Friday, March 09, 2007
Finding the Bottom: Low Risk Entries Using the MACD and ATR.
The second chart shows the MACD continue making higher highs above the trigger line while the ATR shows the volatility increase and then continue the primary downtrend. AIG goes on to make 10 points in 2.5 months.
Dr. Dre: Nuthin' But A G Thang
The market is fine. I am mincing the MVIS doubters. And, life is fucking golden at "The Fly's" office. I was up another 1.1% today.
I covered a few shorts, but still hold many inverse ETF's.
Next week, I intend on buying more MVIS, ADY, CENX and HANS.
NOTE: Make sure to visit this weekend. Woodshedder is likely to bust out his fucking charts, and stuff.
Late Day Thought
Fly Buy: ATHR
Fly Buy: AMKR
Fly Buy: HANS
Disclaimer: If you buy HANS because of this post, the Yen carry trade will unravel, effectively forcing you to pay back the 10 billion Yen you borrowed, in order to buy U.S. treasuries. Bummer, I know. And, you may lose money.
Position Updates: MVIS, LOCM
Sector Spotlight: Semiconductors
With regards to the market, I am sure the sellers will try to press today, considering they have been thrown down a flight of stairs-- while sitting in their fucking wheel chairs.
However, I doubt the market will close red. As a matter of fact, I feel there is a very good chance we will close significantly higher-- than the 20+ points we are up now.
Within the market, I am most impressed with the Semi's, despite being short the sector. Furthermore, because of this strength, I will likely cover my ATHR and BRCM shorts. Fuckers.
Finally, "The Fly" is well on his way to win the CNBC jackpot, being long MIDD, +10 today (I keep some stocks secret, hatfuckers).
As promised, when I win, the proceeds will go towards ad space in Times Square, which will read: "CNBC sucks balls."
Asshat of the Week Award: Tom Brown
I know Cramer likes to polish this guys knob every chance he gets, but he is a one man wrecking ball-- with regards to his fund. Tom has been uber bullish on the sub-prime lenders, recommending and owning shares of NEW and LEND, amongst others. In addition to the sub-prime death spirals, Tom is a big fan of high risk financial stocks, such as CCRT, FMD, NTBK, ECPG etc. Furthermore, he owns the fuckers in size.
On 2/28/2007, Tom recommended, with two pumped fists, LEND, exclaiming:
"Given the level of investor panic surrounding the sub-prime borrower lately, I’m feeling very greedy regarding sub-prime lenders these days, and am especially greedy over sub-prime mortgage lenders in particular. (One company among them stands out; I’ll get to it in a minute.) This is one of those times in investing, I believe, when it will pay to be very, very aggressive."Clearly,Tom has let old age deteriorate his brain, to the point where fucked up bank stocks "appear" to be good investments.
Also, it's worth noting, his 800 million dollar hedge fund may be in jeopardy, providing his positions stay down.
I am not aware of his funds agreements, with regards to redemptions. However, I will say, if his partners are permitted to withdraw funds on a quarterly basis, Tom's 800 million will be substantially less-- come March 31st.
Trust me, people smell blood out there and will short the fuck out of his positions, if they knew Second Curve needed to liquidate, in order to meet redemptions.
It has been reported, due to Tom's asshattery, that Second Curve lost over 8% in January alone and more than 18% in smaller funds. Moreover, according to some of the numbers I crunched, he may be down a staggering 16%+ (not including NEW!), inside two short months of the new year.
To clarify the mess, I had a spreadsheet with Tom's positions, compiled. However, I do not know how many shares of NEW his fund owns.Considering the current state of NEW, I doubt Second Curve will release that information.
Click here for asshattery.
(spreadsheet of Second Curve's positions)
Thursday, March 08, 2007
Collie Buddz: Come Around
If a machine gun were put to my head, in order to extract a stock pick, I'd say "go long CENX."
I have concluded, the market is not nearly as vulnerable as the hatfuckers on the tube want us to believe.
Frankly, I should have seen this misdirection/propaganda campaign-- from the beginning. Since when do the retarded Asian markets move our stocks-- like they did?
Also, why have there been so many fucking rumors-- all being negative? From carry trade to slowing growth to recession to "global bear market"-- all of the fucktards have been wearing their finest asshats, while espousing such negative commentary.
