Fly on WallStreet

Have a great weekend.

If you are a skeptic of this rally, you have been poleaxed for three straight months. However, if you are still sticking to your convictions, skeptical of the bull, your D-day is coming-- next week Tuesday.

On Tuesday, the following companies are reporting 3rd quarter earnings results:

ADTN, BOT, CSX, EMC, INTC, IBM, JNJ, LLTC, MER, MOT, NCC, NVLS, WIT and YHOO.

Additionally, we will get a slew of economic data and it will be interesting to see how the market adjusts to colder weather. Meaning: Will oil jump? And if so, will the market hold its gains?

Recently, I have been forced to go long stock, despite my deep convictions that everyone is fucking moonbat crazy. To date, I maintain large positions in VLO, GD, DNA and SNDK. However, recently, I have been trading more often, scalping profits in EQIX and RACK (short), while taking on new trading positions, such as GLBC and ATHR (short).

Finally, if you are a bull, you must be concerned with the psychotic runs many micro-cap stocks have been on, lately. Stocks like BKHM, VTSS, CMOS, BITS, TPC, LPTH, CMGI, VRSO, CYTR, CYTO, ACOR, AGEN and scores more are ramping, but they are not leadership. They are 3rd rate companies-- that are attracting new money from the gambler class. The guy who is out to make 100% tomorrow. The downside to the gambler is his inability to sustain large losses, causing the hot stock to plummet-- once cooler heads prevail.

I have noticed, when the micro caps start running, the rally is mature and its time to get out.

The question that is the most difficult to answer is: When? Can't I milk one more trade?

Perhaps the answers to those questions and more will be answered Tuesday evening.

Stocks are ripping through any form of resistance in their way, as the DOW steam rolls the sellers-- on its way to 12,000.

The sector that is just ridiculous today is the Semi's. Many of these stocks are up more than 5%-- as short sellers get bought-the-fuck-out by margin clerks.

The stock that stands out the most, to me, is LRCX +6.7%.

Despite my bearish sentiment on the semi's, it doesn't look like anything can stop these runaway trains today.

I bought 2,000 GLBC @ $22.45.

I bought 10,000 CTXS @ $34.92.

I sold 6,000 shares of EQIX @ $65.55.

I sold short 5,000 shares of ATHR @ $20.55.

So far, I like the action in the market today. It has all the underpinnings of a nice rally. We are enjoying strength across the board in high beta tech stocks.

Specifically, I like the action in EQIX, NVEC, ADBE, AMD, CRM, BITS, BRCM, ATE, SNE and CHINA. However, I have no plans to commit fresh dollars to long positions-- due to the extent of the recent run.

If you are short U.S. equities, notable weakness is abundant in Homebuilders, Drugs and Retail.

Finally, its worth noting Energy and Precious Metal stocks rallying nicely off recent lows and appear to be under accumulation, again. As for oil, record snow in Detroit is reminding people that we need oil for the winter. Duh.

Almost forgot. Due to seasonality and the prospect of the Bird Flu becoming headline news this winter, I will share my "Bird Flu stock list."

GNBT, HEPH, DSCO, HEB, GILD, GTHA, EMFP, STTK, NVAX, AVAN, CPHD, CARN, QDEL, CRXL, SNY, BCRX, GSK, MBRX, AOB, PPHM, NVS, MEDI, VICL, AVII, SIGA, APT, NNVC, SVA and AMAR.

NOTE: Most of the stocks above are really bad companies and were found during last years Bird Flu pandemic scare. If you have any that may be worth a look, please share.

Everyone I know is shocked by the extent of this rally. All of the dumbest people I know are making the most money, while the "intellectual" types are getting blown-the-fuck-up.

All of the guys who are trying to outsmart the market are feeling some serious pain now, short U.S. equities; while, Joey Bag-o-Donuts is bankrolling and buying a new Benz. How you doin'?

Too many smart fuckers are short stocks. They are stuck and dying in a reverse death spiral. Furthermore, because of the markets momentum, coupled with a lot of smart guys short stocks, this run is likely to continue-- until max pain.

