18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,200 Blog Posts


All of the hallmarks of a stark turn lower are present now, with exception to upside movement in semis. I took the opportune to unload many of my mistakes this morning, in addition to averaging down in SOXL — which ended up providing me with an honorable exit of -1.7%.

My day, thus far.

IFRX +33%
(MAR -10.2%)
(DK -3.55%)
(MUR -14.2%)
(HAL -5.8%)
(FANG -6.7%)
(HFC -9.7%)
(MNK -9%)
(SOXL -1.7%) x2
(JACK -3.8%)

BOGGED for sure, but I have a few irons in the fire now working. One thing is for certain, the volatility affords one the opportunity to claw back from the dead and profit.

Two things, rancid action in banks. They are shorts.

I like the action in gold. They are longs.

Old man stocks like SJM provide safety and comfort, but this market is wholly unforgiving and should be treaded carefully. I know your bias is wrong, because it is higher. We are going to retest the lows.

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I got caught leaning hard this morning, long for the sake of short term trading. I booked a loss of 10% in MAR today and have about a dozen other stocks bogging me down now. My sense is that destruction lies in the not-too-distant future, yet here I am trying to buy dips. The rationale is of course greed and the idea that sporadic jumps are customary in bear markets.

I was fortunate to buy IFRX in the After Hours last night at $4.85. I sold it today for a 33% gain. Even with that, I stand to lose some money today — due to my bullishness. I am not, however, throwing in the towel just yet, since I do believe in financial rigging and all of the bells and whistles that go with it. I am comfortable being net short towards the close of trade, much more than intra-day, where mean reversion trades are known to take place.

The news is grim, more than 4k Americans dead from COVID-19, soaring unemployment and massive liquidity issues in just about every sector. The hopium depends on a quick resolution. However, last night Trump said to prepare for a hellish two weeks, and the WH projected up to 240,000 dead when it’s all said and done.

Markets look to be settling in here, down 700. I will take a look at things and make adjustments soon.

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The SPY was down 20%, but the story was much worse on a sector by sector basis. Although tech held up relatively well, posting a loss of only 22%, most stocks dropped by 40%. Some of the more severe industries hit hardest by the collapse in crude and quarantine dropped by 75%-90% of its value — teetering on bankruptcy.

Oil dropped 70% and the world as we knew it changed, seemingly overnight due to a BAT SOUP virus that has since gripped the world, plagued us with death and mayhem — pushing western nations to the brink and forcing central banks to intervene on a scale never seen before. The stimulus coming into the economy, as a result of this new born crisis, will likely top $10 trillion before it’s all said and done. The Fed has declared to have “unlimited money” to fight the deflationary scourge. One would surmise, seeing all of this printing, that gold would trend higher. Gold itself moved higher by 4.5% for the quarter, but the miners caught a battle-ax to the cranium, lower by 20% for the year.

Part of the reason is due to mine shut ins, which limits the profits and viability of miners. Retail foot traffic, according to Cowen, is down 97.6% year over year. Thus far, nearly 200k people in America have been afflicted with COVID-19. I lost my Uncle to it last night. More people have been lost to this than on 9/11, yet many still believe it to be a joke, since we’re living in an era of disbelief.

I have deep concerns about the future of the global economy and pecking order. These types of declines usually precede depressions. Goldman BallSachs is forecasting a staggering -34% decline in Q2 GDP, with 15% unemployment. They’re also projecting a +19% jump in GDP, largest on record, based upon the idea that everything will go back to normal. That’s the big bet here, isn’t it?

Leverage loans and high yield CLOs were blown the fuck out for the quarter. The S&P LSTA Index hit a low of -22% for the year before recovering half its losses in recent weeks. We’ve been on a nice roll the past week or so, up nearly 20% from the lows. Stocks like BA higher by 50% the past two weeks, but down 55% for the year. The chop has become untenable for some. The decline has dragged in all sorts of unsavory people into the market, persons of low information trying their hand at trading emboldened by the belief that what goes down must come back up. Dave Portnoy comes to mind with that, tossing $3m into the market for all to see him trading in real time, carelessly tossing millions of dollars into a single trade and declaring himself a genius after closing out a 1% return.

Life as we knew it changed. Since it happened so fast, we still believe it can go back to the way it used to be. But can it? Will people go back to cruises and PACK TIGHTLY into concerts anytime soon? I suspect it will take years to get back to January of 2020 and I am preparing for that eventuality. I cannot find a steady source of toilet paper and papered towels in North Carolina, a state with only 1,500 infections and a handful of deaths. These aren’t normal times and the damage done to the crude sector is bound to have deep and everlasting effects on many states dependent on oil money. Wyoming Asphalt Heavy Sour traded at NEGATIVE 19 cents a few days ago and is now worthless. Many landlocked crude prices in America are 50% below WTI spot. This is an industry that employs over 10 million Americans. We were the largest producer of crude in the world.

