THE MADMAN MIGHT’VE DONE IT — ZERO TARIFFS FOR ALL

UPDATE:
White House confirms agreements; EU will import more soybeans; U.S. will reassess existing tariffs on steel and aluminum; U.S. will hold off on future tariffs (281.28 +2.40)

President Trump and EU Commission President Junker agreed to work towards zero tariffs, barriers, and subsidies on non-auto industrial goods. The E.U. agreed to reduce trade barriers on soybeans and chemicals. EU will strengthen commitments to import more liquefied natural gas.

“We agreed to establish a dialogue on standards. As far as agriculture is concerned, the European Union can import more soybeans from the U.S., and it will be done. And we also agreed to work together on the reform of the WTO. This, of course, is on the understanding that as long as we are negotiating, unless one party would stop the negotiations, we will hold off further tariffs, and we will reassess existing tariffs on steel and aluminum.”

This also includes the retaliatory tariffs that the E.U. placed on U.S. goods such as cigarettes, steel, boats, motorcycles, and agriculture.

Except China of course. We need to jack those taxes up 5,000%. But negotiations with the EU appears to going well, thanks to the Morton’s Fork offered by his excellency. Either you abide by his rules and fulfill the needs of the empire, else we’ll let Russia invade your countries and steal your young.

“We agreed today first of all to work together towards zero tariffs, zero nontariff barriers and zero subsides for the non-auto industrial goods,” Trump said Wednesday.

Market did the olde 3:30 Ramp today, adding all of its points gained in he final hour. True fuckery at its finest.

How’d I do?

My Quant portfolio, where I keep 75% of my investable dollars, soared by 2.1% — thanks to USNA.

My trading account jimmied higher by 1.7%, thanks to OSTK, FIVN, and DECK.

I cannot be stopped again.

The reactions from Twitter.

The United States and the European Union have a $1 TRILLION bilateral trade relationship – the largest economic relationship in the world. We want to further strengthen this trade relationship to the benefit of all American and European citizens… pic.twitter.com/4zlmEEtCpG

— Donald J. Trump (@realDonaldTrump) July 25, 2018

These perpetual trade war wins are beautiful, believe me. Create crisis. Expand crisis. Fix crisis. Fucking hero. Rinse and repeat.

— The_Real_Fly (@The_Real_Fly) July 25, 2018

Wow, we won the trade war, again

— Ramp Capital?? (@RampCapitalLLC) July 25, 2018

JUNCKER: WE AGREE THERE ARE TOO MANY ILLEGAL SUBSIDIES

hi China

— zerohedge (@zerohedge) July 25, 2018

JUNCKER: WE AGREED ON NEED TO CRACK DOWN ON FORCED TECH TRANSFER

hi again China

— zerohedge (@zerohedge) July 25, 2018

If #Juncker did not get hard agreement from #Trump on removing the unjust steel & aluminum #tariffs then he did not achieve his goal. EU has put de-escalation and mutual benefit of good trade relation first, always, but today’s concession could set dangerous precedent #trade

— Marietje Schaake (@MarietjeSchaake) July 25, 2018

did Trump and Juncker actually do anything beyond agree to talk?

— John Harwood (@JohnJHarwood) July 25, 2018

"We're starting the negotiation right now." @realDonaldTrump on trade talks w/ the EU. So, quite far away from a deal. But this joint presser w/ EU will help calm markets & reassure allies…Unless it stalls out.

— David M. Drucker (@DavidMDrucker) July 25, 2018

The executive branch should not have carte blanche powers over trade. This is sheer lunacy. GM missed earnings this morning, based off a sharp increase in raw commodities and fucked up FX crosses in Brazil — but the real carnage in the sector today is due to a rumor that Trump is set to slap foreign car imports with a 25% tariff.

For the record, this will NOT induce me to buy shitty American cars. I am grateful for the Germans and the Japanese, for their ability to create great cars. Both Ford and GM can eat a dick.

As a result, the auto sector is in ruins today. Take a look at some of this pin action.

Trucks:

WNC -3.2%
DSKE -6%
USX -4%
YRCW -3%

Auto Parts:

DAN -10.5%
AXL -6.2%
CVGI -4.6%
ADNT -4.5%

Recreational Vehicles:

PII -13%
LCII -6%
WGO -5%
HOG -4%

Auto Dealerships:

LAD -12%
RUSHA -5.5%
AN -5%
GPI -4.5%

Auto Manufacturers:

FCAU -14%
GM -7%
F -4%
TM -1.5%

Separately, the much maligned TSLA is higher by 1% for the session.

There is a disruption in the matrix.

When I used to review client portfolios, I was always astounded by the shit in them. They were hoarding stocks like collectibles, buying trends, or anything that appealed to them at the moment. The net result was a portfolio that wasn’t built for success, a heap of shit that needed to be unwound. Most client portfolios that I review were like dirty garages.

