At this point, the Presidents of all nations need crypto – more than crypto needs them. To the majors (China, Russia and the U.S.) allow me to say: (a) the ‘Genie is out of the bottle’, (b) that ‘Ship has already sailed’, and to the U.S. (c) ‘Elvis has left the building’. Mr. Biden, you’re counting on crypto-tax-proceeds to pay for your infrastructure bill, and do you even know where to look for them? Why don’t you just say: “We no longer pay for things in the U.S. We simply print money, give it away, and hope that people like what we’re doing enough to vote for us – again.”
Are you trying to make a difference? To make a difference, you need to understand that the other person: (a) doesn’t know what you know, (b) doesn’t believe what you believe, and (c) may not want what you want. You need to ‘understand them’ before you can ‘ask to beunderstood’. If all you want to do is make a point, simply tell them a story about yourself. But when you’re trying to make a difference, you’re asking them to embrace a new story about themselves. Although it’s a lot safer to make a point, if you really care – do the hard work to make a difference instead.
Limit your data when searching for information: The good news is that data is posted faster to the internet than anyone can consume it. Your ability to understand the data is a function of your filter condition and your sorting ability. “We need more data” is a common response from a decision-maker; however, more data can quickly become a path toward confusion and paralysis. Therefore, before searching – construct the proper filters and sorts before frustration sets in.
Who’s moving and who’s not: If you’re at the train station, sitting on a train about to leave – you may notice that the train next to you is moving. Or maybe that train is standing still and you’re on the train that’s moving. It’s hard to tell. All we ever know is that our relative position is changing. We can’t remain in the same place because the world never stops moving, and it never asks us where we’d like to go. Insisting that nothing has changed is not only a waste of time, but also a source of frustration. Always figure out where you are ‘relative’ to something else. That is your only guidepost going forward.
The Market:
If you’ve been in the market for any time, you realize that a big mess awaits us in these markets – we just don’t know when. Per HL: We currently have two financial markets. Crypto has incredible volatility and few rules, and our equity markets have more rules (most unenforced) and virtually no volatility. In crypto we have Bitcoin at $47k and Ethereum at $3.2k – while in equities the S&Ps are at all-time-highs and low volatility rotations help to keep talk show hosts happy. The crypto exchanges have been the winners thus far, but the ‘wallet’ will very shortly become an important part of our lives. You’ll need to: know, own, and locate what you have at a moment’s notice. Your digital wallet will become your new crypto internet browser – only with a cool spending layer built into it. Take your security seriously, because our government is working very hard to blur the lines between crypto and physical – so that they can get paid. In the meantime, Ethereum has rallied 75% in three weeks spurring speculations in smaller cryptocurrencies and crypto-related stocks like: MSTR, SI, MARA, RIOT. Market breadth has been lacking with more names selling off than rallying. This will only change if the Russell 2000 small-cap ETF (IWM) rallies above 225 – its 50-day moving average. If the financials continue to rally, the IWM is also likely to break out.
InfoBits:
- Penn National Gaming acquires… theScore for $2B.
- DraftKings acquires… Golden Nugget Online for $1.5B.
- Cargill and Continental Grain acquire… Sanderson Farms for $4.5B.
- SpaceX acquires Swarm Technologies… a satellite data provider with 30 smart employees and a network of 120 tiny satellites.
- Honor acquires Home Island… one of the largest providers of personal home care in the country.
- Authentic Brands acquires Reebok… from Adidas for $2.5B. Authentic owns: Brooks Brothers and Forever 21 as well.
- Leafly is going public… via Merida Merger Corp. SPAC.
- Walmart & Target are offering… their worker’s and associate’s tuition and book fees at various universities in an effort to retain employees.
- Job openings in June surged over 10M… for the first time ever, as employers scrambled to hire while the economy reopens.
- The average pay for US supermarket and restaurant workers… topped $15 / hr. for the first time.
- It’s expensive to be late… In 2012, chicken surpassed beef as America’s most popular meat. Since 2018, Chick-fil-A has earned more per restaurant than MCD.
- The $1T Infrastructure Bill could start a spending spree… that reshapes the role of US government. Biden is positioning himself as a new FDR, trying to fuel an expansion with social programs and climate initiatives.
