After the Bounce, Don’t Forget to Sell

I’m already counting my chickens before they’re hatched. This much is certain: we’re do for a stupendous rally, in spite of all of the horrible horribles. It’s important that the weak get washed out and the tree of speculation be nourished with the blood of the uninitiated.

Futures were down 300 last night and now the open is somewhat of a snooze fest, down by only 132. I see sell orders piling up and people tripping over themselves towards the exit. This is precisely the conditions for a mania, people doing things without thinking, acting both rash and incoherent — because they’re trying to save themselves from destruction.

TOO LATE — you’ve already been destroyed.

I have 50% cash and 50% insanity. I will be minding those position and stopping out of them should be take another spill lower. I can always get back in.

Good luck.

PS: Once we bounce and rally hard, you’ll be tempted to believe the worst is behind us and that we’ll rally right back to the highs. This is the sort of thinking that gets people killed. The RETEST THE LOW-FAGS will be out in force immediately, requesting we pass the crucible of relieving the horrible times before heading back up, so bear that in mind.

All points to a short term spike that will rip your fucking faces off — knock your jawbone loose, and then mudstomp the rest of your mug into dust.

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Nasdaq futures are -45, which is practically up considering today’s -300 squall.

Watch the USD/CNY cross. Right now, nothing.

Here’s Trump making sure the Fed hikes again in order to maintain a semblance of independence.

“I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president said after walking off Air Force One in Erie, Pennsylvania for a rally.

“Actually, it’s a correction that we’ve been waiting for for a long time, but I really disagree with what the Fed is doing,” the President added.

I’ve always been against the Fed hikes, but they haven’t got in the way for two years — until now. There was never a reason to hike rates in terms of the economy — but that wasn’t why they were. The Fed was hiking rates in order to increase the returns of pension accounts nationally, those tethered to bonds, forced to abide by certain risk criteria. Zero interest rates was a curse and a pox upon pension managers. They need higher rates in order to keep their Ponzi schemes going, otherwise we were barreling towards perdition with GE being the poster child of corporate malfeasance.

In terms of inflation, the rich enjoy 15%+ inflation, YOY. Everyone else, nothing.

The NIKKEI is -3.3%, but the DAX is only indicating -0.9% now. If this holds up, I can assure you will be bounce in the morning and Le Fly would have won again, in a most admirable and respectable way.

Enjoy your suppers.

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What did we learn during this decline?

This time was different. Please remember this and know that these squalls, or market panics, are unique and rare. In the future, when markets drop, you might be inclined to think this will happen again. You’ll be wrong and you’ll also lose a fuck load of money betting on a crash.

What did we do?

I bet on the Exodus oversold signal because it had worked well in the past. At the same time, I respect my stops. The net result was me losing money, but with only 35% of my account exposed to the tape. In other words, my losses were very muted, in comparison to what could’ve been.

At the close of trade, I did two things — went long TQQQ and OKTA, reducing my cash to 50%.

I can promise you two things, drawing from my deep reservoir of experience, markets will either drop fantastically at the open tomorrow or scream higher. There will not be a milquetoast response. Please ignore the futures tonight and definitely ignore the immediate after-hours buzz, which will be dreadful.

Keep an eye on Asia. Should China trade up, that will improve US futures. Should European markets drop by only 1 or 2%, we might get a feverish rally going in the AM. One thing is for certain, the Fed needs to back off from hiking rates and respect the risk off tone to markets.

Hello gents.

You’ve been dispatched and your cocks have been chopped off. But what if I told you you could get them back. It wouldn’t take long before everything you once had is back in your possession. Please imagine yourselves by the sea, maybe on a beautiful yacht with a beautiful woman, drinking Champagne, properly frapped, and of a good year. Now see yourself driving that beautiful yacht, atop the beautiful blue sea, with little fishes shadowing you on the side, directly and violently into a coral reef — immersing yourselves in fire.

That’s what’s going to happen to you, lest you step in there and buy some fucking stocks. We’re talking about the green halcyon dream that is America. Don’t squander it, else find yourselves making omelettes in the dirt with naked people in the foreground, your wife busy in the back beating a donkey to death for supper.

If you’re long and getting drilled and your stocks have hit stop limits, you are not permitted to participate in this dip buying excursion. This blog is tailor made for gents like me — the ones who’ve lost some coin, but had the foresight to parlay significant dollars aside for this very moment.

