German Bunds Hammered, The Ark is Taking Cannon Fire

Eighteenth century cannon are being fired upon the ark this morning. But in the big scheme of things, it’s just grape shot. The ark is impervious to cannon fire and will float past this nonsense into the sunset of mankind itself.

On the other hand, German bunds are getting shattered, rightly so. Yields are up an impressive 6bps, placing the vastly overpriced bund at around -0.10%.

In comparison to the bund, our 10yr looks like a steal.

Today’s big story is in forex. The dollar is surging against the yen, which is great for Japan, not so great for our exporters. But who gives a shit about American jobs anyway?

With Theresa May about to become Britain’s PM, it’s very likely she’ll delay or even derail the process for the UK to exit the EU. She was part of the BREMAIN camp. I believe markets are pricing in this eventuality now.

The Dow is at new record highs.

Today we are bearing witness to a complete repudiation of the risk averse trade. For the first time in months, bonds are getting crushed. The ark is taking on considerable water, with TLT off by more than 2.

The forex unwind is more severe. The pound is soaring, while the yen is plummeting. Both of these events are great for stocks.

Lastly, we’re seeing gold getting hit as WTI soars.

All of this has formulated a toxin for short sellers that is undeniable. Markets are soaring to new highs and the momentum is gaining traction.

The big fears have always been tucked away in forex and bonds. With those trades unwinding, stocks will continue to lift and crush both the purses and spirits of overzealous bears.

Art Laffer, former economist under Reagan, believes a gigantic bull market is only just beginning.

BEHOLD.

It’s all fun and games until your portfolio indicates LIMIT DOWN, fucked face, in the pre-market.

The NIKKEI is up more than 1,000 over the past two trading days, marking a degeneracy unseen in many moons. The NIKKEI 225 is now higher by 500, or 3.2%.

The Samurai are leading the charge against the asshole westerners with gatling guns. At the vanguard of this lift is Ash Ketchum from Pallett town, with Nintendo higher by another 5%.

Some of the supreme commanders of this run include Sumitomo Mitsui Trust (+13%), Toshiba (+10%), Mazda (+8%), Daiwa securities (+8%) and Mitsui Fudosan (+7.5%), naturally.

Separately, but related, the yen is off by 0.25%, which is likely the cause for the run in Japanese run banks.

U.S. futs give zero fucks, currently off by 1.

This is typical.

Someone who was given access to the beta version of the Pokemon Go app came up with the great idea to build a Pokemon Go chat app, dubbed GO Chat. The result was wanton success. People have been downloading the app in droves. The only problem: he didn’t have funding or a way to monetize the app. As such, his broke ass is living on a strict, impoverished, diet of crackers and water–Victorian era jailhouse style.

GoChat, which is available for iOS and Android, was released on July 4th — a day before Pokémon Go became available. Zarra posted about GoChat on Reddit, and the app was installed 10,000 times on its first day. As Pokémon Go grew into a global phenomenon, people began downloading GoChat at much higher rates. For the past two days, it’s been a top 10 search in the App Store. As of this writing, it’s the eighth-most-downloaded iOS social networking app. “The amount of traffic that we are currently getting has been the most insane thing ever, man,” says Zarra, who lives in San Diego. “People are just blowing it the fuck up.”

Also blowing up: GoChat’s servers. It was impossible to register a new account for most of the morning. And even if you did manage to log in, the app frequently crashes when you try to load a message. App analytics firm Sensor Tower estimates that 7.5 million people have downloaded Pokémon Go as of Monday, which would suggest that around 10 percent of all users downloaded a third-party chat app to go along with it.

GoChat is a hit, but it isn’t generating any revenue. Zarra resisted adding advertising to the app — “I hate ads,” he says — and worries that attempting to monetize the app could draw unwanted legal attention from the Pokémon Company. He said he is currently having discussions with investors to keep the app solvent. Zarra declined to say how much he has spent on GoChat to date — “I don’t want people to know how stupid I am,” he says.

Aside from a few experiments, Zarra says, he had never built a mobile app before GoChat. He says he’s happy with the results — one user messaged him to say he had met a girl using the app and had made plans to take her on a date. And Zarra will figure out a way to stay afloat — eventually. “I’m going to be able to pay my rent,” he says. “First and foremost, we really need to get our servers back online.”

