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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.

Quant Day: Another Week of Outperformance

I got to make this quick, as I am on the run — fam related.

For the week, Exodus Quant netted 0.02% — which is a nothing-burger — but still better than the -0.10% for the SPY. Chalk up another week of outperformance. Small caps broke higher this week, which means I reallocated to smaller caps. Also, I went long TLT and GLD at 5% each. This is my risk aversion hedge that only triggers when it is alpha.

On the discretionary side, oil is higher, ergo, my oil shorts in DRIP and RUSS are lower. I am not in the least bit concerned and have no interest in selling before mid next week. It’s worth noting, DRIP was higher by 6.1% for the week and is still conformably above my basis.

As for UVXY, it’s a god damned rounding error, 3% here, 9% there. The ETF is lower by only 3% for the week. One does not go long triple upside VIX and expect to see calm returns. The point of UVXY is for surprise rape — which hasn’t happened.

HMNY and FIZZ continue to show signs of life and LABD wants to break out — because biotech is old and fat — just like your Dad.

My BAC short will work, only if yield curves continue to flatted, and VERI is a fucking lunatic — but I am willing to be a little patient with it.


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Morning Poppers (I Got Alotta Mo’ Fo’ You Edition)

Out of all the sexual harassers, Rocky hit home the hardest. Jesus Christ, I watched this man knock out giant Russians and scary black guys with Mohawks as a child’; now I learn, all the while, he was chasing after 16yr old virgins, coercing them into gangbangs. I’ve lost complete faith in the thespian society; not one of them can be worth any salt.

Futures are little changed and Europe is cucked as hell this morning, but oil is up 1.8%. I haven’t searched as to why, but I am guessing it has something to do with the middled east. This bodes poorly for my DRIP position and I get the sense stocks are going to lift higher again. Bear in mind, according to the genius that is Exodus, this all ends mid next week amidst black clouds of dust and metal choking you out until your blood pressure hits zero.

Watch JNK and LQD today and try to see if we can truly go down, or is this just yet another head fake, on our way to new highs.

Here are some other headlines.

Anadarko Petroleum upgraded to Outperform from Market Perform at BMO Capital Markets
Fifth Third downgraded to Underperform from Neutral at Macquarie
Foot Locker beats by $0.07, beats on revs; Q3 comps -3.7%
Square upgraded to Outperform from In-line at Evercore ISI
Hibbett Sporting beats by $0.15, beats on revs; Q3 comps -1.3%; raises FY18 EPS and comp guidance
Moody’s upgraded to Overweight from Equal Weight at Barclays
Diamondback Energy removed from Conviction Buy list at Goldman
PayPal target raised to $89 at RBC Capital Mkts — Announces “asset-light” US consumer credit transaction
NVIDIA target raised to $250 at RBC Capital Mkts — This IS Nvidia! Call The Spartans Upside Case Goes to $300.
L Brands upgraded to Outperform at RBC Capital Mkts; tgt raised to $58 — Look what VS made us do

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Roy Moore is the Tipping Point That Will Destroy the GOP From Within — And Other Fine Points About America

Taking a brief respite from being right about the markets and making the lot of you look like God damned fools, I’d like to address the Roy Moore allegations. Personally, I think he’s guilty as hell — not based upon any of the evidence — but because of my deep bias against people from the south.

Let me explain.

As a Northern Master domiciled in the Northeast corridors of the United States, my bloodline has evolved over centuries to become adaptable to my environment. My ancestors would plan for winter by farming during the warmer climes — storing food and money away to survive. This made them intelligent and when the winter winds howled and the snows fell, they reflected upon life and read and became smarter. This Northeast gene pool has been perfected over centuries in America and overseas in Ireland and England, which is why the braintrust of America is here and not anywhere else.

People down south act solely on impulse, cursed with hot weather year round; these savage men and women act upon their caprices and partake in wild sexual exploits, which is why the birthrate is so much higher down there. They do not plan for anything — because they can grow crops year round. Over the centuries, people from the south have been scorned and ravaged by war — because of their greed and hatred for their fellow man. After the North roundly defeated them during the Civil War, all but burning all of the southern cities to a cinder, they became an even colder and bitter people — resorting to all sorts of thievery, lynchings, and incest.

