WHAT THIS MARKET NEEDS IS MOAR REVERSALS

The market is up today, which is unacceptable. Before the day finishes, let us prey for sharp reversals of misfortune, whereby everyone gets tossed into the chopped meat grinder, broiled, then served to monsters for expeditious devouring.

There isn’t a reason in the world to trust anything on the screen. But there are trends worth pursuing, long term. With gasoline in the shitter, gas station plays will work higher. Names like TA, MUSA and IMKTA look solid.

Consumer sensitive names that cater to the bedraggled, my former and future class, benefit the most from lower gas prices. Now what do the lower class folk do with extra coin? Having been from this class as a young lad, I can tell you, with unequivocal confidence, they eat at the panned cake house (DIN) and buy Nike (NKE) air jordan’s, from either Finish Line (FINL) or Footlocker (FL). It’s part of the hip hop culture now, to be fashionable with $200 rubber basketball shoes on one’s feet. The quality of one’s clothing and brands that he/she advertises (free of charge) tells the rest of the world how important/unimportant one is, truly.

So, if you’re poor and living off grilled cheese sandwiches and cup o’ noodle soup containers, be sure to buy some fashionable $200 basketball shoes at your local FINL this week, in order to ‘pop off’ and acquire easy to impress female counterparts, who are equally bedraggled and of course highly fashionable, with all of the decadence and splendor that one can muster from the bottom of the capstone.

I made one final purchase of NDRM. The market looks real good, which probably means we will reverse lower tomorrow. Either way, a man has to stay true to his convictions. Right or wrong, “The Fly” is true.

Like I said earlier, The PPT hybrid (mixture of both technical and fundamental scores) are indicating biotech stocks are about to bounce hard.

You cannot pay me enough to do this job. Stocks are up now, as people finally realize that the ECB is dead fucking serious about inflating their shit filled economies. The world is in one giant ‘fag-box’ and it wants inflation now. Why does it want inflation?

Because they fucked up and burdened their people with an unseemly amount of debt, an amount of coin that can never be paid back. Under normal circumstances, these countries would fold and restructure the debt, then get to enjoy true inflation, true growth. However, everything is inter-connected these days. Banks in Germany can’t sneeze without a bank in NYC feeling the breeze.

So, we find ourselves in a situation where central banks desperately attempt to keep the party going. Scott Bleier called it years ago: We are all Japan.

The silver lining in all of this is we are not in the dark ages. Quite the contrary, since we are in the midst of the greatest advancement in the human race ever, both medically and technically. These things have a way of working out and I invite you to keep the faith–because that’s the most valuable currency in the world. It always has been and always will be.

Biotech stocks are now at the lower end of the hybrid score range, a level that has resulted in sharp upside reversals. This of course is data found in The PPT.

The ECB announces QE and the market went down. If the ECB didn’t announce QE, the market would go down. If space invaders landed in Nebraska, the market would go down. If God himself appeared on Wall Street and told everyone to buy stocks, the market would go up, then reverse lower after bears spread the rumor that God was secretly short.

Everyone is a cynic. No one believes the ECB or the Fed; and as a result, stocks are going down.

Despite the market being near new highs, multiple sectors have been obliterated over the past year, laying the the groundwork for a diseased investor sentiment.

Be a trader. Swing in and out of stocks like a gorilla on a vine. We are in a trough and it feels like hell. Understand that life is all about peaks and troughs. Survive the troughs, slay the peaks. If I ever say “rinse and repeat”, you have my permission to attempt to kill me.

Why not just buy TZA, kick up your feet, and throw a few logs on the fire?

I hate the word “market” now. I don’t even want to write about stocks anymore; that’s how sick this tape makes me. Just do the opposite. When the market opens down, buy stocks. When it reverses up, start shorting. Keep doing this until you become the world’s richest man, then come back here to pay me homage, kiss the coin.

Do you see how the market is looking real shitty now and how it looks like a dunkshot for some downside spiraling action lower? Yeah, well the opposite will probably happen. We’ll dip to China, then spin around and kick higher.

Ah, as I just finished typing that sentence the market went from -13 to +1.

FUCK MY LIFE.

***Housing starts rise 4.4% v est. of 1.4%***

Mortgage refis are on pace for +60% year over year and new home sales continue to show strength, despite the fact that housing related stocks have recently been skinned and char-broiled. As the laws of the land would have it, my burgeoning TPH position only started to knife lower, in an ultra violent way, after I started to brag about how great a position the housing market was in. A rather fresh and inviting +10% profit quickly morphed into a nuanced loser of sorts, leaving me, Le Fly, in shambles about the rocks and the dirt.

