Fly Buy: VXX

Continuing my theme of betting against the market by not really betting against it, I am allocating 10% of my assets in [[VXX]] , under $24.40.

Disclaimer: If you buy [[VXX]] because of this post, the next time you visit the zoo, an ostrich will kick you in the face. And, you may lose money.

So sorry to beat this dog to death, but the decline in [[SGG]] is plaguing me, like [[UUP]] terrorizes Jakegint in his dreams.

Folks, I fear a “blue blazer” event is in the balance. I know you have been making lots of coin, long stupidity. However, sometime soon, men with brains will reinsert your empty vessels back into the matrix—by way of putting the fear of God into your hearts.

Sugar is going down because “shit ain’t sweet no mo’.” And, on top of that, The PPT has seen the Overall Hybrid score top 3, for an unprecedented 5 times, over the last 3 weeks. These levels cannot be sustained, without a pullback. I put my word on it.

So, with my cash, I’m going long volatility, via [[VXX]] .

It’s time.

NOTE: Shout out to my boy Merlin, for calling the top yesterday.

As I obsess over the Important Matter of Sugar, I came across this gem, which boldly states that “reducing the degree of fluctuation in blood glucose may offer a possible means for the treatment and intervention of some impulsive disorders, anorexia, drug addiction, and gambling addiction.”

Furthermore, they suggest that (normal) people who drink real soda, as opposed to that shit with cancer in it, tend to think longer term. The people drinking the cancer soda get all bent out of shape and demand less money RIGHT NOW!, while regular fatties prefer more of it later.

Fascinating stuff. Without a doubt, the sugar hunt continues.

The results indicate that when we have more energy available (that is, higher levels of blood glucose), we tend to be more future-oriented. The authors note that “the future is more abstract than the present and thus may require more energy to process. Blood glucose as brain fuel would strengthen effortful cognitive processing for future events.” Conversely, having low energy (or low blood glucose levels) may make an individual focus more on the present. The finding that a diet soda drink increased the degree of future discounting suggests that artificial sweeteners may alarm the body of imminent caloric crisis, leading to increased impulsivity.

I dare to say: the credit crisis, and all of the bad decisions that were made leading up to it, were a direct result of the increase of substitute sugars! Prove me wrong.

CAVEAT: Sugar intake may cause you to think “longer term” because it makes you mentally ill. ROFL. Damned if you do, damned if you don’t.

“sugar consumption triggers a cascade of chemical reactions in the body that promote chronic inflammation. In the long term, inflammation disrupts the normal functioning of the immune system and wreaks havoc on your brain”

BREAKING NEWS UPDATE: Cocoa is also at a 7 month low, [[NIB]] . WTF! Is this a The Hershey Company [[HSY]] , Tootsie Roll Industries, Inc. [[TR]] conspiracy? Great, now I have to obsess on cocoa too. I’ll be up all night.

Think again.

My mind works in mysterious ways. All day, I’ve been brainstorming/obsessing over the sudden and precipitous drop in the price of sugar and how it relates to the market. Traditionally, confectioners and beverage companies drive the price of sugar. More recently, due to “green initiatives,” sugar based ethanol has contributed to the price as well.

Sugar is now at 7 month lows, as shown by [[SGG]] . The drop is being attributed to a strong Brazilian crop, coupled with stiff reluctance from confectioners, The Hershey Company [[HSY]] , Tootsie Roll Industries, Inc. [[TR]] etc. and beverage companies, PepsiCo, Inc. [[PEP]] , The Coca-Cola Company [[KO]] , Hansen Natural Corporation [[HANS]] , Dr Pepper Snapple Group Inc. [[DPS]] refusing to pay up for the sweet shit. My question to you is why?

It is a little known fact that national growth and strength coincide very nicely with beverage consumption. Has everyone, suddenly, decided to guzzle coffee, Green Mountain Coffee Roasters Inc. [[GMCR]] , instead?

The Important Matter of the Price of Sugar mystery is ongoing, by yours truly. More later.

Top picks: [[TLT]] , [[TAN]]

This market is driving me fucking crazy. So you know, I have millions of dollars in cash, ready to be deployed. I am over here thinking of different strategies, which include long/short pairs. Essentially, there are some specific names that are way over valued and several NON-LEVERED ETF’s worth a looksy, like [[SEF]] and [[RWM]] . However, when scouring for short ideas, I am reminded of the the HORRIFIC— and seldom discussed losses— I incurred, back in the old dot com days.

