Just Above the Sun, the Clouds are Black

Do not be fooled by the pretty exterior of this market. Many of you are being boiled, slowly, long garbagio into the soup. Get this, the Swiss government’s last bond auction was 7x normal demand and they MADE $4.2 borrowing money. Did you get that? Apparently, the Swiss have the best business model in the history of mankind, making money by borrowing it, or something is seriously fucked up here.

Last year this time, I got fucked long VXX into a 9% S&P melt up, which translated into a 50% loss in my position, a new record for yours truly. It was, without a doubt, one of the worst trades of my career. I doubted QE2 and it cost me millions. I will not make the same mistake twice and you can’t pay me to bet against Le Clam. However, let’s face facts here, this Friday’s jobs report is gonna suck bad. My risk on trade is betting against treasuries, via TBT. I am long WNR and GSVC and TZA calls. I have 40% of my assets long, some in TBT, the rest in cash.

On Jupiter’s stone, this market is giving you a gift. Quit being so damn greedy and take it, else get hit by errant lightening bolts in exactly one week from today.

If stocks are for asshats, then bonds are for retards. Explain to me why people are buying 3 and 6mo Swiss bonds for (0.75%) to (1%) yields? The buyers of these bonds are paying the Swiss government 1% to lend them money?!?! What!

If I was running the Swiss bank, I’d issue a gagillion in debt and buy the world, enslave everyone under the banner of the CHF and invade France for fun. Are things really THAT bad or is this the work of dramatic individuals playing stupid with other peoples money?

Here at home, treasuries are absurdly cheap too. There cannot be a sustainable rally if fucktards are still bombing the bond markets with fresh cash. I stepped in and bought some TBT today, as a play against this insane flight to safety. I will limit my downside to $1.

Today’s tape is confusing. On one hand, industrials are doing quite well. On the other, a variety of names that interest me aren’t trading with vigor. Things are sort of milquetoast after the early morning push. It didn’t help that the morons who run our country slapped AT&T with an anti-trust for the T-mobile acquisition. The anti-business environment of this government is pervasive and an obstacle. They are not helping sentiment.

Aside from my TBT purchase, I am sitting this fucker out. I made back 25% on my assets over the past 3 weeks. If I was to push the envelope here and fuck up, due to Friday’s jobs report ball and chaining the market, I would not be able to reconcile with myself. It was bad enough that I missed the beginning of the August crash, part 1, by one day. This time around, I am sticking to my game plan.

Okay, since everyone is espousing caution in September, due to it being “a bad month,” I am tempted to just buy shit. Did these people forget the S&P went up 9% in September of last year? Is there anyone out there bearish on volatility? It’s plainly ridiculous how everyone gets in lockstep with one another. Nevertheless, I am opting to avoid stocks due to my own beliefs. For example: TLT and GLD are too high, people are buying Swiss debt and locking in 1% losses via negative yields, Italian yields are creeping higher and Greece is scheduled for a bailout on 9/7. That’s enough for me.

The pendulum has swung back in favor of the bulls, rightfully so. Most of the pessimism that took hold of the market in early August was purported by professional short sellers, only interested in breaking the market.

Going into September, lots of momentum stocks are worth a look. For example, NFLX has been up 8 of the last 9 Septembers. And, CRM, NKE, CME do extraordinarily well in September. So it’s not all bad, asshats.

Bottom line: I am 40% in, with a TZA call option hedge in my personal aggressive accounts. I will dive back into this tape when the conditions that I mentioned above abate. Do not forget how bad you sucked three weeks ago. It is entirely possible that this little rally will be short lived. If we are heading back into recession, remember, earnings will be cut by 30% across the board, putting the fair value of the S&P at about 900.

Remember when I warned you not to listen to people talking shit on the teevee and the internets, declaring the end of the markets are near? Well, those people are inside of an inferno funhouse right now, struggling to keep their skin in the game. However, on the other side of the spectrum are clowns shooting themselves out from carnival cannons, always bullish, often wrong.

Despite what many of you believe, especially newly minted readers, “The Fly” is not a permabull. As a matter of fact, on occasion, HORATIO CLAWHAMMER makes an appearance and he enjoys to see the world burn, if only for a short period of time. Having said that, I am not bullish here. It’s time for a breather. If you do not allow yourself to chill the fuck out, you’re gonna die.

Go bake in the sun, drink yourself retarded.

I’ve taken this respite to go to cash (60%) and hedge my personal accounts with TZA call orders, specifically the Sept 40’s. I will buy them in 10 contract increments until the market breaks. I suspect we have 200-300 points of near term downside and I have little interest in losing money on fresh longs.

Like I said before, there are plenty of stocks tempting me. I will share my buy list inside of The PPT this evening. However, I am always careful when markets tempt me, always a trap of sorts to saw my legs off and hack away at my scrotum.

No thanks!

