Fly Buys: MTW, NXPI

Doing a little averaging in on some dogs.

I bought both MTW and NXPI.

The market is “gorilla gay.” After further review, it appears to me the market will hit 1,250 on the S&P, clearing out all of the OVERBOUGHT signals, provided by The PPT over the past 6 months. In case you forgot, Ragin Cajun posted a study pointing to the OB/OS system trades inside PPT. The results were nothing less than staggering.

However, partly thanks to LTRO, the market ran away at the beginning of 2012, putting the system TZA trade deeply underwater, by as much as 30%. Naturally, this was a very hard pill to swallow and I opted to cut losses at around $21-22. However, lo and behold, the market is coming in and that TZA trade is on the cusp of break-even–absolutely staggering. Once The PPT closes OVERSOLD, the TZA trade must be closed and the first of 3 tranches of TNA should be bought.

Moving on, ZSL was flagged OB the other day and I still like that trade, as a short. Shorting ZSL, long EXK, AG works for me. Both gold and silver are long overdue a bounce. Aside from that, I like YELP on the Facebook shit and MTW for “cheap as fuck” bounce.

My recent drawback has been displeasing to say the least. But why don’t you do me a favor and kindly gander over to my position sheet and learn about the defensive nature that is Le Fly? Why thank you.

More than 45% of my portfolio is either in cash or mega-caps yielding 3%+. Another 30% is in my lunatic YELP position, which has been a store of value as of late. The rest is a pastiche of EXK, WNR, AG, MTW, AAPL and CPST. I like to consider that to be my “risky shit.”

Believe me, I am well aware that my lack of offense in this market gives the appearance of weakness. To relinquish a bit of candor onto your ugly faces, I will tell you this is the furthest thing from the truth. “The Fly” thrives best when cornered like a hungry rat looking for cheese. Nothing tests my mettle like a spiraling market lower, one that breaks smaller men in a single trading session takes an eternity to break me.

I am still up 6% for the year. Yes folks, I’ve done give back nearly 14 fucking percent in this wretched whore-bitch of a motherfucking tape (why don’t you pardon me for my verbiage?). But that’s okay. I still got my balls attached to my penis and millions of dollars to throw into the fire. I do not fret from danger, but embrace it with an effervescent spirit, bearded face, and bayonet.

I will short stocks when I am god-damned good and ready. You can short this shit at low levels, providing that is your thing, only to get fucked up in a squeeze later on. It happens to most of us, but never the best. I will kindly play the long side, from my porch, sipping on lemonade, while watching the kids play with my collection of grenades.

Until next time, this was Gentleman Fly telling ya’ll to fuck off and good night.

Sweet dreams small peas.

http://www.youtube.com/watch?v=I7O_lKNCsPo

I am tired, not from the emotional stresses of the market, but physically tired because I didn’t sleep last night. Perhaps it is just my somber mood; but we’re fucking toast. Fuck the Facebook and its nerd CEO. The whole thing, the market, economy, financial order, is going to shit. Greece had a bailout and then decided to elect lunatics who are filthy LIARS. By declining the bailout and leaving the euro, Greece is executing themselves. Fucking idiots.

I am somewhat pleased with my precious metals today and WNR (MY FUCKING COCK!). They appear to have bottomed. But everything else is for shit. TZA is knocking on $23 and The PPT isn’t even OVERSOLD yet. This is, without a doubt, the worst possible market at the worst possible time, ahead of the biggest and gayest vampire ipo to have ever come public.

I have shares in MTW knifing lower by 7% daily, as if those bozos were ready to file. Unbelievable.

There is no trust and the world is being ruled by fucking imbeciles. To think we are still above 12,000 is a fucking miracle. With all the news and likely outcomes, prepare to shed another 3,000 Dow points over the next few month.

Greece leaves Euro. Spain and Italy get bailed out. Markets crash. Merkel fucks herself in the Rhine.

DISASTER

I want you to look at a few things, small man.

First this:

WTI Crude

Now this:

321 Crack Spreads

And this:

Finally this:

Refiners

It’s a horrible market. Yes, most stocks are trading lower. But, you must understand, the recent decline in oil has HELPED refiners. Cracks have widened and the WTI-Brent spread is back above $20, near historical highs. On top of that, these stocks have been targets of high profile fund managers, like Icahn, Tepper and Stevie Cohen.

