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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.

Should Be a Fine Week of Financial Rigging

My brother in law got COVID-19. In NYC, apparently, they do not look at you unless you need a ventilator. He remained home, enduring 105 degree temperatures, for 8 consecutive days. I found that hard to believe — but it’s true. They didn’t give him any meds, just Tylenol. Doesn’t seem promising.

The head of the NIH, Fauci, said we should expect 100k-200k deaths in America before this is all done with. I find this virus to be the most incredible thing I’ve ever seen. My friends in Brooklyn tell tales of youngsters throwing giant house parties, dubbed “QUARANTINE PARTIES”, and others are holed up with thousand of dollars worth of food and materials. I cannot find papered towels and was lucky enough to find a hidden resource of toilet paper in NC, otherwise I’d be hard pressed for it.

Food is scarce, with roaming bands of hoarding animals sopping up all protein inventory within hours of being restocked. There is a barrier between customers and cashiers now, with a little hand sanitizer pump just adjacent for everyone’s safety. People walk around casually with masks and I walk around with my plastic black cooking gloves.

Neighbors wave at you, but not in an inviting way — more like “hi there, keep your distance you COVID-19 having bastard.”

How does this all play out? By the time GDP recovers in Q4, will it be time for COVID-20? Is the world completely BOGGED? What is this thing mutates?

IS IT A NATURAL OCCURRING VIRUS OR WAS THIS SHIT CREATED? Out of nowhere, this fucking bat out of hell escapes China and blankets the entire globe — even the most remote areas of the world?! How?

I guess those questions are pointless, since it solves nothing. But one thing is for certain, this shit isn’t done wreaking havoc on global economies. Italy announced for the second day in a row, dissipation in the amount of deaths caused by the virus. I suspect markets will want to trade higher on Monday. I suspect many of you will hate markets trading higher because “it makes no sense.”

That’s how it works.

Until we get another downside catalyst, markets will be rigged higher. Once that catalyst presents itself — WATCH OUT — the rope will be cut and the elevator smashed at the bottom of floor.

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Progress Report on Exodus 2.0 aka StockLabs

April marks 1 year since we started working on Exodus 2.0, an exponentially massive project that I thought could never get done. IT estimates were anywhere from 1yr to 2yr the annual revenues of the platform and the MILLION lines of code, more than the total beachfront of the coast of California, seemed like a task that was insurmountable. Like aways, fate reached out to me and made it happen.

I was updated today on the progress and have been micro-managing the project from day 1, presently using the services of some trustworthy people in Germany, I found a new partner to help me take Exodus into the next phase of its evolution.

All data will stream, this includes our overbought/oversold algorithms, industry data, valuation data etc. We’ll have tangible price target estimates based on historical valuation data and future sales/earnings running in real time. The Pelican Room, which is probably the most important feature to upgrade, will be slack-like, giving users the ability to upload images etc. User profile pages will come with alert settings, users to follow, baskets to follow, screens to follow — and an array of things one would expect from a project Le Fly put his heart and soul into.

Presently, and due to the stock market refugees coming to iBankCoin and Exodus, I am overloaded with beta trial requests, which can be requested at Stocklabs — presently being graced with our newswire. I suspect completion by mid-May and beta trials around the same time with a full blown lunch by Summer.

Here are some pics of the new features. My favorite new feature is the OBOS for intra-day, which uses my mean reversion algorithms, but modified for day trading. So far, so good.

New Market overview page will look something like this. We have our own indices now (LC =large cap, MC= midcap)

Share buybacks now measured, along with innumerable data points — revs, eps, FCF, EBITDA etc.

Real time algos provides RT insights into stock performance, based on the history of a stock, over a determined time frame. For example, AAPL has an algorithmic score of 3.45 out of 5 and in its history this has translated into a 1.6% return within 5 days over 300 data points.

This is our upgraded seasonality tool, which now measures months, days of the week, and hours. This is AAPL from 3/1/20 thru now. You can see the best times to buy and sell AAPL, or any stock, industry, sector, market, using this tool.

The OBOS (overbought/oversold) algorithm applied using 15min tick data, attempts to provide mean reversion, actionable, trades on an intra day scale. This is actual data for AAPL. We will upgrade this to have better user interface to clearly define the data and also make it screenable.

Things on the front burner include an Advanced Algorithm which will score stocks on a longer time frame so you can see what has been strong on say a monthly scale. Also, we have a volume alert tool that takes volume of a stock and pro-rates it by the minutes to provide alerts. If volume spikes on a 1min, 5min, 15min, 30min scale, you’ll know about. We can couple keyword searches, such as “COVID-19” with the volume tool in order to be a degenerate.

