Backdrop: My father and father-in-law were both involved in WWII’s European theatre.
Imagine… landing on France’s Normandy beach in 1944, and (against all odds) being a part of a Band of Brothers that changed the course of human history in the biggest war that our world had ever seen.
Imagine living through:
- The Radio / TV boom: where we spent hours watching a screen.
- The Internet Era: where we spent 7+ hrs/day interacting with others – via a screen.
- The AI promise: where we get to spend all of our time interacting with machines that hopefully understand us and the world around us.
What if you could tell the world ONLY ONE memory… What would you choose?
This past week one of our Normandy heroes… left a U.S. hospice-care to celebrate with his Brothers in Normandy. He received the ultimate gift. On Friday, he was forever reunited with his fallen Brothers. May he Rest-in-Peace.
The Market:
Very few times in life do we correctly predict the ‘Rinse’ / ‘Collateral Damage’:
- NVDA’s 10-for-1 stock split is in motion. Traders who held shares at Friday’s COB will see 10X their shares on Monday morning, and the price will be split-adjusted downward from ~$1200 to $120. Therefore, the Nvidia gamma squeeze looks to be coming to an end. I’m worried as to whether NVDA at ~$120 can still drive the market the way it did at $1200. After all, Nvidia has produced ~50% of the S&P’s YTD returns. Be careful what you wish for – because if it doesn’t have the juice to keep that going – look out below.
- The politicized Birth/Death Model associated with the monthly Jobs Report is gaining more visibility. Last month, it was reported that we created 272k jobs. However, 231k (85%) of those new jobs were fictitious / fake / made-up by the Bureau of Labor and Statistics (BLS) as they guess the number of net-new, undocumented small businesses created last month. This week both Bloomberg and CNBC started to vocally question the validity of their number. Especially, now that the Jobs Report is rocking our bond market and our currency valuation. Be careful of the downstream effects of a politically created number.
- Volatility is at its lowest point in 3+ years; therefore, options premiums are ridiculously cheap. Which means, the current way to safely invest (lowering your risk and increasing your reward) is to purchase Put or Call Option Spreads – out into October or January. A couple suggestions:
o #1: Buy the Coinbase (COIN) October $300 / $350 Call Spread.
o #2: Buy the Astro Zeneca (AZN) Jan. $85 Calls,
o #3: Buy the CNX Resources (CNX) Jan. $30 Calls,
o #4: Buy the AMD (AMD) Oct. $210 / $220 Call Spread, and
o #5: Buy the Bill Holdings (BILL) Sept $50 / 40 Put Spread,
Get started with BeeHiiv for free…
InfoBits:
- Roaring Kitty owns $200m in GameStop shares... and that includes $65m in GME June 21 Calls. [It’s not every day a meme kitty turns into a whale.]
- China dumped ~$102B in U.S. Treasuries… in the past 12 months, and our FED continues to ignore its effect on the U.S. Dollar.
- Musk redirected a shipment of Nvidia’s AI chips… from Tesla to Musk’s privately held X and xAI. This crystalizes concerns that Tesla shareholders have about Musk’s divided loyalties.
- Mr. Beast’s +271m subscribers… makes his channel #1 on YouTube.
- Nvidia hit a market cap of $3T… making it the second-most valuable company in the world – ahead of Apple. The last time Nvidia was last worth more than Apple was 2002 – before iPhones existed.
- South Korean vending machines are selling mini-gold bars. [U.S. citizens are not alone in questioning the value of their own country’s currency.]
- The FDA is reversing its 2022 ban on Juul e-cigarettes. [So, I guess: Smoke ‘em if you got ‘em.]
- Zero-Day Options are now 50% of all options trading. [Yes, Wall Street – you have built the world’s largest casino.]
- Gentlemen, start your Rate Cuts… Canada was first to cut rates and Europe is not far behind. Of course, bring up the rear is the ‘Higher-for-Longer’ USA.
- Channeling their inner Davy Crockett… BlackRock and Citadel were having a moment when they told the NYSE & NASDAQ: “You can go to hell, ‘cause we’re startin’ our own stock exchange right here in Texas.” [Live in 2026.]
- An HBR Report titled "Mind the GAAP" found… 20% of firms that show a non-GAAP profit (Gen. Accepted Accounting Prin.) actually show a loss, and the spread between GAAP and non-GAAP == CEO ‘bonus’ pay.
Crypto-Bytes:
- CZ began his 4-month sentence… in a low-security Santa Barbara prison. [Officially the richest prisoner in the U.S. … ever.]
- Crypto whales just dropped $110m on Dogecoin (DOGE)… betting on a meme-coin/Musk rally. [Guess that the meme-coin craze isn't slowing down anytime soon.]
- Senator Ted Cruz bought three Bitcoin miners… and kicked off his own BTC mining operations. Cruz's move shows his strong support for crypto.
- Chainlink's (LINK) CEO believes we will soon see… crypto and the global financial system – merge. [Why? Because the only information you can trust these days is: ON-CHAIN.]
- Crypto funds raked in $2B in May… showing strong YTD inflows.
- Crypto season will really take-off when… (a) Bitcoin is over $73k, (b) the Dollar breaks below $104, and (c) tech stocks reclaim their March highs.
- The Exchange-Wars are heating up… as Robinhood buys crypto exchange Bitstamp for $200m.
- Franklin Templeton is venturing into the altcoin market... and forming a crypto fund that focuses solely on altcoins. [Yee-haw – I’d like to bet on Red 13 please.]
- On Friday, a whale liquidated $318m in bitcoin… putting off the inevitable crypto breakout for at least another week.
