This Market Has Sponge Bob Muscles

Earlier today, Exodus flagged oversold, which coincided with a sharp bounce in the broader indices. Even still, this market is 100% horseshit, as our algorithms have decreased in value for 5 consecutive days.

Bear in mind, there are some amongst us who trade tapes like this better than others. As it so happens, you are fortunate enough to have one employed on this site. The Option Addict has been firing on all cylinders and is now taking reservations for his 5 day mini boot camp. I strongly advise you to take him up on this gracious offer and give us your monies.

My largest position is COST. Its been my largest holding, by a factor of 2, for several weeks now. Normally, I do not weight into mega caps like this. I do not run billions of dollars and I tend to gravitate towards high beta. Nevertheless, it’s important to know when you’ve been dispatched and abused by an evil tape. I shot out from a carnivale cannon with long dicked (extra Tyrone) gains earlier this year and have flailed in the wind since then. During this recent respite in stocks over the past month, I made a conscious effort to protect my 20% gains and avoid another meltdown.

Some of my favorite holdings, albeit smaller, are behaving in your typical, ruinous, fashion. Shares of PAH, SHAK, JAZZ and FCX are giving me nothing but fits now, which sort of elates me in an odd way, happy that I was prescient enough to see my own short comings and position into larger cap stocks, like COST and CNC, to offset this fuckery.

Wade through this muck, gents. The market isn’t nearly as strong as it looks, or as easy as The Option Addict makes it look. We’ll most likely mark time from now until year end, ebbing and flowing with extraordinary levels of fuckery. I expect the market to be annihilated during the first two weeks of January.

I don’t understand why they’d do such a thing. I mean, isn’t Snapchat the coolest thing to hit idiot teenagers since acne cream?

Wut, the co izn’t worth $20 billion ne moar bcuz they don’t make ne revenews?

Fidelity, a fund manager which invested in the creator of the mobile app for sending disappearing photos and videos, marked down its stake in Snapchat by 25 percent to $34.5 million in the third quarter, according to data from Morningstar on Tuesday. Snapchat had raised cash from investors at a $16 billi o n valuation earlier this year, a person familiar with the matter said in May. The Financial Times earlier reported the writedown.

Fidelity is reassessing its stake in Snapchat amid increasing anxiety in Silicon Valley that some privately funded companies may not live up to their lofty valuations. Other startups, including Dropbox Inc., have had their values adjusted downward by mutual funds in recent months. Last week, Square Inc. said it was seeking a market capitalization for its initial public offering that was significantly lower than its private-company valuation.

The era of the unicorn is over. Fuck the millennials and to hell with privately held crap, overhyped by Frederick Wilson. Very soon, programmers will be in the streets with tinned cups, begging for stock options.

Let’s kill all price gougers. That’s pretty much the short thesis for gunning after these drug companies. Aside from medicine, humans need clothes to survive too, no?

How about we build a short thesis on JWN; because Nordstrom is fucking price gouging like a motherfucker. Do you know who else is price gouging?

EVERY FUCKING COMPANY ON THE FACE OF THE PLANET.

I believe MSFT has gross margins of 97%. That’s pretty rich.

Ever been to a TIF or a DKS? Some of those prices, I gotta say, are fucking high.

Let’s not even get into the restaurants. As a member of your planet and person who needs sustenance to survive, I take exception, mind you, to the prices of burritos at CMG and hamburgers at SHAK and motherfucking coffee at SBUX.

God damn it; why can’t everything be on the MCD dollar menu?

My son is in college now. And, I must admit, I am growing somewhat suspicious of the prices of his books. I find myself spending upwards of $1k per semester for text books and I find myself awfully suspcious of PRICE GOUGING at his college.

I’ll be keeping an eye on them.

Do any of you own NYC or San Fran real estate?

(flails cane wildly in the air, screaming “price gougers”)

This is wholly and utterly ridiculous.

MNK’s shares have spiked around 8 points since this interview.

NOTE: Left said his short in VRX is “significantly scaled down” and had several positive things to say about its CEO. Does anyone else find it odd that Citron has backed off VRX so quickly, especially after Ackman became very vocal about it?

