Speculation is the new Edu-tainment? Uncle Sam, didn’t you realize what injecting $11T into an economy would do? You took us from ‘Netflix and Chill’ to collecting NFT’s w/ fractional ownership. You’re ushering in Bitcoin as the new ‘global gold standard’ in currencies. Uncle, you taught me to ‘Follow the Money’. Were you too busy worrying about China, manufacturing, and our debt crisis that you ignored crypto, blockchain, and DiFi dismantling our global financial system? You taught me: “Your competition is never sitting with you at the table, but always looking over your shoulder.” Hey, at minimum it’s edu-taining.
What is the size of your market? If you have a million Twitter followers, that means that 99.9% of the people on Twitter never heard of you. If you tell me your target market is Twitter users, I’ll tell you and your 1m followers that you have an amazing opportunity to control 0% of the market. Per SG: The good news is that you do not need everyone in your target market to be successful. The bad news is that the mere act of chasing down everyone – is probably keeping you from reaching anyone.
Will Ai eventually control the markets? I’m a strong believer in efficient market theory, and right now there is just too much money chasing very small returns. Too much money == no edge, no arbitrage, no pricing conflicts, and no clue. FB, AMZN and GOOG will always know what foods you eat, what places you visit, and what videos you watch. But there’s very little anyone can gain from knowing about my: short strangle on TSLA or my covered calls in FXI. Efficient markets are not only the world's greatest sandbox, but also the ONLY sandbox where social media trades in our favor.
The Market:
Per HL: “A. Pomp’s marketing game is strong. His traffic instincts are genius, and his content interesting. Pomp’s latest: ‘Since Jan. 3rd 2009, Bitcoin has only spent 38 days at a higher price (in U.S. $’s) than it is today. That means anyone that bought Bitcoin on 99.19% of the days since its inception – has seen their purchasing power increase.’”
The SEC will NOT oppose the Bitcoin Futures ETF applications… that are set to begin trading on Monday. That means that our government will now be complicit in two actions that have contributed to significant bitcoin price appreciation. In Q2 of 2002, Uncle Sam printed trillions of dollars right into the bitcoin halving. It’s these types of market manipulations that push investors into bitcoin (BTC) = a non-correlated, inflation-hedged asset. Per Pomp, “Bitcoin is unaware of any macro-economic forces. An open monetary, decentralized network doesn’t care if nations are printing money or interest rates are moving.” 85% of bitcoin’s circulating supply has not moved in the past 90 days – producing an extremely illiquid market. So, if demand were to increase (due to ETF approvals) – the price will rocket higher. Combine all of this with +5% inflation, and you can see many of the forces that are pushing investors into bitcoin. The equation is simple: a highly illiquid asset that will have increased access to larger capital pools – is being released into an environment where investors are scurrying to find non-correlated, inflation-hedged returns. This is a gorgeous global setup, and has been for years.
InfoBits:
- Sales of Vans have jumped 7,800%... since the debut of Netflix’s “Squid Game”.
- GM isn’t only doubling down on EVs to catch up to Tesla… it’s launching a robotaxi fleet to zoom past it.
- China’s Evergrande Group missed a payment… and the world didn’t end.
- Tesla sold 56,006 China-made vehicles in September… up 26.5% MoM, and the highest since it started production in Shanghai.
- Southwest Air left several hundred thousand passengers stranded… without a decent answer as to Why. How is their stock not $0? It must be LUV.
- Netflix announced a partnership with Walmart on Monday… which will include plush toys and t-shirts. The partnership will also include a feature that allows Netflix fans to vote on what merch they’d like to see and buy.
- Frances Haugen will meet with Facebook's Oversight Board and said… “Facebook has lied to the board repeatedly, and I am looking forward to sharing the truth with them."
- Grey Poupon (the mustard) debuted a condiment-infused wine… and it’s already sold out.
- Pharma’s COVID story is far from over... as only 35% of the world is fully vaxxed. Since unvaccinated people are 11X more likely to die from COVID, Merck’s pill could lower death rates in countries with poor vaccine access.
- In Q2, Apple’s iPhone sales were up 50% YoY: If Apple’s showing a shortage of 11% of all new iPhones – this could get ‘bloody’ for Apple’s Q4 results.
- A $12,500 tax credit is in the Dem’s $3.5T social spending bill… but only for those EV’s built by unionized automakers (Ford and GM). The credit drops to $7,500 for non-union workers like Toyota, Honda and Tesla.
- Starbucks turned 50 … and has over 40% of all the coffeehouses in the US. It is the world's 2nd most valuable restaurant brand, trailing only McDonald’s.
- A record 4.3M workers quit their jobs in August… with bar, restaurant, and retail employees leaving in droves.
- Higher inflation will increase Social Security payments by 6%... the biggest increase in almost 40 years.
