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
18,972 Blog Posts

Covered All My Shorts — But No Interest to Buy

I sold both LABD and SOXS for 5%+ gains. The SOXS position was a 15% holding, so the gain was nice. I sold because we were down over 200 and semis were still strong. The logic is obvious. Any reversion in the market will be led higher by semis. Ergo, it was my obligation to close out those positions.

There is a bit of a conundrum in stocks now. The technicals are dreadful, very late 2007ish. However, we’re oversold and shorting into OS tapes is stupid. I’d prefer to short more into a rally — because in a bear market rallied fail.

We’re rangebound, but inside of this range are large red candles, indicative of major distribution. Even though I closed out my shorts, I am not willing to buy yet. There is always the risk we leg lower outside of this range. If that should happen, my shorts will be applied like a figure four fucking leg lock, in fairly short order. To get me long again, in my trading account, I’d need to see an exhaustion day, a really do nothing day following an early sell off. A little boredom is needed.

It’s also worth noting, old man stocks have broken their uptrend and the only safe havens are gold and bonds.

Any idea how horrible that is?

I stepped in and bought a lot more TLT here, seeing it’s the safest way to keep my money safe.

Cash is now ~60%.

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If you would only hearken back to the halcyon days of 2008 when men were men, you’d see the pattern then repeating itself now. We’re in a FAGBOX, chopping around, after confirming a head and shoulders top. I know technical analysis can be tedious, so let me describe this to you in real terms.

Stocks were doing really well for a long time and people made a lot of money. Then they dropped, tried to get back up, and then dropped again. Only this time, the decline was accompanied by some fear, which made it drop even more. Now we’re in a range, vacillating around, unhealthily, obviously waiting for another leg lower.

The bias is to the downside, especially with strong bonds, gold, and weak oil. We can rally hundreds of points from here and still be in a range. In the past, these ranges are often extended for several months and then broken in dramatic fashion. My best guess — much lower by mid- January.

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Amazing: Madoff Victims Have Been Made Whole

In an amazing feat of claw-back excellence, the law firm Picard has managed to regain ALL LOSSES for Madoff’s many powerful victims. At the height of his scheme, the fund was worth $65b, of that $19-20b was principle.

The law firm Picard is very close indeed to making a full recovery.

Just last month, Picard’s lawyers asked a U.S. appeals court to revive about 80 such lawsuits in which he’s seeking up to $4 billion—perhaps the last big chunk of money available in the case. A lower court threw the suits out two years ago, ruling the money was beyond the trustee’s jurisdiction because it had been been transferred from feeder funds to foreign banks before Madoff’s arrest.

“That kind of recovery is extraordinary and atypical,” said Kathy Bazoian Phelps, a bankruptcy lawyer at Diamond McCarthy LLP in Los Angeles who isn’t involved in the case. Recoveries in Ponzi schemes range from 5 percent to 30 percent, and many victims don’t get anything, Phelps said.

What’s equally amazing is the fees Picard has been able to siphon from the public via SIPC.

For its work, the trustee’s firm has been paid $1.67 billion over the past decade by SIPC, not from the customer funds. The industry group also provided $639 million in advances—up to $500,000 each—to victims who were waiting for claims to be paid.

Some people never lose. Happy holiday’s to Madoff victims.

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Prepare for Sellers Exhaustion

All of the writing that we’re in a bear market is on the wall. However, even with that being said, nothing goes straight up or down. This generations Lehman or General Electric and the boogey man resides in high yield and the enormous amount of debt on corporate balance sheets. Those worry about student debt are foolish. However, if this drama with China doesn’t recede, there is a real threat to America’s top universities who host scores of intelligent Chinese students.

Expect a lot of chop inside of this downward and do not anticipate a reversal to the upside anytime soon. Most spikes will likely be met with trepidation and end up failing. Trump’s two magic bullets, the China trade war deal and Fed pause have been expended. If he doesn’t broker a deal with China soon, this market is going to get fucked in a way you’ve never seen before. More than $150 billion in US sales are born in China and not having that strong trading relationship, in spite of how unfair it was, will cause irreparable damage to our multi-nationals and also the US consumer — who will inevitably get hit with price hikes.

