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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.

I Will Kill You

If I hear any more shit, regarding “The September Surge,” I will find you and split your head in four parts. I’ll go QCOM 4 for 1 on your asses, without regard for personal injury. The market is simply testing my staying power, by way of perpetual, yet insidious, daily melt ups. Little does Mother Market know, “The Fly” can hold his breath a long, long time. I’m the type of guy that is willing to die for a cause, providing it is a cause only reserved for a gentleman. From my vantage point, this is a most distinguished task, one that cannot and will not be underwritten by the likes of you.

I reckon, you are far better off obtaining the friendship of a Mr. James Cramer, than emailing “The Fly” with money management requests. For the last time, small plebs, “The Fly” is not accepting new money. Moreover, even if “The Fly” was down to his last nickel, he’d never accept clients from the internets. Let it be known. Let it be archived: I have my own fucking money. Fuck you very much.

Back to the subject of perpetual mark-ups: do you think that it bothers me? On the surface, it vexes me to the point I am stroking out, like a fucking retard on a life endangering insane roller-coaster ride, doing loops. However, deep down, I don’t give a fuck. Next thing you know, POOF, “The Fly” is in Mexico City doing shots, hanging out with first rate idiots. This stock market business that you speak of is simply child’s play. My near term focus is to raise enough private capital to sink my enemies, simply out of spite. You do not know what I speak of; therefore, I will say no more.

At the end of the day, the market is all about pricing and timing. Sometimes my pricing is off. Other times my timing is off. On Jupiter’s stone and the eyes of my future great grandchildren, your pricing is completely and utterly wrong.

Good night to you and farewell.

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Anatomy of a Melt-Up

Dollar/SPY (intra-day)

That pretty much says it all.  The dollar fell hard and the indices ripped higher. Breadth went from horrid to terrific. If you slept in today, long equities, you woke up to more of the same. Unbeknownst  to you,  AAPL was down 15 at the bell. Here is my specific issue with chasing this rally:

The market is going up on the back of technology shares. Agreed? For the most part, oil and banks have been quiet to weak. There has been strength in the industrial names. But, for the most part, tech has stolen the show.

SYMBOL    FPE    P/S
BIDU    49.00    55.00
VMW    38.00    18.00
ARMH    24.00    17.00
FFIV    20.00    13.00
AMT    49.00    12.00
CRM    75.00    12.00
AKAM    15.00    11.00
RHT    35.00    10.00
CTXS    20.00    8.00
MELI    44.00    19.00
CAVM    54.00    13.00
APKT    25.00    17.00
NETL    23.00    10.00
ARUN    23.00    10.00

Essentially, if I was to buy into nasdaq related stocks now, I will be ignoring the lessons learned 10 years ago, during the dot com bubble of 2000. Am I exaggerating? Absolutely not. Unlike 1999-2000, this economy cannot support those exorbitant valuations. You cannot make gold from shit, no matter how hard you try. We are priced for perfection. Should we deviate from perfection, you will see the floor removed from bids and share prices will plummet.

When will this happen?

No idea. I read some report, from the blowhards at Goldman,  calling for S&P 740 by 2011. To me, that’s fucking laughable, on a hysterical trend. But, it’s worth noting, Wall Street is hurting right now. I know you are seeing something different. But, where this shit all starts, people are about to lose their jobs again. What Wall Street needs are some frothy ipo’s, in order to showcase our shit to the public again. It’s not surprising to read Joe Public has pulled all of his money out of the stock market, in exchange for the mattress. This shit is too hard, unless of course you have the proclivity to be one directional in nature. I mean, if you are permanently bullish, you are absolutely killing the market right now. On the flipside of that coin, those same people will end up bearing the brunt of the future pullback, if that shit ever happens.

At the end of the day, clearing all the smoke and shattering all of the mirrors, I am simply asking for better valuations, before allocating fresh capital. Is that too much to ask? What would my excuse be, if the market suddenly dropped 1,000 points from current levels, caught long the above stocks? I suppose I could tell my clients “hey, those stocks were awesome, just prior to their demise.” The bottom line, as much as it pains me to miss out on the fun, I have a fiduciary responsibility to be cautious, when valuations get out of whack. Moreover, with year to date gains close to 28% (down from 40%), I am better off waiting, than playing with the proverbial nuclear tipped Jack in the Box.

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NEVER AGAIN!

I can’t do the sour grapes thing anymore, for I will become what I loathe most. Yes, the market is manipulated. That shit did not just happen today. I am sure the market has always been manipulated. What’s important to note, however, is the sudden absence of the shadows near my favorite urinal. I am not sure if they went on vacation (likely to Paris) or moved out; but they’re not there anymore.

I’m pretty much amazed/stunned by today’s turn around. We went from a frown, all very sad and gloomy, and we turned it upside down.

