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Dr. Fly

18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.

Struggle Session

You must take me for an idiot — one minute fully long and the next as bearish as the prospects for the Ukrainian army. I am almost always conflicted and my trading is chaotic — but the results speak for themselves: +14x since 2021. Even still, I could not manage this tape and closed down 49bps, now cemented into losses for April of -1.25%.

A somber mood has cast itself over the market, sort of like how one might imagine the funeral of Joe Biden. It’d be a shame if anything should happen to him, just like it’d be a shame if this market tumbled over and broke its fucking jaw.

I have extremely strong sentiments about the market and all of them bad. In the brief periods where I am ebullient, something is wrong with me. Perhaps I ate something delicious and it brightened my mood — or maybe I saw something on X that made me laugh for a few seconds and gave me a feeling of completion. But those moods shift quickly and I am fast reminded of the terminal illness wreaking havoc on America, by the custodians of those who rule over us. I know them to be weak and emotional, corrupt and also incompetent — spiteful. They aren’t all knowing and they aren’t planning things ahead. These are morons who happen to wield power and once it is taken away from them — we will preside in mobs akin to the Jacobins in France a long time ago.

I finished with an 18% weighted $TZA position, 12% $TLT, the rest long — mostly defensive names. I had to decide which way I wanted to go: hold high beta stocks into and thru the fires in the hopes of a bounce or remain protected, potentially forgoing a morning spike. Last year I missed out on most large rallies, but still finished the year +55%.

I am ok with missing out on a rally in order to make sure I don’t bleed out anymore. My primary goal is capital appreciation, but only under the conditions that are compatible with my comfort level and trading acumen. I do not like stepping out of my wheelhouse, which is why I am, as of now, leaning short — hoping for the very worst in the after hours session — dark times ahead and very bright fires.

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CHURN

I’ve felt we bottomed and would collapse about 10 times today, each time churning my account over to suit my current emotions. I have been rangebound from +50bps to down 50bps and now sit near my session lows — after diving in headlong only to quickly vacate some positions and throw on some hedges.

I am reticent to short too heavily because rates are falling, down 8bps. I am also long $TLT with 12% of assets.

I am hesitant to go all in long because the technicals are weak and everything is lower.

I have an edge with Stocklabs with a tool that rates large cap stocks in the aggregate and we are now nearing levels that could mean two things.

1. Major shift in the mechanics of the market — perhaps going from bull to bear.
2. We are approaching a pivotal mean reversion moment where stocks are going to move sharply higher.

Don’t be dissuaded by the action. It has been tough, even for a consummate shit talking professional such as myself — as I gaze into my fucking screen and bear witness to another down session.

Find solace in knowing the sun also rises and one day, perhaps soon, we’ll all be galloping, or perhaps frolicking even, across the clouds with our pet giraffe’s — enjoying the market once again and feeding off its sweet ambrosia as the structures of society crumble around us and the edifice of order turns into chaos and melee.

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Sick Market

It was supposed to rally but now we’re heading lower again, spearheaded by Bitcoin. It looked so fanciful last night, when the futures traders clad in their fucking pajamas pranced about rigging futures higher. As soon as reality settled in and Trader Joe got to panic, we went lower.

I still have faith and have kept most of my longs. I did pare down a bit and I did just hedge a little via $TZA, but for the most part I’m with you long.

I see gold and oil and steel and commodity stocks in general are strong today. Weakness is concentrated in biotech and high beta. But tech isn’t too bad and it has me believing we might rally today. Maybe that’s what they want me to think, so I’ll step in, directly onto a fucking landmine and blow me legs clean off.

The corrupt politicians we elect are really trying their best to give our money away to other countries so they can wage war. When thinking about it, the issue most Americans have with the leadership here, if you’re being honest with yourselves, is the lack of ethics and honor in our government. We grew up under the illusion that a democratic America was ideal and just and we were strong because we were virtuous. To learn this isn’t true and to see them lie and do horrible things is one of the worst black pills for any patriotic countryman. To be virtuous and honorable you have to uphold standards consistently without exception. But we see with Ukraine and Israel and so many other cases that there are these exceptions and it also seems there is a bloodlust amongst the leadership that be unnatural and it extends into controlling and harming the very people they govern: us. So when we say “fuck them”, it’s really a reflection of our failure to stop them and this sense of helplessness leads us to say “I’d rather see Putin win than you, so fuck off.” And that’s the truth.

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FULLY LONG INTO THE FIRES

I was forced to endure seasonal allergies all day, sneezing in between trades and then laid siege to by people around me — pestering me with inane topics. Working from home “trading” isn’t the illustrious life one imagines, especially when trying to concentrate on things that are difficult.

