Deer Trader Flow

I just can’t pull the trigger. I am too comfortable on the sidelines, away from dangerous danger, and would rather go to church and pray for the market to implode than buy here and be wrong.

A great man once said “no balls, no babies.” To that end, I am sterile, a eunuch of sorts, blogging about the market without risking anything. It’s a wonderful thing and place to be: enjoy all of the excitement of the markets without having to incur personal hardship. The truth is, I cannot shake the bearish feeling. Might I add, this feeling has been wrong numerous times over the past 5 years. However, it served me well during the flash crash, having 30% of my assets long VXX into the maelstrom. It also served me well during 2008-2009, as I held a net short book and bet against all of the famous names like Lehman and Bear.

Maybe I’ll meet the market halfway and buy something defensive, larger cap. I have a tonne of money here doing nothing, collecting dust.

GTAT looks good off the AAPL news that they will use Sapphire. RBCN should be running tits on that news; but who wants to get long that bastard ahead of earnings? Certainly not I, or it might be my head in a basket.

Bad news is good news again. I’d be foolish to decline an invitation to an “all you can snort” cocaine party.

Updates forthcoming.

The jobs report is going to be decidedly bad; but the unemployment rate is going to drop because apathy kicks in after a while. The slobs in front of the teevee dinners are going to throw in the towel, looking for an honest wage at COST or CMG, and opt for lives of unfettered crime. They are going to sell drugs, while smoking legal marijuana. Then they are going to rob you of your belongings and leave you in a ditch to die.

Shotgun to the face, cowering in fear, move here is to be long of volatility (in dollar terms) and to be short this market–because Yellen doesn’t have it. I’d sell my high beta belongings and take to the road for hitch hiking, catching rides from strange persons along the way, and then killing them after I reached my destination–for sport.

Gold and silver are of interest to me, but in an ancillary way. I like the pawn shops down here, post nuclear disaster. Should gold uptick from here, EZPW, DLLR and CSH are going to rip tits to the upside. Plus it coincides nicely with my apocalyptic flavorings.

This market has all of the trappings of being, well, a trap. There is unchecked hedonism, decadence amongst the plebeian army beyond belief–bordering on disgust. And we have a fresh/vile debt ceiling debate ’round the corner, with an economy that sucks balls and a Fed chairwoman who has the look of someone who does cross word puzzles all day long.

I am very happy to be sitting on the sidelines, like a pile of rusted metal, waiting for an explosion to happen. As long as GOGO goes higher, I am somewhat content, as it is a 15% position. The other 10% of my holdings is wrapped up in a bunch of olde man stocks, like CHD, WM, AAPL and FB.

But nothing irks me more than YELP. Do not discuss it in these halls and never mention it to me in person if you value the continuity of your jaw.

Today is a celebration of resilience. We were down and now we’re up. But remember, all of these good feelings can change to dark matter blowing up around your testicles, should tomorrow’s jobs numbers suck marble balls.

At least I have GOGO going for me. Even though I am missing out on today’s rally, it’s good to see my biggest piece of offal float to the top. I am tempted to buy ULTA, DKS, MBT, BBD, CXO, TWTR, TJX and WETF, just to name a few.

What will be interesting to watch tomorrow is earnings out of NUS. That stock has been destroyed, after an article in China pointed to unsavory business dealings in China. China represents 35% of their sales, so it’s a big deal. In the event they get the “all clear” from the Chinese authorities, that stock is going to move $50 to the upside, almost overnight.

FWM is so cheap. I wonder why.

I am starting to see a lot of LITB products on AMZN.

Will chinese stocks rebound? If so, I like SFUN and YY best.

Bottom line: this is the sort of day that sucks you in and then spits you out. I know it sounds crazy; but I’d rather see the market follow through on today’s gains before stepping in with serious money.

This is a very nice bounce and I’d like to buy a dip, here or there. But if this keeps up, we’ll be back at new highs, soon enough, and I would have missed the entire rally. I’ve done this before, you know, missing the whole rally and such. It was several years ago, while I was stubbornly trapped in VXX and cash. I eventually booked the 7 fig loss and moved on, for the better. I ended up making back most of the losses in fairly short order, all thanks and praise to the Bearded Clam, whom might I add, is somewhere in the Bering Sea now–on vacay.

