RF's Financial News

Sunday, December 26, 2021

This Week in Barrons: December 26th, 2021

Ho-Ho-Ho … Happy Holidays: To bring a smile to your face, here’s a little game that MCC pointed out to me: ‘Carrot in a Box’. It’s a bluffing exercise – enjoy: https://youtu.be/0UGuPvrsG3E and https://youtu.be/Bp04HZDCELw.

Choose your next job carefully: One type of job will require you to stick to a recipe. Another, will require you to understand the recipe. If you understand it, then you can change it. Your ability to understand increases your resilience, insight, and leverage. Which job is better for you?

The Business Plan tells you one way that the business will NOT grow:

- Your Demand: If you decide to become a coach, most of your prospects will be people who don’t think they need a coach. (Because the people who needed a coach – already have one.)

- Your Surroundings: If you’re a mental health professional, most of the people you encounter will have issues with their mental health.

- Your Competitive Advantage: If you attract new business by being the cheapest, your customers will always want a lower price.

Choose your path wisely because – most-of-the-time, things workout the way they are supposed to – not as we might like at the time.

The Market:

My equity markets New Year’s List:

1. Continued high volatility,

2. Make more meme-stocks,

3. Gimme crypto options and lotsa IPO’s, and

4. Continued price movement outside of the expected move.

Bank predictions for 2022:

1. Goldman expects things to stay bullish. GS is not fazed by Omicron, but is concerned about the Democrats’ failure to pass Build Back Better.

2. B of A believes that the stock market will trade flat next year.

3. Morgan Stanley expects next year to come in with a small loss.

4. Wells Fargo thinks that “the probability of a correction is rising” (duh).

Pantera Capital’s top crypto predictions:

1. Level2 Scalability: Scalability platforms built on Ethereum will gather traction because a solution is needed for Ethereum’s increasing network congestion.

2. Non-Eth/Bitcoin Chains: Decentralized application (dapp) ecosystems will continue to grow as bridges – in order to increase cross-chain liquidity.

3. Web 3: Projects will find new ways to integrate with one another in order to create a unified user experience.

4. NFTs: NFTs will continue to soar in popularity as the digital artform grows. NFTs will also begin to power verticals like: music, gaming, and influencer fanbases.

5. DAOs: More decentralized autonomous organizations will launch around unique / fascinating use cases – but management of the DAO will be the issue.

6. DeFi Security: DeFi security will be a higher priority in order to increase users’ confidence and trust in DeFi as a viable, financial alternative.

InfoBits:

- The U.S. money supply increased 40% over the past 2 years. It was the largest increase … EVER.

- In 2021, SPACs and IPOs raised 800% more money than in 2019. In 2019, SPACs and IPOs raised $19B – in 2021 they raised $159B.

- Oracle bought medical-records company Cerner… for $28.3B. The all-cash deal makes Oracle the latest cloud player to break into healthcare.

- The opening weekend for “Spider-Man: No Way Home”… was the third-most successful opening weekend for a movie in the U.S.

- Build Back Busted is the Dem’s nightmare before Christmas. The $1T infrastructure bill that included monies to modernize roads, bridges, and transit is still happening. But Dems saw it as an appetizer to their larger plan.

- Elon Musk finished selling stock to pay his +$11B tax bill… after Sen. Elizabeth Warren accused him of tax evasion. Tesla stock immediately rose 7.5%.

- Due to COVID, global economic growth has slowed to a crawl. Not to mention, our FED’s’ inflation measure is up 5% this quarter.

- U.S. population growth fell to a record low... of 0.1% growth YoY.

- Abbott and Quest Diagnostics are happy that… Pres. Biden plans to distribute 500m free at-home COVID tests starting next month.

- Nikola agreed to pay a $125m fine… to settle fraud charges surrounding its technology readiness (the infamous truck-rolling-down-hill promo).

- Pfizer’s Covid-19 pill (Paxlovid) just received FDA clearance… and Pres. Biden just bought 10m treatments for $5B.

- The Biden Administration extended the student loan payment pause… until May 1, 2022.

- Two-thirds of companies, including Apple, Ford, and Google… have postponed office returns.

- The World Economic Forum has been postponed… but next month’s CES (Consumer Electronics Show) in Vegas is still on.

- Companies bought back a record $850B worth of stock this year.

