Solid Undercurrents

Lots of momo stocks surged ahead today. Even though I shed 1%, I am encouraged by the overall action. I am looking to reposition into YELP, YY, TRLA and GOGO, but lack the funds to do so.

“The Fly” is leveraged to the hilt, at the very pinnacle of the market, begging for a beatdown.

But it’s not going to happen just yet.

In order to buy the stocks on my wish list, I will need to take profits on some or all of my current holdings. I own very obscure names, low brow even. None of my positions are “main stream” and cry out “do your worst mother market, you’re a whore” at very loud decibels.

My new positions in ALJ, JAZZ and AMBC performed well today, while BALT, NSTG, HK and MODN wallowed like fat men in a pool of lard.

As I write this composition, ALJ was my largest position.

Be patient with your buy orders. The market isn’t going to crater; but you never know. It’s the fear of “you never know” that allows stocks to drop, precipitously, without net.

I am very interested in buying back YELP, TRLA and GOGO. However, I’m afraid the risk is too great down here, heading into earnings. I have to make a conscious decision: do I risk a lot here, in speculative names, with +58% gains for the year?

The answer is, as always, YES. But not in the social media space.

Instead, I favour the refiners, low brow biotech stocks and the blackest oil the earth can produce. I’m still long ridiculous amount of BALT, which is more of a play on smaller boats, than big. Let it be noted, the rates for Handysize and Supramax ships haven’t gone down like Capesize in recent weeks. Because of this, shares of BALT have held their own and should continue to do so, as long as rates remain elevated.

By the way, MTH reported very strong numbers. I like MHO and AMBC, as plays for housing.

In short, I am fully invested, leveraged to the hilt, down 1% for the session. Ultimately,  I believe the market will trade up from here. But, I am fully prepared to ride it lower first.

WTI is down $1.70 to 96.58, while Brent is barely off at $109.72.

This is extremely bullish for refinery stocks, particularly those who refine crude ‘mid-continent’. Crude derived from W. Texas do not have the luxury of pipeline infrastructure to transport around the country. Instead, it is trucked around, circa 1900. Because of this annoyance, crude from W. Texas sells at a discount, even to WTI prices. Expanding on that point, gasoline or refined products are priced in Brent, making the WTI-Brent spread a supreme factor in determining profit margins for refinery companies.

The spread has widened from $3 to $13 since September, but down from $20 achieved in March.

Since March, many refinery stocks have traded down because of the tightening spread, spearheaded by analyst downgrades.

Look for said analysts to eat crow. The sector is back in play again.

Top picks: ALJ, ALDW, WNR, HFC and DK

We’re all making money, some more than others. The Option Addict nailed another homerun inside After Hours with Option Addict with his APOL call, further enriching his spoiled rotten members. Good job Jeff.

This experiment in western finance is based upon one singular assumption: manipulation of markets.

There isn’t a better description of what has taken place here, for the last 5 years, under the direction of Ben Bernanke. Does that change with Yellen? Well, that’s the $20 trillion question, isn’t it?

I just wanted to remind you perverts, as you spend money freely amongst your greedy, good for nothing, friends, that everything you see here is a mirage, pure fiction.

I, myself, bathe in it and embrace this matrix form of reality, one that I deem to be exceedingly preferable to the harshness of facts.

In the meantime, I am up nearly 60% for the year and my clients can’t send me enough of their hard earned dollars.

CREE is getting poleaxed in the after-hours.

Ladies and Gents,

Welcome to the third quarter earnings season. Expect to give back large swaths of gains, amidst vindictive earnings reports. Although the indices went higher today, under the thin veil of beauty laid an ugliness so horrible, so monstrous, the very idea of looking at it again might turn your warm, beating, hearts into rocks of salt.

PNRA down

YY down

YELP down

VECO down

NFLX down

DANG down

ADHD down

DQ down

BFR down

FANG down

CXO down

BNNY down

VEEV down

GOGO down

I can go on. You get the gist.

The fruits of un-labored fortunes can come to a brusque end with a snap of the finger. The hedonistic bullishness, the triple digit returns, that you’ve grown accustomed to can come to a screeching halt with sentiment. The market runs on confidence. Often times, during periods of excess, said confidence is held in overwhelming numbers, by people with small brains and shallow pockets, pikers mongering about like the trade-winds.

The strengths and greatest attributes of a bull market running off momentum can indeud become its albatross. Be on guard for reversals.

Top picks: AMBC, ALJ, BALT, JAZZ

I started a position in AMBC.

I’m not interested in anything, aside from the occasional JAZZ trade, than the refiners–RIGHT NOW. Are you seeing the divergence between Brent and WTI crude today? This will be talked about soon. Mark my words.

Brent is up .30 cents while WTI is down $1.60.

PAY ATTENTION, JACKASSES.

I haven’t been this excited over the refiners since my WNR days. I abandoned them because of the shrinking spreads. At one point, WTI surpassed Brent in price, placing stocks like ALDW, ALJ and DK into the ‘fag box.’ However, things have changed since then, haven’t they?

Upgrades will be introduced to the public square and short sellers sellers will be carpet bombed, a la Dresden.

How high can they go?

Back to new all-time highs.

How’s that, pal?

I started a new position in JAZZ, looking for the $100 roll.

During the Bush years, many of you partisan jackasses out there derided the 2003 recovery as being ‘lackluster.’ For some strange reason, you felt Bush, in all of his awesomeness, had control over the economy. The end result of the Bush economy was a grande crash of epic proportions, which helped pave the way for the Obama regime.

Just like Bush, Obama has no control, whatsoever, over the US economy. It’s run by corporations, for the corporations, and there is very little government can do, other than offer temporary stimulus.

Having said that, I’d like to acknowledge today’s jobs report as “the new norm.” They were terrible and will continue to be terrible because your stupid kids aren’t prepared for the 21st century. Keep telling them it makes sense to be a cop or a god damned fireman, or even a doctor. They’ll hate you for it later.

Jobs are being exported because corporations want cheap labor. If you want a high paying job, forget about a manufacturing plant and learn to code. If you don’t want to code, learn how to play this stock market racket.

The Federal Reserve will continue with QE. This morning’s numbers solidified the fact that the economy is still too weak to grow on its own. The rich will get richer and everyone else will fall by the wayside.

We’re heading into earnings at 27x sales. In the real world, sans the internet hype, if you wanted to sell your business, you’d fetch anywhere from 3 to 5 times sales. Due to the nature of YELP’s potential and overwhelming liquidity in the internet sector, it can sustain a share price of 27x sales, providing they smash earnings estimates.

Are you feeling lucky, punk?

To put things into perspective, NFLX is trading 5x sales. At the very top of the internet sector is LNKD, trading at a very meager 22x sales. FB and Z both trade at 21x sales and everyone else is stuck at around 13-16x sales.

What does this mean, Fly?

If YELP doubles their revenues next year, this means nothing–nothing at all. The 27x sales will begin to look cheap, at around 13.5x next year’s revenues. It all depends on the earnings and outlook.

If you want to gamble, hold the stock through earnings and wish for the best. On the other hand, if you are risk averse and do not care for 20% price swings, sell it and pray to the olde Gods (they are the vengeful ones, unlike the new one’s who like to participate in cocaine parties, drinking and perverted behavior) that the stock will sell off–down to LNKD type valuations, allowing for a reentry into said shares, with all of the love and grace that a Father shows towards his daughter getting married for the second time or graduating from a community college with a GPA of 2.