Afternoon Crash

What a wonderful afternoon. I just came back from a gingerly autumn walk with my fucking dogs — watching them savagely chase and attempt to eat numerous small animals along our path. It was especially good knowing that with the cooler climes descending upon me the fires inside of the market would keep me warm — as the NASDAQ crashes into cataclysm and much much more.

This tape reminds me of so many others — nothing usual about what you’re seeing at all. This feels like hell because you’re in it. The simplest answer is always the right one.

I stand before you +47bps — building slowly throughout the session with a plan in mind for tomorrow.

HINT: It has nothing to do with the market bouncing.

A well deserved drubbing at the open for Pax Americana, following a day of pretend and fantasy. Stocks are back in their rightful place, SHARPLY LOWER. Amidst the din of heads splattering on the pavement, it’s important that you acknowledge the trend is LOWER and we are in a terrible bear market, in both bonds and stocks.

ALL STOCKS are down 9% for the year, a much different narrative than what the main indices suggest — negating the curious tale of “UP STOCKS” woven by the swindlers in the media.

My gains are +50bps at the open, courtesy of my $FNGD position and a trade I took in $UVIX. At the moment, I am 90% cash, long only $LMT and $BTU.

The allure of buying the dips is palpable. But you must realize the sins of America are expensive and as the fabric of society withers away like a piece of drift wood abandoned on a desolate but violent beach — stocks will suffer.

Listen to me now: gone are the days of hegemony and low rates to spur our perfidy. Rates are not only skyrocketing due to inflation — but due to lack of interest in US GOVT bonds and perhaps net selling aboard. As the US 10yr swims for 5% while the CPI data declines — think about why that is.

After my previous blog, markets almost immediately shot higher and continues to jog on for the duration of the session. While some of the more emotional effeminate traders on Twitter might’ve laid down prone — waiting for the lawnmowers to circumvent the crevices of your faces — “The Fly” went to work on a journey to close exactly flat. I nearly accomplished this feat of trading perfection but was upbraided at the bell and ended up losing 2bps.

After the close $MSFT beat and $GOOGL beat — but both went in opposite directions with the evil incarnate Bill Gates lifting 5.5% in the after hours session and the Censorship Bureau for The New brave Republic of America aka Google — off by 5.5%. In other words, a circle jerk.

It should be noted a took a sizable hedge against my longs betting against the bastards at Google via $FNGD. As of now, my schemes fell flat since the ETF is down 0.6% in the AHs.

We were supposed to crash through the fucking floorboards today and we did not. I am hopeful we can find the courage to see to it tomorrow — sledding lower in a fury taking out all of the stops and laying the bulls down prostrate for the lawnmowers to clean up.

My gains for the year are +40%. My intention is to survive October and then weigh into a sharp selling frenzy with buy orders — all but bailing out the entire stock market and western finance in one fell swoop. I do not believe we’ll trade down in November and I would be wise to remember that when I’m actually trading in November calling for a complete closure of the exchanges and suspension of western finance in order to stop the bleeding.

That’ll have to wait for 2024.

The melt up that could’ve been gave way to collapse and now you’re all thinking — “how did Lord Fly manage through it all?”

My gains were stolen from me — but they were never large to begin with. I went from +30bps to FLAT and I am only flat thanks solely to enterprising moves on my behalf to short the fucking market into the ground.

Heading into the afternoon session, I am smartly hedged, perfectly balanced. Anyone can make or lose money — but can you close flat?

I am short the NASDAQ, short bonds, short oil, long gold, long Bitcoin and several other stocks. Since we’ve done nothing but leg lower the past hour or two, I will wait in the tall grass again — patiently waiting for my prey to hobble behind the pack. When I see her, I will pounce and rip into it limb by limb — causing bloods and bone matter to spill and crack all over the prairie. Other zebras will look on in horror as I chew their loved one — profoundly victorious and satiated.

Last night $BTC exploded to the upside, thrusting more than 10% to $34,000+. Some tied it to Chinese flight of capital; I chalk it up to life and risk aversion — a denizen of transport for large sums of money. Whatever the reason, this certainly got the speculative juices flowing again, as we all reminisce over the best days when the Metaverse was popping off and $BTC was heading, inexorably, to $1 million per coin.

At any rate, markets have followed up in kind this morning, with the NASDAQ +100. There is some temperance to this move, as the ribald nature of it seems to be measured and half-hearted, almost as if traders are waiting for a shoe to drop and the rally to be spoiled.

Speaking from the perspective of a PERMANENT BEAR, I must alert fellow bears to the distinct possibility we could have a retardo upside move soon. We are very oversold according to Stocklabs and the % of large cap bullish (LCRB) is less than 10%. At the close of trade yesterday we were at an appalling 4.8%, which basically means the technical score of all stocks with market caps $5b+ were under 3, on a 1-5 scale. In the past, when the technical reading was this low markets mean reversed the fuck higher in a eye bleeding rally.

Be prepared for all eventualities. I closed out my shorts this morning and switched over to the bull side, as I have been known to do on occasion.

When I was a boy, around 7 years old, I had a crush on a 10 year old girl and I wanted her to be my girlfriend — even though she was out of my league. I asked the Gods one evening before bed to curry me favor and to grant her to me, as I felt entitled to enjoy the company of such a fine specimen. The very next day whilst having a personal stroll along the corridors of my housing tenement — she asked me to be her boyfriend — at which point I flatly rejected her overtures as ridiculous.

I’ve been doing this my entire life — manifesting fantastical things — all bestowed upon me with such expediency that I could only feel a certain sense of speciality whilst walking in corridors today amongst ordinary people.

Some of you misconstrue the purpose of this blog and the purpose of Stocklabs — look towards it and me as a God to help you manifest things. You’d be wrong to think that of me and you’d be wise to understand the purpose of men, all men, is to walk their own path — carve out their own corner of the universe with their own hands — breaking through stone if they have to in order to attain what is rightfully theirs.

For some of us, life is charmed — easy from the start — barely any waterbugs to kill in the house growing up. But for others, life is an albatross — a weight that manifests itself always at the wrong time. It’s easy to give up and become comfortable in failure, chalking things up to “bad luck” or a “rigged game.” But the truth is simpler and more direct: you extract from this life what you’re able to invest, whether it’s time or money — no difference.

For the slothful and wastrels — life is an arduous climb, rugged terrain for decades on end until collapse and then forgotten like the summer breeze on August 13th 1983 — when young Fly ran about the neighborhood on the hunt — kicking cans and sipping gallons of sugar water in pursuit of glory.

I closed the session +44bps, fixed in a NET SHORT position for tomorrow — intending to manifest the entire market lower, as I feel, if being honest with you, it is my right to do so.

Before you get too excited about the future, I wanted you to peer into the past and recount how often the market had gone up on Mondays — only to soon after slide down for the balance of the week in perfidious manner.

In Stocklabs, we measure all sorts of stuff. In this instance, the percentage returns for the NASDAQ from March to date 2023, by days of the week. You’ll notice, if you’d kindly fix your monocles on the chart below, the NASDAQ has gone up 77% of the time on Mondays.

I closed out my shorts and longs and just hold $SPOT now, +32bps for the session. The NASDAQ is up a cool 150+ or so from the lows and I was of course clever enough to get out of the way. I’m always clever enough, always will be.

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.

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.

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.