CHOPPED UP AND SPIT OUT

I almost don’t want to do this blog. Let me review what happened.

First headlines, in order from morning until recent.

DONETSK BEING EVACUATED OF CIVILIANS

The US has obtained intelligence suggesting that Russia’s claim of pulling back forces earlier this week was deliberate disinformation designed to make the West think they were de escalating while moving more forces toward the border – CNN

Russian President Putin says sees ‘deterioration of situation’ in eastern Ukraine:

PUTIN ORDERS EMERGENCIES MINISTER TO GO TO ROSTOV REGION ON BORDER WITH UKRAINE – IFAX

PUTIN ORDERS MINISTER TO ORGANISE SHELTER FOR RESIDENTS FROM DONBASS – RIA

RUSSIA’S RIA NEWS AGENCY REPORTS LARGE EXPLOSION IN THE CENTRE OF SEPARATIST-HELD CITY OF DONETSK IN EAST UKRAINE

DPR and LPR leadership have refused Kiev’s offer to hold an extra session of the Trilateral Contact Group: Russia, Ukraine and the OSCE – RT

Men from 18 to 55 years old banned from leaving the territories controlled by the LPR and DPR.

169,000-190,000 Russian troops in and near Ukraine compared with around 100,000 on Jan. 30, U.S. envoy to OSCE says. “This is the most significant military mobilization in Europe since the Second World War.”

SEPARATISTS IN SELF-PROCLAIMED DONETSK REPUBLIC IN EAST UKRAINE: WE INTEND TO EVACUATE APPROXIMATELY 700,000 PEOPLE TO RUSSIA.

U.S. OFFICIALS WARN OF IMMINENT RUSSIAN INVASION OF UKRAINE WITH TANKS, FIGHTER JETS, CYBER: DJ

RUSSIAN COMMUNIST PARTY LEADER ZYUGANOV: PUTIN WILL ANNOUNCE AN IMPORTANT DECISION ON DONBAS ON FEBRUARY 20

Head of LPR says “I call every male person able to carry arms, to take arms”

PUTIN CALLS FOR MILITARY RESERVE FORCES TO UNDERGO TRAINING WITH A DECREE TONIGHT – DOCUMENT RELEASED BY THE UKRANIAN MEDIA

SENIOR US ADMINISTRATION OFFICIAL: PUTIN’S DECISION TO OVERSEE NUCLEAR DRILLS ON SATURDAY IS AN ESCALATORY STEP

SIR —

Why did you buy stocks?

I entered the session in perfect form — closed em all out by 9:45 +40bps and feeling fine. Then the market started to rally. You fucking saw it. Stocks like AFRM were ramping and I got hooked first early and did ok — took small gains out into what was a much larger rally than I expected. As it kept lurking and my losses increasing due to my UVXY and SQQQ positions, I added beta and it got fucking HAMMERED when markets finally reversed lower. Instead of what would’ve been a fine day, up between maybe 30-50bps, I closed DOWN 108bps, off by 5.5% for the week. There is no excuse for this, as I broke every trading rule known to mankind. I was just looking, I was just looking, for a small window of opportune, Sir. I did not mean to do it — but I did. And now I closed the day hating the market and hating all of you, even though I don’t know you. I hate it all and I need to stop this shit because, well, it’s gonna kill me.

Back to my worldview.

Of course it makes no sense to fucking rally into WW3. I don’t even want to debate something that hasn’t happened. I don’t disagree with anyone’s ideas if they are rooted in logic. My logic is this: Russia is flooding markets with oil ahead of sanctions. Russia is gearing up for what seems to be a much larger war than just Ukraine. Why are they calling up reserves? That’s millions of men. In all, I don’t know. It’s funny — because it’s so fucking stupid and I hate this era with all of my guts.

Nevertheless, I am -1.4% YTD and I am better than that. BTW: If you think I am just full of myself I am not. I’m not very good at many things. I can’t even fix a car. But I can trade and make macro calls and I have always managed to trade my way out of messes.

I am long treasuries, volatility, short NASDAQ, long oils, coal, and for fuck’s sake SHOP and NVDA, 23% cash. I win when cannon fire erupts from the Black Sea.

