This market can’t hold its butter. Sell, sell, sell.
Thanks to March, big hedge funds got crushed and are now sending back money. That money needs to be raised. As a result, we get this bid less whore of a market. You’re gonna try to turn this into something it isn’t, based on fundamentals. The only reason why stocks are unattractive today is because they are going lower. It has nothing to do with earnings, macro-economic results, or political tensions.
One month ago, these dogs on CNBC were sucking the knee-caps off of stocks. Now these same people hate them, evangelizing the end of the market because–all of a sudden–we’ve all found religion through Graham Dodd.
PUHHHLEAZE!
I’d rather die than sell any of my four horsemen down here. If I have to die holding them, so be it.
It’s not going to be easy; but rest assured, I will make it all back and then some. I still haven’t had the courage to open up the profit and loss screen, but have seen the damage and it’s around 25% to the bad. Make that a 37% swing from the top, the sort of setback that destroys lesser men.
I don’t know if I’ll make it back with my current positions, or something else entirely. All I know, right now, is this:
The PPT said we were oversold yesterday, “The Fly’s” computerized brain unencumbered by emotion. It’s record is near flawless. Those who use it know not to ignore it and never to bet against it.
It feels good to make back a few percent today; but this is not the time or the place for bragging. I made catastrophic mistakes, all that I regret, but only with the luxury of hindsight. I made all that money last year because of my proclivity to take risk. So far, in 2014, that hasn’t worked out so well. But I know what I own now is cheap and is bound to trade higher. Maybe I’ll lighten up on bounces, or maybe I’ll turn it around and sell it short. Odds are we erase all of these losses and shoot back to new highs, once the dust settles.
I realize you hate that idea, because you’re an ideologue. The numbers have to make sense and valuations must be respected. The market has never worked liked that. We simply ebb and flow between fear and greed, spurred on by cheap credit and trends– or constricted by tight Fed policy.
Rates are still low and this is the best damn game in town.
If forced to choose between the safe rout or the sword, I choose the latter every single time.
Can you say Chinese burritos? Out of all the stocks in the world, this sector is doing the best during this little sliver of respite. I feel like a rat scrambling for a piece of cheese. I’ll knife anyone for 1 or maybe 2% gains.
Here are today’s biggest movers that have been down more than 10% over the past month.
The above stocks do not represent what’s working now, only what’s bouncing. The stocks that have been working are larger cap, based in Brazil, or are part of the power grid–classic defensive names. For this market to truly recover, however, we need the above stocks to go parabolic to the upside, leaving a cascade of bears falling off the mountainside to be eaten alive by carnivorous goats.
When the markets go up and it dips a little, it’s very easy to bottom and charge higher. It’s also very easy to rip higher on good news, a Fed comment or something to do about Chinese growth. However, after suffering the sort of train wreck we just went through, it’s extremely hard to bottom out and head higher.
For one, all of the bears are pressing their luck, betting against the same names. And two, the overhead resistance is absurd, since margin levels were so high prior to the drop. Often times the bottom is found when the last bull, guys like me, give up and cry in the shower, lamenting over the mistakes made.
After the market bottoms, no one will know it. The bears will continue to short stocks, thinking we’ll retest the lows. We might even do that and it will be ugly. There will be an awfully large wall of worry to climb, all to do with valuation and how the economy cannot support such high multiple stocks, yadda, yadda, yaddda. Then we’ll get a few break out days, again leaving the bears in disbelief.
Then the big one will come, effectively alerting the bears to the fact that the market is on its way up again. By this point, all of the scared money will come racing back, hoping to capture some easy gains. Simultaneously, short sellers will provide the tinder for the fires, by covering their shorts. So you’ll get natural buyers and short covering, a recipe for a massive melt up.
But before any of that can happen, we need a foundation.
Naturally, this time might be different and perhaps the market is smart this time around, telling us something about the economy that we don’t already know. I am just laying out the most likely scenario, based upon my time in the market.