Hopefully, this entrepreneurial moron can figure out a way to capitalize on his great idea.

Almost two years ago to the day, shares of IMPV topped out and imploded to the downside on a truly fucked up earnings report. This singular event marked the beginning of the end of my career in money management, as I was set to endure a harrowing drawdown in the Four Horsemen of the Apocalypse, heavily long WDAY, SPLK, YELP and FEYE. I didn’t leave money management because of the monetary drawdown, as I was very much ahead at the end of last year. Instead, it led to my emotional detachment from a business that I loved since entering it in 1997.

In the after-hours, IMPV is down over 11%–warning that revenues will miss by about 20% to $57.5m from $65m. Moreover, losses are set to explode to 20-22 cents from 2 cents.

“We are disappointed with our second quarter financial results, which were primarily impacted by extended sales cycles across most geographies and verticals predominantly relating to larger deals,” Chief Executive Anthony Bettencourt said in Monday’s announcement.

I expect competing software companies to drop in sympathy, just like 2014.

Year to date, the shares of the archaic maker of hard drives, Seagate, is down 30%. But in the after hours, all is sublime, as STX sprints ahead by 9% on a superb earnings beat. The company upped guidance to $2.65b from $2.34b, citing an improvement in the HDD business.

With the additional revenues, the company intends to fucking fire a bunch of people, 6,500 in total, or 14% of their work force, by the end of 2017. Gross margins have improved to about 25.8%, thanks to its enterprise HDD portfolio of overpriced horseshit.

Wall Street is eating this shit up and calling it caviar.

NOTE: Back in April of 2015, the company had announced a $2.5b share buyback–upping a previously approved buyback to $3.1b. Since then, the stock has been cut in half. They have no idea what they’re doing.

WDC is seeing a 2% spike in relation to the STX report.

What sort of trickery is this? Did AA just jump higher by 5% in the after-hours on an earnings beat?

The company reported earnings of 0.15, 5 cents better than estimates. Moreover, they’re forecasting improvement for the 2nd half as their new platforms ramp up.

To demonstrate their awesome business, Alcoa announced aircraft deliveries dropped by 1%, global automotive growth is expected to be 1-4% and they’re spinning off their piece of shit upstream business, who sports rolling mills in Indianapolis and Saudi ‘fucking’ Arabia. The name of the company will be Arconic and is due to come public in the second half.

I announced this earlier in the day inside Exodus. In spite of the fact that I like gold, in light of how insane central bankers have become, I sold out today because of Fed George’s comments. I know the Fed is bluffing, but public opinion can quickly move towards the “Fed is gonna hike rates soon” camp, which would result in harrowing pullbacks in already highly priced gold miners.

As such, I’ve decided to take profits on all of my gold and gold miners, booking an impressive 329 basis point gain for my portfolio.

Moving this into cash places me in an advantageous position to shift my focus elsewhere, which is exactly what I did today. Out of respect for members of Exodus, I’ll refrain from reporting my new position until I’m done buying it. My current cash position stands at around 63%. Granted, this is a very pussified way of trading. But by methodical application, using the algorithms of Exodus, I intend to demonstrate a market mastery not seen since the days of Commodore Vanderbilt.

Moving on into earnings season, I am expecting hazard. The divergence between WTI and SPY will not last, rest assured. Nevertheless, all of these horrible things have resulted in the market hitting record highs, so what does that tell you? Positively nothing. We are but a few twigs on a very large and tall tree, trying to avoid getting snapped in half by asshole squirrels.

NOTE: My TLT position will not be adjusted until after the U.S. yield curve inverts, currently about 30% of assets.

This is nonsense of the very first magnitude. Crude and markets have diverged from one another, as if the collapse in crude was something of a meaningless inconvenience for cocaine addled junior traders–manning the ‘trading turrets’ at our beloved hedge’d funds. This stupidity is bound to unwind, in the harshest of terms. As such, I’ve taken actions in my Exodus portfolio to profit from this fuckery.

By the end of this week, all of the faces of the celebratory bulls will be crumpled up into a frown.

WTI closed down 1.78% for the day–hugging 2 month lows.