Hence, my "calculator brain" surmises, the events of the past two weeks, to be nothing more than paranoia, coupled with a sophisticated bear raid on the indices. Which is ironic, since my own paranoia is leading me to believe the bears are really that smart.
So, sometime soon, I will remove my hedges and proceed to kick old people down stairs or empty elevator shafts. Also, I will "nibble" at ADY, MVIS, CENX, BWLD, ITRI, GMXR and maybe SDXC.
NOTE: After the close, NSM reported a good number. The Semi's should move higher, as a result.
NOTE II: This is fucking hilarious.
Late Day Thought
Quick Alert: Sub-Prime Lenders Fuck the Rally
Should these rumors turn out to be false, I propose demolishing the building CNBC broadcasts out of.
Keep holding your shorts. They may come in handy.
Quick Alert: Fly's Analyst Pounds HANS Short Seller
I told you, he takes his positions seriously.
Fly Buy: MVIS
Disclaimer: If you buy MVIS because of this post, the "global bear market" will be upon us. And, you may lose money.
UPDATE: Click here to view MVIS technology.
Fly Buy: CENX
Disclaimer: If you buy CENX because of this post, your wife will start wearing Cold Water Creek vests. And, you may lose money.
Sector Spotlight: Metals
Anyway, I am starting to believe the "global bear market" we are supposed to be entering is utter bullshit. Additionally, I am starting to think the bull market is back-- and anyone betting against will get his jaw punched loose.
Today, the Metals are exploding to the upside. If the Asian markets do not melt away, I like CENX, NUE, X, TIE and AL. And, if you are a gambling idiot, maybe ERS and IIIN are worth a dice roll.
Bottom line: I am not having fun, because of my hedges. I have somehow morphed from a caffeinated-crazed stock jockey into a staid-conservative goat-fucker.
I may have to rethink my market positions.
Until then, I'll aimlessly wander around NYC--while littering the streets with my empty Monster Energy Soda cans.
I don't care what the numbers say, no one buys clothes at Cold Water Creek. No one.
If my wife ever wore the dress featured above, I'd divorce her, move out of the state and have a restraining order put against her.
I spit on CWTR, makers of the "ugliest clothes on Earth."
UPDATE: Apparently, the hideous floral dress I had posted was too fucking pretty for certain asshats-- in the comments section. In order to provide clarity, I have posted a vest, made by CWTR, that is so ugly-- it should be illegal.
If my wife ever wore that vest, I'd have her arrested.
Wednesday, March 07, 2007
Dave Matthews Band: Crash Into Me
I was up .14% today. Basically, I have reduced myself to a fucking hamster on a wheel, running in place-- taking occasional Monster Energy Soda breaks.
Bottom line: This market "sucks" and is likely to leg down, faster than I consume my leg of lamb tonight. I know, bad joke. Fuck you.
The only sector that pleased my analyst today was Energy. Everything else was for the goat-fuckers.
With my money, I will continue to "invest" in lottery tickets, with fanatical persistence.
Oh, almost forgot, MVIS kicks ass.
Quick Alert: Oil Stocks on Fire
Now here we are, one week into March, and the sector is busting loose.
With my money, I am long VLO, SU, UPL and GMXR.
Although I hate the gyrations of the sector, they are likely to trade up-- as the driving season approaches.
Fly Buy: GMXR
UPDATE: I bought 4,000 GMXR @ $30.83.
Disclaimer: If you buy GMXR because of this post, termites will eat your patio this spring. And, you may lose money.
Fly Buy: FXY
Disclaimer: If you buy FXY because of this post, your car keys may fall down a sewer, effectively locking you out of your car, indefinitely. And, you may lose money.
Sector Spotlight: Retail
Take a look at the Retailers, they're on fire. So far, the buyers are bidding up shares of CHS, SKS, ODP, CROX and GME. Considering the huge short positions in the Retailers, I'd be very scared to be short-- into this rally.
Even though I believe the market is due for another leg down, that doesn't mean the fuckers have to go down today. If you are properly hedged, it doesn't matter what the market does-- because you will be flat in an up 500 or down 500 tape. However, if you are sticking your flag in the ground, bullish or bearish, you have bigger balls than me and risk too much.