Prior to the bubble bursting, I suspected some names, like Extreme Networks, Inc [[EXTR]], were fucking retarded and needed a good lashing. I remember shorting that bastard every day for a month. It went up in my face, nonetheless. It not only went up, it fucking “space rocketed” into outer space, leaving me dumbfounded amidst large capital losses. The good news: the short position was merely a starter position, less than 5% of assets. So, in the big scheme of things, it had little effect on my assets overall. However, the percentage loss was ABSURD. I don’t remember exactly how bad it was, since I hypnotized myself to forget such wretched experiences. But, if my notes are correct, the stock did something like $50 to $200 in a month. ROFL @ the idiot shorting that! I covered near the top of the range, just before the stock collapsed and settled into a permanent burlap lined coffin.

This market has a similar feel to early 2000, when everyone thought the market should go down, but it just kept charging higher—until it stopped. When it stopped, as you well know, no prisoners were taken. We all received the ominous “black flag.”

In summary, I’ve managed to avoid fucking myself by choosing [[TLT]] over going short. That’s a plus. Despite missing out on big gains, I have no regrets. We all have our investment style that is unique to how we think. Sometimes it takes time for a thesis to pan out, other times it happens immediately. As good as the market feels now, remember the pain you felt when your local bank was forced to suck the tit of President Bush, via bailout. By no means are we out of the water, just yet. As a matter of fact, we are building the world’s largest and most successful ponzi scheme, similar to tupperware sales ladies, only MUCH bigger and far more sinister. Also, please remember, you are trading a bullshit 5 figure account at Zeeco.

Trade accordingly.

UPDATE: I sold out of Visa Inc. [[V]] , north of $90.80

Poof! Your bullshit low volume rally is over.

-Merlin

I bought Citigroup Inc. [[C]] back in the old days of 2009, when the stock was on the verge of a “burlap coffin.” Clients wanted it, due to its illustrious name and “idiotic share price.” Through all of the ups and downs, I’ve held the stock, mainly because it is my hail Mary play. Most people who are bullish on the name think it’s worth more than $5, minimum. All I know, the biggest turds in the history of the United States have gone up 10 fold, like Ford Motor Company [[F]] , yet Citigroup Inc. [[C]] is stuck on the side of the road begging for bacon sandwiches.

All of these things, AND MORE, lead back to the road of Flotek Industries, Inc. [[FTK]] , believe it or not. Most of you ponder “why the fuck is he still in FTK, why, why ,why?” Well, I am in denial, folks. It’s just one of those things that I cannot accept, sort of like a gay son or cheating wife. I bought Flotek Industries, Inc. [[FTK]] at the bottom of the market in 2009, based upon my belief that commodity prices were OVERSOLD and credit conditions were due for a sharp recovery. All of those things happened, yet FTK is still sucking dick.

It’s funny to see volatility drown here, via [[VXX]] . As you know, I’ve been tempted to go long for more than two weeks, but have done nothing. During the 2+ weeks of my cash/treasury position, the best trade that I made was doing nothing. Rationale behind such madness: Well, I easily could have taken down a few short positions, as the market rolled past me. But, this time around, I didn’t let my ego fuck me sideways, via making wrong-headed trades. At the end of the day, my holdings have increased by another 3.5% over the last 2 weeks. Granted, that’s not so great, considering the market is handing out free 10% winners daily. But I am still kicking old guys down sinkholes, via outperforming all indices (+13.5%)—so far.

Nevertheless, I remain steadfast in my belief that we are considerably OVERBOUGHT here. Right now, I will stick with my defensive allocation of 55% cash, 15% treasuries, 30% equities.

Courtesy of The PPT, today’s OVERBOUGHT/OVERSOLD list:

OVERBOUGHT (HYBRID):

count: 103
IRDM
UXG
CPIX
STWD
IVR
FOLD
FRPT
RSOL
ANTP
BSRR
WSH
WIN
VNO
UNM
UEPS
TSM
TSCM
TRP
TRAK
THG
TGX
STXS
SONC
SMI
SHFL
SATS
RWT
RGS
RGR
RGC
RCRC
PZN
PCS
PACR
OSIP
OPLK
OFI
NSR
NSIT
NLY
NLS
MTH
MSB
MRCY
MOV
MHLD
MFE
MERC
MCCC
LFC
LEG
LEAP
LCC
LAB
KG
KFY
JEF
IPSU
INTC
INCY
IMAX
IHS
IDCC
HSY
HMN
GSL
GROW
GAIA
FSC
FMD
FISV
FGXI
FALC
EVR
EMC
ELY
DRRX
DPZ
DPS
DFG
DEI
DCO
CTCT
CRUS
CRI
CPHD
CNQR
CMC
CHRD
CEDC
CDI
BRCM
BEE
BCE
AXS
ARRS
AGYS
ACIW
ACAT
ABR
ABG
AB
AAI

