Morning Poppers (the day after edition)

I’ll be going back to sleep immediately following this post. If you know me, do not bother texting or calling me on the phone, for I will be sleeping, counting sheep. After I errantly deleting the book I had been working on, like a possessed demon, I started a new one from scratch last night — banged out 3,000 words before I went to bed, which was like an hour ago. I’m pretty sure my lost version was complete shit compared to this one, which has a much lighter tone to it, less preachy, and keeps my omnipresent narration less biased and intrusive.

If you’re wondering if I have any shame, whatsoever, about loafing about the house on this fine day, heading back to catch some lazy Zs while the rest of America toils away at work — the answer is not anymore. Long ago, I was self conscious about working from home — especially when this one asshole client from NYC would introduce me to colleagues by saying “hey this is Fly — he works from home, in his pajamas and slippers.” You’d be pleased to know that I ended up losing this gent ~$100k. He should’ve been nicer.

Spanish stocks are lower by 0.8%. Thank heavens the Catalonians do not have guns like us Americans, else they might be able to do something about the oppressive Spaniards and earn their independence now. Instead, they’ll quickly be relegated to the fag box to live out their days as beating vessels for the Spanish police. Rest assured, like BREXIT, this too shall pass. Any ideas of freedom should be exited from your minds. We’re entering an era of technocracy, the natural evolution of government and part of the journey of mankind. We make mistakes and those errors are eventually corrected, by the deaths of millions. Be patient.

Copper is higher by 1%, while crude is flat.

The dollar is weaker by 0.2% v the dollar and BTC is off by 2.4%.

S&P futs are +1 and the Dow +30.

If we’re gonna start banning stuff, for the benefit of mankind, we should ban gambling. There is nothing more degenerate and corrosive to the well being of man than the institution of gambling — which is a denizen of ill repute, vagrancy, and excessive depravity.

“Warmest condolences” Really? Is he retarded?

My warmest condolences and sympathies to the victims and families of the terrible Las Vegas shooting. God bless you!

— Donald J. Trump (@realDonaldTrump) October 2, 2017

Here’s the analyst moves this morning.

I have a habit of cleaning my computer of all files, because I do not like looking at a cluttered screen. More than that, for some reason, I do not like knowing there is trash in my trash bin.

You see where this is going.

For the first time in my life, I felt really good, as well as motivated, to tell the tale of the nascency of the dot com bubble, through my eyes. I was writing strong, with precision, throughly researched from the years of copious notes and records I had saved. I sifted through countless articles from that era, making sure my narrative fit the exact dates.

I LOST THE ENTIRE STORY, ALL 10,000 WORDS.

How?

New computer…never hooked into time machine for backups…fucked.

The Hybrid Overbought signal has now overpassed the lauded Hybrid Oversold signal as the most predictable indicator for higher prices now. Essentially, markets in motion tend to stay in motion. The character of this market is more geared towards continued momentum, rather than mean reversion starts, pauses, and restarts.

The data does not lie.

36 mos, 88% win rate.

Last signal, as told here, was last Wednesday.

The Hybrid Overbought signal has now surpassed the lauded Hybrid Oversold signal as the most predictable indicator for higher prices now. Essentially, markets in motion tend to stay in motion. The character of this market is more geared towards continued momentum, rather than mean reversion starts, pauses, and restarts.

The data does not lie.

36 mos, 88% win rate.

Last signal, as told here, was last Wednesday.

This is hard to quantify. As of now, the official death toll is 58, with more than 500 wounded. Shares of MGM aren’t even down by 5%, in spite of the fact that this tragedy occurred on their property. To put this into perspective, this is the largest drop in MGM since June 30th, 2017 — after Deutsche Bank analyst downgrade the prospects for the hotel giant on the premises of having an ‘unlucky’ Q2.

On the other end of the see-saw are gun stocks. Shares of RGR and AOBC (formerly SWHC) are higher by 4%. Gun retailers showing strength, include VSTO and JOUT. I suppose traders are learning the lessons of Sandy Hook, bidding up gun stocks because people will buy more guns if they believe the government will pass laws that restrict them. The logic is decent. If a wild gunman mowing down children in an elementary school can’t provoke gun laws to be passed, nothing will.

Nevertheless, democrats are out in force again, calling for gun laws.

The smarter trade is probably to fade RGR and short MGM.

