As of now, refinery stocks are best correlating to the overall markets, offering investors outsized returns for their patience.You can fuck around in oil, gas or even coal; but make no mistake, the refinery sector is where the money is being made, with ease and honor.
The wonderful thing about the refiners, aside from $30 crack spreads and $17 Brent-WTI spreads, is the scarceness of supply. Meaning: there are only a handful of big refinery companies in America, since it’s illegal to build new ones. We fucking criminalize the refinement of crude. There are outlier plays in the chemical industry worth noting, like NEU.
Here is the heart of the refinery sector aka all you need to know:
VLO
TSO
WNR
CVI
ALJ
DK
MPC
HFC
That’s it! Follow the crack spreads and Brent-WTI spreads closely and get long mid-contient refiners when the Brent spreads widen and you should be good. However, if and when they get the infrastructure in place to better distribute crude from West Texas, look out below.
It looks like the Greeks will manage to restructure their debt and US employment data will be sufficient enough to sustain high unemployment. However, that does not guarantee higher equity prices. Remember, recent weakness has nothing to do with Europe, but more to do with the ongoings in China.
The fucking Chinese are scrambling around like eggs, trying to boost their GDP, in the most moronic way possible. Think about it: they have planned to grow their economy at 7.5% no matter what. And we look towards that model as being something to behold, the highlight of the global economy? It’s a crock of shit, totally devoid of reason and logic. The end result will lead to massive debt and a slave labor market, with a comedically high divergence between the rich and poor, sort of the direction we are heading towards now.
I do, however, like silver and gold at these levels. It’s always my “go-to” sector following a decline. I follow the path of high probability trades, through mathematical precision. The vast majority of you simply scrounge around, leading the life of a servant, analyzing thousands of charts, spending countless hours looking for “the right stock.” As for me, I do all of that shit, AND MORE, with one click, as I have digitized your stupid charts and brought together all of the predictive elements known to mankind and put them on my laptop for the explicit purposes of banking coin (NO CIRCULARIZING).
At any rate, I will not chase the morning spike. Instead, I will watch with intense curiosity, preparing to ambuscade the lumbering investor henpecked by forced sales.
“Never bet against the guy in the fucking time machine.”
The PPT is flagging OVERBOUGHT for ZSL and OVERSOLD for a variety of silver/gold stocks, like EXK and NGD. And, to boot, UUP is flagging OVERBOUGHT on our 12 month algorithm (ranges are measured over 12 month time frame). Make no mistake, these flags are some of the most accurate indicators in the algorithm and have always made me money. Theoretically, I should be buying right here, right now. However, I am going to wait another day or two before stepping in, mainly due to the looming Greek crisis and Friday’s jobs numbers.
EXK
ZSL
UUP
I don’t mind paying up for a high probability play.
Aside from that, I am still eying luxury names, like BID and LUX, waiting for a dip. And, I am long shit loads of VXX TITS and the TZA STEED.
Speaking of luxury, my TIF positions held up well today. I am expecting them to blow out earnings on 3/20.
Finally, CPST and ALJ have been sucking nuts. I have a lot of patience with CPST, proven by my 20% paper loss. With regards to ALJ, earnings are due on 3/8 and I expect them to not disappoint. As of right now, I am up a modest 0.25% for the day, with 60% of my assets held in cold hard cash, awaiting your margin liquidations.
Sterne Agee has some great research out on retail today and how equity price correlate with sales. Out of all the names in their universe, TIF has the highest correlation to stocks at 0.92. Considering stocks have been on a fucking tear over the past three months, logic dictates TIF will blow the barnyard doors off earnings this quarter.
I’m looking for high quality stocks that are selling off, with the hopes of catching the next inflection point higher. I’m not suggesting today is the day to buy. However, I am telling you the whole purpose of having my bountiful cash position is to eventually purchase the liquidation, buy the fear, and put money to work.
Thus far, this is my list (subject to change, posted in The PPT for constant perusal)
Granted, my opinion can change, rather dramatically, should the wheels in China fall off. The essence of this sell off is China related, not so much Europe. Make no mistake about it: this market isn’t pricing in troubles in Europe whatsoever. Should we begin to worry about Europe again, banks and brokerages are heading much lower. This sell off is more related to basic materials and industrials, due to China.
