Up Goes the Dollar; Up Goes the Market

I sold all of my yen, via [[FXY]]. There is some sort of strange bullish tone spreading throughout Wall Street. It feels as if the confidence to take on risk is back and the sellers are on the heels, thanks to financial stabilization.

However, keep in mind, tight credit will permeate the economy for many months into the future. The problems we’ve seen at the banks will make its way into small business financing and industrial related names.

I realize everyone is pointing to India and China as the main catalyst to get long industrial names. But, don’t look now, China’s stock market is down 40% this year and have been under considerable inflationary pressures.

For the most part, earnings estimates of the S&P are way too high and need to come down. With the Dow only down 5% year to date, I believe there is another 2% tops of upside, while 10-15% of downside potential remains. Keep in mind, the bull case calls for the deflation of commodities, namely oil.

Well, oil and commodity related names make up more than 15% of the S&P right now, Considering how weak the financials are, do you, as a bull, really want to knee-cap the earnings of your lowest multiple/strongest group?

If so, expect the composite PE of the S&P to shoot through 20, making this market incredibly expensive.

All of that jargon is meaningless today. Right now, the market is running on increased optimism and momentum. I do not want to sell short the banks here. No yet. As a matter of fact, the only group I am comfortable with betting against is commodities, since the dollar is strong.

For now, my top picks are [[SMN]], [[DCR]] and short [[MON]].

They [[MON]] warned. When your stock is up from $7 to$113, over the last 4 years, YOU ARE NOT ALLOWED TO WARN. It’s almost like these fuckers just pulled a [[DIVX]] on the market, by guiding up last week, only to guide lower today. What the fuck is that all about?

Anyway, here is some “technical analysis” I drafted up for the internet(s).

Brian has nothing on me.

UPDATE: Here is a special song for Mr. Monsanto. Quite fitting.

UPDATE II: I’ll have you know, “The Fly” is in his office dancing (running man, cabbage patch) to the above song, while counting his profits in his man-sized MON short.

More on this later.

Buy the banks or we’ll kill you.

Hank Paulson, U.S. Government Bank Bailout Department, Goldman Sachs

UPDATE: Even though I believe technical analysis is the “special reserve” ambrosia for the ignorant and laziest sort of investor, Senor Woodshedder has done an excellent job reading the tea leaves.

Read his recent missive here.

[youtube:http://www.youtube.com/watch?v=UeuEGr_UTzg&feature=related 450 300]

Another 400 point rally?

It seems every other week, the market runs 400 points. This is absolute tomfoolery, coupled with fuckery, to see stocks gyrate like this.

Much to my chagrin, I lost several boat loads of appreciating dollars today, getting “skull fucked” in [[SRS]], [[SMN]] and [[DGP]].

To make matters worse, I neglected to cover my [[MON]] short, when it was down near $104 earlier today.

So, the 2nd quarter has officially begun with a mind numbing 3%+ rally, effectivley wiping out 1/3rd of the year-to-date losses, in one day.

With this strength, expect to see a lot of banks raise capital, adding fuel to the bullish fervor. However, in reality, all of the deals will be dilutive and do nothing to help produce earnings.

On days like this, I just want to walk around NYC and throw dynamite sticks at birds and shit.

Final note: Fuck the banks.

Maria and Co. are quite busy laughing it up, telling their viewers how “everyone knows the banks are losing money.”

So, since everyone knows the banks suck, we might as well buy them, right?

That’s like saying, it’s okay to go hang out in the house that is lit aflame, since everyone knows it’s on fucking fire.

Go ahead, get drunk and buy some [[MER]], [[LEH]] and some [[RL]] to boot. Who cares if you are inadvertently burned to a cinder, trying to catch a bottom?

After all, the ungodly folks at CNBC are not permitted to invest in the market. They’re just idle spectators, trying to catch a few ratings points.

In other news, “The Fly” is being flame broiled, like a a filthy Burger King Whopper.

I realize my title could get me shot, if i were living in China. However, that is not the case. And, since I live under the protection of former Italian mafia bosses, in NYC, I have no problem saying: “Fuck China” over and over, until the goats come home.

I’m going out on a limb here, exclaiming [[FXP]] is a screaming buy—down at these levels. It is so cheap, meaning its components are so expensive, I feel like cleaning out other positions in order to load up, sub $85.

Unless we are entering some new trading range, the components of FXP should trade lower, within days, if not tomorrow.

The stocks you need to watch, when long FXP, is [[CHL]] and [[LFC]]. Both names are heavily weighted in the ETF and pretty much dictate where the fucker goes.

My chart chomping friends swear the market is going to 12,750, short term and maybe retest 13,000. I, on the other hand, believe this rally will fail, like all the others.

However, in the event that I am wrong, it makes sense to get long something. Right now, if forced to go long, I’d buy [[RIG]], [[CLX]] and [[AAPL]].

By the way, I am long all of the above stocks.

So, to sum things up, fuck China, via FXP, works here. Don’t overshoot and leverage your accounts, like some sort of degenerate OTB guy. Trade in small numbers.

UPDATE: [[FED]] cannot get a break. If this fucker can’t rally in this tape, when will it?

[youtube:http://www.youtube.com/watch?v=cb4Dd9itgzo&feature=related 450 300]

I bought 2,000 [[FXP]] @ $84.24

UPDATE: I bought 4,000 FXP @ $84.57.

Disclaimer: If you buy FXP because of this post, the summer rally will begin now. And, you may lose money.