Is the Market Pricing in a Trump Ascendency?

With The Donald up in the polls, trouncing over the troll, is the recent surge in stocks a reflection of a Trump win and a return to the greatness inherent in all Americans?

Discuss.

The data is the data. It isn’t what you want it to be or think it might mean. The term ‘overbought’ is often synonymous with dangerous or overvalued. If I didn’t have Exodus available to me to crunch these large data sets, I’d likely be in the dark–just like the lot of you. But, unlike the misers and the scoundrels out there who refuse to join the league of top hatted gentlemen, I am afforded the data and I parse it…regularly.

On Tuesday, May the 24th, 2016, I posted this inside of Exodus, alluding to the systemwide OB signal that had been festooned all over the site.

Those numbers are even better than the oversold stuff I tout. Buying into an Exodus overbought signal has yielded a 93% win-rate over the past 3 years. Plainly, it’s as good as gold. This isn’t Fly trying to have it both ways, being bearish as shit and then pointing to his time machine that was bullish, always right and never wrong.

The algos aren’t my opinions. My opinions, wrought with emotions born during a stark childhood that was rife with wanton violence and mischief, were indelibly misplaced over the past week.

As of the close on Friday, just 43 stocks were considered to be overbought, that had any backtest meaning. Only a handful of stocks were oversold.

My free cash flow portfolio screen is up nearly 12% over the past 3 months. It automatically includes companies rich in cash flow, high in growth, and with great gross margins. Believe me, I’ve studied just about every combination of fundamental analysis to produce the best possible returns and this one reigns supreme every single time.

Another favorite screen of mine is the 200 day. This finds weak stocks vacillating at the 200, typically a place where support might be found.

In mind-numbing bull markets, short squeezes were always a favorite denizen for my money. Here are some heavily shorted stocks in my short squeeze screen. I’d attack the ones with the higher technical scores first. A rating of 5 is tops, and 1 is the worst.

Lastly, this is the final week for the 15 stocks in my GAPR index. They will be replaced on June the 1st. For those uninformed, this is a semi-annual portfolio that I update twice per annum. As you can see, the returns have been lackluster, up slightly for 2016–hamstrung by a few dogs.

I’ll likely build an entire portfolio from scratch for the June index.

In short, overbought is good. Risk is still reviled, on a year to date basis. My bubble basket is down 17% for the year, which is my chief barometer for risk. According to the data, markets should remain firm through next week.

This is, by far, the best documentary ever made. I’ve seen this 11 hour documentary on the American Civil War twice, once as a teenager and again a few years ago. It is the authority on all things to do with the Civil War, featuring legendary historian Shelby Foote, whose southern drawl soothes the belligerent northern ear. One critic called his voice ‘sweet molasses over hominy.” I happen to agree.

This isn’t for the ADD addled cocaine donkey puncher. But if you have time to sit through a long documentary, discussing the single most important event in American history since transvestites were permitted to shave their fucking beards in the Target ladies room, I promise you an epic experience.

I suggest buying it and watching it like a normal human being. However, if you’re into watching 11 hour documentaries on a computer, like a moron, here’s the link.

Happy Memorial Day. Festivities at House Fly continue…

NOTE: My favorite part was when President Lincoln unleashed General William Tecumseh Sherman upon the savage of the south. He taught them a lesson in northern manners that is remembered, by the ruins, until this day.

“War is the remedy that our enemies have chosen, and I say let us give them all they want.”

-BEAS (unknown date)

Since some of you don’t tune in religiously every day to learn about what great things Le Fly has cooking up, I’m detecting a bit of confusion when it comes to my content and market bias.

Plainly, I’ve succumbed to the mental illness that has plagued Tyler over at Zerohedge since the day he was born. I do not like stocks in a box, with a fox and certainly not with a cocks. But my bias is somewhat moot in that I quit the business back in late December. I am not trading my account and do not manage money professionally any longer. If I was managing money, I am sure the content on the blog would be different, as I am a degenerate of the first order and love to bury myself in stocks.

Having said that, I have but one position, TLT, and will hold it until the yield curve inverts. It is up over 9% for the year, or 9x better than your fucking nasdaq, so you can go fuck yourselves in the back of a rancid urinal. Sorry, I don’t know what came over me.

I’m also trading the oversold signals in Exodus, which have proven to be extremely accurate over the years. But this isn’t a sales pitch. This is more of a clarification of where I’m taking the site.

None of which I am posting is purely editorial. I am posting mainly news now, with my spin on things. If the news is overly bearish, that’s because the fucking news is overly bearish. I am not simply making these things up. When Macy’s and Tiffany’s warn of impending disaster, I am not able to say “they were just joking, go ahead and get long the shopping mall.”

If you’re relying upon my blog for investment advice, you’re making a mistake. You’re better served going over to The Option Addict’s or Ragin Cajun’s pages than mine, if it’s specific picks that you crave. “The Fly” is too busy talking shit, on a very grand scale, than to cater to the likes of you–offering up stock advice to a class of reader that is simply unbelievably dense.

Along those lines, however, I do manage a GARP index in Exodus, which I update twice per annum, and that’s up 0.7% for the year. Give me a medal.