- Things are getting more expensive across the U.S…. as the economy tries to keep pace with the pandemic. Consumer prices rose 5.4% YoY. (It’s more like 14% - but hey – what’s another 8.6% among friends).
- WeWork is partnering with Hudson Bay… to add co-working spaces to department stores. The first 5 "SaksWorks" are slated to open in NYC. WeWork will operate them in return for a cut of their sales, but it won’t have to pay rent.
- The “Un-Leased" WeWork could be a tech company: After all, Uber doesn't buy cars, Airbnb doesn't buy houses, and Instacart doesn't buy grocery stores. WeWork doesn’t have to pay for buildings – it can just provide the service.
- Google, FB and TWTR will reduce salaries by 25%... for employees who choose to work-from-home.
- A new study suggests mRNA vaccines offer limited protection against Delta. Moderna was 76% effective against the Delta variant, but Pfizer just 42% effective.
- TikTok overtook Facebook… as last year’s most-downloaded app in the world.
- Reddit raised a fresh $410M funding round at a $10B valuation… as the company focuses on building out its ad business.
Crypto-Bytes:
- The DeFi Poly Network was hacked for $600m… but the hacker left a message inside the transaction saying he was ready to return the funds.
- Circle plans to become crypto’s 1st “Full-Reserve National Commercial Bank”. Circle would be the first crypto-native institution to operate under the supervision of the U.S. FED, U.S. Treasury, and the FDIC.
- The Crypto-Paradox has arrived... Crypto's unregulated, decentralized, and hard-to-trace nature is core to its identity. SEC Chairman Gensler believes that crypto's survival depends upon regulation. Remember the phrase: “I’m with the government, and I’m here to help.”
- Coinbase had a blockbuster Q2 earnings report… as it reported $2.03B in revenue aided by a $737m tax benefit. They’re currently sitting on $4.4B in cash.
- PNC, the fifth-largest commercial bank in the U.S. … plans to offer crypto investment services to clients. The bank is partnering with Coinbase to complete the project.
- Ethereum’s trading volume outstripped Bitcoin’s for the 1st time. Although trading volume is not necessarily predictive of price movement, it’s one way to measure demand as ETH preps for its next big update – Eth2.
- According to KPMG, investment in crypto in the 1st half of 2021… outpaced the total for the previous three years.
- Bitcoin miners are increasing their investments in Ethereum… despite the network’s upcoming change to proof-of-stake.
- FTX.US intends on offering cryptocurrency derivative trading… in less than a year.
Last Week:
Monday: Last night gold fell 4%. Apparently, Sunday night was the perfect time to dump 26,000 gold futures contracts ($4B) on the market with absolutely no respect for price. Who in their right mind would do such a thing? It had to be someone who wasn’t price sensitive – which leaves our favorite banksters and their crony governments. This morning: Treasury Sec. Yellen calls on Congress to increase the debt ceiling. Why is there a debt ceiling? There's unlimited U.S. money printing, and we can't stop it or our man-made house of cards will fall under its own weight. Who didn’t get the memo?
Tuesday: This morning both WISH and SNAP look like upside breakouts. MMAT (for just $3.55) also looks like it's going to try and make a climb. Most days, it's tech that rules, but today it's all about the companies that make stuff: CAT, DE, and CLF are all up. I like CLF, and if it can get over $26.16 – I’m in.
Wednesday: It appears that the $3.5T infrastructure bill got passed, with no apparent way of paying for it. It also seems that the White House is now concerned about the price of gas, and is calling on OPEC to pump more. Excuse me? Is this the same White House that canceled oil pipelines, put thousands of acres off limits for drilling, and is pushing their ‘New Green Deal’? The CPI (Consumer Price Index) just hit and it was only up at a 5.6% annual rate. Naturally, inflation is roaring and prices are going to the moon but to quote Alfred E. Newman (and our government): “What, me worry?”
Thursday: Today the PPI (Producer Price Index) blew away estimates, coming in up over 1% / 12% YoY. Prices were up substantially for everything across the board. Steve LIESman is on CNBC saying he: “Feels that the numbers are wrong, and prices aren’t as high as the report says.” Poor Steve.
Friday: MMAT crossed over my threshold on Monday – so I picked some up. They posted good earnings along with a 129% revenue increase, but they’re down. Why do I even bother with fundamentals anymore?
