RALLY OR DIE

This is it people. We either rally now or get buried alive amidst black smoke and rusted, broken down, Oldsmobiles. With my money, I am not trying to time the bottom, so I am not buying anything. My move was completed yesterday, via removing downside hedges (save MET short) and implementing a small purchase of TNA. Even though TNA is lower than yesterday’s purchase price, I am not chasing it because that would be emotional.

Remember, the market will always present great opportunities, some better than others. This particular market is very dicey and should not be played in an aggressive manner, which is why I am taking a milquetoast approach to it.

For now, I am comfortable letting my longs recover, instead of adding to them down here.

Even though it looks like I am doing a lot, I am really doing very little. I am not taking on a lot of risk. As a matter of fact, my entire market thesis is revolved around low risk. The one constant, through all of this turmoil, has been my oversized, big cocked, cash position. I’ve been punching people in the face, via timely long and short positions, but it’s all a big fucking circus act. If I was really looking to make serious coin, I’d be up like 200% by now, like my personal trading accounts.

Don’t get me wrong, I am not minimizing my 28% return. As a matter of fact, I am quite proud of it, like a Father claps for his son who just finished 4th place. See pal, I am not impressed with 28%, because I want more. It does not fulfill my craving to outstrip you, to only do so by 30%. As far as I am concerned, I am getting better, on a daily basis. I’ve always been good; but now I am getting better. Being up more than 180% over the last three years has really helped me grow and realize that I can do better.

But, there are certain limitations that I must adhere to, because it is my fiduciary responsibility. Believe you me, I am far more aggressive in my personal accounts.

At any rate, what you should be concerned with is how I am able to outperform, consistently, on an annual basis. Unfortunately, for you, there are no short cuts and I cannot teach people with monkey brains. This shit is a gift and cannot be learned. You either have it or you don’t, not so much different than a pitcher throwing 100mph fastballs. But, what I can do is help you see the bigger picture and instill some discipline to some of your trading habits. No, I am not talking about stop loss orders and pussy shit like that. I am talking about sticking to a strategy and learning how to walk before you run.

More on that later.

The market wants to bounce here, but the FXY is in its way. Should FXY drop here, we are off to the races, a good 200-300 points of upside in the short term. Longer term, we are still fucked, which is why I have a cash position of about 55%. Once again, my only short is MET, mainly because insurance companies are the dumping grounds for the financials.

“The Fly” is about to show you school girls what investing, in every sense of the word, is all about. You’re all pussies, afraid of oil spills, petrified of market volatility. As you know, volatility is Le Fly’s bitch.

Going into tomorrow, I ride unhedged, aside from my MET short, begging Mother Market to smack me in the mouth. Do not fear, little people from the internets, my powers have grown in recent years and it is no longer possible for Mother Market to smack me in the face. I can only be “Rino’d.”

I see the CDS spreads widening and I know exactly what to do and when to do it. In short, there is no man or woman alive today that is in greater control of a specific situation, as I am now. A person, such as myself, travels the nightly winds in fucking space rockets, burning down bullshit houses with my exhaust along the way.

The point of this blog post is to inform you that I have already won, even though the battle has yet to begin.

Fuck it, I booked another round of monstrous VXX gains, as well as FAZ. At the present, my only downside hedge is MET. I might be getting a “little too cute,” with my navigating skills. Nevertheless, I sense panic amidst the CNBC proletariat, best represented by the sheer FUCKERY of their hosts.

Plus anyway, The PPT is flagging OVERSOLD again and it has never been wrong, so far. Of course, all trends were made to be broken and I would not be surprised, nor disappointed, if The PPT mistimed this bottom call. Ultimately, the decision is mine and I choose to time this fucker like a space alien magician, via a large dose of TNA in my personal account.

UPDATE: Into the close, I look like a jackass, with the market vomiting on itself, AND MORE. There is always tomorrow to further dig myself into a fucking murderhole. For the year, I am up about 28%.

NOTE: I did not add to any longs, aside from a personal purchase of TNA. For now, I am comfortable with letting current longs recover, considering my cash position is north of 50%.

Bot 10,000 TNA @ $39.

Disclaimer: Don’t follow me.

I sold out of my VXX position, north of $32. At the present, my only hedge is MET. I now have more than 50% cash.

The market is not fancy on seeing the Euro choke, while the Yen flourishes. There are all sorts of ominous cross currents that puts me in a box. On one hand, I have never seen The PPT spit out an OVERSOLD reading without a decent bounce transpiring shortly thereafter. On the other, this time is different.