Yeah have a good fucking weekend too. Hopefully we’re all alive by Tuesday.

The news from Ukraine is getting grimmer by the minutes. Separatists are refusing to negotiate with the Ukraine govt unless concrete proposals are on the table. Evacuations of as much as 700,000 people are underway. Putin will give a speech on Sunday regarding what to do with Donbas. Biden is talking at 4pm. As the moment, there is artillery fire underway in Eastern Ukraine and the situation only seems to be escalating.

At the same time, both natty and oil are stable, nothing in their prices suggests a supply shock. Is this Russia dumping crude on the market in lieu of sanctions to come? No idea. Numerous stocks from many industries are rallying off the lows and gaining momentum and it begs the question: Is the market taking this threat seriously?

Another one: Do you want to be long into the weekend with this threat looming?

The answer is probably in the middle somewhere. On one hand, any non WW3 news might stoke stocks and propel a fierce rally. On the other, the based on current trends, it seems those fucks are heading for war. Aside from Putin’s words, is there any evidence to the contrary? I believe there are as much as 190,000 Russian soldiers at or near the border.

At any rate, I’ve seen crazier shit happen and rallies occur in the depths of the worst economic news known to mankind, so it’s anyone’s guess what stocks do on a day by day basis, let alone intraday.

At 2:20pm the market is rallying. Do you think we run to the close and end green in what could potentially be catastrophic news, geopolitically?

Let’s see.

The retestoors always get their way. It’s a mental illness with them, always needing to revisit previous lows in order to “test” them. This process has always played out and the way it works is as simple as it is childish.

Choose a level to crash to and then rally. After said rally point to previous lows as a level to “test.” Upon manifesting this, either two things happen next.

1. We pass the test.
2. We fail the test.

If we pass it, we go higher.

If we fail it, we tank.

Sounds stupid?

Because it is.

We seem to be rallying OFF THE LOWS and the fact this is occurring is offering courage to those who are afraid of the retest. However, and this goes without saying, Russia aside, earnings have been fairly abysmal and the post earnings drops catastrophic. That said, maybe it’s already priced in? Let’s see.

For me, not exposing myself either way. The oil trade is not behaving right and pretty much everything is on edge, with little consistency amongst asset classes. What I mean is, yes there are small pockets of defensive stocks holding up — dividend payers. But the war trade in the traditional sense has also been dislodged and the oil markets are behaving like Russia is flooding it with crude, ahead of potential sanctions.

Let’s be perfectly clear about something. It is not an illusion that Russia has 150,000 soldiers on the Ukraine border and it’s not pretend that the soldiers in Belarus and surrounding areas are in staging formations for an attack on Ukraine. It is not “fake news” that Russia has moved more than 50% of his eastern district military units to the west for “training exercises” and it is not a fiction to see violence ebbing up in Eastern Ukraine, followed up with a coincidental appeal for independence.

It is also not imaginary that sirens are going off in Donetsk to evacuate civilians in the area.

DONETSK BEING EVACUATED OF CIVILIANS pic.twitter.com/VR8DFiJ3DR

— The_Real_Fly (@The_Real_Fly) February 18, 2022

Markets were supposed to gap up on news the US-Russia would meet for talks next week; but here we are barreling lower on all this non-imaginary news.

People are so psyoped due to years of fake news and misinformation that they do not believe things, even when they see it with their own eyes. This doesn’t mean Russia will 100% invade Ukraine and that the worst case scenario will play out. However, I think it’s worth bearing in mind that it’s possible. Don’t take people at their word, even the holier than thou Putin, whom people only like because he appears to be a straight shooters and doesn’t ascribe to lunatic levels of western wokeness. At the end of the day, he is a leader of Russia, not the world, and he is only looking out for the best interests of Russians, not retards from Nebraska angry at the Democrats, wanting Hillary Clinton in jail..

Sir —

If I am disintegrated tonight amidst Russian mushroom clouds of joy, I’d like to tell you its been an honor coming here blogging like the wind all these days. We have been through a lot and I am sooooooo happy to have quit my 7 fig money management gig in favor of this — an ad-less site sparsely visited, software platform filled with degenerates. This is the life.

