RF's Financial News

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),

o Sold Apr $11 CCs for income,

- **Ethereum (ETH = $3,900 / in at $310)

- GME – Holding

- **Grayscale Ethereum (ETHE = $33.93 / in @ $13.44)

- **Grayscale Bitcoin Trust (GBTC = $34.42 / in @ $9.41)

- Hyliion (HYLN = $6.16 / in @ $6.01)

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

- **Loopring (LRC = $2.06 / in at $2.27)

- **Solana (SOL = $185 / in @ $141)

- Uranium Royalty (UROY = $3.71 / in at $4.41)

o Sold Jan $5 Calls for income,

** Denotes a cryptocurrency

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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Sunday, December 12, 2021

This Week in Barrons: December 12th, 2021

Look on the bright side… We learn more from failure than we ever do from success. I always wonder why people are (generally) slow to announce failure – preferring to push it off into the future. Postponing does NOT turn failure into success. Postponing simply allows you to continue pouring resources into a low probability solution. Postponing simply makes the inevitable more painful. Make choices sooner. Make choices: when you can, and not: when you have to.

Accuracy vs Precision: Accuracy points you in the right direction, gets you aiming at the correct target, and focuses you on attaining the goal. Precision (on the other hand) is a measurement. Without accuracy – precision doesn’t matter. Aka: Who cares if you’re driving at exactly 54.7 miles / hour – if you’re going in the wrong direction? Most organizations spend their time improving their precision, instead of making sure that they’re accurate in their objectives.

Most of us do NOT HAVE the Right Stuff… Most of us walk around with a mediocre toolkit – from which we try our darndest to create great work. And to make allowance for the ‘meh’ toolkit – people encourage us to have a positive attitude and a problem-solving approach to road blocks. But let’s do some math. Great coders are 100X more productive than good coders, and great coders only cost 2X more than good coders. So, why wouldn’t you upgrade a great coder’s toolkit in order to maximize their productivity – given they produce 90% of your code?

The Market:

FW, thanks for explaining last Friday’s Jobs Report to me. You see – the jobs report is composed of 2 surveys: one of employers and the other of households. The employer survey, which determines the payroll and wage figures, showed hiring slowing – including an inability to hire workers across the board. The household survey, which determines the jobless and participation rates, showed employment surging by 1.14m with many coming off the sidelines. So, employers are reporting sluggish job growth, but households are reporting a huge surge in the newly employed. The theory is that more people are going to work for themselves and other small businesses that are not part of the employer survey. U.S. Census data on new business formation shows the above chart. What was an upward trend toward small business for the last decade has become an explosion during the pandemic. Maybe we are not witnessing: The Great Resignation, but rather: The Great Formation / Entrepreneurial Resurgence.

InfoBits:

- Moderna made $7.3B and Pfizer $36B in profit… on its COVID vaccine sales during the first 9 months of this year.

- Coal prices have hit a 10-year high: China needs it and is paying the price.

- $360,000 is our new, record high median home price.

- Being single in the US is more expensive than joined… as housing, healthcare, taxes, and Social Security all play a role.

- The SEC is probing two SPAC deals… one involves former President Trump and the other is Lucid Motors.

- Jack in the Box just announced its $575m deal to acquire Del Taco… the U.S.’s second-largest Mexican fast food chain.

- Toyota plans to build a 1.3B battery plant in North Carolina.

- AMC Offers NFTs to Shareholders. Following the positive public response to a movie-themed NFT – AMC will now provide a 2nd NFT to any/all AMC Investor Connect members.

- In May, $2.1T worth of Chinese companies were on U.S. exchanges: Now, that value is closer to $1T. Last week, the SEC started forcibly delisting foreign companies that don't follow auditing requirements.

- Online grocery sales more than doubled last year… inspiring a wave of startups focused on fast urban delivery. This year 15 quick-delivery companies have raised nearly $8B. GoPuff, which launched in 2013, is now worth $15B.