The manner of this downturn is pretty standard, with losses stacked in the smaller cap stocks. But it’s also worth noting, Tootsie Roll is the big winner the past three months. If you look at those defensive stocks now, you’ll notice they’re also struggling here — which has created an environment with our safe havens.

I barrel into tomorrow a strong man — heavily long SOXS, LABD, TLT, and gold. I will most likely book profits tomorrow, however, as I suspect the market will soon consolidate recent losses before making a fresh leg lower. The true action, mark my words, lies ahead for us in January.

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Capstone Programme — Getting Started Next Week

My sessions begin next week. Don’t be scared — I’m quite affable.

Here’s what I want to go over first.

I spent some time and created some decks highlighting the many reasons you need to fear for a bear market. Many of these things have been talked about before, but none as eloquent and with poise as I am prepared to orate.

The second is the most important subject for any trader, beginner to expert.  It’s the psychological aspects of trading — knowing when to buy and sell and how to think about positions and/or strategies. It is the foundation from which everything else will be formulated on. Without being sound minded and having clear goals, you’re building a house of cards destined to fail. I know because I too failed before and have seen dozens of good friends and family beguiled by the same rigors.

The last topic for next week will be a technical look at the markets — by presenting some data. What are the most important sectors, stocks, data points, to pay attention to? How will we know if any bounce is legit or a head fake? WHAT IN THE FUCK IS GOING ON? I intend to broach all of these subjects, AND MORE.

You can join Capstone and cancel if you’re only interested in one session. That’s fine. It’s a subscription based service that is designed to put members thru a Fly styled boot camp. At the end of 12 months, I expect you to curse wildly whilst drinking gimlets, reading from leather-bound books, and smoking an nice estate pipe — women too.

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China Summons Canadian Envoy to Beijing over Huawei CFO Detention — Threatens ‘Severe Retaliation’

It appears the attorneys for Meng Wanzhou are having a difficult time convincing the Canadian that their client isn’t a flight risk. Part of that concern might stem from the fact that her crimes are political in nature, based upon sanctions are are wholly subjective. She was tossed back into her cell on Friday, to face the judge on Monday. I suspect she will be held without bail, in spite of the fact that she’s willing to wear an ankle bracelet, surrender her passports, and live in Canada until the trial is finished.

China is not amused.

Chinese Vice Foreign Minister Le Yucheng summoned Canada’s ambassador to Beijing, John McCallum, on Saturday to deliver the warning, according to a statement from the Chinese Foreign Ministry.

The statement doesn’t mention the name of Huawei’s chief financial officer, Meng Wanzhou, though it refers to a Huawei “principal” taken into custody at U.S. request while changing planes in Vancouver, as was Ms. Meng. The statement accuses Canada of “severely violating the legal, legitimate rights of a Chinese citizen” and demands the person’s release.

“Otherwise there will be severe consequences, and Canada must bear the full responsibility,” said the statement, which was posted online late Saturday.

Phone calls to the Canadian Embassy rang unanswered while the Canadian government’s global affairs media office didn’t immediately respond to an email request for comment.

What ‘severe’ measure might China take? Will they, perhaps, stop making toys for them, or cease buying their oil. Or will they, by chance, attack Vancouver with their missiles and burn it to the ground? I think not.

In a statement cited by official news agency Xinhua, China’s Vice Foreign Minister Le Yucheng said Meng’s detention was a “severe violation” of her rights and interests as a Chinese citizen.

“Such a move ignores the law and is unreasonable, unconscionable, and vile in nature,” the news agency quoted Le as saying in the statement.

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ALERT: The Fly’s mentoring service, The Capstone Programme, has launched. Our greatest product to date. Indeud.

I know this shit is serious to a lot of you — so I’ll reserve my bragging for Sunday night.

Here is how I am positioned. SOXS is a 15% MAX holding. TLT is 10%, LABD is 10%, and everything else 5%. I have 45% cash.

