20201107 Current Picks

GBTC: Last traded: $17.54Characterization: Closing on a break out of a very long term Cup formation. Potential 2 Banger.
Now: Own 1/3 of planned investmentClose above $18.25: Go to 100% at closeFeb 2021 Price Projection: $31- $37

Ring (RNG) Last traded: $294.34Characterization: Potentially ending a trading range with a bias to the upsideNow: Own 1/3 of planned investmentClose above $301, buy second 1/3Close above $310 but last 1/3Feb 2021 Price Projection: $340- $360

Generac (GNRC) Last traded: $233Characterization: OverextendedIf you own: HoldIf you don’t, wait. An opportunity to buy at $222 should emerge in next 2 weeks. Feb Price Projection: $240-270

Silver 3X Bullish Exchange Traded Fund (AGQ): Last traded: $49.74Characterization:Breaking trading range above $50 w/ short term resistance at $55Now: Buy 50% of planned investmentClose above $56: Go all in.Feb 2021 Projection: $80

Tesla (TSLA) Last traded: $429Characterization: Nearing end of a bullish ascending triangle.Now: 50% of planned investmentClose above $440: Go all in.Feb 2021 Projection $525
Note: I hate TSLA. Wildly overpriced based on production. I dislike Elon Musk. So, I am compromised in that regard. In fact, the most fun I’ve ever had in the market was shorting this POS stock in Feb 20. Was a huge pay day. Lost some recently on a Long sell stop that was too tight. Caveats complete-  the chart is very bullish. If it closes over $440, I’m throwing bank at it. Let your own judgement guide ya! I am not saying TSLA is a good company- it is a stock with a very promising chart.

20200726 GSB LINK

My thesis from my last post remain unchanged. The best way to protect yourself from the coming economic storm remains Gold, Silver, Bitcoin and Chainlink (LINK).

I’ve not posted to this site in months. I’ve engaged in significant self reflection on the posts I’ve made and the opinions I’ve shared with friends and family that there was no way that the broad stock market would have a “V” shaped recovery. It did. I was undeniably wrong! What went wrong? Why was I so jacked up?

Made the third classic blundere. The first two blunders can be found here: https://www.youtube.com/watch?v=7LUUk6wVNrY

The third blunder is “Do not fight the Fed!” I think the validity of that rule will soon be suspect- but for now, it holds true.

There is a reason for the “V” shaped movement of the stock market- its false. It is based in digital dollars created out of thin air and the proclamations of the US President and the Fed Chief to do what ever it takes to prop up the stock and bond markets. The right side of the “V” that began in April is of almost the exact angle as the growth of both the US Debt and the Fed balance sheet combined. So yes! The market has scorched higher. Not due to economic activity by due to artificial and temporary intervention.

There are NO underlying fundamentals pushing the market higher- the only thing driving this nonsensical rally is the idea that somehow the US Government and the Federal Reserve have become the ‘Greater Fools.’ Why not push Tesla $1000 higher than what Elon Musk said in Feb 2020 was ‘fair value’? Why not? If the USG is going to flood the field with cash and seemingly remove risk! Tesla is not a financially viable company! But, since early April, its been a fantastic stock to own. The disconnect between reality and what has really happened dollar wise to many equity assets will soon stop diverging.

The US economy is in contraction. COVID 19 in the US has been incompetently managed. Perhaps that is too generous. The fact is that COVID was never managed as a National Response. Scientists were ignored and the entire disease somehow managed to become politicized by the Idiocracy that is modern US body politic. All the while, the Government is printing money like drunken fools. The underlying assumption is that the USG will somehow manage to get this right and the economy will resume as it usually does after recessions. That is an IF that I cannot abide.

I anticipated that between 2027-2030 there would be a shift from dollar dominance of world trade to a new global reserve currency. I suspect that shift will be much sooner- if not already starting. Why on Gods Green Earth would any nation trust the US to manage the Reserve Currency, when the vast majority of the Citizenry and the institutions of the Federal Government have quite clearly gone mental?

