ARE YOU READY FOR THE BIG A?

Apple is scheduled to report earnings tonight. Estimates are for $1.88. According to Factset, average revenue estimate is $50.98 billion.

Let’s be honest about Apple. It, like AMZN, is a giant deflationary vortex that constantly draws from the economy to ingratiate itself.  What’s good for Apple is good for Apple, not necessarily good for everyone else. Bear that in mind when trying to extrapolate something from their soon to be reported quarterly earnings.

If, by chance, Apple misses earnings, then the market is entirely fucked. Let’s hope Tim Cook was solely focused on his business and not so much being happy with his sexual orientation.

I added to my JAZZ, XON, COST, CNC  and NK positions, defending and advancing the cause of Le Fly towards all the corners of the globe.

If you recall, last week the WSJ threw Miss Holmes and mega-cap, privately held, blood testing company, Theranos, under the bus.

And now this from the FDA:

Heavily redacted inspection reports, posted Tuesday by the U.S. FDA, said that Theranos’s “design validation did not ensure the device conforms to defined user needs and intended uses.” The name of the device was redacted. In addition, “the design was not validated under actual or simulated use conditions.”

The inspections were conducted Aug. 25 through Sept. 16 at Theranos’s Palo Alto and Newark, California, offices.

In other words, Theranos is full of shit and their magical blood test, which only requires a pin-prick, is most likely a far fetched fantasy.

According to Crunchbase, ATA Ventures, Continental Ventures, Draper Fisher, Tako Ventures, as well as Larry Ellison are investors in Theranos.

Can you say ‘down round’?

It was a nice respite, but now it’s over. The over-arching trend of debilitating deflation has resumed, taking with it wide swaths of market capitalization from the indices. You might be tempted to bottom fish from the sewage infested waters. But you’re only going to capture sick fish, who will eventually die on you.

Might I posit an alternative stance?

Instead of repeating my errors, why not allocate funds into boring stocks that work? My largest position, as of yesterday, was COST.  It’s holding up rather well in this tape, isn’t it? Simply screen for mega cap stocks within 5% of a 52 week high and start from there.

The small cap rally that has alluded us for so long isn’t going to happen now. Very simply, after a 9% move in October, it’s unlikely we’ll get much follow through from here.

I expect the market to tread water from now until January. My job, aside from being the best god damned finance blogger who has ever lived, is to protect gains and maximize my investment dollars by limiting downside and capturing easy upside.

I just don’t see easy gains here. Biotech is down; but are they cheap?

Sure, if we knew AGIO was gonna have killer data, we’d all pile in ahead of the move. But that’s not how the market works, at least not for non-congressmen.

We make assessments and then try to figure out if our conclusions are worthwhile, based on risk/reward metrics. I’ve been rifling through risky shit like crazy these past two years, enduring savage drawdowns and inhumane periods of capital loss.

Those days are over. Le Fly is no longer interested in the Fast Money, a term coined by catamites partaking in heinous acts of degeneracy.

“The Fly” is better than them, better than all of them. You will see the fruits of my labor soon come to fruition.

The airline stocks haven’t been doing shit this year, despite the price of jetfuel plummeting to lows.  Part of the reason is Americans hate the airlines, always have and always will. We select the cheapest fare and lament over waiting in the 3rd world styled airports, amidst insane delays and ridiculous cancellations. In a sense, our air travel industry is the very worst this great country has to offer, which is why we have ZERO loyalty to any brand.

“Given that 50 percent of our revenue is up for grabs in these markets and that these carriers have had so much success when they weren’t matched, we know that we have to match their fares,” Kirby said. More than a quarter of American’s domestic capacity overlaps with Spirit’s, he said.

The fare bargains are causing a bit of an existential crisis among some who had turned bullish on the consolidated industry. Does the world’s largest airline need to join a race to the bottom to lure the most price-sensitive customers? United and Delta aren’t matching the cheap fares to the same degree.