- The FDA authorized Vuse vaping products as an e-cigarette.
- Louis Vuitton Moët Hennessy (LVMH) said Q3 sales of its fashion and leather goods were 38% higher than pre-pandemic levels.
- GitLab open on the NASDAQ at a valuation over $10B. HOF Quarterback Joe Montana invested $100k when the valuation was $12m. So, Joe 1,000X’d his money = nice pitch ‘n catch.
- Apple is working on making AirPods a health device… including enhanced hearing, reading body temperature, and monitoring posture.
- For the first time since the COVID pandemic began… initial unemployment claims fell below 300,000.
- Walgreens is starting Walgreens Health… which will allow many of the brand’s 9,000 stores to offer doctor’s appointments & medical tests.
- Tesla just jumped into the insurance game… offering a product that uses real-time driving behavior.
- McPlant patties are coming to McDonalds.
- Flier satisfaction increases 5% when overhead bins are bigger: Imagine the increase if you didn’t have to sleep face down on your tray table.
- For people who got the JNJ vaccine… research found that Pfizer and/or Moderna boosters will produce more immunity than another J&J jab.
Crypto-Bytes:
- Bitcoin jumped above $60,000… following a report that a bitcoin futures ETF will clear the SEC and be available for trading on Monday.
- The SEC is signaling potential approval of 2 crypto, futures-based ETFs… one by Valkyrie and the other by ARK invest.
- Within Morgan Stanley, there is muted demand for their crypto offerings… but not for buying crypto directly.
- ConsenSys’ funding discussions… value the Ethereum incubator at $3B.
- JPMorgan has concluded… “the failure of gold to respond in recent weeks to heightened concerns over inflation is a possible driver showing the return of bitcoin as the new ‘flight to safety’ investment.”
- Stripe… is assembling a crypto engineering team to chart its multi-coin future.
- Disney, Electronic Arts, and Robinhood are benefiting from NFTs. NFTs are a significant disruption to any/all sectors with exposure to IP, licensing and merchandise-related revenues.
- Coinbase’s entry into the NFT world… will open itself up to a new revenue stream – beyond exchange fees. It also tells us two things: (a) NFTs are far from dead, and (b) the battle of the blockchain networks is heating up.
- The IMF sees a “cryptoization” of the developing world. They rank crypto among COVID-19 and climate change as one of the top challenging transitions for the global economy.
- The U.S. is the world’s leader in Bitcoin mining… following the renewed crackdown on the industry in China.
- G7 finance officials outlined a set of 13 public policy principles… for the development of central bank digital currencies (CBDCs).
- Decentralized Finance (DeFi) has driven North America… to become the world’s second-largest crypto market.
- Visa is launching an NFT program… to help artists join the digital art space.
- There is ‘creeping exposure’ to crypto in equity markets. About 50 companies with a combined market capitalization of $7.1T have taken on some degree of crypto exposure.
Last Week:
Monday: We're green across the board, and I wouldn't be against PLUG > $28.28. I like the looks of RUN, but after a 3-point morning – I’ll pass. BLDP has me intrigued. It may have bottomed, the technicals are firming == a move > $14.12 would pull me in.
Wednesday: A much lumpier start to the day than I'd have imagined. The NASDAQ has been holding up the best. The energy patch has cooled off a bit today, but BLDP – is doing quite well. So, what is out there is not for the faint of heart. DATS has the attention of the Reddit crowd, so that’s a wild ride. LTHM looks good and given it's all about Lithium – a move over $26.88 is a good entry point. DOCN is up almost $5, but if it holds it could run considerably higher. Finally, little GSAT has been beaten back. I could see taking a shot at GSAT at the $1.63 level as it was was $2.80 in September.
Thursday: Is there any reason for all this joy? Well, we had 3 down days in a row, and people began talking about a new correction – so our FED ‘fixed it.’ Unfortunately, 95% of any move will come from this gap up – effectively blocking us from making a good entry on anything. Watch UPST, and AFRM as both could put on a show today. The banks have pretty much all reported and surprise – they all beat estimates.
Friday: I did not expect a +300-point morning on the DOW. The big guys are moving higher today, but too many things are stretched. A chart play that might be worth a look is BB. The technicals are curling up, and it has gotten over its 50-day. LAC is also trying to break free of some congestion at the $25.75 level. RBLX is firming up nicely, and looks like it could be worth a look fairly soon.
TW3 (That Was - The Week - That Was):
People say the darndest things… Yeah, I know but Jamie Dimon is CEO of JP Morgan and is worth over $2B. When he says: “Bitcoin is WORTHLESS” – it’s right up there with his company paying $920m in fines last year for precious metals and treasury market manipulation. A Twitter response by MO was funny:
- “Jamie, if you invested $1,000 in Bitcoin 5 years ago – it would be worth $100,000 today. Life changing money for many households.
