iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,376 Blog Posts

Extremely Oversold Danger Zone

We’re at a point in this tape your ego will start talking to you, letting you know how smart you really are over others and this will lead you to festoon your accounts with losses largess.

It’s true — we are extremely oversold and under these conditions we can rally very hard off the lows, which makes it hard to short. On the other hand, something might break causing a domino effect and washout of stocks, making your dip buying excursions painful.

The answer to this tape is obvious: trade small. I promise you there will be better tapes. Even if you miss some massive melt up; I promise you there will be low hanging fruits.

In order to catch a mean reversion rally you must be willing to put yourselves out there to withstand the fires. This means taking losses while waiting for things to turn.

An alternative position is to wait for a fat pitch. Your most important job is preservation of capital. So many of you digusting fools throw that concept out the window as soon as you begin believing God himself is talking to you, offering up stock tips.

Many of you right now are reading this saying “this fucker doesn’t know what he’s talking about — stocks are soooo cheap right now or OMG stocks are going to crash this time for good — what a fool.”

But you can all suck a bag of dicks, knowing that The Fly doesn’t draw down, rarely gets fooled, and is generally right about these things way more often than not.

My advice to you now is to reduce your footprint in the market or if long to hedge your longs until this squall passes. This is most likely the last big sell off for the year — but that doesn’t mean we’re about to enter a bull tape either. Shit is fucked up and stocks are merely reflecting that.

Be quick and try not to believe in your own bullshit for more than a few hours.

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Fall of 2023: Worst Market Performance Since 2008

October is often regaled as an ominous time for stocks, when in fact on the whole it’s a net net winning month. The few true market collapses have occurred in the month of October, harkening back to the glory days of 1929 and 1987 when all appeared to be lost forever.

In recent history, 2008 stands out as this generation’s truest financial collapse. Sure the dot com bubble was bad — but it didn’t possess the same panache as 2008, featuring banks dancing for dollars in an attempt to stave off permanent collapse.

And her we are today, staring down the barrel of the $IWM down 6% for October following a 6% drubbing in September; noteworthy because it’s the worst month of month Autumn decline for small caps since 2008. The only other year that enters the conversation is 2018, accompanied by losses of 2.6% in September, -11% in October, +1.7% reprieve in November and topped off with extreme Xmas collapse of -12.3% for December.

Here is the raw data, courtesy of Stocklabs.

September

October

November

December

Analysis: I place seasonal trends in high regards. Humans are creatures of habit with emotions that can be measured and often used to predict the future. When fear is at its apex, time to buy and vice versa. One thing is abundantly clear: this sell off isn’t ordinary. There is a unique character to it and we shouldn’t dismiss it as some random ship passing in the night. Based upon the previous two occurrences of Autumn collapses in stocks, we have more downside left in this tape.

Since we are not in a fundamentally driven decline like we were in 2008, I’d opt to use 2018 as a guide of what to expect. Lower prices for October, followed by reprieve in November — capped off with extreme cataclysm in December — starring Krampus and his evil habits.

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You Could Have Sold a Long Time Ago

Your bets were driven south today, as markets bargained with the idea of a once beautiful nation rotting away, withering into the easterly winds. As time carries on, all of the successes achieved by previous generations are slowly but surely cracked asunder — deficits to the moon, national debt heaving over and unable to sustain any semblance of normalcy.

Ladies and Gentlemen, we are in the opening salvo of societal collapse. You can see it everywhere, every single facet of Americana — from our borders to our cities to our schools and even our military. To say that it’s over is a gross understatement. It has been over for some time now and we’re simply running out the clock now. But as we sink lower into the crevasse of ruin, we lash out with anger and malice, exaggerate our might through words and gestures — attempting to conceal the hallow interior that we all know exists due to negligence and grotesque corruption.

All of the problems in America could be fixed, if only we had patriots who worked for the glory of America led her. Sadly, this isn’t the case now and will not be the case tomorrow — as we are prisoners to foreign interests, foreign wars — captive to internal deterioration thanks to the weakest leadership in American history.