OVERBOUGHT (TECH):
count: 97
IRDM
UXG
DRN
IVR
RSOL
RST
ANTP
BSRR
MJN
NTDOY
VBR
WSH
WIN
VVI
VGR
UNM
TSCM
TRP
TLK
THG
TGX
TEO
SVU
SUP
STXS
STV
STMP
SNV
SNHY
SMI
SIGI
SID
RGS
RGC
PRGS
POOL
PLUG
PACR
OFI
NZ
NUAN
NLS
NDAQ
MTH
MSB
MERC
MCCC
LSTR
LEAP
LCC
LAB
KFY
KEX
ISCA
INCY
IBNK
HSY
HMN
GWR
GSL
GMT
GES
GBNK
GAIA
FSC
FORR
FISV
EXBD
EMC
EDR
EBAY
DRC
DPS
DOX
DHX
DHI
DCO
DAC
CRUS
CPHD
CNQR
CMC
CHRD
CDI
BMI
BK
BEE
BCSI
BCE
AXS
ALSK
ALKS
AGYS
ADP
ACN
ACAT
ABR

OVERSOLD (HYBRID):

count: 2
THLD
PTNR

OVERSOLD (TECH):
count: 4
NIB
SGG
IAU
GLD

Why give you fuckers insight? Hell, this market is easy. All you have to do is wake up and buy Research In Motion Limited (USA) [[RIMM]] and Apple Inc. [[AAPL]] , then collect a daily fortune. An “s-cok” for all, with a side order of several 8 balls, 20 cups of coffee and a personal urinal assistant, who actually multi-tasks as a white shoe financial adviser. The next thing you know, all of you ham and eggers will be flying in your own spaceships.

I have 3 stocks that are buried in losses: U.S. Global Investors, Inc. [[GROW]] , SandRidge Energy Inc. [[SD]] and Flotek Industries, Inc. [[FTK]] . If I exercised the slightest of risk management, I would have sold out of these stocks a long time ago. However, because of my big gains, coupled with said names conveniently pigeon holing into a nice asset allocation model, I held. During the life of these positions, I bought and sold Green Mountain Coffee Roasters Inc. [[GMCR]] , Chipotle Mexican Grill, Inc. [[CMG]] , Cummins Inc. [[CMI]] , United States Steel Corporation [[X]] , and a plethora of big winners—much to my chagrin.

For the love of broken baseballs, I’m not even trying to make a point. There is no lesson to be learned, from every God damned mistake. You fucking dicks. Investing is not so much a science, more of an art—so watch me paint.

At this stage in the rally, we are so OVERBOUGHT it’s funny. I don’t even need to comment any longer. I will not buy, no matter what. As a matter of fact, if the market lifts off 5,000 points from here, over the next 12 months, I will miss out on the entirety of the rally. I think it’s hilarious, in a very serious way, that some of you are all excited and shit, above 10,500, but were shitting in caves at 9,000.

Bottom line: I still have skin in the game and much of my current roster is filled with losers. If I could somehow escape them, with minimal losses or even a profit, I will be as happy as a pig in CNBC. But as far as new money is concerned, I have no interest in this market.

Reminder: Sign up for Scott’s newsletter (free trial), else I will track you down like the dogs that you are and kick you.

I left a brimming cup of coffee on my windowsill and it got cold, after just 5 minutes. You know, George Bush and his diabolical weather weapons are getting annoying. Case in point: how much snow did we get this winter?

Answer: Exactly.

To make matters worse, now, he’s globetrotting the world, fucking up fault lines and shit, causing earthquakes. You know another thing Bush did?

Answer: He created the stock market rally, off the March of 2009 lows—despite the fact that Obama was President. Bush still did it. As a matter of fact, today is the 1 year anniversary of the market bottom, which makes today Bush’s birthday, in a very stupid sense, if you know what I mean. No, scratch that. Today is Bush’s anniversary for saving the world from total financial collapse.

However, the one thing that has me stumped, if Bush saved us from financial collapse, why the fuck is he precipitating all of those earthquakes and melting the fucking ice caps? I mean, isn’t that a bit of a “dual mandate”? Maybe he has personality issues, not so much different than Dr. Jekyl and Mr. Hyde.

As for the market:

This low volatility, steady grind higher, will end VERY SOON, leaving most of you goat fuckers in a pickle jar. Once again, boring ol’ Fly wants to be long [[TLT]] , into the pending correction, since Bernanke wants your money—and he wants it now.