Banks Down, Stocks Up

I just covered my intra-day short in COF for a $1.30 profit. It’s a funny thing seeing these banks get raped like this; at the same time, stocks are relatively unscathed. Once again, the market should be down 250 today; but here we are buying dips.

I have a very specific purpose in life, which is to crack 40 ounce bottles of malt liquor on the heads of my enemies. Believe me, I have many, many enemies, some even in my own camp. I see who you are, plebs.

With regards to this market: there is no set up or secret sauce. When we enter bull mode, stocks go up. When we enter bear mode, everything goes down. Try to figure that out, then get back to me.

When managing money on a professional level, it’s important to think big picture, right? It’s not enough to simply say “I follow trends.” If I said that to my clients, they’d fire me on spot. Sophisticated investors want to hear a story. They want to know that you have an idea and willing to execute upon that idea for profit. Dare I say: we are setting up for a most horrific decline, one that will be remembered for decades. The bubble is being inflated and packed with idiots, who claim to be making “free money.”

This sort of rampant speculation NEVER lasts.

Having said that, I’d be foolish to believe the move is imminent. However, I am looking for signs that such a move could take place. The pin-less hand grenade action in the banks today certainly lends to the Armageddon thesis.

Banks are getting pummeled two days in a row, thanks to foreclosuregate. I really don’t have time to explain what it means in detail; go do some research you lazy bastards.

Investing is not about systems or charts or random acts of excellence. It’s about consistency, asset allocation, risk management and intelligence. Be smart about your positions and think them through. Do not cheapen yourselves by simply relying on a few indicators. That’s for the rookies. In due time, you will develop multiple weapons for your arsenal, providing you put in the effort. You should be able to recognize nearly every ticker symbol and know what that company does.

Having said that, I sold short COF, in the high 38’s. Why?

Well, it’s complicated. But, the dumb/short answer is: people don’t like banks anymore.

Today’s reversal, so far, is ugly and pervasive. Without a doubt, the dip buyers will make a late day effort. You can count on that. But remember, this tape is filled with rookies, idiots and people who got hot for the first time in their pathetic lives. They will fold quickly, at the first sign of danger.

A great man once said: “You might be hot right now; but I’m gonna be rich forever.”

Bernanke is talking; but I refuse to believe what he is saying. He is talking a lot of QE2 jargon, specifically complaining about the lack of inflation. This is a man who is not content with oil, gold, corn, cotton etc, at these lofty levels. What type of person, purposefully, promotes the denigration of the national currency, while imposing harsh taxes on its citizens in the form of rapidly increasing commodity prices? Why does he feel it is the job of the Federal Reserve to jump start the jobs market? Isn’t that the task of the President and his stupid band of thieves?

This country is being led by headless horsemen, with magic penis’.

Predictably, the dollar is getting smashed and futures are spiking. But you have to ask yourself this question: how long will this last? Furthermore, when the music stops, will there be a frenzied exit from the dance floor?

Question of the day: Is the BEARDED CLAM aka The Magic Penis blind or mentally ill?

Corn

UPDATE: I sold short COF, at these levels.

Lesson #1: Dealing with Black Swan events.

What is a “Black Swan” event? Essentially, it is an unforeseen event that catches one offguard, in this case monetary loss.

Yes, it’s true, I just endured a black swan event with my VXX position. Let’s examine the ramifications in depth.

Over the past 2 months, VXX has shed nearly 40% of its value. Exactly two months ago, thanks to a previous 100% return in VXX and other substantial winners, I was up a little more than 40%. Exactly two months ago, I had 25% of my assets in VXX.

What happened?

We had the most stupendous rally in generations. Anyone who thinks they “nailed” it is being 100% disingenuous, since there is no way to predict anomalies. Back to the point:

I lost 40% on 25% of assets over the past two months, just in this one position. What does that mean in real terms?

Let’s use 100k as an example, something most of you ham and eggers do not come close to in your idiotic zeeco accounts.

25% of 100k= 25k

loss of 40% on 25k= $10,000

$10,000 loss from 100k= 10%

Comprende?