The gene pool of the south is one of a subhuman quality, similar to those living out west, whose ancestors sought out riches by mining for gold and other ridiculous things. Persons of the midwest were too stupid to make it out west and usually got stumped by broken chuck-wagons and then decided to take up a piece of dense forest, like idiots, attempting to clear it for farming. Dealing with tornadoes and dust storms and floods, people from the midwest remain almost as dumb today as when their chuck-wagons broke down en route of California. This is why almost nothing of value comes from the midwest and it’s referred to as ‘flyover country’ — because you’re supposed to skip it while en route to California.

It should come as no surprise to anyone that the most perverted industries are domiciled in California — because the gene pool is one of a mountebank huckster who was unable to succeed in NY or Boston, who then ferried over to California with a pick ax and shovel, attempting to make quick money. This is the equivalent of someone leaving their job today and flying down to jungles of Brazil to play the lottery for a living. Just imagine how stupid these people were, and now imagine how stupid their children were. Now you know why California is a wasteland of human genome, blessed by only the unparalleled natural beauty of the the state. Mostly all smart people in California moved there from other parts of America — lured there by promises of becoming rich or to enjoy year round pleasant weather. These are the same tactics that drove people there during the gold rush and history is repeating itself. It should come as no surprise to any of you that, in spite of California’s wealth, it is wrought with corruption, promiscuity, excessive drug usage, enormous debt, and poor public schools. They literally can’t help but to sabotage themselves and will eventually cease to become reliable citizens once the gravy train stops.

At any rate, I got a little sidetracked trying to educate you about America. After all, it is in my Northern genes to help others and try to show them the truth.

Here’s Roy Moore with a band of complete rednecks by his side, essentially saying his sole duty is to destroy the Republican Party. Good times.

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Markets and Bitcoins Roar to Highs — Crude Face Plants

The rationale for owning high beta, small caps alongside a pastiche of inverse ETFs and shorts is for days like this. It’s all in the allocation and it’s a delicate game of trying to balance one bias against the other. In the case of my DRIP and RUSS positions: they’re obviously a gamble on a collapse in crude. I paired that with AAL because when said collapse occurs, airlines will outperform.

Then I have a position in LABD, which is 3x short biotech. A bet against the hottest sector can be a wild one, so I have wild upside longs like VUZI and VERI to go with it.

I am short NVDA and BAC — because the former is leadership and the latter is simply a false construct of ZIRP and should get nailed if the yield curve continues to contract. My long position in UCTT is a contract manufacturer for chips and also OLEDs — the hottest segment in the market. It is an effective hedge against NVDA and small cap enough to outperform it on up days like today.

My volatility bet, long UVXY, is the riskiest gamble on the VIX index, essentially betting on surprise rape. To hedge this, I needed to be long the riskiest and most potential upsided longs. Both HMNY and FIZZ fit the bill just fine, with the latter being a company that could receive a takeover bid at any moment.

Although it might not seem like it to the untrained eye, there is a method to my positioning and I do not intend to come out breakeven — as one of you assholes suggested. The way this is supposed to work is I’d take profits on my shorts or longs at an inflection point and then let the other side roll. Since I was unsure and plainly stated that there was a window of opportunity for bears, nothing is set in stone, I loaded up on both longs and shorts, betting on some volatility.

Oh, what the fuck am I explaining anything to the likes of you? It’s not like you can understand more than 10 minutes into the future. I’m very amused by the newly minted passive investment fags out there these days, a whole cabal of absolute faggots who’ve been spoiled by $9 VIX, thinking MCD and CAT are gonna go up forever. A day of reckoning waits for you in the tall grass. It won’t be long before you’ve been stripped of skin and muscle down to the bone, wondering how the fuck you thought it was a fine idea to buy and die.

Oh, BTC is up a gazillion dollars today. Fresh highs, +50% over the past week!

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Fly Buy: $VUZI

Taking advantage of this epic sort of grandeur, I bought VUZI. The details as to why I bought it are irrelevant — just know that it’s gonna go.

My inverse ETFs are getting the stuffing kicked out of them, especially UVXY. However, those losses are being mitigated by my longs in VERI, UCTT and FIZZ and AAL.

Here’s to hoping VUZI will mitigate some more.

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John Malone Calls Amazon a ‘Death Star’ for ‘Every Industry on the Planet’

The Liberty Media boss had some candid words this morning on CNBC, telling David Faber that the cable industry missed its chance to compete against Netflix and that the only company capable of doing so was Amazon, which is likened to a Death Star, sucking the life out of every damned industry it touches.

Liberty Media Chairman John Malone believes Amazon will dominate the future and is the only company that has a chance to beat Netflix.

