A Few Questions for Your Person

If the price of gold went up 50% over a 1 week time span, would you have an interest in buying gold stocks? Similarly, if the price of oil went to $170 by May, would you be interested in oil stocks? Lastly, if SBUX was able to raise prices by 50% on their coffee, without seeing demand destruction, might you be interested in a small purchase of said shares?

Well, it’s not exactly that simple with the refiners, but almost. The profit margins, via crack spreads, have blown out to the upside and no one is paying attention. Spreads are up another 3.5% today, now trading above $28, up a staggering 100%+ year to date. At the same time, gasoline demand is on fire, with draws at 5 year highs. Naturally, it takes time for people to come around to a story, especially with a sector that is so tough to gauge. However, it is my belief that after earnings are announced, you will begin to see a titanic shift in the way these companies are valued. I may end up being woefully wrong. But that’s what makes a market. Go ahead, fuck face, bet against me.

For the day, thanks to stocks like MWW, WNR and ALJ, I lost a staggering 2.5%. I care not to discuss my losses with the likes of you, or offer any advice. It is what it is and it is fucking stupid.

The idiots from Nigeria are killing each other again, mainly over fake elections and Gods. I warned you a few weeks ago that the morons from Africa would get jealous of the other morons from Africa (Libya) and start lighting oil fields on fire. The Nigerian rebels love to do rebellious shit whenever people least expect it, sort of like the movie Mars Attacks.

Unfortunately, I do not know anyone from Nigeria, with exception to several rich prince’s in need of IMMEDIATE HELP, via email. However, using my larger than life brain, I can surmise shorting oil here might be a bad idea, with Nigeria going full retard, post elections.

According to The PPT, as of now, just 9.42% of the 3,888 equities followed are up for the day. Essentially, this is a 90% down day and people are clamoring for safe harbor. Incidentally, this is the 5th time the market has endured an 85%+ down day in 2011.

How did the others pan out?

1/19/11: 15.71% up, SPY closed at $127.70

Three trading days later: SPY closed at $128.54

1/28/11: 13.6% up, SPY closed at $127.17

Three trading days later: SPY closed at $130.49

2/22/11: 11.19% up, SPY closed at $131.26

Three trading days later: SPY closed at $131.76

3/10/11: 9.97% up, SPY closed at $129.38

Three trading days later, SPY closed at $128

As you can see, 3 of the last 4 times the market traded up, following an 85% down day, in 2011. In all fairness to the bearshitter robed in burlap, big down days, typically, are a warning sign of ominous shit to come. In the past, when the marker reversed lower on heavy volume, that encouraged billionaire, low IQ, managers to raise cash. However, even since the Federal Reserve started snorting home grown cocaine, sell offs are nothing more than mere way-stations to higher prices. You do not have to agree with this fact, nor do I. It just happens and I am simply pointing it out for you to chew on and shit out.

Most of you have goat brains and cannot see TLT diverging from the idiotic call by S&P. There are all sorts of counter-trend signals popping up, from dollars to treasuries to munis to gold. Do not let the news be your guide. Be like the fruit loops guy with the fucked up nose and smell the cocaine. Personally, as opposed to my opinion but not really me, I don’t need to smell the cocaine, since I help manufacture it, via large equity buy orders. You retail fuckers are subject to the whims and machinations of people like me. Not me, per se, but you get my drift.

It’s also worth noting, The PPT closed at 3.00 on Friday. It appears the algorithim is now responding to 3.00 + closes. And, as you read this gospel, both SKF and FAZ are flagged OVERBOUGHT. The PPT has been 75-80% accurate in calling tops in both FAZ and SKF. We shall see how this pans out and we shall do so with extreme vigilance, while sipping on single malt scotch!

So the guys who were complicit with the entire credit crisis and subsequent collapse, via rating junk as shit CDO’s AAA, are now finding religion by warning the United States may be subject to a credit downgrade?!? Although I agree with them, I do not believe they should have a say at all. As a matter of fact, I believe they should lose their authority to opine on the credit quality of sovereign debt since they suck so bad. It’s not like they made a few mistakes. They nearly destroyed the entire fucking world with their AAA rating bullshit. Now, after everything is to hell in a hand basket, partly thanks to them, they threaten to downgrade our sovereign debt? Something doesn’t smell right.

