bought my liquidation, ironically, and will make some coin from it. But don’t confuse luck with skill. The silver miners have been in an unrelenting bear market for over a year. If you should happen to make some coin in them, praise the gods and take profits, for they will be short lived.

If May is to be down then this is the week to sell.

There are several ways to trap a short. To understand how to accomplish this, try to remember how you felt when you had to sell a large position into an illiquid tape. I recall feeling frustrated by an inefficient/corrupt bid/ask system, where I was forced to hit bids below market price to get out.

Now imagine being short a stock spiraling higher–laden with short sellers dying to cover –but keep waiting for a pullback. You can redouble that pain if the stock trending higher is relatively illiquid, measured by average daily trading volume and the size of the float.

For the sake of curiosity and a chance to find something meaningful, an opportunity of a lifetime, I created the following screen inside of The PPT. As of now, here are some notable names.

PAMT

HPTX

USNA

IRG

CARB

SAM

WRLD

CLVS

RRGB

BOFI

BWLD

CHE

SUSS

RH

ESI

OSTK

PETS

The above stocks are nightmare’s to be short into an upward trending tape. Due to the small float size, they have the ability to rip higher without pause, case in point: OSTK.

Out of this bunch, what’s your favorite.

I’ll reveal mine tomorrow.

You have approximately 30 years of quality, mature, living. Do not waste it by arguing about things that are beyond your control.

I am not asking you to do this: it is an order.

As you know, the good folks over at iBankCoin have all readers under surveillance. We are watching your every move. Violators will be punished by paralyzation, placed into wheeled chair, sent yonder over the cliff, directly into sewer pipe.

Stop with the cynicism, with regards to the recent terrorist event. Turning it into some sort of inscrutable ruse to strip away freedoms for political purposes makes you look like a slack-jawed ape– with your mouth wide open and your eyes as empty and dumb as a set of testicles.

I made a small amount of money today, because I am mostly cash and HDGE. I own KMB, WM, PEP and CHD, which did great, but they’re such a small part of my holdings, I’d be remiss to brag about them.

My “core holdings” are FRO and GTAT. It’s truly funny that those words were just written by me. I cannot trace back to the time when I thought to myself “Fly, that’s exactly what you should do. Make FRO and GTAT your core holdings.” My position is one of disbelief; but I must carry on, for the sake of the people and the extravagant living mannerisms of a one Mrs. Fly.

If it was up to me, I’d probably live in the woods somewhere, grow a thick beard and do pull ups off a tree all day, in between breaks where I’d murder animals and eat their flesh.

I have a lot of stocks that I am willing to buy, none of which come with instructions to buy on a sleepy Friday afternoon when the entire city of Boston is under martial law because a crazy 19 year old terrorist in on the loose.

I’ll wait for better prices.

I am looking for companies with pristine balance sheets, who are profitable, sport low PEG ratios, and possess market caps more than $5 billion–whose stock is down more than 10% year to date.

Out of thousands of stocks screened, just 10 fit the criteria.

AAPL

BIDU

CEO

CHL

EXPD

FNV

GRMN

JNPR

SLT

VMW

It’s tempting to allocate funds to this exact portfolio.

So far, one of the two Chechen scum brothers have been killed. The other, the punk in the white hat, is being sought after and will be killed soon. The entire city of Boston is on lock down, searching for the younger (19) of the two brothers.

The NY Times has a full background on these two muslim idiots, who somehow believe that by killing and maiming innocent people will result in a grande prize upon their sudden/fortunate deaths.

The older brother was quoted as not having a single American friend because he didn’t understand them. That’s code talk for being an introvert virgin, who was unable to make it in real life, so decided to lash out–indoctrinating his younger/impressionable brother to help him create a sense of self-worth by hurting others.

This is classic moral insanity. The good news, as far as I can tell, these might be an isolated event, unrelated to a broader terrorist plot.

UPDATE: Police are looking for a Gray Honda CRV, Mass plates 316-ES9.

UPDATE II:  Police are warning that this bozo might be heading towards Manhattan, strapped with a suicide vest. Be careful out there.

UPDATE III: Here is another photo of him.

UPDATE IV: The elder/dead brother had made this psychotic Islamist video month’s ago.

UPDATE V: Another person of interest is being sought after, who apparently took a train to Connecticut.

UPDATE VI: They found the car in question.

First 10 seconds, trust me.

You other bloggers are simply embarrassing yourselves.

Don’t believe for a second the drop in gold and silver were isolated events. As a matter of fact, it’s all tied into a single thesis, all to do with liquidations and the reemergence of risk off.

Oil will follow, luring people back into the fold due to a reduction in “input costs.” However, what they won’t realize straight away is the municipal dependence upon gasoline taxes and how lower gas prices is onerous for many state across the country.

There are beneficiaries.

Look at the shippers, companies like FRO are plagued by fuel costs–which comprise 67% of their expenses. If one could surmise a few simple points, they may start to believe that a company like FRO will benefit from sharply lower fuel costs.

But the shippers are not a short term play, as it needs to undergo restructuring in order to heal.

Be wary of the fast money trades, picking the depressed “for a trade.” Sometimes those trades end up becoming an albatross, something you will regret with every fiber of your existence–shortly thereafter.

“The Fly” will continue to wait out the tape in search for reasonable discounts. At these levels, following a mini-pullback, I do not feel a sense of urgency to jump into the fray.

I am not offering advice, but speaking to myself.

All I can do is wait for some of my favorite names to cheap, names like WETF, BX and USG. Sure enough, they’ll come down and it will be scary to buy when I decide to buy them. But there aren’t many pullbacks in this perpetually bullish market, so you might as well take advantage of the pullbacks when you can.

We’ve been sharply lower in May for the past three years. Some might say “it’s time for a change. May will be up.” But everything points to the continuation of this trend. In the big scheme of things, one month is a very small amount of time to wait for cheaper stock prices. Instead of risking 20-30% of your holdings, based upon the caprices of the Fed and our beloved policy makers, might I suggest taking a month for holiday?

Top picks: GTAT, HDGE

Today confirms what we’ve all suspected: this market is headed for much lower prices. Traditionally, the market is “let go” during the month’s of April through July. I see no reason to believe 2013 will be any different.

Volatility is back and so are treasuries. As you can see, TLT and VXX are heading up again.

My preferred form of short is HDGE, however. I am not looking to make a fortune on my shorts, just stem the flow of blood from leaving my body. I do not feel comfortable initiating short positions into the teeth of a decline–because based on recent history, shorting the market has been a losing endeavor.

So, my position is simple: 55% cash position and another 20% in HDGE to pair alongside my depreciating longs should allow me to remain in control of my destiny, at least for now. I am very eager to make back recent losses, but know the fastest way to accomplish this task is to bide my time and wait for my trade, not acting out of desperation like a dog fetching a scrap of food.

The Devil is net short too, but has a special situation that comprises all of his efforts at the moment. Hopefully this downward tape will allow me to buy some. However, it’s been very stubborn and extremely strong.