HODL (Hold On for Dear Life) … is an old movie cliche. Often, you’d see the hero dangling from a railroad bridge – with only their will and determination to help save their life. In the real-world, we often end up HODL’ing on to: our ideas, our grievances, and our view of the world. Factually, the harder we HODL on to the past – the less important our present-day life becomes. Per Seth G: Maybe we should: Let Go for Dear Life instead?
Your Name is part of the Game: The current world champ at bad names is AI, and in specific – ChatGPT. The trademark office just denied them ownership of ‘GPT’ so even if they were a pioneer – that name recognition advantage is now gone. It’s darn hard to tell a story when you don’t know what to call it. Claude.ai leaves a ‘meh’ taste, and Gemini is so bad that it’s devaluing Google’s existing search engine. It’s time for marketing & sales to rejoin these tech teams, because very soon valuations will be based upon sales – not promises + potential.
The Market:
Boeing – “It’s been a bad week...” Since the mid-fuselage exit door blew off one of your 737 Max’s, your planes have seen:
- A tire fall off – crushing cars below,
- A couple fiery engine malfunctions forcing emergency landings,
- Stuck rudder pedals forcing a landing to go awry,
- Fumes filled the cabin forcing an emergency landing,
- A strong altitudinal event that injured 50 passengers,
- The FAA’s found that you failed 33 of 89 specific audits, for a total of 97 instances of non-compliance, AND
- John Barnett (your former quality inspector) who filed a whistleblower complaint over plane safety – was “found dead” in an apparent suicide. John Barnett had spent over 30 years at Boeing and sounded the alarm in 2017. He was set to give deposition testimony in his federal legal action against you this week. Think coincidence? I think not. The timing and circumstances around his death have attorneys everywhere scrambling to do a full-scale investigation into what really happened.
Boeing, previous to John Barnett’s death – I thought you were just completely mis-managed. Now, this is beginning to read more like a spy novel. Are you still taking bids on the movie rights?
Full Self-Driving Awards… delivered by the Insurance Institute of Highway Safety – were dismal:
- Toyota’s Lexus LS was the only car to notch an ACCEPTABLE rating.
- The GMC Sierra and Nissan Ariya nabbed MARGINAL scores.
- The remainder (including Tesla) were deemed to be POOR.
Overall, the IIHS concluded that current driver-assistance systems do nothing to improve safety.
InfoBits:
- Sam Altman of OpenAI wrote… “Musk refers to a Founding Agreement. Musk’s Founding Agreement is a fictional document that Musk has conjured-up to lay unearned claim to the fruits of an enterprise he (a) initially supported, (b) then abandoned, and (c) then watched succeed without him.”
- Reddit’s IPO next week could raise $748m… at a valuation of ~$6.5B. It will be the first US social media offering since Pinterest’s $10B debut in 2019.
- Startups cut Managers and VPs in 2023… as companies prioritized the ‘get-er-done’ worker. Worker-Bees are 60% of all new hires in $100m companies.
- EV startup Fisker (with its cult-like following)… has hired advisors to guide it through a possible bankruptcy filing. Cult followings don’t pay the bills.
- Speaking of Tesla… which received a downgrade to hold-sell from Wells Fargo as they cut their price target from $200 to $125 – saying that it could go as low as $44 over the next year. Consider the source here.
- Eli Lilly is teaming up with Amazon… for home delivery of its weight-loss drug, Zepbound. The AMZN touch could give it an edge over rival Novo Nordisk’s Ozempic and Wegovy drugs, which have faced shortages.
- If March were to close today… it would be Silver’s highest monthly close since July 2021.
Crypto-Bytes:
- MicroStrategy bought more Bitcoin… as they now hold +$14B in BTC – more than any other public company, and are issuing $500m more in convertible notes – to buy more Bitcoin.
- Less than 2 months after spot BTC ETFs launched… BlackRock’s IBIT product crossed the $10B mark – faster than any ETF in history.
- JPM says that spot bitcoin ETFs could see… an additional $220B of inflows over the next 36 months, and believe in Coinbase – raising their price target to $300. Remember J. Dimon thinks: “Bitcoin is a fraud”.
- Bitcoin retreats to $65k from $73k… and some are calling this a ‘topping pattern’ coupled with a ‘failed breakout’. Let the games begin.
- Ethereum developers completed a blockchain update… that reduced Layer-2 transaction fees. It’s the biggest change since their move from proof-of-work to proof-of-stake, and will boost the use of L2 projects.
- If BTC drops from here… the first level of support is ~$58k and then $48k.
- For ETH, if it breaks $3.5k… the next support is ~$2,750.
- Speaking of sentencing: U.S. prosecutors are asking for a 40-year prison sentence for former FTX CEO Sam Bankman-Fried – because he was: "One of the largest financial frauds in history." The defense is asking for 5 yrs.
TW3 (That Was - The Week - That Was):
Monday: The CPI will set the tone for the rest of the week. If the CPI comes in hot, I think there's a shot at a pullback. Word on the street is that MSFT is the target of an ongoing cyber-attack, and that’s never a good sign.
Tuesday: I thought that if the CPI came in hot – the market would pout, and if it came in cool – markets would run higher. We got the combo platter. Core CPI came in higher than expectations (3.8%), but cooler than last month’s 3.9%. Markets are not pouting because investors believe that our FED will cut rates – no matter what happens. Back in the real world, inflation is still roaring as represented by insurance companies most recently hiking premiums by +10%. What me worry?
