America the Great: Q1 GDP Tracking Higher After Today’s Numbers

The school girls are out in force today, supporting Janet Yellen’s decision to purposely drain the world of liquidity. Steve Liesman is out shooting nerf bullets at the negative GDP camp today, suggesting that the numbers are going way up.

I am bored of the horseshit coming out from Liesman. The economy hasn’t outperformed in a decade. However, for some oddball reason, whenever one piece of positive data comes out, Steve and his school girlfriends crawl out from under the stairs to say GDP is going up, how it can grow at 4%, yadda, yadda, yadda.

It never happens.

Nonetheless, if this Russian style form of propaganda can boost my SPY higher, so be it.

This is a solid gain, despite just 73% of stocks trading higher. We have the banks and materials leading the way, with bonds and gold selling off.

This recent downtick has several key elements that are the proverbial stars, or poster children, of this whole mess. It stems from the commodity bust, bad banks making bad bets, China, retail getting annihilated by Amazon (death to the mall), and the social media bubble being let out.

If forced to choose five stocks that represented the overall risk appetite of the market, I’d go with Twitter, Deutsche Bank, Wynn Resorts, Macy’s and Freeport McMoran.

Sorry, they don’t Voltron up into a convenient FANG like fucking acronym for your small brains to memorize. But these five stocks are the horsemen of our time.

They’re all raging higher.

TWTR +9%

FCX +15%

M +2.8%

I guess you can call them TWDFM if you like, after “These Will Definitely Fuck Me”. They are the opposite of FANG, the Mr. Glass of this story. But they need to go higher if we’re to escape the wrath of the seemingly endless negative feedback loop.

But they’re built to hurt you. You know how the story ends. Villains always lose.

I purchased more SPY this morning, bringing my basis to $185.04. I am being very open with the timing of these purchases only because there is a current free trial taking place in Exodus. Once it expires (today is the last day to grab one), I will not be so forthcoming here.

With the DB news in tow and the long weekend ahead, I am optimistic for a raucous rally in stocks. Hey, if Italian markets can run higher by 3%, so can ours.

As I am presently situated, I’ve depleted my cash reserves to zero.

25% of my assets are in TLT, with a basis of $120.42.

My year to date loss is -1.79%.

Should the market sell off, I am prepared to go 200% long, which means I can buy SPY on another 3 occasions, providing the oversold signals in Exodus all occur inside of 10 trading days. I will begin to sell out of my SPY positions starting 2/23.

These aren’t emotionally driven trades, purely algorithmic mechanical exercises of sublime mathematical precision.

This just came out:

Deutsche Bank announces that it will buy back €3B of its Euro denominated debt, and $2B of its USD denominated debt

The bank said in a statement on Friday that it’s “strong liquidity position” allows it to repurchase these senior securities without any change to its 2016 funding plan. The euro tender offer is targeting 3 billion euros, while the dollar tender targets $2 billion.

The stock is on fire in Germany, up greater than 10%. Commerzbank is higher by 15%, Unicredit +8% and here in the states the XLF is higher by 2%, with gains in C, JPM and BAC.

Dennis Gartman got up with the roosters this morning to remind people how right he’s been on gold, in yen and euro terms (no one actually does that). He thinks the yellow metal might parlay into a dalliance with sellers–driving the price lower by a few dozen points or so–at which point he’d likely step back into the fray and ride it back up.

In addition, he believes the market is ‘more than required’ to go higher in the immediate term, in all forms of currency, even wampum.

Oh, he also had a few comments about oil, which I found to be of the gibberish varietal.

I know it’s a little pre mature, this being only 7am and all–but equities are looking like they have a rally in them today.

Dow futures are up 150, Europe is higher, gold and bonds are lower, and oil is higher.

With the Chinese market closed, there is nothing, other than the margin clerk, to set us back today.

Since Exodus closed oversold, I’ll be buying another tranche of SPY today, leaving me with zero cash. I will leverage my account to 200% long, if need be.

I fade the arch pessimism every single time.

Someone left a comment the other day, accusing me of being overly dramatic. He said the market was merely correcting, all very normal aspects of a bull market. Fucking moron. I will show you the type of normalcy this market has been exhibiting over the past 30 days, the type of stuff ordinary for a day in red hell.

(Stock, YTD returns, min mkt cap of $1 bill)

Basic Resources (median return -21.5%)
CHK -61%
ETE -58%
MPLX -56%
PAH -57%
ENLK -51%

Consumer Goods (median return -18%)
VC -47%
GPRO -43%
TSLA -37%
FCAU -34%
ST -34%

Financials (median return -16.9%)
NRF -47%
AEL -46%
FDC -46%
CS -41%
SC -40%

Healthcare (median return -21.5%)
ALKS -60%
RDUS -57%
PRTA -56%
RARE -52%
ACAD -50%

Industrial Goods (median return -16%)
ABGB -47%
TGI -40%
MOG’a -35%
ESL -35%
CSTR -32%

Services (median return -17.3%)
FRO -88%
HTZ -49%
LGF -42%
RH -40%
URI -40%

Technology (median return -21.1%)
SCTY -67%
DATA -57%
LNKD -54%
FIT -53%
MOMO -51%

Epic carnage.

He’s out shitting on Keynesian economics, conjuring up 5,000 years of history dating back to Babylon, to point to the errors of the negative interest rate policies.

He cites One Flew Over the Cuckoos Nest as an analogy to describe the current market, where the doctors are insane and the inmates are normal.

Recession is already here.

HOWEVER, before the world ends, Faber is expecting a spring rally–due to the oversold nature of the market. He’d sell on strength and wait for a pop to initiate new short sales.

All very funny.

This makes the most sense to me. Saudi Arabia is crushing the borscht out of the Russian oligarchs and the black souls of Obama’s friends in Iran.

Fadel Gheit doesn’t believe in the OPEC cut rumor. This is all about Saudi Arabia and Russia, trying to maintain market share.

WTI is trading at $27.49.

It’s off by another 5% today, extending the recent foray into oversold territory by 21% for 2016–so far.

Crude oil, however, is higher by 5.5% (contracts rolled?) on some bullshit story that the hedonistic clowns at OPEC will cut supply. They’re simply too lazy to file the paperwork to care that much.

The Yen is stable vs the dollar, so that’s good news.

Globally, bonds are selling off, which is good for risk assets. Portuguese-German spreads have narrowed to 374 bps.

Gold is down 0.8%.

And, finally, Dow futures are higher by 35 and DAX futures are higher by more than 1.5%.

In summary, Japan is getting rocked tonight because their markets were closed last night. Other than that, there’s been a cessation of selling and it appears the risk aspects of the market are in play.

NOTE: Tomorrow is the last day I’ll accept free trials for Exodus. Give it a try and enjoy it with my compliments.