The retards at Buttfeed described Topo Chico as a competitor to La Croix? In what world is ordinary mineral water competing with Mure Pepino? I understand Top Chico just added lime and grapefruit to their repertoire of sparkling water — but that’s standard twists for boring water. Bear in mind, Top Chico is not a new brand. They’ve been around since 1895, widely sold in Texas for decades. Now that you hipsters discovered Top Chico, you seem to think it’s something new.

Fuck off.

Coca-Cola bought the maker of Topo Chico, Arca Continenta, the first bottler of Coke in Mexico. I’ve always believed FIZZ would be acquired by the loafers at Pepsi, not Coke — so this doesn’t change my thesis. If anything, this will increase pressure on Pepsi to make an acquisition to compete with Coke-Chico.

Shares of FIZZ are stupidly plunging on this news. I will hopefully be buying back my shares soon.

NOTE: Topo Chico did $74 million in sales last year, +29% — placing this deal at around 3x current sales. With FIZZ trading 6.5x sales, I can see why people are selling the stock. However, FIZZ is much bigger than Top Chico, doing sales in excess of $250m per quarter. I like to compare its valuation to MNST instead, trading at 9.8x sales.

We got ourselves some ‘chart art’ this morning, for all of you fucking faggots who love to base your decisions based off meaningless lines on a piece of paper.

Look, listen to me, watch my chart.

The Orange Gorilla loves DDD. I stepped in on this analysis and bought some. For the day, I’ve purchased two wild and crazy stocks today. Go ahead, ask me if I give a fuck.

Why hasn’t Kashkari fallen in line yet and why the heck was he permitted to be on the board anyhow? I feel like he’s there to keep the pitched forks at bay, voicing concerns of rational people who analyze Fed policy and the economy to make us feel like the Fed is listening.

Here’s Kashkari out with bold statements this morning, bluntly saying inflation expectations will be reduced thanks to new Fed policy that will reduce its balance sheet. Moreover, he’s suggesting the Fed should NOT be hiking rates now, at a time when reducing the balance sheet is of paramount importance.

I believe the most likely causes of persistently low inflation are additional domestic labor market slack and falling inflation expectations. This essay will explore the causes of the latter, falling inflation expectations, and I will argue that the FOMC’s policy to remove monetary accommodation over the past few years is likely an important factor driving inflation expectations lower.

This is not meant to be a criticism of the FOMC’s prior decisions. As I will explain below, we now know that policy was tighter and there was more slack in the labor market than the Committee realized at the time it started removing accommodation.

He continues…

“There is no reason to raise rates until we start to see wages and inflation climb back to target,” Kashkari wrote. “The only explanation that would potentially call for further policy tightening is the transitory factor explanation. But the longer low inflation persists (here and around the world), the more tenuous that story becomes.”

Kashkari has dissented twice against Fed hikes this year

I just stepped in and bought YELP, which was one of the stocks that contributed to my near death experience in 2014. I am now loaded up with PANW, YELP, WDAY, EDIT and COHR. The last two are new, 2017, additions to the once infamous horsemen, which also included FEYE.

I’ve always liked YELP. I was probably one of the first people to start using the app and I never eat anywhere without first consulting it. In my estimation, it is one of the most valuable social media companies in the world. The stock is higher by 2% today, acting odd. I’ve been watching this stock trade for a long time and like to think that I know a thing or two about patterns.

All that aside, markets look wondrous today, especially biotech.

It’s being reported that 90% of Catalonians voted for independence from Spain.

The Prime Minister of Spain said the vote was not legitimate, thanking his police for beating the brains out of those trying to disrupt an otherwise harmonious relationship.

Spain's prime minister says Catalonia's independence vote is not legitimate https://t.co/M0ZpmKjsoi pic.twitter.com/w2KNFG2zNJ

— Bloomberg (@business) October 2, 2017

Rumors are spreading that Catalan will declare independence from Spain within the week.

Catalan President Carles Puigdemont appealed to the European Union for support as he pledged to inform the regional parliament of the result of the vote in the coming days. The assembly will then act in line with the referendum law, Puigdemont said — and that could lead to a unilateral declaration of independence within 48 hours of the notification.

For those unfamiliar, back in 2011-2012, PIGS was the investment scare of the time. Not only were people afraid that Greece would cause another credit crisis, but also Portugal, Italy and Spain. At the height of the crisis, before the ECB stepped in, French bond yields were blowing out too. The specter of Spain being broken apart has to worry someone, somewhere.

Today, Spanish stocks are getting rocked, lower by 1.83%.

Here are the biggest losers on the IBEX35.

Also notable, the Spanish 10 yr is +8bps to 1.69% while the German is down 1bps to 0.44, increasing the spread to 125bps.