And were Spirit executives foolish to think they could expand their flying 30 percent in 2015 without sparking a fierce backlash from rivals, at a time when cheap fuel is helping bolster American even more than others in the industry? American doesn’t hedge its fuel needs, meaning it hasn’t paid above-market prices this year or last, unlike its three largest rivals. That financial benefit has soared into the millions.

Florida-based Spirit is now “our No. 2 competitor” at Dallas-Fort Worth International Airport, with 25 nonstop routes—more flights than Delta or United, Kirby said. “In those 25 routes in Dallas that Spirit flies, they have 20 percent market share, huge market share,” he said. In Chicago, where American has a hub, Spirit has 60 daily flights to 24 cities.

As a result of Spirit’s low fares, American plans a new, no-frills fare in 2016, much as Delta devised “Basic Economy” as a way to match Spirit in competitive nonstop markets. American declined to discuss specifics of the new economy fare.

More broadly, the bare-bones fare innovations at Delta and American are the latest permutation in legacy airlines’ decades-long effort to combat the rise of low-cost rivals. In the early 2000s, after the vaunted “Southwest effect” had begun lowering fares in major markets, legacy carriers turned to an “airline-within-an-airline” model, with a goal of flying a lower-cost airline alongside their mainline operations. In 2003, Delta started Song and United followed not long after with Ted. Both flew only briefly.

I bought Centene. I have little regard for the industry and I’m not a fan of our moronic healthcare system. Nevertheless, this stock should work, as they rip their way through the middle and lower classes of American society, further ingratiating themselves with the lavish lifestyle God demanded that they have.

I have no fucking idea why I thought these two piece of shit dogs were going to trade up. Maybe I got caught up in the moment and it passed and I held to long (obviously). I just sold out of SLCA and CNX for big percentage sized losses. I am going to state a singular silver lining, which also happens to be the biggest crock of shit: they were both small positions.

So fucking what? Small positions that nibbled away at my essence each and every day. CNX reported earnings this morning and they’re fucked. SLCA is down in sympathy of EMES and HCLP, with one of the two getting slapped with ZERO dollar price targets. The frac sand market is dead. I knew that, but held on for a “trade.”

Do you know what happens when you buy a stock, that you know is a piece of shit, but want to squeeze a fucking trade out of it?

THIS HAPPENS

Spy futs -5, Europe lower by 0.6%, oil -2%, gold -0.3%, dollar flat; FUCKED

Higher

Earnings nonsense: IDTI +9.5% (made a bullshit acquisition), BABA +8.5%, ASC +6.9%, EW +6%, SAVE +5.4%, AGEN +5.2%, CNC +5.1%, COH +4.9%, PCRX +4.8%, ROSG +4.4%, MGLN +4.2%, AGII +3.7%, BMY +3.6%, PAH +3.4%, ONE +3.2%, PFE +2.8%, UTHR +2.8%, YNDX +1.8%, MDSO +1.7%, CIGI +1.4%, MRK +1.2%, TXT +1.1%, BP +1.1%, .

Mergers and Executions: PRSN +166.6% (Some moron is buying this company), TRIV +55% (acquired for $9.10 by ELGX), RIVR +29.6% (The Germans are buying this for $9.90)

Chinese lottery winners: WBAI +5.6%, JD +4.7%, DANG +3.5%, JMEI +3%, BIDU +1.9%

Random horseshit: UQM +24.6% (China pyramid scamming, most likely), ASTI +18.2% (mapping for Mars. Talk about horseshit), CYTK +13.9% (rubbish), SBBP +9.2% (RA Capital Management discloses 12.7% passive stake in 13G filing–these guys are boss), SHPG +5.6% (phase 3 stuff), AGEN +5.2% (more biotech boredom ), YHOO +5.1% (riding BABA dick), PBMD +3.3% (fucking biotech), LOOK +2.8% (don’t bother), RMBS +2.5% (100mill buyback), TWTR +1.7% (IBM announces collaboration with Twitter and The Weather Channel), TASR +1.6% (Baltimore body cams-Reuters) AA +1.3% (CRAMER PUMP)

