Bank of Japan and Random Shit

I see the CEO of DHB was convicted of fraud. Many years ago, just after 9/11, one of my junior reps solicited that cocksucker in order to set up an investment banking arrangement. Long story short, my partner walked out of the meeting, infuriated after just 5 minutes, accusing the CEO of being rude, in addition to other profanities, and then went on to accuse his female assistant of farting in our conference room. Needless to say, we did not help them. It was one of the funnier stories that I am somewhat cloudy on.

One that’s a little more vivid was with the CEO of Immune Response, old ticker IMNR. One day he took a group to lunch to discuss the great many prospects that his company had to offer, all the while trying to get us to buy his stock. You have no idea how low some CEO’s will go, just to get some sponsorship. As the CEO went around shaking hands, my buddy (as he was holding the hand of the CEO) said “hey, I have poison ivy.” The look on that fuckers face was priceless. His response was one of a flabbergasted, yet appalled, man. My friends retort, just prior to ordering his lavish lunch: “hey, you must have immune response, no?”

As for the Bank of Japan playing Godzilla with Yen lovers: good luck with that, pal. Intervention is not a long term strategy.

NOTHING CHANGES.

I bid you farewell.

You are witnessing a blow off top in precious metals today and some serious yen action, that can only be described as “detrimental” to Japanese exporters. I am confident in my opinion that we are in the last days, if not hours, of this current uptrend. Having said that, I blew out of my largest long position, BAC and GMCR, raising my cash position to about 50%.

With the cash, I will take 5% and add to my underwater VXX position. Remember, it’s a play on the market, not an individual name. There are limits to momentum and traditional correlations can only be ignored for so long. Again, you cannot have a stock market rally with Yen and long bonds going through the roof. We are now up 10 of 11 days on the S&P, making this another mind-boggling rally, that feels mechanical in nature.

Volume is very light; but I am not a big believer in volume, unless the move is big. For the most part, we’ve been stair stepping higher, as short sellers wait in the balance for a chink the the proverbial armor. It is my belief, that chink will come in the form of a fucked up Japan (racist pun NOT intended).

As for me, I do have one bullet left, with regards to a TZA average down. I will not be executing that order today. I much prefer to see how the market will open tomorrow. As for VXX, I will intentionally miss out on the initial move, in order to place my last average down with precision.

Soon.

Get long TLT, FXY, GLD short UUP, short USO and long even moreSPY and lots of cocaine.

WTF!!?? am I talking about? Yet, that’s exactly what is happening here today, on this fine day of our lord 9/14/2010. Stocks are being buoyed by a blender full of absolute nothingness. But, what sticks to the wall is most important (are the sour grapes shining through yet, no? Wait for it): the dollar. Ah, the fucking dollar is going down, at the same time long bonds are going up. Here on Wall Street, we don’t give a fuck if that makes any sense, as long as it makes sense for me right now.

MSFT is borrowing some free money to buy back stock, naturally. What else are they gonna do? After all, isn’t the most important aspect of American capitalism equity manipulation (ah, there is is, quite bitter actually).

The market is leaning towards accomplishing another 40 points and out, even though there is weakness in banks and some oil names. Actually, today is a very mixed day, aside from gold and retail. Both of those sectors are through the roof, as retail stores now accept GOLD as a form of currency to purchase their bullshit wares.

I got the “deer in headlights” action going on here, so don’t expect much from Senor Tropicana. I’m a bit stubborn when it comes to investing, almost like a spoiled baby brat. So, until I stop pouting and pacing back and forth in my white robe and sandals, you might want to, well I don’t know, read a book or some form of investing literature.

More on this later.

NOTE: It’s not the money, but the wins.

Now that Basel III is a phenomenal success, effectively letting banks play with marbles ’til 2019, the market is free to reward longs with antagonistic rallies, all the while spewing out fucked up economic data. Don’t worry, I will spare you the sour grapes, as they do taste rather, ummm, sour. I can go on about money supply and the fact that this economy is heading towards a DEFLATIONARY VORTEX, despite what CH believes. However, I will not.

Did you know “The Fly” douses his food with hot sauce? I don’t do it for the flavor, mind you. I do it to remind myself that this shit is hot, which in actuality has nothing to do with eating. Just like buying and selling stocks has nothing to do with making a living, for me at least. It’s about winship, on a conquer and fuck your whole life up level. Days like this serve as a reminder that this shit is hard. There are no free lunches and nothing is guaranteed.

Having said that, I cannot buy stocks up here, so sorry. I am pleased to see EWZ, BAC, iBN, GMCR, C and SHLD higher. But you need to put things into perspective, when walking around with crotchless suit pants. Motherfucker, I am up 30 times what the S&P is up this year. I ate today’s loss like a hot chicken wing. Nothing more, nothing less.

See you cocksuckers tomorrow.

I’ve purposely abstained from throwing money into this market, despite mid-day weakness, due to robots in the balance. None of this mid-day shit means anything when all of the HFT algorithms activate at 3:00pm. Remember something, cold clam fucker, I am in an excellent position to play this market, with regards to my large cash position.

