The Santa Claus Rally is Now

There are so many people to punish today, where to begin? All of you greedy types, buying UVXY into the teeth of despair, shall be dealt with today–justly. Your lands will be seized, wives confiscated, and estate’s liquidated.

Between yesterday and today, we are looking at a 500 point rally. If you missed the run, it’s probably too late to get in for the large percentage gains. However, seeing people like Cramer on the teevee, there is a wall of worry still. There are people out there who just don’t believe in Santa Claus. Those people, mind you, shall be dealt with–justly–too.

By the looks of the open, I stand to take back some of the money that was stolen from me. But the hole is too dip to fill from now until year end. I will likely gain 20% of what I lost in recent weeks today.

PTRY got bought out. I was eye balling them because I know gas stations do exceptionally well when prices decline. I was looking to buy PTRY at $19 and missed the whole run. Other gas station/grocery plays to consider are CST, CASY, IMKTA and of course COST.

Top picks: SLCA, HABT, ECR, FMSA

As you know by now, The PPT accurately called the bottom yesterday, flagging an oversold signal that led to a monumental 100 NASDAQS surge. Today’s rally changed the tone of the tape, in that the short sellers felt vulnerable to downside pin action, despite all of the seemingly negative news.

I’m gonna keep this 100 percent numerical, leaving out opinions and emotions.

Here is the raw data of recent PPT oversold signals and how the market responded.

Yesterday’s OS

This OS came after a series of oversold signal, most of which proved to be early. The market jerked back and forth, but ultimately hit new highs.

This one nailed the bottom, to the day.

How’d it do on other occasions, you ponder?

This.

And this.

Also this.

Getting boring.

And again.

A sublime harmony of mathematical precision (SHOMP)

So why haven’t I strictly adhered to the teachings of The PPT algorithms? It’s the mystery of my life. It confounds me on a daily basis. I am not hedging myself here. The data is the data is the data. PPT wins. It gives people an edge by analyzing over 4,000 stocks, ranking them by fundamentals and technicals, taking into account price movements in commodities, treasuries and currencies. It parses out traditional correlations and makes predictions as to when the rubber band will snap back. It’s not your standard, run of the mill, mean reversion tool. It is robust, accurate, and invaluable.

It is my greatest achievement and my biggest detriment wrapped up in one. It’s so hard to remove oneself from the art of stock picking. It’s an addiction that addles me. It calls my name at night. It speaks to me in the day. I know my life would be far better off making macro-calls, using this and ETFs to accomplish my goals. But it’s hard, real hard, to just give up the pipe. I need one more hit. One more parade down the canyon of heroes, then I am done.

Until the next one comes and then I am here, writing a blog at 1:38 am about what could’ve been and what should’ve been, instead of what happened.

As much as I’d like to pop champagne corks into your faces and celebrate the new bull market, one designed to offer daily 15% gains in oil stocks, we are more likely to fall into a sewer pipe tomorrow. All of this pomp and circumstance is part of the circus act. Janet Yellen is tone deaf, as well as 99% of the people on the tv.

Oil reversed and gave up big gains, yet all of these ham and eggers keep talking about a strong economic environment.

Remember when this pole strokers said China would be insulated from the credit crisis? Yeah, those same people think we will avoid the Grimm Reaper, as he makes his rounds around the world–plunging everything and everyone into despair.

There cannot be a stronger than expected US economy when you have 6 million jobs at risk, in an industry that is circling the toilet bowl. The Fed made the same mistake in 2006-2007, tightening into a damaged economy.

For now, I remain long and will try to regain some of my lost swagger with this lift. I deployed some capital today and have prayed and brayed to baby Jesus for mountainous gains.

Oh, and yes, The PPT won again. It flagged oversold yesterday. Pretty amazing stuff.

You’re all too jaded. You forget that bears get fucked too, especially in bear markets. Remember when the market went up a thousand points in the depths of the 2009 crisis? Of course you don’t–because you’re all punk kids, or if you were a bear, you died that day.

Breadth is at a solid 82%. It is very unlikely that we will sell off. Santa Yellen did what she was ordered to do. Now she’s at her local diner eating a club sandwich.

If there is one thing you should take from this blog, it is this: in the end, everyone gets fucked–even bears in bear markets.

I don’t care what happens today. I can become homeless and live inside of a garbage can, but will still be content because of the availability of Cuban cigars. Yes, it’s true, after a gagillion years we are normalizing relations with Cuba.

Let the Italian mafia live long, prosper, and rebuild that idiot island of doctors and auto mechanics into the Mecca of the caribbean.

In other news, get long cigar shoppes.

NOTE: I added to SLCA.

Seeing the energy complex rip off heads and shit down shoulders, I added to my SLCA and FMSA positions. In addition to that, I bought more BALT, seeing the shippers starting to percolate. If indeed we are to rally, the fucking shippers have a 100% move in them.

My other energy lotto play, purchased the other day, WRES, is ripping off mammaries.

I doubt Janet Yellen has even bothered to look at the news. I am almost certain she still believes oil is still trading at $100, just like Joe Kernan and the rest of the fucktards on CNBC. In case you’re wondering, the oil and gas industry employs almost 6 million people in this country. More than 10% of all new jobs created, since 2007, has been in this industry. Skimming over reports, I can tell you, unequivocally, US rig count and cap ex budgets are set to plummet in as big way. More than 500 rigs are scheduled to be idled soon and the Bakken shale turned back into a wasteland. Pink slips by the truckload will be delivered.

Yet, you turn on the teevee and these fucking morons are beating off to higher interest rates all day. Sure, that’s exactly what the currency market needs now–a hawkish Fed to super charge the dollar vs the ruble.

