WAIT FOR IT

I made back 2/3rd’s of yesterday’s losses. I didn’t expect today’s melt up, but welcome it.

There is more work to be done. I’m always on the look out for innovative ways to capture coin. As the struggle continues, the pressure is firmly on the necks of those who sold short yesterday.

Enter the vise and feel the squeeze.  It’s coming.

Quit wallowing in the underbelly of Wall Street, portfolios teeming with vagrant penny stocks–such as PAMT.

Today is a bounce day, is it not?

Well you need to examine what is working on a strong day because it is a tell on where Wall Street is placing their bets, the “go to” sectors.

Residential construction is up more than 3% as an industry today, making it the best performing industry of the day. Overall market breadth stands at just 65%, so this is a big move in a rather narrow bounce.

Inside of The PPT, I have a housing index compiled, listing all of the companies that are publicly traded who contribute to this great renaissance of American industry.

=

The overall trend is higher. Unlike silver miners, who trade lower on a day the base metal is +1.25%, housing related stocks make their shareholders money.

Today’s outperformers are HOV, HVT, SPF, HD, KBH, PHM, MHO, LL and USG.

Take note.

I added to my PAMT position.

We’re not going to have resolution until the Italian election “crisis” is resolved. I know how people think and they’re fixated on Berlusconi and his nazi plans. This morning’s bounce was great, but now it’s gone and I am once again in the red.

The housing and consumer confidence numbers were also great, but pale in comparison to the horrors that Berlusconi and his fascist thugs will inflict onto Europe.

Do you realize how stupid this whole process is? How one event can cause so many overly dramatic responses from the investor community?

It’s the nature of man to hoard and  protect what is theirs. People want to hold onto gains and will use any excuse to protect them. As such, here were are, stuck in purgatory, being  waited on by stupid men with Italian accents.

I’ve divested the majority of my VHC position, reducing it from 30% to a little less than 5%. With much of the proceeds, I bought BX, USG, BZH and APO–all doing woefully horrific in this meatball of a tape.

I’m short CCL (the broken toilet) and AG. However, I am leveraged out to my eyeballs, exposed to the market. My net long exposure is about 105%. I am not doing this simply because “stocks have to trade up until tax day.” You misinterpret my hyperbole.

The very basis of my bullish position is the undeniable resurgence in housing. The timing of my positioning is optimal, from a seasonality point of view.

I have two primary tools at my disposal.

1. Idea, information flow, intuition.

2. Timing.

If I get the latter wrong, the former will be for naught.

I do not mean to be curt with you, but you should short silver with all of the muster you can bear–immediately. When is a good time to short silver?

Anytime.

Consider this: silver sucks. Even more so, silver miners are the very worst investments over the past 12 months, save fraudulent education scams.

Do I have proof?

Of course!

One of the many things creative people do when they are bored is build things. Unfortunately, my creativity has been stymied over the past year due to the never-ending, tedious, development of PPT 2, which I am told is no more than 50 years away from completion. Nevertheless, before iBankCoin became moribund, stuck in amber, I developed a tool (still in BETA aka not for public use) that tracks correlation between individual stocks/industries to the S&P 500.

Observe silver.

Look at the last column and you will see that silver has underperformed the SPY by more than 40% over the past 12 months.

The raw commodity itself faired better, but still sucks.

The underperformance is 14% less than what the dastardly miners have ccomplished, which proves my points exactly.

What are my points?

• If you must own silver, buy silver and not a miner.
• Silver sucks.
• The trend is your friend.

Disclosure: I am short AG

Let’s have a look at the market, over the past month.

Currencies:

Sterling was down 4% and the Euro was off by 2.5%. The Canadian dollar was off by 2% and the US dollar was up by 2.5%.

This is a sign of market deterioration.

Treasuries, represented by TLT, was up about 1%, while a variety of muni funds were down anywhere between 2-3.5%. High yield, however, was not badly damaged–with JNK and HYG off by less than 1%.

This is a sign of moderate deterioration.

Commodities have been weaker across the board, led by Wheat (-10%), Coal (-8%), Tin (-7.5%), Uranium (-7.3%) and Silver (-7%). The only notable strength was in natural gas, +5.5% for the month.

This is a sign of market deterioration.

Market leadership is often found is larger cap stocks. I searched through the top 25 companies, ranked by market cap– per sector–for month to date performance data and this is what I found.

Basic Materials
24 out of 25 stocks were down

Consumer Goods
11 out of 25 stocks were down

Financial
16 out of 25 stocks were down

Healthcare
14 out of 25 stocks were down

Industrial Goods
15 out of 25 stocks were down

Services
12 out of 25 stocks were down

Technology
13 out of 25 stocks were down

Utilities
12 out of 25 stocks were down

After viewing the large cap world, coupled with the data compiled from the raw commodity performance, I think it’s fair to declare there is severe dismantling of the commodity sector, which in many cases, is a barometer for global growth and reflation.

On the other hand, if you are looking at this from the Federal Reserve’s point of view, there is nothing in the market that is suggesting “inflation.” Therefore, the QE to infinity and beyond mantra should persist–putting a bid in any downtrending market.

Out of the top 25 stocks, ranked by market cap, only 11 were down over the past month. Most of the down stocks were off marginally. Moreover, it’s important to remember how much the market went up in January (+4.5%). All things considered, the market is still UP 1.4% in February and you jackasses are calling this 2007 all over again.