Personally, from the beginning of my TZA venture, I reserved coin to buy at these levels. Therefore, now that these low levels have been reached, I should not bitch and moan about it. Trust me when I tell you, I am not distracted. It’s always hard, timing tops and bottoms. I do it better than most; but it’s never easy.

Off to see about a sandwich. See you at 3.

You stupid fuckers love to get under my nerves, with comments like “I bet Fly will say he sold VXX and TZA last week.” Naturally, those type of comments are concocted by men with serious mental defects, as a woman would never dare stoop so low. No, dick lover, I did not sell my VXX and TZA last week. Think of TZA as a taser gun, dialed up on high. Then imagine “The Fly” taking a shower in the sunshine singing his favorite gangster rap song. Then, if you could follow me here, imagine a criminal, dressed in a VXX Halloween costume barging into my “sunshine shower” to kindly offer me a TZA (taser dialed on high) to the fucking face. That’s the sort of day I am having, so have respect for those in mourning.

Breadth is incredibly bullish today, which is helping my longs push higher. Remember, aside from the spastic VXX position I find myself comedically long and wrong with, I do have a 40% long exposure, with BAC being my biggest.

Nevertheless, with the sort of breadth I am seeing today, I am shocked we are not up 2-3%. Believe me, I will not dare say “oh, since we’re not up 3%, we’re going lower.” I hate smug fuckers like that. However, I will tell you, this is not enough to scare me out. If you want to scare me out, you’re gonna have to do better than this.

With yen storming higher and TLT nearly unchanged, I remain stoically wrong, yet unchanged in my position.

This move is unsustainable. You will not believe me tomorrow, when the most retarded stocks known to mankind are off to the races. However, as sure as I am sitting here, you will believe me soon.

I’m long banks because there is a real value proposition in BAC/C. But this market is not being fueled by banks or retail stocks or tech stocks. It is being propped up by a new class of stocks, that trade separate to industry, logic, and far away from traditional valuation metrics. Just like people said the dot coms can keep going higher in 2000 and the banks could all soar to $300 and split 5 for 1, due to momentum, degenerate momentum traders are out and about saying the same shit about this new class of stocks—as if we haven’t seen this shit before.

Truth be told, momo stocks are incredibly hard to break and I do not suggest shorting them, since the laws of reason to not exist there. It’s sort of like trying to discern the difference between smoking three viles of crack or 10. You done fucked up with the first, no need to get snooty now. Ya dig?

One day, the following names, if not acquired by HPQ, will fuck up this market something awful:

AMZN, BIDU, LVS, CRM, VMW, NFLX, MELI, PXD, EGO, LULU, IOC, RAX, ARMH, ARUN, SNDK, CTXS, CMG etc.

Remember, earnings and growth look great until they don’t anymore. The proverbial rug is often pulled from companies when they least expect it. The simple truth of the matter is: money managers have been piling into the same stocks, in order to avoid risk. As odd as it sounds, from a macro perspective, there is far less risk buying AMZN at 50x, than a bank with billions in toxic assets. We are at a point where the bubble in momentum stocks is so egregious, no one dares bet against them. For the love of broken X-mas presents, NFLX just sprinted $40 past $100 in a few short months. Hello!? That’s a 40% increase in market cap. That my friends is what I call “fucktarded.” But who is gonna bet against them? Not me.

Look at the VIX–near new lows. That tells me we are awfully complacent with the current arrangement of things, which entails a woefully weak jobs market, high commodity prices and a banking system that continues to suck the tits of the Federal Reserve. All the while, the housing market remains mired in the biggest slump since Greece was burned down by barbarian hordes.

Here is my advice, condensed in a short few sentences:

Know the market you are investing in and do not bitch and complain when it goes against you. I am opting to play this tape, which I deem to be “bubblelicious” via a large cash position (40%). If I had conviction to short names, I would do so. Hell, during 2008, that’s pretty much all I did (short stocks). However, until the hypnotic spell is broken from the small brains of hedge fund managers, I will remain exceedingly cautious and play both sides of the tape, as I expect this market to remain range-bound, although buoyed by the most overvalued large cap stocks since the 2007 banking bubble.

Quick note to those of you who make less than 100k per year, yet choose to shop at Louis Vuitton or Gucci: don’t do that. You look like a fucking jackass. Work on building up your net worth, prior to wasting it on homosexual fashion trends (hip-hop homos).

Back to the important matter of watching me improve upon the best investment tool ever invented for retail usage. I have a new tool in beta that is designed to improve efficiency of trades, during the famous OVERBOUGHT and OVERSOLD cycles. In other words, you see me post all of those PPT charts, with numbers on them, right? Well, those numbers represent “cycle changes.” Let me be more specific: when the Overall Hybrid score (which represents both fundamental+technical data of more than 4,200 stocks) flags OVERBOUGHT (score higher than 2.95), The PPT enters a new OVERBOUGHT cycle.

It gets better.

