In response to the psychotic pin action, I sold GE for a 9% loss and bought some SOXS — because NVDA is heading down by another 50%.
Additionally, to hedge against a possible triple head fake rally, I bought LABU — because biotech is strongest and the people who buy biotech are degenerates.
You cannot keep large positions in the tape like this, or trade stubbornly. The longs I accepted into my bosom this morning, might in fact, end up making me some money. But it’ll bet hard. That’s okay. Le Fly is used to toil.
Keep an eye on HYG. Markets are trading on a 1:1 correlation with it.
I sold DRIP, DRV, and NUGT for +19%, +19.6%, and +9% gains. The last two were double sized positions and I’m incredibly grateful for having the foresight to get involved. With some of my cash, I stepped in and bought a basket of SAAS stocks: HUBS, NEWR, and MDB.
Will stocks catapult higher?
I’d like to believe so, at least for the week. But in the event I’m wrong, I have 50% cash to buttress my fall. I will be using price momentum to direct my investments. I might buy more, maybe not. The point is, when you have nice gains in leveraged ETFs, you have to book them.
This bounce should stick throughout the week. We’re so oversold and sentiment is so bearish, it makes sense for us to enjoy a little respite. Short sellers should refrain from adding to positions and instead think about closing them out.
This will all resolve itself during the first week of January. See, people will celebrate the New Year’s in a tenuous manner, relived, yet scared, unsure what to do. It is my belief, might I add, stocks will be destroyed in the first week of 2019, rendering this little rally and the rally to come meaningless — smoke and mirrors in a clown house filled with trap doors.
It has been the worst December ever and there’s a reason for it. We don’t know exactly why stocks are down to this degree, only that it’s happening. I do believe this narrative fits the 2011 market panic and in some ways I reserve the right to completely change my mind about the crash to come. Plainly, I have a bias and I have my beliefs, but am old enough now to know those are just thoughts attached to emotions, the sum total of my life experiences coupled with an intangible intuition.
Ultimately, I am price sensitive and will use the direction of the market as the final arbiter.
Every downtick in stocks, Trump sweats a little more. You can tell he’s panicking, unsure how to rig markets higher. This is the problem with policy makers, always concerned with jimmy-rigging equities higher and not letting markets settle and do their thing. During periods of economic uncertainty, policy makers often instill more panic into investor psyche. The people who regularly help confidence are industry titans, legendary investors, influential analysts.
Alas, Trump lashing out again, like a baby.
“They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon,” Trump told reporters in the Oval Office, referring to the U.S. central bank.
“I have great confidence in our companies. We have companies, the greatest in the world, and they’re doing really well. They have record kinds of numbers. So I think it’s a tremendous opportunity to buy,” Trump said after speaking with U.S. troops deployed abroad via video conference.
Nasdaq futures are -19. Now is a good time to reduce shorts, move to cash, and wait for a breakout above a consolidation range, which is bound to establish soon. You can play the bounces, which should be sharp, but remember to book profits quickly. Any measurable gap lower tomorrow will likely be met with bottom pickers.
You can’t say you weren’t warned. Oil drops makes oil stocks go lower which makes debt to equity balloon which makes high yield gets hit which hurts the market. There is a workflow, a pecking order here, that is easily decipherable. Just like bearing witness to IYR and VNQ being the only major assets yet to death-cross lower and me positioning, KEENLY, into DRV with a double sized position.
See pal, this is who I am — and you’re nothing.
Good Father? Fuck you, go home and play with your kids. You want to read here, CLOSE.
I’d like to sit here and write an eloquent blog about how everything is going to be all right and how your stocks splendid — but it would be a lie. On this Xmas 2018, Le Fly offers you the gift of truth and that truth is, inexorably, you’re fucked. Markets are reeling lower because there is a ball in motion, a ball that will be revealed, in a great reveal, later on down the road. In the meantime, you wallow in your misery — because you’re a slave to the bull — getting poked by it with indescribable fury.
You’ve worked hard for your money and it doesn’t deserve to be treated in such an indecorous manner. The decade long bull market has made you weak, flabby, greasy, and fat. It’s time to take matters into your own hands and regain the initiative god damn it. Hope isn’t an investment option, but an opiate for the masses to dream away as they’re murdered.
I wish you all a Merry Xmas and hope that you can forgive yourselves for genuflecting to the bull. Find solace in knowing during periods like this that there are men out there, like The Fly, with the eternal fortitude and zeal to see this market through, ravish and forage from it, like an army of locusts sweeping through the lands plagued by drought and famine.
“The Fly” is, after all, a man of the people. I wish you and yours a good day.
The banks all confirmed ample liquidity is available for lending to consumer and business markets.
Washington — Secretary Mnuchin conducted a series of calls today with the CEOs of the nations six largest banks: Brian Moynihan, Bank of America; Michael Corbat, Citi; David Solomon, Goldman Sachs; Jamie Dimon, JP Morgan Chase, James Gorman, Morgan Stanley; Tim Sloan, Wells Fargo. The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations. He also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly.
Tomorrow, the Secretary will convene a call with the President’s Working Group on financial markets, which he chairs. This includes the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission, and the Commodities Futures Trading Commission. He has also invited the office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation to participate as well. These key regulators will discuss coordination efforts to assure normal market operations.
“We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business,” stated Secretary Mnuchin and added “With the govemment shutdown, Treasury will have critical employees to maintain its core operations at Fiscal Services, IRS, and other critical functions within the department.”
