I worry about running out of time. I worry about: Google, Facebook, Comcast, AT&T, Amazon, Apple, and every other U.S. company that has my name and phone number. I’m not worried about China or TikTok. Our banking system is on the fringe, we have huge inflation and layoffs, there are crazy dictators threatening nuclear war, we have too many guns on our streets, the world is dumping the U.S. Dollar, and our politicians have lower IQ’s than stuffed animals. So, our government’s response is to put TikTok on the ‘extinction bubble’ because they’re great at what they do. Every marketing budget only wants to spend money on TikTok. U.S. mega-cap tech has been humiliated to the point that they’re throwing cash at lobbyists to kill TikTok. Hopefully, we won’t let the whiners win.
Of the thousands of ways to express encouragement, enthusiasm, and support… most require no inconvenience. Just imagine if you uttered 1 more ‘At-a-Boy’ per day, or ‘I can’t wait to see how this turns out’, or ‘I know someone who really needs to hear about this’. If we want things to get better, why aren’t we encouraging all of those people who are trying to make things better.
As banks continue to un-bank… Apple keeps moving into everyday financial services. Per HL, it’s perfect that Goldman is behind ‘Apple Pay Later’ because we know APPL + GS will solve all of the issues with payment processing and lending. Apple Bank is inevitable and the current banking crisis is a great cover for Apple to push further into financial services and banking.
The Market:
The bottom line: It's not about whether the Equally-weighted version of the S&P500 is outperforming or if it's the Cap-weighted version that’s leading. It's all about the Dollar. Per JC: a weaker Dollar is consistent with higher stock prices, and a stronger Dollar puts pressure on stocks. When you overlay the U.S. Dollar Index with the Short S&P500 ETF (see above) – notice how they look exactly the same: When the Dollar is falling, so is the Short S&P500 ETF – aka stock prices are rising.
- Interest Rates (rising vs falling) determine which types of stocks will outperform.
- The Dollar (rising vs falling) determines whether stocks will go up or down.
InfoBits:
- Over 118,000 U.S. tech workers… have been laid off thus far in 2023. Disney just cut 7,000 and McKinsey cut 1,400. Where are college grads getting jobs?
- #AI-of-the-Tiger: Hey Zuck, 3 years ago half of America got their news from Facebook, and now it’s AI bots. Now that’s a missed trend.
- 50% of American employees… have a 2nd job to supplement their income.
- Renewable energy surpassed coal in 2022… for the first time in the US.
- Cal-Maine, the US’s largest egg producer… saw quarterly profits increase 800% YoY. Their chickens were un-affected by avian flu, and the average price of a dozen eggs just hit $4.11. Move along, no inflation to see here!
- 43% of Americans said that money is ‘very important’ to them… ranking it higher than patriotism, religion, and having children.
- Saudi Arabia will build China an oil refinery for 80B yuan. Saudi also said that they’re okay with selling oil in Yuans.
- Instead of the U.S. Dollar… China and France completed the first LNG gas trade using the Yuan – ending the reliance on the U.S. energy-dollar.
- Instead of the U.S. Dollar… Columbia and Brazil have agreed to use their national currencies for bilateral trade – instead of the U.S. Dollar.
- “AI is cheap… and once good tech becomes cheap – it proliferates.”… per HL.
- “During Q1 2023… investors poured $508B into money-market funds. It was the largest quarterly inflow in the last 3 years.” … per B of A.
- The Nasdaq just closed its best quarter since 2020.
Crypto-Bytes:
- The Nasdaq will launch its own crypto custody offering by June. Traditional finance titans are making a play for the “future of finance.”
- SEC Chair Gary Gensler will be asked… to explain his actions toward the crypto industry by the House Financial Services Committee on April 18.
- Ripple Labs is discussing a resolution with the SEC. When a settlement occurs, it will boost confidence and demand for XRP by clarifying its legal status.
- Most of the top 25 cryptocurrencies… are close to making a technical trend-change – that could cause their stocks to explode higher.
- Gemini / The Winklevoss twins… are fed up with U.S. crypto-regulations, and are launching their own international, crypto, derivatives exchange.
- Crypto wallet company Ledger… raised another 100m euros in new funding.
- The SEC is seeking $2.4B in funding… to go after the ‘wild west of crypto’. Honestly Gary, no amount of money will keep you up-to-date with crypto.
- Bitcoin had its best quarter since 2021… rising over 70% YTD.
TW3 (That Was - The Week - That Was):
Monday: All is NOT well in bank-land, and there's a ton of zombie banks surviving day to day via the FED window. Gold and silver are down a bit, because if the banks are going to be fine – nobody needs hunks of metal (just kidding). BLNK looks like it’s constructing a bottom, and taking out $8 gets me terribly interested.
Tuesday: The S&P needs +35 green points to break-out and about -45 points to break-down and fail the 200-day. In other words, there is ZERO trend in place. Watch gold and crypto.