Friday’s job number can turn this market on a dime, higher. Or, we can just brush it off and continue to worry about shit we have no control over. It’s very tempting to step in here, with hopes and dreams that everything will be okay. But hope doesn’t pay the bills. Before getting back in, I am looking for a fucking flush out.
In The PPT, we haven’t been this overbought, for such a long period of time, since QE2. This LTRO shit threw the algorithms through a meat grinder and pushed prices higher, no matter what. If we are going to unwind some of that move, it will take a lot more than a mere 140 points to satisfy the wolves who are savaging stocks today.
We’re finally getting some real pinless hand grenade action, well deserved might I add. I’ve enlightened you to the ‘chinks in the armour’ and have been warning you of an extreme overbought condition, persistently plaguing stocks. Expect stocks to take on a rakish look this morning, spearheaded by Europe.
Furthermore, I hope you understand there may be a default in Greece, as early as Thursday, if the private sector doesn’t capitulate.
As equities sell off and the lot of you scurry about trying to retain a semblance of deportment, Scott Bleier, Caine Thaler and I look at you with censorious resentment.
The weavers will attempt to stave off a full liquidation and there may be a brief moment of hope during today’s session. But rest assured, this fucker is getting tossed in the blendtec today, much to the bedevilment of the pipe smokers who pray at the altar of subterfuge.
Pardon the phrase; but it most aptly describes the current situation most regularly occurring in the despicable, and hated, great nation of CHINA.
Aside from building ghost cities and excelling at expedient mobile executions of shoplifters, China has become addicted to western culture, most likely thanks to the grotesque YUM eateries inside of Beijing. Everything has a root cause and I am making the case that YUM brands, through its filthy and unhealthy KFC and Taco Bell eateries, have infected the minds of otherwise rational and long term thinking, yet barbaric, people, not so much different than having contracted MAD COW disease (pun intended and with belligerence!). Easily tricked, easily taunted, yada,yada, yada…
Having said that, the centrally planned economy of China is now saying “shit sucks, and we’re looking to ‘only’ grow at 7.5%, motherfucker.’ You might believe this to be wonderful, considering we are growing at 2%, like jackasses. But, remember, our dicks are much bigger than theirs. They have nothing going on but slave factories and rich people who defecate in alleyways–because they find it convenient.
Here in America, we have golf courses in every town, and generally speaking, we’re all rich as fuck.
If the Chinese struggle to grow, their slave factories will lay off people and those people will either starve to death or start cutting off the heads of the elite in the southern districts of SHENZEN. The government is afraid of popular uprisings and has concocted a most outlandish policy of leveraging up hard to build skycrapers for ghosts, hoarding basic materials like this shit was a video game.
Well, I have news for the fucking Chinese: this isn’t a game and soon enough you’re all gonna get tossed into buttfuck prison for playing the game of monopoly wrong.
Besides, your military is weak and we can fuck you up with our capital ships, anytime, anywhere.
The early signs to detect ‘chinks in the armor’ of the Chinese is to view the performance of basic material stocks or anyone who does a fuckload of business in China: like CREE or LEDS.
China related names to keep track of include:
TCK, LFC, JOY, YUM, FCX, WYNN, BHP, VALE, BIDU, CLF, MGM, PKX, MTL, CAT, TEX, MTW and CTRP–just to name a few.
UNRELATED: Reformed Broker had the audacity to steal my phrase ‘murderholes’ that was stolen from the movie Saving Private Ryan, after getting permission from me and attributing it back to me in his soon to be NY Times best selling book. What’s the world coming to?
Don’t listen to the dicksuckers on CNBC. Today was an awful day for stocks, with massive carnage found in heavily shorted names. Aside from the wondrous world that is BVSN, risk appetite in stocks that professional short sellers bet against were blasted today, abhorrently. For me, this is the #1 indicator of risk appetite.
Have a look.
