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.
Ironically, it’s occurring while their idiotic exchanges are closed for holiday.
What you need to know about this reflex rally is simple.
It does not mean everything is awesome. We are reverting back to the mean. Nothing goes up or down in a straight line. Again, please reference Feb of 2008.
All of the Chinese related stuff, metals, oils, chicoms, are the shit. Own BIDU and lavish yourselves in the splendour of dog-eating greatness.
This will be a great October, in my estimation.
For this rally, you will want to be long oils, chicoms, chemicals and metals. Biotechs aren’t pressing higher because they have nothing to do with this story.
Upside: DD up 6.3%, as the Illuminati felt the decline in House DuPont’s shares were more than sufficient. MNK +5.8% on guidance. PMCS +32.6% after being acquired by SWKS. STRZA +7.2% based on a rumor from the LA Times, suggesting LGF might bid. NVCR +15% on FDA kindness, EXEL +8.8% on positive phase 3 horseshit, ALKS +4.2% on FDA graciousness, PEP +3% on earnings
Downside: ILMN -19% after warnings that their stupid drugs aren’t selling enough, EXAS -35% after some USPSTF draft says their colon screening nonsense doesn’t work (duh), HAE -12% on zero fucks given, TCS -8.8% horseshit, RDWR -7.8% on no one cares, SRPT -4.2% on offering news, FFIV -2.4% on Citi sell rating, TSLA -2.2% because Morgan Stanley lowered target from nonsensical $465 to even more nonsenscial $450.
I waste so much of my time trying to trick the collective price gatherers, to sell me something for a price cheaper than what it’s worth. Believe me, I understand the nobility of figuring out this puzzle we call investing. I even went out of my way from managing mmoney to develop quant software to try to gain an edge on these price gatherers.
It’s a giant fuck-salad. I should be on a boat, floating forever, visiting exotic places, playing catch with camels. I don’t even sail and I’m not even fond of it. But I should be on a fucking boat, away from this shit.
You read about some fucked face scoring a gazillion dollars in some crazy eyed gamble and then fix ourselves on duplicating said degeneracy. What are we fucking retarded? It’s all shit. Trying to duplicate black swan trades is no different from striking oil in your backyard or the lotto. 99% of you are going to underperform the S&P this year and will underperform it for 75% of your natural born lives.
Why fucking bother?
Addicts. We’re all addicts, streamlining these fucking stocks into our systems. It’s so perverse, swashbuckling about the digital pyramids, losing and making vast amounts of money, totally numb to it like nothing. Hell, in real life, I get pissed the fuck off when the waiter puts an extra shrimp dish on my bill. But I have no problem, whatsoever, losing 300k in an options trade gone bad. Fucked.
I should just take all of my money and buy SPY, then travel by boat. But I won’t because I’m addicted. My life is built around this ego driven game to prove everyone else wrong. I endeavor to kick Bluestar into the middle of an active volcano. I’m sure he’s a nice guy and all. I’ve spoken to him on the phone and he seems like someone I could shoot the shit with, maybe initiate a bar fight with. But in this world that I live for, he goes straight into the fucking volcano pits of fire, no questions asked.
I don’t pay attention to my industry as much as my peers, mainly due to my complete indifference to the success or failures of others. But I came across this video, while reading Reformed Broker and it struck a cord. There wasn’t anything necessarily brilliant about this hour long analysis of the past 20 years of market fuckery. It was more of a fireside chat with someone who knows his shit. I’ve never heard of Passport Capital; but now that I am aware, I’ll be looking into his methods and philosophies.
The thing I liked most was how he was interested in “new things”. What’s new? It’s a very simple question. He talked about the dot coms, housing, China, commodities and how being early paid off.
Off the top of my head, there are several things today that are new.
1. Over 40% of our population is over the age of 45
2. Alternative forms of energy
3. Advances in medicine and medical instruments
4. Zero interest rate environment and negative rates abroad
5. Debt bubble
6. New forms of communication that has streamlined news and information
7. 3-D printing
8. Enhanced sensors on automobiles
The next step would be to consolidate these concepts into investable themes, trying hard not to denigrate ourselves through the purchase of early concept dice throws.
The rally has just begun. Short sellers, globally, should commiserate around the idea that they pressed the envelope one too many times.
A keen ability to forsee the decline will now be neutralized by pride to hold you in losing positions. BEHOLD as the NASDAQ mixing up a toxic brew of seasonality, coupled with an easy monetary policy, all thanks and praise to the fact that jobs, for lack of a better word, are becoming scarcer.
I was up 1.75% for the day and ended this monday will a chest filled with courage, a testicular fortitude that has afforded me various degrees of winship over the past 2 decades of investing.
The initial bounce is always in the higher echelon names, larger capped, institutional favorites. I want you to think like a short seller, for the moment. Imagine yourself idle, near the active volcano, staring into the boiling hot magma, hoping the world would drop into it. You’d fantasize over cataclysm and outsized stock market losses, massive unemployment and depression.
But your resources are limited, after years of unemployment and being on the wrong side of the market. The market starts to rally and you begin to feel squeezed. Afraid of losing your volcano side cottage, you begin to reduce your short positions, in the hopes that you will be able to short them higher.
This is called a ‘short squeeze’, an event that takes place when natural buyers meet short covering to create an explosive upside move.
Here are some solid candidates for a short squeeze, sorted by technicals and percent of shares sold short.
FTK
BAS
CNX
CRR
IMGN
CRK
DO
MELI
BCEI
NAV
SUNE
WYNN
CJES
SLCA
THRX
X
AMBA
BTU
If current trends prevail, you will promptly regret being born tomorrow. Markets will plunge. Life will suck. And whatever clients you have left will fire you. On the other hand, if we push the timeframe back a bit, the market loves momentum and tends to rip to new highs when overheated.
Make no mistake, buying here is risky. You risk having egg placed all over your face, your pockets stripped from your pants, and your dignity soiled. But, if my hunches are correct, we are about to commence on an epic run to the upside, one that will abrasively leave skid marks on the hunched backs of short sellers, and slap the faces of those who cower in cash with paddles.
Here is the Hybrid oscillator for the steel and iron industry in Exodus.
That shit is super-extended. You’d have to be a mad-man to buy that shit, which is why I like it. Costanza trading 101: do the opposite.
I’m a liberals worst nightmare. They hate this stuff more than serial killers. Maybe it’s because this shit causes earthquakes and tsunamis, causes clean water to become flammable, and enriches those who’d like to put handguns in every child’s hands in America.
I bought me some frac sand, or what I like to call Dracula Sand, via SLCA.
I also added to my GG position–because everyone hates that shit too.
I am now fully invested, for all intents and purposes.
All China related names are loved, commodities and all. Everything you were taught to hate about this market, now is loved. Like virgin snow on a mountain slope, this is exactly what you want to see on this snap back.
This is like February of 2008, only it’s October of 2011. The most hated market in all of mankind will rise up from its slumber to slay its enemies. Men who rise up against it will be tossed into a woodchipper and fired out as small particles into the adjacent wilderness.
Let’s keep this simple. I like banks, commodities and anything that has been reduced by half.
