A Sublime Harmony of Mathematical Precision

The PPT is the axiom of syllogisms.

UPDATE: 2009

2010

After the cocaine addled GORILLA bashed your face in with a decorative boulder, you got up and cleaned yourself up. The sauna was a fucking mess, with GORILLA shit all over your prized wooden walls and floors. Looking at the mess, you simply needed to unwind a bit, sort of “get away from the world.” The only logical thing to do was lock up the house and head for the carnival.

On your way to the carnival, listening to bloomberg radio, you heard the market was losing steam. As predicted by yourself and the “team” at Zerohedge, investors were selling into strength. Aside from the giant gash on your brain, you were delighted.

You reached the carnival and parked the car right next to the cotton candy vendor. You always liked cotton candy, especially the pink colored version. Before locking up the car, you popped the trunk and fetched a chilled bottle of chardonnay, with glass, in order to “get your carnival on” in style. With chardonnay glass in hand and pink cotton candy in mouth, like a vagabond, you gallivanted inside the effervescent and whimsical carnival.

As you wandered out from a funhouse filled with retarded mirrors, while noshing on buttery popcorn, you gazed upon a clown doing magic tricks. As you approached said clown, you realized, much to your dismay, he wasn’t an ordinary clown. In fact, he was a homeless man pulling shit out from his hat, laughing hysterically in a crack-cocain infused fury. You tried to get away; but it was too late.

The crackhead clown detected your weakness and ran after you, full speed. Upon tackling you to the ground, he licked your face and drank your wine. He screamed at you in an undetectable language, then slapped you twice with his shit filled hands, one front-hand, the other back-hand.

I added to my LCC position, buying 10,000 at these levels.

Disclaimer: If you buy LCC because of this post, the next time you are on an airplane you will be accused of “acting suspicious” and will be detained by Federal air marshals. And, you may lose money.

Today’s rally is being sold by fearful men. As always, the news is bad, so the selling is warranted. I sold out of my SWKS and bought a starter in AMCC. I am barely up and sense the market wants to sell off. However, I am cognizant of market headfakes and how easy it is to be shaken out of a rally.

Over the past week or so, the market has recovered, despite the jarring volatility. It is my belief, eventually, the S&P touches down below 1,000. Knowing that, I don’t have confidence in any rally, for any prolonged period of time. On the other hand, there are many weak shorts in this tape now, just like we had weak longs in July. I would not be surprised if we gave back all of today’s gains or soared 150 from here. The market is in beast mode and nothing can stop it from crushing people.

I am still holding TLT and have 30% in cash. I may sell TLT today, or leave it just in case people get scared again. TLT is today’s tell for market direction.

In short, your eyes may deceive you into believing something is there, when in fact, there is nothing at all.

Go eat a sandwich.

So you’re sitting there executing a premarket purchase of FAZ, gently sipping on your morning chardonnay. You see the futures dip and it delights you. The current news out of Zerohedge is grim, all to do with the end of the western banking system. After reading this, with a certain air of smugness, you add to your FAZtardmobile position, then strip naked and head for the sauna.

As you relax in the sauna, you daydream over the profits to be had inside your wonderful FAZmobile. The world is ending and you sold it short. You put your head back on a pillow and close your eyes, totally relaxed from the “earthy” music playing in the background.

Then all of a sudden, a fucking giant GORILLA kicks in your door, chewing on cocaine leaves, pounding his chest, with his cock in hand. Startled, you jump up and throw your Martha Stewart terry cloth towel at him. Angered as fuck, hopped up on cocaine, the GORILLA picks up one of your decorative boulders and smashes your face in, then proceeds to rip apart the wood paneling inside of your bullshit sauna.

We fucking tanked into the bell, because dicksuckers sold into strength. This morning, we dropped like a stone on a false press release, regarding Austrian politics. There is nothing, whatsoever, logical taking place here.