Do you see what’s going on? The Dow shows a paltry decline, yet under the hood it’s all Fred Flintstone.
Aside from coal stocks trailblazing a path to zero, natural gas was crushed. Also, semis were punched in the fucking face!
Look, I have a God given right to luxury and winship. Do you think I like giving back money that is rightfully mine? The idea that ALJ or CPST dares to stand in my way of unmitigated success shakes me to my core. Now I’ve been very patient and I have most of my money in cash. I do not listen to men who sound like Kermit the Frog, declaring we have 25% upside in this tape. I know how to read the tea leaves and understand how the global economy works. Because of all of that, I am exceedingly cautious here, into a month that is traditionally robust.
UPDATE: Have a look at The PPT Tech Index, 1 month chart. Does that look healthy?
This market is full of oxymorons. Shall we have another?
This week there is a strong likelihood that Greece will trigger a “credit event” because they will need 66-75% of the private sector to participate in the debt swap. In the event they are unable to rob them in broad daylight, they will do so in the dark, effectively triggering CDS. Also, let’s not forget the record level of cash being parked with the ECB. If things were so “awesome and amazing” in Europe, that would not be the case.
Separately, Morgan Stanley is predicting 1% US GDP growth in Q1. What the fuck are they smoking? Don’t they see C, GM, F and GS are on fucking fire? At any rate, at 1% GDP growth, there is zero justification for a stock market rally. There will come a time when you are forced to deal with reality. I believe we are approaching such a crossroad soon.
If you come to grips with the fact that the only reason why we are up is due to “free money” out of Europe, US and China, you will understand the underlying dangers of being too long at the wrong time. Whenever the stimulus stops, so will the music–just like a terminal patient on life support.
As an aside, China took down their growth forecast to 7.5%. But that’s a fucking bullshit number anyway. Really, the local Chinese debt burden is ballooning to epic proportions, now estimated at $2.2 trillion. In other words, the Chinese are trying to “fake it before they make it.” Instead of building an economy that will last the test of time, those stupid fuckers are creating a giant bubble that will burst in their faces, just like the old Hubba Bubba commercials.
All that being said, we’ve been going higher and all of the shit I am eluding too might be misconstrued as sour grapes. Please forgive my volubility on the matter of stocks and how it disassociates from the facts. “The Fly” is merely trying to point out potential dangers, innocently, in the most unarmed way humanly possible.
Disclosure: Still long “The TZA Steed” and VXX TITS.
Anyone who is in this market knows the pitfalls of the current banana run. In recent weeks, many stocks have been taken to the proverbial woodshed and beaten like bag pigs (I presume ill-humored pigs are beaten by their owners down in the deep south).
Using The PPT to screen for stocks down 10% or more over the past month, 619 names listed. Let me explain that to you in layman’s terms: about 17% of the stocks listed inside The PPT database have undergone a 10%+ correction over the past month. Either this is the buying opportunity that I’ve been waiting for, or the hammer of certain death, destruction and homosexuality is about to befall those who are long equities.
What do you think?
Nah, just kidding. No one gives a shit about what you think.
Fun times at Fly High are over. I will no longer grant safe quarter to those of you who vex or annoy me, not even in the slightest form or fashion.
Effective immediately, I intend to kill a great many of you, through unorthodox means. I’ve sent out my assassins to every corner of the world, waiting for my command to commence “operation poisonous heart attack dart.” It’s a very simple strategy that will enable me to get rid of irritants, whilst making the ‘tragedy’ look entirely ‘natural’.
Medical genius!
Also, we’ve gone through great lengths to create profiles for many of you, pointing to a troubled history of heart failure, so don’t try to investigate your deaths after the fact. Rather, tell your families to fuck off now, in advance of your demise, on our behest.
This should all go along, swimmingly, without delay.
So you know, we’ve lost a great commenter and short seller extraordinaire today, who went by the name of Alf. Apparently Alf had a long, tedious, history of terminal heart disease. Upon walking home from his Saturday afternoon ballet rehearsals, poor Alf dropped dead of an apparent “heart attack”, whilst gobbling down an extra yummy buttercream cupcake.