- Over 20% of people have gone back to their pre-pandemic lives. The virus will never fully go away, but people’s ability to live restrained lives absolutely will.

- Consumer Confidence rose last month… suggesting the public is feeling bullish about the economy, despite inflation and supply chain woes.

Crypto-Bytes:

- You can now buy Bitcoin in Walmart. Bitcoin ATMs are already in 200 stores, and will expand to 8,000 in the coming months. Bitcoin has more than doubled in value this year, and we’re opening it up to WMT’s’ +220m weekly customers.

- JPM has partnered with Siemens… to develop a semi-distributed system for payments using the bank’s Onyx blockchain.

- The Bank of England is facing informational challenges… as it tries to ramp up the pace of regulating crypto. It seems that the number of banks offering crypto trading and custody for clients is growing exponentially.

- MicroStrategy (MSTR) outlined various ways… it could generate yield from its 122,478 bitcoin stockpile during its investor day. It could do counter-party lending of BTC, put a lien on it for other software firms, or even mortgage it out.

- Fitch Ratings thinks that regulatory clarity… could moderate stablecoin credit risks. That would create new market opportunities, and reduce the uncertainty that has deterred financial institutions from using them.

- Deutsche Telekom AG, put its weight behind Polkadot… by purchasing a significant amount of DOT, and will also provide node-running infrastructure for other stakers.

- El Salvador bought another 21 Bitcoin… to mark the 21st day of the last month of the 21st year of the 21st century. They now hold 1,141 BTC and plan to buy $500m more with a $1B bond tokenized on the Liquid network sidechain.

- For $23m, Adidas sold out of all 30K of its new "Into the Metaverse" NFTs. Each NFT costs about $800 and included physical merch like tracksuits, wearables, and invites.

- Block CEO Jack Dorsey has gone on a frenzy… suggesting venture capitalists like Andreessen Horowitz’s (a16z) Marc Andreessen, Coinbase’s Brian Armstrong, and Gemini’s Tyler Winklevoss need to put Web3 power back in the hands of regular web users.

- A law to regulate cryptocurrencies in India… is unlikely until at least after a Budget Session in April, 2022.

- Swift, the cross-border payments service used by over 11,000 corps…. is planning to experiment with tokenized assets in Q1 2022.

Last Week:

Monday: The market is very grumpy this morning. Over the weekend, we learned that (a) Goldman cut its GDP forecast after Sen. Manchin said that he wouldn’t support Biden's 'Build Back Better' plan, (b) the world is going back to lockdowns over the Omicron variant, and (c) our FED has threatened to remove some punch from the bowl – and the market is reacting like little kids who were told they can't have any more candy. This time we need to entertain the idea that ‘it’s different’ and maybe the run is over. I've said for years that the plan is for the Powers-that-Be to support the markets UNTIL they decide they want to inflict maximum pain, and at that point they will pull the plug. Is this the day? I don’t think so. In fact, I would actually entertain the idea of buying NVDA over $280.80 and AMD over $137.54.

Tuesday: The futures are up wildly this morning. Did we cure cancer? Did we end the pandemic? No, this is a reflex bounce after seeing the DOW lose almost 2K points in 3 days. The only question is whether it will hold. It could be the start of the Santa rally, or it could be a couple and done. I’m watching: KLAC, C, and STX over $107.50. The $107.50 level on STX is like a brick wall, but if it gets past it – it could soar.

Wednesday: It seems like the chip sector could stay hot, with AMAT, LRCX, heck even MRVL waking up. Watch ‘em today.

TW3 (That Was - The Week - That Was):

Crypto is fine … wish you were here. The total crypto market cap has more than doubled in the past 2 years. We’re seeing higher highs in recent weeks than what we saw earlier this year. I don’t feel bad at all about where we are in crypto-land.

Ethereum is slow, expensive and… it will be months until its developers start to arrest that problem. That’s why new “scaling blockchains” are getting some love. Solana and Cardano are no strangers to the spot-light, but unexpectedly Avalanche received a big vote of confidence from a B of A analyst and rose 32% in response.