The polarized incompetency of the US ruling class has created the conditions for Nations that are not totally financially incompetent or as looney as the U.S.A. to seek a new form of reserve currency that is divorced from the USD and all the baggage of Washington DC. Most Americans do not understand (and will not until its lost) the significant global advantage it has enjoyed as the Reserve Currency since the end of WWII. Losing that status will impoverish most.

Not sure what that new Reserve Currency will be. I suppose nobody is. I suspect that a legitimate Free Market will decide that issue. So to hedge the bet- a little bit of old and a little bit of new… Gold, Silver, Bitcoin and Link are the best bets moving forward. The Fed and insane amounts of stimulus can only go so far- and those opiods will lose potency sooner than later. This fall is going to be ugly. Bears make money, bulls make money and pigs get slaughtered. This fall, its doomsday for the pigs. If you were smart enough to run this artificial “V” up to these levels… don’t be a pig. Take some of that and GSB-LINK that cash to an asset class that might survive the pending Reckoning.

200430 Way ahead

No charts or quips today. IF there was ever a time to be glad you are not a Mayor or a Governor of a US city or State- today is the day. Imagine for a moment we are just that. Since our Egos are large- lets be Governors. Choose your State!

First, we fellow Govs are facing a healthcare crisis of rather epic proportion. We have some decision making authority- but we all know that our Constituents have no savings. So, while closing everything makes sense- the fact is that our citizens cannot afford that. They have rent, car, tax, grocery, healthcare, cell phone, cable, gas, electric and a myriad of other bills to pay. As Governors, we cannot afford that either- since we never planned on paying unemployment benefits to 20% of our population in 2020.

Remember so very long ago (3 months) when the economy was rolling, tax receipts were excellent and it was the best economy, ever! Today, we know that the US Federal Government has no plan to help & wants to pin all the blame on our rosy expectations for tax receipts on us. Well, wasn’t our models for tax receipt based on USG projection? How/ when did we become the stupid ones? To pay what we owe- we now need to fire our State Police, teachers and other first responders. Oh, bills versus public safety- that’s not a choice anyone should have to make!

What to do? The absolute truth is we all want to keep each and every one of our Registered Voters and their kids safe and sound. Not just for the cynical reason that they are Registered Voters. But, that’s a part of the equation. Keeping the State economy shut down is (for lack of USG support) becoming untenable. The State has interest on Bonds to pay. Salarys to pay. And, landlords & mortgage companies have to get paid. Landlords must get paid simply so they can pay the banks that hold the liens on the property.

If you are a renter, be thankful! You can walk away from this mess and buy an RV or a tiny home!

There is no person more delusional (IMO) than a person with a mortgage who calls him/ herself a “homeowner”. A homeowner with a mortgage owns absolutely nothing. Zilch. They own a dream. The bank owns the home. They are nothing but a glorified renter with far more net worth… skin-in-the-game …than a renter. No one can wave a wand and wish away the pandemic. And more to the point of the post- no one can wave away the feeding of the credit (Ie, Loan / debit machine) that underpins modern monetary constructs.

The machine will hunt down and evict / foreclose on those that cannot pay the bills. Far too many “Homeowners” are about to find themselves homeless than I am willing to admit to myself. What is coming for them is awful. It is not safe to be a State or municipality, either. Bankrupcy is hunting you- relentlessly. Particularly in the Red States where the majority of taxes that fund those governments are from Property and not Sales tax. Yes, I know publicly many Republican State leaders are laughing at the fix that New York and NJ are in- but if we could waterboard them, they would admit the truth that they know the axe is about to fall on them.

