It’s Time that We Had Ourselves a Chat

Last week I gave up hope for a large market decline based solely on the date on the calendar. Everything that provided me with confidence about being bearish still persisted, such as the incredibly large amount of stocks down 20%+ over the past 6 months compared to +20%. Depressed yields in the face of a seemingly strong economy and tightening Fed, also led me to be long TLT and utilities. When I sold them and opted for risk, I made a commitment. There is no retreating from that commitment now.

The last time The PPT missed an OVERSOLD signal was in August of 2013. The result was 14 days of agony, before a massive spike. Tomorrow will be day 8 of the malaise and I expect there will be more downside to come.

Today was a confirmation of my original thesis. Bubble stocks are being shattered to pieces, a la 2000. Utilities and TLT are safe havens and the street is wrought with fear. The culmination of these ingredients will lead to the ultimate tradable bottom, at which point you’ll be content with being halfway alive.

You should prepare yourselves for the complete and absolute annihilation of your asinine brokerage accounts. There will be no respite, or pause, only the black flag.

NOTE: I added to my YELP position.

I added to YELP

Having 50% of ones assets tied up in TLT, ETR and EXC would’ve been pleasant right about now, no? I blame Bill Gross for TLT’s underperformance last month, which was likely the result of PIMCO selling ahead of his departure. But the very essence of my thesis is playing out today, is it not? There is no need to sell short, when you have utilities up 3.5% for the day. In the past, during periods of excessive weakness, utilities have run 15-20% in a single month. Investors seek comfort through low beta dividends and that’s why I positioned this way for September.

But that’s all ancient history now, isn’t it? Instead of being in the bosom of safety, I am in a fucking hornets nest with my ass exposed to devilish insects. I’m long shit like PANW, EMES, BITA and 10 other lunatic stocks. I am embedded, mind you, in the thesis of a raging bull, ordinary maniac, a Ned Riley of sorts, awaiting dip buyers.

The market is off by two hundred. Yields are crashing lower. Utilities are soaring and I saw it all coming from 6 months away.

I sabataged myself  and will now pay for my trespasses.

What sort of psychopath (Bridgewater) is on CNBC right now? This guy is talking about being ‘brutally honest’ with employees, when in fact we all know that is a fucking disastrous recipe for creating an environment filled with assholes. Humans are sensitive beings. Many need to be coddled and their egos pumped up, in order to operate effectively. By creating a work atmosphere of unchecked honesty, you invite assholes telling you in the morning that “your tie looks gay” or “you are looking a bit fat, hun, about the face and ass.”

Who needs that shit before coffee?

Frankly, I don’t get the idea of expressing ‘true feelings’ in the open. The workplace was invented for liars, for the benefit of hucksters, in order to promote inter-office back stabbing and betrayal. Thus far, since the industrial revolution, this policy of concealment and plotting has worked wonders for the US economy. Why mess with a winning formula?

Let the games begin.

Futures are gapping down and european markets suck. You are expected to fear the unknown, the black abyss that awaits you in October. There are black swans hiding everywhere, readying to ravage your brokerage accounts and break up your tenuous marriages. The ADP numbers were good. But that data is completely fictitious and is generated randomly, by rogue computers.

As of this moment, right now, I look forward to absorbing a few losses in order to liven up the place. We’ve had it good for too long and some of you need to be woken up.

Has there ever been a wall of worry this high, morbidly built upon the skulls of the ebola-stricken deceased? It has washed onto our shores, courtesy of some do-gooder who was likely trying to feed rice to small children in Liberia. The end result was he caught a deadly virus, and potentially killed numerous americans on the airplane he was traveling on– and in his small, stupid, town of Dallas.

Why isn’t there a fucking travel ban to west africa?

Now we have a reason to panic. We’ve all seen the zombie movies, apocalyptic endings that could only mean the complete destruction of the stock market. Aside from all of that, the dollar is strong, sending wheat and oil lower. Oh, how I pine for $4.50 gasoline and out of control corn prices.