As we heave and ebb towards perdition, I have given you everything I have. Whether that’s of value to you is subjective and my style isn’t for everyone, especially day trader Fly with an attention span of 10 mins. However, I would like to highlight a salient point in all this geopolitical melodrama, we are entirely, as a nation, to blame. No sense is beating ourselves up about it now as we will soon be forced into allegiance and observant of the weaklings who’ve gotten us here and placed in a position of serfdom — ancient rituals for ancient folks. The game is always the same and I apologize for being cryptic — but I like my bank and I want to keep it.

I closed the session +100bps, off from the highs but still solid. I am short banks, long volatility, long oils, gold and even 1 biotech with 38% cash reserves.

Now I must admit to you I am a bit of a pessimist. It’s something I picked up young, a defense mechanism that keeps me from being let down and disappointed. But at the same time, I can honestly tell you beneath all of the hubris and the shit-talking and inappropriate behavior, I am incredibly empathetic and must tell you I do not want to see people die. War is a horrible business and I hope I am wrong about reading the tea leaves and I hope I lose money on my positioning if it means people didn’t have to die in combat.

Alas, this is the nature of man — the evolutionary spirit that binds us to violence and forces us to resolve differences through kinetic means.

Tomorrow is Friday so of course we are already facing a steep hill to climb. The only news that could be viewed as positive tonight is an acceptance between Russia and the US to a summit, to discuss the recent events over a nice cold bowl of borscht.

I have a few very solid hunches here.

1. Russia is going to invade Ukraine.

2. Oil will spike, alongside potash.

3. Gold will finally get its safe haven status.

4. Stocks will fall.

5. The Fed will not have to tighten too much because stagflation will crush the economy.

6. Treasuries will also receive safe haven status.

It seems the Russians are intent on doing something in the Ukraine, not sure exactly how it happens but it’s likely to occur. If they do not attack Ukraine, then some premium will be removed from Natty and Oil. But that will be transitory.

The other stuff is pretty standard except for gold. Is gold, dare I say, be trying to bust loose here?

Let’s be clear. One does not compare gold to BTC. That’s stupid. Gold has been a terrific safe haven for storing value. There can be no question about it. With Russia steaming towards war and US threatening to hit them with severe sanctions, perhaps gold will somehow play a larger role in Russia? Unsure, other than the fact that Russia owns 7500 tonnes of gold.

This tape is ugly and there are few safe havens, but there has been stabilization in various defensive areas.

The rest of the tape has been chewed up and spit out — completely useless assets other than to gamble with and I can see no valid reasons to buy tech down 50% while posting numbers and sinking another 20-50% on earnings shortfalls.

I had a nice blend of VIX and other things working today and at the peak saw my gains at 1.8% and the an array of cross currents took the market all over the place, from shippers to gold to Chinese stocks and to and out of oils. It was too much and because I had gains, mostly thanks to my big position in UVXY — I decided to close it all out, save one oil stock.

With a lull in news, there is a distinct chance we can gun higher intra-day. I would rather not bet on it or against it, so instead I will choose to position for tomorrow.

Plainly, the market WANTS higher, but these news items are in the way. Let’s not even discuss the earnings reports which keep coming out bad. It does not matter. All that matters is the price action after the fact and we are buoyed all the time by tera-cap monopolies. The rhetoric out of Russia is war like, literally.

Russia 'will be forced to respond, including with military-technical measures,' if no US security guarantees: Russian foreign ministry *

— The_Real_Fly (@The_Real_Fly) February 17, 2022

It seems the market digested it and now is calling Russia’s bluff. It’s 11am and how we end at 4pm is all that matters. For now, I am out.

Last night violence broke out in Eastern Ukraine with Russia quickly saying it was Ukraine’s fault and it seems awfully coincidental with Russia soldiers teeming on the border.

UKRAINE DENIES SHELLING SEPARATISTS' POSITIONS IN EAST UKRAINE

— First Squawk (@FirstSquawk) February 17, 2022

The big news this morning is the expulsion US Ambassador from Russia and the likelihood we will now expel the Russian Ambassador. These are typically things that happen before war.