- Elon Musk criticized federal efforts meant to spur electric-vehicle adoption… and expand the nation’s network of EV charging stations. “Do we need support for gas stations? We don’t. Get rid of all subsidies."

- Twitter acquired Quill… a business-focused messaging service meant to compete with Slack. TWTR is trying to cut its dependence on ad revenue.

- Intel will take Mobileye (it’s self-driving car unit) public: The move (in mid-2022) could value Mobileye around $50B.

- Volkswagen is still exploring a possible Porsche IPO… as a way to fund its shift towards software and electric vehicles.

- There’s a new EV player in town: Con Edison, Duke Energy, the TVA, and 50 other electric utilities are launching a coast-to-coast network of fast-charging EV stations along major US highways – completed by 2023.

- October job openings jumped to about 11m… with the leisure and hospitality industries seeing the biggest increase.

- Starbucks in Buffalo, NY voted to unionize: It’s a first for the coffee chain, but a sign of things to come. If unionization is successful, the domino effect would be good for employees but bad for its stock price.

- Google execs have axed any companywide, inflation-based pay raise.

- Activision Blizzard employees announced a union drive and a strike: They hope to initiate a labor change in the gaming industry.

- Google’s top trending searches for 2021 are… “Squid Game,” “Cottagecore,” “How to pronounce Dogecoin,” and “Bernie Sanders’ mittens.”

- Elon Musk, Mark Zuckerberg and others are selling stock at historic rates as the market soars and tax changes loom. This marks the most sales by insiders in decades – resembling waves of sales during the dot-com finale.

- Ford is doing such a good job in the EV truck game… that they had to stop taking reservations. Ford CEO said “We are completely over-subscribed with our battery F-150 Lightning. We stopped at 200,000, and those are hard orders.”

- The Better Corp. announced that CEO Vishal Garg… will be taking time off after an email surfaced that called an investor: “an old private equity Neanderthal, who should be taken to the shitter of his rocket ship.” Vishal sent the email to +70 investors in an effort to humiliate him.

Crypto-Bytes:

- Given banks will soon not rule the payments landscape... why are we giving them control over stablecoins? This question is being asked of our Congress.

- Just months after the U.K. told Binance to ‘get out’… the world’s largest crypto exchange said it has hired staff and plans to file for regulatory approval.

- U.S.-based crypto exchange Gemini… plans to allow users in Colombia to trade crypto through a partnership with its largest private bank, Bancolombia.

- Crypto lender Nexo will partner with Fidelity Digital Assets… to provide products and infrastructure for institutional investors.

- Payments giant Visa has formed a global crypto advisory practice… to help financial institutions develop crypto-business lines.

- Eric Schmidt (x-Google CEO)… has joined Chainlink Labs as a strategic advisor.

- Only 27% of U.S. VC dollars have gone to Bay Area startups… with Los Angeles attracting the MOST VC money in 2021.

- Coinbase is planning to integrate with Ledger hardware wallets… bringing users more options for self-custody of their crypto.

- Mastercard is teaming up with 5 startups including… smart-contracts = Ava Labs, AI-focused mobile banking = Envel, peer-to-peer savings = Kash, Bitcoin Banking = LVL, and Crypto Rewards = NiftyKey.

- MicroStrategy bought 1,434 BTC between 11/29 and 12/8.

- Coinbase is opening up DeFi to customers who want a slice of high yields earned from lending and borrowing crypto assets… starting with an integration with lending platform Compound.

- Binance is in talks with the Bank of Central Asia… about a crypto-venture in Indonesia.

- A ConsenSys-backed virtual gaming company… has launched a poker game where you can’t lose. The game is called: Play-to-Earn.

Last Week:

Monday: The big question is: "Was all the volatility and the dramatic 2,500-point DOW loss over the last three weeks – the bottom?" I'm still on the fence with that one. I tend to believe that Powell going forward with taper and interest rate hikes, is going to prove to be an Achilles heel for this market. As we get into next week, I think markets will be hoping that our FED slows their taper plans. If our FED backs down a bit, then we’ll make new highs by mid-January. But if they don't, we’re in for more volatility.