See, fucktards like you get wiped out everyday. The type who wear their emotions on their buy tickets, like little whining bitches. Pardon me for ranting, but I deal will asshats like you all day.
If you want to stay in the game, and not serve as fodder for the bears or bulls, get flat.
Finally, I suspect the market will trade lower today, but squeeze a few overzealous bears out in the volatile process. Also, I know it sounds fucking nuts, but I want to go long MVIS. Next week, the company will be visiting several funds and retail outfits, in an effort to keep the story fresh. Also, I understand, the company may unveil its "stand alone projector" for the Picop.
Tuesday, March 06, 2007
Cicada: The Things You Say
Even though I underperformed the market today, up .86%, I had fun watching all the crazy people chase stocks.
Every sector was on fucking fire, with oversized gains in Internet, Semi, Networker and Financial stocks.
Exchange related stocks were up big and will continue to lead the market higher, providing the market does indeed go to new highs.
Also, via CNBC, the recent correction is now over, as all of the sellers and economic worries are fucking history. Additionally, it is now safe to assume the Yen will stop appreciating versus the dollar, since the bulls like free money and do not want to pay back their fucking loans to the Japanese.
Finally, in all seriousness, I am going to win the NYC "Megamillions" tonight. The jackpot is for 370 million. Upon winning, I promise to start a private equity fund, buy CNBC from GE, then systematically fire Bob Pasani, Maria Bartiromo, Erin Burnett and Charlie Gasparino for being asshats.
Quick Alert: Bazooka Gum
Fly's Analyst Threatens HANS Short Seller
He is quite the multi-tasker.
Fly Sell: NYX
Quick Alert: Market Ripping...
Right now, I am not shorting or buying. Frankly, I am sort of deer in headlight-ish.
Nonetheless, I am up nicely today and will consider closing out short positions, once I am convinced the selling is over.
Although you bull-fuckers are ringing the cow bell, calling for new highs on the DOW; I am not convinced.
Let's see what happens tomorrow.
Until then, I'll stay hedged.
Quick Alert: NYC is Iceberg Cold/ Pink Coffee Cups
Fuck you and the tundra you reside in.
Also, it's worth mentioning, I am drinking Dunkin' Donuts coffee. And, surprisingly, it's not half bad. Although, after buying the coffee, I felt ashamed of the pink cup--causing me to run in a paranoid frenzy to my car--in order to hide the cup. However, after further "analysis," Dunkin' Donuts coffee is 50 times better than the shit Starbucks is shoveling.
If only I could pour the Dunkin' Donuts coffee into a high society Starbucks cup, life would be perfect.
Until that day arrives, I will drink this superb java in the privacy of my car or office-- like a fucking asshat.
Sector Spotlight: Financials
Everything is ripping higher, as the bulls drop piano's on the heads of the sellers. Even the sub-prime lenders are up.
However, I will use this strength to lighten up and add to my shorts. I anticipate a mini short squeeze, followed by natural buying, via the dip buyers.
In short, I don't trust the fuckers who run this market and wish they'd be reassigned to run Iraq's stock market, instead of ours.
Within Financials, ISE, ICE, NDAQ, NMX and NYX look great. Basically, the exchanges have enjoyed record volume, as of late. If the market firms up, all of the exchange related stocks are going to fucking rip higher. The fear factor is the market vomiting on itself, effectively wiping out the piker investor (you). When the average Joe gets poleaxed, volume will dry up like old people in the sun.
Right now, the market is one big gamble. It's Vegas time.
Either we are correcting or in the beginning stages of a prolonged sell off. My money says the market will impale the sellers, but not yet. Before we get to throw sharp edged bottles at them, some of the weak buyers need to be wiped out. It's Mother market's way of "cleansing" the system.
To put it bluntly, I am not interested in making money now. All I want to do is preserve capital, until a clear direction is decided upon.
Finally, by midday, I will probably put down my third can of Monster and buy a little more SSG or QID. Or, maybe I will spend the rest of my day throwing phone handles at my trader/servant. Too early to predict.
