The Slope is Slippery

I know the market was down just a bit today and we’ve been hitting new highs almost every single day. However, big runs always find resting points and big gainers undergo periods of consolidation before making fresh legs higher. We can very well be heading towards a lull in small cap action, sending many of you to the ‘fag box‘ for an expeditious rout from the battlefield.

For now, I am about 30% cash and I might up that level to 50% if the weakness persists. There have been lots of monster winners and logic dictates one shouldn’t get greedy up here. I have pre-set screens up in The PPT scouring for stocks that are up over 20% over the past 3 months, yet down more than 10% over the past week. I am biased towards profitable, very liquid, reputable names into a decline. The low volume, chinese burrito, moonshots are often purchased towards the end of a run up, since all of the good stocks have been bid up already.

I’ll let you suckers know what looks buyable tomorrow.

When the bubble stocks burst a few months ago I created a ‘bubble basket’ designed after the criteria that David Einhorn talked about in his cryptic warning to investors, regarding ‘high valuation’ stocks. The index is made up of about 100 stocks and it slid from par (100) down to about 80, when the market bottomed. Since then, the ‘bubble stocks’ have been leading the market higher, as that index surged from 80 to over 106 last week–making up all of its losses.

Well, today it is getting hammered, down nearly 3%. If your portfolio is getting racked today, you’re probably overweight too many ‘bubble stocks’ and stand at risk for a repeat of April of 2014.

Risk is off. I sold out of LEJU and booked a 16.5% gain in the process. Thus far, for today, I sold out of BALT, RBCN and LEJU.

Technicals have deteriorated to the point where I think there’s a chance for a flushout, another PPT oversold signal. I could be wrong, which is why I am not selling more. But, I am cautious enough to want to sit on my cash and wait for the market to show me a clear direction, instead of trying to anticipate one.

Now is a good time to refresh watch lists with quality stocks and forget about the low brow stuff.

I sold out of BALT for an 8% one week loss. I also sold out of RBCN, for a 1.5% loss. I sold RBCN because of the pin action in GTAT, after an analyst downgrade. Naturally I disagree with him, but the price action rules the roost. With regards to BALT, lines in the sand will be adhered to, no matter how I feel about the stock.

In the past I’d average down in BALT and possibly end up banking coin on this trade. But things are different now and I cannot afford major draw downs. With the proceeds, I will be looking to buy dips. But I will be patient.

On the other end of the spectrum, my LEJU position is now up more than 15%.

As you can see from the chart above, The PPT‘s oversold indicator crushed it again. Over the lifetime of the system, since 2008, the system is now running at an impressive 83% accuracy rate. Now what I would like you to do, since you’re all big talkers, is to print this post out, dip it in some water, and smack yourselves in your big, fat, faces with it.

Futures are indicating a weak opening. But I don’t believe the sellers are hell bent on lower prices just yet. We are overdue for some weakness, the July lull that I’ve been waiting for. But at the end of the day, any dip is a buying opportunity until late August.

Just to reiterate: I am ‘super-bullish’ on stocks until late August, when I believe this market might top out. Until then, enjoy your chinese lottery plays and prepare for a rainy day.

To honour the great successes of the iBankCoin premium services and give back to the people, I’ve enacted policy that will reward annual members of The PPT, 12631 and After Hours with Option Addict with cash prizes. To enter, one must be a ‘Distinguished Gentleman’ of one of our premium services. To join, please email our customer service rep R. Kim at [email protected] to receive a raffle number. If you are a ‘Distonguished Gent’ of more than one service, you shall receive one raffle number per subscription. In other words, triple annual membership gentlemen will have three chances to win a cash prize.

This is how it will work.

On Labour Day we will have a live drawing. I haven’t finalized the mechanics of how it will work. But two winning numbers will be chosen. The first prize will be $1,000. Second prize will be $500. Third prize is you’re fired. Any questions?

If, by chance, you are a lowly piker or gentleman (1 mo, 6 mo duration member) and care to upgrade to an annual subscription, in order to join the contest, please email our customer service rep Richard Kim at [email protected].

Thank you and good day.

Fucking Shit, Update: This is going the opposite of swimmingly. In order to stem the flow of confusion and save my sanity, I’ve decided to assign all annual subs a fucking raffle number and furnish a full list of user name with number this week. As membership ranks swell, throughout the summer, said list will be said fucking updated.

-Management.

July 4th is a day for white trash to bask in their undignified glory. For those of you living that sort of lifestyle, oblivious to how one might throw a proper white trash 4th of July party, “The Fly” is here to help. With the assistance of my readership, as well as many other people who I’ve met growing up in Brooklyn, this is your “how-to” guide on having an ‘un-gentlemanly” Independence Day.

