The Top Has the Best View and the Sweetest Air

God damn it! I just ate some ‘authentic’ chinese food and it’s burning my face off. Who eats this sort of crap…dragons? Don’t get me wrong: I enjoy a good spicy meal. But this stuff was like eating a jar of spicy peppers, mixed in with a little fish.

Back to the markets.

Anything related to internet security was higher today, thanks to the iCloud non-breach.

The market looks great and the mood is mild. Nothing should go wrong, as investors lazily return to their desks from a long summer of slumbering and drunken debauchery. Both road slob and catamite alike will return to a gracious market, one that rewards patience and aggressive bets. The gambler, whore, and savage swine shall dine together and laugh at the priest-like (no pervert) behavior of the cautious.

In short, I’ve never sold a top that looked bad and I never bought a bottom that felt safe.

You’re all in grave danger of losing your heads.

The guillotine is out and about, speed chopping heads off this afternoon with reckless abandon. The tit that you’ve been accustomed to sucking on for all of these years now belongs to a very old lady and she is removing said tit in October.

Understand something: this is not June, July, or a gentile August.

THIS IS SEPTEMBER, a time of year when men are forged in the fires of tragedy and stocks spiral lower because they can.

Momo stocks are still heading higher, despite the market pullback. Certain biotech and pharma stocks continue to hit new highs and rates are going higher. Everything the bulls should want is present, with exception to a higher market.

AAPL is higher on the iCloud news (lolz) and GILD  and YELP  are up 15-30 points straight– following Chairman Yellen’s retarded statements. Nonetheless, I remain stoicly convinced of a great doom and gloom just around the bend, invisible to oncoming traffic–readying to ‘Stunt Man Mike’ all of you through hard windshields (no one else will survive the coming correction but me).

So everyone is buying FEYE now because they feel it can protect them from iCloud hacks, all pertaining to naked photographs being disseminated for public consumption. Pure, unadulterated, rubbish. Nonetheless, the momentum is in favor of internet security names now, so be it.

My TLT is getting hammered, post dividend, and utility stocks are coming in. So what?!?!

Alibaba is coming public this month and there is nothing to change the status quo, from now until then, other than a geo-political event. My intention is to be very patient, edge into utilities on pullbacks, and generally take it easy, leading the life of leisure that I was intended to lead.

While all of you slave over hot stoves and file TPS reports, “The Fly” sits in his parlour, listening to Billy Holiday, watching the neighbor chop down 15 trees in his backyard.

The pullback is coming and when it does you’re all gonna be shining my shoes.

THE RUNNER IUP DRAWING

Winning number: 427

THE GRANDE PRIZE WINNER

Winning number: 392

We will know who these numbers belong to shortly. Soon after, we will email you and paypal you the winning prize.

ChessnWine is doing a drawing right now, which will be recorded and broadcasted here shortly.

There are 908 tickets. Of which, one person will receive a 2nd place prize of $500 and the grande prize winner will win $1,000.

DEVELOPING…

When taking defensive positions, we tend to believe that somehow the market is watching us, waiting for us to capitulate and close out the bearish/defensive positions so that the market can really head lower–in earnest.

The market isn’t watching you, idiot, and there is nothing wrong with taking a stand–like a man.

September is, by far, the worst performing month for the market. There are several geo-political events that could harangue investors, leading to a small rout.  Remember, the largest IPO in the history of man, Alibaba, is being priced this month and it would be very timely for the market to pause after our banker friends make a mint in the underwriting.

I am betting on a risk off environment and a race for yield, which should buoy bonds and dividend paying stocks, like utilities.

That’s it. Plain and simple. I have nothing else to say to you people, so go away now.

I am done for the day and perhaps for the rest of my life. I took liberties to sell, mind you, all of my XONE position. I had a look in the mirror, or the looking glass as some like to call it, and pondered to myself: “why in the world am I long this stupid 3-D stock?” I immediately took action and sold it before it could drop again. It had made a miraculous comeback and I locked in a 5% gain.

At the end of the day, I am loaded up in TLT, cash, utilities and a sundry of exotic and unique stocks–most of which are trending higher.

I wish all of you the very best, even though you don’t deserve my well wishes. But this charade, this fanatical, servile, march higher is coming to an end. Failure to acknowledge the opinions of those who know better than you might lead to your ultimate and untimely death from the stock market game.

I bought EXC and ETR.

With the Islamic State on the move, cutting heads off along their way to Allah, western treasuries continue to gain steam. I cannot stress this enough to all of you lads, drunk about the water cooler, drinking gin from a water bottle.

There is a safety trade taking place, at the same time application software stocks rip through roofs.

This is what I am going to do.

I will collect another monthly dividend from my TLT position, then liquidate it in september. I just sold out of my ECOM position because it refuses to rally. I don’t have time for that, so I took a 3% loss. With the cash on hand, I am going to buy a basket of utility stocks–some today, others next week.

I am going to hold said basket through september, or until I am proven right or wrong (this gives me room to wiggle). The way I see it, buying utilities is a preferable way to fade this rally without actually fading it. I don’t want to just go to cash because my temperament doesn’t allow me to sit idle for long periods of time.

Longer term, I still own a crap load of stuff, from GILD to ICPT to SLCA to HAIN. If the market melts up, I will not miss it entirely. I am simply shifting my trading assets into a bomb shelter.

Stay tuned.

Let’s assume that I am wrong about the coming correction. The September surprise never comes and we gingerly trade up until the New Year. All of the high beta stuff continues onward, trading up to 20, 25, even 30x sales. No one gives a shit, total honey badger market, and everyone gets rich– or dies trying (extra 50 cent).

But what if I’m right? How much downside does a stock trading 20x sales have in this market?

Well, I will have you know, CSCO was trading 22-25x sales at the peak of the market in 2000. Do you know where CSCO trades today?

2.5x sales.

Do you know where it traded in 2001?

5.5x sales.

Just imagine the downside pin action of that stock price and the people who got caught flat footed. I was one of these people, unfortunate and young, rich and careless: utterly retarded.

In September of 2000, the correction, in earnest, began. The market had gone up from the May lows and everyone was doing 100k in monthly gross commissions–until the party ended. CSCO dropped by 20% that month and went down the sewer drain ever since. I am not suggesting the market will endure that sort of pullback. However, it would be unworldly of you to not acknowledge that the drop in March-May was ‘special’ and not ordinary. It was bid less and no one believed we’d rebound.

Well here we are, living to tell the story, at new highs. I haven’t quite recovered from my losses yet, because I’ve been taking a methodical approach. Even still, I cut my losses from -37% to -13%, which isn’t too bad when considering the dire straights I was in.

Here is the reason for the post.

Back in 2000, had you shorted stocks in September, you made a mint. But there was another way to make a mint, without having to accept the idiot nature of being a short seller and the risks associated with such blackguardly actions.

Buy utilities.

I have a long list of utes that I am eying and will discuss in The PPT over the next few days. However, the XLU can suffice and did so in September of 2000, netting a 14% return amidst the agony and pain of once proud and brave stock brokers, like myself, then lined up for execution.