Tuesday: There's no excuse for Monday, other than to say the market just felt like it had fallen far enough for 3 weeks. Maybe someone learned that Powell will take a tamer approach about tapering. But as you may imagine, I don't see anything that hasn't already run up a lot today. I'm sitting on my hands for the rest of the day.

Thursday: Looking around, PENN and BBBY could be in play today. If a gap fill is a thing, then DOCU has a monumental 80-point gap to fill. In bottom fishing, OCGN looks like it might be curling up off of a sustained bottom. BBBY has a target entry over $20.12 and PENN over $52.95. QCOM is working on a big double top. It closed Nov. 18th at $185.62. At some point, I think I'll nibble on some of that, and see if we don't get a NASDAQ rebound and a QCOM push higher tomorrow.

Friday: U.S. stocks appear to be on pace for a solid weekly gain, but things could get dicey after the monthly CPI report at 8:30am, where economists are expecting a headline inflation rate of 6.7% YoY. This would accelerate firmly past the October reading of 6.2%, and mark the fastest rate of inflation since the early 1980s. Recent comments by our FED indicate a faster pace of bond purchase tapering from the central bank next week, as well as earlier-than-expected rate hikes later this summer. Both of those can only get quicker with a “hotter than expected” reading this morning. I found the following, pretty interesting: Across the S&P 500, corporate insiders have sold a record $63.5 billion in shares through November, a 50% increase from all of 2020. So far this year, 48 top executives have collected more than $200 million each from stock sales. That's an awful lot of selling. Any idea why so many are desperate to dump their own company shares? Okay the numbers are out. The CPI came in + 0.8% in November. YoY inflation is raging at 6.8%, the biggest number since 1982. Heading into the CPI release, the DOW was up 41. Three minutes after the release the DOW is up 117. So, they're okay with the hottest inflation number in 40 years? That's a lot of bravado. So, these numbers absolutely force Powell to taper and hike. Right now, the market thinks that's no problem. At some point the reality is going to hit. Maybe they play their charade until the first actions actually take place, but when the debt market yields start spiking higher, it's going to be quite a show. I mentioned yesterday that at some point I was going to take some QCOM and see if we get a bounce in the morning. So, I did. Just 4 mins into the close, I took some at $182.49. Right now, they're trading $184.40 in the premarket = fingers crossed.

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

J.P. Morgan Chase is predicting… that 2022 will be the year things sort of: Return to Normal. A couple of J.P. Morgan Chase’s predictions are:

- COVID: 2022 will be the year the world will achieve population immunity with the help of new therapeutics that are expected to be broadly available next year. Only 57% of the world's population has received a shot, and just 7.5% of Africa's population is fully vaxxed.

- GDP: By the end of 2022, 66 out of 77 key economic metrics (representing 96% of global GDP) are expected to be at or above pre-pandemic output.

- Global Unemployment… in 2022, will remain above pre-COVID levels.

- Stocks… have rebounded higher than their March 2020 pandemic plunge, with the S&P index more than doubling. Chase sees the markets trending higher, but at a much slower growth rate.

- Inflation… has risen worldwide, and the U.S. had one of the largest increases in its history – with consumer prices hitting a 30-year high. Inflation will continue longer than everyone expects.

- Global Supply-chain issues… will last well into 2023.

How ‘bout inflation at a 39-year high… Friday’s CPI data showed 6.8% YoY inflation – the hottest it’s been since 1982. But you know the numbers are fake – right? Since 1982 they have been changing the way they measure inflation – always trying to hide it. They’ve used both substitutions and hedonic comparisons to do so. With substitutions, if steak (for example) was soaring in price – they would simply reference a different meat that was moving less (maybe hamburger) and move on. The hedonic measures are a little more creative. If this year’s lowest grade computer you can buy is 15% faster and more efficient than last year’s – even though it costs 12% more and you’ll never use this new-found efficiency – they will say that it went down in price. Yep, only our government can tell us something is cheaper – when it actually costs us more money. Recently the BLS announced that starting in January, they are going to use consumer expenditure data from 2019 for calculating CPI weighting. So, we’re now going to weight today’s purchases based upon pre-pandemic life. Wow. FYI: Shadowstats still calculates inflation the old-fashioned way, and it’s running NORTH OF 16%.

