Gambling Gets You Nowhere

I’m not cracking the champagne bottles, due to my shorts are working this morning. Fuck, for all I know, this market can spin like a Tasmanian Devil—upwards—into the close.

What I do know: gambling on big event economic data is a suckers play. Sure, from time to time, it’s cool to roll the dice and get on the right side of the trade. There is no better feeling than nailing a controversial pick, no?

But, I must say and insist, gambling in this market is foolish. We’re up too much too quickly to be levering up long, hoping for more.

I remember when the dot com bubble burst in 2000; I believe it was March, to be exact. I knew stocks were ridiculously expensive. As a matter of fact, I was in 100% cash, just prior to the collapse—sometime in April. However, seeing the market go up everyday, watching my colleagues bank millions on asinine dot com ideas eventually got to me and forced me back into the market—just in time for the fucking crash. I was young and overzealous.

I could have been a fucking hero. But, instead, I ended up being like all the other poor losers/saps, getting poleaxed by panic selling. I will never forget those lessons and will punch it into your fucking heads, if you choose to ignore these warnings.

In other news, PALM and DRYS are off to the races. It really is a non-event. They are not leaders. Ignore them.

Let’s talk about important shit:

Oil cracked $40. It cracked $40, despite a weak dollar, because the world economy is grinding to a halt. And, my guess, there are lots of asshole speculators out there who have been storing oil or long contracts, waiting for a higher prices. As the price action deteriorates, those fuckers panic sell crude.

Ignore the eps warning at CVX , if you must. But, there will be many crude warnings to come and cap ex budgets will be slashed. It is a dead sector, regardless of the price of crude. That damage has been done.

There is strength in select banks, like GS and MS. However, if you are long those names, I’d suggest taking a profit.

By the way, the main distributor for HANS, old Budweiser, has begun selling its own energy soda, called 180. This is a fucked up thing for HANS, since BUD places it right next to Monster, on store shelves. I think HANS can be shorted here. However, keep in mind, it is always a takeover play.

Finally, my shorts in XOM, NOV, KIM, VNO and HANS are working well, for now. As for my longs, they are doing poorly. However, with all of the 200 and 300% levered etf’s (SRS, FAZ, DUG, REW, SSG, EEV, ERY, SMN) on my books, I find myself in a rather enjoyable predicament, at the moment of course. Stubbornly, I will hold my shorts until I sense capitulation.

As of now, the market sentiment is still extraordinarily bullish.

UPDATE: More Madoff fun.

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