Since we now know, as Governors, that the Federal Government is going to 1) Not help in the COVID fight and 2) let our States go bankrupt- we need income & Sales taxes! We are clearly all alone in the fight… so all of us Govs MUST now concede and send people back to work- many in unsafe conditions. We can pin hope on scientists and pharmaceutical companies that they will develop a miracle cure soon. Hope. It was beaten into me in Ranger School that hope is never a planning factor. That said- I hope they pull it off.

Ok- down to basic “Squad Level Tactics.” What should you do to protect you and yours?

  1. If forced back to work- demand safety.
  2. Make hard choices. Sell stuff. Get out of debt. For the love of God- do it- now! If you do nothing else! Get out of debt and do NOT invest in debt instruments, or REITs, real estate or crazy high PE companies like Tesla. Debit is a trap that is about to shut. If you own Real Estate, seriously consider deleveraging!
  3. Start a garden. Raise veggies. Its not just a huge $$ saver- its fun for you and the kids!
  4. Observe Denial. You will see it in friends and family who believe this Pandemic is not a game changer. They will truly and honestly believe their idea of “normal” will return. Bet on it, not returning. Not due to COVID directly. It won’t return because the credit markets are going to collapse under the weight of bad loans and nothing in the future will resemble the old normal.
  5. Do not fall into old bad habits. Save every penny. IF the only thing you learned by sitting at home for a month was that 20% of your spending was wasteful- you have learned a life lesson that you shouldn’t soon forget!
  6. Get a tiny bit of Bitcoin and maybe some Alt Coin ( ETH, LINK). Whatever suits your budget, your risk tolerance. There are a lot of downsides to Crypto- but at least most of them are free of inflation risk. The US Govt is printing money right now like crazy men. Simple law- supply and demand. The US Dollar is becoming, every day, more worthless. Soon STUFF will be currency.
  7. Sell dumb stuff you own to people that still think that times are soon returning to normal. All the crap you got lying around. NOT stuff you might really need. Just the ancillary things. Your heart will tell you what is needed and what is expendable
  8. Buy some silver coins. Silver is insanely cheap right now. Go to a local coin dealer and do not believe the fraudsters on TV. There are some legit internet dealers but a local guy is a resource to cultivate. At about $15.50 an OZ, you should be able to get some silver dollars at about $21 per coin.
  9. Demand on silver coins is high & it is pushing the premium (Delta between Physical silver and retail coin price higher- go with god! Remember that modern silver US dollars are 99% silver. The older stuff before the 1970s was ~75% silver. Thats because they actually were in circulation and needed to be harder. I am NOT a coin guy- so before you go off half cocked- do your own Due Dill.
  10. When Jewelry stores open in your area- buy 18K gold chain and high quality silver chain. If they are strapped for cash, the premium mentioned in #9 will be much less.
  11. ANTICIPATE an October resurgence of COVID. It will be the stake in the heart of the credit market. The 2008 crash began in March. We limped along until September. Most folks remember Sept 08. They ignored March 08. That was the warning shot. Do you remember March/ April 2020? What more of a warning shot across your bow do you need, dumbass!
  12. Every action you take, every penny you spend should be done with forethought. What is best for you? Your family? Plan, plan, plan.
  13. POST LOCKDOWN PARTY: Let all your friends and family get as stupid as they want in the coming weeks. We are either approaching Half Time or the First Period Break.
  14. Pandemics generally resemble NFL Football (2 halves w/ a halftime) or, like the Black Death… Hockey That is 3 ‘game on’ periods and two breaks. We are either at Half Time, or end of the 1st Period.
  15. If there was ever a time TO GET STUPID (forgive the Caps) this is not it! Let others do stupid. This is the time to find stuff on the shelves ( Flour, yeast, TP) that were in short supply, and may be again. Did you learn that there are times in life where stuff, and not cash, was king??
  16. Time to buy a freezer and fill it with protein. The more people party- the more opportunity exists for you to plot and plan your way ahead! When the party is over they will swap really, really, good stuff for a pound of hamburger. Read stories of the Great Depression. Men sold cars worth $1000 for a weeks worth of meat and potatoes to feed their families. A thousand back then is over 100K now. The citizens of the US have 80 years of proof they can waste anything and everything without consequence. That “proof” is about to be proven false.
  17. Buy Mason Jars and food storage systems. Buy as many as you can afford. More than you need. It will be the TP of 2021. Mason Jars are cheap now. They will be gold as families across the nation take all they have learned from the last 6 weeks of social distancing and decide to declare their own food storage independence. For 2 generations, food storage was a power held by grocery stores. Their is a shift in that cycle of dependency coming. In fact, there is no reason why anyone with access to a 10th of an acre of land ever had to be or ever should be dependent on a grocery store. See #3. See YouTube. You can do this! It will taste better and be far more fun!

