The Hugh Hendry: Official Party Killer, Most Preferred by Gentlemen

Let’s be clear: the market should be down over 2% right now; but it isn’t.  We are seeing rates simply disappear and bonds rallying like a motherfucker, yet zero market reaction. The yen is absolutely parabolic to the upside, while the dollar suffers, making today an extraordinary day. Perhaps the yen carry trade is over, swapped out for dollars? I am not sure about that. However, one thing I am positively certain of is this: we are not supposed to rally while bonds are screaming to the upside.

Imagine you are dancing at some party. The music is going fast paced and loud. Girls out number men 3:1 and you are having the time of your life, until 10 fucking dorks step into the small club, dressed with pocket protectors and velcro pants. They take over the DJ booth and put this shit on:

Then they starting “nerding” up the joint, officially fucking up your party, with their robot- like Hugh Hendry dances. The girls leave and you are left holding your dick in your hand.

That’s what TLT represents, right now. It is a fucking cock-goblin and needs to be stopped, else we will all be inserted into the funnel and effectively smashed to pieces by the nerdy hordes.

Howsoever, “The Fly” does not participate in your little quibbles, as he has an aerial view from above. Nevertheless, for the sake of my longs, TLT needs to sell off.

Bottom line: tech has been obliterated in recent weeks and offers a decent set-up, right here, right now. If we get a reversal to the downside in the bond market, we will have a rally, AND MORE.

Lots of news of “imminent crash” going around the net these days, due to some bullshit indicator that was concocted in 1995. That’s right gentlemen, this is not some ancient indicator, dating back to the 1937 airship disaster. The asshole who developed it, Meikka, did so in 1995.

This is all you need to know, before shooting yourself in the face with a howitzer:

The Omen was behind every market crash since 1987, but also has occurred many other times without an ensuing significant downturn. Market analysts said only about 25% of Omen appearances have led to stock-market declines that can be considered crashes.

Umm, okay. How many crashes did it predict then? I suppose it predicted 1997,1998,2000 and 2008? Big fucking deal; I predicted those declines too.

Hence, starting today, I am unveiling THE PROPHECIES OF THE FLY, MASTER INDICATOR.

As you all know, I too am predicting a rather sharp decline in September. So, when it happens, give credit where credit is due, not to some bat-shit dude from Florida, who names shit after horrific tragedies.

I dare you to even try to understand what is going on here.

Gold is no longer a reliable tell for inflation expectations. Recent dollar weakness can only be attributed to a record short squeeze event in the euro. What’s important to monitor is treasuries. Look at the TLT and tell me why it was diverging from the dollar.

Answer: anomaly.

The relationship between treasury strength and dollar strength cannot be denied. Their fates are intertwined. Just to throw it out there, sovereign CDS spreads for Venezuela, Argentina, Portugal and Ireland have been blowing the fuck out. Keep that in mind, when aimlessly allocating money for yourself or clients. The truth of the matter is: this is a period in time when you will accomplish more by doing less. Go on vacation and toss the ball around with your bratty kids. Instead of rolling into this market in a tank, pick up a knife and quietly kill people when no one is paying attention.

This is great advice.

All in all, today would have been an uneventful day for me, if it wasn’t for the parabolic move in FTK. By the way, that fucker is not done going higher. Nevertheless, I remain steadfast in my belief that we will enjoy a relief rally soon, as dictated by the articles of law, inside of the handbook of sublime harmony of mathematical precision (S.H.O.M.P). Because of these beliefs, “The Fly” has allocated his dearest resources (cash) towards achieving market excellence, via bulltarded long positions. However, I remain hedged with 25% of my book saddled in a rather delightful and wondrous VXX position, with an additional 25% in cash.

In short, tread, but do so very carefully.

I bought all three stocks in the title above.

Disclaimer: Don’t do what I do. I am much smarter and richer than you.

I don’t give a shit what happens today, for the stock Gods have blessed me with winning lotto tickets. Much to my delight, it appears the transvestites at FTK got their acts together, by way of conducting business. The company, believe it or not, is in a hyper growth phase, with 32% yoy revenue growth and 48% growth in their booming chemicals division. While it’s true, the company is still losing money. However, they are well on their way towards profitability. What does this all mean for Senor Tropicana?

It means if you are short the name, “Fuck you, you’re dead.” That’s all.

With more than 20% of the float sold short, I stand to make a lot of coin, once the squeezing is done. To be clear, I am still down on the name. But I have been waiting for this moment for over two years and believe you me, I will be eating large quantities of cake, very, very soon.

As for this tape:

We are not in a LONG ONLY MARKET. With that being said, I am keeping my VXX, due to my personal hellbent mission to see this market lower in September. But I am adding to longs here in a significant way, now representing over 50% of assets. My best advice to you is this: prepare for a bounce. Make money on that bounce and then get ready to defend yourself from zombies trying to eat your fucking brains—sometime in early September.

Top picks: BAC, GMCR, TNA

From The PPT

There are a few things in life “The Fly” does not do. One of them is defying the laws of The PPT. Responding to the OVERSOLD scores posted yesterday and today, I opened up my war-chest and started buying stocks—only for short term trades. Let it be noted, I still think the market’s face will get peeled off in September.

At any rate, I started positions in the following:

TNA, ANF, BUCY, GMCR and BAC.

My goal was to select a group of stocks that “embody” the market. I believe the above names accomplishes such an arduous task. Let it be noted and also known, it is very low class of you to refuse my pearls of wisdom, for I am light years ahead of you, with regards to spatial intelligence. What you need to understand, ever so succinctly, is that “The Fly” is your superior being. If you and I were living in the 1800’s, in the same neighborhood, you would be my butler.

Finally, I did not sell any of my VXX. I am sort of leaving it in place, as an insurance policy. My cost basis is high $24’s. Essentially, I expect to be wrong with today’s buys. Because of this, I made partial buys, with full intent to add to my newly formed positions tomorrow and again on Monday. It is a rare event to see “The Fly” on the wrong side of the trade. Do not bet that it will happen now.

NOTE: As you know, I sold out of my SCO position, booking egregious gains in the process.

I booked the profit, selling my entire position, north of $14.80

The market is trying hard to rebound, but can’t quite get its footing.

I mean, we have decent action in a number of sectors. In basic materials, CLF, CENX, SCCO are looking good, as well as a number of other metal stocks. In the banks, NTRS and C are showing strength, while COF and BLK lag. Ag is on fucking fire, due to the sudden “scorched Earth” policy of Mother Nature on Russia. Stocks like CAGC, MOS, IP, AGU and POT are off to the races.

Gold and silver stocks are green across the board, as GLD presses higher.

Retail names are okay, with leadership in GES and PLCE. However, SHLD, KSS and SKS are very weak.

The big outlier and albatross for today’s tape is tech, thanks to CSCO. Their tentacles spread wide and are inflicting damage to the share prices of NETL, CAVM, JNPR, CIEN, BRCM and JBL. If not for the “CSCO problem,” this market would be off to the races right now.

If forced to guess, I’d say we get a decent bounce tomorrow. Prepare accordingly.

NOTE: I will likely be buying some names shortly.