Yesterday, I bulked up on my ATHR short, but luckily was spared today--as the stock barely moved. Even though things look great, I still feel it makes sense to start setting up some shorts. There is going to be a day, sometime soon, when Joey Bag-o-Donuts stops buying the dips and the smart and miserable fuckers take control.

Again, just to recap:

The market is not done going up because of massive short interest and new money sloshing into U.S. equities. Moreover, look for stocks that are too extended and start selling into rallies, like today.

For now, I will look for quick trades, in order to be flexible and to be more like Joey.

NOTE: My EQIX position looks the best out of all my tech stocks.

Everything is on fucking fire now, with the DOW nearing 12,000.

Additionally, energy stocks look very good for momentum and value.

Again, my fav's are: VLO, SU, CEO and TSO.

I bought 1,000 shares of CORS @ $21.37.

No, it (the market) doesn't feel right. The upward climb to 12,000 is leaving many complacent and unaware of impending risk. Although, I am not a bear; I do feel the market is overheating-- at this point.

If shorting is your game, now may be a good time to look for some good setups.

The market is unstoppable. For every seller, there seems to be 10 guys willing to buy. However, don't get too giddy over the recent bullrun. The momentum is what is keeping this upward movement going. And, momentum, opposed to a fundamental rally, is what can hurt the small investor most. It swings both ways.

In my opinion, the place to be , if you like tech, is the Networkers. Due to red hot demand for video (YouTube) and music online, companies that provide bandwidth services to popular websites are enjoying terrific stock runs. Unfortunately, every once in awhile, you get fucked like I did-- selling VSTH, on the news of losing their biggest customer, and then it gets fucking bought out for a 27% premium 2 days later. Again, I say to the rumor millers at thestreet.com (Stocks under $10 Guys): Fuck You and fuck you.

Within the Networkers, my favorites are: EQIX, GLBC, AKAM, FNSR and SVVS.

Regarding FDRY (recent position of mine): I changed my mind and sold out the position, due to valuation concerns.

Finally, I do believe the market can go higher. However, I am bearish on the Semiconductor sector. Therefore, I have started to bulk up on my ATHR short. Although, they may have a good qt., any company that has UTSI as a 10%+ customer is worth betting against.

The following Networker stocks have mojo:

VSTH +22.6%
ONT +12.7%
AFOP +7.8%
DIVX +6.4%
VOCL +7.2%
CIEND +3.8%
EQIX +3.1%

I sold 40,000 shares of FDRY @ $13.55.

I fucking sold my last 1,000 shares of fucking VSTH @ $8.10.

Fuckers!!!

I bought 5,000 GLBC @ $22.46.

I bought 3,000 EQIX @ $63.15.

Call me crazy, but I got scared when I saw the headline "Plane crashes into NYC building." I have been itching to short more ATHR, so on the "accident" news, I pulled the trigger.

The market had a difficult time digesting hawkish Fed comments, coupled with a potential act of terrorism. As a result, despite big numbers out of LRCX after the close, I feel comfortable selling some stocks for a trade.

The red flags in today's market were the brokers and asset managers, led by LM and AMTD. It goes without saying, the market cannot continue to run, without the Financials.

On the flipside, today's surge in the Semi's was very encouraging for the bull story. I suspect, barring confirmation that terrorism was to blame for today's "accident," the bulls and bears will battle for control of the broader indices tomorrow.

The bears will point to LM, while the bulls will pump LRCX.

Needless to say, we live in interesting times.

UPDATE: Get the fuck out of here! The airplane was piloted by Yankee pitcher Corey Lidle? Fucking Yankees.

NOTE: Had the Yankees done their job and beat the Tigers, this tragedy would never have occurred. Weird twist of fate.

UPDATE II: Listening to the LRCX CEO on the conference call is lowering my IQ. This guy is so full of shit, he is single handedly driving the stock into the red. The qt. is not nearly as good as first reported.

# posted by Broker A @ 4:28 PM 3 comments