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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.

Halftime Report

Well, we are halfway through 2010 and the markets are reeling. Despite minor year to date losses, the recent trends have been horrific, particularly in commodity related names. As always, there is a fight being played out, live in the markets, between the inflation and deflation crews. On one hand, common sense dictates that we are about to enter some brand of fucked up inflation, based upon the behavior of the Federal Reserve and incessant “bail out anyone” attitude of the Federal Government.

On the other hand, people seem to forget the banks are lying about their losses, thanks to new accounting rules, and will get sucked into the deflationary vortex, hard core, if some of the sovereign debt risk worsens. The losses are too great for the banks to bear. As a result, there will be a seizing up of credit, effectively pushing us over the ledge into the whimsical world of “double dip recession.” Plus, there seems to be a worldwide movement against easy money, vis a vis “austerity” measures and “responsible budgeting” here in the states.

Let me be clear: I am not here to tell you what is better for the economy. I am here because I know what will help stocks go higher. Say what you want about easy money and fucked up bailouts; but Wall Street likes it. Take the punch bowl away and we will all feel the pain immediately, some more so than others, indeud. Maybe we need to bite the bullet and throw this fucker into a deflationary vortex, so we can all come out “cool as fuck” on the other end, with mohawks and shit. However, something tells me deflation will lead to war and war will lead to a kick ass market. So, maybe I am for deflation?

Year to date, I am up 37% for clients and much more for myself. Coming off of 60% and 90% returns in 2008 and 2009, “The Fly” is enjoying an investment renaissance for the ages. With the grace of Santa Claus and God, I’ve been able to destroy my enemies and crush the markets, with ease and with dignity, all the while inventing the greatest investment tool ever known to mankind, The PPT.

Halfway done, I have a 65% cash position and decent sized holdings in FLS, CIEN, FTK, GS, SD, SHLD and TNA—just to name a few. My goal is to return more than 100% this year, which, if accomplished, will be the first time I’ve enjoyed triple digit returns since 2003. I am not particularly sure where this market is going, 3-6 months out. If forced to guess, I’d say we are going much, much lower. But, you never know what the Fed has up their gay sleeves. Keep in mind, the tougher things get, the greater the likelihood the Fed will intervene. Hell, we may get another stimulus package before it’s all said and done. After all, it is an election year.

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The Stage is Set

“The Fly” was besieged all day at his local Lexus dealership, where the greasy mechanics tried to trick him into fixing shit that didn’t need to be fixed.

I see the market rebounded off the lows, making my early sales of VXX and purchases of FLS and TNA correct. However, I am not so sure the market is ready to suck its own cock, ahead of the July 4th weekend. Tomorrow’s numbers are meaningless. The market is being controlled by insidious robots, who need a little greasing.

It is my belief, mind you, that within 5 trading days from now the market will be 3-5% higher. It might not happen tomorrow or early next week. However, rest assured, it will happen.

Having said that, I ended today’s session with a 65% cash position.

[youtube:http://www.youtube.com/watch?v=GLvohMXgcBo 616 500]

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Zero Hedges

I spit in the face of fear. With that in mind, as planned, I sold out of the remainder of my VXX, north of $32. With some of the proceeds, I bought 10,000 FLS in the $84.40’s. And, I added to my TNA position in the $34.60’s.

All of the data is negative. However, if there is one thing I have learned, through the years I’ve wasted accumulating wealth in the stock market, nothing goes according to schedule. Meaning: even the shittiest data can sometimes put in a temporary bottom. I’m not very confident about this thesis, however. Which is why, at the moment, my cash position is north of 65%.

In my opinion, the easy money has been made, playing the downside. Now it’s time to make some hard money on a bounce.

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Strategizery [sic]

In between history lessons, “The Fly” is mapping out a precise game plan for the coming days to come, which will lead to a sharp upside reversal, in the very dumbest of exchange listed stocks. With today’s VXX sales, the current level of VXX on my chest is 15% of assets. I also reduced some of my longs by selling GLDD, mainly because it looked cool and shit last week when stocks were expensive, but not so much today. There are plenty of other names worth buying, that will sprint higher on a reflex rally. Current cash position is north of 55%.

This is high level, highly skilled trading going on here, not some nonsense that you read about on your fucking twitter stream.

Anyway, my plan is to sell out of the remainder of my VXX into tomorrow’s shit storm. There are a few stocks on my buy list. However, I will leave that advanced knowledge exclusively for the gentlemen inside of The PPT. My general plan is to remove hedges and decant my longs. Let them breathe a little and enjoy life.

On a personal level, I flipped out of my TZA for a quick one day .70 profit, on an absurd amount of shares. And I started a very small position in TNA, still holding 80% cash. Depending on market action, I intend to have 100% of my personal trading account in the most aggressive ETF’s, crafted by beastly men, known to mankind. And, I will do so without reservation or regard for your feelings. Always know that when reading this site.