Bonds have been a safe haven, specifically treasuries, with the 10yr at 0.68%. But this drop hasn’t translated into a drop in mortgage rates, since the mortgage industry blew up amidst unprecedented margin calls. The corporate bond market has recently recovered since the Fed started to buy everything and we’ve seen RECORD issuance in recent days. But without the Fed, it was in free fall mode — with the LQD hitting a low of $105, presently trading above $124. High yield ETF HYG hit a low of $67, now trading at $77 — hasn’t done as well as LQD because the Fed can only buy IG.

I closed out the quarter +100% on my trading account, thanks to monstrous wins in virus stocks and a sundry of timely in and outs that pretty much marked the best trading in my career. I have recently struggled with some trades and have taken some losses. I am presently very long and in the worst sectors — hoping for a bounce. I say “hope” because  it’s an extension of my intuition. My retirement account is still 100% cash and I might’ve pulled the trigger too soon on that — but I feel more comfortable this way — being in complete control to make changes on the go.

Q1 is in the books. I hope you survived it. If you didn’t, you’ll be shining my shoes before long.

NO BOOZE, NO CARBS. NOTHING. STEEL YOURSELVES MEN for the fires are here and they’re burning bright. Be on point for we can turn lower or higher on a drop of a dime.

Data dump for Quarter

Market cap over $5b

Market cap over $100b

Up for quarter, market cap over $100b

Virus stocks

Corona Fears Index, Exodus

Best Industries

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Bears Are Running into a Mobile Guillotine

If I was short, I’d cover now. This has all of the hallmarks of a trap. The downside action is in fact too orderly and measured, coupled with a steady VIX. I suspect we will soon see a sharp upside reversal. I could be wrong and this is just a fucking bet, so relax your bras and quit getting your tits worked up.

I am long oil and semis, and lots of other shit. My best thesis trade now is to be tucked away, deep inside of the Jelly Jar and sealed.

Why get long oil here?

A trade, nothing more or less.

Regional oil prices in the US are virtually worthless now and ruin hasn’t been cast across the nation yet. There is always a small window of opportune between reality and figment. Right now we’re living in fantasy land, where Goldman suspects we’ll bounce back by +19% in GDP for Q3. This, of course, is sheer lunacy and far from what will actually occur. Nevertheless, the market is an emotional beast and retards are angling heavy for a quick and sharp decline — because recency bias. Those people are running into a fucking mobile guillotine and will soon lose their capstones.

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If you’re shorting stocks now, you might need to wait a while to see a profit. The market is running on hope, the Federal Reserve fueled rally that is seemingly endless. They have a printing press that they operate every morning and with that printing press, they use the money to buy everything. If something goes down, they buy it. If you’re a bank and have shitty bonds you can’t sell, you call them and they’ll buy it from you. Since they’re the Fed, there is no margin call and no one can ever made them sell. They have UNLIMITED MONEY, quite literally and there’s nothing you can say that changes that.

Is it fair?

No, but life isn’t fair.

What does it mean?

It means markets will remain upward trending until we get a catalyst that causes a DELUGE of selling, the sort of selling even the Fed can’t control. Right now the market is running on hope that the coronavirus will subside and everything will go back to normal. So normalization is being priced in, sort of, and many stocks are still down 50% the past month — even after the recent melt up.

Sure, we’ve bounced 20% off the lows — but we’re still WAY down, so put that into perspective.

Am I bullish?

For now. Things are changing fast and we’re getting monthly moves inside of a day. I sense the fear subsiding and I see people drinking the Kool-Aid. I’ve tasted it and it’s quite delicious. I will ebb back into stocks quietly and try not to get too crazy — but we’ve probably got a few days of rally left before the rug is pulled.

Look at how fucking stupid the Empire State Building looks now, a giant fucking siren on top of building to induce panic.

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The Dow rose by 700 today and shorts who went into today got their fucking dicks cut off for them. It was ugly, brutal, and nothing can save them ever.

Ironically, I was long and betting for a continuation of the rally and got fucking FLOGGED and beaten around the face today. I had just one solid intra day trade, long APRN, and that’s it. Other than that, totally fucked trading day for me.

(VTR -7.7%)
(AIV -2.6%)
(NMIH -16.4%)
(NMIH -10.5%)
(BHR -23%)
BHR -wash
(NYMT -15.7%)
(ORC -11.5%)
FAS – wash
(RNG -4.5%)
APRN +8.5%
SOXL +0.6%
(DRIP -7.5%)

I got HARD FORKED long, short, every which way but loose. I did find some respite deep inside of the JELLY JAR, as I am long SEVERAL old man stocks of high esteem. SJM ripped, GIS ripped. Pretty much anything paying a solid dividend that wasn’t a REIT did great. Since we’re in a ZERO INTEREST RATE environ, I expect MULTIPLE EXPANSION to continue.

I closed out the session 45% cash, up a fuckload for the first quarter, +102% to be exact, and I pretty much shit on all other traders in my realm. I am presently long refiners, a tanker, and all old man stocks. After a few solid wins, I will resume my swashbuckling across this market place and catch SEVERAL 100% winners, as I am famous and widely known for doing so.