So you have great underlying fundamentals, solid growth and a strong shareholder base. That’s the trifecta dick guillotine for people who are short these names. The chips are heavily stacked against you Sir. In order for you to make money, well, you would require the entire European financial system to collapse, or something silly like that. Ha, we all know that could never happen!

Pardon my tardiness, I was at a doctors appointment having my organs inspected.

The market cannot catch a bid because no one knows or understands the fate of the European banking system. This is redundant and I apologize for telling you what you already know. But here’s what needs to be done.

Cash positions should be north of 25% and your positions should be in mega-cap dividend payers. If you want beta, look towards gold and silver stocks. They’ve been manhandled and sellers exhaustion may be taking place there now, with most miners up sharply for the day.

If the European banking system really collapses, well, you’re looking at Dow 10,000 in a day. I don’t think those stupid bastards will just sit by and let that happen, unless of course they want it to happen.

This slow drip lower is worse for stocks than a giant flush. This is the sort of tape that wears people down, until they all capitulate at once, like in a crash scenario. Do yourselves a favor and get defensive and avoid trying to buy cheap stocks. Sure, lots of names are cheap. AAPL is fucking absurdly valued; but it has been used as a bank for about a year and now people want their money back.

One thing is for certain: QE3 is coming, whether you fucking faggots like it or not. Until then, it’s all mystery meat with every bite. Valuations mean nothing when stocks are being used as “source of funds.”

I remember May of 2001 like it was yesterday. My birthday was around the corner and my business was stable, albeit boring. After the crash of 2000, my business was solely focused on preferred stocks and bonds. My gross production was a joke, about 15% of what it was just a year prior; but I was building assets. To couch my boredom, I started playing with my own money, in a very aggressive manner.

I was in my early 20’s and had no respect for money. If I lost $250k in an option trade gone awry, big fucking deal–I’d make more money. The only problem with this mentality was I hadn’t come to grips with the new reality, which entailed me being a fucking piker. My income was a joke and my spending habits didn’t reflect that “new normal.”

So I took $300k from my checking account and splashed it into the markets, leveraged it up and said my prayers. I couldn’t lose; after all, I was a genius. The market was ripping tits and 9/11 hadn’t happened yet. I was the shit and the other brokers could suck my dick if they didn’t like it.

By mid-May, I was really feeling myself, as you can see by the chart of the Nasdaq, circa May 2001. Things were on fucking fire and the internet stocks were making a comeback. I made my small fortune buying and selling dot coms, that later became dot bombs. But it wasn’t clear to anyone still in the game that they were dead. Although I cursed these stocks on a regular basis and didn’t dare buy them for clients, with my own money, I didn’t give a fuck.

What transpired next was a worst case scenario, spawned from hell, delivered to my door–executive class.

In less than 2 weeks, the Nasdaq dropped a little more than 10%. However, my portfolio of high octane HORSESHIT plunged. After they plunged, they plunged some more. I stopped going to work because I could not concentrate and wanted to focus on my account–because it was pretty much the bulk of my savings. I started trading from my friends office in Bay Ridge Brooklyn. He was managing $20 million for one guy, like some sort of devil degenerate. Aside from that, he was a nice guy.

As the market plunged, I bought more. I could not believe the prices on the screen. Things were getting so fucking cheap. It defied logic. I was levered to the hilt, greedy as fuck, fully convinced that the market was wrong and I was right.

It all ended on my birthday with my account at $00.00. “Happy fucking birthday, asshole”, said my margin clerk, as she liquidated everything. I remember the pangs of misery, the sharp knife in my stomach, as I celebrated my 25th birthday. I had to tell my wife “honey, I shrunk the bank account”, which led to  “no touching the savings account for speculation ever again” polices, at The House of Fly, which were later revoked as I regained my footing of manhood.

To make matters exponentially worse, EVERYTHING I SOLD came right back to my basis, and more, literally one week after I was flushed.

The moral of the story: Markets don’t give a shit about your birthday.

I am watching this thing you call the market, unravel in front of my eyes–amazed by its simplicity. I know exactly what should happen; but I’ve been trained to expect government to intervene and paper over this problem. If you are betting against government, opting for the “this time is different” attitude, I wish you good luck. I cannot get myself to sell short anything because we are at a cross-roads. The news might come from the Fed or even the IMF. But rest assured, it will come.

