Christmas Time Blues

There is nothing redeeming about the tape I am seeing. The post National Feast, Pre Xmas blues are in effect. Everyone is sad, a wave of apathy has swept the nation–as people keep busy shopping for meaningless stuff on Amazon.com.

Fuck the oil patch. Fuck retail and to hell with every single stock that trades.

Nothing has gone right for me this year and I am pretty sure there is more comedic value in me shooting myself out from a cannon than attempting to make any real headway in this tape.

After collapsing earlier this year, swimming deep in the red blood of 35% losses, I managed to press my luck and cut those losses to just 11%–just two weeks ago. But now, everything has turned dark again, as the stars and the planets align against me, I find myself back into the gimp box, down 17% with less than a month left in the year.

I bring you tales of ‘true failure’ and fantastic stories of tragedy, unlike those other financial experts out there who do nothing but win. I, King Fly of Clan Fucktard, offer you loss.

Get yourselves some oil today. Everyone is doing it. The lads over at EMES worked a conference room yesterday and basically told them “hey folks, it doesn’t matter what the price of oil is anymore. We have customers with so much money, they’d be glad to pay us for sand to get oil that they will lose money on.”

Believe me, I am long SLCA and would love to buy every single share down here, if I knew there were companies out there who didn’t care about the price of oil. But in the real world, these little shit companies are going to get their faces punched in and lunch eaten by the majors. They were barely profitable at $100 crude; how the fuck will they survive at $65? It’s laughable at how stupid they think we are.

The whole $65 crude hasn’t settled into the minds of these execs yet. They believe the expediency of the move warrants a sharp reflex move higher and that everything is going to be okay. We saw the same sort of laissez faire attitude with the banks in ’08. I want to see oil execs panic, firing people, defunding projects, trimming the fat. The companies who keep their heads in the sand, before long, will be buried in it.

Today’s tape is better than yesterday’s. The breadth is respectable at 70% and everything but my GPRO is working. What can I say, I am cursed.

Nevertheless, some of my other holdings are picking up the slack and I am up a little bit for the day.

Now that we’ve settled the matter of bear v bull market and have concluded that we’ve been in a ‘severe bear market’ all along, it is time to acknowledge the ruinous pin action that presents itself to us, each and every day.

Do you like 3-D stocks? How about LEDs? Might I offer you some solar stocks? Perhaps if a republican wins, we can profit from some coal. Better yet, deep water drilling is all the rage. Drill baby drill. Have you heard about fracking and the wonders of horizontal drilling? Did you know web 2.0 is going to be bigger than web 1.0? I have a cure for fatty liver. I have a cure for cancer. And, I have a cure for ebola.

With oil trading lower, might I offer you some airline stocks? Or, better yet, a shipper or two?

Brazil, Russia, India and China is where it’s at, plain and simple. Look, I even made it into an acronym: BRIC.

Did you know Brazil was energy independent, choosing sugar ethanol over oil? Did you know Brazil no longer relies on sugar ethanol and now favors oil?

Ethanol is a cleaner fuel. Surely we can save the world by investing in ethanol stocks. While we’re at it, I’d like to explore some alternative energy names.

My wife once said KORS is better than COH. Bill Ackman likes JCP. Carl Icahn likes HLF. Everyone likes AMZN. No one likes SHLD.

If a hurricane strikes the US, you want to own generator stocks. And, if drought hits the US, let’s buy corn related names. But, if corn gets too high, we should short companies who sell chicken wings. And, if the Fed stops tapering, we should short the market.

Did you know Taco Bell was going to start competing with CMG?

Why would anyone want to make coffee in a Keurig, when they have a perfectly fine coffee pot at home?

But, if the Fed does another round of QE, we should short the dollar and buy gold. Buy gold all the time because the dollar isn’t worth anything.

Etc, etc, etc.