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WYOMING HEAVY ASPHALT SOUR CRUDE BTFO, ETERNALLY. These land-locked fuckers are fucked for good. All of their crude is worthless, because to pipe that crude in — it costs at least $7 per barrel. If we’re talking about trucking it, forget about it. This is why WYOMING SOUR trades at a NEGATIVE value.

So who wins?

Overseas in the Brent market — foreign producers are storing crude in tankers.

I am long FRO. Other plays include EURN, STNG, and NAT.

Here in the states, crude is sent to refiners. Those refiners are now GODS and can pretty much set prices. If they don’t like it, fuck off and die. Refining margins had collapsed until recently and have since SOARED from $2 crack to $9. I suspect these margins might hold for some time, as domestic producers get BTFO until their crude is selling for $00.00.

My refiner positions are DK and HFC.

Other plays include VLO, PBF and MPC.

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Land Locked American Crude is Literally Worthless Now

There isn’t any end user demand because of quarantine and there isn’t any place to store the stuff, so the world has a huge problem on their hands now, when it comes to crude.

As ZH pointed out earlier, producers are essentially floating their inventory on giant tankers now, which is why day rates have exploded from $20k per day to as high as $300k.

“This is a once-in-a-generation type of event,” she said Thursday, quoted by OilandGas360.

As Bloomberg reported separately, citing Robert Hvide Macleod, CEO of tanker owner Frontline Management, “oil is going on ships at a speed never seen before,” as a result of the market’s glut; he added that vessels are being filled at five times the pace of 2015, when oil market was last heavily oversupplied. International Seaways, another owner, said on Thursday that the total volume of oil in floating storage may top 100 million barrels during this glut.

Because of this, I am long FRO — this time for good, or all least until comfortably profitable. The bigger story today is the price of regional crude supplies in the US — junk oil markets. Refiners would buy junk oil from places like Arkansas, Alabama, and Wyoming and made due with it. But with WTI trading at $20, there is zero demand for shit tier crude.

The following landlocked crude is trading minimum 50% discount to WTI, all under $10. I suspect the price to ship the crude makes it untenable.

Colorado Southeastern, North Central Colorado, Central Kansas Sweet, Eastern Kansas Common, Kansas Common, Michigan Sour, Mississippi Extra Heavy Asphaltic Sour, Central Montana, Nebraska Intermediate, Nebraska Western, North Dakota Light Sweet, Oklahoma Sour, South Texas Sour, Upper Texas Gulf Coast, Williston Basin Mixed Sweet, Eastern Wyoming Sweet, Wyoming Asphalt Sour, Wyoming Heavy Sour, Wyoming Sweet.

Wyoming Asphalt Sour trading at negative prices this month and is essentially worthless now.

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I nailed the market, but was wrong on positioning. Had you told me on Friday that stocks would rise 500 today and mortgage plays would be down, I’d punch you in the face twice. But that’s exactly what happened. I sold out of my shit today that felt like the market was down a thousand. Could they rebound? Sure, but then I’d be emotionally attached to them and that’s fucked.

Here were the disastrous results.

(VTR -7.7%)
(AIV -2.6%)
(NMIH -16.4%)
(NMIH -10.5%)
(BHR -23%)
BHR -wash
(NYMT -15.7%)
(ORC -11.5%)
FAS – wash

Normally I stop out at 10%, but couldn’t because of the gap downs. My only other option was to TRIPLE DOWN and I don’t do that unless I am 100% sure of a directional shift. So here I am, a loser amongst losers, shooting the shit — talking losses.

The FAS trade didn’t look too bad, but I had no interest in owning it since it’s weak in an otherwise strong tape.

I have since acquired 4 or 5 new stocks and hope to report those losses to you shortly.

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No Bottom in Crude — Heading To Zero

Markets are +215 and I am having a miserable day. The fucking Nasdaq is +152 and I sold my DRIP on Friday, which is flying today. In its stead, I have FAS — which is lower, a bunch of old man stocks and some fucked mortgage plays. I was angling for financial rigging and a run today and got it — but not in the way I expected. Today’s run is laser focused on tech, healthcare, and tankers — naturally. I was FIRST to the tanker trade and have now watched that ship sail right by my nose.

DECISION TIME: cut losses or press on stubbornly?

It’s never a good idea to press on — because that’s what losers do. The right thing to do is reset and move on — forget about the bad trades and look at Dave Portnoy making a mockery of finance. That makes everyone ok.

The US 10yr is down a staggering 12bps to 0.62%, whilst markets are up. This is not your typical correlation and suggests someone or something is fucking with the matrix. My guess is the Fed. If you’re wondering WHY stocks are up as the global economy is completely shut down, the answer is simple. Stocks trade on emotion, the delicate line between greed and fear. The fundamentals will matter, but at a time when they matter. Now everything is settling into place and traders don’t know what the true damage to GDP will be. This is similar to many other black box trades I’ve mentioned before.

Eventually, the fundies will matter and stocks will get fucking cremated. Until then, we have a short squeeze taking place in one area of the market while the area I happen to be long is getting poleaxed.

Oh, crude is down nearly 7% to $20. There’s no point in discussing it any further. It’s going to zero.

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