THE COAST IS CLEAR FOR A COMMODITY SUPER RALLY

SIRS —

I stand before you in complete control — all knowing Capstone in the face of unprecedented perils. We have big moves underway in a series of commodity sectors and some of my favorite names are running higher. Before you utter the words “demand destruction” just shut the fuck up and acknowledge you don’t really know what you’re talking about.

Although early to position for tomorrow, these are the type of names I’d be focused on if I were you for tomorrow’s rip. We are overdue an extended rally — one that reels in many new money FOOLS into the fray to be eaten whole and fresh out from the water — heads first.

Having said that, I might toss on a hedge or two into the close because world wars tends to have a deleterious effect on equity. But it is my opinion, and the opinion of others, that the easy money on the downside has been achieved and the hard money is on the way up, best found in commodity related names.

I rotated out of my tech stocks and back into a heavy commodity trade, since that’s all the runners today. It’s possible this is a trap, like so many morning rotations or even ordinary lifts before noon. Nevertheless, I’m making a moderate stand that the commodity trade is back on. I say moderate because I’m 53% cash.

My quant, however, which was rebalanced yesterday is up nearly 5% for the session, due to a very heavy commodity allocation.

The narrative for commodities is a logical one, but the trade was crowded. Since it got crowded, many of the leaders are down 20-30%. Now is a good time to reenter, in my opinion, for the big push up into war.

AP is reporting Russian forces are now storming the steel plant in Mariupol. Last night there were reports to suggest Poland was readying to invade Western Ukraine in order to create a buffer between them and Russia. Oliver Stone, who interviewed Putin and did a full documentary on Ukraine post 2014 coup, thinks the US might create a false flag event to enter into hostilities with Russia.

OLIVER STONE ON UKRAINE pic.twitter.com/9qgn8MxUiC

— The_Real_Fly (@The_Real_Fly) May 3, 2022

Natural gas is higher by almost 7% now — because let’s face it — Russia is going to turn off the gas and the US is going to be the main supplier of LNG to Europe, which will deplete our reserves and create an environment where Americans no longer enjoys abundance of natural gas.

Famed hedge fund manager Paul Tudor Jones says he can’t think of a worse environment for stocks and bonds now.

And of course Germany and everyone else in the west is sending more weapons than ever into Ukraine, to kill Russians, because we are no longer scared of the bomb and in fact embrace it.

Yet futures are higher — because nothing goes straight down or up and even during the worst of time there are people willing to take a stab at a potential bottom.

Very brief. I’ve thought about this good and plenty and this is my updated analysis.

We are heading to $435ish on the $SPY, a 5% jump from here and then we’re done.

The last time Stocklabs clustered oversold like this was back in January. This was the price action.

And this is where we stand now.

A 5% jump could equate to a sharp 10% lift in most of your favorite piece of shit tech stocks. Once this move is achieved, we will die.

There’s an old saying around these parts that applies “bet against The Fly and lose your house, wife and kids.” Those rules still apply, more than 15 years after starting this piece of shit website that hasn’t been updated since 2014. Nevertheless, my panache for trading is eternal and all wrongs righted once in front of a computer terminal.

Take today, as an example. I was inside Stocklabs Pelican Room talking shit, buying stocks — a real dip BUYOOR into what seemed like a bottomless pit. The lads inside there, trolls like Nothing and Index, laughed and derided me — as my losses doubled and my outlook became grim. But I held firm with the idea that I’d soon be vindicated and all of those shit-talkers would be castrated under my knife of vengeance by the close.

I stand before you with dicks in hand (pause) completely victorious — higher by 1.26% for the day with 53% cash. My algo driven account gained 5% and the new Quant was +33bps.

My outlook is for misery and pain. But in the short term, I’m looking for a bounce.

And yes, my account is at record motherfucking highs.

Everything is bedraggled. Not only that, we are all of a sudden stricken with apathy — slow dripping molasses onto soggy grass and the crowd has dispersed leaving all of their trash behind. We have pockets of strength in biotech, semis, and pot stocks. We have attempts in the commodity space to come back — but everything lacks vigor and/or violence. The only area of the market with any verve are the refiners. For now, we still have an economy, although the catamites in DC are trying to negate all of that and have you eat bugs. You know it and I know it we are heading for, racing towards, the very worst of times.

Rates are through the roof and the 30yr is now above 3%, up 10bps. The market was supposed to Jimmy higher, but is being battered down. Your safe havens in commodities are being FESTOONED all over Wall Street, blood and guts everywhere. This is what happens when stagflation happens. We tried to warn you, tell you it could happen, but you chose not to listen. Now you are absorbing the consequences of your actions — as your brokerage accounts STEAM to zero.

In all seriousness, markets should go higher today, but not commodities. They are marked for dead — because of “demand destruction” or the idea of that. The global engine of GDP is slowing. Ergo, so will the demand for commodities. If the Fed is successful, we might see unemployment go to 7%, stocks down another 20%, and commodities down 50-75%. This is what they are attempting to do. Prove me wrong.

I’m having a late start today, so no trades so far. I own some refiners and all cash, down 12bps. Will update this fucking blog when I get a better look.

