THE GIMP IS BACK, YET AGAIN

At this stage in my blogging career, I post for my own amusement, less to impress the plebs who read me. So you know, the brains behind the IT operations, VINCENZO ILLUMINATI, likes to program from the luxury of a wooden chair inside his local Starbucks. Just know, as you read this, he is reading this, feeling incredibly uncomfortable in the process. Who knows what I might say?

Anyway, since he programs in a public arena, other locals tend to see the site’s front page, perhaps quiz Vincenzo as to the contents of the beautiful exterior of our web pages.

Needless to say, when I post headlines and pictures, such as what is posted now, it shuffles him into a state of panic–desperately trying to hide and/or avoid iBankCoin’s front page from fellow Starbucks aficionados.

Today’s jobs numbers were calibrated to castrate the shorts. Bernanke did exactly that. Do not short into a whirlwind of fire, for you’re more likely to be scorched to a cinder, than escape with your mustard. Two of my larger positions, IMMR, FRO, underperformed today–one due to misplaced fears of dilution, the other due to reported weakness at Samsung. In time, both names will recover and reign supreme.

In the meantime, I had work to do. Dutifully, I allocated 55% of my assets this morning, into YELP, WETF, MTU and AMBA. All of my purchases were correct, as I am sitting atop of quick gains. But the rally isn’t done, small plebs, chaps and gents alike. Next week we shall swim into a sea of green perversion, lighting fire to the faces of gawkers along the way. Do not fear what you do not understand; chalk it up to ignorance and have faith in your God, The Federal Reserve.

The Gimp is back.

In case you’re wondering, yes, The PPT did nail the bottom to the exact tick.

I am getting ahead of the curve and positioning for a huge rally in Japan, through purchases of WETF and MTU.

WETF represents the last cog in the wheel, putting me at 100% invested.

NOTE: I also added to my IMMR position, which is now my biggest holding.

I have one more stock on the buy list. After that, I will be fully invested again.

The Bank of Japan is the easiest bank in the world. Big money borrows in yen and then buys assets that are denominated in euros and dollars. Many people attribute the rise in stocks and European bonds (Italy, Spain) thanks to the yen carry trade. However, as of late, the yen has seen material upside and is in fact in an up channel.

Should the yen continue higher, the carry trade will unravel. The canary in the coal mine is FXY, then Italian and Spanish yields.

It’s worth noting the carnage in US REITs, perhaps a direct beneficiary of this yen carry trade. Although the REITs appear to be oversold here, things could get crazy if their shareholders are yen whores.

TLT is lower again, based off the jobs report. Normally I’d say this means stocks are more attractive than bonds. But we don’t want yields to shoot higher too fast. It’s not good for anyone. Having said that, TLT is an interesting long trade here, as it represents stability. If you believe in stability, TLT will bounce here, alleviating higher interest rate concerns. It’s worth mentioning, TLT pays dividends on a monthly basis.

As for gold and silver: they lose in almost every scenario short of a plunge in the dollar.

In short, the yen is the key to almost everything.

Jobs +1750,000

but…

unemployment rate rose from 7.5% to 7.6%.

The Bearded Clam wins again.

Up we go.

It’s not a simple proposition. I need names that can make me 10%+ into a strong market rally, as well as possess decent underpinnings in their fundamentals to warrant further buying, if my original entry points are wrong.

APO
YGE
WBK
KOF
MTU
O
WETF
YELP
HOV

I doubt this list will change, as I am determined to own some or all of these stocks. Indeed, I will act aggressively if they dip further.

Even with 55% cash, I managed to make a decent amount of coin. Net, net, over the past week, I am a loser, however. But that’s the price I am willing to pay to be able to buy cheap stock. My next move is always my greatest and this one will rank at the very top.

I am not buying ahead of the jobs report. It’s gambling at this point and I have no business being in the parlour, when I am perfectly fine in the back of my 1980’s style stretch limo.

Let the dogs and the pigs bite each other’s faces off. We will be there, in the end, to light their bodies on fire and feast (no cannibalism) off their remains.

Top picks: IMMR, ANFI, FRO

The closer we get to tomorrow’s jobs report, the more I smell fear in the air. I am 55% cash now, risk averse ahead of the numbers. I am very busy complaining about this and that, citing percentages and hardships. Meanwhile, back at the Federal Reserve castle, Benjamin Bernanke is fine tuning tomorrow’s numbers to be goldilocks, not too hot or cold. It will likely launch a powerful rally, displacing bears and sending them rolling downhill in their wheeled chairs.

Sounds crazy, huh?

Well crazy is exactly what happens, over and over again.

Everyone is expecting the market to rally soon. The REITs are at the top of everyone’s buy list and just about every broker I know is positioning for a rally. But there is two sides to this coin. Prior to the decline, pension funds and margin exposure were at their highest levels ever. The small investor was leveraged to the hilt, trying to get rich.

So the market declined, after speculation hit a feverish pitch. REITs are off by almost 20% in recent weeks and no one is talking about losses. There has to be a lot of people hurting out there who will take the first bounce to liquidate. I do not think we are setting up for another “V-shaped” recovery. I was going to buy some REITs, but have changed my mind after thinking it through.

Also, I was going to put some money to work today, ahead of tomorrow’s jobs report. I am not so sure about that anymore. If the numbers are good, interest rates will rip higher and the market will get crushed. Again.

Since 1993, the SPY has traded lower 7 times in June. The average decline is 4.13%. Month to date, we’re down merely 1.3%. I will feel much better about buying this dip only after the SPY is down more than 4%.

On Friday, I expect the jobs report to come in strong, which might lend to further downside action in stocks. It’s well known by anyone with a modicum of sophistication that stocks do not trade higher based upon macro-news. Instead, stocks trade higher based upon the Permanent Open Market Operations (POMO)–spearheaded by Benjamin Bernanke.

Basically, if you believe the economy is in the tank, you should go out and buy short dated calls on the market, for it will trade frantically higher on a worse than expected report. If, however, the report is good, prepare to have your testicles shaved.

Bad economy= more POMO.

I like WETF, RAS, BX, APO, HOV, USG and of course IMMR. FRO is good too, but not my top choice at the moment.

Let’s put the correction aside for the moment. The prevailing wisdom is the economy is in recovery and possibly booming. This is happening because housing has recovered and is booming in many parts of the country. Due to this boom, retail stores, construction materials, mortgage lenders and residential builders are leading the market. The facade is based upon this myth. If this myth is discredited, we are without facade and the Dow is 5,000 points too expensive.

So, housing should be at the top of your buy lists, as well as REITs (non-commercial), banks and mortgage lenders. Also, banks that do better with a sloping yield curve might attract idiot hedge fund dollars. Your plays are KEY, HBAN and CMA.

SPECIAL EMERGENCY ALERT FOR MEMBERS OF THE CLUB OF GENTLEMEN OF THE DISTINGUISHED VARIETAL

BEHOLD! The Impala Lifestyle
http://www.youtube.com/watch?v=-bRSJ-dtN6g