Brain-Dead, Full Speed Ahead

[youtube:http://www.youtube.com/watch?v=WTUzw6BF-I0&feature=related 616 500]

Some of you fuckers are hypnotized into believing we are entering a period of rapid inflation. This theory supports your view, wrongly, that equities should trade higher for as long as we shall live. Nothing could be further from the truth. This morning the Swiss National Bank warned of potential deflation risks in 2011. But we already knew that. Why else would yields be so low? With every central bank trying to devalue its currency, it’s not a surprise to see gold trade at new highs. I am not a big believer in “smart money.” As a matter of fact, I believe, in many cases, the bigger your money pool is, the dumber it gets. Having said that, gold is a massive bubble that will continue to inflate until one day people realize they can’t buy sawed off shot guns with yellow coins. The commodity and the underlying stocks are both exhibiting classic signs of a bubble, all the way down the food chain to market participants. Basically, investors of gold, similar to dot com players in 2000, feel we are in a “new economy” and owning gold is the “place to be.”

Been there, done that.

Today’s economic numbers were not eventful and the futures look bad. We should trade lower today. However, ahead of quadruple witching and with investor sentiment catatonically bullish, I would not be surprised to see more of the same.

Month to date, the S&P is up about 4.3%. Listening to the media, one would think we are up 40% in September. Slow your fucking roll, douchebag. The market will vomit up all of its gains, and more, inside two quick trading days—and you know it.

So far, in 2010, the market has been a lot about nothing. If you are up more than 10%, you have managed your money well. Do not try to make 200%, for that entails taking on too much risk.

Here is the monthly performance data of the S&P, in 2010:

Jan: -3.6%
Feb: +3.1%
March: +5.6%
April: +1.5%
May: -7.9%
June: -5.1%
July: +6.8%
August: -0.6%
Sept: 4.3% (open)

Notice any trends? Of course not. Back to the topic of playing this tape: it’s hard. I don’t care what anyone says, this tape, despite my 30% returns, is fucking difficult. Nevertheless, I think my attitude towards the market is jaded due to my disbelief in just about everything. If I was a perma-bull or bear, I would be able to trade with more conviction. But because I think we are simply partaking in building a house of cards, I ebb and flow between bullishness and outright pessimism.

Historically, if the market escapes September with gains, there is a better than average chance of the market continuing the uptrend until December.

There are headwinds. With Japan active in the forex, China gets thrown into the fag box. I have no proof or evidence; but I believe the strong yen action is being caused by insidious forces inside of China. I am not surprised to see Shanghai trade lower, rather aggressively, two days in a row following Japanese intervention. As an aside, the Indian market is the most overvalued in the world, trading more than 20x eps. I will be selling my iBN position tomorrow. There are 10,000 reasons to take profits right now. However, no one wants to be the first one to sell.

One thing is for certain, following simian brained moves to the upside, the funnel is set. Heed these warnings else find yourself inside of a fucking funnel for Halloween, getting mudstomped.

UPDATE: I knew I was onto something with my Japanese/Chinese rift scenario.

This is getting redundant already. Pardon my emphatic demeanor. I am unable to cede my position, just so that Mother Market can swoop in and slice my balls off with her switchblade. You know damn well, if I sold VXX/TZA and bought XXV/TNA, I’d lose my limbs in the GREAT CRASH OF 2010.

At this point, I am just being stubborn, sustaining myself by eating my own liver. We are up about 9% in 9 days on the Nasdaq. For the love of dead dogs and infectious diseases, the market will bow to my demands, one way or another. Just know this, the longer it defies me the greater the pain will be for many of you later. Yes, it’s true, I am envious of not partaking in such low end gambits. However, I warm myself with the blood of those I have killed during previous mortal combat engagements.

I bought more VXX/TZA today, as it is my right to do so. Having sold the majority of my longs, for the first time since April, my bias is net short.

I fucking hate this market and want it to die in a pig-pen, filled with zombie goats, and umm, pigs.

Off to blow up a few Japanese eateries.

In an effort to continue the “broken clock” trading strategy that I am pursuing, I made final purchases of both TZA and VXX ($29.20’s and $17.20’s respectively)

Disclaimer: If you buy the above stocks because of this post, your only son will become an avid Tea Party organizer. And, you may lose money.

Very quickly, I’d like to offer my 10,000 congratulations to the fucktards at Lehman Brothers for destroying the company, as today is the 2nd anniversary of their demise. I am sure the blue bloods at Barclays are treating your executives with the utmost respect and dignity, not so much different than the British treated American POW’s (prison ships) during the revolutionary war.

Back to box watching.

Go play shuffle board in the ghetto. If there is not a shuffle board arena there for your pleasure, make one yourself with chalk. Or, if you are not interested in that, how about some crunches, hanging upside down off a lamp post?

As for me, I will be busy slapping homeless men in the face with slices of turkey (peppercorn or salsalito).

In short, I am resisting the temptations of this bitch of a whore of a market. It is after my coin and wants to deposit it into her bussom. Well, fuck you lady, I have a prior engagement.

