Cashed Up at Recourd Highs

I went to 100% cash because I don’t trust tapes where Chinese stocks are +100% in a week, coupled with new wars that involves major oil producers and also with the port strike underway. I’m bullish, but not stupid.

Part of me was angered to book gains of +66bps on an otherwise glum day because I was +170bps pre market and wanted those gains back. But I reminded myself they were never mine to begin with and the only thing that mattered was what I had right now and what I could do in the future.

For me, the future is very very bright and I’ll be able to manifest more gains and navigate the tape with the professional acumen that comes natural to me.

At any rate, I’lol jimmy back in later, after things settle down.

I want to communicate something that is important. We all have been angered and irritated by the management of western nations and the subsequent results of their malicious intent. It’s important we be honest when assessing things, because lies serve no purpose other than to live in a deluded fashion. The Globohomo is winning and will most likely continue to win for the balance of our lives.

It seemed like there was a window of opportunity in 2016 and again in 2022; but the sequence of events that have transpired since makes it abundantly clear that opposing their hegemony will lead to injury. I am not saying it’s over or that you should stop fighting for freedom; but you should realize they don’t play fair and they make the rules, so they’re arbitrary.

Trading in this environ, from an American point of view, is easy and mostly mundane, at least for me. In a session wrought with tumult and angst, I came out the other end down just 12bps, due to some smart positioning in $SOXS and a series of China stocks. I have an 8% hedge in $TZA; but do not have a bearish disposition.

It is precisely days like today that make the difference between the sedentary portfolio instructed by know nothing advisors and Sir Le Fly, the greatest, bowling on these clowns since 2007.

This morning’s collapse and my subsequent moves out from high beta to low paired with a well timed $SOXS hedge at 12% of assets have reduced my losses from 90bps to just 30bps. I am only 2.5% $TZA, the rest long, on a day where the fucking NASDAQ is careening through the floorboards, and much more.

There is no wall of worry, as Wall Street is spoiled via FOMC moves and fear is non existent. Happenings in the Middle East is accelerating with lots of kills by the IDF paired with incredibly tough talk out of Iran. The level of incompetence by Israel’s enemies is front and center and the chasm between their abilities could not be wider. The problem for Israeli’s enemies is akin to be afflicted with Dunning Kreuger, whereby the feeeeeeel they can win but in reality they cannot.

My opinion on the market is slightly changed, with more of an emphasis on lower beta stocks rather than super risky stuff. I am sensitive to the market winds and find I do best in tapes, such as this.

Several things to discuss, chiefly the port strike. The last time we had one of consequence was July 1971, and it lasted 134 days. During that time stocks like $DIS, $MMM and $IBM got hammered due to logistics, but shares of $MCD, $MRK, and $PG did very well.

If this strike were to last long, you’ll want to be long stocks that are domestic and now reliant upon shipments for supplies.

Markets have collapsed lower today on fears of war, rumors and fears. We have been at this a long time now and those fears have gone largely unwarranted, mostly because no one is able to displace American dominance.

Nonetheless, I had to scramble this morning to reduce my beta, as I was positioned for more grandiosity. I went from a beta of 1.6 to 0.4, hedged with $SOXS, festooned with losses of 75bps to start October.

No worries. We’ll get them back; but we must be careful when navigating large spikes in volatility.

The past 3 months has been a volatile one, but ultimately bullish. The NASDAQ gained a little more than 1%, $IWM +8.5%, and the $SPY ~4.5%. The rationale for the chasm between the NASDAQ and Russell lies in the bullish case for domestic companies over global, due to perceived lower interest rates and possible Trump administration.

The winners

All of the above industries are lower interest rate plays. The next leg of this rally should intertwine, but not limited to, consumer facing companies.

I closed just about at RECOURD HIGHS, up a little more than 16% for the year. My intent is to extend those gains in a most magnanimous manner during the next 3 months, which are traditionally very good for traders. Although markets are up around 18% for 2024, it has not been easy and no market is ever easy, with marked exception to 2021. As traders and investors, we constantly fear pullbacks or missing out on rallies and rarely feel at ease, because something is always happening. I do feel most at ease now than all year, based on a fundamental conviction that stocks will be going higher due to the Fed easing. I’ve said this before and I’ll repeat it now: they’re likely to cut much more than you think in order to get ahead of the looming debt wall, which stands above $7.2T, from now until 2028. To avoid another financial crisis and meltdown, those bastards will need to reduce the cost to borrow money at a time when the economy is very good. THIS HAS NEVER BEEN TRIED BEFORE and don’t be fooled into believing they’re doing it because they know something we don’t. They don’t know a damned thing and are forced to cut rates to keep this rigged game going.

We have multiple upside catalysts working at the same time, from Fed cuts, to elections, to cheap energy, to multiple expansion to China. The only thing that can hold us down is fear and the market isn’t scared of anything at the moment.

It appears we are in wanton greed mode, which is important to understand in the context of risk. Even though risk is on, that doesn’t mean we should comport ourselves like animals. I remain 100% long, largely mega cap stocks both broad and diverse.

I am NOT interested in doubling my money over the next month, but over an extended period of time.

