Shortest Bear Market Ever

What else can be said? Two weeks ago the “no brainer” trade was to be short, indefinitely. Now the genius trade is to buy into a 13% 6 day run. This is an unbelievable short squeeze for the ages. The shorts have been entirely wiped out inside of 1 week. The amount of damage to the shorts is absolutely staggering. I am fortunate to have kept and added to longs during this run, instead of doing what my emotions dictated, which was to sell short.

Both VXX and TZA are down 17% since I bought them, stymying my current gains. Had I allocated the VXX money long, I would probably be up 25% for the year–unfuckingbelievable.

What will the market do next week? Will we continue this batman run and further eviscerate the bears? Or, will the bears strike back with their homo-catapults and bring about the end of the European fraud, by way of Italian 10 yr bonds?

All of these questions and more will be answered soon.

NOTE: “Fat Fuck” Rick Ross nearly died today. Apparently he had some sort of hamburger seizure today on an airplane, like due to all of that cocaine he snorts off his iPhone. He had to be revived and carted off to the animal hospital. Good news: he’s been released and is back to selling dope, most likely from the luxury of his brand new iPhone 4gs.

Ignore my HSOL purchase. It was just a buy of 10,000 shares aka nothing at all. I am net long, with just 25% in cash. My largest position, by far, is WNR. Aside from OPEN, my other longs are performing admirably, especially GSVC. In my opinion, GSVC is worth much more, just based on their management team. It is a long term investment for me.

Nevertheless, I have hedges, with about 8% of assets in VXX. I have another 4% of assets short EXH and some TZA in my personal. Granted, none of these positions are profitable. But that’s the whole point of being hedged. You give up gains in exchange for stability. Should the market top, my fall will be less. At the same token, over the past few days, my upside has been muted. But then again, who gives a fuck, since I’m up 16.25% year to date, aka ALL TIME MOTHERFUCKING HIGHS.

I am in my comfort zone here. I am looking for a reason to sell. However, if the market keeps chugging higher, I have no reason to sell anything. With the dollar weak and treasuries getting debased, equities are in play. Long term, this run is unsustainable. However, I did tell you to be on guard for an 8% October rally, didn’t I? This has happened before, to a lesser degree; but it has happened.

I bought HSOL for a lottery gamble.

Zynga is going public. The ticker symbol will be ZNGA. If you can’t get the ipo, buy GSVC. I don’t understand why there isn’t more hype around GSVC, as it is the only way to indirectly invest in Zynga, Facebook, Twitter and Chegg, amongst others. It is the CMGI of this generation.

Retail sales came in well above expectations, sending futures through the roof. On this news, ahead of the weekend of European debt negotiations, we are off to the races. It doesn’t matter what I think or feel. The animal spirits of the market will take over and offer death blows to those leaning short.

Into strength, I will be unwinding my positions, slowly but surely. I will most likely keep all of my WNR, which represents 15% of my assets. 321 crack spreads are north of $34 and end user demand is robust. Apparently, the economy if off to the fucking races again. That shit we just experienced in August was a mere blip in the grande scheme of things, a liquidation party of sorts for Mr. John Paulson.

Global growth is back, much to my surprise. Today’s retail sales numbers were so surprising, it literally stopped me in the midst of punching someone’s mustache off. Truly groundbreaking stuff.

All jokes aside, this market scares me. I have a lot to lose and for a moment, back in early August, I thought I lost control. I went from +16% to -8% in a few short weeks. I was on edge, even while in Turks and Caicos. Sleep was virtually impossible, since I needed to monitor Europe. When the shit is hitting the fan, I find it necessary to watch how all world markets trade to “get a feel.”

I can honestly say, while at the lows, I had a feeling that everything I had built over the years was in jeopardy. My saving grace was two fold: I didn’t have margin. Instead, I had about 30% net cash. And, I had confidence that I would be able to pick the right pivot points to make my money back, like I have done so many times in the past, from 1997 to date.

Believe me when I tell you, many of my peers are out of business. You might find it humorous to hear of hedge fund managers blowing up. But, in reality, the hedge fund manager will be fine. It’s his partners that get fucked. Regular millionaires with only one or two summers homes, wrecked to pieces by some dicksucker with a cocaine addiction. The shame.