Don’t waste halftime by going to the beer stand like a fan. You are not some old fat fan! You are a Player! This is your life. You pretended pre-COVID you were a fan of some game. In Post COVID world, you are either a Player or a Victim. There are no ‘fans’ of COVID-19. Take that from a guy who lost some dear friends in the past month.

Use this coming half time to make adjustments against the opponent you face. Be your own Governor. Or, choose to lose. Your choice. Either way, my best to you!

200414 May you live in interesting times

Market Bulls are correct! They are! There has been in the past no time when the overall stock market has bounced 50% from a low and later reversed lower. It hasn’t happened in the past. So, the TV pundits are now pushing stocks, loudly. That is their job. I think they are nothing but shills for virtually worthless Fiat investments. They may be right, in the short term. I suspect they are wrong in both the short, intermediate and long term.

COVID-19 is a game changer. Stay at Home orders (SAHO) implemented on a virtual Planet wide basis has destroyed industries. Its changed lives. There may be a tremendous relief rally in a few weeks as SAHO’s get lifted and people become irrationally exuberant about returning to their pre- COVID lives.

I applaud anyone that can make money in an uptrend- as long as they put at least part of their profits into physical gold and silver. There is no cure for COVID-19 at this time. No cure or vaccine coming soon- regardless of what politicians or “cheerleaders” say. China is once again locking down entire regions due to new outbreaks. As I’ve said before- I will say again- this isn’t over!

The battle for COVID-19 isn’t over. This isn’t the beginning of the end. It just the end of the beginning. The pundits are saying that only 2nd quarter earnings are going to be awful…. they promote the idea that sometime in the summer normalcy will return. They have no basis for the prediction since a situation like this has never happened when so many Average Joe’s have had exposure to the stock & debt markets.

What does “normal” look like? Right now, in the States, millions of husbands and wives are looking at all their expenses with suspicion. Three weeks locked up at home, with limited income and they are wondering about why they wasted so much money in the past. Starbucks? Really?

The longer the lock-down lasts- the more they realize how much wasteful spending was in their budgets. The US Consumer has long been hailed as the 70% driver of the economy. Now, that consumer, isn’t. That consumer is learning that he/ she has under- saved for emergencies and over- consumed on dumb stuff. The longer this lasts, the more self realization will occur. Why pay $6 for a coffee one can make at home for 25 cents?

The game has changed. But most (the dumbest people really) won’t accept that at first. First will be a post lock- down splurge. That will happen globally. Happened after the first year of the Bubonic Plague in Europe. Then, COVID returns and panic returns. People are going to get busy congregating and it will propagate the problem.

What to do:

  1. Self isolate yourselves and your family long after this seems “over”. It only make sense. Polite excuses might save the life of your or your loved one.
  2. If you have savings, buy some Silver and Bitcoin. Don’t drain your accounts- but it is prudent based on wildly out of control money printing by governments- the USG in particular. The debt markets are at a virtual crisis point.
  3. Take advantage of the “Splurge” time to restock your shelves. Clearly basic goods are far more valuable than cash. For the kids down the block that were selling rolls of TP at $5 each- kuddos!
  4. If you have a sewing machine, make masks! Not that you need them… but you can sell them on a street corner to those to dumb or lazy to make their own. $1 in material can net you a 600 to 1000% profit. Too amazing an opportunity to ignore! The modern Lemonade Stand!
  5. Look at all the positions you held in your 401, 403, IRAs and other investment accounts with a clear eye. Is this rally a chance to cut losses?
  6. For all the positions you keep- set Stop Losses on them. Take the emotion out of the equation.