Russia expels American diplomat Bart Gorman – RIA

NASDAQ FUTS -130

— The_Real_Fly (@The_Real_Fly) February 17, 2022

Putin is also in preparation to make a speech to the Russian parliament and the rhetoric on both sides could not be more intense.

Sec Blinken is en route to the UN and then Germany. He knows plenty about Ukraine, being of Ukrainian descent and founder of private equity firm Warburg Pincus. This all has the feeling of being over our heads — a narrative is being played out here that is not what it seems and I can promise you this — our interests in Ukraine have nothing to do with democracy.

NASDAQ futs are -123, not really a big move down considering the drama.

US Defense Secretary said Russia inching troops closer to Ukraine, stocking up on blood supplies. He adds that "I was a soldier myself not that long ago. I know firsthand that you don't do these sorts of things for no reason"

VAMPIRES ON THE MOVE ***

— The_Real_Fly (@The_Real_Fly) February 17, 2022

?????Lukashenko: Americans must admit that they have worthless intelligence.

— Ukraine War Report (@UkrWarReport) February 17, 2022

It should be noted, BTC is not behaving defensively but gold is and I would think oil would jimmy higher but it’s not. I do not believe the market is pricing in the gravity of the situation, with VIX up just 7%. This all could be solved easily if NATO would just say “Ukraine cannot join NATO.” But they won’t.

Instead they say this.

Ukraine has the sovereign right to seek NATO membership, to choose its course.

We will not guarantee otherwise to Russia.

— Emily Haber (@GermanAmbUSA) February 16, 2022

Why?

I made you a chart to look at. It is GUSH, the leveraged oil stock ETF, which was my fate today. I was long so many oil stocks and ag stocks and gold stocks and military stocks to go with my hedges. I was all loaded up, General Faggot Patton in the PR serving up bombs.

To be clear, by 12pm I knew I was cursed. I knew no matter what I did it would go wrong. I could be both long and short at once and both would decline and that’s exactly what happened. Longs down, shorts down and I closed at my session lows -2.1%. Today was even worse than yesterday, a day which I opened -3.5% only to rally back to -1.6%. Today was a larger loss and a more severe loss mentally, since it seemed the market was my shadow and it cursed me at every corner and in every alleyway I looked. I am now down 1% for the year, after blazoning ahead last week +13%. I am also down more than 5% this week and the pit in my stomach is turning tight and I can feel the anxiety and the stress mount — with all of the cross- current news items and wild gyrations in the tape. It’s also worth documenting here, there was news in this oil trade before the news hit, if you know what I mean. ALL DAY the oils were getting hit and it made no sense with WTI +3%. Yet methodically and then all at once, it collapsed on some stupid fucking Iran-nuclear deal to come. No fucking idea what that means — but likely Iranian oil back on the market. Biden seems to love sucking Persian cocks.

What next?

I ended the session a true moron, long 3x UVXY and some SOXL, LABU and MOS, a plainly stupid combination which should amuse you to know ALL CLOSED DOWN for me except MOS — since I bought that 2 mins before the bell.

Today could not have been worse even if I tried. It was so bad, I am thinking about not trading for the rest of the week — because -1% for the year isn’t bad all things considered. But what is bad is my mental state, furious and frustrated at the state of things, prone to error and poor choices.

No idea what’s going on here but scam wicks are everywhere. The news can be construed as flaccid, Fed faggots concerned with asset prices suggests if markets drop they’ll suck our dicks.

FOMC "The staff judged that asset valuation pressures remained elevated. In particular, the forward price-to-earnings ratio for the S&P 500 index stood at the upper end of its historical distribution"

— zerohedge (@zerohedge) February 16, 2022

Lots of headlines, mostly useless. People just wanted to rally.

In more concerning news is the Russian-Ukraine drama.

US STATE DEPARTMENT: MORE RUSSIAN FORCES, NOT FEWER, ARE ON THE UKRAINIAN BORDER, AND THEY ARE MOVING INTO COMBAT POSITIONS, WHICH IS CONCERNING.

— The_Real_Fly (@The_Real_Fly) February 16, 2022

Which way do you go? Do you buy into the rally or run from it, scared Russia will attack tonight! LOL — fuck this shit.