Yeah, like I said, there really wasn’t any reason to be selling those oil stocks.

You were had, son.

HCLP +11.2%
BAS + 7.3%
VOC + 5.5%
BTU + 5.0%
SXCP + 4.5%
ETP + 4.0%
NADL + 2.0%

I am now down almost 2% for the year. I took a moment to celebrate this lunacy by nibbling on yet more BAS, for $13.50.

All thanks and praise to the mighty Saudi’s for the wondrous occasion…

No, really though, who do you think Saudi Arabia’s super speculative intentions are going to hurt more? The United States? Or Venezuela, Syria, Russia, Iran, Iraq, Brazil, Nigeria, Algeria, Libya, Egypt, or Yemen?

Cool story: if you’re a country even close to revolutionary upheaval (or just strangled by an ill thought out safety net), the actions of Saudi Arabia are a death knell. And if there’s one thing we’ve seen pretty conclusively, it’s that countries that get tipped into a state of open revolution or political upheaval see their oil production drop…sometimes all the way to ZERO.

So let’s play chicken, you little shits.

Somehow, in the midst of all that is terrifying and sad in today’s stock market, ETP is a singular beacon of hope. I don’t understand how, but ETP is still making new highs.

They are a terminal company for energy products, so lower oil prices helps them. But if we were really on the precipice of something horrific, don’t you think demand concerns would hit them also?

Or perhaps ETP is just that needle in the proverbial haystack?

I am going to go out on a limb and say we are not about to experience another major meltdown of the magnitude of 2008/09. I believe the Federal Reserve is currently “all in”. They could not tolerate such a decline as it would undermine their entire authority as central bank. The Keynesian line simply cannot lose on such a big test of their expertise. It would be the end of them.

So in that respect, I believe financial markets would continue to have a permanent bid under them. If commodity prices are allowed to get too low, government tax receipts would fall and debt burdens would become untenable. It’s not enough to have a recovery; people have committed to a recovery where more dollars trade hands for goods and services, not fewer. It’s a completely arbitrary distinction, but important now nonetheless.

Besides, when I look through the operations of many of these energy names getting dismantled…they’re fine. I don’t see huge slowdowns materializing or cash problems or even demand problems. Unless this is still winding its way down from the manufacturing and consumer sectors and hasn’t appeared yet in the actual energy names?

It’s possible but I’m putting my chips on the table. I think this blows over. We will probably have a nasty correction, because of bad bets in market valuations. But by and large I think we just stumble through this and work our way back to new highs.

What has surprised me is that I can still find positions I want to buy. It’s not like I’m going out there and coming up empty handed. There are still plenty of good companies reasonably priced. You just need to filter the high flying tech and low yield financial product crap off your screen to find it.

Wow…

There is just no avoiding a hit like today. In terms of pulling it together, we just need to hope there’s a bounce near term to organize. Make no mistake that following action like we’ve had the past week, there’s not going to be an immediate turnaround. We’ve done some damage and people are hurting.

My guess is we get a bounce here shortly, and that gets faded hard and fast. I made a round of purchases in HCLP today, taking my cash balance down a few percent. Honestly, I almost regret even that (although that’s what the most profitable trades usually feel like).

Keep your eye pegged on the EURUSD. That’s the tell here.

I have been a major recipient of serendipitous timing over the past several weeks. What has happened simply cannot be attributed to skill.

In early August my portfolio was 100% long HCLP, CCJ, BAS, ETP, MAA, AEC, NRP, and BTU. But things felt wrong so I persuaded myself, based mostly on the opinion of others, that I should raise cash into September.

Where major luck comes into play is how I raised that cash. HCLP, BAS and CCJ were all >20% sized positions. I clipped HCLP, and sold BAS and CCJ down hard to around or under 10%. This was all mostly at the highs.

But where the fortunes get greater comes next. I really wanted more cash, but I couldn’t bring myself to trim those three any more. So instead, I made some tough choices and discarded both NRP and MAA. Plus, everything that was left was sent to the 5% mark.

Almost everything I have has taken a severe beating. This, coupled with the EURUSD, leave me convinced that the worst is yet to come. But I’ve mostly held out intact.

BAS and HCLP have pulled back very hard, but I’m up so much and scaled them down so intensely, I actually added to BAS around $24 because I could afford to. Elsewhere, BTU, MAA and NRP have all felt the worst of it, but my exposure to them is almost gone. As far as the multifamily sector is concerned, AEC as the one position I retained has held up pretty well. Physical silver is the only place I didn’t manage to find a silver lining (…).

And ETP has actually risen. That was maybe my only error this past month, was selling that down to 5%. I turned around and bought it back up to a 10% position last week. It’s shrugged off economic weakness, because the company is awesome.

Sometimes, you just get lucky. This year has held that theme for me.

On a day when the NASDAQ was down more than 1% into the close, the S&P and DOW were barely treading water, and I personally had three positions that sank more than 2%, you would think it would be pretty clear cut that today was decidedly “not bullish”.

But you would be mistaken, as I counted off numerous Twitter beings preaching the mighty “bullish day” we had. Did you, perchance, see that awesome rally the DOW had? What with all the bouncing I had to hear about today, you may have completely missed the HORRIFIC SLAUGHTER occurring more or less everywhere.

Please rest assured that in spite of the glorious bull market we had today, the man being murdered behind the shed was still very much stabbed to death. But by all means, get about to fretting over the first degree butchery at your convenience.

Go check out the Fly’s blog, where he has conveniently posted the black list of the mutilation.

On the one hand, today’s action only set us back to early August.

I guess the other hand is that we are not done going lower yet…