Crossroads

Whether you know it or not, we are at a very important crossroads in the market. Either we melt the faces off of bears, indiscriminately. Or, Greece sets off a series of events that will make you regret being born.

Naturally, I am playing the long side, as it is the higher probability play. However, it’s worth noting, The PPT is currently OVERBOUGHT, which makes me a little nervous. It’s not official until we close OVERBOUGHT. Nonetheless, should these high hybrid levels persist, I will have no choice but to obey the hybrid and go to cash. It nailed that OVERBOUGHT QID call last week like a fucking space alien magician with advanced copies of the final exam.

My money is long commodity related names, like CLF, OXY, WNR and CVI. On the tech side, I am long BGC, SOHU, TZOO and FORM. And, for shits and giggles, I am long VIT and HOGS.

My entire life force firmly believes in the refinery story. A very large percentage of my assets are long WNR. Hence, as WNR goes, so does “The Fly”.

UPDATE: I sold out of OXY.
UPDATE II: I sold out of CLR.
UPDATE III: I bought CY
UPDATE IV: I added to WNR

I starte new position in both TZOO and SOHU.

I booked a 5% gain in both EXK and TNA. With some of the proceeds, I bought VIT and HOGS. Don’t ask why. I just have a hunch the Chinese Burritos are set to blaze.

For managed accounts, I am sitting on my hands, waiting for the shadows near my favorite urinal to give me the sell signal. Typically, they nod at me, while puffing on oversized cigars.

Don’t look now, but I am up 4% intraday, effectively halving my YTD losses inside one day. Hence the term applies: “The Fly” is winning most when he appears to be losing ever so severely. Also, HOC is trading at new highs.

Get your fucking popcorn ready because CVI and WNR are about to rip to new highs too.

Taking a shot with a Chinese Burrito, in light of SEC action against Muddy Waters.

I bought 2,000 VIT, personal.

UPDATE: I bought 10,000 HOGS

Disclaimer: If you buy VIT because of this post, it will be revealed almost instantly that VIT is nothing more than a few guys sitting around playing Chinese checkers. And, you may lose money.

What the fuck is the world coming to when I have to wait for some Greek vote to determine my economic fate? If the vote goes bad, we plunge. Should the vote go well, we melt up. Please do not confuse trading catalysts with a long term thesis. My intention was never to own stocks indefinitely. As a matter of fact, I was somewhat sour on the markets, until this Greek shit presented an opportunity.

Yes, this is taking much longer than I had expected. By now, I intended to be cash rich, planning out my summer vacations. Instead, I am playing catch up, down 8% for the year.

I will have my inflation trade one way or another. Do not believe for a second global policy makers will all of a sudden find religion and let institutions fail. If you believe that, you are a fucking hairy gorilla driving a clown car. They are committed to this course of action. Therefore, as an investor, it is my duty to take the high probability play, not the logical one.

More later.

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Back when Enron folded, I bought a shitload of bonds from other utilities and made a fortune. People assumed they were all frauds because of one bad customer. The situation with the ChinaScams is a little different because it’s in the Chinese culture to commit outright fraud, apparently. Perhaps it’s a page out of the Sun Tzu “Art of War” manuals when he tells his fellow Chinamen to “annoy and evade, then commit accounting fraud against white devils” when faced with an opportunity to “get rich as fuck.”

It’s also in human nature to overdo things, as is the case with many legitimate Chinese burritos right now. The problem lies in the jack in the box style fraud allegations published by websites like Citron and Muddy Waters. Over the long term, we will look back on this period of uncertainty as an opportunity to buy these companies at bargain basement values.

I’ve grouped names by BIG 4 auditor, in an effort to weed out the companies with fifth tier auditing representation. Here are the groupings and stocks that look interesting at face value.

PWC:

NTES, SNDA, PWRD, HMIN, LTON, SINA, NCTY, SOHU, CMED, CTRP, CYOU, CGA, HNP, ACH, PTR, MR, GSH, LFC, TOMO, CEA

DELOITTE:

SPRD, FMCN, WH, JRJC, KONG, CNTF, VIT, WX, NINE, EDU, EJ, SV, AMCN, NED, ASIA, ACTS, VISN, NTE, CISG, YZC

ERNST AND YOUNG:

GA, GRO, XIN, BIDU, CYD, SVA

KPMG:

CHA, SNP, CHL, NPD, GRRF, ZNH, YONG, FFHL, ATAI, SHI, GU, LONG, SCR, SSRX

Names of interest:

PWRD, SPRD, COGO, EJ, CMED, LFC, CEA, SHI, HMIN, SNDA, VIT, CISG, SCR

I am glad my personal is mostly in TNA at this point because picking individual names is like throwing darts. The PPT says just 62% of stocks are higher today. That’s hardly anything to rave about. We need a 90% day, with bears running in the streets, holding their brains in from spilling on the sidewalk below.

Until the euro-trash get their bailouts in order, the market will trade without conviction.

Over the past 3 days, the market has made gains, yet I am hardly making any money. I imagine many of you have the same issues. In the past, tech and commodities would run hard on bounces. Now it’s hit or miss with commodities and tech is dead.

If anything, gold and silver offer neutrality in this whole mess. Both bearshitter and bullshitters like the defacto reserve currency status of precious metals. One thing is for certain: this is not a market that I want to short, knowing the history of our policy makers. They are bailouts makers. Don’t bet against that, else you will be in the streets soon trying to hold your frontal lobe from falling on the dirty sidewalk below.

Exclusive.

I love the doom and gloomers out there, calling for default in Greece, Portugal, Italy, Ireland, even here in the U.S. They mask their mental illness with claims that by “taking the medicine now” we are saving our grandchildren later. Are you people fucking nuts? What you are asking for is  voluntary acceptance of a great depression. By chance, have any of you dicksuckers lived through a great depression and failure of your domestic currency?

I did’t think so.

Say what you want about moral hazard, but I’d rather give myself a fighting chance to fix things later, than guarantee my death now. Who knows, perhaps in 10 years some sort of renewable energy will be main streamed that will help spur another boom, allowing us to grow out of our problems. By asking Greece to default is equal to letting Lehman fail. Now, we all know after Lehman failed, we had to bail out AIG. If Greece is Lehman, Spain is AIG. We are going to have to deal with these problems right now, else all of the QE money, TARP funds and stimulus that has been injected into the system will be null and void, as we will descend back to the lows of 2008.

Now if you were a policy maker, does that sound like a reasonable course of action?

The problem with Greece is that it’s full of Greeks. Even if they approve austerity, their government may get voted out and then we will have to start the ham and egging process all over again.

Early going, futures are improving, which is a good sign. Like the Analyst Bomber said, ” if the stocks stop going down in the face of bad news, they are probably done going down.” I agree 100%. Should the market stop trading down in the face of bad news, we will have a tradable bottom. The situation is very fluid, as news flow dictates the money flow.