To Bake or Not to Bake?

Most of you are perma-bulls, pretending to be “technicians.” So please, spare me with the details of how awesome you are, with regards to this run. Frankly, broken clock trading works on both sides of the spectrum, every so often. Let me see you bob and weave this market, like I have for over 15 years, then get back to me with lessons from your alleged pearls of wisdom.

A good friend of mine runs a pretty big staffing company, specializing in IT. He reports: “vapor-lock on jobs, bro.” The jobs market is dead, unless of course you are being spoon fed federally sponsored job programs, which favors the poor over qualified, skilled workers. Things are wretchedly awful for him, much to my chagrin.

However, bad news could be good news, in a world where QE II is the elixir to all that is bad and evil. We could have a scenario where the numbers are bad, but the market trades up anyway. Naturally, the chart people, from the basement, will praise their bollinger bands, as to the reason why the markets kept going up. But, if I might intervene with a bit of logic: your methods exclude any notion of mean reversion, which is the sweetest part of investing to begin with. Let’s just agree to disagree on methodology and market bias. Always remember, while you might be right today, “The Fly” will toss you off a building, just prior to snatching your man-purse, tomorrow.

I’ve been doing this for too long, successfully, than to even contemplate the idea of you giving me financial advice.

The market faked both a breakout and a breakdown today, churning investors in the meat grinder because it’s fun. I’d be remiss if I didn’t say “today means nothing. Tomorrow means the world.”

Big jobs numbers due out tomorrow, which will definitely set the tone for the market going forward. There is a certain sense out there that we are about to break out to a new range. Before that happens, the economy needs to show signs of life, else there will be ample reason for a sell off. Of course I can go on and on about FPE’s and p/s ratios of some of the tech names out there. But, once again, they are merely today’s stars, not “the market.” When you are gauging “the market,” you look at big cap stocks. For the most part, those names are not incredibly overvalued. They are more mid-range and can go either way, depending on the economy.

It is my belief, the economy is getting markedly worse. However, that does not mean tomorrow’s numbers will be bad. Who knows what type of welfare related jobs program the government concocted over the past month. Remember, this is NOT a battle of truth. This is a battle of sentiment, vis a vis propaganda.

For now, the bulls are benefiting from the lies come out of DC. Frankly, I don’t see a reason for them to stop lying, at this moment in time.

As you can see, during this big run up, The PPT never really flagged a high score. The highest we got was 3.09. However, during the entire run, none of the inverse ETF’s were flagged OVERSOLD, until today.

For the first time in PPT history, many of the inverses are flagging OVERSOLD, namely TWM, FAZ, SSG, BGZ, MZZ etc.

Food for thought.

The heretics are out and about selling stocks again. Therefore, I roam my office, fully robed and sandaled, smoking from pipes.

And yes, technology is squirreling back into the little murderhole it found itself in this morning. I will be sure to update you all, as needed.

The 15 minutes of fame for tech bears has ended with a sharp upside reversal in all of my favorite names, namely in the cloud computing space. God only knows how dear they are to my heart. Incidentally, I took out a small short position in MELI, just prior to its full recovery and subsequent short squeeze. That’s always a good feeling.

Gold has reversed lower, helping out my AEM short. But, as the Lord dictates, nasdaq much be purchased, aggressively and on a continuous basis.

Look for something oddballish and spectacular to occur today. I can envision nothing less than a fantastical ending to today’s joyfest.

I know many of you have worried and have lost sleep, thinking about my green robe. I am here to assure you, in all honesty, I wear it now, as we speak.

The initiation of green robe coverage is significant and represents a ground-breaking mood change in Senor Tropicana. As you know, I am preparing to receive great sums of money, as well as mutton and other delicacies only offered to Romanian Kings. For the record, I am not Romanian, but take full credit for conquering the great goat riddled state.

I sold out of my FXY position, even though I think it goes higher. I made over 2 bucks on the trade, over the past week. I wanted to raise a little more cash, ahead of tomorrow’s jobs report.

You should know, tech is being swallowed whole again, by upright walking pigs. ARUN, RVBD, VMW, NVDA and AKAM= taken to the cleaners. Samsung warned last night and the analyst community is now warming to the idea that the semi cycle has peaked. Look for staggering drops in the prices of DRAM.

For weeks now, you’ve seen me throw a bunch of stuff against the wall. Little do you know, I am creating art, a masterpiece for the ages. To simplify matters for you lamb brained homeless men, here is my thesis:

Dollar reversal to the upside

Continued Yen strength

Gold top

Tech and other high multiple, high price/sales stocks obliterated

The return of volatility

Long treasuries, based upon weak economic data

UPDATE: I sold short 2,000 MELI @ $63.20. I shorted another 2,000 @ $63.70

Question: at what point does the dollar decline start to concern you? Like oil, what is the tipping point that will start to erode confidence?

Future are ripping higher this morning. It doesn’t matter why they are up; they just like to go up. The dollar is getting clown raped and gold/oil continue their respective melt-ups. Remember, it’s important for oil to trade up, ahead of the winter heating season, with respect to taxing people in frigid parts of the country.

The euro is fantastic and I want to keep all of my money in Irish banks, yadda, yadda, yadda.

UPDATE: I sold out of FXY, north of $120.

Despite the tech space getting obliterated today, investors stepped in and bought everything else. The current theme is: if the dollar is down, times are good. Oddly enough, treasuries are not trading in lock-step with the dollar any more, mainly because the Fed is buying them. God and clever dogs only know why the Fed is buying treasuries. Perhaps it’s the only way they can insure foreign participation? You tell me.

It’s all about liquidity and finding a place to put capital. For the moment, money is leaving tech and going into big cap industrials. Asset managers are playing whack-a-mole today.

Personally, I like my chances long FXY/TLT here. For now, VXX/TZA is just the butt of all backhanded jokes. I remember everything and have been keeping diligent notes of all transgressions. And, should the commodity rally continue, I like AKS too. However, it is a concern to see X trading at such low levels, considering we are supposed to be in a global growth renaissance. It’s all about jobs now, so keep your eye on that employment data—as if your lives depended on it.

The apocalypse for tech stocks is here. Had you cast aside reason and logic yesterday and bought shares of CRM, EQIX, RAX, FFIV, VMW, AKAM, MELI and BIDU, you are regretting the day you were born, and more. It’s just the tip of the iceberg, really. Those stocks are still trading at absurd p/s, FPE ratios. Fundamentals really do matter, despite what the quislings say on CNBC.

Affectionately, I embrace the coming drop in the indices, as they will cleanse the market of all the people I hate most. All of you low quality men shall be washed out, amidst a sea of red. And it will not be a surprise to anyone but you.

I realize the overall markets are still holding up; but not for long. This is the opening salvo into a series of future shocks to the system. Once the dollar firms up, elevator down, gentlemen. As an aside, I bought some AKS, in an effort to bet against myself. Do not take that purchase too seriously. I still think we trade down 10% from current levels.