As for markets — we cascaded into the close amidst aggressive selling — older hedge fund managers drinking themselves into oblivion — tipping over and out of windows — free falling directly to hell. I closed +121bps for the week, now presiding over gains of 1.5% for October. I am positioned into Monday accordingly: short the NASDAQ, short bonds, long volatility, long gold, long oil, and long Bitcoin — which has once again proven to be incredibly defensive in a market wrought with perils.

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FLUSH OUT AHEAD

Here is the gameplan.

The hedge funds must feel the pain in order to truly collapse the market. In order to do this, we must hit them where it hurts — where they’ve been safe.

3 Month Returns for FAANGT stocks

$META +2%
$AAPL -10.4%
$AMZN -3.5%
$NFLX -8.7%
$GOOGL +13.6%
$TSLA -19.5%

The answer is simple: we must destroy The Facebook and Google corporations — aka Meta/Alphabet. Both companies are run by malicious government bootlicking tyrants who use their wealth and power to hurt Americans. As such, the favor should be returned to them, in kind.

With the war in Israel escalating, I don’t see how markets can rally today. We are deeply oversold and it’s all very grim out there — but let’s be honest — this is nothing. The $IWM is off by 5% for October and the NASDAQ is flat. We’re going to need a much redder October if we are to bottom heading into the holidays.

The plan for the balance of the day is as follows: trade small and try to avoid being tricked and fooled by the money changers. Position in defense stocks, gold, Bitcoin, short semis, short small caps, short NASDAQ, short bonds — buy oils. I will keep 30% cash for eventualities and execute most of these trades after 2pm today.

Presently, I am in $LMT at 10%, $JNUG 5%, and $SOXS at 5%, the rest cash — +50bps.

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THRIVING IN THE RUINS OF THE BULL

All of my friends in the business are clinging onto their longs — hoping and praying peace breaks out and markets are relieved from the tragedy unfolding before you. Over the past 24hrs, American troops were hit in Syria, Iraq and off the coast of Yemen. Due to mismanagement in artillery procurement, the US had to divert munitions away from Ukraine in favor of Israel — as they set upon a long arduous battle that will encompass all fronts, placing the two American strike groups in danger of reciprocity from the axis.

It’s important that you understand the backdrop of this market to be able to peer into the future. Over the past several days, I feel as if my psychic abilities have returned to me — enabling me to profit from the doom with outsized gains. I methodically traded with acute precision, both long and short — closing +115bps — at motherfucking session highs — as it is my right to do so. Long ago, I embraced the fires and saw to it to become immune to them. As I aged and learned more about the world, I became an advocate for them — yearning for a great reset to unseat the evil that presides over us.

A great cataclysm has cast itself over this market — bulls are both forlorn and cockless — reduced to catamite status hoping for reprieve.

Listen to me now, volatility closed upwards of 20, oil higher by more than 2%, and the US 10yr near 5%. The armies of the bear are in control of the tape now, laying siege to the transgendered bulls who hide behind their pickets afraid to look outside into the foggy hordes of retribution.

My prediction for Friday is for sharply lower prices, accompanied by, but not limited to a spike in volatility. I am long oil, gold, Lockheed Martin, short bonds, short small caps and most adeptly along the ride for the upwards trending volatility index — based upon my theory that put buying, very soon, will become all of the rage on Wall Street.

Good day.

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FED’S POWELL RUINS RALLY — RATES SOAR

The NASDAQ had been +100 when the Fed starting to talk and after he opened his mouth — a bolt of lightening struck down on investors, all but evaporating any semblance of a rally.

If you don’t use it — we offer a free newswire powered by X.

In summary, Powell doesn’t know how we’ll grow with such high rates. At the same time, he doesn’t think we’re too tight. Those two statements might appear to contradict one another; but in clown-world they’re apropos.

I took the plunge lower to close out my shorts, victorious once again vs the semiconductor cabal.

The NASDAQ is -50, washing 150 points in little more than 10 mins of trade. This is easy stuff.

I have but one position left and it’s $TMV — based on the rate environ. We are now at 4.99% on the 10yr. I feel it is all but assured we sprint past 5% and soon.

On the long side, into the final hours, I might dabble in some oils.