TWTR is interesting down here. I’ve always said that TWTR is a stock you can buy once per quarter for the next 5 years. Just make believe you are an employee and relish the dips. Naturally, I am a greedy person and hoping to buy it cheaper.

YELP is gone. I’ve been off and on that stock since $14, when no one else wanted it. It pains me to see it here, because I always said it would happen. Water under the bridge.

I am still 75% cash, sitting here watching all of the cool kids smoke cigarettes and play dodge ball with one another.

UPDATE: LOOK WHO’S UNLOCKING SHAREHOLDER VALUE, OVA HERE.

The ECB did nothing today, which is typically of Draghi. He likes to talk a big game and do nothing. Thus far, he’s gotten away with it.

Futures are all over the road. In light of the TWTR report, I expected social media stocks to sell off. However, it appears YELP and SALE might have saved the day. The market may just ignore TWTR and offer Wall Street some upside bounces today.

There isn’t a lot of enthusiasm in the tape now, save GMCR. In order to break the malaise, it’s important that the market rip higher with conviction, otherwise it might get bogged down by people selling rallies.

More later.

FB is the King at 20x sales and the stock up 23% over the past 3 months.
GOOG is the Queen. Her valuation and share price performance are irrelevant, as she will outlive the King, who is busy prepping for another stupid war.
YELP is the prince at 25 sales and the stock up 10.5% over the past 3 months.
YAHOO is the princess, who now lives off of a rich allowance, provided by her very rich husband from the east.
TWTR is the deposed King, now on the run after stealing money from loyal subjects. His final destination is undetermined and his fate is in question.

AMZN is the department of War, waging it as it deems fit, how it wants and on its own terms. It has yet to lose a battle.

NFLX owns the royal theatre, always an interesting and lively experience.

P, OPEN, TRIP and Z are part of the royal family; but are not invited into court because no one really likes them. People say hello to them only because they know the Royal family.

YOKU, QIHU, SOHU, SINA, YY and SFUN are chinese diplomats living at the royal palace. No one really knows who they are or what family they belong to, only that they are rich and very mysterious.

ZNGA and ANGI are both court jesters, with double digit gains over the past 3 months, trading less than 5x sales–clowning it up for everyone else.

I’m not buying VXX or HDGE or TLT or shorting any stocks, despite thinking the market will trade lower in the short term. Shorting stocks into oversold tapes have proven to be stupid over the years. Therefore, I’d much prefer the safety of cash, rather than letting greed grab me by the collar and toss me down a flight of stairs in an upside surge.

To start shorting now is tantamount to believing we are entering a prolonged correction/bear market. We haven’t had one in years, making it a very low probability trade.

Aside from the recent weakness, it’s worth noting, many large cap names have been struggling for a month. Significant sell offs in a number of large cap industrials and retail names have spooked some large investors out of stocks and into hedges. Nothing goes up in a straight line, nor down. If forced to guess, I’d say we chop around during February, with some stocks getting splashed over the pavement because of earnings shortfalls and others soaring on beats. After earnings season, we will resume the upswing in stocks and top out in March-April, setting up for a sublime shorting opportunity.

The Devil wants you to buy now, ahead of TWTR’s numbers. You’d be stupid to do that, especially since valuation is absurd and the TWTR folks haven’t been tested yet. America has entered a new ice age. Sleds have replaced automobiles in my neighborhood and commerce and school have all been shut down.

In the past, after taking large draw-downs, I’d get anxious to make back my losses right away. I’d run into the market, buying everything in sight. More often than not, that strategy failed miserably. The tape has changed and this isn’t the same Federal Reserve. The market has bounced nicely off today’s lows and I am sure there was some good money made by alert day traders. But that isn’t my game, as I opt for longer term holds of at least 1 week.

So I ask myself: “will the S&P be higher from here one week from now.” Is it a high probability trade?

I am unsure. Therefore, I remain in cash. Should something pop out at me, you will be the second to know.