WINTER IS HERE

I’m not buying VXX or HDGE or TLT or shorting any stocks, despite thinking the market will trade lower in the short term. Shorting stocks into oversold tapes have proven to be stupid over the years. Therefore, I’d much prefer the safety of cash, rather than letting greed grab me by the collar and toss me down a flight of stairs in an upside surge.

To start shorting now is tantamount to believing we are entering a prolonged correction/bear market. We haven’t had one in years, making it a very low probability trade.

Aside from the recent weakness, it’s worth noting, many large cap names have been struggling for a month. Significant sell offs in a number of large cap industrials and retail names have spooked some large investors out of stocks and into hedges. Nothing goes up in a straight line, nor down. If forced to guess, I’d say we chop around during February, with some stocks getting splashed over the pavement because of earnings shortfalls and others soaring on beats. After earnings season, we will resume the upswing in stocks and top out in March-April, setting up for a sublime shorting opportunity.

The Devil wants you to buy now, ahead of TWTR’s numbers. You’d be stupid to do that, especially since valuation is absurd and the TWTR folks haven’t been tested yet. America has entered a new ice age. Sleds have replaced automobiles in my neighborhood and commerce and school have all been shut down.

In the past, after taking large draw-downs, I’d get anxious to make back my losses right away. I’d run into the market, buying everything in sight. More often than not, that strategy failed miserably. The tape has changed and this isn’t the same Federal Reserve. The market has bounced nicely off today’s lows and I am sure there was some good money made by alert day traders. But that isn’t my game, as I opt for longer term holds of at least 1 week.

So I ask myself: “will the S&P be higher from here one week from now.” Is it a high probability trade?

I am unsure. Therefore, I remain in cash. Should something pop out at me, you will be the second to know.

I am sorry for not posting earlier, as I was busy not losing money.

In fairness, I am losing a little bit of money, as it appears the FDA–once again–declined GOGO’s latest cancer drug. No worries, as they have another 364 drugs in the pipeline. ANGI catching a downgrade today is pure, unadulterated, luck on my behalf. Sometimes you’re good; and the rest of the time, you’re just lucky.

The trillion dollar question you all have is: when do we buy DDD? The answer is never. As for the overall market, I’d wait until the margin clerks were out and about, zeroing out your buddies trading accounts. We are waiting for the white’s in their eyes. This is a process and it’s not exactly a science.

But what about The PPT?

Yes, it’s true, The PPT will probably spit out another OVERSOLD signal today. It’s obvious to me that this sell off is a bit different from the rest. The system learns from its mistakes and will adjust, going forward. Perhaps the market will bounce from here, in a furious manner, proving The PPT correct once again. However, and I am sorry to disappoint you, but “The Fly” isn’t a robot and must act upon his emotions, every so often, even if that leads him to murderous rage.

Everything is down big because markets are adjusting to the reality of a world sans Ben Bernanke.

NOTE: I am still 75% cash. Actually, it’s a little higher today, since the stocks that I own are down.

European futures are looking ‘grim’ too. Don’t ask for details, for I will not provide you with any.

Don’t forget to follow me on Twitter, lads.

You have to look at the fair value, chaps.

I expect there to be massive amounts of carnage and blood to be flowing in the streets of Wall tomorrow. There isn’t a Bearded Clam anymore, just a nice olde lady at the Fed who is busy knitting her grandkids new sweaters.

There isn’t any cocaine left either. Ben took it with him to the Bering Sea.

I don’t expect the crash to occur overnight. Rather, I believe it will slowly develop until the last bull, the very last bovine, gives up in an act of grave desperation. At that point, I shall reenter the markets with a full chest and bury as many bears as I can, at least what is possible for one, singular, human being.

Today I was AFOP’d and my YTD gains are all but gone. I’ve been reckless and complacent. But I am still in the game, as crazy as ever, with a point to prove–yet again.

Puerto Rico was cut to junk status at S&P, a well deserved designation. How are you bond criminals enjoying the triple exempt status?

No one believes in the next leg lower, which is exactly why it is going to happen.

I closed out today in a 75% cash position.

Today is a dead cat bounce. Tomorrow we might resume the current leg lower, in a significant, dumbfounding fashion. With every correction comes a washout. Maybe I am just jaded because one of my biggest positions just punched me in the face, then threw me under a bus and rolled on me a few dozen times. Or maybe it’s because natural gas is ripping higher again and I was forced to cut losses on AREX because it’s acting like a GOD DAMNED oil stock now.

One way or another, I am probably better off doing nothing, staying away from money, heading off to the gym to inflict serious bodily harm to myself.

Speaking of God, who knows why BALT is trading higher. Look at the BDI and the Capes and ponder to yourself: “what are they thinking?”

Hey, I still own GOGO and the FDA hasn’t declined any of their cancer drugs today, so maybe it might go up. Or, maybe it will go down? Either way, I am perfectly content with the outcome, as I’ve grown to embrace the homeless man clad in feces.

I just caught my first pin less hand grenade of the year with AFOP, a top 3 position of mine. In times like this, I don’t care to discuss what went wrong or how wrong everyone else is for selling. Wall Street is a fashion show and AFOP is a three piece plaid suit right now, so I am out.

Booking heinous losses in AFOP was coupled with locking in massive gains in ANGI. Finally, I sold out of my largest position, AREX, for a small loss. The point here is to start new. I wasn’t happy with the positions that I had, so I ripped them out and moved on. The only stock of meaning left is GOGO. Part of the issue with taking big positions, 20% stakes, is the other side of that blade. When they work, life is grande. However, when they fail, especially during earnings season, life becomes somewhat difficult, to say the least.

So instead of lamenting over a down position, wondering when to average down, I just decided to sell it all and start fresh.

I find it hard to believe Benjamin “The Bearded Clam” Bernanke resigned. He was fired by our bank hating Prezident, who wanted to place the insane man, Larry Summers, at the head of all tables. When that failed, miserably, he conceded to Yellen–but not after hemming and hawing about it.

The blunt smoking ways of Bernanke, catching short sellers flat footed at midnight, infecting their dreams with visions of doom, is gone. He’s now on the love boat, sailing the seven seas, somewhere near the Bering Sea. He is watching the mess unravel and can only marvel at his track record of saving the world, not once, but twice, all the while our cabal of amateur politicians threw mud and rocks at his good name for meeting extraordinary circumstances with extraordinary antidotes.

Ben had the world under his “Iron Dome” of liquidity, keeping the music going long enough to help us forget about what was in store for us in 2008.

Now he’s gone and coincidentally everything seems to be unraveling again.

Let’s see if Yellen runs with his playbook, or is under the directive of the President–who’s busy organizing communities, instead of governing from the top.

The blunts have been extinguished and the Federal Reserve ashtray has been cleaned out and filled with old lady butterscotch sucking candies.

I am not looking for high fliers on sale. I am looking for high growth stocks that have sold off due to the overall market correction.

Here’s what is on my radar.

WETF
YNDX
DDD
DWRE
AMZN
RH
GNRC
FSLR
MONT
YGE
OSTK

If we gap down tomorrow, I am a buyer.