Well Played

Much to my surprise, the bulls kept it together today, despite all of the ingredients present for a most horrendous decline. Everything resets tomorrow, except for the inevitable pullback in Asia tonight, led by the Samurais in Japan, thanks to strong Yen. CAT and XOM kept the ball rolling today, effectively knee-capping all beartarded attempts to bring the big index lower. Nevertheless, it looks like I will close with marginal gains in both VXX and EDZ, for the day.

One this is clear to me: you cannot have the Yen and Treasuries up here and expect the market to rally. Life doesn’t work like that.

While it’s true, the CDS market has improved a great deal over the last two weeks. It’s also true that the CDS market is now littered with fucking morons who think they are going to hit “Bear Sterns lotto” or some shit. I do not think the market will crash, nor will we see grandiose failures. I’m just looking for a pullback.

Bottom line: If we are setting up for a 10% move in the market, what do you think is more likely, 9,000 or 12,000 Dow?

The time for games ended yesterday. With this post, I hereby put you on notice: the “black flag of absolute death” (not that half measure shit) is coming your way. Run now, else, ummm, receive the black flag.

That is all.

A corrupt judge just ruled that it is illegal to uphold the law in Arizona. The O’bama administration has no idea what it just started. The majority of people view illegal Mexicans worse than Al Qaeda, mainly because most Americans have the IQ of a llama. However, it goes without saying, if you are going to run a fucking country, it needs laws. Without the law being enforced, the law in an ass. Going with that train of thought, this country, as a whole, sans states who want to uphold the immigration laws, is an ass.

In my opinion, this should have little to no bearing on the markets. If anything, it increases the chances of big GOP wins this fall, which will undoubtedly buoy the market, if only for a couple days.

Nevertheless, I am disgusted by the policies and inaction of the Federal government. There is no one there to represent the will of the people. That includes BOTH SIDES OF THE AISLE. I know some of you will point to one or two “good guys”; but they have no power. The power in consolidated into one train of thought: milk the people.

As for the markets: very boring. It’s never a good idea to short a boring market. I want you to understand, despite my gloomy forecast, I still hold a plethora of longs and even more cash. I have built up a colossal cash position (40%), so that I might endeavor to buy your margin liquidations, yet again. As absolute as my convictions may be regarding this market coming down, it is NEVER easy riding out tops, or bottoms for that matter. I loathe the process.

Keep your beady little eyes on the Yen, for it is your master.

You’re over there, all comfortable and shit, watching some delightful movie in 3-D, while picking at a box of raisins. They taste quite delectable. As a matter of fact, they taste so fucking good, you offer one heavenly raisin to your wife, saying “honey, OMG, you must try one of these, they are sooooo good.” Much to her horror, your fucking raisin has antennas and its legs are scurrying about trying to break loose of your fucking grip!

You’ve been eating roaches the whole time, you sick, perverted, son of a bitch!

The same shit applies to this market. All of the earnings and growth numbers being reported: fucking lies.

I read the comments section here and see many of you make excuses to lose money. You bitch “awww man Fly, just yesterday you liked stocks and now you don’t. How can I follow you when I have to work and do not have time to do trades during the day?”

Oh really? You dumb son of a bitches don’t have lunch breaks? You mean to tell me your life savings or investment nest egg is not priority? If so, pal, you’ve come to the wrong site. Plus anyway, I’ve been telling you fuckers I would start to sell off my longs, as The PPT approached OVERBOUGHT. I told you I’d add to my EDZ/VXX positions. Furthermore, I told you when the market reverses, it will not be a one day event.

Quit making excuses for mediocrity.

In closing, the market is one big roach.

Having said that, I sold out of my BAC position and added to my EDZ.

Today’s tell: FXY

Indeud.

Keep in mind, 41 states have budget shortfalls. Due to the poor economy, all have been forced to cut spending and raise taxes, some more than others. Here is the rub: more than 50% of states have already assumed that the Federal government will extend their assistance programs into 2011 and have accounted for it in their spasticly retarded 2011 budgets. ROFL. However, with Tea Party people going bananas and public opinion vehemently against bailouts, it will be a difficult, but entirely necessary, bill to extend.

The market will view this as a possible negative, as 2011 approaches, especially if the GOP picks up seats. I know that is like “1,000 years from now,” but remember the answers, for you will never know the questions.

Look, I am 100% convinced this market is set to move 10% inside of 3 short months. You need to keep your eyes on the TLT, GLD, FXY, USO, UNG and all of the basic resource stocks, daily, to get a feel.

