I’m seeing a lot of chatter on IBC and stocktwits from people who want to make the big call to be “contrarian” bulls and buy heavily on Monday. My friendly advice is, “don’t be a hero.”  I even know some dicks who bought into the close on Friday, which really seems like masochism. And as the other markets worldwide today turn not only red but are also somehow thick seas of gore, my preening and annoying advice from this weekend proves to have been correct.

 I bought (and have the timestamped stocktwits posts to prove it) 132 puts at 3:30 on Thursday when the SPY was at 132.20 because I had an analysis that I completely believe in, and I was noticing that the bulls had been fueled by rumors for weeks and had systematically discounted every single piece of bad news. Each new rally infuriated me because I didn’t keep enough powder dry, but I held on and accumulated whenever I could because something had to give eventually and the job numbers on Friday were actually worse than my most pessimistic estimate.

The amazing thing is that bulls in the ol’ stream were still trying to spin a miss of more than 100,000 jobs on top of weak manufacturing data for Germany and China as somehow not a big deal and already priced in. That’s the attitude of a glassy-eyed cultist, not a sober investor.  If there are enough of them on the market and they’re leveraged enough, their stubbornness can cause a spectacular crash.

Buy when there’s blood on the streets is the oft-quoted advice, but understand that the current downturn is nowhere near enough blood on the streets. I won’t be a buyer until there’s a policy response or we hit around 115. Now that will be blood, and I have a whole watchlist of companies I like that I’d love to scoop up around there.

The question I ask the contrarian bulls  is: why should the stock market be going up when realistically the prospects for future profits have diminished in the near term and there needs to be some serious global restructuring?

Fucking…forget technical analysis, forget being a clever contrarian, take look at the actual, physical building blocks of the world economy. Given their current configuration, why should the S&P be higher now that it was three or six months or even a year ago? Why should we be more optimistic now than we were then, knowing what we know, with the data we have now?

If you can’t answer that question in a detailed and very specific way you shouldn’t buy on Monday.

All I’ve seen from the bulls is a lot of handwaving and shit about how being “contrarian” is the smart play even when they have no underlying basis for their opinion right now. I feel like most of the bulls couldn’t even begin to answer these questions and even worse  have contempt for anyone who seems to find them important. If I had a larger soap-box or any real relevance, I certainly wouldn’t give any advice because in a macro sense this exact shortsightedness is what’s going to give me 300% yearly returns. But because I love you all, I’ll say this again: nobody move, nobody gets hurt, the bears will be in and out in a few months and leave you with a tradable bottom. But if you try to be a hero and  grab the gun from our hands before we’ve emptied the safe we’re going to blow your head off without a shred of remorse. Even worse, we’re gonna laugh about how you screamed when you died as we drive home to our new condos we paid for with your money.

I’m now quite happy to reshort, but reshorting the SPY smacks of laziness, so where might I put my newly found wealth to work for me again? Probably the bulk of it will be going towards Pokemon cards, pogs and beanie babies but I’m a keeping a watchlist just in case people on ebay won’t deliver them to my third world country of choice.

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