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Dr. Fly

18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.

TRUMP ASSASSINATION ATTEMPTS FAILS; BELIEVE NOTHING THEY TELL YOU

At a rally in PA an alleged ‘lone shooter’, perhaps from ANTIFA, attempted and failed to kill Donald Trump. He was grazed in the ear, but sadly someone else was shot and killed as a consequence. The shooter was killed by a secret service sniper and now people are angry and want retribution.

I did a poll on X and asked if ANTIFA should be considered a terrorist organization and 95% said yes. While I hate their ideology and the methods they use to push their politics, I am not sure if blaming them is appropriate here. Even if it was someone from ANTIFA, we know for a fact the government itself is to blame for the demonization of Trump and we know for a fact the ‘deep state’ has been trying to derail Trump for a decade, supporting by their agents in the media and every single facet of American bureaucracy.

This was inevitable and they let the shooter do it; or even worse, this is their shooter. The onus of the blame is on the Biden administration and the institutional left who are only interested in globalization, their fucking wars, and their attempts at deneutering American men.

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BOGGED CITY, MY HOME

I had grandiose plans for this closing blog. I have several things I’d like to discuss, one of which will make 90% of you furious and cause you to slander me. But, sadly, I am uninspired and cannot pen decent prose right now, as I am retarded.

You see, this was my day, courtesy of my brain + Mrs. Fly’s plans.

I knew it would happen. My bad timing coupled with me chasing stocks petering out of their momentum was designed to do this. I have traded this exact set up thousands of times and each time I have lost money. In the future, I will be tricked and bogged like this again for a specific reason: hubris. If markets rally and I am not benefiting from it, I am inclined to compensate my hurt feelings in two ways.

1. Short the market and attempt to kill everyone else.
2. Chase the market and try to blend in with everyone else. “Hey guys, I am just like you. Want to toss the frisby around?”

Here is the bare truth and I am mature enough to know it and say it because my feelings, at the end of the day, are not important. I am just not that good at this time. The problem with me saying this out loud too often is I might start to believe it and you cannot trade well without confidence. But I think due to my awareness, coupled with the fact I am just about the smartest trader in the world, I can navigate through it.

Chiefly, my shortcomings this week was chasing failed rallies and then blowing the CPI day trade, which was huge because I had a massive $TNA position already in place.

Solutions: I might create a static portfolio sourced by my strategic holdings and quant and then trade around it using margin. If I do this, I will only need to concern myself with tactical plays and hedging, freeing up my mind to focus on those things instead of market timing.

Have a good weekend, catamites.

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Markets Broadens Out, Small Caps Surge Again

I’m having difficulty trusting the rally in the smalls. It was obvious yesterday what was happening, rotation out from big caps into the smalls. And now we have a continuation of sorts with the $IWM up nearly 1.5% on top of yesterday’s 3.5%, which is especially painful when considering this was exactly what I was looking for.

If you missed the past two days and now look on from the outside where everyone is happy inside and celebrating their success, you have two choices in front of you.

1. Jump in and have faith this rally is legit and all of the small cap piece of shit stocks that did nothing for a year enliven and continue to grow.
2. Ignore it and allocate into the areas of the market that has worked for the past year, minus two days.

The other risk is this small cap set up is the top. It’s a wild thing to suggest and I am 20% serious. But we know the shit rises to the top when markets exhaust themselves. If that were true, I find it hard to believe it would ‘top’ after just two days of rally.

Lastly, you can always fuck off like me, 70% cash, long a handful of relatively safe stocks, pretending to be happy when you’re really fucking seething inside and just know the second you step in to buy $GOEV it’s going to file for bankruptcy protection and really nail you to the cross.

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I’m Way Too Smart For this Tape

I don’t get this type of action, NASDAQ lower by 2% while the piece of shit FILTH Russell higher by 3.5%. But it should be noted, I called it. But I am not here to boast, but instead inform you that due to my incredibly high IQ I was unable to trade today and closed the session +35bps.

I refuse to live in a world where $COST is lower and $JMIA the African Amazon up. We had some of the strangest action I could ever remember today, with incredible breadth of 81% yet ALL of the major companies were HAMMERED by 4% or more.

In other words, hedge funds hated today and it worries me that should we see the $SMH lower at the open tomorrow, we might crescendo lower.

Nevertheless, I took a gambit for the upside, long $FNGU, $LRCX, $COST and the like. I did reserve 32% cash for eventualities but sense I won’t need it. Odds are $NVDA and the boys will be right back at it tomorrow, creating generational wealth in short periods of time.

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CONSTANZA TRADE THE CPI; SHADOWS OF 2000?