With 5% of my 60% cash, I bought TQQQ.

The Dow is off by more than 500 and the crash we’ve all been waiting for is finally here. My Bubble Basket of high value stocks is now down for the year — off a staggering 15% the past two weeks. This is real pain.

What to look for now is cessation of the selling and a motherfucking V shaped recovery. I know that sounds reckless, but that’s exactly how these things usually end up.

Here’s the skinny. There aren’t any outsized moved in forex or bond markets. There isn’t any economic news worth noting. So, this is, basically, a standard drop off the mountain tape — caused by greed, avarice, and now panic.

The only thing I’ve bought today is NBEV and I’m up. I’ve made a few dumb plays the past week and have almost made up for them by selling early and avoiding the lion share of this drop. Bear in mind, I was 65% cash heading into today. My next move will be sublime, an exercise and trading prowess unseen since Bud Fox hit the bid on Bluestar, only to then buy it all.

My quant fund is 120% invested now, so I’m quite sad about things in general. Life, as I know it, is no longer fun and gay. It’s onerous and I feel more odious today than ever before. Each passing day is another 52 week low for House Fly. In order to take the edge off and do something meaningful with my life, I stepped in and bought NBEV again — ’round $6.

I’ve never lost money in the name and I see TLRY is shooting higher.

Every one I know it nearly suicidal over this “dip.” The ephemeral winds of glory and gathered excellence have been washed away now, by a tidal wave of grave stupidity and expeditious ignorance.

Heed my warnings, but also know that I am 60% cash and long a marijuana stock into the jagged teeth of a deleterious decline.

I very well might be losing my mind.

Stock traders before Kavanaugh and after pic.twitter.com/mJTeQNs8hl

— The_Real_Fly (@The_Real_Fly) October 10, 2018

My favorite sector and leadership for high growth tech, the SAAS sector, is being completely dismantled. As I said earlier, I sold out of my last two SAAS stocks and have been taking losses on them all week. Granted, drawing down 10% on my portfolio is painful and it hurts me to see the carnage — but it could’ve been far worse if in fact I had held onto some of those names.

For the day, the best SAAS stocks in the market are lower by more than 5% — approaching -20% over the past two weeks.

There is heavy rotation out of growth and into utilities and low growth old man stocks. I can bored you with some Sharpe screens, but what’s the point?

I am going to show you something and it won’t make me look good. It will only demonstrate the importance of stop losses and how to avoid small holes turning irreversible large. Learn from my wisdom you fucking idiots.

Here are the stocks I sold recently and their prices and where they’re trading now.

HUBS $131.65 — $126.68
ZEN $61.61 — $60.21
TEAM $82.19 — $77.75
SOXL $133.35 — $119.71
NOW $181.80 — $172.38
TWLO $73.53 — $70.77
SQ $88.91 — $78.25
BL $51.28 — $43.63

Hence the term, “The Fly wins all the time, even when he’s losing badly.”

Today’s high profile losers.

The second you begin to truly believe this time is different and we’re heading much lower, BUY.

Hard to hedge while in the thick of a heart stopping decline. However, I am raising more cash — stopping out of HUBS and ZEN for 8-11% losses.

I am now 65% cash in my retarded trading account, long idiot ETFs like YINN and TNA. Who knows what should expect next — probably disastrous downside pin action and more.

Well, we’re diving now, so we might as well enjoy the long shadow being cast upon us now, embrace in the agony of others and hope to dear God the air of quiet death doesn’t come for us too.

Aside from dealing with the Chinese trade war issue, Trump and Co. have to deal with WTI shooting higher to $75. However, and this should not come as a surprise to you, this is GOOD for America. Granted, you’ll pay more at the pump. But at this point, because the US is such a big producer of oil, having skyrocketing WTI prices is now a net positive for the country, so fucking deal with it.

On the pressing issue of the moment, the USD/CNY cross. It appears the Chinese are out of control, devaluing the renminbi whenever they eat a snack or take a sip of tea.

Sec. Mnuchin warned them to cut the shit out this morning.

“As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations,” Mnuchin said to the media outlet. “The renminbi has depreciated significantly during the year … We are going to absolutely want to make sure that as part of any trade understanding we come to that currency has to be part of that.”

I’m getting into the bearish mind here and simply laying some thing out so you can worry more.

Higher WTI
Trade war
Higher rates
Trouble in emerging markets
USD continues to strengthen
Elections loom

Did I miss anything?