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Markets Collapse in Final Thirty Minutes of Trade to Close Down Almost a Thousand

Bad day for me. Lots of swings and intermittent pauses that threw me off. I am at my best during periods of volatility. My bet was for a continuation of the rally, just for the opening tick and I planned to reverse and sell short. Nothing worked out as I planned. Instead, I took losses early, double down on three names, went short oil only to make 0.4%, and then allocate funds into several old man stocks (which did good), only to finally get BOGGED long FAS.

I’m only down 40 cents from my basis, but it is an uneasy feeling holding this shit into the weekend.

The market looked like it wanted to close higher, reducing losses to just 300 by 3:30pm and then the fucking shit storm hit and the sell orders steamed into the bell, pressing markets towards the lows — down more than 900.

I ended the day with 30% cash and overweight 3 little bullshit mortgage plays, a sundry of REITs, some consumer staples and also some FAS. You can say I am HOOKED.

I had an superb week, but admittedly leaving off on a down day makes me both angry and confused a little. Hopefully I can get back into the swing of things next week. My sense of course is for a retesting of the lows. THAT IS MY THESIS. The fact I am long now only speaks to the levels of greed inside of my bones. I’m the guy looking for one last beer before the bar closes. That guy never gets laid and often crashes his car and dies in a fucking fire.

First order of business coming Monday, if I am wrong — I clean it all out and start fresh.

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Got Caught Leaning Long — Markets in Turmoil Again

This action isn’t up my alley — too orderly for my taste. We just moved up 20%, so naturally a small dip is in order. But is this it — or is there more? These types of questions cannot be answered on a Friday and if I’m not careful — I’ll end up leaning one way for too long and get absolutely raped.

It’s likely the path of most pain is nowhere. Most are looking for wide swings. What if we trade small and range bound after this?

I had some position from yesterday and two failed day trades today, all closed out. The results.

(TXT -3.5%)
(GTLS -7%)
(SYF -9.2%)
(AAP -2.7%)
(TPC -5.8%)
AVB +2.6%
(MITT -5.2%)
(NRZ -5.2%)

In all, those losses amount to about 185bps for me, since my trades are typically 5% of my portfolio a piece. When I get a 50% winner, like I did yesterday ( I had two of them), those aren’t life changing for me either — maybe 2.5% for my overall portfolio a piece. The point here and the reason why I am telling you this is because I KNOW YOU AREN’T ADHERING TO POSITIONS SIZES and figure on making it big on just a few trades. How can you ever get good without practice? You need at least 10,000 hours of fucking up before excellence. Trade small and try to up your winning percentage. Only on rare occasions will I average down. I actually did so today and am up 12% from my second basis.

I’m not special and neither are you. Just because I crushed the market the past 3 months doesn’t mean everything I touch turns to profit. I am bound by the laws of mathematics and eventually I too will have a losing streak. The way I stay in the game is by humbling myself, taking losses quickly and not letting past successes get into my head — thinking I’m impervious to loss.

I’m not, and neither are you. If anything, you fuckers ought to just go to cash and wait for warmer climes.

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Without Question, We Will Retest the Lows

It’s one of those things that Wall Street loves to do — the olde retesting of the lows to make sure everything is swell. The cat calls for this to happen will begin to echo as we drop lower again. The closer we get the louder these calls will become until it’s inevitable. This is important to remember, since most if not all of you are now heavily long, caught leaning.

While I myself find myself long too, I also possess lots of cash and I am long several CMBS related names — which seem to be immune this morning.

Dow futs are -700 and Boris Johnson has CORONAVIRUS. The world as we know it is crumbling into pieces and toilet paper is now a luxury item. Don’t step to me with high multiple breakout names at a time when I can’t find papered towels and toilet paper at the store.


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Is ‘Montauk’ Bill Ackman a Villain or a Hero?

‘Montauk’ Bill Ackman has a rich history of using media to propel his profits. While his actions are undoubtedly amoral, I find myself conflicted, purely from a traders point of view, if in fact he is the goat or just an asshole.

I was first alerted to Bill’s nefarious dealings in 2008, when he went on CNBC like a patron saint, pleading for Fannie Mae to be bankrupted, in order to save it. Truly hilarious.

Let’s not forget about his public spats with Icahn and Herbal Life, a battle he ended getting BOGGED down in and publicly humiliated for — at the hands of Carl ‘give me three seats on your board’ Icahn.

On the 18th of March, 2020, we all saw Bill warn America of impending doom — declaring Hilton would trade to zero — if the country wasn’t shut down foe 30 days. He went on a long diatribe about how fucked we all were, and reminded viewers that he was in fact long, very long, and only wanted the best for America.

“America will end as we know it. I’m sorry to say so, unless we take this option,” he told CNBC on March 18, five days before ending his bet against the market. “We need to shut it down now. … This is the only answer.”

