There Are Levels to This Pain

The markets are in the pits and we should get an oversold rally soon. All true. But in Exodus, we actually measure pain, showing its tangible ugly face and identify places in the market when it might turn up.

The overall market is oversold. The amount of time needed to measure the success or failure of this signal is 10 trading days. In other words, if you’re buying TNA because you expect an immediate response, you’re not looking at the data correctly.

Number 2.

Today is the first day we’ve seen the tech score move into oversold territory, during this recent decline.

Number 3.

Despite the poor nature of the markets, major ETFs are not being flagged OS. Neither QQQ or SPY, both of which have phenomenal track records, are showing extreme stress. The only ETFs of note that are oversold are: IYT, TAN, GEZ and FEZ.

Number 4.

The market is in a weird spot now, caused by distressed debt in the oil and gas space and a looming Fed hike into the teeth of a recession. Previous conditions that led to a sharp oversold rally aren’t present now. It’s entirely possible that we keep selling right through the New Year’s.

Merry fucking X-mas.

As for you oil lovers out there. We measure the level of distress in all industries. We are getting there. But, as you can see by this oscillator, we haven’t entered the gates of hell just yet.

Look at what’s happening to the commodity markets, the debt underlying these companies, trading 50 cents on the dollar. Look at JNK, HYG. I am telling you to look at it because it’s been YOU the whole time accepting of the notion that we could and we should hike rates. In other words, you are complicit in your own destruuction by encouraging the people who don’t know a damned thing about stocks to destroy us with tightening the monetary base, when we could least afford it.

Icahn weighs in

“The high-yield market is just a keg of dynamite that sooner or later will blow up.”

He’s right, 100%. I didn’t want to believe it myself. But look at the 265 billion dollars in distressed oil/gas debt. Look at CHK. Do you think it’s funny? There is a ripple affect, you know. Oil and gas towns will become depressed and the people living in them DISHEVELED.

We wanted to ‘normalize’ rates because we wanted stocks to trade significantly lower, said every single short seller in the United States.

Enjoy your bear market.

Boy I can’t wait for those federal reserve hikes next week. Yellen and co, if they even knew the U.S. had a stock exchange, might be a little more receptive to holding off on rate hikes next week–taking into account recent developments in both the commodity and equity markets. But, she has no idea, whatsoever, that stocks trade. She thinks the  American people are fending off burglars by throwing worthless cash at them. Granny is socking the bad guy with a bag of silver dollars, while grandpa is throwing bricks of cash at him, all worthless too.

You know, here in America we have a big problem and we are in trouble. The politicians here and policy makers put America last, as a matter of practive. For the better part of two years, our policy makers, the globalist elites, are more concerned with Europe’s economy, than our own. I’ll say it again, for dramatic effect.  Ever since Europe found themselves in a pickle because of their idiotic union, the Fed has permitted, even enouraged, the euro to devalue v the dollar. Hell, they’ve encouraged all currencies to drop v the dollar–because America enjoys waking up to hair splitting declines in sales, earnings and her stock market.

We’ve spent the better part of 10 years, working tirelessly to build an oil and gas infrastructure, so that we didn’t have to rely upon the marauding muslims. Well, that’s been completely destroyed in less than  2 years. It will take decades for us to get back to where we were a few years ago. Don’t you see what’s going on here? We’ve been hijacked by jackasses!

Why?

Because the brainless morons at the Federal Reserve enacted a policy that accepted foreign competitors to gain a distinct advantage v us, through currency manipulation. What did our Fortune 500 companies receive for this benevolent behavior: BILLIONS in dollars in currency losses, crashing commodities and a destablization in the equity markets not seen since 2008.

Our wonderful biotech sector has been crushed. Public markets aren’t receptive to them anymore. One could argue that they were in a bubble to begin with. While that might be true, it’s never a good thing for a bubble to pop. Don’t you get it? Wouldn’t it be preferable to see the air come out slowly? Of course. We’re not morons. We’ve seen what happen when bubbles pop and it’s not pretty.

Impossible, with policy makers who put America last and politicians who pander to an idiot class of people who don’t know the difference between a stock or chicken stock, we are doomed to repeat the mistakes of old because we have incompetents driving us into a wall made of dynamite sticks. This is like a bad cartoon.

So, what options do we have left, other than to grabbing them by their stupid shirt collars, these vapid ignoramuses, to make them look at what their doing?

“HEY, REMEMBER WHAT YOU DID TO US IN 2008? WE’RE NOT GONNA LET YOU DO IT AGAIN.”

Crash the whole damned thing and make them regret what they’ve caused. That’s assuming they even care, which I highly doubt to begin with.

What am I doing?

I’m preparing for the worst, hoping for the best.