I have little confidence in this rally sticking, post Fed. There is a certain group think, rooted in extreme idiocy, infecting the minds of everyone.

A few quick ideas.

SYRG, FANG, GPOR, PDCE and MTDR have the best balance sheets and wells around. They are low cost producers and should make it out of this mess unscathed. Then again, who knows where crude will stabilize? I’ve looked over countless oil and gas companies and I hate most of them. With over $500 billion in debt, this industry is slated to be destroyed. The junk bond market is in free-fall and that negative sentiment is spilling over into ordinary corporates. It’s imperative that you own companies who are aptly financed.

Lastly, I find it supremely comical that the retards over at GE were beguiled during the ’08 meltdown for being a financial company and now find themselves equally misfitted during the energy crisis, as an energy company. In recent statements they said business would be a lot better if oil were $125. Good luck.

I haven’t slept in 36 hours. Christmas exploded throughout my house, decorations everywhere. Yet, I continue to sulk and mope, plot and scheme, during a time when I should be cheerful and optimistic. Why do I do it?

I’m not just managing my own bullshit accounts like the lot of you, see. I have responsibilities to others and have been charged with maintaining and growing the assets of others. Much to my chagrin, none of that has panned out in 2014, quite the opposite actually.

It’s almost common knowledge now that the market is destined to fail. I can walk down the street and ask small school children or crossing guards and they will tell me so. After all, we’ve been given a $500 billion tax cut and that simply won’t stand. All of the oil wells here in the northeast have been shut down and workers laid off. I am told if you fire oil workers before Xmas, as a manager, you get a bonus. Therefore, oil managers everywhere are firing as many oil workers as possible for the holiday season.

I read somewhere that Apple products are being bought like fucking mad inside Russia, like Miami Zombie crazy. Apparently the communist bastards over there fancy our capitalistic electronics as a form of currency, instead of their toilet paper rubles. Think about it. It makes sense.

If Putin says Russia is being targeted by the west and its currency broken on purpose, he would’t be lying. With $400 billion in cash reserves there is little reason to target Russia. There are plenty of others countries, like Australia and Canada, who suck more. Nevertheless, Russia is the enemy, despite the fact that Canada burned down our fucking white house and is filled with loyalists to the British Crown.

Tomorrow we get to hear what Janet Yellen has been up to. I bet she’s been drinking plenty of egg cremes and has been visiting her podiatrist regularly. In light of this human crisis, massive deflation and subsequent panic, I am sure she will suggest that the Federal Reserve intends to HIKE rates and usher in the apocalypse. Then a giant centaur will stomp its way through the NYSE and begin biting off the heads of traders, whilst slapping others with its giant centaur cock.

Merry Christmas.

The problem with having a large cash position is that it makes you lazy. You just wait there, hoping for God to present himself to you and offer you true elixirs. Sadly, what is likely to happen is the market will turn and you will miss that glorious melt up day. Many of you thought it was today. But the signs were everywhere, proving the contrary.

Back in 2008-2009, my main course of profit was via 3x inverse etfs. If you have 30% cash and 70% long high beta stocks, it makes perfectly good sense to buy a 3x index etf, like TZA, to hedge your longs. However, at this very moment in time, and I only tell you this because we are in crisis, The PPT is flagging OVERSOLD. The last time it flagged OS was back in early October, just before the epic melt up.

Having said that, after we get a sharp rally, the following etfs are all suitable hedges against high beta longs.

ETF/ 1 Mo returns

DWTI (3x inverse oil) +90%

ERY (3x energy bear) +50%

EDZ (3x emerging markets) +30%

TMF (3x treasury bull) +22%

On the flip side, if you are scared to buy stocks, an alternative play would be to short treasuries, via TBT or TMV. Rest assured, whenever the market decides to bounce, TLT will trade lower, substantially. Shorting treasuries up here seems to be a low risk, long the market, directional trade.  I am purposely avoiding country etfs, like RUSS and BZQ because both Russia and Brazil are too oversold to pile on here. I am also avoiding gold and volatility etf’s, due to the inane nature of both instruments.

With my money, I am likely to do very little, as my tolerance for loss is at zero. Hedging will likely be done after a rally through index puts.

Let me try to understand why rates should go higher.

Do you want to raise rates because our jobs market is doing well? Might I remind you that the oil and gas industry is in tatters and will be laying off hundreds of thousands people within the next 6 months. I am amazed by the experts on the television who still insist that the Fed will raise rates. HELLO, MCFLY, ANYONE HOME? You have to be a complete idiot to believe deflation isn’t the main risk to the global economy now.

Look, dry bulk prices are in the hole. Iron Ore prices are at 2009 crisis levels. Oil is at crisis levels. Russia’s economy was targeted, post Ukraine, and seemingly destroyed. Their currency is worthless and their main source of income eliminated.

Let’s not kid ourselves. I was on the fence about the reason as to why oil was tanking. At first I though Saudi Arabia wanted to shut the Bakken down. But now it’s clear. This is all an economic war against Russia–because they didn’t bow down to the great Xerxes aka Obama. I don’t know why we even give a shit about the Ukraine. But here we are, in the midst of a developing economic war. Most of us will become casualties. Today’s losers were airline stocks and consumer discretionary, the very names that should be working in the cheap crude environment.

Very simply, the Fed must forget about raising rates and start another round of QE.

Oh, one last thing before I go: since we are at war with Russia, albeit an economic one, the Fed will not act. This is intentional and designed to afflict maximum pain. Ergo, they are prepared to sacrifice our growth for Russia’s total annihilation.