FUTURES SOAR!

There is a large party taking place in Europe right now. Indices have reduced shorts to rubble, higher by 1.5%.

Crude oil and everything that goes with it are higher, inexorably so.

It feels good to be fully invested into a global rally.

If you thought Monday would be better climes for your ursine ways, you are sure to be sorely under appreciated as a sage in about 10 hours.

Asian markets are setting the tone, rallying between 1-2%.

The risk is good analogue is spilling over into commodities, buoying oil and subjugating gold to losses, now off by 1%.

US futures are fantastically higher, especially when compared to the deficits from earlier.

In short, expect a continuation of last week’s rally and perhaps something much more perverse, reminiscent of previous frantic rallies, spearheaded by goodwill and an over abundance of euphoria that could spell doom for all those short.

You cannot feel worse this evening, if you’re long LL.  Just last week, the CDC released a report showing benign carcinogen levels in LL wood. Now, they released a correction of that report, which says their wood is complete shit, likely to cause cancer at 3x the rate of normal flooring.

This stock should get taken to the woodshed first thing Monday morning. Can you have worse publicity than “buy Lumber Liquidators floors, and receive with it, 3x the chance of a malignant tumor”?

Dreadful.

According to Exodus, the median return for stocks last week, measured using 4,311 stocks in the system, was +3.49%.

Basic materials, in spite of the fact that many will soon be bankrupt, were up 2.44%.

Consumer goods rose by an impressive 3.36%.

Financials, representing $5.5 trillion in market capitalization, were higher by 2.26%.

Healthcare, spearheaded by the recently dreaded biotech sector, enjoyed a respite of  +4.43%.

Industrial goods, which have been at the epicenter of the recent decline, was up 3.31%.

Services, which entail autos, airlines and retail clothing shoppes, were up 3.87%.

Even the utilities were up 1.47%, despite it being used as a countermeasure to risk in the market place for the better half of 8 weeks.

Tech stood out with an outsized gain of 4.82%.

This was an all around impressive showing for the market, by far its best week of 2016.

Stocks with market caps above $1billion in market capitalization were higher by 3.63%, whereas the smaller cap varietal was up 3.26%–effectively narrowing the performance gap between large and small capped stocks that have beguiled investors for the better part of two years. One week doesn’t make a trend, however. But it’s important to note the participation of the riskier asset classes, which might precede a larger rally to come in equities.

Digging deeper along those lines, we’ve found that heavily shorted stocks, as defined by companies whose shares have more than 10% of their float sold short, rose by an impressive 5.26% last week, shattering the performance of those stocks with less than 10% of their shares sold short, which rose by just 2.79%.

By using the software bestowed upon the great masses of investors, thanks to Exodus, we can begin to paint a picture of where the money is going, with respect to stocks. Using very rudimentary screens, we can tell that money has flowed freely into larger capped tech and healthcare stocks, heavily shorted and most likely hated by the public, for the better part of the past week.

Providing this trend continues to progress forward, and possibly exacerbate with vigor to the upside, I am prepared to offer you a handful of names worth watching closely, which may break out to the upside in the days and weeks to come.

Here are some names that presently fit the profile of stocks on the verge, or in the process of, breaking out to the upside, using the criteria mentioned above.

FIT

BOX

AMBA

AVGO

SCTY

XON

ALNY

SGEN

BLUE

RARE

Granted, several of the stocks mentioned above are utterly useless companies, whose share prices have been ravaged in 2016 for good reason. But, it’s important to note that periods of excessive speculation are often accompanied by mindless asset allocation, whereby traders jump from one bad stock to the next in search of momentum.

If it was my money, I’d seclude myself to the TWDFM (these will definitely fuck me) cabal– which includes TWTR, WYNN, DB, FCX and M. One thing is for certain, this is the best set up for the bulls in months and possibly the most important since the grim days of 2011.

Word to the wise: if you’re going to file for bankruptcy protection, avoid posting pictures of yourself smothered by ornate belongings or gratuitous amounts of money.