Get matched with a Fiduciary Advisor for free today…
TW3 (That Was - The Week - That Was):
Wednesday: A Bloomberg report suggests that our own Bureau of Labor and Statistics (BLS) is overstating employment by mis-using their very own Birth/Death model. Anna Wong, Bloomberg’s chief economist said: “We estimate that monthly nonfarm payrolls overstated job growth by 730,000 jobs in 2023 – with hiring going NEGATIVE in October.” To Wong, official payroll prints don’t account for the spike in business closures and the decline in new business formations. Her team estimates the true pace of job growth is below 100,000 per month, which is less than half of the official 242,000 three-month average. It’s nice to finally have somebody ‘shine-a-light’ on the fictitious & politicized Birth/Death model.
Thursday: The Bank of Canada cut its interest rates yesterday. Big banks generally move together, so the pressure is on our FED to follow suit.
Friday: After going through all of the components today’s BLS Jobs Report stinks like 3-day old fish. May’s household employment number revealed 408,000 JOBS were LOST. How could we have added 272,000 BLS jobs in May when:
- (a) the number of people actively looking for work INCREASED by 400,000,
- (b) the number of unemployed INCREASED by 157,000, and
- (c) the number employed DROPPED by 408,000?
Morgan’s Moments…
How can I invest in the crypto ‘picks-n-shovels’ companies? The Bitcoin Miners that are worth a look are:
- #1: Marathon Digital (MARA): the #1 miner out there,
- #2: HIVE Digital Tech. (HIVE): above $2.50 w/ target $7.20,
- #3: Mawson Infrastructure Group (MIGI): above $1.20 w/ target $3.60,
- #4: Applied Digital Corporation (APLD): above $4.70 w/ target $8.65, and
- #5: Hut 8 Corp (HUT) above: $11 w/ target $22.
Crypto is moving higher because… our fiscal and monetary policies are out-of-synch, but more than that – our banking system is ‘creaking’. Factually:
- We have 63 banks on life-support that could fold at any time. The banking system has bad loans of +$517B (mostly commercial real estate).
- The balance in our Deposit Insurance Fund was only $125B as of April 1.
- Bottom Line: our banking system has over $517B worth of losses on the books, with only $125B worth of insurance to cover them.
- We need to cut rates in order to avoid another banking crisis.
- Now you know why governments are piling into Bitcoin, Gold and Silver … it’s because: “The TRUTH is out there, but it’s only ON-CHAIN.”
Next Week: “It’s Nvidia’s game to lose…”
Bkg: There is a sense of calm and complacency in the market, that is eerily similar to the Dot Com era:
- (a) Volatility & Stock correlations are low – while credit spreads are tight.
- (b) Very few stocks are out-performing the index.
- (c) Markets peak in November & December – not in June.
- (d) Tech is expensive vs history & expensive vs the market.
- (e) The Get Rich Quick culture is alive-n-well in stocks.
Two-sided trading is everywhere but in the indices: As the SPX ended the week on the upper edge of its Expected Move, there were ebbs and flows in all of the individual stocks – just not in the SPX or QQQ. Big tech is back in the driver’s seat, and is focused upon moving these markets higher. Financials were down and Energy was crushed – but the S&Ps and the Q’s continued their ride higher.
Can a split-adjusted Nvidia still drive markets: Nvidia is up 150% YTD, and it alone accounts for 50% of the S&P 13% gains on the year. Because of its high volatility, NVDA is trading more like a $7.5T behemoth rather than the $3T company that it is. When NVDA trades on Monday morning, it will have a 25B share float vs Apple’s 15B shares and Microsoft’s 7B shares. In order to keep the same level of momentum (Gamma squeeze) going forward, NVDA will require 10 TIMES the level of commitment inside of the options community. [i.e. NVDA traded 2m options contracts on Friday. It will need to trade 20m options contracts on Monday in order to sustain the same level of upside momentum.]
The Jobs Report rocked the Bonds & the Dollar: It was the catalyst for some of the largest 1-day moves in recent history inside of the Dollar (DXY) and in Gold (/GC). But the Jobs Report didn’t influence the S&Ps at all – because they’re waiting for NVDA on Monday morning.
Wednesday is FED Day, with a side-order of CPI data: Yes, the latest consumer inflation data will be reported on Wednesday morning at 8:30am, and the FOMC will report its latest interest rate moves on Wednesday afternoon at 2pm. Our FED wants to lower rates, but it must figure out how to SELL everyone that dis-inflation is upon us – when even the stock markets are at all-time-highs.
SPX Expected Moves (EM):
- Last Week’s EM = $62, and we closed +$70.
- Next Week’s EM = $75 – with NVDA’s split, CPI data, and a FED meeting – what could possibly go wrong?
TIPS:
HODL’s: (Hold On for Dear Life)
- 13 to 17-Week Treasuries @ 5.44%
- Physical Commodities = Gold @ $2,311/oz. & Silver @ $29.2/oz.
- **Bitcoin (BTC = $69,650 / in at $4,310)
- **Ethereum (ETH = 3,710 / in at $310)
- **ChainLink (LINK = $16 / in at $7.78)
- HROW – Harrow Health == $18.17 / in at $12
- **IBIT – Blackrock’s Spot Bitcoin ETF ($39.42 / in at $24)
- INDA – India ETF ($54 / in at $50) / BOT Nov, +$53 / -$55 Call Sp.
- LUNR – Intuitive Machines: ($4.5 / in @ $6.40) / SOLD: Sept Cov-Calls
- **MARA – Marathon Digital = ($19.3 / in at $12) / Sold Sept $30 Cov-Calls
- **RIOT – Riot Bitcoin Mining ($9.7 / in at $12.5) / Sold Sept $20 Cov-Calls
- TGB – Gold Miner == $2.37 / in at $2.76
** 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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