As I speak, traders on the NYSE are doing lines of blow off vintage Beatles records and the executive producer of CNBC is jacking off to his intra-day ratings. Back at the banks, as evidenced by MS, executives are pondering what the fuck all the fuss is about, as their trading turrets have been sucking dick for months. Nonetheless, rainbows and gay giraffes descend on Wall Street, thanks to the Bearded Clam and his trusty sidekick, Prezident O’Bama.

Never again will America need to endure a recession, for they have been made illegal. Never again will 401k and 403(b) participants fear their monthly statements. Never again will Americans need to work or pay for their mortgages (okay, just a little sour grapes).

In other news, it appears RARE EARTH plays, MCP and REE, are taking the day off. What a shame. Look forward to their Earth, as opposed to the shit you walk on, to be back in play—first thing tomorrow morning.

I will do a market wrap up later aka whenever the fuck I get around to it.

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Execution

Wow, there is no doubt that robots are fucking with this market. Some of you can pull up some intra-day charts and see what the fuck I am talking about. Following really, really weak economic data, the markets began to drop. The dollar was firm, gold was weak, treasuries were great, breadth was horrible. Basically, it looked like a down day in the making.

Then, out of nowhere, the dollar plunged, gold soared and breadth improved dramatically. Believe me, I watch this shit like a hawk and it NEVER changes this quickly, without news. I’d rather not devolve this conversation any further by declaring “the market is rigged.” However, it certainly is fishy.

Right away, high beta stocks are responding to the buy programs, pushing shares of FFIV, VMW and AKAM higher. God and Santa Claus know how much I hate AKAM.

Bottom line: if you asked me 15 minutes ago “can we rally today?” I’d say “fuck no, go get me a coffee.” However, the way things are lining up now: absolutely.

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Celebrating Your Demise, in style

Indignant malcontents.

I have been blogging stocks for over 4 years, gifting you dick suckers with coin making ideas/ family style entertainment. In exchange for my graciousness, you pepper these holy grounds with backward commentary.

Over the past 4 years, my investment style has evolved tremendously. Long ago, I was something of a gunslinger, like you. I’d rattle off 50 trades per day, which in turn led to sky rocketing blood pressure and a temperament that made Archie Bunker look like a nice guy. Times have changed.

I’m much more focused on mean reversion, asset allocation and beating the livers out of conventional wisdom, instead of following the herd. If you are interested in being in a herd, get the fuck off my site, for I loathe people who are unable to think out of the box.

JBL warned. They are the largest maker of CSCO routers, being a very large contract manufacturer. And, KBH warned: big fucking deal.

Ultimately, the market will bend to fundamentals. You just need staying power and clever asset allocation to make it through the process.

One final note: Japanese intervention is failing.

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Wait For the Bust

Do not confuse the shit you read here, on this Godly site, to true investor sentiment. I hear a lot of “well, everyone is bearish, so we must go up” jargon. First of all, that’s an idiotic statement. Secondly, it’s a fucking lie. Take iBC as a cross-section of investor sentiment. Basically, everyone but me and Gio, who has been AWOL for weeks, has been bullish on this tape. Granted, HOLLY-Woodshedder and Chess are somewhat cautious, but not nearly as bearshittery as HORATIO CLAWHAMMER aka “The Fly.”

It’s important to know who you are and avoid fighting it. I am HORATIO CLAWHAMMER and I am here to bash in your skulls.

As an aside, I’d like to punch the livers out of all tech stocks, trading with p/s ratios above 10. Seriously, fuckface, these valuations WILL NOT last: I fucking guarantee it.

Having said that, never heed my advice. Instead, seek the counsel of your local fucktarded money manager, as he will goose step alongside all of the other little lemmings, all the way to Dow 14,000. As for me, I upped my TLT exposure to 25% of assets today.

I spit on your person. I spit on your future graves.

Signed

H.C.

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Technology go BOOM

Yes, it’s as if I am living through the dot com era once again. Although the movements are not as violent, the pervasive moves higher in tech stocks reminds me of the days when I’d trade CSCO, at a time when it had a 500 billion dollar market cap. After all, it was the “new economy” with limitless ceilings. Here we are, 10 years later, and NFLX, AMZN, AAPL, CRM, FFIV, VMW, BIDU and let’s not forget everyone’s favorite burrito stock CMG are defying the basic laws of gravity. If you are trading momentum, inside of a bullshit 5 figure Zeeco account, you should have no problem getting out of these time bombs—when the collapse begins. However, if you are managing money, professionally, you are out of your fucking minds buying tech up here. Contrary to popular belief, NOTHING is guaranteed, not even from the Federal Reserve.

That’s the new bullshit, circling around town: The Fed has a put on the market.

I’d rather not discuss it.

This morning’s bad breadth market has improved, led by gains in tech. CRE and banks are still weak, so I am not too enthused. It’s one heck of a bull run and you are probably better off reading the missives of one of iBC’s more optimistic bloggers, providing you are into trading. “The Fly” has a line in the sand and will not cross it, no matter what.