This market will be served by obsequious traders, men prepared to buy dips and climb that skeleton’d wall of worry.

When was the last time buying oil above $100 worked? People always get the trade wrong, avoiding it at the lows and buying the highs.

These are the times of your lives, people. Embrace the never-ending story of extreme gluttony and unchecked hedonism. The occasional magnum of champagne and endless sea of shrimp cocktails will be funded by this market.

Be predatory and embrace the fear as cause to kill thy neighbors, weaponize your portfolios into blood seeking hounds, clamoring for bargains, opportunistic to the point of savagery.

My top picks are my top holdings. I reiterate EMES, BITA and PANW, with CLR a close fourth.

I don’t know what some of you are smoking because today sucked. 75% of stocks were lower, most aggressively. We just capped off the worst quarter for crude since 2012 and most of my stocks nailed me to a cross, with exception to my purchase of CYBR today. Boy is that stock nuts.

I had giant gains in EMES and BITA turn into mush, as momentum oriented stocks reversed and punished the faithful.

I do not walk away from this trading session, off by 1.1%, feeling good about myself. I walk away and spit at the ground behind me, wanting to forget it ever happened.

LOL @ the indices. Most stocks on my screen are down 3-5%, yet the Dow is barely changed. Despite the emotionally charged title of this post, I am trying to look at this decline in oil as something that will pass. Clearly, there has been some extensive damage in the commodity space, due to the strong dollar and good weather. Up until recently, this carnage escaped oil, thanks to the friendly cartel folks in the middle east. But now it’s all coming to a head and oil stocks are getting the business.

My raw commodity index is getting smashed to pieces. Very simply, you cannot be overweight any of these names. You can add them as part of an allocations–but that’s about it.

Some people say this is a good thing, as prices for commodities fall so do input costs. While this might’ve been true 20 years ago, this global economy is fueled on oil money. I’m afraid if that money dries up, so would liquidity.

Today is a very somber day, a day of extreme reversal. There were plenty of gains this morning and now it’s all turned to rust.

I wish I still owned my utilities.

I am very sorry to inform you of this, but my top 3 positions are higher this morning (EMES, PANW, BITA) and you wallow about the dirty rugs festooned with devil dog wrappers and stale cheesed doodles. Looking at the tape objectively, plainly, it sucks. Small caps are weak. Bonds are strong and there seems to be an overall sense of pessimism in the market.

Howsoever, we’re still in september and there is a large wall of worry to climb. I expect the rally to ensue, full fledged, within 7 business days from now.

It appears I’ve jinxed myself, even before publishing this, as PANW is now lower for the day.

Lots of red ink out there. Let’s hope for a firming of the tape.

UPDATE: I started a small position in CYBR

I do a lot of business with Paypal, through iBankCoin premium services. As many of you know, they completely suck and I wish them a poor ending to their story. I am glad that Ebay is spinning them off, as I am long Ebay. Without Ebay, paypal will suffer, for they suck and smarter innovators, like Stripe, are going to eat their lunch. Here at iBankCoin, we always marvel at the absurd incompetence of Paypal, with their low end tech support and ridiculously dated interface. It’s as if they didn’t give a fuck.

Futures are higher this morning and Europe is up.

Prepare to make some money.

When I was a boy, there was a mentally ill man who used to torment all of the kids as they made their way to school. He’d drop gallons of milk from the 7th floor of the stairwell I used (I was on the 2nd fl). He made a whistling sound to accompany the ‘milk bomb’, as he unleashed a milky hell onto us unsuspecting kids. After he was finished drenching us with milk, he’d scream out at the top of his lungs “MAYONNAISE”, then he proceeded to the roof where he’d balance himself on the ledge, whilst throwing whole watermelons onto the pavement below. I swear to you everything that I just said is a true story.

Well today the bears were those innocent school children, trying to be punctual and shit–making their way down the stairwell– until gallons of lemonade came screaming down onto their heads.

It’s all over people. Don’t even try to short this market, for it wants higher.

Top three positions: EMES, PANW, BITA