The only reason why this market is not down 150 today is because of strength in the banks. The European “stress tests” were a great success, in that the share prices are ripping higher. Look at BCS, UBS and RBS for proof. It really is a fucking joke to report the stress tests were a success. I mean, who the fuck are they kidding? It’s not like they were going to say “OMG, holy shit steaks, our banks are Le done. Bye Bye.” Fuck those Euro losers.

Personally, I prefer the American loser, for he is fatter and much more jaded.

Get ready to lose your teeth. The market is into punching out punks (no idea where that came from. 10,000 apologies).

Sometimes people get caught up with the concept of hoarding money. They watch every single tick of the stock market, as if their pathetic lives depended on it. I can not stress this enough: GO EAT A FUCKING SANDWICH. You can’t just sit there, like some sort of pussy, waiting to hit the stock market lotto. It doesn’t work like that. Most trades are hard. Sometimes you get a gimme. But those gimme trades are the ones that lure suckers into the fold for future deballing.

Wall Street is a deballing factory, where men are split two for one.

Personally, I’ve made my bet now. It’s time for “The Fly” to go for a stroll. Or, I might take the kids to the park, for a little football toss. See folks, when investing, it’s important to remember how retarded and utterly stupid fund managers are. Don’t even get me started on retail. But, the point is: people have very, very small brains, like dogs, only worse. They lick shit from the asscrack of CNBC and call it their own. They walk around, dressed like Pat Riley, but behave like Ned. My whole existence in life is to destroy these people. Don’t you get it? I was built to hone in on and break apart these clown from within.

I shall do so before I am dead, AND MORE.

Back to sane thinking:

Bet against me and lose your fucking house.

It’s about the metals, ladies and gentlemen. Everything you know to be true or a lie is made in China. Life itself is manufactured at FOXCONN, under the strictest supervision of a Mr. Lee, who will gladly throw you off a building and make it look like an “unfortunate suicide.”

Having said that, it’s important to notice the basic resource stocks having their fucking Jimmy’s knocked off this morning. I realize the market is manipulated and the Dow has not responded yet. But PCX, X, AKS, STLD, CLF, amongst others, are suffering under fierce lightening bolts to the face. As you know, The PPT has been over 3.00 for three consecutive days now. This is an extremely rare occurrence. As mentioned inside The PPT yesterday, 2 out of the last 3 times this has occurred, the market went significantly higher. The one time it went lower; it fucking dumped out hard. Without a doubt, we are setting up for a rather large directional move and it is very hard to argue for more upside, here at 10,500.

It’s also important to note, several months ago we made some minor changes to the algorithm, effectively making it harder for the system to be tagged “OVERBOUGHT,” at least on a macro level. Moreover, despite the system closing above 3 for three consecutive days, it never went full “OVERBOUGHT,” since 75% of large cap stocks were not rated “buy” or higher. Perhaps I am being too picky.

At any rate, in an effort to position for a pullback, I sold out of GDP, CIEN, MLNX (the rest of it), EMN and added to both EDZ and VXX.

Now, I am fully aware of the risks associated with 3x ETF’s. If you are unfamiliar, please look at a long term chart of FAZ and understand these are NOT long term investment vehicles. I suspect there will be a tug of war, between the bulls and the bears, before the direction is set in stone. Either way, rest assured, Le Fly will come out victorious.

Be afraid. Be very afraid.

Let it be said and let it be known, it is not becoming of you, or I for that matter, to rush art. While we zestfully navigate the upper boundaries of the trading range, particularly in The PPT, it’s important to understand how unreasonable people are. Just because we are OVERBOUGHT, does not mean we will trade lower immediately. As a point in fact, much to my surprise, The PPT is NOT flagging OVERBOUGHT signals for any of the upside ETF’s or the market as a whole. Stubbornly, the percentage of large cap stocks rated “buy” or higher remains under 75%, which effectively leaves room for more upside expansion.

Nevertheless, I have taken it upon myself to do a little pruning up here, in order to raise cash so that I may average down on my VXX position, whenever I deem suitable. On a personal level, I bought a little GDP, in order to participate in the natural gas “squeeze game.” Trust me, it’s coming.

Bottom line: Claim victory via booking gains. If you are interested in playing the reversal to the downside, do so in small increments. Heroes get shot first.

UPDATE: I started an EDZ position into the bell.