I do like the action in TLT and it is very indicative of the true nature of this economy, much more so than the price to sales ratio of FFIV.

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VORTEX TRADING

It’s not enough for me to pan the market, day in and day out. I must do more, in a way that cannot fucktard myself into murderholes, a la 135% “Venus Fly Trap” trading. I’ve been buying TLT rather aggressively, as it is the least aggressive way to bet against equities. One way of another, through hook or crook, yields will fall. My good pal Scott Bleier likes to say “we are Japan.” I could not agree more.

See folks, it’s time to do “The Hugh Hendry” again and piss on all of those who own TBT. Do it with vigor and tenacity. As for me, well, I’m just an olde fashioned type of guy, who opts out of chasing rallies, fueled by fucktarded money managers (Tepper). I couldn’t care less about his performance data, especially since my own data is better. In other words, Tepper can fuck a horse after a divorce, as far as I am concerned.

Vortex trading dictates or mandates the following:

Bullish on bonds
Bullish on the dollar
Bearish on Commodities (ex Gold)
Bearish on Equities

I could go on; but that pretty much sums it up. In the past, gold went lower when deflationary scares hit the market. However, the nature of gold has morphed. It is now acting like a reserve currency. With that type of status, it’s very hard to be a gold bear, for any significant length of time.

So far, breadth is poor, especially in CRE. Also, certain banks are trading like asshats, especially MTG and MFG. I like the pin action is some heavily shorted names, like ATPG. But, for the most part, I am uber bearish on this market. This market distresses me. I am taking measures to bring it down.

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No More Chicken Feet

In response to U.S. pressures to force China to revalue the yuan, China countered with adding “anti-dumping” duties on U.S. chicken feet, anywhere from 50-100%. As of now, there are no restrictions on human fetus soup.

As many of you ham and eggers chew on granola bars, on this splendid evening, Asian markets are advancing. It’s like a chain reaction of abject stupidity, which is also reinforced by many of you simple IRA types. Your lifestyle is in line with your thinking. Therefore, I do not expect you to understand me or agree with my assertions.

On November 12th, iBC will celebrate its third anniversary. By then, I expect many of you to be under my shoe, once again, as God always has a way of blessing me, while punishing my enemies.

As the clock ticks, the set up is ripening. There has never been a time, in all of my years investing, that I have been 100% certain about my positioning. Needless to say, I am 10,000% (anything more than 100% is simply annoying, no?) certain, as I write this. Perhaps it can be chalked up to a disruptive mental disorder, one that I am unaware of. Or, I know exactly what I am doing and why.

As I close out this blog post, “The Fly” has great plans for himself and is plotting out another dramatic career move, as his evolution quickens. In case you are wondering, YES, he will leave you in the dust: but that’s because, to a large degree, you’re entirely wourthless [sic]. So sorry.

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Big Picture Perspective

You didn’t think I could forget about today or this week and get drunk like the rest of you losers, did you? I have nothing to celebrate.

I am not going to give opinions in this post. Instead, I will offer up some statistical facts, for your perusal, and to confuse you a little bit.

Man, the dollar sucks. It’s getting fucking killed right? Over the past two weeks it’s down 4.21%. Whoa, holy fucknuts. Wait a second, year to date it’s only down a whopping 0.48%. Hmmm.

Next.

Gold is this years winner, up 18.05%. Hey, do you want to know the only asset class that is outperforming gold, aside from silver (+26%)? How about TLT? BINGO. Correct. TLT is up 18.38%, ytd.

Copper? Nah, only up 5.5%.

Financials? Up 1.88%

Oil? I mean, with the dollar tanking to the tune of 0.48% this year, oil must be up huge. Nope. Down 14.99%, which is leagues better than natty—down more than 36%.

How about SPY? Well, it’s up 9.4% over the past month, the biggest gain in 71 years. However, for the year, I’m afraid it’s barely up 4%.

Material stocks? +3.9%.

Do you get my drift?

We might spring board higher and close out the year with spectacular gains or reverse lower and clown rape everyone, including David Tepper (if I see you at Short Hills mall, you’re catching a pizza slice to the mustache). But it’s important to take a step back sometimes, block out the noise, and see what is really working here. It’s easy to get caught up in emotionally charged, catalyst driven markets. But, if you take a look at things from a longer time frame, the true trend crystallizes. Is money really fleeing the dollar because of inflation fears? If that was the case, wouldn’t it be down more, ytd? Gold is awesome, but so is LQD, JNK and TLT.

Investors have been chasing yield. Maybe that will change. Perhaps the economy will rebound and banks will soar 50% from here. However, we already had the monster run in 2009. That was the easy money, just like 2003. To me, I view 2010 like 2004, the year after the big rally. During 2004 and 2005, we pretty much traded flat, as the market consolidated its gains. Looking at the year to date stats, and blocking out the last two weeks, that’s exactly what we have been doing.

Just a little late night perspective for you dick sucking ball jugglers.

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