Clean Breakout

I was traveling most of the day but managed +109bps in spite of making a few bad trades from the road. It was a big NASDAQ day, but it was narrow. The gains were focused in tech and some action on basic materials. Others areas were much more muted and that’s not necessarily a bad thing.

Reason being: tech was the weakest part of the tape, so it’s only natural for traders to rotate out of lower beta names back into risk. Irrespective the of what happens tomorrow, we have a clean breakout in all indices and should expect new highs soon.

Tomorrow I depart from Fredericksburg, the place where the south vanquished the low disciplined northern aggressors and will find myself in NYC by noon to see friends and family. Since I’m with the dogs, I’m not in a rush to get back and might stay a week, or perhaps longer.

In regards to setting up calls for those interested in learning more about retaining Senior Tropicana to oversee your meager funds, please understand that my time is valuable and do not harangue me with requests if you’re only rolling with $5k at Robinhood.

GOOD DAY.

Listen to me,

I depart tomorrow with Mrs. Fly and two fucking dogs in tow, meandering throughout the southeast corridor heading north, en route into hell (NYC). I chose to drive rather than select a more modern form of transport in order to extend my stay as long as I like, having the dogs alongside for the ride, sicking them to attack people who might approach me without permission.

Because of this, my schedule is busy and I won’t have much time to update the fucking blog, let alone field your calls, asking me to accept your money for proper management. I wanted to pen this blog to inform you, rather emphatically, that we are getting free rides off the backs of the FOMC, who will be quite busy printing new billion dollar bills soon. What I mean by that is this and listen very carefully:

The Fed should not be lowering rates now, but are. They are doing this in an attempt to circumvent a repeat of the 2008 financial crisis, due to the debt maturity wall that is looming from now till 2028. This unique scenario will provide you and me alike with CHEAP CREDIT for a period not to eclipse 3 years. During the next 3 years, I expect rates to collapse to 3.5% and markets to soar by 100%. This is the free ride.

After this, markets will invariably and categorically CRASH into the 100th anniversary of the 1929 varietal. In a sense and most likely quite literally, we are replaying history and that would make this ‘the roaring twenties’. After we’ve risen enough and the last bear has been shot, markets will run out of steam and perhaps at that time we can relive the wonderful Great Depression era of the 1930s, inevitably leading to war with Germany or someone else we don’t like, to satiate the vampires and caitiffs amongst us.

The predictable nature of today cannot be overstated. Even so, I closed DOWN 12bps, due to my overall bullish outlook for stocks. I am, however, traveling tomorrow so we might crash into the floorboards, and perhaps a bit lower. But with many rates cuts coming down the pipe, it’s only a matter of time when this risk appetite business starts to overheat.

I allocated into the close, which contributed to the small drawdown. I was up about 65bps at session highs; but it was never my intent to position short, as I believe it to be ridiculous, given the circumstances.

But markets will do what they do on a day to day basis and perhaps we do swan dive lower into the open tomorrow, as all of you fucking idiot morons panic out of your positions because the market didn’t jerk you off proper today.

I think when it’s all said and done, the Fed will cut by 300bps, double what is being factored in. The issue here, as I alluded to in an earlier post, is the high levels of debt maturing over the next 3 years, which sets up a loosening cycle from now until 2028.

Initially, markets took off to the upside ad whether that sticks or not is largely immaterial to what this means in the next 6 months: markets should spike and continue to spike based off the premise of ‘multiple expansion.’

I went into the meeting any 60% cash and will maintain this level for another hour or so. I do not like trading on Fed days, because it’s often filled with hot money looking for large swings. Ultimately, this is BULLISH for equities and real estate, and commodities, and inflation, and anything denominated in dollars.

I challenged you to think about why the Fed was cutting rates earlier because on paper thing are good.

Unemployment is low
Sales are strong
Profit margins are good
Stocks are near record highs

It’s a curious thing to need to cut rates when at record highs. But beneath the veneer is a categorically odious facade.

A debt maturity wall looms in the literal sense.

If the Fed doesn’t start to cutting rates soon and fast, then a wide swath of companies might go bust, facing quadruple the amount of debt maturities from now till 2028.

That’s all this is, financial engineering and the Fed, for once, getting ahead of the curve. If done right, we might all benefit from this and perhaps create another giant bubble to worry about by 2028.

Originally I wanted to be in cash but then changed my mind, thinking about the wondrous gains to come and to be enjoyed at the opening trade tomorrow. The way I figure, the market will be calm up until the Fed announces and then PANDEMONIUM WILL BUST LOOSE, with sending stocks to the moon or collapse it into hell.

I’d like to play a minor role in the foreboding drama to come and will soon extricate myself from the market place. Essentially, I’m in for a few hours and then gone, a whisper in the wind: totally analog.

The way I see it, traders were given pagers today and tomorrow will blow up, cocks and balls strewn across Wall Street to look like a Jackson Pollock painting. Yes, that was a double entendre, if there ever was one written.

Good day.