If I was writing a book of fantasy, pure fiction, I could not make up a more sinister plot to overthrow the U.S. government than the evil shit flowing out of S&P. Who needs conventional warfare when you could simply choke off the liquidity of a nation vis a vis scare tactics?

Ten years ago, they said it was “safe as shit” for investors to buy CDO’s, knowing full well they were garbage. Any credit analyst worth his salt could tell you inside of 5 minutes they were not AAA rated paper, even though they were. So, ten years ago, CDO’s were great. Then, the housing market collapsed and the banks got fucked for holding all of that paper. As a result, many went out of business, but all tightened up and froze lending activities. The result was a doubling of national unemployment, if not more. Since then, the Federal Reserve has been forced to print new money, in order to stave off deflation. They are purposely devaluing the dollar to help our exporters and create the illusion of economic activity. Out of nowhere enters S&P saying “fuck that shit. Your national debt is fucked due to your binging out on CDO’s. We’re gonna slash you guys and destroy the country.”

I know I am jaded; but they should not have a say at all.

The result: stocks are plunging, old school style, now down nearly 200. EDZ, TZA and other inverse ETF’s are off to the races and my stocks are getting S&P’d. My refineries are not doing too bad, all things considered. If people took the time to look, crack spreads are up more than 2%. That’s right folks, when crude drops more than gasoline, that’s good for refiners. Nonetheless, I am interested to see how the tape plays out. We could start to see a “buy the dip” mentality creep back in or “holy shit, OMG, we’re fucked” trading action infect the minds of over-coked, lazy ass money managers.

I am happy to report, our auxiliary offices in Ulaanbaatar have fended off “assholish” attacks from our Asian steppe enemies. It should come as no surprise: those who were captured have been executed via pinless hand grenades tossed into enemy container bins aka “fag-boxes.” At this time, they also hit us with various low end cyber attacks, which were again fended off and eliminated. As a result, we are burning the corpses of those captured and killed. Hence, if you see black smoke emanating from the chimney of some non-descript castle, you will know why.

Regarding the market: I expect to see my refinery stocks appreciate a great deal this week, coinciding with my monthly general construction expenditures. Stocks like CVI, ALJ and WNR will offset any and all expenses. Also, as the retards in NATO sit around paying RTN “Bernanke-Bucks” via launching “idiot-bombs” that do nothing, the spread between Brent and WTI crude will widen. This is a major boon for domestic refiners. Blah, blah, blah, blah. You never listen.

Coming soon, how to get rich while spending all sorts of money on senseless shit.

Coming now, for PPT subs only, a 1 week Free Trial to the best trading room service in the world, possibly the universe: 12631. Christmas come early for you fuckers, or maybe Passover/Easter.

This is an update to bring you up to speed with the great trials and tribulations of managing La Casa del Fly.

So the contractor came, not the usual guy. I hired a friend of a friend, and unfortunately, he works alone. The good news is he does not employ lots of idiotic illegal Mexicans. The bad news is it takes him 3x as long to do anything, due to the quality of his workmanship.

The plumber took a look and surmised the upstairs bathroom is no longer routing into the main. Essentially, that fucker “went rogue” and is simply pouring freely into the foundation of the house, the wall, floors, whatever. The upstairs bathroom is no longer restricted by asshole “water prisons” aka pipes. As a result, water is all over the outside, garage, and most egregiously, under the downstairs bathroom tiles and throughout the entire downstairs Brazilian Cherry floors. The bathroom is not an issue, since I want to upgrade it anyway. However, if I am interested in preventing a fucking black mold from permeating the plywood under the wood floors, I may need to rip up the fucking floors, in order to let it dry out. ROFL

This shit is so funny, especially since we have all sorts of parties planned in the near future. I can’t wait to see the look on peoples faces when they go to the bathroom and find nothing but beams and exposed sewer pipes.

Trust me when I say, this all bodes well for stock market gains. The more black mold the better. As a matter of fact, fuck this house entirely. “Knock it down and try it again,” is my motto.