This market is a destroyer. It is not something to get all jovial about, with your camel fucking humor. Don’t you see what is at stake here? From my vantage point, we are in the beginning stages of the grind to the bottom. It’s easy for some to take this lightly, trading at some bullshit Staples desk, whilst making bubbles in a retarded glass of chocolate milk. That’s because these people manage anywhere from $00.00 to $500,000. Look, if you’re not managing at least $10 million, you’re not managing real money. When you have $200 million to invest, understand the difficulty in getting in and out of stocks due to liquidity, then shut the fuck up.

I am real close to just shutting it down for awhile, due to my belief that we haven’t seen the worst of the crisis. Italian 10 yr bonds are closing in on 6%. I guaran-fucking-tee you this will be headline news inside of one week. The higher yields go, the further Italy goes into the abyss of no return. However, policy makers are constant interventionists, making playing the short side close to impossible. With year to date gains of about 15%, I’d be stupid to risk much here, in the face of all of this bullshit.

Off to drink a glass of chocolate milk from a “non-retarded” glass.

Well, I am sure most of you got lured into the market as it was about to “go green” only to find yourself mortified by the late day sell off. Then you were bailed out by a small counter counter trend rally.

One big bag of nothing, in other words.

As for me, I ended up slightly, thanks to WNR, OPEN and RFMD.

My position remains clear and outright pessimistic: this is the last leg of the rally. Prepare for black smoke and chards of metal to bustle throughout your idiotic neighborhoods.

It’s coming. Just sit there and wait for it.

There is a real divergence today, with banks in the shitter and tech ripping. However, trannies are weak, so don’t get all excited and shit about a late day rally. I can say with an enormous degree of certainty, the market will not reverse higher today.

See tech is stupid, trading on the whims of frivolous and gratuitous takeover rumors. The real tell is the banks. Look no further than JPM, BAC, MS and GS.

Instead of selling out of my VXX, I added to my position today. It was a small add, in an effort to reduce my cost basis. Make no mistake, we are due for a 3% pullback.

All of my other positions are performing admirably, putting me flat for the day. Yesterday’s purchases of OPEN and RFMD proved accurate–so far–trading up for the session. More importantly, my WNR is barely down. Trust me when I tell you, “the WNR” cannot be kept down for much longer. It is worth at least $25, if not more.

To be clear: if I thought a steep drop was imminent, I’d sell my longs. I am net long because the market is speaking to me. My next play will be to remove most of my longs in an effort to allow my 15% short exposure benefit from the coming drop in stocks. I will not up my short exposure to more than 25%. My future allocation will likely be 10% long, 25% short and 65% cash.

Okay, this market is on auto-wreck now, so I am going for a spin in my new coffin. As some of you know, I intend to be buried in a pineapple coffin when I perish, which will not happen for another 300-500 years from now. Nevertheless, I am a fanatical organizer, stemming from my wealth of knowledge derived from my community.

President Fly

You are enjoying a morphine shot right now. Before you know it, the market will be knifing lower again, as 0bamanomics kicks in and strips wealth from the land. Obamanomics will salt the earth and set flames to your hospitals.

Over the past 6 days, we’ve rallied 13%. Do you remember when I told you the bears who were betting on the eventual collapse wouldn’t profit from it because of their lack of patience? Well, this is what I was referring to. Bear market rallies are fucking insane and they make you feel like “we’re back.” The reality is, none of this is real. I am sorry to inform you of this, as you are young, stupid and naively bullish on the prospects of fucking nothing at all. The systemic dangers are more relevant now than ever before.

Look how low interest rates are and ask yourself “why is the housing market still in depression?” The top 4 banks are cartels and will not refinance the mortgages of millions of people in need because they desire the old, high coupon, debt. With the government fucking the banks with “The Volcker Rule” and Dodd-Frank, we are, essentially, a bankless nation.

Having said that, short squeezes are infectious. We can easily rally another 2-4%, defying all of the laws of reason and democracy– in true asshole fashion. My goal here is to remove beta and grind my volatility down to nil. Yesterday’s purchases pushed my long exposure up, so I will need to sell or add to shorts to achieve my goals. The point is, I am patient. I know exactly where this market is going, but not so sure when it’s going to get there.

I’ve been thinking about the market and know where it’s going in the near term. Due to trade secrets and pending patents, I will withhold this information in order to protect you from civil lawsuits.