Naturally, An Insane Short Squeeze is Underway

This rally is all about Ben and his proclivity to add liquidity into the system. A few weeks ago we believed he was going to take away the punch bowl. Today we all believe the party will continue because the economy isn’t strong enough. Hence, there is great irony in this rally. It has all of the trappings of a blow off top.

I am not liquidating, just yet, because I don’t have anything better to do with my capital. Am I going to put it into bonds or cash? No, I’d only do that if I felt a huge decline were imminent. If the market sells off from here, I know it will be shallow–because the economy is weak and Big Ben has my back.

Today’s biggest winners are the names that dropped the hardest when we thought the Fed was going to ‘taper’: gold, silver, homebuilders, commodity related stocks, even REITs.

Today’s prevailing wisdom is TLT is going higher and rates are going lower. Therefore, inflation is likely to occur and we all must prepare for the $100 tomato again.

God, sometimes I really hate how simple this business is. The essence of Wall Street is imbued with infantile decision makers.

That’s why this is a young’s man game. To trade without fear is a powerful thing. The old men in wheeled chairs are too busy protecting their assets in Tootsie roll, as the 20 something year old punks kill it in soon-to-be insolvent concept stocks. The game has been the same for over 100 years, only the players change.

Federal Reserve Chairman Ben Bernanke said Wednesday the central bank will likely keep at least some of its easy-money policies going “for the foreseeable future.”

Noting that unemployment is still too high and inflation too low, Bernanke said, “both sides of our mandate are saying we need to be more accommodative.”

He spoke about Fed policies in a Q&A session after a speech in Cambridge, Mass., to the National Bureau of Economic Research.this

Bernanke rattled stock and bond markets last month when he said the Fed likely will reduce its stimulus later this year and end it by mid-2014, assuming the 7.6% jobless rate falls to 7% by then. The Fed is buying $85 billion a month in government bonds to hold down long-term interest rates.

Financial markets assumed that Bernanke’s roadmap also meant that the Fed likely will raise its benchmark short-term interest rate in late 2014, instead of mid-2015 as anticipated.

But Bernanke reiterated that the Fed won’t consider raising short-term rates until the unemployment rate reaches 6.5%.

The Fed chairman also suggested that policymakers could keep the bond-buying program at full throttle longer if the economy wobbles. While the housing market is improving and buoying consumer wealth, federal spending cuts still could dampen growth, he said. “it’s still too early to say we have weathered the fiscal restraint,” he said.

And if interest rates continue to rise in anticipation of Fed actions, hobbling the economy, “we’ll have to push back against that,” Bernanke said.

In his prepared speech earlier, Bernanke says the 2008 financial crisis showed the Federal Reserve that it must strengthen its approach to both regulation and interest-rate policies.

Bernanke says the U.S. economy has yet to fully recover from the downturn.

source: USA Today

S&P futures are +15. Prepare for winship, of extreme perversion.

http://www.youtube.com/watch?v=RtTyCiE4KTQ

I sold out of O, for a small gain. The pervasiveness of ascending interest rates has my attention, which caused me to sell the stock. I don’t want yield. I want growth and short squeezes.

I sold out of FRO, marking an end of an era. It ended with a whimper, pretty much breaking even on the entire position. That’s alright, since I am +35% for the year.

With the O proceeds, I bulked up on SCTY, making it a top 3 position. I also added to SHLD.

Look, rates are going up and the market isn’t going down. This is bullish. Pay attention and try to keep up.

If you’re unable to adapt, you’ll never make it in this business.

http://www.youtube.com/watch?v=263Cnsd0tLQ

I sold out of the rest of my FRO position.

This is a very important point I am about to make to you. WTI is surging, as predicted by the July seasonality stats. It’s amazing how trends keep repeating themselves. Anyway, the WTI-Brent spread is now under $3, which places the refiners, especially mid-continent refiners, directly into the ‘fag box.’

Look at the shares of ALJ, DK, HFC, WNR, PSX and CVI, all drowning in oil. The pendulum swings the other way and when it does, it cuts hard.

The refiners could be ‘epic’ buys here, if indeed the spread is set to widen again. After all, all of the experts believe that is will. I happen to think a ‘pain trade’ is taking place here, which will inevitably result in a flush out. This is not that.

I’ve been a shareholder of the WNR for many years, on and off, all the way down to $11 per share. The stock defies logic and reason on a regular basis. I do not think $27 is a bargain for the shares. I will look to get in under $20.

On the other hand, surging oil prices is good for a number of sectors, such as solar, alternative energy and good old fashioned exploration plays who bank coin off the price of oil going higher.