Presently, I am down 9bps, but feeling ok about the broad strokes and hoping to close out September with gains of 2%+, which is fine especially when considering I started off down nearly 5%.

For October, I am extraordinarily bullish.

Last night the Asian markets took on a ribald quality, with the NIKKEI capsizing more than 4.9% due to their new Prime Minister and looming rate hikes, which in turn will unwind the Yen carry trade and China shooting higher by 8%, based off this notion that the government will actively intervene in markets to boost share prices. We heard people like David Tepper declare “buy everything” in China last week in response to this news.

The subsequent results have been nothing less than staggering, with Chicoms ripping 30 to 40% the past 2 weeks.

The double leveraged $CWEB ETF is +89% in the past two weeks.

Clearly, this is overdone to the upside; but now China bulls are pointing to the very large short positions in these stocks and wanting more. Bear in mind, like the oils and basic materials, the China bull trade has been dormant for a very long time, which was a convenient hedge for long short funds to constantly bet against. Now with the fervor pointing straight up, we have ourselves a classic short squeeze playing out and once these things get started, it’s really hard to predict when they’ll end: case in point $GME.

Instead of pitstopping at Richmond or Fredericksburg for a night, traveling from NYC to NC, I decided to just drive the whole way. It was about an 11hr sojourn, including stops, and I could’ve driven another 5 hours before swerving off the side of the road into a ravine.

The trip was capped off by me unhooking the net inside my trunk and seeing my wife’s cherished bottles of red wine and ‘imported olive oil’ roll slowly and then at warp fucking speed onto the concrete below WASHING OVER MY BROWN SUEDE SHOES, much to Mrs. Fly’s horror. She didn’t give a shit about my comfy shoes, but the salads that were to be enjoyed and now cannot. Delicious, wonderful salads. The subsequent results of this unhooking of the net has made my driveway appear to be a denizen of an auto mechanic and my shoes a total loss, oil stains everywhere. Any of you tracking me for a while understands this is part and parcel of me going on vacation. Either I lose wanton amounts of coin in the market OR personal items are stripped from me by the Gods, forcing me back into a mode of toil to seek vengeance via grandiose market gains.

The wine, I will have you know, was purchased by Mrs. Fly at a “super cute” vineyard in Long Island, overlooking a ‘wonderful view’ of the grapes and the goats trapped in some little playpen. She will tell you the wine was “very good” but as an authority on wine I will tell you it was “less than mid.”

At any rate, we are back in the saddle. By “we” I mean “me”, since Mrs. Fly is now retired and has been retired for over 25 years (we are 48).

Things to do today, aside from unpacking, include church, a trip of Whole Foods to restock, and watch the finale of Industry (fire) and the second episode of The Penguin (also fire). Tomorrow, we will bank coin. By “we”, I mean me and the people inside Stocklabs, not any of you reader class losers attempting to extract valuable information for free.

Good day.

Good day —

In the past I’d lose large sums of money whenever away on vacation — but this go around I moseyed back to recourd highs.

I cannot be upset about this result but will tell you that this trip embedded my hatred for NYC forever, on a scale not formerly understood to myself. The problem with NYC, aside from the ribald and ugly aesthetics of the city, is primarily the people. They’re a monstrous sort, easily tricked and fooled, angered by easterly winds, both vacuous and small. If not for family, a thousand years could pass and I’d never come here to visit, much preferring the southern comforts and amenities of North Carolina.

At any rate, we depart for home tomorrow, but might sleep in Richmond for a day, since I don’t like to drive 10 hours in one sitting, mainly because I’m not an animal.

Into the Monday session, I long with 15% cash and a 5.5% $SQQQ hedge. Today’s tape was sloppy, I think — but who really knows since I spent the majority of my day drinking some beer and noshing on some amazing pizza.

Back to the turret on Monday.

I realize the lot of you are chiefly concerned with “buying everything” because David Tepper said so, particularly in regards to China. Let me remind you that David makes his investors 13% per annum and hasn’t been relevant in more than a decade.

I’d like to show you an hourly chart of returns for the $QQQ in the month of September. Let me know if you see a pattern.

That’s right, all mornings will be faded until you lose confidence. Or, perhaps it’s just because traders like me prefer to cash up at the open and load up later. This sort of trading pattern is custom tailored for a person, such as myself.

I closed out most of my longs at the open, netting +35bps. I’m 83% cash now and waiting in the tall grass, eagerly awaiting for a zebra to cross my path. But since I’m on “vacation” in a city I fucking hate, I’m not really on vacation, per se.

I see the hurricane has finally wiped out Tampa clean, about time if I don’t say so myself.

All things end and turn to dust, this market included. But that’s just small talk. On the bigger narrative, we are bullish and continue to be tactical. When I refer to “we”, that’s simply just referring to me in the most royal sense possible. Or perhaps it’s a foreshadowing of things to come, as I do intend to employ talented people when I get back into money management.

On that talking point, I’ll get to many of you this weekend to set up dates to talk in the weeks to come. I’m limiting my clientele number to 150, so please refrain from requesting an audience with me if running $10k at $HOOD. For inquiries, email me flybroker at gmail.com.