Apple is down $200 billion in market cap from the highs. Real money. But here is the actual position of the overall market, less the noise. It’s a lot of chop — transfixed inside of a FAGbox designed to kill people.

I suspect we break thru this box into the downside next week. At front and center of the catalysts is of course the China trade war, the Huawei CFO being held without bail and facing 30 years in prison on a sundry of charges, and of course a slowing economy. Last quarter, earnings grew at its fastest clip since 2010 — at +25%. Now we’re heading into a period of slowing expansion and possible deceleration. While the market trades cheap, at just 15x, the leadership in tech, AAPL and NVDA, have already pointed to considerable weakness and earnings revisions to the downside.

In other words, the E in the PE is uncertain. Ergo, we’re now probing, led lower by fear.

Bear in mind, at the very center of any bear market environment is credit. There is roughly $3 trillion + in BBB rated credits that could face a downgrade. This would lay waste to junkFAGS who’ve been relying on easy money for a decade to grow, buy back shares, and ingratiate themselves with bonuses.

If forced to condense all of my thoughts into a singular narrative, I’d argue you need to simply obey the trend. Remove yourselves from the bias of being long for the past decade and accept the idea that maybe, just maybe, things are about to change.

Today I was looking back at my old blogs, on my very first finance blog and recall the first blog I wrote that truly admitted to the possibility that the bull market of 2007 was coming to an end. Back then I was inspired by Cramer’s advice and his insight. He was tapped into the large bracket firms better than anyone in the media and truly was great in his commentary during the crisis. Even though I despised him, I respected what he had to say.

Keep an open mind. You might be proven wrong one day and perhaps saved by the ideas of someone who knows a little more than you.

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Report: Trump Box Watching Markets Crash Lower

According to the apes at WSJ, Tariff Man is obsessed, transfixed even, over the rapid decline of his great, beautiful, stock market.

Mr. Trump has often dismissed market fluctuations as part of a natural correction, but several people close to the president say he places as much importance on the health of the Dow Jones Industrial Average for validation of his job performance as he does with his polling numbers.

While at the White House, he will often keep the TV tuned to business channels and watch the Dow’s minute-to-minute movements, people close to the White House said. He would get excited about triple-digit gains in a single day and question aides about how certain actions might influence the market, people familiar with the matter said. Asked about Mr. Trump’s attention to the stock market, one person close to the White House said: “He’s glued to it.”

Let’s examine this for a moment. He’s scared, plain and simple. He is obsessed with his legacy and how markets respond to his administration. In a sense, it represents everything he’s trying to achieve, which means the leverage is wholly on the side of the Chinese — who quite literally give zero fucks about their markets.

If you’re President XI, you do not bend and set a bad precedent for your country. You wait Trump out, as he sweats and markets unravel. In two years hence, a new President will preside and Xi can crush him into reverting back to the status quo.

At the same token, we’ve seen his recent tweets and how he’s explicitly trying to jimmy stocks higher, even sending out his minions to talk up markets. This is not normal behavior for any President, even this one. I think Wall Street is keen to his tricks now and have called him out for crying wolf and are punishing markets, more than usual, because he lacks credibility. He needs to broker a deal now, and stop talking about getting one, otherwise morale will collapse and markets will follow it down the rabbit hole.

UPDATE: Unbelievable tweet.

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Listen to me now, I am much smarter than you. Both silver and gold have displaced Bitcoins as a alternative investment to stocks, most readily in demand during periods of duress.


This is a HIGH CONVICTION trade. I bought WPM, KL, and AU.

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You stupid fucking shits. I told you not to buy stocks yesterday. But you knew more. You were better than me, the Space Alien Magician (SAM) — the guy in the fucking time machine zipping thru space while your fat faces sleep.

I sold my TZA — because small caps are strong. But I bought more SOXS — making it a 3x position, or 15% of my trading account. This is my maximum allocation and I do so because I know we’re heading lower.

Markets do not bottom on Fridays, lads.

Come join me in the Capstone Programme, the boot camp to end all other boot camps. I will teach you what you need to be told.


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