I closed as my SESSION FUCKING LOWS and I knew I would, no matter what. There are some days that I know that no matter what I do — the end result will be disaster and this was one of those days, down 1.15%. I have now squandered all of my gains for April and sit before you FULLY LONG and leveraged into what very well could be a heart attack rout at the open.

Interestingly, my static accounts faired much better, down less than 40bps, which basically means I am doing more harm than good out here attempting to outsmart the tape.

My entire bull case is based off fantasy and/or the idea Israel lacks the capacity to hit Iran and that somehow not bombing Iran is bullish for stocks. This is pedestrian level thinking and I know it. Even still, I decided to commit to the upside only because the chop was doing me no good. Instead of wallowing in neutrality, unsure and unimaginative, I thought it best to place my testicles on the table whilst speed chopping carrots.

I do have some cash, which will be deployed in the morning in the event my gambit turns into catastrophe. My downside is 2.5% — after which I will dramatically limit my trading to piecemeal and only rewarding myself with greater access to capital after proving worthwhile.

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Trading into Chop is Ruinous

I’ve done more harm than good today attempting to extract value out of a market that is little changed. Every pop is matched with a drop and vice versa. My stagnant accounts are doing better — because they aren’t tricked or fooled by the present winds. What looks like a break out now is a break down in about 15 mins. By leaning one way and sticking to it, at least you can resign yourselves to fate, even though there isn’t such a thing.

You can load up and just shut the screens off and say “whatever happens is meant to be” — like a dog-brained fool and go play some golf. Odds are, you’ll be proven a genius, once again. We’re all geniuses in a runaway bull market that doesn’t pause for shit. People are losing their minds over this 5% drop the past week and if it goes much further — you’ll then get the catamites on CNBC clamoring for Fed rate cuts to help us all out.

But the only wrinkle in that analysis is the incessant move higher in the 10yr, now nearing 4.7%. I am actually long bonds now in my long term account because I believe the crybabies on Wall will very soon complain to their mommy and daddy about the rates and they’ll be heading lower today.

My returns for April are now gone, poof vanished like a pair of sunglasses on a speedboat. I’d like to have them back and I really don’t know how it happened, since I am usually prepared and felt inclined to be prepared for said eventualities. But here I am, like you, moronically lower in a tape that is custom tailored for me. No worries, as these sojourns into loss are brief for me and it won’t be long until I find my stride.

I am reticent to take too much risk for an oversold bounce opportunity and quite frankly — that’s exactly what is required to make big gains. It’ll look something like MASSIVE SELL OFF INTO THE BELL on all sorts of bad news, which is sure to leak into the morning. Futures will be DOWN 300 NASDAQ and all is lost, until out of nowhere a silver lining appears and you get the sense that space aliens are buying stocks, mystery hands with magical money and then everything is back the way they were and you missed out paused by fear.

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Zero Respite, Approaching Oversold

It’s brutal out there. We have ourselves an interest rate rooted rout, with the 10yr zooming to fresh highs and the economy stronger than expected. The IMF upped their global growth estimate to 3.2% from 3.1% today and everything appears to be great, other than the fact that markets absolutely suck.

Yesterday we had the LME-CME banning Russian metals to buoy copper and aluminum. Today, we don’t have that same news and as a result: COLLAPSE THE METALS.

Over the past week, stocks have dropped by ~7%. Until today, there was respite in gold/silver — all to do with panic and gold hitting new highs. Like previous market squalls, this one feels bad and it’s not pleasant to buy dips when they keep dipping.

If I might suggest, when buying dips — try your hand at the larger capped names — the stocks that you liked but went too high, rather than the shit tier stocks down the most. If still hedging, remember to close those hedges out when profitable and also remember the market is RIGGED TO GO HIGHER. We can trade down sharply over short periods of time — but ultimately policy makers will make sure stocks high fresh record highs. This is not my opinion, but fact.

Lastly, some of you might err on the side of too much caution and only dip buy in defensive stocks. This will ensure that you’ll be sidelined whenever markets bounce. If you’re going to buy dips during a market rout, you might as well buy the stuff that’ll go higher if and when we bounce.

Stocklabs is fast approaching an oversold level I deem interesting, which means I’ll be ruling out shorts soon. Presently I am 51% cash, 12% $SQQQ — waiting for a shoe to drop or a decisive move that convinces me of a clear direction. Today’s -1.1% drop in basic materials is basically the market punishing hot money. You can see the price of $BTC planning daily, now tantamount of a legitimate correction. The entire crypto space is -25% the past week alone and the fact that VIX is relatively low makes me wonder if we’re going to get really ugly first before things get back to normal.

