MARKETS PLUMMET TO DEATH IN BROKEN ELEVATOR DEATH TRAP PIN ACTION

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What did we learn during this decline?

This time was different. Please remember this and know that these squalls, or market panics, are unique and rare. In the future, when markets drop, you might be inclined to think this will happen again. You’ll be wrong and you’ll also lose a fuck load of money betting on a crash.

What did we do?

I bet on the Exodus oversold signal because it had worked well in the past. At the same time, I respect my stops. The net result was me losing money, but with only 35% of my account exposed to the tape. In other words, my losses were very muted, in comparison to what could’ve been.

At the close of trade, I did two things — went long TQQQ and OKTA, reducing my cash to 50%.

I can promise you two things, drawing from my deep reservoir of experience, markets will either drop fantastically at the open tomorrow or scream higher. There will not be a milquetoast response. Please ignore the futures tonight and definitely ignore the immediate after-hours buzz, which will be dreadful.

Keep an eye on Asia. Should China trade up, that will improve US futures. Should European markets drop by only 1 or 2%, we might get a feverish rally going in the AM. One thing is for certain, the Fed needs to back off from hiking rates and respect the risk off tone to markets.

Hello gents.

You’ve been dispatched and your cocks have been chopped off. But what if I told you you could get them back. It wouldn’t take long before everything you once had is back in your possession. Please imagine yourselves by the sea, maybe on a beautiful yacht with a beautiful woman, drinking Champagne, properly frapped, and of a good year. Now see yourself driving that beautiful yacht, atop the beautiful blue sea, with little fishes shadowing you on the side, directly and violently into a coral reef — immersing yourselves in fire.

That’s what’s going to happen to you, lest you step in there and buy some fucking stocks. We’re talking about the green halcyon dream that is America. Don’t squander it, else find yourselves making omelettes in the dirt with naked people in the foreground, your wife busy in the back beating a donkey to death for supper.

If you’re long and getting drilled and your stocks have hit stop limits, you are not permitted to participate in this dip buying excursion. This blog is tailor made for gents like me — the ones who’ve lost some coin, but had the foresight to parlay significant dollars aside for this very moment.

With 5% of my 60% cash, I bought TQQQ.

The Dow is off by more than 500 and the crash we’ve all been waiting for is finally here. My Bubble Basket of high value stocks is now down for the year — off a staggering 15% the past two weeks. This is real pain.

What to look for now is cessation of the selling and a motherfucking V shaped recovery. I know that sounds reckless, but that’s exactly how these things usually end up.

Here’s the skinny. There aren’t any outsized moved in forex or bond markets. There isn’t any economic news worth noting. So, this is, basically, a standard drop off the mountain tape — caused by greed, avarice, and now panic.

The only thing I’ve bought today is NBEV and I’m up. I’ve made a few dumb plays the past week and have almost made up for them by selling early and avoiding the lion share of this drop. Bear in mind, I was 65% cash heading into today. My next move will be sublime, an exercise and trading prowess unseen since Bud Fox hit the bid on Bluestar, only to then buy it all.

My quant fund is 120% invested now, so I’m quite sad about things in general. Life, as I know it, is no longer fun and gay. It’s onerous and I feel more odious today than ever before. Each passing day is another 52 week low for House Fly. In order to take the edge off and do something meaningful with my life, I stepped in and bought NBEV again — ’round $6.

I’ve never lost money in the name and I see TLRY is shooting higher.

Every one I know it nearly suicidal over this “dip.” The ephemeral winds of glory and gathered excellence have been washed away now, by a tidal wave of grave stupidity and expeditious ignorance.

Heed my warnings, but also know that I am 60% cash and long a marijuana stock into the jagged teeth of a deleterious decline.

I very well might be losing my mind.

Stock traders before Kavanaugh and after pic.twitter.com/mJTeQNs8hl

— The_Real_Fly (@The_Real_Fly) October 10, 2018

My favorite sector and leadership for high growth tech, the SAAS sector, is being completely dismantled. As I said earlier, I sold out of my last two SAAS stocks and have been taking losses on them all week. Granted, drawing down 10% on my portfolio is painful and it hurts me to see the carnage — but it could’ve been far worse if in fact I had held onto some of those names.

For the day, the best SAAS stocks in the market are lower by more than 5% — approaching -20% over the past two weeks.

There is heavy rotation out of growth and into utilities and low growth old man stocks. I can bored you with some Sharpe screens, but what’s the point?

I am going to show you something and it won’t make me look good. It will only demonstrate the importance of stop losses and how to avoid small holes turning irreversible large. Learn from my wisdom you fucking idiots.

Here are the stocks I sold recently and their prices and where they’re trading now.