I know it’s very cliche of me to say so. As Mrs. Fly would say “suchness is sooo overrated.”

While I do not know what the fuck that means, nor do I bother asking, it’s worth noting that there is a certain amount of genius built into statements that mean absolutely nothing. It takes a lot of skill to say nothing.

Back to the market.

I am getting RINO’d in this fucking RINO, deservedly so. What in the world am I doing buying low end chicoms, in the midst of a fucking meltdown. I deserve the losses, AND MORE. Furthermore, I am enjoying pivot kicks to the scrotum in GS, ATPG and GLDD as well. With VXX and FAZ barely up, my losses are outstripping my gains, making Le Fly a very unhappy space alien.

With credit default swaps widening across the board and the Euro diving, be very careful about taking on aggressive long only strategies. Trust me, I am much smarter than you, certified by IQ tests and have been banking coin in this market, ever since puberty.

Top picks: Short MET, long TNA

UPDATE: I sold out of my FAZ position @ $16.80. Respecting the Hybrid.

You might think the world is ending, due to recent events. However, things are no more dire now than previous periods of sheer fuckery. However, that does not mean stocks have to go up. The very notion that stocks must go up because the world isn’t ending is fucking ludicrous. Nevertheless, there will be peaks and valleys. Following Friday’s drubbing, I would not be surprised to see some sort of bounce here, especially since The PPT is registering an OVERSOLD reading of 2.19.

As an aside,  “The Fly” just received his 3g ready iPad. I must admit, it is a very cool device. It’s like a giant iPhone and I love the iPhone.

So, in short, my bias is bearish and my expectations are to endure incredible and mind numbing daily ranges, due to the “coolness” of the western economies dealing with the eventuality of a “double dip.” Ultimately, I am in this game to buy stocks, at absurd valuations. I am not one of those burlap wearing bearshitters who pray to dead goats for the apocalypse. At some point, stocks will reach a level where the “worst case scenario” is priced in. In my estimation, we simply aren’t there yet.

Hence, I will continue to hold full positions in VXX, FAZ and will look to add to my MET short, when the opportunity presents itself.

Forget about the bull market. Just forget about it. We are officially on the “other side of the mountain”, with steep losses in all of the global growth names. Before we can say “the uptrend is intact,” there is a lot of work to be done.

So, for the sakes of keeping things simple, I am assuming the primary trend is lower, with an emphasis on deflation. Regardless of where you stand on the ever cumbersome inflation versus deflation debate, one thing is abundantly clear: the market fears “the Big D” way more than a little i. This is why treasuries are rallying and commodity stocks are being poleaxed. The worst case scenario, for the market architects, is to see their fraud unveiled, vis a vis sovereign debt defaults.

It’s very easy to paper over some bullshit mortgages. But, it’s not so easy to ignore the entire EU collapsing before our eyes. Who do you think loaned out all of the money to the PiiGS?

Answer: French and German banks, who are all intertwined with U.S. banks. The whole thing is connected.

For the foreseeable future, I suggest that you monitor the bond marker very closely. On The PPT, I update fellow gentlemen on the CDS market. And, I put together a Risk Appetite Index (RAI), which was designed for a market just like this. I want to know, before retail, where there is stress and I want to know right away. Here is a screen shot of the RAI:

(NOTE: The RAI is comprised by using a multitude of publicly traded bond funds, both domestic and foreign. I’ve compared this to the Markit CDX index and it definitely compares quite well.)

I will play this market accordingly:

Assume the primary trend is lower.

Do not press shorts, when extreme OVERSOLD conditions persist. Central Banks tend to do outlandish shit when markets crap out.

Play the upside, in a measured and fast way, even if that means going long 2-3x ETF’s for the sake of expediency.

Stay hedged, at all times, even if that means eating monstrous losses. Nothing is guaranteed, including the apocalypse.

Utilize The PPT‘s algorithms to help identify specific overbought/sold ranges.

Top picks: Short MET, AFL

A Flashback to the bear market days of 2008. Note the orange tone to the site.

[youtube:http://www.youtube.com/watch?v=RSzFIGZLNuo 616 500]

My previous works of  “chart-art” have all sold at Sotheby’s for high 7 figure bids. I expect this one to do nothing less than 8.

“Doin’ the Hugh”

The Fly, June, 2010