Looking at the market now, I am not happy with the action. It’s rocking back and forth between gains and losses, a bad idea when you have technical damage and people who have forced liquidations coming up.
Back in 1998, my book of business was a smoldering mess, reeling from the 1997 debacle. I had been fired from my previous firm, supplanted from the office I was placed in at my new firm for lack of production, and generally hating life being the sole source of income for my wife and newborn son. In the summer of 1998 the Russian crisis hit, aka “Asian contagion”, and it wreaked havoc on equity markets, sending the Nazzy down a cool 30%+ in a matter of 8 weeks.
Whatever clients I had left were decimated, reduced to rubble, thanks to the ruble. At that point in time, I was looking to switch careers. I never really made any money, so I had nothing to lose and nothing to gain by staying.
After failing to secure “a real job”, I had no choice but to get to work.
Barnes and Noble’s was one of the stocks I was buying, getting smoked daily like a pack of Benson and Hedges. Unlike today, BKS was a hot stock. They were supposed to take on AMZN for online bookstore dominance. They even had a deal with MSFT that led people to believe they’d beat AMZN’s face in.
WRONG.
But the point is, it was a momo stock, lifted more on sentiment than fundamentals. As you can see, when the animal spirits left Wall, the stock lost its floor and crashed 50% in a few months.
Look at today’s momo stocks. Even though the Nazzy is only off 6% from the highs, there are stocks down 30-40% on no news, simply a side effect of cancer infecting the minds of speculators. Clearly, this is overdone. Nothing goes down in a line. Nothing goes up in a line. Nothing lasts forever, except death.
Based on the current numbers, if the Nazzy fell by another 25% (LOL!), FEYE would be down around 80% from the top, sitting at around $15. C’mon son.
Just like 1998, this market isn’t going down on fundies. It’s going down because of fear. When the fear dissipates (look at that chart), we are going to whipsaw around faster than you can shoot your margin clerks in the head.
I built my business in 1998, went from supreme piker to #3 producer at the firm in less than a year. It was a crazy lifestyle change for me, as I was literally sitting at 10% equity at the time we bottomed. Accounts were teetering on zero equity, long internet stocks into the teeth of insanity. Everyone around me was in cash and warned me to stop buying stocks. Stubbornly, I kept calling people, telling them to “buy the blood and drink it like a fucking Vampire in a blood bank.”
When it bottomed, my money line went apeshit to the upside. I even got my office back. Clients sent me their friends, mothers and grandmothers to manage–all setting up for another grande fiasco in 2000. But that’s another story.
Coffee is up 75% for the year. The Russian bear fund, betting against a bunch of borscht eating Ivan Dragos, would’ve yielded you +59%, via RUSS, year to date–had you been involved.
NUGT and DRN are both up almost 40%, pointing to strength in gold and also real estate. I thought real estate was dead? I guess people want yield, now that the second coming of the great tech wreck is upon us.
Hell, even EGPT is up 25% for the year.
How low can the momo go? Well, for some choice names, unfortunately, a lot lower.
Going over my work, I see there are 353 stocks down 10%+ over the past month, who have quarterly revenue growth of 20%+. Of those names, those disgusting, filthy, growth stocks, 121 are STILL UP for the year. Ha! Can you believe that?! Clearly, this is unacceptable. This is a down year and if you are growing your business, mind you, your stock deserves to trade lower, so that all of the money can slosh around in real estate stocks, utilities and foreign telephone companies.
Who are the most egregious violators of this cardinal sin?
I will tell you now.
PLUG, BLDP, a bunch of weed stocks, IFON, MGN, TSLA, YY, even CRTO and FB are up for the year!!!
Bastard devils: get back down and go lower. Short those stocks and throw dynamite sticks in the air for celebration, once you’ve broken them to pieces, dismantled their lines of credit, and fired all of their employees for Christmas. Since America is borrowing lots of money, not growing jobs fast enough, and generally NOT on the gold standard, saddled with a black communist president, we ought to dive headlong into the concrete pool of credit destruction.
