Hey, guess what, asshole? We’re in a bear market. You didn’t think the market would be up in 2008, did you?
Unlike some of you, I have traded through a bear market, of epic proportions, and it’s not fun. Bear markets are chockfull of misdirection, where asshole dip buyers constantly give hope, but bearshitters crush them.
I have no interest in trying to figure out the daily machinations of the market. Instead, I’m geared, better yet, built, to endure over the intermediate term.
During today’s tape, banks got “deballed” in early, mid, and late day trading—spearheaded by the fortune cookie morons at [[LEH]].
I have a short list of banks/brokers worth keeping on deathwatch.
They include, “The Fly’s Reverse Four Horsemen”: [[FED]], [[DSL]], [[CORS]] and [[FHN]].
On the brokerage side, I despise: [[LEH]], [[MER]], [[TWPG]] and [[COWN]].
For good measure, I spit on: [[FITB]], [[HBAN]], [[WM]] and [[SUSQ]].
On the long side, I am losing patience with my ethanol plays. However, it’s worth noting, [[BIOF]] is being walked up like a motherfucker.
While it’s true, oil is at the bargain basement level of $125ish. It’s also true, natty NEVER trades down. That fucks America, in a preposterous way, too.
My favorite natty plays are [[ARD]], [[TXCO]], [[SWN]] and [[NGAS]]. I no longer sanction long trades in the refiners, after this recent run.
You’ve been warned.
All in all, we’re in a bear market. Don’t look now, we are quietly edging near the March lows. A few hundred points to the downside, then all of the assholes will come out of the woods to declare: “We’re gonna fucking retest the lows.”
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This market is gonna grind the life out of a lot of traders before it is done bottoming.
Bear market = S&P < 200 DMA Class dismissed.
I am glad I am not the only one that thinks the market run over the last couple months was bullshit.
I love how most contributors on CNBC declared that the market bottom was the day that BSC collapsed. Fuckers. It is only a matter of time before we re-test the lows (haha, I won’t even wait for more downside to say it).
For natty, I like HP, which has been working for me.
Confirmed Bear Market sir, S&P closed below 1383.
However with positions like OMNI, I would never know.
Love the front page pic, ha!
Note: you nailed ROYL
True.
But if the market goes into freefall mode, EVERYTHING become a source of funds.
Remember January?
Save some spit for RF & KEY
NO BEAR MARKET
all bear markets of the last 30 yrs have been preceeded by all or most of the following.
1- hostile fed
2- overvaluation
3- sentiment over the top bullish
none of these conditions exist today.
in addition four of many things exist today that have always been historically positive for equity markets,
1- a fed thats willing and ready to do whatever it takes.
2- a positive yield curve
3- real short and long rates are negative.
4- even to this day, still huge insider buying.
more to follow on a pg post.
Amazingly, DSL looks like it might beat CORS to sub-$5.
One of the reasons I didn’t grab some CORS when you recced it is it seems that these shorts tend to decelerate the closer they get to $5.00.
Seems like the “sweet spot” for shorting these banks is right at $20 down to $5. Best “quick bang for your buck” at those levels.
In fact, perhaps that’s the ancillary to “$80 stocks always go to $120.”
_
You forgot, “Bear markets are often led by the collapse of the financials.”
That one’s true, no?
And how accomodating can the Fed be if the inflation bug bites? The Fed might not be “hostile,” but what more can it do than cut the rates to zero and accept a lot of bullshit as “collateral” on their balance sheet?
Note:
No music tonight.
“Serious night”.
__________
“all bear markets of the last 30 yrs have been preceeded by all or most of the following.”
Chivas, 30 years is not long enough to make that determination. Remember that we have been in a secular bull market since 1982. To relate to the current circumstances we need to go back to the 70s.
On another note, I was thinking – forget not paying your mortgage, what happens when people cannot pay their utility bills ? You’ll drive around at night and see entire neighbourhoods in darkness.
Right On
For any riverboat gamblers, WSM short – earnings before tomorrow open.
Cap,
it applies going back to 60’s. early 70’s, nifty 50 and late 60’s go go yrs. same for fed and valuations.