Next Week: Q: Should you Fight the FED? A: NO!

- Next week features a FED meeting… and the press conference following will be led by our new FED Chair: Jerome Powell. J. Powell has accepted the role of FED Chairperson for the next 5 years, and will introduce a major FED policy shift.

- Last week gave us a rip your face-off rally… that ended just shy of all-time-highs. But once we touched the edge of the ‘expected move’ – the rally ended.

o The increase was led by the Monsters of Tech. 64% of the Nasdaq’s YTD gains have been produced by just 5 stocks: Microsoft (+57% YTD), Google (+71%), Apple (+39%), Nvidia (+130%) and Tesla (+40%).

o Look at market makers in terms of Market Cap * Market Volatility. For example, with Nvidia’s 53% implied volatility and her $750B market cap – she can move markets. But JPM’s $500B market cap and only 22% vol. – doesn’t carry nearly the same weight.

o This is a damaged market. Most stocks are in ‘bear market territory’, with many COVID impacted and SPAC stocks being completely decimated.

o The Monsters of Tech are the only group driving the indices higher.

- If you’re looking for a ‘bearish’ trade, consider: Microsoft, Google, Apple, Nvidia and/or Tesla. Their risk vs reward scenario leans toward risk.

o Apple’s week was flooded by retail traders as over 1m Call options were purchased at (or above) the ‘Asking Price’.

o The Risk vs Reward story (in tech) is in jeopardy. NVDA ($302) is near the lower end of its range, and is in ‘corrective territory’. Tip #1: If NVDA breaks under $300, TSLA < $1000, or AAPL’s parabolic momentum stops (30% in a month) – you could see sell side activity.

- Hedge NOW or FOREVER hold your peace.

o You can taste the downside potential that’s in the air. Everybody is talking ‘Buy-the-Dip’ and how the market NEVER goes down. But when you have only 5 stocks that are holding this market up, and 2 of those stocks are in jeopardy of breaking through their lower support levels – I would suggest you: Tip #2: Buy February, out-of-the-money VIX Call Spreads.

- The FED meets Untamed Inflation.

o The CPI / inflation number came in really hot this week – confirming the FED’s taper of its bond buying and raising of interest rates.

o Currently, we have a slightly inverted yield curve between the 20-yr and 30-yr notes. An inverted yield curve normally precedes a recession. Tip #3: Watch the 5-yr vs 10-yr yield … and if they invert, then purchase MORE February, out-of-the-money VIX Call Spreads.

- This week will be all about the FED announcement. Do not count out seeing significant volatility early in the trading week – because we also have options expiration on Friday.

o Q: When was the last time that our FED did NOT have your back?

o A: December, 2018 – when our FED ruined Christmas.

o Do NOT FIGHT THE FED when it talks about: (a) mopping up some liquidity, (b) tapering their bond buying at a more accelerated rate, (c) removing the term ‘transitory’ from inflation, and (d) raising interest rates.

o None of those are market friendly terms – so Do NOT FIGHT the FED.

Tips:

HODL’s: (Hold On for Dear Life)

- *BitFarms (BITF = $5.58 / in at $5.12)

o Sold Nov, Dec, Feb, May, Dec ‘22: $7.50 & $10 Calls for income,

- **Bitcoin (BTC = $49,600 / in at $4,310)

- Energy Fuels (UUUU = $7.93 / in at $11.29),

o Sold Dec $11, and Jan $11 Calls for income,

- Englobal (ENG = $1.65)

o Sold Dec. $2.50 Calls for income,

- **Ethereum (ETH = $4,050 / in at $310)