Let me be clear (no 0bama): I am long tech, a great deal of it, with 30% cash. I own large amounts of TLT, as reserves, in order to benefit from the fear trade. My largest position is VMW and I intend to take profits when The PPT flags OVERBOUGHT.

Make no mistake, today’s close was bad. Expect more of this shit until the lunatics are killed. I need the keys to Zion you fuckers. The smell of this place is making me sick and I want to murder every single one of you, with my ax.

The world is filled with fear and this country is being led by the blind. The people who will replace the blind are fucking psychopaths. Long term, I am not optimistic. Short term, I am looking for gorillas eating cocaine leaves to smash rocks over your heads.

You do not deserve music today. Now go home.

The market is punishing greedy shorts with African spears through the helmet, or BLACKWING 602 pencils through your smugness. Tech is leading the way and treasuries are rallying too. As the Gods would have it, everyone is making money, sans leprechauns who overstayed their welcome in the gold trade. I know, I know, never bet against a “bull market.” But what is a bull market and when does it end? Many argued not to short the bull market in dot coms, housing or biotech crazes, until they deflated like sex dolls.

With my money, I’ve been adding to positions all day, especially FFIV. I am enjoying massive melt ups in my options account, long VMW, FFIV, CIEN and SWKS.

Do not misconstrue my optimistic tone with security. I understand the underlying risks and the sensitivity that possesses the souls of our biggest money managers. They are without spines and exude cowardice.

Having said that, I reduced cash to 30%, so effectively, I am fully invested here. The only way I buy more is if urinal shadows club me to death. As for my TZA position, I am in the process of closing it out.

I bought 150,000 LCC, sub $5.70.

For the first time in months, I witnessed significant buying interest in the airlines. Why is this significant? Answer: Jet fuel margins.

Think of the airlines as the other side of the crack spread barbell. They do well when refiners suck and suck when the refiners roar higher. It’s a zero sum game and someone is always winning. For all of 2011, the refiners have enjoyed record spreads, which enabled them to repair broken balance sheets and update facilities. This respite ensures they will be in business for years to come, at a minimum. Regarding WNR, as of last quarter, they were 35% hedged on 321 cracks at $27. At the present, cracks are trading about $27.5, down from $38. Also, WTI-BRENT spreads are $22, down from $28. The trend is lower, which has caused some to believe the trend is broken.

I’m not so sure about that. However, it’s important that I be honest with myself and acknowledge that stocks prices have stagnated at best, underperformed compared to tech. With the end of the hurricane season around the corner, I suspect the appetite for refiners, right or wrong, will wane. This is a 180 degree change for me and that’s how I roll. I can’t change who I am.

Now WNR may end up looking like fucking rocket scientists if cracks continue lower. Think about it. They locked in $27 cracks, historically, a fantastic profit margin.

But, for my money, I need juice. I need to maximize my upside during respites because I am not actively shorting. Meaning: I must make rallies count.

At the present, WNR constitutes just 5% of my holdings, down from 30% last week. I am done selling and will redouble my efforts in the tech sector, then revisit the refiners later on.

Bucket shoppe operators over at Jeffries are calling the crisis in Europe as “the next Lehman event”, this time without TARP. Naturally, the trials and tribulations of Europe affect us greatly. Because of this, you must be careful where you place money. Under no circumstances will I buy bank stocks. However, I happen to agree with Cramer: now is a good time to buy tech.

Due to fortress balance sheets, tech will enjoy premiums in the coming months, as consolidation rips through the industry. If the world banking system stays afloat, there will be deals made in the tech sector. Bank on it.

My favorites are SWKS, MU, AMD,  VMW, CIEN and today’s new buy FFIV. They are all takeover candidates and all down big from the highs. If I am right here, I will be beating you to death with your gold bars by X-mas.

Regarding FFIV, the seasonality data for October, discussed inside of The PPT weeks ago, is insane. I am a buyer into October seasonality. At the present, I am half in, loaded with tech. In my personal, I have a bullish bias, with a TZA hedge.

NOTE: I trimmed more WNR today;