On paper, this market should be sold. There is nothing that could be done to save Greece and Spain/Italy/Portugal are next. Precious metals are not even close to a safe haven and the dollar/treasuries reign supreme. This is exactly what the good gent from across the pond, Hugh Hendry, has been predicting.

BEHOLD THE DEFLATIONARY VORTEX.

However, some things just don’t add up. Like why is LEN and RYL at new 52 week highs? If the housing market is in shambles, clearly these stocks would reflect that.

The reality is not as grim as everyone thinks. The economy is doing good, save the armies of people on food stamps. Aside from the unskilled, America’s productivity has never been higher. Our balance sheets are great and companies are expanding overseas, catering to a burgeoning middle class in China, who needs basic necessities as we did 120 years ago. A middle class is being formed and KMB stands to do a lot of business.

But none of that matters during market panics. We are intently fixed on the worst case scenario because, at the end of the day, we’re all pessimists, subject to decay and extinction. Exactly 11 years ago, I wiped out my personal trading account due to greed and fear. I will elaborate on this subject later on today.

Look at the bright side and put yourself in a position to withstand the worst case sceanrio.

My positions in PEP, KMB, LNCE, WM, WNR and YELP are up.

The fucktards in Europe have turned that frown upside down, with most of their indices green after an abysmal start. Like small dogs, we followed them up. But unlike our European masters, there is no gumption in US markets. It’s dickless, totally beholden to news flow out of the ass of Europe, literally. To think one small vacation country could cause a global panic is unbelievable. I debate the point over and over, with myself and Chuck Bennett, regarding the minuscule nature of Greece’s GDP and how idiotic the world is for quaking in their boots over such a non-entity.

The PPT has not registered an OS signal for 2012. So, according to the laws of mathematics, we can still head lower, before we get a bounce. However, based upon the laws of science, which are at times subject to interpretation and creative license, we are long overdue a rally.

The charts always look the worst just prior to mountain sized rallies to the upside.

With all of the reversals taking place, coupled with the firming up of the commodity sector, we should trade up today. But we won’t. We’re too jaded and scared to risk our skin. We see Spain’s stock market at 2003 lows and Italian yields shooting higher, then gander at the Dow north of 12,500 and piss in our pants. America has become a nation of cowards and Europe is a continent filled with incompetent potato brained perverts.

There is nothing at all redeeming about the tape, with exception to big divvy mega caps, like KMB, CHD, PEP and GIS (seasonality wins again). I am on a buyers strike and will reserve my 20% cash position for better times. A time when men can roam the streets freely again, pissing in the wind, kicking animals in the face for the getting in the way.

FREEBIE: Stats on TYP (3x Tech bear) – currently flagged as OVERBOUGHT inside PPT.

Do you buy beaten down names here, in attempt to catch an inflection point that can result in a quick 10-20% return? Or do you pare longs, down at these levels, due to a belief that the market is poised to go much lower?

Instead of going to cash, do old man stocks, like GIS, KMB and CHD, make for a better alternative? Or, will those old man stocks become a “source of funds” for hedge funds in distress?

The truth is, it’s all a guess. If anyone declares to know what the government is cooking, they are dumber than you first suspected. The playing field has never been even and the rules always change. The best thing we can do is live to fight another day. If that means forgoing some kickass inflection point returns, so be it.

During the course of managing money, over 15 years professionally, I’ve seen the worst blow ups turn into disasters when people pressed their bets. Sometimes the best thing to do, pardon the cliche, is to slow the fuck down and trade small when turmoil is in the air.

For some of you, buying calls, instead of having massive equity exposure, is a better bet. For others, dollar cost averaging comes into play now, providing you have cash reserves.

In summary, we’re not done going lower, unless of course we are. Stocks go up until they don’t and they knife lower until they reverse higher. The one thing you can control is the level of risk and losses you are willing to endure. Let that be your guide when deciding an investment thesis.

This can very well be 2008, with all of its trimmings and disastrous results. To hedge against that, keep a short leash and be skeptical.

http://www.youtube.com/watch?v=wBfKXHoSvDM