Bitcoin has had a great year. The digital currency is up +70% since the start of 2021, driving the entire crypto market over $2T. In 2021 we saw: (a) the 1^st major crypto go public with the debut of Coinbase in April, (b) increased participation from Wall Street banks like Goldman Sachs, and (c) the approval of the 1^st U.S. ETF linked to Bitcoin. Here are a couple more predictions from crypto-experts for 2022:

1. Watch for a crypto-crash in the coming months,

2. We should have our 1^st spot Bitcoin ETF,

3. Financial institutions will continue to rotate into ‘DeFi’, and

4. Crypto-regulations will begin to pop-up everywhere – including the U.S.

Next Week: The Strong continue to get Stronger…

EOY Update: What worked, What didn’t work, and the Trends going forward.

- Indices (YTD): IWM +15%, DIA + 19%, S&P +28%, and QQQ +28%.

- AMZN +7%, FB +25%, AAPL +36%, TSLA +46%, MSFT +50%, GOOGL +70%, and NVDA +126%.

- Crude Oil +55%, Gold -7%, and TLT (Bonds) -6% year-to-date.

- XLP +13%, XLU +14%, XLI +20%, XLB +23%, XLV +23%, XLY +27%, XLF +33%, XLK +35%, XLE +45%

- Going into 2022, the S&P, Nasdaq, and DOW could finish at all-time-highs despite any and all short-term gyrations.

A Simple STRATEGY for a COMPLEX time:

TIP #1: If it’s STRONG right now (attracting money-flow) – then it will be STRONGER moving forward (attracting more money-flow).

- These stocks provide opportunities to buy on pullbacks & retracements back to their 20-day exponential moving average (EMA).

- You then sell covered-calls against them (on a monthly or bi-monthly basis) – fully expecting them to maintain their strong, previous performance.

- Review the performance of: United Health (UNH), Broadcom (AVGO), and McDonald’s (MCD), and Apple (AAPL).

- You’re looking for stocks where:

o Their ‘close’ is greater than their 20-period EMA, and

o Their ’20-period-moving-average’ is greater than their 50-period EMA, and

o Their ’50-period-moving-average’ is greater than their 200-period EMA.

- You buy them when they pull back into their 20-period EMA.

- Examples of this strategy would be:

o Apple (AAPL), United Healthcare (UNH), McDonalds (MCD), and recently Microsoft (MSFT),

- You would prefer stocks that are gradually up-trending and NOT experience deep pullback events.

- Look at UNH, PG, and PFE on pullbacks to their 20-day EMA.

TIP #2: If it’s WEAK right now (not attracting money-flow) – then it will be WEAKER moving forward (not attracting any more money-flow).

- You’re looking for stocks where:

o Their ‘close’ is less than their 20-period EMA, and

o Their ’20-period-moving-average’ is less than their 50-period EMA, and

o Their ’50-period-moving-average’ is less than their 200-period EMA.

- You short / buy Put spreads when they pull back into their 20-period EMA.

- I put my most recent SHORT list below.

Tips:

HODL’s: (Hold On for Dear Life)

- *BitFarm (BITF = $5.75 / in at $5.12)

o Sold Feb, May, Dec ‘22: $5, $7.50 & $10 CCs for income,

- **Bitcoin (BTC = $51,100 / in at $4,310)

- Energy Fuels (UUUU = $7.95 / in at $11.29),

o Sold Apr $11 CCs for income,

- **Ethereum (ETH = $4,100 / in at $310)

- GME – Holding

- **Grayscale Ethereum (ETHE = $38.08 / in @ $13.44)

- **Grayscale Bitcoin Trust (GBTC = $39.13 / in @ $9.41)

- Hyliion (HYLN = $6.64 / in @ $6.01)

o Sold Jan, Feb $6 and $7 CCs for income,

- **Loopring (LRC = $2.31 / in at $2.27)

- **Solana (SOL = $193 / in @ $141)

- Uranium Royalty (UROY = $3.82 / in at $4.41)

o Sold Jan $5 Calls for income,

** Denotes a crypto-relationship

Thoughts:

Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

Disclaimer:

Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews. You can learn more and get your subscription by visiting: <http://rfcfinancialnews.blogspot.com/>.

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PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.

R.F. Culbertson

<mailto:rfc@culbertsons.com>

<http://rfcfinancialnews.blogspot.com>

Sunday, December 19, 2021

This Week in Barrons: December 19th, 2021

“Just Eat the damn cookie”… Lately, I find myself ratcheting up my risk tolerance. I’m wearing pants that have small holes in them. I’m letting my dog run free. Before every tough decision, I’m saying to myself: “Life is too short, eat the damn cookie.” Heck, I can’t see the future. In 2022, I’m going to be less accepting of the status quo. I’m going to: buy stocks before the uptick and sell before the downtick, buy different crypto alt-coins, try newer ideas, and most importantly – “Eat more damn cookies”.

