Why can’t we say: I don’t know OR I’m not sure? That applies to: customer service, our bureaucrats, and our teachers. Per Seth G: It can always be followed with: “Would you like my educated opinion?” or “Could you give me more context to go on?” Proud and confident bluffing is never helpful. But, it’s not surprising that ‘bluffing’ is ChatGPT’s default behavior – because Art Imitates Life. The real issue is – bluffing is a lousy way to build trust. As someone most recently told me: ‘Soon, the only way I’m going to trust you – is On-Chain!’
Grace, Kindness, and Respect… are words that people will remember you by – long after the wins, loses, and details of the negotiations are forgotten. There are many ways to leave a legacy, but resiliency coupled with gratitude and constantly spreading goodwill – have earned a place at the top of my list.
The Market:
Gold & Bitcoin are simultaneously hitting all-time-highs (ATHs)… and that’s not a coincidence. Gold hitting ATHs will go a long way toward getting the next leg higher started for precious metals. Gold has held up well in the face of a stronger Dollar and elevated yields. Historically, if precious metals are doing well, you're likely to see (a) silver outperform, (b) a lethargic equity market, and (c) digital assets come alive.
Per Anthony P: Every retirement portfolio should include Bitcoin.
- Bitcoin is a non-correlated asset… and this is the holy grail for any portfolio. Bitcoin’s current 180-day correlation to the S&P 500 is ZERO and the correlation to the dollar index is near zero as well. Investing in non-correlated assets will reduce portfolio risk and increase portfolio returns.
- Bitcoin is risky, but offers a corresponding asymmetric return. Which means that there’s more upside than downside when owning the asset. For example: the downside (loss of capital) is capped at the total amount of capital invested, yet the upside is ~100X if/when Bitcoin becomes a gold equivalent.
InfoBits:
- Apple was fined nearly $2B by the EU… which sided with Spotify in finding that the Apple Store restricted competition for music-streaming. Apple will appeal.
- Anthropic launches Claude 3… with better test scores than OpenAI’s ChatGPT-4. Could be the “New Kid on the Block”.
- Subscription Fees are on the rise… as Walmart+ subscribers spend 2X more than non-subscribers and membership continues to grow. Target’s sales fell for the first time in 8 years – so they’re launching a subscription service.
- NOT Too Big To Flail… as New York Community Bancorp received a $1B cash equity infusion from: former Treasury Secretary Steven Mnuchin, Citadel’s CEO Ken Griffin, and players to be named later. NYCB reported a Q4 loss due to shaky commercial real estate loans and bad management.
- The average, US adult FICO credit score fell last year… for the first time in over a decade. Americans are struggling to repay record-high credit-card debt.
- TikTok’d Off… A bill that would force TikTok’s Chinese parent ByteDance to sell off the app or be blocked from US app stores – made it out of a bipartisan House committee by a vote of 50 to 0. TikTok said it’s the equivalent to an outright ban.
- Instagram surpassed TikTok… in worldwide downloads last month.
- Participants in Novo Nordisk’s new Amycretin trial… lost +13% of their body weight in 12 weeks. That’s over 2X faster than Wegovy – their other weight-loss drug.
Crypto-Bytes:
- Bitcoin springs to life after a long winter… as billions pour into spot ETFs ahead of the ‘halving’.
- Gold prices are moving first… and Bitcoin follows
- I listen to only a few people when it comes to crypto because. a) They understood it from the beginning, and b) They took the time to explain it to me. Per Howard L:
- o Was I smart enough to buy every dip? Nope.
- o Did I sell some along the way? Yep.
- o Do I regret selling some? Absolutely.
- o Is that my fault that I sold? Yep – I take full responsibility for my actions.
- o Do I know what’s next? Nope, but last I checked the people that I listened to in the beginning about BUYING – have NOT SOLD any.
- What is Bitcoin halving? Bitcoin (BTC) is designed to be a scarce, inflation-resistant asset. One of the key technical mechanisms it uses to maintain its design is ‘halving’. Halving is when the amount of new bitcoin created by bitcoin mining is reduced by half, and this happens about every 4 years. Currently, 6.25 BTC are mined every 10 minutes. After April’s halving, that number will drop to 3.125. Bitcoin prices spiked following the last two halvings, and that is one of the reasons traders are buying BTC now. However, JPM analysts suggest that the ‘halving effect’ has already been priced-in by traders, and BTC will fall to ~$42,000 post-halving. Other analysts suggest that halving’s reduced supply will be met by even higher ETF demand – and will result in a rally. Let the games begin.
TW3 (That Was - The Week - That Was):
Monday: This week, Powell talks to Congress, and we also get the Jobs Report. In terms of where to invest, I’m loving crypto, but for those who don’t: energy may be in play as OPEC has kept their production cuts in place. AAPL has been very weak as it’s being sued by the EU over anti-trust violations. The Gold Miners are set to move, and SKYT is looking good over $12.40.
Wednesday: Powell’s Humphrey-Hawkins testimony starts today. It's his biannual report to Congress on our FED’s monetary policy and economic goals. Powell will deliver an inflation assessment, discuss our FED’s view on interest rates, and take questions from Congress. If Powell doves out – markets will go higher, but if he holds the line – we may see more pouting. Take a look at NOK as it’s trying to get over its 200-day @ $3.64.