Just so that I can break it down for you real simple, down to your level, my VXX tragedy cost me 10% of assets. Since I had more than 50% of assets in cash + treasuries and the rest long, my net, net loss, over the past two months, is less than 10%. My year to date gains are still about 30%, give or take a point. I do this professionally, not for newsletter type pin action.

Why do I mention this for the umpteenth time?

You know damn well why I am talking about this. Mention me again and you are fucking fired.

BAC got “BAC-ATTACKED” today and no one even cared. People looked at BAC, then the other banks, and then bought more VMW—trading at 1 billion times sales. Bernanke is coming, boys and girls, and he is armed with a magic stick. He will waive said stick and declare “QE2,” then all will be well and all will reflate.

Cotton is soaring, ripping tits on the way up, as the fashion industry panics over lack of supply. Very soon, we will all be wearing MC Hammer pants, made from silk, because there will be no cotton left. BAL is your direct play on cotton. Every commodity is going up, due to the Fed’s deliberate plan to bankrupt the middle to lower class. Let’s be honest here, I would enjoy the novelty of paying for a $100 heirloom tomato. However, that type of action will put everyone on government assistance.

Rates ripped higher today too, sending TLT packing. I guess the economy is coming back, in a reverse sort of way. It doesn’t matter.

All that matters is there is money out there to be won. For the day, I bought BRCD and CSIQ, fully believing that the BEARDED CLAM will whip out his magical penis and make this whore of market go higher, sometime very soon.

I bought 25,000 BRCD @ $5.93.

Disclaimer: If you buy BRCD because of this post, you will get herpes and die. And, you may lose money.

Dare I say “QE2”?

The market looks bad today, which is giving buoyancy to my VXX positions. But, you must BEHOLD what is in store, later on this afternoon. The BEARDED CLAM shall come out from behind the curtains and shake his magic stick at his market levers, bringing stocks back to life, not so much different than Frankenstein.

I’ve been saying it for more than a month: this market deserves to be down. But that doesn’t matter, as long as the BEARDED CLAM waves his penis at the market, making it go up. He calls it, and I quote: “Viagra for the unwashed.”

“It’s you’re birthday, right?”

Despite a lay up arb play with HRBN, I sold out to raise some cash. As you know, as of yesterday, I was practically without the luxury of cash. Can you believe such a thing?!?! ROFLMAOMGCOPTER

Just a quick reminder: “The Fly” has vowed, on his honor, to never curse on this blog, until the Dow touches down on 10,000 again. Considering QE2 has magical powers, I better get used to this virgin dialect, if you know what I mean.

I didn’t sell HRBN because I want cash. Quite the contrary. I sold HRBN so that I can buy some other cool takeover play. As you know, “The Fly” has decided to invest in stocks that will be taken over, from hereon-forth. And, he is into Chinese Lotto plays, in a big, big way. I still think HEAT breaks jaws to the upside, when it gets going again.

For the next few hours, “The Fly” will ponder the very meanings of life, while eating sandwiches, and figuring out where to win money next. To clarify that point: money is not made in this market, but won.

Off to crumple a bunch of charts up into a ball, light them aflame, then pull out the inflammable ones for instant purchase.

UPDATE: I bought 30,000 CSIQ

It’s Gonna be a VXX Halloween

People are losing their jobs and the dollar is diving into the black abyss. On that news, I expect rampant lotto activity today. Despite Europe being down, I fully expect idiotic QE2 fueled buying today, ahead of tomorrow’s BEARDED CLAM speech. Now, in the event we trade down today: “The Fly” will kick back, relax, and drink pina coladas all day long. There is never a reason to worry in America, for this is the land of FREE LUNCH and jackass political parties.

As an aside, YHOO must fend off any retarded overtures by AOL. The morons at AOL timed the top in the market, back in 2000, via buying Time Warner. Without a doubt, they are trying to jinx the market, yet again.

ALL ATTEMPTS TO JINX THIS MARKET MUST BE “FORKED” ON SITE.