I’ve been trying to figure this market out my entire life. Sometimes I get it just right and make so much money, my arms involuntarily start punching people in the face. I toss money around, like the world is my strip club, and chalk up the wanton excesses to “what goes around comes around.” This, of course, is a recipe for idiocy, largess; but its never stopped me in the past. I’ll be damned if its gonna stop me now.

The older I get, the more ridiculous the market appears to me. I consider it to be a living entity, who is literally trying to murder me, via hook or crook. The moment I escape its wrath and celebrate a transient victory, I am presented with a Byzantine endgame, whereby I become pre-occupied with a myriad of puzzles and death-traps by which I have X amount of hours to see my way through to safety.

A man of my talents can pursue this unrequited passion for so long. From the moment I entered this business in the late 90’s, I’ve been met with rolling market catastrophes, on a regular and continuous basis. For the love of God, shortly after I got on my own, after a period of vagrant cold calling, the market halted for trade, shut the fuck down, and went straight down the toilet. Out of the class of 100 or so young men who entered the training program at the firm I was employed at, only a handful of us are still in the business.

This is a business, for better or for worse, of attrition. It wears you down until you have nothing left. Only then, when you are faced with a decision and a path, will you learn if this business is for you. I’ve been faced with this reality numerous times over the past 17 years and have always chose to bear down and make it work. Only through ox-headed perseverance will you succeed at being a trader, money manager, operator of coin, in this god forsaken avenue of employment.

Historically oil has traded anywhere between $10-$40 per barrel, with $40 being crisis levels. A quick fact for you ham and eggers out there: a gas guzzling truck, parked and turned off, is worse for the environment than a modern day vehicle going 60MPH on the highway. This just goes to show you how utterly stupid we were twenty years ago. Modern day engineers are advancing civilization faster than anyone ever dreamt of in the past, even Orwell.

So now we have the conundrum of lower oil prices, what to do with them, and the ramifications. A little side note for you: Texas homebuilding is in the gutters now, expected to decline by 20% in 2015, as all of those homos in big hats enter receivership. Let’s not forget that 18% of all junk bonds are energy related. There is going fire and brimstone inside of the fixed equity portfolios, sometime during 2015. Now the question is, where the fuck is oil going?

Some Iranian asshat suggested that oil could trade down to $25, without OPEC stepping in to save the day (extra Tom Greene). If he would’ve said that three months ago, you’d probably laugh at him and chalk him up to being a palaver. But now with oil in the $40’s, we are paying attention, aren’t we?

My worst case scenario for oil is pre-Iraq war levels. On the day the war started oil was trading at $28 per barrel. Now that peace reigns throughout the middled east and the charitable organization ISIS is at the helm, one should surmise that the “normalized” level for oil to be $25-$30 barrel.

Why the fuck not?

When that happens, General Vladimir Putin will fire nuclear missiles at the oil derricks in Saudi Arabia and Iran will simply melt away, like a snowman in July. Venezuelans will starve on an industrial scale and the American consumer will gain a collective 5 million pounds, from all of the additional fast food they will be ingesting, thanks to the cost savings.

We’ve been in a meat-grinder since November. Nothing has worked, aside from gold, airlines and biotech. However, it’s worth noting that my recent foray into micro-cap biotech has resulted in apocalypse: NDRM. Some people inside of The PPT proposed the idea that I’ve offended some black-hearted billionaire and that I should offer “general apologies” in order to receive mercy. Well, I will have you know, “The Fly” apologizes to no one, and will gnaw off said billionaire boot, drag his torso into my parlour and toss his limp body into my fireplace. After that, the kids will gather ’round and stare into the hot flames, as Father Fly tells tales of victory and redemption, of the biblical nature.

Chop, chop, chop.

This pretty much sums up today’s trade.

This market will ruin you if you’re not careful.

If you want to bank coin in this tape, there are 3 principle drivers to it.

1. Precious metals. After 80% down, this stupid sector is having its face in the sun.

2. Airlines. With oil getting its face punched off, the airlines are the no brainer winners in all of this dreck.

3. Bonds/REITs. We get it. The world is fucked and people are throwing their money at bonds, despite many of them having NEGATIVE interest rates.

Seriously, have any of you sat down and really thought about this? How can this be happening while markets are near new highs? It-makes-no-fucking-sense.

Other areas of interest are grocery stores and gas station plays. But I am sure people will get bored of them before long. This is the absolute worst bull market I’ve ever traded and the most difficult. It’s like a deranged game of whack-a-mole, and we are the moles.

I’ve begun liquidating some of my positions. I sold out of XLRN and AN already and have designs to sell more. This tape isn’t one that I am interesting in bearing through. To go from +80 to -100 in ten minutes without any news is a little fucked up, if you ask me. More than that, we are starting to border on the inane, with european markets trouncing ours, all the while oil knifes lower by 5%.

I can’t sit here and watch this rubbish any longer.