A great man once said “it’s gonna be a hot summer.” I concur.

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Victory, Yet Again

I sold out of half of my VXX position, north of $31.25 and all of my TZA, around $8.20.

I am reducing hedges due to the laws dictated by The PPT. And, I initiated a small position in TNA, mainly for novelty.

Oh, I also sold out of GLDD.

NOTE: This is all extreme levels, over the selected time frame, of The PPT. Any score under 2.26 is considered “OVERSOLD” and above 3.10 is “OVERBOUGHT.” However, whenever it goes below 2.30 or above 3.00, it’s worth paying attention to.

[youtube:http://www.youtube.com/watch?v=Z6Wc7-R7gN0 616 500]

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BREACHED

Get your fucking life vests ready and jump out your windows with it, for the market has breached the “Magical Support Level” of 1040, with grotesque urgency. Cancel your fucking vacation plans and run for the woods, where you may or may not enjoy the living quarters of the naked forest, for the remainder of your pathetic lives, “off the grid,” with the trees and shit—until the IRS arrests you for tax evasion.

Into weakness, I will be removing hedges and letting longs breathe and live a little.

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Staggered

The reflex rally is getting heavy, especially on the books of underwater hedge fund managers. As they read this post, their palms are getting sweaty, for they are down more than 5% for the year, having squandered early gains. In an act of desperation, these jet setters double down on atrocious bets, like X, MON and FCX. You see, they, like many of you, are religious with their investment thesis, sucking the dicks off quantitative easing via large directional bets on “reflation.”

On the other side of the coin, “The Fly” is relaxing in a balmy office, where palm trees reside and asinine little trinkets litter my fucking monstrously large mahogany desk. I do not have a care in the world, despite it crumbling all around me.

As I conclude this post, the “Magical Support Level” of 1040 is approaching, yet again.

More on this later.

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Magical Support Level

You shall not fear anymore, young pleb child, for the stock exchange has been fixed and we shall go higher, henceforth. The magical support level of “1040” on the S&P is biblical and will part the mustaches of anyone who dares bet against it.

As I sit here, surrounded by luxury, investors are selling volatility and buying short term call options, as if their heads were on fire, by way of gasoline and phosphorus match. Do not pay attention to TLT, as that is only a national joke, purported by several high ranking government officials. Instead, look at BP and all of its “splendour” [sic].

As for me, I will go about my business and eat sandwiches throughout the day. After all, seeing the market bounce back so impressively and dramatically, following yesterday’s bloodbath, I find it difficult to famish myself.

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Don’t Tread on iBC

I’m not a nice guy. I waste inordinate amounts of time talking to fucking idiots on the internets. The very last thing I will tolerate is questions in my email box and/or nonsense inside of The PPT. Let me be clear: This is my domain. Fucking with my domain will put you in a mustache-less situation, if you know what I mean.

Consider The PPT “The Fly’s” office, where he permits you fucking ingrates to look in for a measly 29 bucks per month. It is a place of distinguishable honor, sacred to me and my reputable backers. We do not need you there, always remember that.

As for the tape: you do not deserve late night commentary, due to past and present sins. I am sure you all know what to do, being experts in all things that have nothing to do with how the markets work.

Do not waste my time.

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iBankCoin: Your Home For Deflationary Vortex

Who called this deflation trade better than HORATIO CLAWHAMMER aka “The Fly”?

Instead of building on the recovery, the world has decided to take away stimulus and impose harsh austerity measures, in order to support “the big lie” that inflation is a risk that may hinder economic growth. Well congratulations, fuckface, you have all but guaranteed a double dip recession, by way of using the “how to fuck up the economy, fast as fuck” handbook, written in 1932. On top of that, the financial reform bill is a fucking travesty of epic proportions that will further knee cap our banks’ abilities to lend money.

But this is all by design.

Our elected officials tell tales of China owning the United Steaks, via large treasury holdings. They talk about the dollar going down, due to inflation. To solve these issues, they demand “fiscal responsibility,” by way of harsh budget cuts, just two years removed from the biggest credit crisis since Hannibal fucked up Rome. Well, the end result, much to the delight of our low IQ Congress people, will be deflation—effectively funneling money into U.S. Treasuries, a la Japan. I told you this would happen and here we are now: it’s happening.

Like Japan, our debt will be financed internally, providing the spreads are attractive for our fucked up banks. Without a doubt, the share prices of our banks are zombified and offer little to no upside.

If the world does not change course and reintroduce unbridled stimulus, we will be feeling the pain of the 2008 credit contraction with great vigor, very, very soon. The end game is Dow 7,000 or lower. We will have up days and rumors of resurgence. But rest assured, we are being led towards economic death.

Trade accordingly.

[youtube:http://www.youtube.com/watch?v=barLaHrtvoM 616 500]

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