Last year, the United Steaks consumed at a rapid pace, preferring the online venue on Cyber Monday ($2.2 bill in sales) to shop to their gluttonous heart’s delight. However, all of our shopping was eclipsed by China’s imaginary holiday event called “single’s day”, a day hijacked and promoted as a holiday by the CEO of BABA, Jack Ma, within 30 fucking minutes.

Last year, Alibaba hosted $9.3bn worth of transactions on its online stores, after consumers spent $2bn in the first hour alone.
This year, Singles Day is expected to smash through those records.
IDC, the market research firm, predicts that Alibaba’s sales during this day could reach 87bn yuan, or $13.7bn.

Jack Ma is an evil genius villain. He hijacked this little known college originated holiday, spawned from demographic fuckery, which is the net result from decades of idiotic one child policy in China.

Via Wikipedia

Singles’ Day or Bachelors’ Day was initially celebrated at various universities in Nanjing during the 1990s, and originated from Nanjing University in 1993.[citation needed] It got the name “Singles’ Day” because the date consists of four “one”s. These college students have since graduated, and carried the university tradition into society. Singles’ Day has been largely popularized in the internet era and is now observed by youth in several regions outside China as well.

Why is BABA lower today? I believe people are still fainting over last year’s big fade, which saw BABA top out and burn out after single’s day; because, well, it’s all downhill from here.

The scale of this event is awe-inspiring. It paints a vivid picture of how powerful a true Chinese middle class could be for retail. It’s the reason we still tolerate Chinese stocks, despite the fact that most of them have proven to be outright scams.

UPDATE: BABA has surpassed $5 billion in sales within 90 minutes, more than double our Cyber Monday.

Some analyst issued a report on Apple today, saying that Apple cut back on its Asian component orders by 10%, due to lackluster Apple 6s sales. Hence, the stock is dropping and everyone is freaking out like it’s the end of the world.

So?

We played out this movie role before, scared investor running in the woods, tripping over Apple cores, trying to escape the boogeyman.

Pardon me if I’m not overly concerned about Apple 6s sales, ahead of what is going to be a huge iPhone 7 rollout.

Moving on.

Stocks are off a bit; but the current is a lot rougher than -30 suggests. Once again, Wall Street is throwing a temper tantrum over the prospect of higher interest rates. Weak balance sheet companies will be affected. It’s not so much the 25 bps raise that has people freaking out. It’s the fact that, once the Fed starts raising, they may not stop. Rates could go back to 1-1.5% over the next year, which would definitely hurt some fucked up companies who are dependent on cheap credit to stay alive.

Short sellers have total control of this market. Look at MNK and VRX bending to the will of Citron, a small website with 28k followers on Twitter. It’s hilarious that they’re breaking numerous hedge funds, in a dark macabre way, over very specious allegations.

“Look at how much they charge for their drugs. Isn’t that nuts?” That’s, in nutshell, Citron’s case against MNK.

Wayfair, ticker W, posted much better than expected results, guided way up, and the stock is screaming lower.

There’s no reason to get worked up about this sordid market action. We are going through a squall, after many years of uninterrupted upside. Eventually, this will pass and speculation will return. For now, panic is in the air.

What can go wrong? Corporate balance sheets are laden with twice the amount of debt since the pre-crisis levels of 2007. In retrospect, that worked out well for the market, so I imagine this debt bubble will too.

“Companies in the United States have taken advantage of low interest rates to issue record levels of debt over the past few years to fund buybacks and M&A,” Goldman analysts led by Robert Boroujerdi wrote in the note. “This has driven the total amount of debt on balance sheets to more than double pre-crisis levels.”

I can tell you first hand, since the housing bubble burst and the market recovered, investment banks’ favorite go to product has been oil and gas debt instruments. If, by chance, we are to be blessed with a tipping point event, one that ravages and consumes the entire market and swallows it whole, odds are it will begin in the asinine oil sector.

“The Fly” isn’t big on 2nd chances. I did tell you I’d find and kill anyone who didn’t attend the 2nd annual iBC conference; now you get a second chance to avoid such a fate.

