Black Smoke Abound

Let this be a lesson to you clam-fuckers: never fuck with “The Fly”. I speed in space rockets, while you’re in bed, cuddling with bitch-ass stuffed animals. My level of awareness is much greater than yours, thanks to the terrible burden placed on me: I can’t help but to bank tremendous coin in the market. I see what no one else can and hear what you do not want to, mainly because you are tone deaf and you need to listen ever so quietly to hear my music.

This is NOT the beginning of a precipitous decline. Instead, this dip can and will be bought, eventually. For the moment, I am being a pussy, bogged down in [[TLT]] —currently a 12% position. I intend to hold it—at a minimum—through its next scheduled dividend payment (3/1). If the market rebounds off these lows, I shall and will buy some [[VXX]] .

Just know and understand: “The Fly” is well aware of his actions and how a small minded person, such as yourself, might have difficulty in discerning the difference between shit and chocolate pudding. I never ask that you “follow me” into anything. I do this blog thing for sport, in order to vanquish and utterly destroy all other financial bloggers. So you know, I AM ACCEPTING RESIGNATIONS, from whomever can’t handle the day to day stress and anguish (the fucking drama) of calling the shots on these here internets.

Top picks: [[TLT]] , [[VXX]]

Why yes, as I matter of fact I do.

skip to 1:00

He was just off by a year and change.

Carry on.

We are enjoying an oversold bounce. But, in my estimation, there is more downside, in the near term, than up. Overall credit conditions are still good, as evidenced by [[LQD]] and [[JNK]] . However, trading stocks is more of a crystal ball activity, not reading the latest headlines—if you know what I mean.

If you are still heavily long, please, on Salomon’s eyes, raise cash.

Separately, the refiners are looking attractive again, heading into driving season. In that space, Tesoro Corporation [[TSO]] and Holly Corporation [[HOC]] are your best horses.

As for me, well, I will simply pass the time, kicking back in my southern hillbilly made rocking chair, reading newspapers, while sipping ever so gingerly on a nice cool glass of lemonade—not too sweet ya hear. My next move will be to go long [[VXX]] , as I further entwine myself in the business of betting on lower stock prices. One step at a time, young man. One motherfucking step—little leech.

“Bearded Clam” Bernanke tells us we need low rates, for a long, long time. No shit, dickhead. We need low rates because just one year ago today we were on the precipice of total and complete collapse of the modern banking system. Don’t forget, we can still fuck this up, sending us back into the stone age. Forget about inflation; try to focus on the greater evil: deflation.

With my money, I am seriously considering a position long [[VXX]] and short NIKE, Inc. [[NKE]] . The days of the Nike Slave Prisons are coming to an end. Let it be known, no one wears Nike sneakers anymore, not even in Harlem. In all seriousness, the upside is 1-3 points with 10 points down. The Vix trade is a cute way of saying “stocks are heading lower, asshat.”

Thus far, the market is higher, giving my longs a boost. And, much to my delight, my [[TLT]] position is up too. So you know, [[TLT]] is now my largest position by a factor of 3.

It’s time to teach those treasury shorts a lesson or two about this here government. The dark forces of the Grande Recursive Order of the Knights of the Lambda Calculus shall thrust their monetary spears into them, while chewing on gobstoppers and other childish sweets.

Some of my best ideas were never captured because I was too busy being a cheap-ass, trying to get better prints. Or, I had a theory, but second guessed myself and ended up having to claw out of a fucking financial sinkhole. As much as I would love to ignore bad news and kick old/disabled fuckers into active battlefields, I must—PAUSE—here for a minute and observe what the fuck is going on.

Banks are not lending, because they do not have a reason to lend. Why lend to you, when they can buy whole books of business, on the cheap, via the FDIC? Or, they can borrow from the Fed and buy bonds— for an easy, quick, assured return.

Much of this recovery is contingent upon a sharp improvement in employment. I keep fucking waiting for it to happen. However, thus far, all I get is Obama-talkie talkie, with little results.

While it’s true, the printing of money should, in theory, devalue the dollar, hence, leading to a rise in dollar denominated commodities. But, what about the debts? Also, how do we account for European debt? All in all, the market is one big scrambled egg, with fuckfaced cooks throwing shit in the pan— mixing in onions, meat, cheese and now FISH. The fucking omelet, for Uncle Robert the Trading Robot-God’s sake, is disgusting and I want no part of it.

The latest salvo out of the Fed (raising rates) screams desperation to me. I do not see the need for the Fed to raise rates in an environment where fuckers from Ohio are living off government cheese, working at Burger King Holdings, Inc. [[BKC]] . Sometimes it’s important to think crazy; and right now, I’m off my meds.

Let’s assume the Fed knows there isn’t enough buyers for government bonds, throughout 2010. Most people think rates will be forced higher, in order to lure desperate Chinese men back into the fold. Really? Do you really think 1-3% higher is the difference it takes to attract 500 billion dollars?

I think not. This is a political relationship, completely and utterly detached and devoid from performance review.

If the government needs money, you will provide it. They can take it from you, via tax hikes; but no politician wants to do that. Or, they can trick you into lending it to them, by way of convincing the investment community that they need a “flight to safety.” As we know by now, gold is no longer a “safety” trade. It’s more of a reflation trade, very sensitive to the whims of the dollar. The only real safety trade is [[TLT]] .