To date, there have been 16 OB cycles, excluding the current OB cycle. What this new tool does is track the price performance of all stocks during previous OB–>OS cycles. Get it?

With this data, I am able to truly utilize the algorithmic genius of The PPT, by way of revealing what stocks should be purchased or shorted with impunity—during said cycles. Then, on top of that, after I find a name, I can search individual OB/OS cycle stats to better understand how long it might take for the stock to get going.

Let’s use SPY as an example:

As you can see, The PPT OB/OS cycle change signals have been extraordinarily accurate, with an 81% win rate timing bottoms and 69% timing tops. Keep in mind, I can request this data for any stock or ETF, some with far greater efficiency than SPY. However, since SPY best represents the market, as a whole, I thought it only made sense to be totally transparent about how accurate PPT was at timing tops/bottoms.

Okay, let’s dig deeper. When the Overall Hybrid score flags “OVERSOLD” there is a better than average chance SPY will be OVERSOLD as well, since it tracks the overall market so closely. Looking at previous OVERSOLD signals for SPY, I know that it trades higher only 50% of the time after 1-3 days, for an average return of 0.6%. However,  over a 5-7 day period, my chances for trading success sky rockets to 83%, with an average return of 2.9%.

What is the point in all of this?

Well, it’s important to put things in perspective when trading/investing. Time frames can shake people out of trades, due to the unknown. What I am trying to accomplish, by developing these tools, is to shine some light on how this market truly behaves during inflection points, might I add with great success. The data speaks for itself.

This tool is in beta, so it is not available for public consumption yet, as I am a perfectionist and need to add new features to it. However, when I do release it, it will be added free of charge to all users. That is one of the added bonuses of doing business with a stock market fanatic: I always endeavor to improve and do not require great sums of your money to do so, since I have my own. Thank you very much.

Oh, by the way, I see some of you tech savvy PPT subs trying to reverse engineer your way into this screen data. Needless to say, you have been defeated and are now blocked from viewing it.

Lastly, we are now in the process of adding deviation from mean/median avg. return data into the system.

For example:

During OB cycles, TNA trades lower 69% of the time for an median loss of 6.7%. However, during this current cycle, TNA is up 4.8%, effectively deviating from the median by 11.8%. This data can be mined across The PPT universe (by me only, for now) and is a great tool when trying to understand how overstretched or coiled back a security is, at a given time.

Okay, back to doing shots of patron, no chaser.

DB is going to raise a shitload of capital, in an egregious 30% dilutive share offering. This is some shit out of the 2008, panic and let’s burn the fucking house down, handbook, when banks were raping shareholders in an effort to paper over losses. The truth of the matter is: European banks are likely hiding massive losses, all to do with PIIGS. Now, I am not suggesting this will lead to an eventual and probable collapse of the world banking system as we know it. However, I an suggesting that you should expect these type of capital raises, especially from our European counterparts, indefinitely.

Truth be told, if American accounting regulations were not so corrupt, our banks would need to do massive cap raises too. However, thanks to the politicians on capitol hill, banks can hold bullshit deteriorating “assets” forever, without having to mark them down. The point remains: cap raises are bad for current shareholders, even though it shores up the balance sheets of said banks.

Having said that, I am long C and BAC, mainly because I am a firm believer in trickery and government deception. Go figure.

With 40% cash and another 20% withering away in VXX, “The Fly” is playing defense, even though he expects a pullback. The bottom line is this: despite chopping around here for months, the market has given no signs that the trend is lower. Therefore, it’s important to know when to bet big and when to simply wait it out. I am far more comfortable “surviving” pullbacks and profiting from upswings, then betting on a sharp move lower, especially in an election cycle.

In short, I expect a pullback but will not bet the house and kids on that coming to fruition. For now, with marked exception to my degenerate personal accounts, it’s all about defense for me.

UPDATE: I sold out of SCO, due to pipeline trickery and outright chicanery. There are better plays.

Listen very closely, as you can actually hear technology stocks crashing into one another, like little clouds made from metal. As a point in fact, the bustling metal is giving me quite the headache. Are you not disturbed by it, especially during afternoon tea and crumpets time? Thus far, we have received NOTHING BUT BAD NEWS in the tech sector. Please do not mention AAPL, for they are in a world of their own.

Yesterday’s warnings came from TXN and NSM. Fuck faces from the internets, IGNORE THESE WARNINGS AT YOUR OWN PERIL. Hey, it’s not like I give a shit; but I’m just saying you should take a peak.

OVTI, ATHR, ANAD, CSCO, NETL, SWKS, SNDK= CLAWHAMMER.

That’s all.

Oh, by the way, during OVERBOUGHT cycles, according to the laws dictated by The PPT, GLW goes down 87% of the time for an average loss of 4%. Now you know why I sold out of my GLW last week. On the other side of the coin, in OVERSOLD cycles, GLW trades higher 81% of the time for an average return of 9.6%.

What does this mean?

SHOMP

NOTE: Yes, I see oil is higher. But now ask yourself a question, punk, “is The Fly feeling lucky?”