Prepare for a Summer Sell Off

FNM and FRE are down over 40% this morning. The worst ecological disaster in modern history is ongoing and yet the Dow is down a measly 20 points. Something doesn’t jive, if you know what I mean.

The Obama administration is attempting to nationalize a foreign oil company and people seem to be cool with it, due to the oil spewing into the Gulf. Does that make any sense to you? This is some seriously fucked up shit. Unfortunately, the answers to our problems are not to be found in the wonderful/splendid Republican party. They are all corrupt and deserving of the guillotine.

ATPG is finally in full recovery mode. I feel the stock is still 50% cheap.

With my money, I am waiting for the market to speak to me. Thus far, it’s being very quiet and ambiguous. However, I am emphatic about it going substantially lower by the end of Summer. With cap gains going up from 15% to 20% in January 2011, the BP disaster and European banks in dire need of more capital, a severe sell off is all but guaranteed now, just in time for the debut of Wall Street 2, coming 9/27.

Top picks: VXX, ATPG, SD and GNK

Naturally, I am about to take the other side of the popular trade. Two weeks ago, most of the internet proletariat was bearish, as the indices hit new lows. I went long and made a bundle. If I was properly motivated, WHICH I AM NOT, I’d bet large on a pending reversal. Credit default swaps for Spain are blowing out and the wolves will not stop until the EU is forced to cut rates and/or cut cheques.

Plus, The PPT has never been more extended as present conditions indicate, with more than 84% of large cap stocks ranked buy. Also, the hybrid score has advanced a record 7 days. The previous record is 5.

I am a big believer in setting new precedents. At the same time, I believe in my system, mainly because it has made me millions of dollars, literally. However, I am very open to the idea that it will miss this move and the market will keep marching higher. Like I said, I am open to the idea. However, if history is our guide, it is not likely.

This motherfucker is going to pause, then drop hard, similar to one of those spazzed out rides that you idiots go on, at your local “amusement park.”

Needless to say, I will continue to liquidate longs into strength, until my allocation is 50% cash, 15% VXX, 35% long.

I pretty much fucked upped with my sales yesterday and today. I should have kept all of my TNA, MWW, GS, X, FLS, PCP and RINO. I left a lot of fucking money on the table, for arrant assholes to swipe, unknowingly, at my expense. It’s not that I need the extra money. I fucking want it.

Markets like this are pretty fucking stupid, with all of its whips and saws. For me, I much prefer a steady melt up or down, in order to build positions or pile on. When markets act like this, it’s hard to do anything but trade. Despite doing a lot of trading, as of late, it’s not my preferred investment philosophy or objective. Trying to catch bottoms or tops is not so much different than playing Russian roulette. You can get lucky lots of times. But, every so often, you get your cabbage blown out.

Luckily for me, my cabbage has been blown out before, enabling to act in a way that protects my brain from sudden discharge. With my hedges and large cash position, I’ve been flat lining all day. Considering I was sure we would trade down today, I will take a flat day, compared to a 10% drubbing, had I been 100% short, any day of the week.

A few quick items:

Feeling natty here, I doubled my SD position. Also, I bought heavily shorted shipper, GNK, just for shits and giggles. Into further strength, I will liquidate my SHLD and GLDD positions, paving the way for a downside bias. I see the rally and it chagrins me to know I called it, yet did not participate in it. However, the fucking stock market does this shit like every two weeks.

No sweat; I’ll catch the next one.

I doubled my SD position in the $6.70’s. And, I started a position in GNK, buying 10,000 @ 17.

Disclaimer: If you buy the above stocks because of this post, your dog will shit on your bed. And, you may lose money.

The markets are pushing through the moving averages, yet here I am selling shit and adding hedges. Why am I doing “suchness”, as Mrs. Fly likes to say?

Well, for one, I am up 35% for the year. Secondly, it’s not really a big deal.

The problem when comparing you to me is that you take my hedging as a sign to get short, with burlap’d vigor. Asshole, when I have just 15% of my assets short, that means I have a long bias. Having said that, I sold half of my GS position, for a decent sized loss, for a couple of reasons. The main theme behind my sale is the untenable fact that the stock has been “gay as fuck” as of late. And, secondly, it was my largest long position. I needed to reduce it, in order to limit my downside to the financials.

Once this rally flakes out, expect to hear about municipal short falls, a regular conversation piece at many asshole NYC social clubs. Get your fucking martini glasses ready.

Basically, “The Fly” is taking it easy, spending money at a rapid pace, while depriving himself of REM sleep. If life is a race, I’m a fucking laser beam.

With my money, I might add to one of my natural gas names. And, I really, really like the action in PKX.

I bought 20,000 VXX, sub $27.60.