Here is data of all NASDAQ performances on CPI day and the next day. Notice a trend?

1/12/24 +0.05%, flat
2/13/24 down 1.52%, +1.1%
3/12/24 +1.4%, down 0.7%
4/10/24 down 0.92%, +1.64%
5/10/24 +0.23%, +0.23%
6/12/24 +1.31%, +0.45%
7/11/24 down 2%, ?

Of the 7 reports, this is the 3rd down day. On the previous two down days, markets jumped higher by 1.1% and 1.6%. Although the data set is tiny, I am pretty sure the same sort of data exists in 2023, since the CPI has been moderating for almost a year. The gist of this is, we are inexorably in a bull tape. There hasn’t been any motivating factors to contribute towards a prolonged decline in stocks. These things DO NOT happen out of nowhere.

For example, during the dot com collapse of 2000, which many people compare this tape to with overvalued AI chip stocks replacing the overvalued internet stocks of that era, we had actual news events that jarred markets.

On Feb 15th, 2000: Microstrategy issued and earnings warning and restated for the previous two years, sending the stock lower by 61% for the day. $MSTR

On Feb 18th, 2000: Pets dot com issued an earnings warning, sending the stock down 18%

Fucking Etoys warned on 4/14, sending the stock lower by 81%.

Aside from the small companies warnings, we had a March warning out of the $NVDA of that era $CSCO, more warnings out of Lucent, Yahoo, Amazon, Dell, Nortel, and Qualcomm, which was an absolute beast of the stock back then.

My point is, and this is directed to all of you fuckheads who keep calling for a crash: we will not get a deleterious decline without significant warnings. We haven’t seen any yet. People often ask me how I was able to successfully navigate all previous bear markets and my answer then is the same now: they are pretty god damned easy to identify. They’re usually coupled with terrible news that gets worse by the day and it’s akin to shooting fish in the barrel. If and when we ever enter a bear market again, you’ll know it’s coming and won’t need to be told, lest you’re fucking retarded.

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CPI COMES IN CUCUMBER COOL; BIG CAPS CRASH, THE SMALLS RALLY

If you think I’d be somewhat embarrassed showing my face around here after getting the CPI call wrong, you’d be kidding yourself. Half the time in this business you get things wrong, fumble around looking for reasons to love or hate something. But in the end, you should’ve just held $AAPL.

I won’t even touch on the CPI numbers since it’ll just be me spitting out sour grapes at you without offering any value. We accept this new reality of plunging inflation and now we look at the results. On days like this I like to compile lists of stocks that performed well since I can always revisit it in the future to have a gameplan if a similar scenario should ever arise.

First let’s start at the obvious: rates are dropping. The US 10yr is down 10bps to 4.18%. Who benefits from lower rates class? That’s right, fuckheads with a lot debt or people who want to take on a lot of debt. It also benefits supply chains and consumer facing companies because we know lower rates is conducive with great consumer activity.We might also look at companies saddled with large losses due to their treasury exposure, going from low rates to high and back to lower and also companies growing fast but burning through cash in order to finance operations.

What we want t ignore, for the sake of posterity, are stocks rallying today who will likely be bankrupt in a year or two anyway, such as $LCID or $BIG.

The interesting thing about today is 78% breadth is all of the cool stocks are lower: $AAPL, $MSFT, $NVDA, $AMZN, $META, $TSM all hammered lower from 2.5 to 5%. That’s because those stocks worked for years and now we are pricing in shit. Look at the $IWM, higher by 3.4%, a staggering gains when crossed against a loss of 3.1% for the $SMH and a NASDAQ down by nearly 2%.

But this rotation isn’t narrow, quite the contrary. We are hitting all of right areas of the market to bid up whilst punishing the overpriced FCF money makers. I view this change as a net positive, although jarring at the moment.

So what stocks are working?
Retail: $GPS $VSCO $URBN
Solar: $RUN $CSIQ $NOVA
Homebuilders: $DHI $PHM $HOV
Biotech: $ILMN $NTLA $TWST

Banks stocks, especially those with a lot of treasury losses, such as $SCHW.

Admittedly, I sort of blew this rally, as I sold my 12% $TNA position before the close due to fear. But I did manage 37bps return and now sit in 100% cash. My sense is hedge funds are really getting hammered today with the losses in tera cap stocks and the rotation into the areas mentioned above is too much too soon. Look at some of these gains.

Overall, this CPI number guarantees the Fed will cut rates, but that doesn’t necessarily mean everything is great. It’s just great today, at least for those who sold all of the stuff that was working for the past 3 years and loaded up with shit.