When you wake up in the afternoon, after a solid night of drunken debauchery, you should feed the children something sugary, like Captain Crunch cereal and/or frozen panned cakes (extra syrup).

Now that your parenting for the day is done, you can prepare for the 4th of July BBQ and drinking extravaganza!

Head on over to the local liquor store and buy a few kegs of beer, several bottles of Jack Daniels and a whole lot of cases of budweiser (CANS ONLY!!!).

After hauling in your treasure, prepare the old charcoal BBQ by spraying massive doses of lighter fluids on it. Have the kids throw things at the flames and play with the fire. Prepare to welcome some of your guests.

After your guest walks through the open screen door, welcome them by saying “what’s up bro” or “yo, man, have a bud”, then carelessly throw a frozen aluminum can of budwesier at him. Every once in awhile you will errantly strike his girlfriend in the head/face with it, so have an extra frozen can aside for the purposes of suppressing swollen bumps about the face and head.

As the party progresses, it’s time to serve your guests of dishonor food. Grab some styrofoam plates and slap a few hotted dogs on them, preferably with bun. If, by chance, you do not have buns, as they weren’t within your budget, feel free to use Wonder Bread as a substitute. Some people actually prefer good olde fashioned white bread anyways. Be sure to douse all hotted dogs with copious amounts of generic ketchup.

As the day drifts on, and the beer cans begin to pile up around the house and yard, ask the children to pick up the cans and place them into the giant black garbage bag that you have hanging off the side of your metal fence. The kid who picks up the most cans of bud gets to drink a can of their own!

FIREWORKS TIME!

You and your friends should now head on over to the front of the house to light some fireworks. It’s important that 90% of your fireworks be of the deafening loud, explosive, variety and not that “color crap.” You will light all fireworks with a lit cigarette butt and be sure to let the children light and toss M-80’s too, as it is their right of passage to do so.

After the fireworks, the real party begins. Parenting is over and has been over since breakfast, so feel free to let the kids roam off into the woods or nearby junkyard for a little childhood curiosity. You and your friends will begin, in earnest, drinking excessive quantities of Jack Daniels, while decrying how “fucked up” this country has become, especially honing in on the immigration issue and how people who don’t speak english should be deported and/or killed.

After 1am is the witching hour. By now, you and your guests should be comfortably buzzed. But it’s time to take it to the next level. Marijuana filled “joints” should be passed around at this time and a side table filled with lines of cocaine should be displayed, for all those interested. Shots of tequila with slices of lemon are appropriate chasers after “partying”, so be sure to have that in stock.

By 3am, 70% of your guests will be asleep (including the children), strewn out across the yard and furniture. Now would be an excellent time to partake in a little innocent adultery. Anything that transpires now is subject to denial and is easily excused, as everyone was “so wasted” that he or she could barely remember what happened.

By 11am on July 5th, most of your guests have woken up and should be asking for coffee. DO NOT PROVIDE THEM WITH COFFEE. By failing to provide them with coffee, they will be forced to leave your residence and find it elsewhere.

The party is now over. It’s now time for you and the kids to clean up the vomit and bottles of Jack Daniels and prepare for the hangover to come.

FUN TIP: Storing beer in aluminum trash cans is good, but getting rid of the water can be a hassle. ENTER BATH TUB.

For our great nations birthday, I bought shares of Chinese online retailer LITB, in the hopes that it might dislodge one or two American retailers. I raised funds by selling out of PE, adhering to the strictest money management practices north of Krum Rock.

Now you go have yourselves a great 4th of July. Stay away from those damned fire bombs and be sure to limit yourselves to just three 40 ounces of malted liquor.

Big jobs numbers this morning, as this great country of ours added an astounding 288,000 jobs for the month of June. I am sure there are some details that my bearish colleagues would like to point out. Howsoever, I am no longer interested in your insight, only your blood.

Starting immediately, your bank accounts will be frozen and you will be prohibited from investing family funds into asinine ventures, such as short selling a market at all-time highs. Furthermore, any attempts upon your person to reenter the equity markets with the intent to sell it short will result in your immediate liquidation.

Thank you.

NOTE: Futures are flat. But don’t let that get you down.

I see my LEJU reversed off the highs and closed weak. I also see my BALT traded down by 4%, clearly a rebuttal to yesterday’s chinese explosion of enthusiasm, pertaining to Dry Bulk Shipping Rates.

The game has not ended, but has only just begun.

Starting tomorrow, I intend to see the likes of LEJU, BALT, LITB, TEDU skyrocket through the roof–into the clouds above, where the sun resides. The 21st century belongs to our Chinese overlords. There is nothing that you or your stupid southern friends can do about it, especially since you’re busy fending off diseased ridden illegal mexicans at the border.

In short, tomorrow is going to be grande, almost opulent–despite it being just a halved day of trade.

Get ready for it.