I am taking my chips and going home. With TLT pressing higher and gold acting all apocalyptic, coupled with the fact that I’ve managed to regain all lost coin and more, I sold out of my second largest position (DECK) and now sit atop of a fucking mountain of green, 60% cash.

To a small degree, I am long TZA calls. However, it’s nothing to circle jerk over, you fucking disgusting bears.

There are many stocks tempting me to buy. As a matter of fact, I had my finger on the buy button, for this one particular name, sweating and trembling as I dealt with the emotions of risk. However, at the end of the day, “The Fly” regathered himself amidst sharp self-inflicted slaps to the face and put the buy button away (yes, I have a buy button).

For the remainder of the day, I will gawk at the Twitter stream, whilst eating popcorn and laughing a great deal, watching total jackasses make fools of themselves, over and over again. I will also be keeping a keen eye on many of you, via iBC’s spy camera network. Should you fuckers get out of line with the comments or funny looks, I’m gonna send a boxing glove through your screen and punch you in the face with it.

About 30 minutes ago (time stamped inside PPT), I opened positions in TZA. Nothing too big, just hedges and advantageous call positions against longs.

Yesterday I was bragging about my home receiving no damage, other than two downed potted palm trees. Then, about 1am, the fucking water transformed into a decepticon and turned red on me. “Wonderful”, I said to myself. As a matter of fact, I always wanted to drink blood from the faucet.

So as I sit here, dealing with the fucktards at DEP, I realized there isn’t any hope for me on this island. It’s time to go and with great brevity.

Stocks opened down and are now trucking over bears, Creep Show style. I am trading light here and will not chase, no matter what. I have about 60% of my assets long, mainly in WNR, DECK and GSVC, and intend to sell more as we go higher. I am not a trend slave and have a great mind about these sort of things. Soon enough, Greece will be back in the headlines and the fucking French will be doing French shit again.

To be blunt, I may open a small TZA call position today, providing this rally extends.

For now, I am simply enjoying this here cup of rusted water, southern hillbilly style, while at all time highs.

I just got home from that fucking rubed out bitch of a whore place in central, PA, where goats and fuckers looking like Abe Lincoln reign supreme. I had a bit of a scuffle at the local pancake house, where the service was way less than acceptable. I make it a rule, never bitch when at a restaurant, just walk the fuck out. Fuck those people running sideways (no idea what the means, but it sounds insidious).

My house survived the storm, unscathed. The only causality was two potted palm trees on the ground. I picked them up just a minute ago, while eating a granola bar.

As you can see, the market melted the fuck higher today. I love it. All of those brilliant risk managers on CNBC getting air time due to the end of the world thesis just got blown the fuck up again, for the umpteen time in so many years. Seriously, you don’t sell when fuckers go on teevee and tell you to go to 0% equities. Look, you don’t let those people manage money for you. They aren’t qualified to run an UGMA; keep them away from your brains.

My investment strategy has evolved a great deal over the years.Before I built The PPT, I used to spend an inordinate amount of time sifting through balance sheets, looking over momentum runs. Now, all of that, and more, is run by my algorithms. Because of this, I am able to trade bigger. My average position size is 10-20% of assets now, up from 5-7%. See when I am buying WNR, DECK, GSVC, VHC or IPGP, I don’t think they are going to trade higher, I know they will. My convictions will either make me richer than a mothefucker swimming in crude oil or carnival poor. Here’s the thing, I’m already rich; I just want to get richer.

For the year, I am up 17% and I am up on my WNR position, now 26% of assets. The whole “never put your eggs in one basket” argument is poor fallacy. If fallacy could be embodied into one fucking statement, that would be it. Look, if you don’t know what you are doing, you will lose. There are no short cuts around that. From time to time, we all fuck up and get lost in a sea of idiocy. The key is to bounce back and stick space swords into your enemies with great swiftness. Typically, I won’t up the size of a single position over 30%. But, I am no longer comfortable with babysitting a bunch of positions, having to run 10,000 trades per month.

I refuse to do that on principal.

Don’t follow this strategy because you will blow up. “The Fly” is on another level, zipping through neighborhoods, vaporizing crops, abducting fuckers from Idaho. During this last dip, immediately, I sold out all non-central stocks and focused on averaging down on core positions on dips. As a result, I am now up on all of them, sitting prettier than Pepe Le Pew, sans the stink, on top of a 42% cash horde.

[youtube:http://www.youtube.com/watch?v=fZW1STjbKSs 603 500]

I booked 10 and 20% gains in IPGP and VHC today, holding them less than 1 week. Additionally, I sold out of my DECK calls, but kept common. Seeing some of my larger positions reversed lower today (WNR, GSVC), I opted for risk reduction instead of cocaine gorilla rally mode.

Frankly, I’ve had my fill for August and prefer to trade light until some things are resolved. Without a doubt, I grade my performance an A+ during this recent debacle, having turned lemons into sweet lemonade.

At the time of my departure from this bullshit hotel, my cash position was 42%.

NOTE: Almost forgot, I sold out of BEE, booking an 8% loss in the process.