You go ahead and buy it. Buy all you want. Tell your friends, neighbors and parents to buy stocks, I will not even think about adding to my positions when oil is COLLAPSING (extra Faber) like this. I’ve already had my fill with bonehead trades, fantasies made from sugar and gunpowder, and it has resulted in nothing but pure agony.

This profession of mine can be rewarding, almost enriching at times. I get to learn about new businesses, about how they work and profit. Most of the time I set out a plan, a really good strategy that will make me some money. I go out into the market and buy up a bunch of stock. Other people walk around aimlessly, tripping into water fountains and drowning in cups of Fanta, but not me. I have a plan and the plan usually works.

Last year this plan netted me an 80% return. I was quite happy back then; now, I am quite fucking mad.

All of my plans are shit–they’re not working. I say this to you with less than 10% of my assets in oil. It isn’t oil that has me vexed, but the whole process of being kicked down the stairs, each and every time I attempt to climb to the top.

Having said that, oil is dropping too fast. You’d be smart to hold off on new buys until it stabilized.

Let’s settle this bear v bull market debate once and for all, shall we?

Year to date, 1,492 stocks are up more than 10%, while 1,567 are down more than 10%.

Going to the extremes, 391 stocks are up more than 40% this year, while an astounding 557 are down more than 40%.

Bear in mind, there are 4,271 equities in The PPT database. As such, that means that more than 13% of all stocks are down 40% or more.

Bull market? Really?

The PPT algos came close to an OVERSOLD signal yesterday–but no dice. One thing I’ve witnessed with the algos, since they adjust on their own with time (I designed them that way) is a widening of the ranges. Meaning: the oversold signal used to get triggered at 2.45ish, almost like clockwork. For those of you who are unfamiliar, The PPT grades stocks on a 1-5 scale, with 5 being strongest. In the past, when the overall score hit 2.45, it would trigger a systemwide OVERSOLD signal with amazing accuracy. Over the past three months, that range has been lowered to 2.38, and over the past twelve 2.43.

I think it’s pretty obvious that the market’s worse days are more extreme than its best, and I’m not talking about the Dow Jones.

Oil stocks like WRES, EOX and SN embody the entrepreneurial spirit of the industry, whose share prices, up until recently, have done very well. One hundred dollar crude spelled success and growth, $65 crude not-so-much.

SN has gone from $38 to $10, WRES $6.5 to $1.90 and EOX $8.5 to $1.50.

Now here is the interesting question, one that I answered back in 2010 when I bought a few million shares of FTK at $1, sold around $4ish, only to see it go to $30: will oil stabilize around these levels and will those three companies that I mentioned above get their financing in line long enough to weather this storm? Moreover, will the price of crude trade back to $100 next year, resulting in 300-500% one year returns for those stocks?

These questions will keep me up at night, God damn it.

The indices are up and mega cap stocks have glided throughout 2014, unscathed, basking at new highs. But back in April over 100 tech/biotech names crashed to the tune of 50-70%, as the ‘bubble basket’ capitulated. After that, the market drifted higher and many of those tech stocks recovered some of their losses. During the summer, oil started to weaken and it never looked back, as well as all commodities, soft and hard.

Looking at the net result, from then to now, is nothing short of catastrophe. Oil, gas, gold, silver, even ag, have all been summarily tossed into the great incinerator and smoked out for the rest of the world to choke on.

Let’s not kid each other any longer, friendo: this is a severe bear market, wrapped inside of a bull. The headlines speak of new highs and elaborate pornography. The internals are just fucked.

I’d like to wish you well, tell you that everything will be fine; but I’d be lying. What happened to tech during April is now happening to oil. The difference between the two is one is meaningless horseshit and the other is saddled with hundreds of billions in debt and is an integral part of global growth.

Over the past six months, the following prominent oil stocks are down more than FIFTY FUCKING PERCENT.

