5 Emotionally Secure Phrases that will differentiate you:
- 1. Let me think about that.
- 2. No.
- 3. How can I help?
- 4. I will work on that.
- 5. I will try.
Who cares? It’s tempting not to care. After all, if you don’t care – you’re off-the-hook. It’s easy to do as little as possible in order to avoid doing too much work. And we all know that caring can lead to heartbreak. But caring offers us the only chance to make a difference, and to actually be involved in what happens next. Caring puts us back on-the-hook and offers us a chance to contribute. When we care, we get a chance to create meaning and significance, and that truly effects all of our lives.
The Market:
Either the market believes that inflation is coming down… or A.I. is going to have a massive impact on our economy. Sure, there’s a chance that A.I. will influence our lives to the same degree that the Internet did. And per Ivan: If that is true, we are in just the first or second inning of the action. The bulk of last week’s moves (especially on Friday) felt like irrational exuberance. So, you might as well ask yourself right now whether you’re buying the next dip in NVDA – because if its action on Friday was any indication – it’s going to get wild in a hurry. The dips will come when you least expect them, and just when you are completely confident in the invincibility of the A.I. story. The dips will be so scary that you will question the A.I. narrative, but this will be the time when the best risk-reward entry points appear. Answer it for yourself now – because it’s coming to a neighborhood near you.
Minnesota became… the 23rd state to approve the use of recreational marijuana for adults.
JPMorgan is expanding internal unit: 23 Wall… a division dedicated to managing the wealth of the uber-rich. 23 Wall doesn’t have a minimum wealth threshold, because: “If you have to ask the price, you can’t afford it.” The unit services the world’s richest 0.01% - or more specifically, roughly 700 families worth more than $4.5T.
InfoBits:
- "I think everyone should be prepared… for rates going higher from here. You should be prepared for 6 and +7% as there's still too much liquidity in the system, which is why stocks are high.”… JPM CEO - Jamie Dimon
- Per BH: “The biggest economic impact of the debt deal is the resumption of student loan payments. At over $100B, this is the largest peacetime gov’t revenue increase in 40 years. It acts just like a massive tax.”
- Per MH: “Americans spend more on lottery tickets than movies, video games, music, sporting events and books - combined. Mostly the poor buy them.”
- Gamblers are spending more and winning less in Vegas. Losses for blackjack players have reached their highest level since 2007.
- Per Tim Cook in 2016: “It doesn't bother us that we are second, third, fourth or fifth if we still have the best. We don't feel embarrassed because it took us longer to get it right. For Apple, being the best is most important and trumps the other two by far.”
- “There’s no compelling reason to pause rate hikes.” … Cleveland FED chief Loretta Mester.
- Our FED and Treasury are incentivized to drive inflation higher… because it helps them inflate away the debt.
- The FDIC’s quarterly report indicates that… U.S. bank deposits fell by the most in 39 years during Q1. “Banks face significant downside risks from the effects of inflation, rising market interest rates, slower economic growth, and geopolitical uncertainty,” said their chairperson.
- Ross Perot Jr. (one of the largest property developers)… warned of a looming real-estate recession if the banks don’t start lending again.
- Goldman flagged a 25% drop in YoY trading revenue: “And we are preparing for a tougher environment as we’re getting a risk-off tone from clients.” Pres. John Waldron confirmed plans for a third round of job cuts this year.
- US companies have announced about 417,500 job cuts this year… more than in all of 2022.
- AI is expensive… as the cost of using LLMs (large language models) = $14 / question – when the cost of having a lawyer answer = $6 / question.
- “You're already seeing credit tighten up… because the easiest way for a bank to retain capital is not to make the next loan.”… JPM CEO - Jamie Dimon
Crypto-Bytes:
- Warnings from Gemini continue… as mounting U.S. market, legal, and regulatory challenges are clouding the future of the Winklevoss’ crypto exchange. Gemini is seeking an overseas reset.
- Charles Schwab and Nomura are among the Wall Street titans… backing or building their own crypto companies. In a post-FTX world, financial institutions are hoping that customers will trust them more than they do crypto-native firms.
- Tether (USDT) now has a record $83B+ market cap. Tether’s share of the stablecoin market grew this year after regulators ordered its competitor (Binance) to stop minting BUSD.
- May’s Bitcoin mining revenue increased 13.7% MoM. This significant increase was driven by heightened on-chain activity, including a surge in transaction fee revenue due to the rise of Bitcoin NFTs via Ordinals.
