You Just Got Lit Up

I am in the midst of an epic turn, now up more than 1% for the day, from down 2.9%. Let this be a lesson for your n00bs out there: when the market is deeply oversold, like it was this morning, avoid short sales. Also, you should keep a close eye for reversals, as they will prove to be the very best trades of your life.

EMES is +13 from the lows. You name it, there was a ridiculous amount of money to be had by buying the lows. Like the old saying goes “buy when there is blood flowing in the streets.” If you were already long, more often than not, you’re better off shutting off the screen and eating a sandwich, than panic out of good stocks.

That being said, we’re not out of the woods yet. There has been extensive technical damage afflicted to this market over the past two weeks. We need to see a reflation trade, led by oil, if we are to extend this rally.

I expect to see a lot of volatility going forward, people bailing out of the market now who were down large numbers earlier this morning. But let’s make one thing perfectly clear: the Russell 2000 was and is deeply oversold. The way The PPT algos works is like a rubber band. It uses reference points of oversold and overbought conditions, based off the technical factors of over 4,000 stocks. When the levels reach a critical point, the system screams OVERSOLD or OVERBOUGHT. More often than not, the algorithms that we’ve developed to measure the market, proves to be fruitful. With TNA, The PPT flagged its 2nd lowest score ever, since it was founded in 2008.

84% of the time, the system has been right, for an average return of 11% over 10 trading days.

That’s my edge. That is what kept me confident that we’d turn the corner and melt faces off like wax on a candle.

As all things in life, nothing is guaranteed and history doesn’t repeat, it only rhymes. But it’s an edge; and that’s the difference between a winner and a loser.

I bought TNA and COP, for the win of course.

UPDATE: I bought T, KMB and SOL.

Beware of the diabolical double dip. Just when you think it’s safe to cross the road, like in the roadrunner cartoons, you get ran over by a locomotive.

Barring that, we have ourselves a classic capitulation rally. All of the weak hands were flushed out this morning and now we’re ripping tits.

Mind you, I am long over 40 stocks and was down 2.9% at the session lows. As of right now, I am happy to report that I am up, motherfuckers.

This is what happens when you exhibit a modicum of patience and dignity whilst trading.

Oh, a special shout out to the players inside of The PPT, who bought TNA on its 2nd lowest score since we created the damned thing in 2008. That trade looks to be a winner now.

Up we go.

No one ever made money by panicking out of stocks. Sure, you could save some money, by avoiding the downdraft. But where’s the glory in that? If you’re not in the game, you’re out. If you’re out, in due time, you will be shining my shoes.

I’ve made it a habit to always be in the mix, take action–because complacency is the cousin of death.

Do you hate stocks?

Then you should short them.

Do you believe stocks will be higher by Turkey Day?

Get long.

As you read this, there is a stiff wind emanating from the west (Bleak House) and stocks are lifting off their lows. What do you intend to do? Fade it or own it?

The pressure on crude has led to this: full scale liquidation of the commodity space. Names like SLCA, EMES and PTEN have been getting bludgeoned to death. A whole slew of oil and gas stocks are off by 7%+ today, which is totally nonsensical given the price of crude. Nonetheless, this is just one of the many hurdles one must jump when investing.

People leverage up their accounts and are forced to sell when the idea doesn’t work out. If you are in a position to buy the liquidation, you stand to make a great deal of money. The problem with buying a dip in a name like SLCA and EMES, both of which I am long, is you don’t know how low it can go. Right now they aren’t trading on fundies, only supply versus demand. Clearly, the supply is very high and demand is nowhere to be found. I am not buying because I’d rather buy it when it upticks, instead of knife catching.

But, as a long, I cannot sell into this rabble, this perverted distortion of speculation.

Unless we’ve figured out how to harness the sun and replace the gasoline powered engine on a large scale, oil will always have a bid.

The one exception would be in the event of a credit meltdown, a la 2008.

Nevermind what the market does today. I want to talk about the real plague that is damaging the purses (tinky winky) of investors: negativity.

Listen to me son: what’s with your obsession with calling a market top? Have you not learned your lesson to avoid doing that, over the past 60 months? The moment the music slows down or stops for a bit, you pop out from your boxes and declare victory. You aren’t victorious, only an ordinary, run of the mill, loser and a huckster– who can’t focus for more than 30 minutes on building a business, so you try to destroy others.

I’ve been at this a long time and I am always reviled by what I see in my industry and peers. Greed through gluttony does monstrous things to people. The incessant longing for fame and popularity by way of success is often taken the cheap, haphazard way, instead of the traditional road that is paved through industry and hard work.

You, Sir, are a lazy ham and egger, a no good charlatan and a detriment to your neighbors.

Now get back into your box.

I am planting a flag here and declaring, with the highest level of confidence since the retarded 2011 crisis, these levels will hold and the market is going to rip faces off to the upside. Write it down and come here to mock me if I am wrong.

Gentlemen, I am not going by whims or depending on hunches, for that is exclusive for the canaille, men with finance blogs named after pretzels. This, my little friends from the internets, is precision through the science of mathematics. You cannot negotiate with it or even get mad at it. It is what it is, because it binds us to the earth and is the foundation of life.

We hold these levels and with exclamatory vigor. We will rip the heads off of our foes, and then reach down into their torso, and gut them.

You’ve been warned, you jelly belly mangled face fucking retard.

http://youtu.be/KldsZ9aOM6Q

Last week I gave up hope for a large market decline based solely on the date on the calendar. Everything that provided me with confidence about being bearish still persisted, such as the incredibly large amount of stocks down 20%+ over the past 6 months compared to +20%. Depressed yields in the face of a seemingly strong economy and tightening Fed, also led me to be long TLT and utilities. When I sold them and opted for risk, I made a commitment. There is no retreating from that commitment now.

The last time The PPT missed an OVERSOLD signal was in August of 2013. The result was 14 days of agony, before a massive spike. Tomorrow will be day 8 of the malaise and I expect there will be more downside to come.

Today was a confirmation of my original thesis. Bubble stocks are being shattered to pieces, a la 2000. Utilities and TLT are safe havens and the street is wrought with fear. The culmination of these ingredients will lead to the ultimate tradable bottom, at which point you’ll be content with being halfway alive.

You should prepare yourselves for the complete and absolute annihilation of your asinine brokerage accounts. There will be no respite, or pause, only the black flag.

NOTE: I added to my YELP position.

I added to YELP

Having 50% of ones assets tied up in TLT, ETR and EXC would’ve been pleasant right about now, no? I blame Bill Gross for TLT’s underperformance last month, which was likely the result of PIMCO selling ahead of his departure. But the very essence of my thesis is playing out today, is it not? There is no need to sell short, when you have utilities up 3.5% for the day. In the past, during periods of excessive weakness, utilities have run 15-20% in a single month. Investors seek comfort through low beta dividends and that’s why I positioned this way for September.

But that’s all ancient history now, isn’t it? Instead of being in the bosom of safety, I am in a fucking hornets nest with my ass exposed to devilish insects. I’m long shit like PANW, EMES, BITA and 10 other lunatic stocks. I am embedded, mind you, in the thesis of a raging bull, ordinary maniac, a Ned Riley of sorts, awaiting dip buyers.

The market is off by two hundred. Yields are crashing lower. Utilities are soaring and I saw it all coming from 6 months away.

I sabataged myself  and will now pay for my trespasses.