But that wasn’t exactly true.

In fact, at the time when that aired on television, Bill was short via options. His strongly worded opinions were so grave, it literally caused circuit breakers to halt markets — sending markets down 7%. Just a few days later, on the 23rd, Bill closed out his notional bets and netted $2.6 billion in profits — a 100x trade.

Tucker Carlson took him to task tonight, but he got the trade wrong. Tucker thought Ackman made $2.6b via buying stocks cheaply, when in fact he was heavily SHORT at the time of his panic induced CNBC diatribes.

Your thoughts?

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Markets Rip Higher — Now +20% the Past 3 Days

I started off the day selling my losers from the day before, letting my winners move. By mid-morning, I took extreme profits and felt really good. Then I got greedy and tried to dip back into the well and ended up stopping out of several of the stocks I thought would move.

The results.

(JWN -7.9%)
(SPG -7.3%)
(MAC -7.3%)
(VER -4.8%)

STWD +40%
PEB +13%
MTG +14%
IVR +53%
NYMT +30%
CMO +11.7%
EPR +8.3%
ABR +10%

(SKT -4.4%)
(WMC -15%)
(ARI -10%)
TRTX – wash
(BXMT -8.6%)

Net net, a big day for me and I still have some stocks up on my books. It could’ve been better, but that’s how it works. Going back to the well is never a good thing. Towards the end of the day I went long some infrastructure plays and auto-parts. I also own mortgage plays, because CMBS is being purchased by the Fed now with infinite cash hacks. Closing out the day, 45% cash with a bias towards going higher. It seems unbelievable, but you’re gonna hear people talking about ‘normalization’ of prices, which means high prices for just about anything. I might fade the opening rip tomorrow, so stay tuned.

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Selling into the Fever — Booked Monstrous Gains

Yesterday I transfixed myself from the gold mine into a man of means and property. I went long a slew of REITs and mortgage related names. I took profits on many of them today, also culled the ones that didn’t work, and am left with a 70% cash position.

Here were the results.

(JWN -7.9%)
(SPG -7.3%)
(MAC -7.3%)
(VER -4.8%)

STWD +40%
PEB +13%
MTG +14% (day trade)
IVR +53%
NYMT +30% (day trade)
CMO +11.7%
(day trade)

EPR +8.3%

What else can I say? Join us in Exodus and see for yourselves.

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Welcome to the Wall of Worry

It’s a tall tall wall and only men of property sleep well knowing that their are beasts on the other side of it trying to step on your freshly placed sod. Jobless claims soared past 3 million and yet stocks are up. Why?


Think of the market as a meat grinder. It’s only interested in making chopped meat out of investors, leaving no steak behind. Last week the bulls were ground up and now the bears. Everyone gets a turn and no one leaves unscathed.

WTI is down 4%, yet the Dow is +400. I do not think for a second the crisis has ended, but I do think there are too many people short, who will now learn what it feels like to lose their minds — as stocks swim higher in spite of a very obvious sharp economic downturn.

It’s worth noting, the $2t bailout aka stimulus package excludes those RICH FOLK making more than $99k per annum. It’s also worth noting, govt doesn’t give a shit about you and checks will be in the mail for poor people in THREE WEEKS. By then I expect cannibailism to take hold inside of your city square.

I am long mortgage stocks and REITs. Have a looksy at the sector.

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Dave Portnoy is 100% Going to Blow Himself Out of the Market

I am not doing this post for attention or to ridicule Pres. As a matter of fact, I’m a big fan of his pizza reviews and love how genuine he is about his business. But he’s going to BLOW THE FUCK UP in the market. I’ve seen people like him come and go in this business for decades and they never ever make it.

The unique part about his situation is that he’s incredibly rich, trading his $3m+ E-trade account with FULL TRANSPARENCY throughout the day. It leaves him prey to bored hedge funders who might just take the other side of his trade for sport. He has negative knowledge about economics and really doesn’t even know how to place an order online. He takes ABSURD sized positions, like wistfully tossing HALF his account in GRUB the other day and then attempting to buy 50,000 shares of NKE today, and soon finding out he didn’t have enough finds to execute the trade. He’s even trading with DELAYED quotes, so when he places an order he’s basing it on prices of 15 mins ago and never gets filled.

Or how about when he sold 945 shares of LULU but pondered over it because he didn’t own any LULU.

I have no idea how insane he is with his sports gambling, but this shit is destined to end badly for him. Only by the grace of God will Portnoy survive the coming fires and it’d be a shame to have to watch him squander $3m in a live stream, just for the sake of needing to produce content.

You can watch his livestream on Barstools throughout the trading day or via their Youtube channel.

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