TW3 (That Was - The Week - That Was):
Monday: Over the weekend, our government came up with a debt ceiling deal. Add that to NVDA announcing a deal with an outfit out of Taiwan – and we are soaring this morning. Are we truly looking at a breakout and a new bull leg up? This can be resolved in a couple ways. One is that the darlings keep going, and finally the breadth expands until everyone hops on board for a new leg higher. Or, the mania for buying the darlings dries up, and they fade back pulling everyone else with them. I think that our markets have a lot to worry about. Our markets are NOT prepared for another rate hike and it feels like they're going to do another one. The markets feel heavy ‘and shorted’ to me, but if things warm up then: AAPL over $180 works, AMZN $123 looks good, and ENPH has an enormous overhead gap that it needs to fill.
Thursday: The house passed the debt bill, and the Senate will too. Last night CRM reported and the street didn't like it. Dollar General is getting hammered as they cut their full year outlook. But then ‘IT’ happened = the manufacturing PMI came in with prices lower than expected and instantly everyone jumped on the "FED is DONE" bandwagon. And guess who's moving: META, NVDA, AMZN, AAPL, and the other darlings. I am watching PYPL again here. I’ll nibble on some over yesterday's high of $63.25, and I'd go heavier over $63.30.
AMA (Ask Me Anything…)
Coming to grips with the ‘new look’ of Education: College enrollments are dropping, and in large part due to a hot labor market. Potential students are forgoing higher education and diving head first into fields that may require special training – but not 4 or even 2-year degrees. Student bodies are shrinking, but 16 to 19-year olds are joining the workforce in droves. Despite their career choices not requiring degrees, many are finding appealing and lucrative salaries. Leisure and hospitality salaries have increased 30% since pre-COVID, and trade jobs are averaging $25/hr. compared to the national average of $22/hr. In previous decades, a college degree was seen as a necessity to obtaining a white-collar job with upward mobility, but America could be duplicating the 70’s and 80’s – where the Baby Boomers got their start. 56% of Americans think earning a 4-year degree isn’t worth the time, money, or effort. After all, demand for blue-collar workers is high, and employers are offering better pay, benefits, and working conditions than any time in the past decade.
How about that JOBS Report? How to you create 339,000 jobs in May when:
- the # Employed Decreased by 310,000,
- the # Unemployed Increased by 440,000,
- and the # Not in the Labor Force Increased by 45,000?
Honestly, it can't be done. They tried adding 231,000 imaginary jobs via the birth/death model – but it doesn’t come close. We were lied to, just move on – nothing to see here!
Next Week: It’s a Buying Frenzy…
The range that is no more: We finally broke out of a range that we entered back in November of 2022. There were things being bought last week that had no business going higher: IWM, Caterpillar (CAT), Target (TGT), XLF, XLE and EEM = wow. Nobody was buying tech, so everyone bought the stragglers (that didn’t deserve it). The market jammed higher on nothing being sold, and various short squeezes.
We became a fully correlated market: Last week, this market become fully correlated (everybody moving in the same direction) – as that was a necessity to break out of this range. Short sellers covered, and this is what ‘frothy, blow-off market-top’ looks like.
Did you catch the NVDA chart on Friday? Notice Friday’s chart on NVDA. While the DOW was gaining 700+ points, NVDA fell 12 points in 10 minutes – moving out of the $1T Club!
Trades:
- Tip #1: BOT META In/Out Put Spread (+$175 / -$170) for July 7… because this was the 3rd week in a row that we closed outside the expected move.
- Tip #2: SOLD SPX way-OTM Calls… as we tagged the upper edge of the SPX Expected Move.
SPX Expected Move (EM):
- Last week - $80 (EM 4-day week) … and we moved EXACTLY $80 higher!
- Next Week - $55 (EM 5-day week) … If there was time to sell short-term premium – it is NOT NOW!
TIPS:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $1964/oz. & Silver @ $23.7/oz.
- 13 Week Treasuries @ 5.25 to 6% / VMFXX
- **Bitcoin (BTC = $27,300 / in at $4,310)
- **Ethereum (ETH = $1,910 / in at $310)
- **Chainlink (LINK = $6.50 / in at $7.17)
- Big Bear Holdings (BBAI = $2.02 / in at $2.90)
o BOT Sept $4 CALLS for $0.35
- DNN – Denison Mines ($1.17 / in at $1.32)
- MESO – Mesoblast Ltd. ($3.63 / in at $3.60)
o SOLD July $5 CALLS for $0.85
- META – Meta / Facebook
o BOT July 7th +$175 / -$170 PUT Spread
- NFGC – Newfound Gold ($4.44 / in at $3.75)
o SOLD July & Oct $5.00 CALLS
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
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