The Worst +200 Day Ever

I was out all day, as promised. I left up 4% for the day. Now I am barely up. Sharp reversals everywhere, yet the market is still up more than 200. During that time, Obama appointed an ‘Ebola Czar”, who has zero medical experience for a disease that has afflicted a handful of people in the United States.

This is a process. I don’t expect it will be easy.

Take a look at CLR. It was up 3 points in the morning; but now it’s down. The fundamentals suggest it’s worth more than $75. So should I be concerned with just one day’s trading action? If I was a neanderthal and had just two pennies to rub together, than I’d be beguiled with today’s misfitted action. But gents, need I remind you to never bet against Le Fly, for he wins even during defeat?

This process will play out. We might even retest the lows. But, rest assured, this market will be supported by our friends at the central banks and we will hit new all-time highs before the year is out.

I know I am buying this into a frenzied rally. But I’ve been wanting to own this stock since it came public. If it dips 10% from my basis, I will double my position.

I bet you thought you’d come to iBankCoin this morning and “that rascal”, Le Fly, would be having conniption fits over the S&P futures. I imagine you thought I’d be plotting acts of cannibalism against my fellow man, tossing empty coffee mugs onto my neighbors front lawn, cordially asking the wife to “move out the way, atta girl.” But you’d be wrong. As a point in fact, today’s melt up means absolutely nothing to me. If you could see me now, I have zero emotions running through my body. I am not scared of Ebola, happy about stocks, or even mad at the world for spinning.

I graciously accept today’s gifts from Mother Market and tip my hat to her. If she chooses to rescind said gifts, I understand and will not take it personal.

I posted 11 blogs yesterday and over a hundred tweets from my scabrous account there, all done spontaneously like a loose jawed bedlamite.

As for my fellow friends who happen to be long VIX related products, I wish you the best of luck. This market is hard enough. You don’t need to come here and be taunted for genetical inadequacies, pertaining to intelligence quotient, all because of an investment choice.

We all are free to decide where our hard earned dollars should be placed. Most people hate the stock market and opt for real estate or bonds instead. What we do here, each and every day, is hard and requires discipline and healthy habits. It’s important to exercise, eat well, and try to laugh at set-backs, instead of stressing out over them. Otherwise, you will not last very long in this business.

In short, the market looks to want higher this morning and I am just the man to like it that way. I will not sell into the rally, nor buy. Rather, I am going to read a book, listen to some Beethoven, and relax. After all, it’s been a crazy weak and I deserve a little peace and quiet.

All of your reasons for lower stock prices are so stupid I cannot even get myself to address them. I am going to mug you tomorrow, then toss you into my fireplace to provide me with the fuel that I need to warm my parlour. There is a difference, however, between those of you who genuinely hate America and would like to see her crumble– and the guy, mind you, WHO IS BUYING VIX INSTRUMENTS INTO THE FUCKING HOLE. The latter is an abomination of humanity, the ISIS of investors, and shall be upbraided.

You, my friends, are going to endure heinous market losses, 20-50% inside of a single session. Your parvenu ways will be no more.

In all seriousness, I expect the market to rally for 3-5 more days, then drift lower, eventually retesting the lows. Bottoming is a process and there isn’t anything to justify a V-shaped recovery.

So the game plan is simple: skin the shorts alive and eat their livers over the next week, then sell out and wait for the hammer to drop. The new found volatility is going to work itself up into a frenzy then collapse. At that time, I will have my revenge on you VXX nerds.

Oil, biotech, social media and chinese burritos will lead the way. Just remember to bail out before Thursday of next week.

The energy reflation trade is underway. I have no idea if it will stick by tomorrow. But I do know this: we aren’t selling off these gains today. The breadth is phenomenal and the percentage gains outrageous.

Leading the way are frac sand companies EMES, SLCA, HCLP and FMSA. I already own SLCA; but I decided to also start a position in FMSA today. They just came public and it could not have happened at a worse time. There wasn’t any institutional support to defend its shares from the brutal downtick. As a result, it fell flat from $17 to $10. Over the past week alone it is down 30%. I am sure analyst coverage will come out with higher price targets and if the oil patch dead-cat bounces, it’s good for $15.

Dividend rich pipeline stocks are also moving today, with the sector up more than 4.5%. Like frac sand, I like a lot of pipeline plays–too many to mention in passing.

Rails are recovering, especially since they move the crude around. My favorites are GBX and TRN. TRN is my largest holding.

And, finally, small cap oil are moving fastest. Stocks like EOX, WRES, REXX and BAS are embracing the lift.

If you like oil here, buy up whatever dropped the most over the past month. It’s that simple. The initial move is always knee-jerk and has little to do with fundamentals. If you’re cautious, take this bounce and run with the money. I suspect this trade will either be the biggest and best trade of 2014, or it will succumb to the black hole that was encapsulating it over the past month. One way or another, it’s gonna be fun to watch.

NOTE: Alternative energy and solar stocks are an even nuttier way to play it. Names like SOL, CSIQ, PEIX and GPRE will move faster than your average independent oil and gas stocks.

Poof! All of your gains in UVXY are gone.
-Merlin

How’s your UVXY now, fucked face?

Top positions: TRN, FMSA, CYBR, WRE, CLR, LITB and SLCA

This song goes out to you VIX product players out there.

I could not help myself. I nearly deployed all available cash into TRN, betting on this average down to bring me to a win.

Once a rail man, always a rail man. If I liked it at $39, damn it, I love it at $34.

I sold out of ETR, my largest position, for a small gain. With some of the proceeds, I bought FMSA and added to CYBR. Although tempted to buy other stuff, with the rest of the proceeds I will leave in cash–due to the insane nature of this market.

Cash is now 10%.

There are rumours of an olde wooden machine dating back to antiquity that is being assembled just outside of the city gates. There have been reports of clashes, and an armed struggle, to get a hold (Stop n Shop) of this medieval contraption. Some say “it is the very machine used by the devil himself inside of hell.” Others believe “Christ has risen to free the people of their perversion.”

One thing is for certain: it appears to be heading into the city square.