“Being on-the-hook – IS the place to be.” If you’re asking someone to work for you, being specific about what success looks like is an obvious way to get better results. If everyone agrees on what success looks like, you’re more likely to achieve it. And yet the majority of entrepreneurs will say: “I’ll know it when I see it.” They’re vague about what they want because being specific means that they’re on-the-hook when it doesn’t work out. Vagueness allows them to hide and/or move the goalposts. Q: If you don’t know what you want NOW, why do you think you’ll know it later? A: Continue to put yourself “on-the-hook” – becausethat is the majority of achieving success.

“When do you call it a day?” If your time is the measure of the work you do, then your work is over when the shift ends – clock-in ‘n clock-out. If your output is the measure, then your work is over when your inbox is empty – when you’ve made the last pizza. More and more our time and the list of things we do is intentionally endless. Just one more sales call could land the big one. One more cycle could get that innovation you’ve been looking for. In a competitive marketplace, it’s almost impossible to self-regulate the length of your shift. It’s on each of us to decide what ‘enough’ looks like. Remember, the only currency that you can’t duplicate – is time.

The Market:

Entrepreneurs – ever say this to yourself: “I need a proven partner who is trustworthy, skilled, cheap, works the way I do, and can scale down to a small company’s operation.” So tell me, why would that other superstar want to help build your company? Being a superstar comes with being able to choose what to do. Often those choices are obvious and larger than what a small company can offer. But you’re too busy ‘getting it done’ to wait for someone to magically walk through that door. The person you’re looking for is most likely - you. So, learn to DIY yet again, or GO to where would you go to find – YOU.

The easy-money part is over… and now comes the hangover. In our economy’s case, the cure for the hangover is rate hikes. Our FED’s easy-money policies helped the economy rebound by encouraging bank loans and consumer spending. Unfortunately, as prices rebound those policies are making it harder for people to pay for essentials like food, housing, and heat. Retail sales slowed in November – a real sign that rising prices are curtailing our spending.

How is it that… acute angles, rough edges, and imperfect matches of diversity actually make human things work better?

InfoBits:

- Wholesale prices jumped 9.6% YoY in November... the fastest pace of wholesale inflation - EVER.

- Amazon will expand an Instacart-like grocery-delivery service… that it launched in the U.K. last year.

- Reef, a nationwide ghost-kitchen startup… that operates out of trailers in parking lots – is backed by $1.5B in venture money.

- CEOs like Musk, Bezos, and Zuck… have sold $69B of stock since Dec 1st.

- Pfizer acquired Arena Pharma for $6.7B… mostly for the company’s research & IP on inflammatory conditions affecting the stomach and intestine.

- Kroger is nixing some COVID benefits for un-vaxxed employees… and adding a $50/mo. surcharge to health plans for un-vaxxed non-union workers.

- Over 17m Americans get paid to create online content. The Creator Economy has 450% YoY job growth, and 33% of all kids ‘want to be a YouTuber’ when they grow up.

- Google has told employees that they will lose pay… and will eventually be fired – for failure to comply with the company’s COVID vaccination policy.

- 286 founders across 521 unicorn companies… have doctoral degrees.

- Gift card purchases are up 43% this year.

- Reddit has filed paperwork toward its IPO.

- Homeland Security will pay outside ‘vetted’ hackers… to find vulnerabilities in computer systems.

- Gopuff, an instant grocery company… is raising $1.5B in funding at a $40B valuation ahead of a likely 2022 IPO.

- Oracle is buying electronic-medical-records company Cerner for $30B… pushing the enterprise-software giant further into healthcare.

- In 2021, 82 big business stakeholders sold more than 3B shares… of their own companies – valued at over $162B.

- Lay’s owner Pepsi is celebrating with a new Lay’s Chips Vodka… distilled from Lay’s proprietary potatoes.

- Born to Run… to the bank. Bruce “The Boss” Springsteen sold the rights to all his music to Sony for $500m – the largest music-rights deal ever.