Wednesday: Bitcoin up to $28,400 as investors shrug off regulatory crackdowns. Micron’s (MU) earnings announcement proved that it was the single WORST quarter in their history – YoY down -60%. But MSFT. AAPL, NVDA, META, and GOOGL are all up today. It feels like our FED is goosing things to keep the wheels from falling off.
Thursday: Right now, markets are in full-on, risk-off mode as no news is good news. No other banks have failed in the past 2 weeks. Our FED raised rates another 25bps last week, but markets are thinking that it could be the last hike before rate cuts. The Fed has of course said the opposite. Tomorrow’s PCE data is our FED’s key inflation metric.
Friday: The core PCE inflation indicator came in +0.3 MoM, which was a tenth lower than expected. Incomes were up a bit hotter. So, YoY we're still at 4.6% which is pretty far away from their 2% goal. The market is cheering things on, because ‘inflation is falling’. Will this number stop our FED from hiking? Nope. While goods inflation may be trending lower, services inflation continues to trend higher. Our FED has explicitly said it’s worried most about the services component of inflation, which just hit 35-year highs. Shifting to manufacturing activity, the Chicago Purchasing Manager’s Index (PMI) contracted for the 7thstraight month. Michigan Consumer Sentiment fell in March as recession worries rose – especially with new college grads.
AMA (Ask Me Anything…)
AP got me thinking: TikTok won fair-n-square. The app is highly addictive and the reason why so many people are using it is because the product & experience are superior to what others offer in the marketplace. TikTok won by outcompeting their competition. This is important to admit because it highlights a giant risk to the U.S. We need to stop complaining and start competing. The best defense against the next TikTok is not to use our government to legislate against it, but rather to out-innovate our closest rivals. We need to learn how to compete and especially how to win – instead of settling for 2nd place. TikTok kicked our ass in the free market and now we are seriously debating banning it – aka taking our ball and going home. Jeez, Come on Man. Learn from history, don’t repeat it.
Next Week: R U Chasing the Rally?
Overbought Insanity… even with the ‘window dressing’ mentality, last week’s market was a Black Friday type of environment – due to a record amount of short positions being squeezed. [The CME came out last week and said it was showing the largest number of short positions on record.] We are seeing a concentration of liquidity into a handful of mega-cap tech stocks – pushing them into over-bought territory (aka. META, MSFT, NVDA and TSLA). In APPL alone, $500B of market-cap was added to its value in Q1 2023. Currently, big-tech IS the market, and has exceeded the upper-end of last week’s expected move.
Financials & Energy were up last week, but are still lagging… and not over-bought. If this rally continues, then we should see a rotation out of big-tech and into the financials and energy sectors. However, if the financials (XLF) and the energy sectors (XLE) begin to roll-over and move lower – this market will feel very heavy in a heartbeat.
Year-to-Date… Energy is down -2%, Financials are down -6%, the S&Ps are up +7% because the NASDAQ is up +21% YTD. Both Gold and Bonds appear to be close to breaking-out, and that’s not making me feel ‘warm-n-fuzzy’ over stocks. The 4211 level on the SPX is critical in-so-far that it acted as resistance for the 3 previous rallies.
Trades:
- Tip #1 = In Semis, BUY ON > $75
- Tip #2 = In Tech, BUY MSFT > $275 / SHORT META / SHORT NVDA
- Tip #3 = In Commodities, BUY GOLD > $2,000/oz.
- Tip #4 = In Commodities, BUY OIL > $75/barrel
SPX Expected Move (EM):
- Last Week’s EM = $89, and we exploded higher for +$135 SPX points.
- Next Week’s EM = $61 (4-day week), but we moved over $60 on Friday. Do NOT sell short-dated options.
TIPS:
I suspect this rally will end soon, but we could add +800 more DOW points and +100 more S&P points before the next wall of resistance. I don’t think we’ll get there.
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $1,987 & Silver @ $24.2/oz.
- 30, 60, & 90-Day Treasuries @ 4.6 to 5.1%
- **Bitcoin (BTC = $28,700 / in at $4,310)
- **Ethereum (ETH = $1,830 / in at $310)
- DNN – Denison Mines ($1.09 / in at $1.32)
- GLD - Gold:
o BOT: Apr 28: +185 CALL / -187 CALL for $0.92 Debit
- GME – DRS’d and HODL
- HPQ – Hewlett Packard:
o BOT: Apr 14: +28 CALL / -29 CALL / -26 PUT
o BOT: Apr 21: +26 PUT … all for $0.22 Credit
- Innerscope (INND = $0.005 / in at $0.0052)
- MESO – Mesoblast Ltd. ($3.29 / in at $3.60)
o SOLD July $5 CALLS for $0.85
- NFGC – Newfound Gold ($5.00 / in at $3.75)
o SOLD the April $5.00 CALLS
- WMT – Walmart:
o BOT: Apr 14: +138 PUT / -139 PUT / -147 CALL
o BOT: Apr 21: +147 CALL … all for $0.08 Debit
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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