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ISRAEL PLEDGES TO BOMB IRAN

Before I get into my sage market advice, it should be noted that Israel is vowing to exact revenge against Iran for killing zero people in their widely telegraphed attack on Israel, in response to Israel’s bombing of their embassy in Syria. I anticipate Israel, with the help of the US, will launch cruise missile strikes inside Iran and this process will continue until, somehow, the United Steaks gets involved.

The process is very repetitive and it also bears repeating: no one can stop it.

Whilst occupation forces are impossible, the bombings of infrastructure and soft military targets will commence.

Markets didn’t like any of this shit one bit. Everything went down, including Bitcoin, with exception to gold. But gold stocks traded lower too — because everything gets bombed. Nothing is left out. Perhaps the IDF, on their way to bomb Iran, will bomb Saudi Arabia just to remind them who’s boss and to not get out of line.

My stocks traded down and I did poorly, once diving lower by 2.5% — I looked into the mirror and saw a truly wretched trader. I recovered somewhat into the close, ending lower by 1.8%, all but giving away all of my gains for April — now up just 0.4%. In spirit, I felt like a winner and I really wanted to claim victory, but due to circumstances beyond my grasp I was unable to and got bombed the fuck out and now sit here thinking about revenge.

I closed NET SHORT in fears of a waterfall response in the morning once the skies over Tehran are illuminated with the cinders of a holy war.

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Western Sanctions Cause Spike in Metals

Ok, in the latest round of getting Russia — it appears the LME and CME are now targeting speculation in metals, specifically copper, aluminum and nickel. Bear in mind, this doesn’t stop real world transactions. It just will stop speculation or any trading of Russian metals on these exchanges. The interesting part about this conundrum is the fact that 91% of all aluminum trading on the LME now is of Russian origin. I would imagine once they get through all of the Russian stocks — there will be very little trading done on the LME.

Moreover, and this goes without saying, this is likely to cause a spike in those respective metals and apply inflationary pressures. At the moment, aluminum us +3%, nickel +1.4%, and copper +1.5% on an otherwise weak day.

Russian copper stocks on the LME is 62% of all trade and nickel 36%.

High beta stocks are down over 2% and the big story is the US 10yr +14bps to 4.63%. I haven’t formulated a cogent description of what I want to do just yet, as I view the Israel-Iran situation as fluid and I’ve been wrong in my positioning thus far, down 1.5% for the session. The collapse in $BTC has surprised me, since in the past Bitcoin served as a defensive measure against risk off. However, since then the price of BTC has risen a lot and I suppose the hands are a bit weaker now. Nevertheless, I am reticent to believe markets are going to collapse, which is ironic because I almost always feel that way and there is all of the prerequisites for it to happen happening right now.

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World War 3 is Not Looming

I often hear the term “world war 3” bandied about on X, as if any conflict that might arise is on par with global war. As much as it chagrins me to see Iran and Israel at war — even if we entered the conflict — it would not lead to “world war 3”, unless of course China and Russia had a military pact with them.

From my novice point of view in all things to do with war, yesterday’s attack on Israel, in response to their bombing of the embassy in Damascus, was child’s play — not a serious attempt at causing harm to Israel. If Israel responds, then we’ll have pressure applied to oil, which will jar markets. But as deleterious as this conflict might seem to you, it is provincial and not global — bears little to no effect on capital markets — and might actually cause stocks to go higher as a result.

Our opinions on this matter are meaningless as investors. The only thing we can glean from the initial phases of this conflict is the price dump of $BTC — which is down $2500 from Friday’s close.

The Saudi market was down 0.3% today and Israeli UP 0.27%; ergo, we have ourselves a nothing burger.

CAVEAT: In the event Iran successfully attacks American assets in the region, this will greatly jar markets temporarily — but then adjust to the reality that war, unfortunately, equates to greater spending and is a net benefit for markets.

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Situated for a Bounce on Monday

I am not a believer in gigantic Iranian attacks, based simply off recent historical events. Nations who work via proxies are inherently cowardice and I expect some sort of normalcy next week. Because of this, I took a net long position over the weekend, but not without hedges. I have some $TZA and $UVIX just in case — not enough to stem the tides of world war — but enough to contain any true panic to the downside.

I closed the session +55bps and this is where I tend to shine, gaining whilst you are losing — never drawing down and maintaining a sense of decorum even in the face of tragedy.

I wasn’t always this good and used to fall victim to my caprices, a younger Fly loaded with too much testosterone making bets to demonstrate the size of my penis. As the years waxed on and things became clearer to me, I learned to moderate myself and not fall prey to folly and tricks and gambits.

I remain obstinate in the face of crumbling facades — the one true pillar of excellent in all of finance that you can depend on to offer excellent advice, at the low cost of me insulting you with very mean words and insults directed at your person and all of the people you hold dear.

Have a great weekend.

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