Look, I am open to the idea that western finance as we know is on the verge of collapse. Believe it or not, I welcome it. I did very well shorting the market in 2008-2009 and generally hate human beings and look forward to his extinction from this planet. Nevertheless, one step at a time BOZO. You cannot jump to conclusions like this, at least publicly. You make yourself look bad, providing your enemies with a never-ending supply of custard pies to throw at your clowned face.

Here are some empirical points to consider, when gauging the overall strength of this market.

Out of the 3,742 stocks tracked inside The PPT, 2,164 are above their 50 day moving averages, 2,592 above their 200 day moving averages and 1,243 are above their 20 day moving averages. The weakest sector is basic materials, with just 109 out of 520 stocks above their 20 day moving averages.

I will concede the presence of weakness in the commodity sector. At the same time it’s important to remember that 311 of 508 stocks are UP in the basic material sector–over the past 3 months.

You people need to chill out and enjoy the ride. We’re going to snap back soon and trend higher in March.

NOTE: Just under 30% of stocks are within 5% of their 52 week highs, while just 226 are within range of their 52 week lows. Also, the diabolical Italian 10 yr yields are at 4.5%, a good 1.5% away from the danger zone.

I am reporting to you from the blackest room possible. “The Fly” does not mingle or gallivant or even travel during the frigid winter months. He remains in his northeast corridors to stockpile coin and socialize with complete idiots on the internets. The degree of today’s losses were sizable, yet none of your concern. What’s important for you to know is what I let you know.

I am brooding, chain drinking from cartoon sized mugs of black tea, seasoned with the finest bergamot oils available to this world. I know what the market will do tomorrow and in the near term, but I am going to ignore it–stick my head in a bottle (like s ship)– and jog on.

This morning I bet some of you were running about the office with exposed genitals, so happy to be long an upward surging market. Towards the end of the session, a great many of you found those same genitalia removed from your person. Castration trading is my favorite, particularly when I am flush with cash.

Having a 100% long bias into a maelstrom of volatility-driven-panic is a sure fire way to become a man overnight. I took my losses, stared at them with glossy eyes, and spit at them.

According to my investors handbook, published in 1817, the market is supposed to trade up until 4/15. At that point, when all of the taxes are collected and the treasury is good and fat–succored with the blood and sweat of the middle class, the government will “let the market go”, until it catches it later on during the fall. These are all known facts, some of you are still unaware.

I should be selling to protect my 9% gain. But I will to the exact opposite and buy more–setting a course for collision– flailing in the wind, swinging swords and lit sticks of TNT like a pirate without a ship to ransack.

http://www.youtube.com/watch?v=-UvXY-evNNQ

Berlusconi will get elected and subsequently declare war on Germany, then detonate a nuclear bomb over Berlin. After he is done with Germany, he will unleash the Italian navy to embark on a mission to cripple the US navy, effectively positioning Italy in control of the world.

At the same time, North Korea will shoot 20 nuclear warheads–randomly– towards the Pacific ocean, striking Tokyo and San Francisco, by chance.

As this occurs, the GOP will stand firm in their insistence to balance the budget–allowing the “sequestration” to become a reality–giving way to US castration and economic decapitation.. As a result, 20 million people will become unemployed immediately, thrusting the economy into a pornographic state of rape.

Stocks will trade down, then some more. Miraculously, gold will really become the only currency accepted at Macy’s, JC Penny, and other big department stores–creating billionaires out of thousands of gold bugs straight away.

The UK will see the destruction of Germany and the US navy as a sign from the war Gods and join forces with Italy to invade the sarcastic French and fishy Norwegians.

Iceland will be removed from the map.

The price of oil and truffles will skyrocket, far beyond the means of the average tax paying citizen. Automobiles will become a thing of extraordinary luxury, as most tax payers resort to riding ponies and jackasses (horses will be used for food in the UK). Restaurants will be converted into museums, as the scarcity of food drives the obese to commit heinous acts of cannibalism.

The Chinese will bear witness to the world wide panic and join in by invading the S Koreans, Indians and Vietnamese, just to prove to the world that they can accomplish what America could not.

Ladies and gentlemen, this is it. Enjoy the remainder of your days as free men and women. Very soon, Berlusconi will seize power and put an end to world peace and never ending rounds of quantitative easing.

We are woefully close to the 2007 highs, which will draw out the very worst investors to shout “double top”–declaring that “we will now retest the 2009 lows.” These people have no idea, whatsoever, of how to invest. The walk around blind, leading others off cliffs.

We might reverse off this optimism. I already sense weakness in several leadership sectors, namely housing. The sequestration is supposed to be especially harmful to the housing market. Nevertheless, we are in a long term uptrend. These trivial declines should be viewed as “stupid nonsense,” something to acknowledge and to buy.

I added to my APO position and started new ones in PAMT (hoping for joozy news) and MTU. If we reverse and dive lower, I will take a nap, wake up, then nosh on a few sandwiches and/or bags of organically fresh tomatoes.

Finally, as we climb this peak and attempt to reach the summit, do not look down–for that will cause you to undergo a bout of vertigo, leading you to slip, fall, break your neck and spine– then die.

I bought PAMT.

Disclosure: This is a very thinly traded stock and my position, as a percentage of assets is very small. I am in this for a dice roll, speculative trade.