The following Financials have mojo:
Fly Buy: NYX
Disclaimer: If you buy NYX because of this post, your neighbor's will spread rumors of your pending bankruptcy. And, you may lose money.
Monday, March 05, 2007
First, let me say, those of you who took me up on my kidney for liver bet, I intend on collecting early next week. Don't worry, I have taken the liberty to find your location and will dispatch a team of surgeons to "collect" my winnings.
Before I left, I put buy orders in, via Trader slave, for SSG and DXD, both were filled. While there is a chance for a "turn around Tuesday," I still need more downside protection. Despite my increasing short positions, I lost .35% today.
Now, I know most of you out there are still holding on to longs-- and doing nothing to protect the downside. You figure: "well, it's already down so much, it's too late." Wrong.
That's like saying, after having a major artery cut, "No. Dr., don't give me stitches, I have already bled too much." Next thing you know is nothing-- because you're dead.
With the market closing at the lows of the session, I expect it to open weak tomorrow, then bounce. When we do bounce, I will add to my SSG, DXD, MZZ, ATHR and AMKR short plays.
Also, a great way to play the mortgage broker disaster is via SRS.
Finally, this website is intended to entertain myself, while throwing lunch meat at my trader/servant. However, I hate seeing so many of you getting punched in the cock. After all, once you lose all of your money and default on your "sub-prime" loan, I doubt you will come visit my blog--wasting all sorts of valuable time on the internets. That, sir, would be unacceptable.
Phil Collins: In The Air Tonight
I have a business meeting to attend. No CC's today.
CNBC Request: I Will Comply
If you don't sell your stocks or hedge now, the big greasy bears are going to rip your arms and legs off, then use your torso as a fucking surf board.
Position Updates: AAPL, CORS
In short, I am not selling, but would not chase the fucker here. Also, it is my experience that big blow-ups, like what's going on in the mortgage business, doesn't go away in a week. Don't bet the out house on a market bottom!
These mortgage fuckers will keep providing the market with bad news, for months to come.
With that being said, I own CORS and have been exactly wrong. I would not bottom fish it here, since the speculators are out and about looking for the next blow up. Many stocks will be taken down, whether they deserve it or not.
Bottom line: Because of this financial meltdown in the sub-prime market, all of the lenders will be discounted. Furthermore, sometime in the future, there will be incredible buying opportunities, but not yet.
Let them come down, then scale in-- as the selling abates.
Take a look at the horrific action in the lenders here.
Quick Alert: Fly's Analyst Irate at BWLD Short Seller
Apparently, the BWLD short seller tried to shake my analyst's hand, saying "don't take it personal, the market is weak."
Needless to say, my analyst didn't appreciate the gesture.
NOTE: See the HANS short seller in the yellow trunks?
Sector Spotlight: Semiconductors
How about strapping a bag around ones head, so that he may work without the inconvenience of taking a break and fucking up productivity? You know, you can fill it up with oatmeal or something, strap it on his head and send him back to work. I think its a great idea.
I'll call it the "Food Bag."
As for today's trading:
Following Asia's and Europe's terrible sessions, U.S. equities opened down, mildly. In my opinion, this a worst case scenario. While it's true, getting punched in the cock, first thing in the morning, is not fun-- but probably necessary. If the market rallies today, I want to own NKZ' or NKI'-- for a bounce in Japan tonight. However, I do feel there is more downside to this market.
The Semi's are fucking running here, as the asshole dip buyer tries to assert himself. Really, today's open was very predictable, as everyone seems to want to time the bottom. Breaking News: It's not that easy, fucktards.
This rally should be faded.
Also, the Yen is gapping higher (FXY), as the "carry trade" unravels.
In short, use this rally for a trade and try to lighten up on retarded positions. Also, consider initiating a protective position in QID, SSG or DUG.
NOTE: The mortgage brokers are getting annihilated: NEW, LEND, NFI, FMT, etc.
NOTE II: Please take the new "Fly Survey." Are you bullish or bearish on the markets?
Godzilla Ate Japan
My only request is for you (readers) to stop complimenting him. Next thing you know, he will start thinking crazy and ask me for a raise or some shit. I'll have you know, I pay him the ancient Roman "minimum wage."