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A HOT CPI LOOMS *

Tomorrow we get inflation data via the CPI. Here is some food for thought you fucking assholes (sorry, I can’t help myself).

The beta coefficient correlation between the CRB index and the CPI is 0.996.

The CRB index is +2.8% the past 30 days compared to a LOSS of 1.28% the previous 30 days for a standard deviation blowout of 4.66.

In other words, that fucking CPI index number is coming in hot and heavy tomorrow and if it doesn’t IT WILL BE RIGGED. The result should be a market celebrating HIGHER RATES and plunging gold. I have no idea what stocks might do because they just always go up. But they should or might react with SHARPLY LOWER PRICES.

I closed +23bps today and took a $UVIX hedge into the terrors to come and possess 25% cash. I still haven’t the slightest idea what I’m doing out here but I am trying to find my salient.

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Can We Get a Rally in the Russell?

I’m sort of sick of seeing the same fucking stocks rallying every single day. I appreciate the rigging and all but this is fucking ridiculous. It’s like that episode from Twilight Zone when the gangster is in a lush hotel room, winning all the time at gambling, had two broads on his arm, and could do anything he wanted because he thought this was his version of heaven. But he was actually in hell and the lack of risk and variety drove him mad.

Similarly, I too fell like I am in hell, with the only caveat that I am not winning all the time and have been forced to grind it out and become a voyer to ribald gains in the fucking semis as I waste time doing whatever the hell I have been doing, maybe posting about blacks on X.

But I’d like to see a rally in the $IWM, which would be a nice change of pace to just the MAG7 faggot stocks rise. In fact, the seasonality favors a nice rally for July.

Thoughts on a broadening out or are we relegated to simply $GOOGL and fucking $LLY every day?

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The Semis Are in a Bubble That Is Going to Pop and Destroy Everything

I’d first like to preface this screed with the fact that I own $NVDA from years ago in the trusts for my children and have some presently in my quant. But let’s get serious about this fucking semiconductor index, shall we?

Returns for $SMH by month
Nov (23) +15.3%
Dec (23) +8.9%
Jan +6.3%
Feb +14%
March +6.1%
April down 4.8%
May +12.3%
June +8.4%
July +7.1%

Are you fucking kidding me?

Now let’s look at this silly thing called ‘valuation’. Some of you younger piece of shits have never heard of this word before because your fucking Reddit and Discord chats only buy stuff based upon astrological patterns or the whimsies of your gurus. But let’s take a look anyhow.

Below are the price to sales values of one of the major semi industries. If you peer in you can see the median p/s is about 6.8x now, the HIGHEST on RECOURD. More than that, if you look at the juxtaposition of it against the overall market by that stat on the far right you will now learn it is trading at a +448% premium to it. Now we can compare apples to apples across the decades and see if we ever traded like this before and the answer is NO. That’s about 3.6 standard deviations above normal. Again, NO BIG DEAL.

Now I know what you’re thinking because plebians always thinks this way: “but Fly what about AI and Bitcoin? How about that pal?”

SHUT THE FUCK UP. Remember back in 2021 when $ZM and all of those COVID plays traded at absurd valuations and you thought it would last forever? Well it didn’t and as much as I like $NVDA and all of the other supporting actors in this bubble; it’s going to fucking crash through the floorboards one day and suck the entire god damned market with it.

But don’t worry. It isn’t happening now, so you can go back your Discord server and figure out where the next play is, as I chew on my sour grapes.

 

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Just An Average Joe Out Here Taking Swings

Another day having the slightest idea what I was doing out there. My stratagem was to basically chase stuff, sell things going down; pray to God it all worked out. In the end, I was sent straight to hell to contemplate my sin, off by 69bps for the session.

There are markets when I cannot lose and then there’s this, an apparent albatross around my neck, strangling me lower into the black to become entangled by Octopi. It’s all very pedestrian and normal, just a guy out here telling you how my day went, an average Joe. I’m a very ordinary and plain person just trying to grow my investment account but the mean markets are stopping me from achieving some of my goals.

Back in my static accounts, I made some money and they just sort of did the exact opposite of my trading, me fumbling over myself into and out from Electric Truck scams and late day gambits into both fear and greed. Very normal Joe stuff.

I realize many of you reading this have heavily matted beards on your faces and sit always at record highs and my mediocrity might annoy you a little. But as children we are taught to have empathy and patience and I am asking that from you now, you and your fucking greasy and disgusting beards.

Into tomorrow, I have lots of longs with a $TZA hedge, because why the fuck not. Somehow I’ll end up losing on bot my longs and shorts. Month to date, I am down about a percent, so it’s nothing too serious, just an ordinary, fly in the woodpile, standard day.

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