Thursday: Yesterday Powell turned pretty dovish, and the market loved it. Today he delivers the same speech (basically) to the banking committee. The initial jobless report came in higher than estimates. That means that the economy is slowing, people are getting laid off, and it pushes our FED toward cut rates. PLTR is breaking out – watch if over $26.75.
Friday: Today’s Jobs Report had the new jobs created number coming-in at 275k, while the market was hoping for under 200k. But:
- The previous two months' numbers were revised lower by 167k jobs.
- The Birth/death model added 151k fake jobs to the report.
- The unemployment rate jumped to 3.9%, and wage growth was just 0.1% MoM.
- And, although we created 275k new jobs, the total number employed declined by 184k.
Gold is up another $20 this morning, so watch the GDX and GDXJ (miners). Speaking of miners, EU is a newer uranium outfit that may be getting ready to rumble.
Morgan’s Moments…
Do you agree with Anthony P. that… Bitcoin is returning to the spotlight due to: (a) an industry-wide spring cleaning (the FTX trial), (b) regulatory approvals, and (c) Main Street buy-in? And experts are expecting the SEC to approve a spot Ethereum ETF in May – so FOMO may not be limited to just bitcoin anymore.
Morgan: ‘Yes.’ As Dylan LeClair points out: bitcoin’s price has doubled in 18 days or less – 3 of the last 4 times that it’s put in an all-time-high.
- Bitcoin’s price is up +20% in the last week, +60% in the last month, and +200% in the last year.
- Bitcoin’s halving is less than 50 days away – leading to further demand outstripping incoming supply by at least Twenty-to-One. We have seen 10 to 12X more demand than what the network produced for the last 2 months. So, a surge in demand (ETFs) coupled with a supply shortage (Halving) will favor bitcoin holders – and that should continue bitcoin’s price appreciation.
- Lastly, BlackRock has filed regulatory paperwork to funnel some of their Strategic Income Opportunities Funds into their bitcoin ETF. That’s a $36B conservative bond fund, and it signals a new source of capital inflows into bitcoin.
- It’s difficult to construct an argument that is not bullish for bitcoin and other digital assets in the short-to-medium term.
Morgan’s Top 3:
- Tip #1: Ethereum (ETH = buy-buy-buy),
- Tip #2: Polygon (MATIC), and
- Tip #3: Chainlink (LINK)
Next Week: The Selling is Different this Time…
Background: Stocks were down on Friday, but that really doesn’t do enough justice to the insane price action that we witnessed. Meta was off more than 1.5%, but Nvidia got crushed – to put it mildly. Gold and Bitcoin had a much better week than NVDA as they produced all-time-highs. Next Tuesday we have a ton of inflation & economic news like CPI and core inflation MoM, and Friday is Triple-Witching.
NVDA is moving markets: Very simply, what triggered Nvidia’s ~100-point decline on Friday, was a pre-market 20% spike in their implied volatility. That shut-down buying NVDA CALL options because they were just too expensive. The Pros immediately switched to SELLING those same CALL options due to the high premiums – and the stock was just decimated. Tip #4: Fair Warning: This same behavior could easily repeat itself on Monday morning if an onslaught of Nvidia CALL option dip-buyers re-enter the marketplace.
Lack of sell-side correlation: Make no mistake, NVDA still had a great week – gaining $60. But watch the rotations and the Advance/Decline line to see if we get any across-the-board selling next week.
Gold, Bonds, and Bitcoin… are all higher. Bonds are once again being bought – causing interest rates to decline. With Gold and bitcoin making new all-time-highs, money is leaving mega-cap tech stocks and moving into more defensive sectors. Apple is falling off a cliff when you compare it to Gold and/or Bitcoin. Tip #5: Don’t fight the tape, and look at these other asset classes more closely. This isn't last year’s ‘Just buy stocks’ kind of market. Take what you’re being given, and right now, digital assets and Gold are working.
Volatility returns with Markets at all-time-highs: On Friday, the S&Ps touched an all-time-high, but this time volatility went higher along with it. Volatility watchers are seeing trouble on the horizon, and that’s worth noting.
SPX Expected Move (EM)
- Last Week’s EM was $64. We touched both the lower and upper edges of the EM before ending the week unchanged.
- Next Week’s EM = $82. Put on your big-boy pants, because there’s chum in the water, and the sharks are circling.
TIPS:
HODL’s: (Hold On for Dear Life)
- 13-Week Treasuries @ 5.3%
- PHYSICAL COMMODITIES = Gold @ $2186/oz. & Silver @ $24.5/oz.
- **Bitcoin (BTC = $68,300 / in at $4,310)
- **Ethereum (ETH = 3,920 / in at $310)
- **ChainLink (LINK = $20 / in at $7.78)
- **COIN – Coinbase = ($257 / in at $125)
- **MARA – Marathon Digital = ($23.4 / in at $12)
- o Sold June $40 Covered Calls
- DECK – Deckers ($912 / in at $882)
- DKFG - DraftKings ($42 / in at $41.5)
- **IBIT – Blackrock’s BTC ETF ($40 / in at $24)
- INDA – India ETF ($52 / in at $50)
- o BOT Nov, +$53 / -$55 CALL Spread
- MC – LVMH ($53 / in at $57
- META – Meta ($506 / in at $458)
- **RIOT – Riot Bitcoin Mining ($12.4 / in at $12.5)
- o Sold June $25 Covered Calls
- **MATIC – Polygon ($1.14 / in at $0.94)
- o Sell it when it gets to $8 / share
** Crypto-Currency aware
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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