Analyst HORSESHIT: VMW +1.8% (upgraded to Heroin from Hold at Drexel Hamilton)

Lower

SHAMEFUL earnings: HCLP -21.4% (sand sucks), RRTS -18.5%, KN -13.8%, MSTR -13.2%, GIGA -13%, CMI -8.8%, AMKR -8.1%, ALSN -6.1%, CAKE -5.8%, HIG -5.8%, ERI -5.7%, FDC -5.7%, IACI -4.3%, CAJ -4.2%, UPS -3.9%, IPGP -3.8%, JBLU -3.3%, NVCR -2.8%, AGNC -2.7%, SWFT -2.6%, F -2.1%, CMCSA -2%, CR -1.9%, PCAR -1.6%, ICLR -1.3%

Miners that suck: MT -2.9%, BBL -1.9%, BHP -1.6%, VALE -1.3%

Oil and Gas that suck: SDRL -2.5%, RIG -1.9%, TOT -1.4%, RDS.A -1.2%, HAL -0.6%, SLB -0.5%

Random shots fired: MRVL -20.1% (PWC resigned; super red flag; Einhorn must be cursed), CTIC -13.1% (DILUTION), AAN -7.1% (in symp with RCII), GORO -5.4%, GLAD -4.3% (DILUTION), FDX -2.1% (in symp with UPS), TACO -1.9% (DILUTION)

Analyst comments: DSW -1.9% (downgraded to No Real Opinion from Buy at Sterne Agee CRT), LVS -1.7% (downgraded to Equal Shit at Barclays)

The savage Chinese are undergoing a transition, one that America underwent 100 years ago, from a manufacturing powerhouse to a bunch of consumers prancing around in $300 underwears, buying shit like gluttonous beasts.

Alibaba beats by $0.03, beats on revs; SEC inquiry has concluded with no action
Reports Q2 (Sep) earnings of $0.57 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.54; rev +32% to $3.49 bln vs. $3.39 bln consensus.
GMV transacted on our China retail marketplaces was RMB713 billion (US$112 billion), an increase of 28% year-over-year
Mobile GMV accounted for 62% of total GMV transacted on our China retail marketplaces; mobile revenue was RMB10,520 million (US$1,655 million), representing a year-on-year increase of 183%;
“Growth of our cloud computing and Internet infrastructure business accelerated, with revenue increasing 128% year-over-year to RMB649 million (US$102 million).”
“Our ecosystem continues to thrive. By the end of the September quarter, our annual active buyers grew to 386 million, and mobile MAUs grew to 346.”
Blended monetization rate to 2.42% in the current quarter from 2.30% in the same quarter of 2014.
As previously announced, we received an inquiry from the U.S. Securities and Exchange Commission in February seeking information regarding our interaction with one of our Chinese regulators, the State Administration for Industry and Commerce, and related matters. We voluntarily cooperated with the SEC’s inquiry. The SEC has notified us that it has concluded its inquiry and, based on the information it has received, it does not intend to recommend an enforcement action against us.

Jack Ma and his Alibaba family of websites are providing the Chinese with an easy to use portal, whereby he is able to extract all of the people’s savings–something that has been nearly impossible to do until now.

Unlike their American counterparts, the Chinese don’t usually spend a lot of money, opting to save it for the next 100 years instead. Thanks to technology and the infiltration of American culture, they too will succumb to our corporate hegemony, effectively opening a grand avenue for our corporations to exploit.

In other words, the Chinese economy can’t be all that bad with these sort of numbers out of BABA.

Bears will certainly feel some pressure now, as Bill Ackman doubles down and defends his $3 billion position in VRX. If there’s one thing, above all, that Bill does best, it’s tooting his own horn and talking his book.

Well, now the stage is his and the whole world will be listening.

Valeant Pharma: Bill Ackman and Pershing Square will host an investor conference call on October 30 at 9 AM ET to discuss their investment in VRX

VRX is up 4% in pre-market. For the record, I believe Ackman wins in this PR Battle Royale.

WWF styled shit, soap opera world.