It was also funny hearing the contractor pitch me cheap price points from his quarry supply, as if I need that shit. I imagine people nickel and dime him often, mainly because people are fucking idiots, always trying to rip someone off. Look, if the guy does good work, who am I to nickel and dime him, in order to save a few thousand dollars? If you want to save money, eat rats for dinner.

The way I see it, if you want something of quality, you should pay up for it.

I swapped out of VLO for CVI

Some of you are familiar with my handiness around the House of Fly. When it comes to fixing things around the house, I am a destroyer. There is nothing that can stop me from fucking shit up. A few weeks back, I had my bathroom tiles steamed, which in turn caused the grout to travel yonder down the pipe until it cemented it shut. Being the handy man that I am, I took it upon myself to “correct” such egregious circumstances.

Mission accomplished.

Fast forward several weeks to today and there is water seeping through the downstairs bathroom tiles, into the foundation of the fucking garage. Fully cognizant of creating a masterpiece of household destruction, I opted to call my general contractor, so that he could laugh at me and my plights. However, at the moment, he is not interested in calling me back. So here I am contemplating fixing this shit myself, knowing full well if I do, the entire house will be flushed away in some sort of plumbing catastrophe.

When the shower is operating upstairs, it sounds like a pleasant waterfall downstairs, almost as if there were no pipes at all!

All of this, AND MORE, usually precedes EXTREME personal winship in the stock market. There is a certain order to things, a give and take if you will. The universe is now taking from me, in a most unusual fashion, setting up for a large monetary gain.

Crack spreads are up 3.5% this morning and the spread between Brent and WTI crude is now over $15. It’s only a matter of time now. The question is, will “The Fly” have a house left by the time his positions reach full potential?

Developing…

Western Refining did a presentation for RBS today. Here are my back of the napkin notes.

Their source of crude, from Eagleford Shale and Permian Basin is cheaper than Brent or Gulf oil, especially from Eagleford, due to lack of proper pipeline infrastructure. This crude is not able to flow freely into the Gulf. Therefore, it trades at a discount, to the great benefit of their El Paso refinery.
It will take at least 2 years to build a pipeline from Eagleford to the Gulf.
The new crude coming from Canada to Cushings is also a benefit to them, further exacerbating the spread between Brent and WTI.
Their stated goal is to take all available free cash flow to pay down debt. They want to improve their credit rating.
The #1 priority is to pay down the 10 3/4% and 11 1/4% floaters.
One of their main markets is Phoenix, ideal market for refinery due to demographics.
It is their belief that current 321 crack spreads are sustainable for years to come. This is not an anomaly.
The management of WNR has a large stake in the company, alongside shareholders, owning 41% of shares outstanding.
The idled refinery at Yorktown will either be sold, in order to pay off debt, or restarted, in order to take advantage of current spreads. However, the spreads on the East Coast are not nearly as profitable compared to what they are seeing at El Paso.

So the imbeciles in D.C. debated for a month over budget cuts, only to slash by $38 billion. What a fucking joke. How did these clowns get so much power? Our government is a dictatorship, bought and sold by special interests. The people do not wield any power, so why take part in the process?

Wake me up when the guillotines are transported to Washington D.C., to punish those who have committed treason against the people of the United Steaks of Amerika (sorry, I went to public school).

After early losses, the market reversed and went higher. Despite crack spreads falling today, refinery related shares recovered. In order to cover my bases, I bought a little ALJ for novelty. It is the least owned by institutions and well positioned to profit from these insane spreads. As I write this, I am up just 0.3% for the day. However, remember, I am preparing a stew, not some Chinese stir fry shit. I have all the ingredients in place and have placed the heat real low, in order to allow the flavors to release—at their full potential.

Naturally, if I am wrong about this stew of mine, I will need to eat my own hands, in order to avoid starvation. But that’s a market, so quit acting like you know anything.

Let me close with this: if you have never made or lost a million dollars in the market, you are not qualified to offer “The Fly” financial advice. Understand, this is the bare minimum of qualifications, in my book. You can be a great little “swing trader” and make lots of cute picks. But you’re not in the same league as me, pal—so fuck off. You’re playing school yard stick ball, while I’m hitting grand slams out of Yankee stadium.

Into the bell, I am liking this oil sands play, WG, into melt up mode.