This morning there were reports that thousands of Lebanese were injured, 300 critical, 8 dead, in what appears to be an attack on “Hezbollah”. In actuality, I cannot trust or believe anything western media says, so to say these pagers only belonged to evil terrorists is extremely surface level, basic, retardation. An act like this is the definition of terrorism and is designed to compel Hezbollah and Iran to wage war against Israel. We have seen attack after attack and no palpable response from Iran as of yet. I do believe a child and the Iranian FM to Lebanon was injured in this attack.

What this achieves for me is looking at my fucking iPhone, wondering if this fucking thing could be hacked to explode on me at a time and place of someone’s choosing. If I drove a Tesla, perhaps they could hack that too and make it blow up a fucking building.

Did they really hack 1990s pagers to overheat and blow up or were these fuckers rigged with c4 in some chicanery between Motorola and I am guessing Israeli state actors? Who else would want to do this? Let’s be honest.

Many on X are celebrating this “attack” because “terrorists” were killed in what appears to be a very “cool” James Bond like Hollywood production. You people are fucking morons. Your iPhones will one day be used to blow off your cocks, and then they’ll just say “that fucker was a terrorist” and half of X will then celebrate your evisceration.

It’s a death cult.

Retail sales came in strong today, one day before the Fed must decide between cutting by 25bps or 50bps. I don’t get it. Please explain to me why we are cutting rates, other than the fact the govt cannot afford to carry the interest on the national debt.

Ohhhhhh. That’s right.

I went to cash and only hold a 5% $TSLA position, +115bps for the session. I might trade or I might not. I just feel like not being in the market at the moment.

Most of you are busy watching the FOOLSBALL game stuffing your fat faces with hot dogs. I can’t stop thinking about the looming rate cut and what it might mean for markets. This is mostly due to only being +12% YTD, which is partly due to the fact that during the May Fed meeting I got bagged for 5% in a single session whilst moving my daughter out of college in Boston, an awfully petty excuse for lacking but an excuse nonetheless.

And now with me about to re enter the field of money management, I am taking 5 to 6 calls per day and very much distracted and not “plugged in” like usual. But I can still make deductions and I have been wondering about this fucking rate cut, which is the first of its kind, literally.

We had one minor cut in 2019 and it bagged markets, but it was a one off event. The 2020 cut of 100bps in March was when the world was ending, so that doesn’t count. Prior to that we had the fucking cuts of 2007 to 2009 that sent rates to zero and before that we had some dot bomb era cuts circa 2001 to 2003 and before that was the Asian contagion/LTCM crisis of 1997 and before that was 1987. Do you see what I am saying here?

The only time in recent history the Fed cut rates during a good economy and without crisis was in 1971 and that eventually rolled into hell from 1973 to 1974.

Some are offering warnings about the yield curve “disinverting”, implying that it is a precursor to a special kind of doom. But the only two times, at least in recent history, of the yield curve disinverting was March of 2020 and then 2007. I do not believe this to be an apples to apple comparison.

So what is it? Why the fuck are we cutting rates now, after working so hard after so many years to get rates back to historically normal levels? Moreover, if the Fed comes in with 50bps will markets freak out, wondering if the Fed knows something markets don’t and if only 25bps, will the market whine and bitch about it not being enough?

In other words, this might be a sell the news type of event.

For your reference, I looked back at previous cuts and isolated which sectors did best. However, I must preface this with the same previous bias that this is not an apples to apples comparison. These rate cuts to come are unique and in a class of themselves.

Best performing sectors in 2020 cut:

Bitcoin, Biotech, Retail, Energy, Regional Banks, Gold

2019 cut:

Treasuries, Gold, Utilities

The bull case for an extended series of rate cuts points towards multiple expansion in numerous areas of the market, one of which might be biotech. This is an area of the market I like to consider a “black box” due to the meaningless nature of most of the constituencies, basic beggars in search of capital in order to concoct new mysteries in the medical space. Traditionally, the biotechs without revs or earnings do fantastic in cheap credit environs, since money is bountiful and easy to attain. It’s worth highlighting this area. of the market because it has been overlooked, with marked exception of and for the absolute fatties taking colon blocking drugs, FORCED CONSTIPATION because they don’t have it in them to exert a modicum of discipline in their fat and disgusting lives.

Bottom line: due to all of the uncertainty and my busy schedule, I might move to cash ahead of Le Fed, or perhaps just a very large cash position.

I closed down 17bps today due to a leveraged Bitcoin position, as I am intent on enjoying the impending GIGASPIKE. Nevertheless, I feeeeeel rather in control, especially with the Fed about to expand the monetary base.

Being up post Fed isn’t a foregone conclusion and there is a scenario where we “sell the news”, as the randomness of Wall Street endeavors to trick and fool speculators all the time. But on a longer term basis, providing Trump can remain alive, we are bullish on the prospects of multiple expansion.

What the means is exactly what is sounds like.

Corporations have debt and they pay interest on that debt. When rates go lower, they have to pay less interest and that is usually factored in the share prices, measured by PE or PS. This is why we are seeing secular ‘old man’ stocks jimmy higher. Stocks like $CLX and $PG do poorly in a rising rate environ but do much better when they drop.

The entire market should do better, as cheaper credit creates speculative fervor. The rally to come is not limited to stocks, but will also encapsulate commodities, real estate and cryptos too. Fight the FUD and stay focused on what you see, rather than what you believe.

I am 107% leveraged long into Tuesday.