NOW IS A FINE TIME for the GOP to wrangle over the credit worthiness of the United Steaks of America.
This sort of action can only mean one thing: there are lots of GIMO’s to come this earnings season. I suggest you batten down the hatches and prepare for the second coming of the devil himself, who will then bring forth, and usher in, the anti-christ (a bit redundant, no? considering he’s here and all), who will then deliver the final salvo to this egregiously over populated, debt ridden planet: a nuclear war.
Who are these people on my television telling me that 30-50% declines in leadership stocks is “healthy”? Do these trolls have souls or are they as ghoulish as my mind imagines them to be?
I “lucked out” today, as FEYE and YELP spun higher into the close. With WDAY and SPLK down nicely, I am sure my losses were somewhat muted in the mid 7 figure range.
Bannings have been banned at iBankCoin, for as long as this market continues lower. Have at it–give me your worst. I look forward to doing single combat with each and every one of you, tracking you down in your little trailer parks, breaking your collared bones into dust.
So we have a bit of a mess on our hands; but at least we got ourselves a fine olde fashioned PPT oversold signal tonight. That must make you feel a bit better about yourselves, no?
Here are the recent OS signals, attached to a little neat chart of the SPY. Rip it to sheds. I don’t care.
In about 30 minutes, I am heading to the gym. It’s arm and hammer day and I intend to rip my biceps and triceps from my bones, leaving my arms limp and jelly-like.
As we speak, Fed Chairwoman Janet Yellen is preparing herself a nice little glass of warm milk, getting ready for bedtime, which is at 6pm.
I’ve given up hoping for a bounce and have looked up local soup kitchens, preparing for the future. All of this stock market calamity has made me hungry. How about you?
Oh, I almost forget to mention, The PPT has just flagged OVERSOLD, which is a big deal for me. Unfortunately (also for me), I acted rashly over the past few weeks and ignored its better judgement, and as a result, find myself in a bit of a jam sandwich at the moment– if you know what I mean.
The last oversold signal registered on 2/3/14.
I know many of you caring folks are wondering “what are Fly’s losses? How much money has that stupid bastard lost in recent weeks?” It’s all relative, frankly. Isn’t it? Short sellers are shooting fish in a barrel at this point and anyone stupid enough to be long “the best stocks” almost deserve the losses. I’d like to tell you “don’t worry, this too shall pass.”
However, it won’t.
This is it. THE BIG GIANT STUPID TOP that we’ve all been waiting for. After the market spits me out, I’ll be lucky to do stand up comedy routines in Trenton, NJ, whereby I get shot immediately following my performances. Aside from dealing with money, I’m a fairly decent writer, better than most. I suppose I could segue my wildly unsuccessful finance career into children’s books. I could write a series of books about the stock market, all showing men jumping out from windows following poor decisions in the stock exchange. It will make for a good lesson or two.
“So how bad are the losses, Fly?”
I’ll put it to you this way. I survived the 2008-2009 crash because I went short and was careful enough to never stay long into declines. Every time the market started to drop, I knew it was only the beginning of a serious decline. So I’d take my losses, reverse course, and go short. I’d buy inverse ETFs, puts, whatever it took to survive. This time around, I got caught flat footed, in “the very best stocks”, and the drops are equal to what I absorbed during the dot com crash, when I wasn’t prepared and barely escaped. The only reason why I made it out of the dot com crash was because I was crazy young, energetic, and fucking ignorant as shit.
I don’t have leverage issues here and will not be forced out of stocks. But, rest assured, many people do. And right now those stupid bastards are being liquidated. After the margin clerks sell, THEY SELL SOME MORE. Rumors of a fund going bust, instantly makes that fund’s positions targets for short sellers.
So here we have a situation where the market is dropping into a rabbit hole, everyone is chasing each other’s tails down the drain and there is nothing, as far as I can see, that can stop it.
Welcome to THE GREATEST TECH WRECK OF YOUR LIVES: a Ben less tape.