Thursday: We got the wholesale inflation (PPI) numbers and wow did they ever come in hot. We doubled the expected inflation at the producer level (from 0.3% to 0.6% MoM). This means that the CPI and the PPI are both moving higher = inflation is accelerating, and that is NOT rate-cut friendly. The evidence is clear, our FED will be keeping rates ‘higher for longer’.
Friday: If we accomplished one thing this week, it was that the inflation numbers (CPI & PPI) finally got markets to question the reality of their rate cut projections.
Morgan’s Moments…
The Alt. Coin index compares the top 30 cryptocurrencies by market-cap. When this chart is going up, it means that altcoins are outperforming Bitcoin. Currently, Altcoins are still trading at their cycle lows relative to Bitcoin. Given Altcoin Season tends to occur later in crypto bull markets, this suggests that we're still in the early innings. Full disclosure: I’m long BTC, ETH, but also Alts: Link, Matic, and Near.
MCC says: “You need 3 things to succeed as a token…”
1. Good Cult-anomics… cultivate a small following that will go-to-the-mat for you,
2. Outstanding Meme-ology … be a tech that is worthy of stimulating the meme-creationjuices, and
3. Amazing Pump-amentals… that hidden ability that causes investors to want to pump-the-crap out of the coin in order to drive it higher for no apparent reason.
MCC’s Quickie Buys vs Sells:
- Tip #1 = Watch Bitcoin (BTC)… Breaking to all-time-highs (ATHs) indicates strong buying pressure, but falling below $65k could cause increased selling pressure from short-term holders = a failed breakout.
- Tip #2 = Watch Ethereum (ETH)… It’s caught between resistance at $4,700 (old ATH) and support at $3,500. Currently: Risk vs Reward is unfavorable for any new positions, and below $3,500 = SELL and rebuy at ~$2,750.
Next Week: Correlation will Cause Concern…
Background: Correlation between Mega-Cap Tech stocks and the rest of the S&P 500 is at historical lows. Big Tech/S&P 500 correlation actually spikes when markets sell off. Combine that with a potential volatility breakout, and that sounds like trouble to me. Currently, we’re in a monster, inflationary rally in stocks – with so many names near 52-week highs. Investor fear has disappeared from the markets. The VIX has been in the basement for weeks, and bonds are hovering near lows – a real sign that the market just doesn’t give a darn right now. Watch for increased correlation between Big Tech and the S&P 500, because THAT will be the sign that all heck’s about to break loose.
A Volatility Breakout is threatening… due to all of the capital rotations / asset allocations that are going on within the entire marketplace. But, the glue holding Big Tech together with the S&Ps is Nvidia (NVDA). Tip #3: Watch NVDA, because as long as it remains stable – volatility will also remain under control. Markets are currently undergoing constant rotation. We’re seeing big moves in industrials like Caterpillar – condense 2 years’ worth of price action into 4 months. The energy sector (XLE) has condensed 3 years of dormancy – into the last 3 (inflationary) months.
The inflationary rally is… coming head-to-head with this week’s FED meeting. And with this week’s FED meeting, comes an updated dot-plot of our FED’s rate cut expectations. The issue is that current asset prices along with this market rally – are inflationary unto themselves. Tip #4: Watch our FED, because increased inflation, could cause a reduced number of rate cuts in 2024 – and therefore a cooling in stock and asset prices.
Bonds are near multi-year lows… causing interest rates to move higher, consumers to reduce spending, and our economy to slow. Tip #5: Watch the TNX before and after the FED meeting, because a rise in the 10-Year Note is going to hurt NVDA which will (in turn) hurt Big Tech and the S&Ps.
Correlation will be ‘The Sign’ and it will come… hard ‘n fast – bringing increased volatility and causing a return to two-sided trading. Our market place has had a bid under it – since November of 2023. And correspondingly, the financials (XLF) have gone virtually straight-up since then. If Energy (XLE) and the Financials (XLF) join in the sell-side activity, we will approach correlation and that is when this marketplace will have problems.
SPX Expected Move (EM):
- Last Week = $82 EM, and we ended the week unchanged. FYI: this the second consecutive week that the tech index (QQQ) closed lower.
- Next Week = $83 EM due to the FED meeting and the higher inflation markers.
TIPS:
This market wanted 6 rate cuts this year, but decided that it would be okay with 3. With the latest CPI and PPI numbers showing inflation re-accelerating, this week’s FED should take a more defensive short-term stance. That would almost force a rate cut in June to make everyone happy, take a pass on September (so he doesn't look like he's tossing Biden a bone), and then another rate cut in December. That reduces the total number of rate cuts for the year - to 2. Fingers crossed..
HODL’s: (Hold On for Dear Life)
- 13-Week Treasuries @ 5.3%
- PHYSICAL COMMODITIES = Gold @ $2159/oz. & Silver @ $25.4/oz.
- **Bitcoin (BTC = $67,000 / in at $4,310)
- **Ethereum (ETH = 3,570 / in at $310)
- **ChainLink (LINK = $18.4 / in at $7.78)
- **COIN – Coinbase = ($242 / in at $125)
- **MARA – Marathon Digital = ($19.3 / in at $12)
o Sold June $40 Covered Calls
- **IBIT – Blackrock’s BTC ETF ($39.3 / in at $24)
- INDA – India ETF ($50.5 / in at $50)
o BOT Nov, +$53 / -$55 CALL Spread
- **RIOT – Riot Bitcoin Mining ($11.6 / in at $12.5)
o Sold June $25 Covered Calls
- **MATIC – Polygon ($1.06 / in at $0.94)
- **NEAR – Near Protocol ($7.65 / in at $6.85)
- **SOL – Solana ($191.7 / in at $172)
** 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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