Contra,
the fed can still do a lot, and it does not include lowering rates.
This…ladies and gentleman….and the Fly;
Is what I call the “FLY’s BOTTOM”; I am super bullish right now…for those that have been readers since beginning of this year, you know what I am talking about it.
We will rally in the upcoming days…you have been WARNED!
Why be angry at the douche, when you can make money out of it?
Alias: BPOE
CNBC is like a game show folks. You would do better to turn the sound off and watch their face expressions. They look like the south park kids on crack!!! Fuck them I’m 100% cash and will buy insurance stocks,NGAS and GIFI when the time is ripe. Fly is right boys. If you don’t want to short stocks go to cash and trade the bounces. The odds are on your side finding a bottom much more then finding a top. Look at the recent market leaders only God could pick the top.
The Market will ping-pong for years between March Lows and May highs.
This will be the best trading market you will likely ever see.
Simply range bound.
(you owe me money for using my picture… fucker)
i love how every idiotic cnbc contributor was talking about write-ups already. i laugh at you guy adami you poor soul you. what kind of crack are these people smoking?
chivas – the 2000s must be the first time in very many decades when the Fed is being extremely accommodative in an effort to undo some of the damage caused by a Fed that has been extremely accommodative.
The U.S. developed a dependence on increases in consumer debt as a primary source of economic growth. The debt party is over and we have to face the fact that real median income has been decreasing in recent years. The Fed can try to prop up the financial institutions, but it can do little for consumers who have already tapped out the ability to borrow.
the only future for the banks is consolidation. there’s nothing else they can do.
i’m just waiting for the floor to fall out.
as an aside: i bought NUE to scalp a little after the post-secondary selloff. it’s done a big pile of nothing, but out of nowhere 11k july calls @ $75 traded today. not sure what that’s about. i’d like to think it’s bullish, but i can’t help but think i’m going to get punched in the face somehow.
The German fertilizer company mentioned in the link below is raising prices so fast it’s had to update earnings guidance twice in the past three weeks.
Good luck with that POT short.
http://www.reuters.com/article/marketsNews/idCAL0318851920080603?rpc=44
Fly you think the consumer will be reinvigorated by the rising Natty prices and the mandatory rise in fucking food fertilizer? I believe this will embolden the consumer to take out more money at LEH and buy more fucking iPods and shit. All I know is there is no fucking way in the world we are in a downturn or any fucking bullshit you faggots make up, if we were in a truly horrible economy these queers in Hollywood ( Sex and the City – $57,038,404 in one Weekend) would be the first people out of business and I would be able to buy a fucking wII. Until then we are in a rip roaring economy, evidently Wall Street is suffering while the Joe average American is fucking prospering like a drunken farmer. Personally I feel very bad for Wall Street employees and feel they should receive subsidies.
China enforcing their own version of the
PPT .
Selling stocks is now illegal. Buy AND Hold, stocks, or else! …. until further notice.
Here it is:
http://us.ft.com/ftgateway/superpage.ft?news_id=fto060320081915103106&page=2
LEH loses $500-700 MIL on hedges – that’s on top of everything else.
Thank you Mr. Fly – I shorted this mofo at 44.
To the bank!!
SDS is an etf that works as advertised. Boone Pickens says oil trades higher until it kills the excess demand over supply – spell that recession. Of course, I went with Boone’s wrong idea to short oil a few weeks ago – he admits his mistake but will not make me whole.
Ottnott,
i agree with some of your statements. here are some of my observations. the fed by lowering rates has accomplished the following.
1- reduced the cost of capital
2- reduced the cost of doing business.
3- because real rates are low or negative, it helps all borrowers.
consumers ability to borrow has only been hurt because tighter lending standards and dropping r/e values. the fed can and will imho alliviate both of those situations.
don’t get me wrong, even though i’m inclined to believe now that we’re witnissing an extention to the bull market, i just do not believe that conditions today call for a bear market.
From the Anecdotal Information Files:
I went to buy a scooter today for some summer fun. The guy kept pitching me on the MPG.