Oil is at 7 year lows, great recession lows. China’s Yuan is at 4 1/2 yr lows, as the red communist manipulate their currency lower. And U.S. futures are sharply lower, wiping out all of yesterday’s gains.

“We are in risk-off mode,” said Piotr Matys, emerging market currency strategist at Rabobank in London.

“Another round of selling in commodities with oil prices at new lows has sent global stocks lower and emerging market commodity currencies are under pressure.”

Dow futures are off 140ish. Prepare for the apocalypse.

This is some conspiracy laden shit. The Chinese, a country renowned for efficiently sending mobile execution vans to dispose of enemies of the state, seem to keep losing their fucking CEOs.

Over the past year, senior figures at China Minsheng Banking, China Aircraft Leasing, and the brokerages Founder Securities and Guotai Junan have all disappeared without initial explanation. Similar absences have afflicted the department-store chain Ningbo Zhongbai and the waste manager Dongjiang Environmental. Now it’s the turn of China’s own mini-Berkshire Hathaway, Fosun International.

Trading in Fosun, owner of investments in Club Med, Cirque de Soleil, and New York’s Chase Manhattan Plaza building, was halted Friday after Guo Guangchang, the billionaire who co-founded the company with about $6,000 of capital during the 1990s, was reported as being missing. The company had “lost contact” with Guo, who modeled himself on Berkshire Chairman Warren Buffett, Caixin magazine reported.

Fosun is one of the most acquisitive non-state-owned Chinese companies, so Guo’s sudden absence leaves a lot of plates spinning. There’s about $2.2 billion of deals still pending, according to data compiled by Bloomberg. They include a $586 million offer for the Chinese film distributor Bona Film; a $476 million controlling stake in an Israeli insurer, Phoenix Holdings; and the $232 million takeover of German private bank Hauck & Aufhaeuser. Plus the tussle for BHF Kleinwort Benson: Fosun has offered $529 million to buy out shareholders in the Belgian wealth manager, but was last month trumped by a higher offer from the French investment bank Oddo.

The CEO of Fosun isn’t an operator for the state. He ran a Warren Buffett styled operation, independet from the govt–UNTIL NOW. His absence marks the 7th highly suspicious CEO gone missing this year. Let me add that China is undergoing its worst economic decline in 25 years, is wrought with corruption, and nourishes itself on a steady diet of dog and cat brains.

If this latest CEO isn’t stuffed away in a mason jar somewhere, I am almost certain he is enjoying Chinese accomodations at one of their tidy gulags.

It’s super horseshit.

One of my guys had scheduled tweets via the Twitter business account and Twitter took exception to it and offered us the ban hammer.

To mitigate this bullshit, I started to use my personal Twitter account to advertise on behalf of our corporate one. Pretty fucking stupid, huh?

A few days after I started to advertise, a rep contacted me to see how things were going. I told her that my corporate account had been banned from advertising and wanted to know how to get it lifted.

As you can see, I was quite courteous. After all, I thought it was retarded that I had to work around a ban on our corporate account, without cause.

Not only was Twitter useless to help me form campaigns– to take full advantage of the platform (I’ll get to that in a minute)– but they were unable to help me understand a major concern of mine, like being fucking BANNED. That’s what you call bad customer service.

So, without her help, I muddled away with a small campaign of $500, just to see what it could produce. First of all, finance is banned on Twitter. You must be thinking “naturally, why would Twitter want to permit people promoting their stock tips on their platform?” I agree. However, look at three of the ads that I placed that were reviewed and restricted, without explanation.

Why the fuck were those ads restricted?

After a few of my promotional tweets went out, immediately, I became concerned due to the level of engagement being too high. After inspection, I found that I was quite popular in Mongolia, Turkey, as well as several non-english speaking African nations.

I checked on the accounts that began to follow me and found they were bots, fake accounts with zero activity. I know Twitter claims to have 300 million people signed up. That’s complete and utter bullshit. I’d be surprised if they had 1/3rd of that.

Before placing filters on my campaign, I was acquiring followers for 10 fucking cents. That shit was cheap. After my filters, looking for finance folk, the cost skyrocketed to $2.50 per name. Who the fuck is going to pay $2.50 per follow?

All in all, the current structure and customer service of Twitter Ads is completely inept and without decorum. I do think there is potential, especially if they assigned reps to help me spend my money. I was more than willing to spend 5x the amount for this campaign, but became frustrated; and as a result, I throttled the budget.

We tried one last time to appeal to the @dick handlers at Twitter, to better try to understand why our good name was being banned from advertising on their glorious, fucktarded, platform.

This was their flippant response.

I am long TWTR. I sold the bulk near $30, but still own some for the long term. Get your shit together @Jack.

That’s it, VRX shorts. I have it under strong advisement that a certain Mr. William Albert Ackman has taken out his light sabre and is in the process of conducting a “thorough examination” into the whereabouts of the short sellers for “immediate disintergration.”