In summary, I want the world to end because it’d be fun and interesting. Plus, I have a mental ailment, apparently. Also, I’m not managing money. Instead, I am blogging, walking around my house in my robe all day, talking extreme shit and having fun on the internets.

Why did I quit managing money? I was doing it since 1997 and it was starting to make me crazy. Most of the time I was miserable and I got burned out, in spite of all of the money it produced for me. I wouldn’t wish that job on my worst enemy.

Makes sense?

Can we put this to bed already and quit day dreaming about the Fed suddenly admitting that all of the threats they’ve been making to hike rates was all a joke?

The economic data isn’t going to get worse over the next month. As a matter of fact, it might get better. The Fed is going to tighten credit. How that will affect stocks is anyone’s guess.

Thus far, I’ve seen nothing but ostriches with their heads in the sand, when it comes to broaching this topic. Everyone saw the December rate hike coming and no one really prepared for it. The result was catastrophe over a period of 2 months. Will we get a repeat of that, or will the market rejoice–thinking the Fed is ‘one and done’?

He’s gonna make America great again and Mexico is gonna pay.

Since we do not live in a dictatorship, President Trump isn’t likely to get the majority of his ideas past the catamites in Congress, who are wholly corrupt and bedraggled. However, there are some bankable plays that will be forced upon them, whether they like it or not.

The number one theme in a President Trump America is protectionism of U.S.industries, which means doom for multi-national, global, plays like KO, PG and ITW. The days of using foreign slave factories to produce cheap as shit goods that break upon initial usage might be coming to an end. Companies like TGT, WMT and other large retailers might suffer, as trade with China becomes ‘difficult.’

But, domestic companies that are being strangled by unfair Chinese practices will flourish. Since Trump is a construction man, it makes sense to get long X, AA and core infrastructure plays like LNN, VMI, CLF, and MLM.

Also, the carnage in coal might be undone, paving the way for big recoveries in CNX, WLB, GBX and a sundry of ancillary plays. Or, you can just buy KOL.

The rails might suffer, in spite of a possible resurgence in coal. Trump wants the keystone pipeline and isn’t afraid to introduce 1930’s technology today, over Victorian era rail transport.

If you recall when Romney was up in the polls, the single best plays were coal. As the Presidential elections near, expect some of the above names to really gain some traction. Think big American infrastructure, energy independence, and an unwind of the EPA. This means many filtration plays, who’ve thrived under Obama, might suffer. Additionally, we’ll need lots of concrete for the massive wall that is going to be built– EXP, KWR, MLM and USCR are choice wall plays for border loving investors.

One side addendum: Yellen will be fired as soon as Trump gets in. He’s a low interest rate guy. Expect credit to flourish; but banks to get squeezed.

Investing isn’t about ideologies and politics. You can hate Trump and still game the system to your benefit. That’s your job, so get to work.

These are just a few ideas. I’ll have more as the elections near and if I ever decide to start investing again.

We’ve had a terrific rally over the past three months. In the ETF world of endless structures, there are seemingly endless ways to skin a cat. In Exodus, we quarantine the ETFs and have them organized nicely for easy navigation. Before I get into my favorite (no, it’s not TLT), here are the best performers over the past 3 months.

Right in the middle of that list is an ETF dubbed ‘XIV’. It’s, essentially, a money printing business, in that it short volatility. In a world of command economics, endless bailouts and fear of decline, nothing imbues the character of the market better than XIV. It is a bet against free markets. Being long XIV will ensure that you’re aligned with the global tzars who manage economic prosperity for all of the field workers below.

Over the past 3 months, it’s up 62%, as volatility was suppressed and crushed into pieces. But over the past 12 months, it’s actually down by 32%, perhaps a sublime opportunity to partake in the splendor of global authoritative hegemony.

On the other hand, should free markets ever get released from its prison, shares of XIV will likely dissipate into nothing at all.

BUYERS BEWARE!!!

I don’t know why I like this guy. There are a handful of people who talk about stocks on the teevee, who I happen to like. One being Bob Parker from Credit Suisse and another being Mario Gabelli, long time Boss Hog of the investment world.

Mario is super sharp and a great investor. This short clip is definitely worth your time. Amongst the media stocks that Mario likes, he’s also getting into homebuilders and defense stocks, which I find to be interesting.

What an early morning shocker. Is anyone else as surprised as I am that Zoomlion didn’t get to finalize their bid for TEX. When I awoken from my slumber, I nearly soiled myself when I read the news, an absolute shocker.

Clowns who were long TEX off the fictitious Zoomlion bid are being disassembled this morning, in truly heinous fashion.

Shares are off by 20% on the utter disappointment.

Here’s a very brief rundown of some of the after-hours action.

Solid earnings:

VEEV +8.5%, ULTA +8.3%

Not solid earnings:

PANW -10%, GME -7.5%, SPLK -5.3%, DECK -2.5%

PANW is a bit of a surprise, being one of the few silicon valley companies able to deliver strong earnings for a long time. This set back, along with SPLK, will injure many tech names tomorrow.