HUBS $131.65 — $126.68
ZEN $61.61 — $60.21
TEAM $82.19 — $77.75
SOXL $133.35 — $119.71
NOW $181.80 — $172.38
TWLO $73.53 — $70.77
SQ $88.91 — $78.25
BL $51.28 — $43.63

Hence the term, “The Fly wins all the time, even when he’s losing badly.”

Today’s high profile losers.

The second you begin to truly believe this time is different and we’re heading much lower, BUY.

Hard to hedge while in the thick of a heart stopping decline. However, I am raising more cash — stopping out of HUBS and ZEN for 8-11% losses.

I am now 65% cash in my retarded trading account, long idiot ETFs like YINN and TNA. Who knows what should expect next — probably disastrous downside pin action and more.

Well, we’re diving now, so we might as well enjoy the long shadow being cast upon us now, embrace in the agony of others and hope to dear God the air of quiet death doesn’t come for us too.

Aside from dealing with the Chinese trade war issue, Trump and Co. have to deal with WTI shooting higher to $75. However, and this should not come as a surprise to you, this is GOOD for America. Granted, you’ll pay more at the pump. But at this point, because the US is such a big producer of oil, having skyrocketing WTI prices is now a net positive for the country, so fucking deal with it.

On the pressing issue of the moment, the USD/CNY cross. It appears the Chinese are out of control, devaluing the renminbi whenever they eat a snack or take a sip of tea.

Sec. Mnuchin warned them to cut the shit out this morning.

“As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations,” Mnuchin said to the media outlet. “The renminbi has depreciated significantly during the year … We are going to absolutely want to make sure that as part of any trade understanding we come to that currency has to be part of that.”

I’m getting into the bearish mind here and simply laying some thing out so you can worry more.

Higher WTI
Trade war
Higher rates
Trouble in emerging markets
USD continues to strengthen
Elections loom

Did I miss anything?

How bad is the recent sell off?

For starters, this is the second time in over 8 years Exodus is showing an oversold signal for 4 consecutive days. Our stress levels are being tested daily and are now exhibiting levels that have always led to rallies. The fact that we’re not rallying is what’s causing the disruption in the matrix. People are getting uneasy. But you haven’t seen nothing yet.

Presently, just 43 stocks with market caps over $1b are down by 20% or more over the past two weeks.

Right behind that are over 300 stocks down between -10 and -20%.

And behind that are over 500 names down between -5% and -10%.

The total population of stocks with market caps over $1b is ~2,300. With a little push and some depraved selling, the bears can fix 40% of relevant stocks down 10% or more the past two weeks. Such pain and misery will be relayed via financial networks, leading to a wide array of asshats foretelling doom and great recessions — calls for the Fed to slow down, culminating in heart attack flash crashes that will surely set in a permanent bottom for the duration of 2018.

In short, I’m optimistic — because it’s a high probability bet. However, I am keenly aware that humans behave badly under duress and will quickly move to cash if my positions began to flag. You should ignore all present losses and manage your accounts for today’s value, not what it was 2 weeks ago.

Trump is angermented over the Fed weaponizing interest rates. Good luck seeking change there.

US Pres Trump: Doesn't Like What The Fed Is Doing.
'I Think We Don't Have To Go As Fast On Rates'
'We Don't Have A Problem Of Inflation'

— LiveSquawk (@LiveSquawk) October 9, 2018

The main problem with stocks is small caps, evidenced by weakness in Russell. It should be noted, the Exodus Quant saw this coming and is position in $100b+ stocks.

The manner of this decline is deleterious and bound to hurt the bullish feelings of optimistic traders. To get a true bottom, we require panic and then apathy. This decline is different from the others, because of its stubbornness.

I stepped in at the bell and bought YINN, hoping for a sharp rebound at the open. I use the word ‘hope’ deliberately because no one really knows when the selling will stop. The only thing we can control is the methods and manners of playing the market. I choose to do it carefully and with discipline; but when I buy the blood, as is the case now, I do it with zeal.

This is where the weak get fleeced. The people caught in cannabis stocks will be blockchain’d to death, as Felicia the margin clerk hits the bid on all of your positions to cover Fed calls — wiping out the entirety of your equity.

You got greedy, damned greedy; now it’s time for you to pay the price for those transgressions.

Listen to me now. The dips should be avoided, up until the very last minutes of the day. Gone are the days of late day buy programs. We sell into strength and then sell MOAR into weakness. Everything you enjoyed about the market this summer has been whisked away, gently, just like your gains.

Le Fly is 50% cash, getting hammered in whatever is left in his trading account. But I had the foresight to avoid leaning hard into this weakness and will, at some point, make an epic trade of grandiose proportions.

In short, avoid intra day action and play for an opening rip.