- McDonald’s settled a lawsuit… with disgraced former CEO Steve Easterbrook, forcing him to repay his severance of $105m.

- Bud Light is launching a hard soda, and Pepsi a boozy Mountain Dew.

- JPMorgan Chase will pay $200m in fines… for using WhatsApp to get around federal record-keeping laws.

Crypto-Bytes:

- Binance Singapore… will stop offering services there by early next year.

- Over 90% of all bitcoin has been mined. That comes as investors resumed accumulating the cryptocurrency – a good sign for crypto prices.

- Myanmar’s shadow government… has recognized stablecoin tether (USDT) as its official currency.

- Wells Fargo and HSBC Bank will use a blockchain-based product… for settling matched foreign exchange transactions.

- Nike is plunging deeper into the world of crypto collectibles… acquiring the NFT studio RTFKT (pronounced “artifact”). RTFKT is currently behind the CloneX project – that’s seen nearly $65m in transaction volume.

- The BCB Group, a crypto payments company with $40B in 2021 volume… has acquired Sutor Bank (a 100-year-old German bank) as it expands into the European Union.

- Turkish citizens, facing high inflation and a plunging lira… have been converting more funds into USDT (stablecoin cryptocurrencies).

- Ethereum and Mastercard have launched “ConsenSys Rollups”. The scaling system promises to process 10,000 transactions per second to give it viability for CBDCs and micropayments.

- Shrina Kurani, a California Democrat… will publish 2,022 non-fungible tokens (NFT) on the Solana blockchain today as part of her election campaign.

- Binance affiliate WazirX, India’s biggest cryptocurrency exchange… increased their 2021 trading volume by 1,735% YoY.

- Justin Sun is stepping down from the Tron Foundation… the organization he founded to oversee the development of the $8B TRON blockchain

- Jay Clayton (x-SEC Chair) who was skeptical of crypto while in office… is taking heat from the crypto community after writing a Pro-Crypto op-ed. Some have called Clayton (now a Fireblocks advisor) – an ‘opportunity’.

- A Banksy NFT goes on sale. Banksy’s “Gorilla in a Pink Mask,” is becoming an NFT. The owners plan to fractionalize the $1m artwork on the blockchain, selling 10,000 copies at an estimated $750 each.

Last Week:

Monday: If you removed the 5 biggest stocks from the S&P, the entire index is RED for the year. For today I have 3 stocks on my watch list: ASML, SNOW and NIO. SNOW looks like a breakout building while ASML and NIO look like bottom reversal hopefuls. This week brings us Chair Powell, and he has NO choice but to confront Friday's insane CPI reading. We have the worst inflation numbers since the early 1980’s but the S&P is at all-time highs. To further confuse me, Ford is at highs not seen since the horse and buggy were believed to be a better option than cars. Consumer Staples hit 52-week highs last week because food and toilet paper are essential during inflation.

Tuesday: I don't know that I'd get too brave ahead of the FED, but if you have a little mad money and want to play the lotto, you could buy a put and a call against the DIAs or SPYs that expire Friday. The FED should do something to earn a couple bucks on either side – just keep it small. Japanese stocks are dropping after the government said that it may consider guidelines surrounding corporate share buybacks. A stock buyback tapering in the U.S. would lead to an instant market crash. This market is only up due to FED money and zero rates. Companies borrow money at 0%, buy back their own stock, sending their stock price higher – and enriching the C suite.

Wednesday: China saw a big miss on November retail sales. The UK saw the largest inflation reading in over 10 years. The WHO said that: "Omicron is spreading at a rate we have not seen, and the sheer number of cases could once again overwhelm an unprepared health system.” Today is Fed day and the market is probably going to say "that was baked in already so let’s buy stocks." Don't get me wrong. This market is in trouble. Take out the FANMG's from the NASDAQ and you have a flat picture. So, the FED’s latest stance is: (a) double the taper to $30B / month, and (b) no movement in rates until full employment (whatever that means). Nothing was said about decreasing their balance sheet. Powell believes inflation will be back down to 2.6% in 2022. He did nothing but punt the ball and keep the plates spinning.

Thursday: Tomorrow is options expiration. Estimates are that 62% of all QQQ options will expire this week. That's had the effect of capping the NASDAQ and the S&P. So, if they're capping the NASDAQ, we might want to fish around in that pond. I’m thinking: VM > $116.25, DOCU > $150.45, AAPL > $181.15, ZM > $185.75, TSLA > $975, AG > $10.95 and GLD > $168.05 are possibilities. But given the Nasdaq is down over 400 points right now, I’m sitting on my hands.