The Option Addict, AKA Jeff Kohler, will be hosting a special 5 day online version, starting next week. Before your life gets downgraded even further, BEHOLD and sign up now.

NOTE: Members of any iBC service will get 25% off the price listed.

WTF is this shit?

Dennis took to the airwaves today of offer his expertise on gold. He told us it basically sucked, really, really bad, over every time frame for 5 years. He furthered that it should continue to get hammered into clown dust because the dollar was in the 4th inning of a 9 inning ballgame (what the fuck does that even mean? Is there like 50 mins left in the game?).

Then he mixed it up a bit and straight mind fucked all watchers of the teevee by suggesting gold had been a great buy in euro terms or even better in yen. Does this motherfucker know he’s on U.S. tele?

He concluded that everyone should own a little gold, in all portfolios, effectively defecating on all of his previous comments regarding gold.

Chinese CPI just came out and it was below expectations. For an economy allegedly growing at 6.9%, to have a CPI below 1.5% sounds freaking ridiculous.

I bet if real accountants looked into China, they’d find the GDP growth to be more in line with America, around 2%.

The consumer-price index rose 1.3 percent in October from a year earlier, according to the National Bureau of Statistics. That compared with a 1.5 percent median estimate in a Bloomberg survey and 1.6 percent in September. The producer-price index fell 5.9 percent, extending its streak of negative readings to 44 months.

The lingering deflation risks, along with declines in trade, flag the need for additional stimulus as inflation remains about half the government’s target pace. The People’s Bank of China — which has cut interest rates six times in the past year — is seeking to stabilize the economy without fueling a renewed surge in debt.

“The risk of deflation has accentuated,” said Liu Li-Gang, the chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “This requires the PBOC to engage in more aggressive policy easing.”

Food prices rose 1.9 percent from a year earlier, from 2.7 percent in September. Non food prices climbed 0.9 percent. Prices of consumer goods increased 1 percent, while services increased 1.9 percent, the data showed.

The inflation reading follows a tepid trade report that suggested the world’s second-biggest economy isn’t likely to get a near-term boost from global demand.

Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, while weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8 percent, leaving a record trade surplus of $61.6 billion.

Muted inflation gives the PBOC additional room for further easing. The central bank will maintain stable monetary policy and create a neutral monetary and financial environment for economic restructuring, according to the third-quarter Monetary Policy Implementation Report it released Friday. The PBOC said the economy faces downward pressure and inflation is likely to be low.

China’s economy grew 6.9 percent in the three months through September from a year earlier, the slowest quarterly increase since the start of 2009. For the full year, growth is set to be the slowest since 1990.

Top leaders have signaled that they won’t tolerate a sharp slowdown in coming years. President Xi Jinping said last week that average annual growth should be no less than 6.5 percent in the next five years to realize the nation’s goal to double 2010 GDP and per capita income by 2020.

“Declining prices, a heavy debt burden and still high interest rates will likely weigh on corporate balance sheets, undermining their debt servicing capacity and investment demand, and worsening banks’ asset quality,” UBS Group AG analysts led by Wang Tao wrote in a report ahead of the data. “The negative feedback loop needs to be broken with more serious restructuring, helped by further monetary easing.”

Pair the woefully weak Chinese economy with ours and one has to wonder if the Fed is purposely trying to cause an equity rout. I can see no other rational explanation for hiking interest rates at a time devoid of any semblance of inflation.

Gundlach is like the 3x inverse Rick Santelli, giving mad shade to Grandma Yellen’s naive Fed. The clam-fuckers at the Fed are either the stupidest motherfuckers to have ever walked the planet. Or (and this is my working theory), they are purposely trying to bankrupt CHK.

“I have a hard time believing a Fed tightening will help the economy,” Gundlach, whose Los Angeles-based company manages about $80 billion, said Monday on a conference call with investors. “I think volatility will increase and the economy will weaken.”

Do any of you people actually believe Fed tightening will help the economy? Being honest with yourselves, you know damned well it’s going to expedite liquidations in the 100 billion plus distressed oil and gas debt and ruin so many people who invest in stocks; this shit is going to get comical–like 2008 funny.