TW3 (That Was - The Week - That Was):
- R.I.P. The Wise Bank https://wise.com/us/business/ == must be going ‘Out-Of-Business’… here are the signs:
o Communication Stops: They recently started deactivating accounts without any outbound communication. [Companies going OOB will be afraid to talk about their non-transparent actions.]
o Actions become Irrational: even to internal bank personnel – hence the lack of communication.
o Non-transparency == Fear: Whether it’s personal experiences like these or public ones such as the ongoing GameStop & Citadel saga – transparency becomes the ‘go-to’ / undervalued commodity in 2021.
o Fear and Greed… continue to be the 2 main reasons why customers choose TOand NOT TO do business with a vendor.
o R.I.P. The Wise Bank https://wise.com/us/ To quote Mark Cuban: “They’re going out of business, they just don’t know it yet!”
Next Week: Markets STALL before the STORM
Historical (realized) Volatility is DEAD:
- SPY vs QQQ: As the above graphs show, up-to-date historical volatility is well under implied volatility. Tip #1: BUY Volatility (VIX) because it’s inexpensive, AND when realized historical volatility continues to be under implied volatility for an extended period of time – the market often plays catch-up and this is where you see 2 and 3 sigma moves.
- The Volatility in BONDS (TLT) is 50% higher in Q’s: That tells you WHERE the action is, and WHO the participants are.
- It’s bizarre when BONDS move more than stocks: If you’re doing anything in the QQQ’s right now, be a short-term buyer of premium due to the inefficiency between low historical volatility and the much higher implied volatility. Tip #2: Over the next month,the QQQ’s will have a 2 to 3 sigma move – buy the ATM straddle and enjoy it.
Volume is DEAD:
- The S&P futures think that it’s Christmas break. Friday was our 7th consecutive day of trading UNDER 1m S&P futures contracts.
- Gamma Risk continues to churn. The open interest in derivative contracts over the next 2 to 3 weeks continues to accumulate, and that will cause instability to the marketplace in the very near future. Institutions are NOT laying off risk right now – otherwise the volume inside the S&P’s would be much higher. Institutions are betting that things will remain ‘stalled’, and are doing it on virtually no volume.
- Bond volumes are still rockin’ – which means that institutional traders are ‘moving some metal’ over in the bond market. Tip #3: Institutions are intentionally positioning themselves for a wild, downside, marketplace move.
- Retail trading is down, but not out. But it’s truly a coin-flip as to whether this market explodes higher or lower going forward. The only reason you may want to lean to the downside are the bonds. Bonds seem to be experiencing a real flight-to-quality, and that’s often not a good sign for equities.
SPX Expected Move:
- Last Week’s expected move was $48 and we remained inside of it. Next Week there is a $50 expected move, and also we’re coming into an options expiration week.
- Think of the marketplace as a power-keg of risk, and this stall is not healthy. Tip #4: In the short-term = buy volatility. In the longer-term = sell back-month premium.
Tips:
HODL’s: (Hold On for Dear Life)
- AMC – Holding
- Bitcoin (BTC = $46,800 / in at $4,310)
- Bitcoin Cash (BCH = $670 / in at $170)
- Peabody Energy (BTU = $13.44)
o Sold Aug $10 CCs for income,
- Electramericcanica Veh (SOLO = $3.47)
o Sold Sept $4 CCs for income,
- Express Inc (EXPR = $6.01)
o Sold August $5 CCs for income – selling more Sept. $6 CCs,
- Ethereum (ETH = $3,250 / in at $310)
- Franks International (FI = $2.75)
o Selling Jan $4 CCs for income,
- GME – Holding
- Grayscale Ethereum (ETHE = $30.47 / in @ $13.44)
- Grayscale Bitcoin Trust (GBTC = $38.37 / in @ $9.41)
- Grayscale Trust (GDLC = $46.70 / in @ $22.75) & buying
- Hyliion (HYLN = $8.77 / in @ $0.32)
o Sold Aug $9 and $9.50 CCs for income – selling more Sept $9 CCs,
- Infinity Pharma (INFI = $3.10)
o Sold Aug $3 CCs for income,
- Kinross Gold (KGC = $6.08)
o Waiting to sell CCs for income,
- Tellurian (TELL = $2.87)
o Selling Jan $5 CC’s for income,
- Yamana Gold (AUY = $4.37)
o Waiting to sell CCs for income.
Thoughts: 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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