DO NOT KILL THE MESSENGER.

Although the market is a heaping pile of donkey shit, Mssrs W.A. Ackman has made it a point to “both punish and torture shorts of VRX in the style of the medieval.”

Again, NO HARM SHOULD BE ACCORDED TO THE MESSENGER.

Lastly, in the event you are short VRX and reading this message, I have a special directive for you.

Good Sir,

You’ve had your fun for the latter part of 2015, at the expense of W.A. Ackman. Now BEHOLD as he light sabres your face and cheeks about the street, ripping limbs from torso, torso from bone, bone from marrow. PREPARE TO MEET YOUR DECEASED RELATIVES IN THE AFTER-LIFE.

W.A.A.

What a wonderful rally. I hope it can last all the way until 4pm. Wouldn’t that be splendid?

Both airlines and oil stocks are up today, despite oil and gas balance sheets whithering away to nothing causing execs to cease handing out free soda pop in the break room.

On days like today, a long can only sit back and hope short sellers finally get mauled and slaughtered and mudstomped into gravel bits. They’ve had it good for too long.

On melt up days, the biggest piece of shit stocks tend to do well. Shares of GPRO, X, ATI, DGLY, BOFI, SN, MTL, CYBR and even BBRY are soaring, for Christ’s sake.

In the past, traders would get an erection seeing this type of risk appetite. However, for those of us who’ve been burned over the past two years, we’ve seen this homosexual horseshit play out too many times.

You get hoodwinked into buying into GPRO today; and by the time the trade settles, you’re balled up in the shower crying to baby jesus.

Look, fuck this market. Take profits fast. Don’t trust the man on the teevee. Remember that the Fed is going to clown-rape us next week.

A lot of people think buybacks are great for stocks. The truth is buybacks are nothing more than fuckery on behalf of the laziest slobs to ever walk the planet.

Imagine yourself to be a C-level exec at a large U.S. firm, like IBM. You have no idea how to scale or innovate; but you’re sitting on billions in cash.

You have a few options.

1. Vacate the golf course and try to invest the money to seek a return that will increase shareholder value.

2. Remain on the golf course and buy back shares, in order to increase earnings to trigger bonuses that will permit you to make 303x what everyone else at the company is making.

Share buybacks by U.S. non-financial companies reached a record $520 billion in the most recent reporting year. A Reuters analysis of 3,300 non-financial companies found that together, buybacks and dividends have surpassed total capital expenditures and are more than double research and development spending.

Companies buy back their shares for various reasons. They do it when they believe their shares are undervalued, or to make use of cash or cheap debt financing when business conditions don’t justify capital or R&D spending. They also do it to meet the expectations of increasingly demanding investors.

Lately, the sheer volume of buybacks has prompted complaints among academics, politicians and investors that massive stock repurchases are stifling innovation and hurting U.S. competitiveness – and contributing to widening income inequality by rewarding executives with ever higher pay, often divorced from a company’s underlying performance.

“There’s been an over-focus on buybacks and raising EPS to hit share option targets, and we know that those are concentrated in the hands of the few, and that the few is in the top 1 percent,” said James Montier, a member of the asset allocation team at global investment firm GMO in London, which manages more than $100 billion in assets.

The introduction of performance targets has been a driver of surging executive pay, helping to widen the gap between the richest in America and the rest of the country. Median CEO pay among companies in the S&P 500 increased to a record $10.3 million last year, up from $8.6 million in 2010, according to data firm Equilar.

At those levels, CEOs last year were paid 303 times what workers in their industries earned, compared with a ratio of 59 times in 1989, according to the Economic Policy Institute, a Washington-based nonprofit.

This is financial engineering at its worst. There’s a reason why people like Carl Icahn and Nelson Pelz have made a magnificent living by pressing the faces of CEOs onto panini presses. American CEOs, more or less, are decadent sloths, galivanting about acres of greenery, living like Caesars, ordering mid-level clerks to initiate share buybacks to ingratiate themselves to no end.

The iron and steel sector is down 65% for the year. The Chinese, apparently, have ceased building ghost cities, gambling, eating, and also shopping. They do, however, still actively partake in accounting fraud and wanton pollution.

The iron sector embodies the hidden depression that has ravaged markets over the past two years. I’ve seen many of my friends check out of the business these past two years, after decades of service. The market is the great fortune creator and destroyer, depending on what side of the trade you’re on.

STLD, CRS, AKS are interesting, especially CRS.

A few years back CRS built a revolutionary plant that was designed to slash expenses and help them kill it. In other words, their expenses are likely a fraction of their competitors, which is why the share price is still in the $30’s.

As for the longevity of this rally: No idea. I am, however, wholly unimpressed.