Anyway, watching CNBC Asia last night, I couldn't help laughing out loud at the poor Japanese fuckers, losing 575 NIKKEI points for no-fucking-reason. It's almost as if Godzilla emerged and started knocking over their buildings and stepping on their stock brokers. Truly, a funny thought-- for me at least.
Then, I got to see the greedy little Europeans smash themselves into oblivion, losing on average-- 1.5%.
However, then it dawned on me, I am next on Mr. Godzilla's menu, as S&P futures indicate a less-than-stellar open.
"Oh, no," I exclaimed to myself, as the worried faces on CNBC America tried to talk up the futures. But then I remembered, I have shorts coming out of my ears and OEX puts spilling out of my nose (truly, a disgusting metaphor).
So then, I sat down and wrote this retarded post, that all of you just wasted your time reading.
Sunday, March 04, 2007
The Yen Carry Trade- A Technical Perspective
Executing a Yen Carry Trade involves selling the Yen and using the proceeds from the sale to invest in Treasuries or equities which return a higher rate of interest. This is in effect the same as shorting the Yen. The reason this transaction is profitable is because it costs very little in interest to borrow the Yen- just 0.5%
If the Yen is then coverted to Dollars, the money can be used to purchase U.S. Treasuries which yield ~4.5%. Anyone who executes this carry trade has just made 4%. If one has a higher risk tolerance, the proceeds from converting Yen to Dollars can be used to buy stocks.
It is easy to see why this is a popular trade. No one is sure exactly how much global equity is involved in this trade, but estimates typically start at one trillion dollars.
Why Would This Trade Unwind?
Several factors could cause this trade to unwind.
- The cost to borrow the Yen could increase. In fact, on Wednesday, February 21st 2007, the Bank of Japan raised its main interest rate .25%, to 0.5%. This effectively doubles the cost to borrow the Yen and raises the rate to the highest it is has been in more than a decade. (Read the article). Any raise in interest rates from the BOJ lowers the profit of the trade.
- The U.S. economy could move towards a recession, causing the U.S. to lower interest rates, which in turns lowers the return from U.S. Treasury Bonds. (Remember U.S. Treasury Bonds are a popular place to park the converted Yen to earn a fixed rate.) When this happens, the value of a USD falls.
- The value of the USD could fall, and the Yen could rise.
If the trade were to unwind, we would expect to see a large-scale dump of U.S. bonds and stocks, as each is sold to free up the Dollar to be converted back to Yens, effectively closing out the carry-trade. The USD would fall in value, and the Yen would rise.
What Do The Charts Say?
Unfortunately, Blogger will not let me move the charts down to this area of the article. Well, I can move them down here, but then they will not enlarge when clicked upon. My apologies for this inconvenience.
Lets look at charts of the USD/JPY. The Yen Carry Trade hinges upon this currency pair.
The first chart is an 18 year, monthly chart. We can see that the USD/JPY has created a coiled spring pattern or a symmetrical triangle. It is very important to notice that the Bollinger Bands are tighter now than they have been in over 18 years. This is crucial. The Bollinger Bands are telling us that volatility is coming. In general, this chart is showing us how the volatility of the USD/JPY has drawn within an ever-tightening range.
The second chart is weekly in period and covers 5 years. This charts shows that the Dollar hit 5 year resistance at ~122.00 and is headed back down towards its rising trend line.
The third chart is a daily chart covering 1 year. It shows the USD/JPY trading within a rising channel. On Friday, it closed at the very bottom of the channel. If this channel is breached to the downside, look for the USD/JPY to find support at the trendline indicated on the weekly chart.
The U.S. economy does appear to be slowing. The Japanese economy is heating up. The Yen is at 4 year lows compared to the Dollar, and the Dollar may continue softening from the dilutive effect of adding billions of treasury debt each week. With the U.S. stock market in a correctional phase, converted Yen which was used to buy U.S. debt and equity may go back home to roost. This will result in more buying of the Yen, and selling of the Dollar. While the technicals do not give a clear indication of any sort of catastrophic unwinding, they do point to the USD/JPY declining to long-term trendlines. This creates a mildly bullish technical picture for the Yen.
If you decide you want to be bullish on the Yen, you can get long it via FXY.