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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.

DO NOT BUY

There isn’t going to be a resolution to this crisis anytime soon. It’s tempting as hell to buy TRLA, YELP, YY and others into this dip, but there isn’t a catalyst in the world that can help stocks over the next two weeks.

The Treasury Sec will offer a retarded speech on Thursday, further exasperating this crisis to the point of absurdity.

I am absorbing losses and do not have hedges. I regret listening to the lot of you about going long VXX. That being said, I appreciate your candor, albeit wrong-headed stupidity.

The time to be brave and filled with rage is not today. Tomorrow the markets shall plunge lower, forcing smiles out of our elected officials for successfully causing crisis.

There is a silver lining.

The PPT is hard at work, spitting out some signals that should be looked at. Get your shopping lists ready and prepare to buy QUALITY once the market turns. I want to stress that last point. Many of you are saddled with garbage, because that’s what has run up over the past 2 months. You don’t chase garbage down the toilet, fools. You flush it and buy the toilet instead (whatever that means). You get my drift.

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Recap of Obama’s Debt Ceiling Speech

Unmitigated disaster.

He spent 1 hour antagonizing Boehner and the GOP. He offered nothing but a stiff arm, admonishing all those who oppose his will. With the GOP firmly backed by the Cock (sic) brothers and a belligerent Tea Party, I view the chances of us defaulting or going over the 10/31 funding deadline at a 100% certainty.

There is nothing redeeming about Obama during this crisis. He’s demonstrated a type of stubbornness that you’d expect from a child, or a retard.

Expect the market to be atom bombed because we have a government that is disconnected from reality.

I am about 30% cash, waiting for a reason to buy. Sad.

Oh, by the way…

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Hey, Anyone Getting Long Ahead of the Obama Speech?

So who wants to get long before the 2:00pm Obama speech, when he is sure to re-declare war on those pesky GOPers?

Imagine the US was a corporation and the President was the CEO. Congress was the board of directors and the company they jointly managed was in crisis. The share price was plunging because its CEO and board refused to meet with one another and discuss strategy. Imagine this corporation had loads of cash, but unilaterally refused, on principle, to meet its debt obligations until an agreement was reached.

In the private sector, such a company would be smoked out within days. Activist shareholders, like Icahn, would swoop in and fire everyone, restoring value and balance to the company. However, in the public sector, no one is held accountable. These guys are like convicted rapists who are let out to roam college campuses while drunk.

At the very minimum, this demonstration of ineptitude shows the stark contrast between the public and private sectors, where one is held to the fire, forced to perform, and the other is encouraged to rot from within, like the city of Detroit.

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Here Comes the Flushout

This is the moment you’ve been clamouring for, at least the people with ample lots of cash on the sidelines. The market is in the midst of being routed, led by high beta names. Although it’s painful for me to see my positions getting lit, I look forward to allocating my cash and making up the difference on the next upside inflection point.

If you’re fully invested, leveraged into this maelstrom: beware.

One month treasury bills continue to scare people to death, with yields rising from 0.18% to 0.30% overnight.

Congratulations to Congress and the Presizent of the United Steaks of America: you’ve got your panic.

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WHAT JUST HAPPENED?

I stepped away and returned to see the NASDAQ and many high beta stocks getting lit.

A major flush out in the NASDAQ just occurred.

nas

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The Secret Dry Bulk Bull Market

No one is talking about this phenomenon. Analysts aren’t calling these companies because “they missed the move,” something that was voiced to me by the CFO of a prominent Dry Bulker.

The BDI is up again this morning. Have a look at the 6 mo chart.

bdi2

bdi

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Here We Are Again

The market is barely off its highs, but you can feel the sentiment change, can’t you? It’s also worth noting, we are receiving this pain under the administration of an anesthetic, which is “temporary govt shut down.” In other words, we’re not taking the sell off seriously because it’s widely viewed to be a knee-jerk reaction to something that is fixable, and plainly silly.

Is it possible that the real costs of Obamacare are starting to get priced in? What if the anemic, pathetic, economic recovery is the root cause of the sentiment shift and not the all-to-convenient Washington impasse? I am dead serious. There is distribution taking place and this Washington scandal is the perfect cover to blow out of stocks.

Retail sales have been weak and the markets are up huge. The Fed have done all of the heavy lifting, while the government makes life difficult for businesses to thrive.

I have faith in Benjamin Bernanke, but he isn’t going to stay on for another term, is he?

I’m just jotting some thoughts down as they materialize inside of my brain.

Back to your regularly scheduled bull market.

NOTE: Just today, it was announced that John Melloy from CNBC will take over the role of CEO at StockTwits, replacing Howard Lindzon. I’m somewhat sentimental over hearing this news, especially since Howard was a very early supporter of “The Fly”, way back in 2006. I remember the day he told me about the crazy idea called Stocktwits. He was excited about Twitter back then, wayyy before anyone else even knew about the site, and wanted to carve out a niche for finance. I recall thinking Twitter was something of a homosexual medium and that it would go by the wayside of time. Boy was I wrong. Howard did a phenomenal job taking StockTwits from nothing to the epicenter of online finance, and certainly did carve out a nice niche for the company. I am sure he’s thrilled to abscond with the day to day duties and get back to doing what he loves most: investing and porn.

Good luck Mr. Melloy. If you mess up Stocktwits, I will have your body parts strewn across whatever land you descend from.

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Step Away

I spent my day looking at different opportunities, building up a buy list for all of the cash I have sidelined. One of the names that popped up was DATE. Then I was reminded about past indiscretions when I’d take positions simply for the sake of taking them, to profit quickly off momentum. While that might work for some of you, that’s not my style. I need purpose behind my buys, else I’m doomed from the get-go.

This is the sort of tape that lures you in with low-brow names, until the hammer of certain death is dropped on your gambling faces.

The market is heading lower because Obama wants panic.

My losses were very muted today; but there is significant risk of a full rout of stocks. Remember, panics do not occur from the top. If this market keeps selling off, we will set up for a capitulation trade, whereby ageless vampires like myself will suck your arteries dry (no homo, simply vampire lifestyle).

VXX tits.

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Stocks That Are Working, Despite Congress

Chinese burritos are doing just fine today. Have a look at VISN, JRJC, RCON, BONA and BITA–rippage.

Marijuna play, GWPH, is exploding to the upside on a massive upgrade. This biotech company is interested in making cannabis based pain killers.

In addition, gold, silver, REITs, even solar (my favorite is SUNE) is trending higher, despite the overall weakness in the indices. This tells me the market is dying to trade up. Nonetheless, I believe this sort of optimism can hurt people, especially since no one knows how long this is going to play out.

Germany deserves a AAA rating because they’re responsible with their debt. The United States deserves a AA rating, not because we lack the funds to pay our bills, but because we purposely choose not to.

Early estimates point to 10/31 (ironic) being the day when the government will run out of cash, and will not be able to pay its bills. My guess: the crisis continues until the very last day. These bozos knew about this issue for months, but opted for a 5 week vacation and never bothered to broach the subject until it became unavoidable. We are governing by crisis and the American people, especially the ones who pay taxes, deserve better.

One final thing to note is the market went higher for two days after Lehman collapsed. Only after the real economic effects of Lehman was realized did the market plunge. That could happen to us with this manufactured crisis, so be on guard for the downside surprise.

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