The metals are breaking down, quite aggressively, as the indices goose step higher. I know it’s practically illegal to discuss the prospect of a pullback, amidst Ben Bernanke’s QE2 programme [sic]; but it’s gonna happen one way or another. On the other side of the coin, tech stocks are offering leadership, after getting kicked in the nose, all summer long.

With the Bank of Japan resisting the efforts of China to strengthen the Yen, I find it interesting that no one is talking about that. After all, the recent climb in Yen was attributed to China allocating capital into Japanese debt, no? I mean, China benefits from a strong Yen on many levels, yes?

All of this shit makes my head hurt. It’s too much. All I know is stocks do not go up in a straight line, nor do they go down forever. Even when things looked so bad I wanted to vomit on my short positions (despite profiting immensely) in 2008, stocks rallied. Even during the dot com bubble, people lost money during sharp profit taking sessions. Trust me when I tell you: they were sharp indeud.

I’m frustrated because I missed out on the second half of this recent run. I caught the bottom; but then I stepped out and hedged. But what exactly do you expect from a person who is intent on catching tops and bottoms? It’s bound to get messy.

Like I said yesterday, I have more than 50% of assets in cash and will average down, one final time, in both TZA and VXX. However, the market is not talking to me yet, so I haven’t done anything. There really is no sense of urgency, especially when the volume is light and the moves are methodical. I’m better off watching Honeymooner re-runs, than attempting to fade this market. Hypothetically, should the market pullback and close lower 30 points, I would laugh at that. I am waiting for a sell off with meat on its bones, so that I might take a nibble. Until that happens, I will be busy partaking in the arts of passive money management.

I see the CEO of DHB was convicted of fraud. Many years ago, just after 9/11, one of my junior reps solicited that cocksucker in order to set up an investment banking arrangement. Long story short, my partner walked out of the meeting, infuriated after just 5 minutes, accusing the CEO of being rude, in addition to other profanities, and then went on to accuse his female assistant of farting in our conference room. Needless to say, we did not help them. It was one of the funnier stories that I am somewhat cloudy on.

One that’s a little more vivid was with the CEO of Immune Response, old ticker IMNR. One day he took a group to lunch to discuss the great many prospects that his company had to offer, all the while trying to get us to buy his stock. You have no idea how low some CEO’s will go, just to get some sponsorship. As the CEO went around shaking hands, my buddy (as he was holding the hand of the CEO) said “hey, I have poison ivy.” The look on that fuckers face was priceless. His response was one of a flabbergasted, yet appalled, man. My friends retort, just prior to ordering his lavish lunch: “hey, you must have immune response, no?”

As for the Bank of Japan playing Godzilla with Yen lovers: good luck with that, pal. Intervention is not a long term strategy.

NOTHING CHANGES.

I bid you farewell.

You are witnessing a blow off top in precious metals today and some serious yen action, that can only be described as “detrimental” to Japanese exporters. I am confident in my opinion that we are in the last days, if not hours, of this current uptrend. Having said that, I blew out of my largest long position, BAC and GMCR, raising my cash position to about 50%.

With the cash, I will take 5% and add to my underwater VXX position. Remember, it’s a play on the market, not an individual name. There are limits to momentum and traditional correlations can only be ignored for so long. Again, you cannot have a stock market rally with Yen and long bonds going through the roof. We are now up 10 of 11 days on the S&P, making this another mind-boggling rally, that feels mechanical in nature.

Volume is very light; but I am not a big believer in volume, unless the move is big. For the most part, we’ve been stair stepping higher, as short sellers wait in the balance for a chink the the proverbial armor. It is my belief, that chink will come in the form of a fucked up Japan (racist pun NOT intended).

As for me, I do have one bullet left, with regards to a TZA average down. I will not be executing that order today. I much prefer to see how the market will open tomorrow. As for VXX, I will intentionally miss out on the initial move, in order to place my last average down with precision.

Soon.

Get long TLT, FXY, GLD short UUP, short USO and long even moreSPY and lots of cocaine.

WTF!!?? am I talking about? Yet, that’s exactly what is happening here today, on this fine day of our lord 9/14/2010. Stocks are being buoyed by a blender full of absolute nothingness. But, what sticks to the wall is most important (are the sour grapes shining through yet, no? Wait for it): the dollar. Ah, the fucking dollar is going down, at the same time long bonds are going up. Here on Wall Street, we don’t give a fuck if that makes any sense, as long as it makes sense for me right now.

MSFT is borrowing some free money to buy back stock, naturally. What else are they gonna do? After all, isn’t the most important aspect of American capitalism equity manipulation (ah, there is is, quite bitter actually).

The market is leaning towards accomplishing another 40 points and out, even though there is weakness in banks and some oil names. Actually, today is a very mixed day, aside from gold and retail. Both of those sectors are through the roof, as retail stores now accept GOLD as a form of currency to purchase their bullshit wares.

I got the “deer in headlights” action going on here, so don’t expect much from Senor Tropicana. I’m a bit stubborn when it comes to investing, almost like a spoiled baby brat. So, until I stop pouting and pacing back and forth in my white robe and sandals, you might want to, well I don’t know, read a book or some form of investing literature.

More on this later.

NOTE: It’s not the money, but the wins.