Assessing the landscape of the market — the novice sees nothing but value — based upon a false perception from historically absurd valuations. The notion of a “new dichotomy” has been negated and we are quickly seeing things revert back to historical norms. Inside Stocklabs we track valuations and can tell you with absolute certainty — should the US economy head into recession there is substantial downside left in tech stocks.

The first line in the sand that comes to mind is the COVID 2020 lows, now 45% lower from present values.

On a more substantive analysis, here is a table of the Application Software industry and their price to sales ratios over time. I highlighted the years where the tech sector was under pressure for comparison.

At a median price to sales of 5x, where is the value? The last time the NASDAQ fell this much was April 2002 when valuations were 1.3x sales. Granted, we haven’t seen revenues revised lower yet and once they do get revised lower the dynamics of valuation will look even worse. At 5x, we are assuming that revenues will continue to grow at 20%+ like they have for the past decade. Should we begin to get DOWNWARD revisions, we will also begin to see SHARPLY lower share prices.

I do not tell you this to scare you, but only to alert you to the fact that we are not in value territory yet and things can get much worse before they get better. I am in the camp that stocks should bounce from present levels, as we are extremely oversold and the  mood of the market is decidedly bearish — which usually lends to a mean reversion bounce. However, longer term, shares of CRM, SHOP and your other favorite go to tech stocks will get CUT IN HALF AGAIN, providing the recession deepens and the war worsens.

It was the worst month to be a permanent bull, as stocks got placed into the meat grinder and then eaten by orcs. Most of the lads in Stocklabs sank to the bottom of the ocean, unable to withstand the fires as they burnt bright. But a select few rose to the top, as the cream normally does. This contest was not without its controversy, as several were EJECTED for rigging the system in order to cheat to win. We at Stocklabs frown about immorality and quickly acted to remove these nefarious folk from the game of play. Most curious was a lad from Cartoonland “Investthebest” who all but admitted to rigging the system in order to elongate his first place lead. This was simply retarded of him, on par with Roger Clemens taking steroids. He didn’t need to cheat, but he did nonetheless. As such, he was EJECTED from the game of play.

The winner was TXAG95, who asked for the $1,000 prize be donated to the family of a departed former member of SL, DMFRacer.

Runner up was Belarusian dictator Alexander Lukashenko, who used his Finance Minister to place large directional bets against the west.

Here were the top 10 and bottom 10 leaders and absolute losers in the contest.

Player/ Return for April

Investhebest +198% (disqualified)

TXAG95 +143%

LUKASHENKO +87%

INDEED

Diddy +36%

TWMExodus +33%

Moober +31%

Brazuca +25%

Bentley1j +24%

CitizenSquared +21% #SUCCESS

JoeKook67 +15%

LOSERS

AUGUST -10,576%

Donald Flamenco -73%

JTizzle -56%

HarryHood -55% (Extra Cannon)

MJ85 -53%

Acehood -51%

ARMBUSTER -38%

Wolfcastle -38%

Awalkindafart -33%

INDEXJOE -32%

Our next contest will be in October, RACE TO ZERO — BLOODBATH — where contestants will attempt to lose all of their money trading. First one to zero wins.

Thanks for all who played.

The fact of the matter is, the west is losing the war against Russia. The only thing going for the west is Ukrainians are the one’s dying for their causes. This fight, it seems, is accelerating and Russia has home turf. Since the war began, Russia made some high risk gambits in an attempt to decapitate Kiev and end the war quickly. Seeing the Ukrainians offered maximum resistance, Russia has now resorted to a much more methodical war plan, one that includes the use of heavy artillery and air assets. In response, the west — mainly US, Germany, UK, and Poland has been piling weapons into Ukraine and this is fine for Russians — since they’ve all but accepted the fact they’re at war with all of NATO. The only thing stopping all out war now is Putin’s patience in allowing shipments of weapons delivered to Kiev to kill Russians.

The west’s main bargaining chip was to “reduce the Ruble to Rubble” by applying sanctions.

"The ruble was almost immediately reduced to rubble."

President Biden speaks about the effect sanctions have had on Russian currency, saying the exchange rate from rubles to USD is 200 to 1, although the current rate is closer to 100 to 1. pic.twitter.com/H3FV9PAmlH

— Forbes (@Forbes) March 26, 2022

Biden is a god damned idiot and everyone following him into this cauldron is a god damned idiot. The sanctions, thus far, have failed.

The dollar has COLLAPSED against the Ruble in recent months, due to the newly founded utility of Rubles, in regards to Putin’s Rubles for gas schemes, soon to expand into other areas of Russian exports. The Ruble is the most formidable currency in the world, after the dollar — in my opinion.

The NASDAQ closed down nearly 16% for April alone. We got a major surprise with a -1.4% GDP number and everywhere you look in the west is runaway inflation. In the war, we hear nothing about Ukrainian casualties, just annoying propaganda videos made to convince people on Twitter the west is winning. Meanwhile, Mariupol fell and the Donbas is getting worse and worse for Ukraine and the war is being waged on Russia’s terms, not the other way around.

Think about how markets will respond if Russia ever takes Kiev and then Lyviv. Think about what that might mean for the Ukraine- Polish border and how tensions might build as Russian forces pile into the borders of NATO.

NOT GOOD.

So how are we winning? What are we gaining, aside from another $50 billion in aid to Ukraine — likely to be wasted and stolen by their corrupt government.