How low can the market go?

I don’t know. All I know is, someone just threw a giant fish in my fucking omelet and I don’t like it. Not one bit.

If you notice, I am purposely opting to avoid selling short, even though I think the market will trade lower. I am trying to remain focused here and not get caught up with the mixed emotions of being both long and short at the same time. For the day, I sold a little more, upping my cash position to about 45%—putting my current allocation at 45% cash, 45% equities and 10% treasuries.

The [[TLT]] trade is a very simple, low risk, bet. Essentially, it’s like cash, but better. If I hold it long enough, I will receive dividend payments. And, should the market get raped by zombies dressed in burlap, it will appreciate. Unlike past markets and trades, my current strategy revolves around lowering the beta, in order to preserve assets, so that I can buy stocks lower.

That’s the point.

As the European cow-fuckers trash their own currency, ours will appreciate, essentially making [[TLT]] a “safe haven.” I realize this is a 180 degree reversal of my previous prophecies. However, the future is always changing; therefore, I must change too.

Top picks: [[TLT]] , [[DRR]]

I bought 20,000 [[TLT]] under $90.30.

Disclaimer: If you buy TLT because of this post, The Fed will raise rates tomorrow. And, you may lose money.

There is no reason for me to blog today; yesterday’s final post is sufficient. However, being the charitable guy that I am, I’ve decided to blog again, even though you do not deserve it.

Just yesterday, I warned you of a pending correction. I told you to leap into the Treasury boat, as if it was filled with great whores and delicious mutton. Needless to say, you chose to not get involved.

Is that still the case?

I knew the market was heading lower, based upon a sublime harmony in mathematical precision aka The PPT. We have spent countless hours trying to get inside of the circuits of those dastardly trading robots. Let today’s move in [[TLT]] serve as proof that Senor Tropicana aka HORATIO CLAWHAMMER knows what the robots are thinking.

As an aside, I will be buying Brocade Communications Systems, Inc. [[BRCD]] on this dip. But, I will not buy any stocks, until the shadows near my favorite urinal quit using profanity. It really gets annoying. Trust me.

Here is the trade: long [[TLT]] , [[UUP]] , short euros, via [[DRR]] . Or, if you want to be aggressive, take a looksy at the 3x Treasury ETF, [[TMF]] .

Bottom line: This will be a mild correction. If you see it coming, try to avoid going down in lockstep with the broader indices, via utilizing some of the hedges or alternative investments mentioned above.

Very soon, large goats will consume your beaks, as you meddle around the business of superior men. There is a distinct smell of roasted coffee beans in the air and I do believe, if I might say so, they are the brains of none other JAKOB GINT aka Uncle Fucker. In no time at all, I shall saute his brains in my golden frying pan (oh, the irony, it’s too much), drenched in a nice chardonnay, by way of [[TLT]] melt-up.

Let me be clear, I still own Gammon Gold, Inc. [[GRS]] and U.S. Global Investors, Inc. [[GROW]] and I am not incredibly bearish on gold, despite my dire proclamations. However, it is written; therefore, it shall be so.

Most people are expecting yields to keep climbing, due to the important matter of fiat currency. After all, the banks are enjoying record spreads and life is generally good for those with money to lend and/or make egregious acquisitions. However, you forgot the answers, fuckface. The Federal Reserve has a buyer for their stupid treasuries and his name is “you.” By way of a market panic, or “flight to quality,” you will be buying treasuries soon enough, via 401k’s or through one of you money managers.

You’ll see. Soon enough you fuckers will be crammed into the funnel, trying to get the fuck out of stocks.

If you wanted to go balls to the wall, you would short oil, euros and go long dollars, treasuries. The old Fly would be in the FAZmobile right now, taking uppercuts to the scrotum. But, the new “reinvented Fly” is opting to play it safe instead, via low beta contrarian investments.

Always remember, I do not lose.

Let me clarify my new position, especially for some of you misfits.

My new 10% [[TLT]] position is a probe of sorts, as well as a hedge. Instead of selling short, my [[TLT]] position offers protection against a down-trending equity market, since it (TLT) ebbs to its (the market) flow. My downside is 2 points max. Should I lose more than 2 points, I will book the loss. In short, this is a VERY LOW BETA play; however, it is a better alternative to cash. Before you go out “imaginating” that I am wearing burlap shoes, getting ready to jump in the FAZmobile, remember I am still NET LONG. Like those CAPS, fuckface?

I want the market to rip higher, knocking out the teeth of shorts. I’m just exercising a bit of caution here, after a well deserved reprieve.

Top longs include Flotek Industries, Inc. [[FTK]] , Nucor Corporation [[NUE]] , POSCO (ADR) [[PKX]] , SandRidge Energy Inc. [[SD]] , Jarden Corporation [[JAH]] and U.S. Global Investors, Inc. [[GROW]] . All in all, I am trying to avoid moving down in lock-step with the indices. If the market shoots higher, so be it. Instead of making a “boatload” of money, I will settle for a small pinto’s worth. To be honest, from time to time, money management gets boring. I like to change things up a bit, think outside the box.

Do unorthodox shit from time to time. Life smiles upon those who slaughter the sheep.