Mnuchin, likely at the behest of Trump, spoke with leaders of 6 of America’s largest banks to discuss liquidity and the specter of recent ominous happenings. Judging on previous happenings, this happening is the onset of a set of actions purposes to reinforce confidence and get markets going again. Often times, these actions are met with cynicism and viewed as confirmation that something dreadful is about to happen. However, at the end of the long road, wanton chicanery and manipulation will provide for higher equity prices.
This is for you Goldman Ballsachsers out there who’ve never trade thru a bear market, silly, stupid, boys — permanently bullish and everlastingly corrupted by the vampire squid.
Back in 2008, the market collapse didn’t happen, in earnest, until September. From the onset of fall thru early 2009, the Nasdaq was annihilated by 50%. Presently, the market is off by 20% over the past 3 months, and people are already clamoring for more.
Admittedly, the negativity is infectious and I’d like to believe hell itself is about to crack open in Kansas somewhere and suck the United States inward. Truth is, this is more like 2011, when Europe was on the verge of collapse and their banks needed to be bailed out by Germany. All we’re pricing in now is an economic downturn, political instability, and China trade war.
Do stocks deserve to crank lower as if Lehman had just collapsed? What the fuck has actually transpired, aside from future prospects of high yield chicanery and a spike in unemployment?
Nothing.
I present to you the FAGBOX, circa 2011 and today’s box.
Today
I traded with trepidation the week before last due to the fact we were meandering at the bottom of that range. I knew if we broke lower, pandemonium would break loose and it did. But that’s all there is to it, the ebb and flow of greed and fear. Weak hands getting washed out because the earth required their blood. Eventually, this stabilizes, chops around in a new box, and then breaks higher.
I’d look for a 10%+ jump in the Nasdaq during January. The only thing that stops it is actual news of credit seizing up and/or more Trump uncertainty. But on the political stuff, that would set up a sublime bottom, as the American economy is bigger and stronger than any one person.
Stocks to buy vary between FAANG and hardest hit, like the oils. If we continue lower, just about every major facet of the market has already done a ‘death cross’, with exception to the REITs. My favorite short now is to be long DRV.
Back to last minute Xmas shopping.
NOTE: I have 3 hours left in The Capstone Programme, until someone cancels. Book and appointment today and be taught what you need to be told.
In response to this tweet by Jeff Gundlach, Jim Cramer was, apparently, forced to excoriate himself and apologize profusely in a live broadcast.
JIM STEPPED OUT OF HIS STATION AND DARED TO INSULT THE REIGNING KING OF BONDS, a man who does not need introduction. A man of both power, and style, managing over $150b in assets.
Shame on Jim and I hope the executives at CNBC whipped him at the gibbet, at least two or three dozen times for this transgression.
*** The Capstone Programme has 6 hours left and then I close the doors until someone drops out. Make an appointment today ***
It’s over SantaFAGS. Your accounts have been destroyed for Xmas. All of the money you spent on presents, washed away twice, once by the store, and then again by the market. You’re looking into the mirror, seeing the visage of a very ugly man. I know the look, having seen it myself on numerous occasions throughout my existence. I will say this to you, boldly and flatly, nothing is a given in this world — not life, nor food, not even a bull market.
TAKE CONTROL OF YOUR FINANCES.
Do not subjugate yourselves to the academic opinions of those in charge of this country. You have a stock and it’s barreling lower — sell it. The idea to buy should be rooted in the actuality that said asset is rising in price. Catch a falling knife — you’re gonna bleed.
I do not say this without a heavy heart — but I did fucking warn you. I did try my best to alert you to what I was seeing. Very few people are able to see the market the way I see it and I’ve always known that. You play the piano; I play the market. This is my specialty.
YOU DO NOT BUY UNTIL OIL GETS BACK INTO AN UPTREND.
Oil lower causes oil stocks to go down, which then causes high yield bonds to go down, which then causes panic in the market. That is the workflow you need to follow. No position should be greater than 5%. No loss should ever exceed 10%. No stock should be bought unless it’s in an uptrend. I can go on for another thousands words. For the love of stolen Xmas presents, stop inflicting wounds onto yourselves.
Yesterday, someone sold Mongo-sized quantities of HYG and JNK. Today, both ETFs are again under pressure.
The size of both trades flagged by Tyler is ~$589 million.
“This is a bid-wanted situation in high-yield credit ETFs,” he told Bloomberg: “HYG options are also very active, currently trading 400 percent above their average daily volume, with a 15-to-one put-to-call ratio.” The fund, which has declined for fix straight days, was down another 0.2% on Friday, to its lowest level since February 2016; as part of the selloff, HYG shares hit their steeped discount to the fund’s NAV since early 2018, suggesting that the underlying bonds have even more to drop.
Fund flows, as you can imagine, are supremely negative — with record amounts of selling taking place. The important thing to look out for is January offerings and refinances.
About $52 billion of CLOs are eligible to be reset this January.
Commenting on what may be yet another place where the loan market pipeline will soon be clogged, is “stuffed”, JPMorgan analysts Rishad Ahluwalia and Heather Rochford wrote that “generally speaking, execution of refi/reset/re-issue can be more challenging compared to new-issue in a volatile environment.” Separately, Deutsche Bank reported that the fact that AAA CLO spreads are nearly as wide or wider than the original spread when they were first issued means that there is less of a cost savings for undertaking a refinancing or reset.
In layman’s terms, we could see some credit seizing up, which is another reason to sell stocks. Back in the good old days, recessions were just that. Nowadays, they’re coupled with banking collapses — thanks to decades of low regulation and leverage.