Top performers in the oil space, over the past two weeks, include: HNR, EGY, XCO, ROSE, GST, HK, KEG, HERO, WLL and CLR. But the space is entirely ignored by the investment community. There is a lot of potential upside to this industry, if the price of oil continues to trend higher.

I’m hitting new highs again, yet I haven’t had a big break-through. I am waiting, ever-so-patiently. Over the previous two sessions, I was down early but came back to close in the black. I am so black right now, call me Bill Cosby.

The top picks have to remain the same, since I haven’t Mt. St. Helens yet.

IMMR, GS, O and FWM are my top holdings. Secondary positions include WETF, USG, SHLD, AMBA, SCTY, FRO and several old man stocks.

I’m doing it plebs, pushing the pedal all the way down to the ground, ignoring caution, leveraged 125% long into what I see as “an opportunity.”

If you’re the scared type, go away. You are visiting the wrong financial blogger.

http://www.youtube.com/watch?v=2YcIgow6TDk

Review site Yelp Inc. is allowing users to order food online for delivery and pickup, partnering with businesses such as Eat24 and Delivery.com.

The offering, called Yelp Platform, can be accessed on desktop computers and mobile gadgets, the San Francisco company said in a blog post Tuesday.

Yelp also said Tuesday that it will eventually roll out a scheduling program for appointments at yoga studios, salons, spas and dentist offices. To do so, it plans to pair with brands such as Booker, Demandforce and MindBody.

source: LA Times

I regret selling Yelp. This is one of those press releases that will be forgotten in a few days or weeks, then permeate greatness into the company for years, similar to the day Apple announced iTunes. Yelp is going to kill this business. They’re gonna be the iTunes of the takeout business. I can’t think of a social media stock that is killing it like Yelp, not ANGI, TRIP or Z– and I love them all.

I need to buy it back. I am going to stalk this stock like a creepy serial killer hiding in the shrubs.

http://www.youtube.com/watch?v=EgPMwDNP-RA

I’ve been seeing this commercial non-stop and it’s brilliant marketing, pointing to the fact that the Samsung Galaxy is indeed waterproof.

http://www.youtube.com/watch?v=HEGGqW3ruk4

SHAME on the House of Jobs for falling behind the curve so badly. If Steve was alive today, I am sure he’d kill Tim Cook immediately after watching this commercial.

My favorite way to play the Samsung juggernaut is via IMMR. Say haptics.

This isn’t the bottom in commodity stocks. I am not bold enough to short them. But I am smart enough to not fall for their alluring looks either. It’s like having a wife that cheats on you. Once you catch her, you have no choice but to divorce and move on. It’s not the act itself that is reprehensible, but the vagrancy of her character.

Gold, silver, copper and steel stocks are constantly giving its shareholders venereal diseases. Why do you keep them around? Are you a glutton for punishment, you stupid gimp?

Here, have a look at my raw commodity index.

And here is my commodity stock index.

Even if you’re a super bull on commodities you don’t want to buy at bad levels. I define “bad” as not optimal or entirely opaque or uncertain. Is it possible that the bottom is in? Sure, no one has a crystal ball. Howsoever, it’s not probable, just looking at the recent trends and knowing the core underpinnings of the commodity trade, which are the commodities themselves, are still mired in mud.

I’d much rather take the other side of this trade and buy stocks who benefit from lower commodity prices, such as BWLD, FWM, NGVC, WFM, TFM, PPC, SAFM, HSY etc.

With lower commodity prices, hundreds of companies stand to benefit, not to mention millions of people who will be relieved to find lower prices at the store.

Get out from the ‘fag-box’ and start thinking like a boss, not like a peasant miscreant troll.

ATTENTION PEASANTS AND GENTLEMEN ALIKE: There is an epic thread taking place in Po Pimp’s NES take down post. I recommend having a look in.

HOV, RYL, BZH, DHI and LEN and all of the residential construction plays are buys, right now. If housing is going to continue to recover, mortgage plays like NSM, MTG, HLSS and RDN are going higher, much higher.

If housing isn’t going to dive lower again, taking the economy with it, material plays like CX, LPX and USG are buys.

Home improvement plays like HD, LOW, LL, MAS, FBHS and WSM are buys, right now.

Online software plays, like Z, TRLA and TXTR should be under accumulation, if in fact housing is on the come up.

h/t @Coopercerulo

This industry is so hated, it’s amazing. The market for new builds is strong and prices are rising. The bond market undergoes a little shake up and everyone marks the sector dead as a doornail. If I was a betting man, I’d start accumulating all of the above names into weakness, strength or indifference. The above stocks led the market higher from 2009 and will lead again. Once this little interest rate scare moves past us, housing will be front and center again, especially after another strong summer of housing data.