Is your portfolio a shitty garage filled with junk?

How about this. Instead of buying XYZ today because “it looks good”, GET YOUR AFFAIRS IN ORDER and cull some of those losers. Or better yet, sell the stocks that you bought for a catalyst that never panned out. You might’ve bought XYZ because of a pending earnings call or maybe a news event that never quite gave you the explosion to the upside that you endeavored to enjoy. The only reason why you’re still in the stock is because you’re too god damned immature to realize you’re holding onto your ego, which is working counter to your financial goals.

Go ahead and read that paragraph over. Matter of fact, print it out and keep it handy.

I, myself, find my positions in my trading account to be both redundant and spread thin. At the same time, I am tempted, on a continuous basis, to buy more stock — the never-ending sojourn into the wilderness of finance in search of freedom.

My mindset has now switched from hunter to farmer, and I will now begin a campaign to manage my current positions in an effort to increase my control over a portfolio that has swelled in both dollar amount and quantity of holdings. I want to reduce my positions to about 10, raising a significant amount of cash in the process. I feel like trading small, not due to cowardice or lack of gumption, but because the market feels heavy and risk assets aren’t exactly off to the races, in spite of all time highs.

I demonize China all the time, mostly for laughs. Truth is, I should be grateful for that crazy country, for lowering the cost of goods I enjoy and for being hard working, industrious, people who create great cuisine. I understand why Trump is fucking with them. It’s a flaccid attempt to deliver on his many campaign promises — sticking it to China.

But does this help his case? I’m not a billionaire and I certainly could never become President — but demonizing people rarely, if ever, works during negotiations, especially with those who are very proud and stubborn.

Every time I see a weak politician asking to stop Trade talks or the use of Tariffs to counter unfair Tariffs, I wonder, what can they be thinking? Are we just going to continue and let our farmers and country get ripped off? Lost $817 Billion on Trade last year. No weakness!

— Donald J. Trump (@realDonaldTrump) July 25, 2018

China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S. They are being vicious in what will be their failed attempt. We were being nice – until now! China made $517 Billion on us last year.

— Donald J. Trump (@realDonaldTrump) July 25, 2018

And here he is discussing the EU.

The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!

— Donald J. Trump (@realDonaldTrump) July 25, 2018

Trade deficits aren’t exactly bad, especially when the shit being made in China is by American companies. The global supply chain isn’t like it was during the 1600’s and Trump knows that. When I read stuff like this, I really want to believe markets can’t handle too much more of it and get worried about downside action. I do not believe people believe the trade war with China will last. How could it?

But what if it does?

Toys and games are one of the top sectors over the past week. What kind of bullshit summer tape is this? I just got through with a late dinner. I went over to the local farm store (there’s a lot of those near me) and bought a few pounds of grass fed chop — anything to the contrary seems unseemly. I’m sure the corn fed stuff is just fine; but I’ve programmed myself to believe labels on food mean healthier food. I suppose this train of thought stems from an innate fear of death. Although, if we were talking to just one another in private, I’d tell you that I do not fear death and almost welcome it. I’m fatalistic in that regard. You can only die once. Cowards die thousands of times.

I’ve been drinking tonight, something I normally don’t do on work nights. It started off with a three shot gin gimlet and now I’m drinking this brown ale that tastes like malta. Persons of latin persuasion will know what I mean.

Futures are soft and I guess it’s time to accept the fact that toys and games is all this summer has to offer. The trade war and all of the other stuff seems to be keeping this market down. If the economy is really on pace for a +4.8% GDP quarter, we should not be subjected to any meaningful pullbacks.

If you’re concerned about the fate of the SAAS sector — don’t be. Sales are ramping so fast — valuations are cheaper now than last year.

I’m gonna chase the tiger, and grab him by his tale.

Nite

You got 1 day to enjoy and it was today. Those who had the gumption, and the internal fortitude, to risk assets in smaller capped named have dominated for 6 months. Only today did the mega-capped FANNGfags reassert their dominance. My sense, this will be short lived — short like their cocks.

Returns for the day, sorted by market cap

Over $100b: +0.80%
$50-100b: +0.41%
$10-50b: -0.17%
$5-10b: -0.52%
$1-5B: -0.83%
Under $1b: -0.96%

You weren’t special today, or especially smart — just lucky. Do not inflate the depths of your black ego, for tomorrow another reversion shall commence and your safe haven will be ripped from crown to root and tossed into shambles.

Rotations do happen and I will allocate into it, should it become a trend. But one day doesn’t make a trend, nor does a singular day make a brave warrior out of a coward who’s been running way and hiding inside his FAANG mobile.

Cheers to the new highs and the fun times we had getting here. But fuck today, seriously.

All will perish under the cinders of avarice and greed. We have a very orange and a very fat President doing stupid things with trade wars, foolishly trying to save America from some sort of beast. Little does he know, it’s too late! America was lost a decade plus ago, under the auspices of Neo-con scum.