The Queens, NY rapper, ’50 cent’, filed for bankruptcy protection a short while ago, then proceeded to mock the law by posting ridiculously juvenile pictures of himself with large sums of money–most likely to appeal to an idiot fan base who gravitate towards performers who lavish themselves with riches and possess a carefree attitude of the spend-thrift nature–the antithesis of intelligent money management.

“There’s a purpose of having a bankruptcy process be transparent, and part of that purpose is to inspire confidence in the process,” the judge said, adding that bankruptcy court is where “an honest but unfortunate debtor can come into court and seek relief.”

“When that process becomes very public, the need for transparency, I believe, is even higher,” she told the rapper’s lawyer, James Berman.
Judge Nevins ordered the rapper to show up in court. On Friday, the rapper’s legal team issued a statement saying he would show up “to make sure that all questions have been addressed.”

“Mr. Jackson has been forthcoming and transparent with all creditors,” his lawyers assured.

Moron.

China has been playing a parlour game of smoke and mirrors for the better part of a decade, displaying a supreme forex reserve of upwards of $3 trillion, supported by robust GDP growth. Well, now that the growth is going away, and the smoke dissipating from the hall of mirrors, people are taking a closer look at the level of debt doled out by Chinese ‘state owned’ banks to other companies, many of which that are also ‘state owned.’

The prognosis is not good. Crisis is around the bend, if history is of any help to us at all.

Seven out of 12 economists see the debt-to-gross-domestic-product ratio increasing through at least 2019, with four expecting a peak in 2020 or later, according to a Bloomberg News survey. Debt will peak at 283 percent of GDP, according to the median estimate of eight economists.

Concerns over China’s borrowing came to the fore last week, when a report showed the country’s banks extended a record 2.51 trillion yuan ($385 billion) of new loans in January. The increase in debt could pressure the country’s credit rating, Standard & Poor’s said on Tuesday, less than a week after the cost to insure Chinese bonds against default rose to a four-year high.

“Every major country with a rapid increase in debt has experienced either a financial
crisis or a prolonged slowdown in GDP growth,” wrote analysts led by New York-based chief investment officer Sharmin Mossavar-Rahmani and Hong Kong-based investment strategist Ha Jiming. “History suggests that China will face the same fate.”

“If China chooses the zombie bank/company mop up and prop up strategy, they will slow not only productivity but current and potential GDP,” said Constance Hunter, chief economist at KPMG LLP in New York. “If they choose instead to take the heretofore unrecognized bad debts of the state-owned banks on the government balance sheet, a la Ireland, they will increase government debt but they won’t have zombie banks and they are more likely to see a robust recovery.”

Zombie banks? Sounds like a country well deserving of first world status.

Americans only elect dumb as shit Bush’s, not the smart type. As this is the case, Jeb Bush has suspended his campaign, unable to deal with the brute force of the Trump ascendancy.

Fox newz is projecting Trump to be the winner in S. Carolina, in spite of just 5% of the polls in. Nevertheless, here are the results, thus far.

Over in the alcoholic state of Nevada, Clinton kicked old man Sanders down an idle sewer pipe to snatch the win.

This is grim news, since it leaves months of rhetoric in the balance. There is nothing the market likes less than uncertainty. Britain’s Prime Minister has set a date for the people to vote on whether to stay in the EU or not.

Leaving Europe would threaten our economic and our national security,” Cameron said outside his official Downing Street residence in London Saturday. “The choice is in your hands, but my recommendation is clear. I believe that Britain will be safer, stronger, and better off in a reformed European Union.”

Vocal critics, like Nigel Farage, are delighted and will use this opportunity to deride mainland Europe best they can to sway public opinion.

It’s worth noting the fact that markets will likely be dreadful by June 23rd, providing investors with just one more reason to sell in May.

There are crooked cops and then there’s Alonzo from the movie Training Day. This is Denzel Washington’s finest performance, which earned him an Oscar for best actor.

It’s about a lead detective on a special task force, targeting drugs, who is breaking in a rookie during his first day in the special unit. Things go from bad to worse, as the many layers of Alonzo’s corruptness are revealed.

I know cops who really, really like this movie, for Denzel’s part, which is scary onto itself and makes me think what these fuckers are doing “at the office.”

This is a top shelf form of entertainment.