- OR you could have invested $1,000 in a JP Morgan savings account, and it would be worth $1,075.
- REMIND ME – which one is WORTHLESS again?”
Spending power is only half about wages… with the other half being about prices. Hourly pay increased 4.6% last month, but consumer prices jumped 5.4%. Wages rose but spending power didn’t, because bacon, gas, and rent all became more expensive. Lower-income Americans would like to see prices level off and wages continue to climb – like they did for the wealthy for many, many years.
Traditional retailers own… the building, the inventory, the vendor relationship, and some data surrounding the consumer. Unfortunately, when many retailers move online, the things they used to own are either eliminated or meaningless. Earning the right and privilege to deliver personal and relevant messages prior to a sale – is at the heart of every retailer’s future. Many newbies are so busy spamming this week’s promotions that they forgot to earn much of anything.
Next Week: Should we Fear or Embrace this Rally?
Market Update:
- Bank earnings were excellent. But it doesn’t matter whether you’re bullish or bearish – you must be nervous in terms of where we are. I wonder if tech and retail earnings be as good as the banks – especially with all of the supply chain issues? Apple this week warned of not being able to produce as many iPhones, and this could be a foreshadowing for other retailers (including AMZN and TSLA).
- Oil and Energy are priced to perfection. Oil itself has been on an unprecedented rip to the upside, and if oil (currently @ $82 / barrel) hits $85 next week – it will be all over the media. High oil prices can single-handedly stall out an economy.
- Bonds / Rates continue to be a factor… and caused the rally in tech this past week. Rates rallied early in the week (and tech fell), and when rates fell later in the week – tech rallied. Once rates in the 10-year go over 1.6%, tech (once again) will go into a tailspin. So, if we see more sell-side activity in the bonds (rates moving higher) – then tech will feel that pressure.
- Our FED will begin to taper in November. The Dollar is a flight to quality vehicle. Its value declined ever so slightly last week – further igniting a rally in tech. Use the Dollar ($DXY) and the Bonds (ZB or TNX) as your market signals next week.
- We had a massive (short duration) volatility crush, but the SKEW balanced things out as it came back to life.
Trading:
- Buy volatility (VIX spreads) when you can. Tip #1: In the VIX, sell the ATM ($17 / $15 – Put Spread) in December (66 days out)… in order finance the Buying of the $25 / $30 Call Spread). This trade can be used as a HEDGE and/or a stand-alone trade.
- Long is not wrong – but use spreads in order to mitigate your risk. The market is ‘on edge’. On Friday alone, this market traded 47m options contracts. That level is huge and not retail focused. These are professionals hedging their bets.
- This volatility crush will NOT kill options premium selling - because the SKEW came back to life. Tip #2: Sell SPY premium out into January, 2022 (100 days out) – because there is still plenty of ‘juice’ left to sell.
SPX Expected Move (EM):
- Last week the EM was $80, and we moved exactly $80. The QQQ’s also hit their Expected Move almost to the penny. Next week’s Expected Move is +/- $61.50. Now, last week we moved both $62 lower and higher in one day. So please, do not sell any short duration premium, and that applies to any Covered Calls you may be selling as well. Sell that premium between 66 and 100 days out.
Tips:
HODL’s: (Hold On for Dear Life)
- Algorand (ALGO = $1.80 / in at $1.75)
- AMC – Holding
- Cosmos (ATOM = $33.67 / in at $33.18)
- Bitcoin (BTC = $61,500 / in at $4,310)
- B2Gold (BTG = $3.95 / in at $4.16)
o Waiting to sell CCs for income,
- Englobal (ENG = $2.37)
o Sold Nov. & Dec. $2 and $2.50 Calls for income,
- Ethereum (ETH = $3,900 / in at $310)
- Express (EXPR = $4.39)
o Sold Oct $5’s and Nov $5’s
- GME – Holding
- Grayscale Ethereum (ETHE = $35.22 / in @ $13.44)
- Grayscale Bitcoin Trust (GBTC = $47.41 / in @ $9.41)
- Hyliion (HYLN = $7.46 / in @ $0.32)
o Sold Nov. $9 CCs for income,
- Infinity Pharma (INFI = $2.65)
o Sold Oct $3 and Nov $3 Calls for income,
- Solana (SOL = $160 / in @ $141)
- Transocean (RIG = $4.01)
o Sold Nov. $4 Calls for income,
- Uranium Royalty (UROY = $4.74)
o Sold Nov and Jan $5 Calls for income,
- Exela Tech (XELA = $1.70)
o Sold Oct $2 and Nov $2 Calls for income,
- Yamana Gold (AUY = $4.36 / in at $4.53)
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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