Netflix CEO Reed Hastings “has been successful in throwing hail Mary passes and then growing into them. And I think he is going to continue doing that. He’s got a great service. He’s disintermediating the studio industry by going directly to the talent,” Malone said in an exclusive interview with CNBC’s David Faber Thursday at the Liberty Media annual investor meeting.

“The only outfit right now that has a chance of overtaking them would be Amazon.”

The internet “makes scale even more important in the media business, where scale always was important. It’s all about scale,” he said. Netflix was “the first wave. And I think Jeff [Bezos] is gonna be the most disruptive. As [his] Death Star moves into striking range of every industry on the planet.”

“If you’re in the B2C business, if you’re selling anything to any consumer anywhere on the planet, you gotta believe that Amazon is gonna have a look at that opportunity to commoditize you to use scale to serve the public,” he said. Bezos is “reducing cost to the consumer and providing great convenience … You just got to take your hat off and envy what he has built.”

Yesterday, it was being circulated that Amazon was fixing to fire thousands of Whole Foods employees. I imagine they might want to swap out human cashiers for robots, the Bezos way. While Amazon offers incredible convenience and affordability to consumers, there is a cost to pay — a long tailed one in the form of a FUCKING DEATH STAR.

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Exodus Flagged Oversold for $SPY Yesterday: Here Are the Stats

These oversold signals are rare these days. Some of you might remember a time when Exodus would flag OS for the SPY at least once per month — now we’ll be lucky to get 1 every 6 months. Nevertheless, one was triggered yesterday, due to the drop in the markets, and here are the stats.

In all of my year’s running the system, I’ve never seen a SPY OS look like this. It’s fadeable after 5 days. The behavior of the market suggests a high probability bounce for the next 5 trading days, from yesterday’s levels, and then taper off.

In other words, look to fade stocks again mid next week.

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Morning Poppers (every dog has its bounce edition)

Walmart’s comps just came in hot at 2.7% v 1.5-2%. The stock is higher by 3% on that news. On the other end of the spectrum, BBY just missed earnings — sending the stock down 4.5%%. Brick and mortar is a mixed bag filled with winless hand grenades.

Nasdaq futures are +26 and the Eurostoxx 50 is higher by 0.48%.

WTI is lower by 0.2%, the yield curve remains at a decade low of 65bps and BTC is approaching record highs, up nearly 40% over the past 5 days. Nothing wrong with that at all.

Expect a bounce — but it won’t stick. You cannot stop the black smoke from permeating every orifice of Wall — choking out the weak and the young who venture off to see what the fuck the smoke is all about. It’s there to kill you, smite you from the planet — because of who you are. The black smoke is a prejudiced bastard. You can try to fight it with QE and other forms of stimuli — but it’s as old as civilization itself — the byproduct of fear and greed and avarice.

Here are some other fucking headlines for you donut eaters.

Wal-Mart beats by $0.03, beats on revs; raises FY18 EPS above consensus
Best Buy reports EPS in-line, revs in-line, comps below guidance; guides Q4 EPS below consensus, revs in-line
Viacom misses by $0.09, beats on revs
Netease downgraded to Sell from Underperform at CLSA
Exxon Mobil target lowered to $85 at RBC Capital Mkts
Restoration Hardware upgraded to Buy from Neutral at Citigroup
VeriFone downgraded to Outperform from Strong Buy at Raymond James
Dollar General upgraded to Buy from Hold at Deutsche Bank

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Markets Donkey-Punched Into the Close

Everyone awaited the great Trump speech and it ended up being more nothing-sauce. Believe me, Trump’s stock market is in danger of an cataclysmic collapse.

As for me, I remain heavily long UVXY, DRIP, RUSS and LABD. I have additional size in FIZZ and HMNY, both of which did fine. And I’m short BAC and NVDA.

NVDA is days away from a fucking tier 1 collapse.

For the day, I only bought AAL — as a play off weaker crude. Once crude starts to slide, you’ll see all of the tranny fags sashay their way into AAL, DAL and others.

It was a bad day, one that saw markets close near the lows. You’d be wise to get your affairs in order. The Turkey Gods aren’t coming this year.

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A few days ago, Trump tweeted this cryptic shit.

Here is the livestream where Trump will drop his news.

Personally, I am hoping for a massive declaration of war. Like, instead of ironing out trade deals in Asia, Trump inked some declarations, possibly with China and/or Vietnam. I truly believe that if we put all of out effort behind another war in ‘nam, we could win this time.

Or, maybe Trump will announce Sessions is going back to the Senate, to supplant the pervert Roy Moore?

Or, maybe more nothing.

Any guesses?

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