So here we are in the final salvo of a once great nation.

Stocks are getting fucking hammered and I am at the point of rage induced tears, having ignored the warning signs that were clear to me. I managed to sell of a few things and raise some cash; but I am mostly stupid and weak and down.

Notable fuckery can be found in the truckers — crashing to the tune of 5%. It’s over, truckFAGS.

My Bubble Basket of high priced stocks are down ~2.5%.

The hardest hist sectors are the ones people adore the most. Hence, all of my software stocks are heads on pikes.

There’s nothing more to be said. I am to endure this deleterious drawdown, long various high beta stocks in an active account that was seemingly designed by the devil himself.

Oh, and for extra enjoyment, the Dow was +163 at the time of this post.

I am tightening my stops and will be selling my positions if they so much as look at me sideways. I have no loyalty to these filthy scum. I sold SFIX for a 7.7% loss — par for the course.

The past three weeks have been one gigantic circle jerk. I had that monster IQ triple sized position win and a sundry of small losses to offset it. More or less, I am trending sideways, which is fine — but I want MOAR.

The Russell is sharply lower today, bucking the overall trend.

Overall, we must remember, the trend is strong.

I have no desire to act unilaterally. Since my current positions aren’t working today, indicative of a cold hand, the proceeds will go to cash. I do not want to hedge — because there’s a strong chance the small caps surge tomorrow, when people least expect it. As long as I watch my positions and remain disciplined, I should be okay.

The only thing I have going on for me now is SRAX — which is both sad and skeletal at once.

I’m getting prison raped, man. I sold this god forsaken RARE for a RARE loss of 6.5%. The OSTK that I purchased this morning quickly and sharply fell like an anchor onto a choral reef, shattering my hopes and dreams for an instant 5% paper loss. I have various other ‘irons in the fire’, if you will, all knifing lower.

I also sold NOAH for a 4% win.

What an indelible tape to be raped by. Why don’t I make fun of the bears now, for being so stupid as to shorting this wonderful tape. What are we 50 Nasdaqs from the highs? Sure, that’s great.

Meanwhile, the Dow is tricking people, higher by 175, and the breadth in this raging bull of a market is at a milquetoast 50%. Even better, the only sectors worth its butter today is basic materials. Here I can prove it, faggots.

I know what you’re thinking: ‘Fly, relax and calm the fuck down. It’s not that bad out there. Be patient.’

NO.

This is how tops are formed, blowing off some asshole earnings release at record highs, slowly boiling the plebs whilst they chase blockchain stocks.

The silver lining in all this is strong tech, meaning there isn’t much distribution amongst large hedge funds. We’re likely seeing some rebalancing out of small cap into large. Bear in mind, my quant has been positioned in small cap for 4 consecutive months. For the day, the quant is +30bps.

How do you expect me to survive off those paltry returns? Why, if I only made 30bps for an entire year, I’d only be up 75% or so, hardly a livable return that I can be proud of.

Truth is, I should probably STFU and go do something non-productive, something to distract me from the everyday tumult and tribulations. Maybe I’ll go for a walk in the woods and throw apples at the bears. Or maybe I’ll go for a siesta, or do some gardening.

Whatever I end up doing, I’m inclined to wait for brighter prospects before writing off my positions. I have hope! I can do it! Yeah!

Ughh.

I was hearing a discussion on Bloomberg this morning about China and how the trade war is hurting them a lot more than us and how copper has fallen hard since the halcyon days of last year. As such, some people believe they will no longer attempt to deleverage their over-burdened balance sheet, since end user demand is now weakened. Ergo, they might apply their massive current reserves towards stimulus.

The obvious winner in new Chinese ghost cities are construction plays, and of course copper — which is seeing a dramatic rise today.

BTC is higher by 6%, pushing the total market cap for cryptos above $300 billion. Just to shed some light on what the number means, it was in excess of $800 billion in late 2017. In other words, we are now trading in a post-apocalyptic world for the alt-coin sector. Think about Nasdaq circa 2009 and how Bernanke bailed out the indices and helped put in a bottom. Now imagine Bitcoin and all of the other alt-coins, decimated, trying to gain steam. But there isn’t a good Dr. to help their plight, only nefarious money launderers and criminals, venture capitalists, and opportunists, who seek to manipulate the asset class for fast gains. This is going to be a very long road to hoe.

Nevertheless, in light of the feverish new highs in the Nasdaq and resurgence of Bitcoin, I took a shot at the favored blockchain play on the Nasdaq, and purchased OSTK. As always, stops will be in place — but I think this could gain some momentum, especially if the ICO sector can follow Bitcoin to the promise land — although, admittedly, I am skeptical.

Markets are weak, internally, with breadth under 50%, so be careful about buying into a reversal.