+51bps midway into the storm.

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Tricky Morning Tape

I was awoken to the sounds of triumph. My concoction of longs and shorts producing a symphony of beautiful music. For whatever reason, markets bid up large cap tech like $NFLX $AMZN and $CRM, whilst ravaging small caps.

Select oils traded up as oil itself traded down and volatility compressed lower. I had been up more in the pre market but settled my affairs +55bps at around 10am, just before markets truly took a sharp turn higher, once again tricking me into some longs. It soon COLLAPSED on me like cheap lawn chairs, at which point I churned myself and now only have shorts and barely any gains, +15bps.

This is a somber story so far, about a man attempting to preside over the fall of western finance as we know it. The allure of stocks and their proclivity to both trick and fool — keep me on edge. You never can tell if the Fed will come out and Jimmy the NASDAQ higher by 300, foiling all plans to crush the markets.

Being a bear is a very tumultuous and contentious job — but I feel that I’m up for the task.

Breadth is at a paltry 40%, but not terrible. SAAS and FANG stocks are strong, while biotech and everything else weak. My shorts are $TZA and $SOXS — because weakness is found in the small caps today and fuck the semiconductors.

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Everything Lies in the Balance Right Now

The war in Israel is on the verge of spilling into neighboring Lebanon, at which point one could presume Iran will get involved in a tangible way. Under this pressure, it’s hard to see how the governments of Egypt and Jordan can remain friendly to Israel, in spite of how many dollars we send their way. Israeli relations with its neighbors have been set back 40 years in recent weeks — and in that regard — the attacks by Hamas was successful.

We now find ourselves, as Americans, on the verge of committing to a fully industrialized war in Ukraine against Russia and a new one against Iran. Our capacity to undertake both wars is possible — but not under present conditions — which is why I believe the government will adopt a war time economy of production and perhaps the first peace time military draft since world war 2.

People who think these are crazy ideas are not looking at the dwindling stockpiles and lack of men in the military, a vast emptiness of capabilities produced by decades of supremacy. The world is changing now and the great industrial might we once enjoyed has been given to China. The idea we could fend off a Chinese attack on Taiwan, Russians in Ukraine, and Iran in Israel all at once, given our paltry means of production, is performative art.

Markets have been pricing in this gloom for the better part of the last three months — you chose not to listen. As you survey the rubble of your portfolio and wonder where it all went long — know this: You are stupid from birth and didn’t have any choice in the matter. Feel free to prance about in your rainbow uniforms and uphold the depraved elements of our society as serious people attempt to fix what they know is broken.

For the session, I enacted revenge and netted +123bps, in aggressively sized positions — betting against the market and long volatility, war, gold, and oil.

My prediction for wayward downside action immediately, followed by a selling crescendo and panic. America is in crisis and there is nothing you can do to stop it.

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Show Me the Silver Lining

Listen up Jack —

Aside from $GOOGL, $ADBE and a few large oil and gas stocks, I cannot, for the life of me, find a bull market.

SO WHERE THE FUCK IS IT?

I hope you realize that 2022 was DOWN 35% and if we blow 2023 and plunge into the final months of the year — hell will break loose across the landscape. I’m not sure what that means or why I said it — but I like the way it sounded.

All I want is for a 50% cut in home prices, unemployment ratcheted up to 12%, and municipal cash calls with a stock market back down to 2008 lows. Is that too much to ask?

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Hold Your Erections — Markets Are Up For October

Fortune smiled upon me this morning, so I took it. I cleaned out my account, both shorts and longs, and netted 78bps. I decided to walk away from the computer and the market shenanigans — but to come back for the late afternoon session in order to extend my returns and prepare for tomorrow.

Whilst you might be elated to see markets lower, there isn’t anything significant about October so far. Both the NASDAQ and $SPY are higher and the $IWM is off by 2%. However, we do have the US 10yr climbing to a terminal level of 5%, now at 4.88%. And we are seeing gold breakout, which is always a sign of looming doom. But I cannot be a serious person and at the same time tell you markets are heaving over to crash, while all dips are bought and shares of $GOOGL remain, obstinately, near highs.

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