NADL -81%

CRR -73%

SN -69%

SGY -65%

OAS -65%

HK -65%

LPI -65%

PWE -62%

SDRL -61%

CVEO -60%

SD -60%

TLM -55%

PDCE -54%

CWEI -54%

CJES -52%

CIE -52%

DNR -52%

BCEI -51%

RIG -51%

TTI -51%

WTI 50%

Pray tell me, who needs a bear market with a bull market like this?

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Yet here I am gawking at oil related stocks trade down. Truth be told, only one of my 5 oil stocks is lower, which SLCA. However, BALT should not have a 2 handle. It deserves better than this.  Aside from my own positions, there is a slew of names down over 30% over the past week. Here are some names.

EXXI -52%

GDP -51%

MILL -47%

NADL -45%

FST -43%

SSE -41%

SFY -41%

EOX -41%

SN -39%

OAS -37%

I can go on. This is as bad as you will ever see it. The pin action in the oils, over the past week, rivals the worst days of 2000 and 2008. Naturally, the world was ending back then and other stocks fell too. But to endure 30% drawdowns in dozens of quality energy names is, frankly, unbelievable.

Leverage is a powerful drug. Some people smoke too much.

Something has to give. I cannot keep on living this way, meandering through dark alleyways, hoping to reach my destination intact. I’ve made a decision. Effective immediately, I am ceasing my bulking diet and will cut, mind you, to the tune of 5 pounds. Originally, I intended to gain 15 lbs of pure mass, in the hopes of being able to one day rip someone’s head clean off his shoulders. But I now see the error in my ways.

This new Fly that you see in front of you will be kinder, gentler, and will not rip your heads clean off from your shoulders.

For the love of tall ladders and hard to install Xmas lights, someone must make sacrifices, in order to get this market going. I’ve decided that it will be me.

This new diet that I will embark on will consist of light fare, salads, fruits and bird seeds. I will resume my activities in the gym, sans the creatine, and model my life after a Mongolian Monk.

These words have been written and read, therefore, it shall be so.

I tried to ignore the tape. I took up some conversation with the gents who are installing my lights (I’m not going up there), chin-wagging about this or that. And then I was panic stricken, as I peaked at my smartphone to bear witness to the biggest and greatest fuckery of 2014. There isn’t logic behind the move lower in SLCA or BALT. However, it is happening whether I like it or not.

The commodity space has been dispatched, sent sea-worthy, into an ocean filled with amphibious dinosaurs. I am in a small boat, in the middle of said ocean, trying to paddle my way back to shore.

I thought Santa Claus loved me and would bring me presents. There is nothing but coal under my tree (extra BTU).

I am a bastard fool, a jackass of the first order. What are these stocks in my portfolio?

How much am I down today?

Well, my top three holdings are GPRO, YELP and COH. You do the math, fucker. I am dying over here, getting my balls boxed in– sad, angry, and vengeful all at once.

I’d like to tell you “The Fly will have his revenge soon. He will kill many people and send them away in ‘fag-boxes.’ But the truth of the matter is, I’ve been doomed all along. My arrogance and hideous display of decadence, both on and off the site, have brought me chickens and they are here to roost.

The downfall of “The Fly” is at hand. Bear witness as this gigantic icon falls and crumbles into 1 million pieces, never to be made whole again.

I bring you many greetings from the land of milk and honey.  I am enjoying today’s market of misdirection, despite it coming at a tall order for yours truly. We all thought today was going to be a rout of sorts for the commodity sector when in fact it was the tech sector that was being prepped for the gallows.

Market breadth is an abysmal 28% and technicals have soured to the point of apathy. But let me remind you that this is a common occurrence. I am sure you can pull up several articles of mine over the years titled “CHRISTMAS IS CANCELED.” It’s always canceled, until it isn’t. Retail sales are never enough and the people who trade this tape are always dicks. These are all ingredients for a recipe that results in a very annoying soufflé.

I invite you to eat a baguette, drink a few glasses of your favorite Bordeaux, and play some scratch off lottery tickets.

As for me, I am busy putting up Xmas lights.