“I don’t care about the MPG. This is for fun with my family this summer,” I said.
“Huh,” he replies. “Everyone is buying these because of gas prices. Anyway, we don’t have any in stock. Honda can’t keep up with demand. They are $5300 new. When we get ’em we can finance it for you. Everyone is doing the 0% financing.”
No fucking way I am laying out $5300 for a frigging moped on ‘roids. And who finances a moped? And since when do they cost 5 large?!
I stand outside and talk to some dum 22 yr old country kid.
“Man. I need a used motorcycle. $600/month to fill my truck is killing me. I can’t hardly afford to drive to work.” (yes he said “can’t hardly”)
Take away: Fuel is fo’ sho’ killing the average Joe. Commuters in exurbs are feeling it too. Folks would rather finance a scooter than pay gas prices.
Wait till the scooter subprime hits in 2030.
Its called consolidation. The market is range bound until December.
I believe we will hold the lows from March.
The gears of our economy have not grinded to a halt.
I have been to North Park mall here in Dallas the last couple days and it is always packed, and its all high end shit. The Apple store is always packed full of emos and moms and so is every other store. I realize Dallas is a good economy, but their is still a lot of spending power out there all over the country.
Expect the Airline industry to consolidate and big changes is the Auto industry. I would Buy F.
Just a last tribute to the Master Harvey Kormann.
Jeremy…..best homepage pic yet.
I live in the DFW area too and I’m seeing a lot less people in the mid to upper level restaurants. In addition, home values just declined for the first month in Dallas. I filled up with Chevron Supreme today and it was $4.19 a gallon. With all the stupid Texas truck owners gas has got to be killing them. I stopped at my Lexus dealer for my free car wash and talked to the Sales Manager and he said sales are way down. I think the consumer pullback is just getting started here. I’m in the BEAR camp and believe the March lows will be just slightly broken on this next wave down and will fall to the next minus 1000 pt. DOW level lower after the election. Over the next few years we go back to 2003 index levels.
It’s called Distribution.
one last about harvey korman, “My mind is aglow with whirling, transient nodes of thought careening through a cosmic vapor of invention.â€
chivas wrote:
consumers ability to borrow has only been hurt because tighter lending standards and dropping r/e values. the fed can and will imho alliviate both of those situations.
Tighter lending standards and dropping RE prices are an economic necessity.
RE has to drop to something resembling the historical normal range of price-to-income. The Fed can try to help prevent prices from overshooting on the downside, but I think they have been using up too many of their bullets too early. I fear that they will have to start raising interest rates before RE prices have fallen to a historically normal level.
Aside from the above, it isn’t just the tight credit and falling home prices that are hurting borrowing ability. The other big issue is, as I mentioned earlier, that real incomes are declining. That hits savings and disposable income, which reduces borrowing ability.
The Fed’s efforts to keep credit availability high is somewhat counterproductive in that it is feeding the inflation that contributes to falling real incomes.
The Fed doesn’t have a good path out of the situation (thank you, Alan Greenspan). It is doing about the only thing it can do, which is to stall for time and hope that some of the problems work themselves out. For example, the death-blow to the homebuilders may be far more important to the eventual stabilization of home prices than is anything the Fed can do (i.e. very low levels of residential construction allows for-sale inventories to fall over time).
No point in debating whether we are in a bear market or not. Last I checked, the market just dropped 600 points, without notice.
Last I checked, my LEH short rules. I will no longer bother you about ARWR and WGAT, that is, until another one of your recs looses (sic) me the money I made in the LEH short.
Yours truly and most sincerely,
-DT
“The Fly” is batting .999.
An aside to DT – I tried to post this on your blog last night but couldn’t log into Blogger… I hope your daughter is better soon, sending good thoughts to you and your family.
Fly,
Once again..get out of Ethanol. Thats not going anywhere by down.
On a side note..congrats on ur DSL call..simply brilliant.
Question – Has the easy money already been made on FED? Does the high short %age bother you?
Ed,
The short % on DSL was just as high, if not higher, and look at it now, racing for “the Lincoln.”
And I don’t mean no Ford motor car.
_