Friday: Today is a quad witching Friday. When futures and options are expiring at the same time, tens of billions of positions must be reworked. I didn't expect them to get as bloody red as they did yesterday. A likely scenario is that we have a soggy open, and then at some point they come rushing in, creating roll out positions for the future, and up we go. But don't go and bet the farm on it. Do I still think Santa shows up next week, and we run higher into year end? I could see taking NVDA here around $287 along with AMD. I think you could pick up some MRVL here.

TW3 (That Was - The Week - That Was):

If the Fed sticks to its plan of tapering, inflation will slow in the U.S. and the economy will cool off. This may reduce some of BTC’s short-term appeal and I could seek some investors taking some crypto-risk off the table. Crypto is still driven by the sentiment and market movements of BTC. Crypto is having a strong weekend once it became clear that the inflation spike was in line with expectations.

Question, if Bitcoin was v1, and Ethereum v2 – what is crypto v3? Names like Solana and Cardano have been embraced as potential contenders for v3; however, one analyst at B of A is placing a less-conventional bet on Avalanche. AVAX claims to have “the fastest smart contracts platform in the blockchain industry.” AVAX may be a cheaper alternative to Ethereum, and is up almost 30% this week.

Next Week: Q: Bull market without the FED? A: No.

Market Update:

- Last week we saw selling begin to proliferate. Markets sold-off into the close on Friday, and even closed outside of the lower edge of their expected move. This week was all about whether the lower edge of the expected move could hold – and it could not. Once you’re outside the downside expected move, market makers begin to dynamically hedge their positions – often pushing markets lower. Last week had: (a) the advance / decline line show 10:90, (b) financials, tech, and energy all ‘get smoked’, and (c) we lost the $300 level on NVDA.

- The U.S. Dollar rallied as the world rushed to collect our currency over their own. As risk begins to hit-the-fan, look for the dollar to further accelerate to the upside.

- This holiday week could be heavy in terms of volume. Markets are closed on Friday, but next week’s 4-day expected move is more than last week’s 5-day. So, I’m not looking for this coming week to be sleepy and gentle.

- Trading firms have moved to COVID protocol = everybody’s trading from home.

Volatility:

- The QQQ has not broken lower - yet. The VIX is NOT feeling the fear. This opens the door for considerably more risk as retail traders are still ‘buying the dip’. This means that sell-side capitulation has not even begun to warm up.

- The SKEW (ratio of puts to calls) is low relative to recent moves – meaning that traders are NOT hedging. By the looks of the VVIX (still in never-never-land), a lot of options are still being purchased – just not as hedges.

Breakdown:

- Our FED no longer has your back. In a marketplace built on stimulus, low rates and bad Jobs numbers, our FED is stepping away from the punchbowl. Bad news is back to being bad news. All inflation data will disturb our markets as controlling inflation is now #1 with our FED. Therefore, Tip #1: the upside potential for risk assets could be limited. As you look over the past 3 years, market movements have been un-natural; therefore, we could be close to the Great Unwind? As of late, dip buyers are being decimated.

- Tip #2: Premium sellers be warned as risk could become extreme. Volatility shrugged its shoulders at last week’s action. In fact, as a hedge – I would suggest purchasing a February, out-of-the-money Call Spread on the VIX.

- Tip #3: If you’re a dip buyer, be warned = ‘Learn how to use option spreads or die trying.’ Markets are designed to take the maximum amount of money at any given time. Learn how to use ‘spreads’ to control your own risk.

SPX Expected Move:

- I’m looking for a bounce next week that will rope more people into long positions. Last week’s SPX expected move was $80 and we moved $92. Experts next week (a short week) are looking for an $88 expected move. Risk is eminent.

- Q: Can this bull market be sustained without our FED? A: NO.

Tips:

HODL’s: (Hold On for Dear Life)

- *BitFarms (BITF = $4.73 / in at $5.12)

o Sold Feb, May, Dec ‘22: $5, $7.50 & $10 CCs for income,

- **Bitcoin (BTC = $47,100 / in at $4,310)

- Energy Fuels (UUUU = $7.24 / in at $11.29),