Disclaimer: If you buy VXX because of this post, the BP oil gusher will lead to the eventual end of the world as you know it. And, you may lose money.

I sold out of PCP north of $111, X north of $44.50 and MWW north of $12.90

Futures indicate we are due for a higher open, despite some really fucked up numbers from BBY. As you know, yesterday I began hedging, allocating about 15% of assets to VXX and the Fazmobile.

Right now, my weighting is 75% long, 10% cash and 15% vxx/faz. In other words, I want this fucker to melt up, so that I can book more gains.

As an aside, pay attention to the ongoing battle between farmers and the fucking railroads. That asshole, Warren Buffett and his Burlington Northern, is raping farmers of profit, by way of raising rail costs. They cite higher energy costs. But in reality, they are taking advantage of the grain to china trade. May they burn in hell.

Into strength, I will book profits in x and pcp.

I swiped this from The PPT, posted by none other Alphadawg. If there are any geologists out there who care to chime in, feel free. In summary, it appears Mr. Devil Dog was right all along.

IT IS A VOLCANO.

Oil Volcano Pressure Too Strong for Containment

“It has been estimated by experts that the pressure which blows oil into the Gulf waters is estimated to be between 20,000 and 70,000 PSI (pounds per square inch). Impossible to control.

The estimated super high pressure release of oil from under the earth’s crust is between 80,000 to 100,000 barrels per day.

The flow of oil and toxic gases is bringing up with it… rocks and sand which causes the flow to create a sandblasting effect on the remaining well head device currently somewhat restricting the flow, as well as the drilled hole itself.

As the well head becomes worn it enlarges the passageway allowing an ever-increasing flow. Even if some device could be placed onto the existing wellhead, it would not be able to shut off the flow, because what remains of the existing wellhead would not be able to contain the pressure.

The well head piping was originally about 2 inches thick. It is now likely to be less than 1 inch thick, and thinning by each passing moment. The oil has now reached the Gulf Stream and is entering the Oceanic current which is at least four times stronger than the current in the Gulf, which will carry it throughout the world within 18 months.

The oil along with the gases, including benzene and many other toxins, is depleting the oxygen in the water. This is killing sea life in the ocean. Along with the oil along the shores, there will be many dead fish, etc. that will have to be gathered and disposed of.

At some point the drilled hole in the earth will enlarge itself beneath the wellhead to weaken the area the wellhead rests upon. The intense pressure will then push the wellhead off the hole allowing a direct unrestricted flow of oil, etc.

The hole will continue to increase in size allowing more and more oil to rise into the Gulf. After several billion barrels of oil have been released, the pressure within the massive cavity five miles beneath the ocean floor will begin to normalize.

This will allow the water, under the intense pressure at 1 mile deep, to be forced into the hole and the cavity where the oil was. The temperature at that depth is near 400 degrees, possibly more.

The water will be vaporized and turned into steam, creating an enormous amount of force, lifting the Gulf floor. It is difficult to know how much water will go down to the core and therefore, its not possible to fully calculate the rise of the floor.

The tsunami wave this will create will be anywhere from 20 to 80 feet high, possibly more. Then the floor will fall into the now vacant chamber. This is how nature will seal the hole.

Depending on the height of the tsunami, the ocean debris, oil, and existing structures that will be washed away on shore and inland, will leave the area from 50 to 200 miles inland devoid of life. Even if the debris is cleaned up, the contaminants that will be in the ground and water supply will prohibit re-population of these areas for an unknown number of years.

Take a U. S. map, lay it flat and measure inland just the minimum 50 miles of total destruction all around the Gulf of Mexico. Should what the scientists who are trying to warn everyone about be even close to being true… much of the property in Florida could be completely destroyed, including massive loss of life.”

Yikes.

We’re fucked, some more than others of course.

I bought 25,000 FAZ @ $15.30 and took 12% of my assets and dumped it, mind you, into VXX, sub $28. The purpose of these trades are not to “make a killing” like some other bearshitters out there, but to protect what I have.  With year to date gains now swelled above 34%, I do not need to make a killing anymore, for I have already feasted on the bones of my enemies.

So, taking notice from The PPT aka “motherfucking time machine”, I stepped aside and hedged up. Additionally, I sold out of the OEH that I bought earlier, for a nifty .30 profit.

Just so you know where I am coming from, at the highs of today’s tape, The PPT registered an extreme OVERBOUGHT reading of 3.32. Granted, there have been instances when the reading has been OVERBOUGHT and we proceeded to burn higher. However, more often than not, this shit is razor thin sharp accurate. Plus anyway, the bulk of PPT misreads occurred just before the market took an unprecedented 1 day dump out of 1,000 Dow points. That’ll learn ya for ignorin’ these here internets.

In short, I win again.