I could very well be wrong. Maybe its all sunshine and roses from here on out. If so, I will never be happier to be wrong! But keep your bright, optimistic eyes focused. My projection of S&P 1750 may be right. Hope not! Keep your options on the table. Embrace your inner Entrepreneur. This disease is a tragedy for so many 10s of thousands of families. Don’t add your name to that list. Move forward proactively!

200407 Only chart that matters

Todays rally was largely accredited to the suggestion by the US President that there was a “A light at the end of the tunnel” due to encouraging news from NY State. That disregards the fact that hot spots during a pandemic shift. While we all hope and pray for NY, the fact is that seven States have not attempted a pandemic response and several others are playing lip service. So, lacking national leadership, the “Light” that the President sees is probably an inbound train.

COVID-19 is a terrible disease that has forced the world to hunker down in a way that undermines all economic activity and is creating a credit crisis that is an existential threat to the world economy. The rally today is to be ignored for now- the Fundamentals of the economy are so bad (https://www.marketwatch.com/story/investors-should-prepare-for-a-coronavirus-induced-vicious-spiral-more-than-twice-as-bad-as-the-financial-crisis-says-jp-morgan-2020-04-06?mod=home-page ) that hope is not an investment option. We’ve seen a strong technical bounce! But without further elaboration I believe any reader can imagine the underlying Fundamental problem of a virtual total shut down of 70% of the economy.

That said- lets look at the chart.

200326 Dead Cat Bounce

The last few days have triggered a significant upside rally that in some years would actually be considered a great annual return (+13%). Do not get suckered into it unless you are buying stocks you are willing to hold long term. The initial drop of over 25% in just a few weeks time is indicating that another drop up to that amount may occur in the ST future. The market has rallied on the news that the US is willing to run the national credit card to max levels. That isn’t something to rally on. It’s modern monetary theory.

Short term, it may offer some relief. Don’t think for a second that this is the last of the ballout bills. Its just the first big one of several. The party will end next week when the news that COVID and the economy remain on grim a trajectory.

Last fall I wrote that the trajectory of the failure of the US dollar had at least 10 years to unfold. That was based on the math of $1T USD in deficit spending per year for 10 years. $10T total. The US Government now appears (with published FED monitization of debt) to be on track to print $7 trillion out of thin air this year. The clear investment winners will emerge later this summer- Gold, Silver and Bitcoin.

Want a great read on what happens when a currency collapses and how it can impact you and your families health, welfare and safety? I recommend this https://www.amazon.com/gp/product/9870563457/ref=ppx_yo_dt_b_asin_image_o00_s00?ie=UTF8&psc=1

Do NOT judge this book by its cover! I was very surprised and impressed with the content. Well worth the time and money. Many might find it invaluable. This site isn’t linked to Amazon Marketplace. I’m not making a penny on the advice it holds.

Sneak Peak: I’ve bought some silver and gold coins over the years. It seemed prudent. What this author describes when he was faced with hyper inflation was that a 18K gold chain was better. When he needed to buy something, he would sell gold links. Owners of gold coins quickly became targeted as “rich” by the desperate. Besides, gold chain is cheaper than trying to buy a coin. Win- win. I had never heard that before I read this book. Probably I wasn’t paying enough attention.

200324 This isn’t over!

I got some Permi- Bull friends that keep calling a bottom and keep trying to catch this falling knife. I know and understand the temptation. Fell for it in 2000 to my regret. My notes to them:

But anything will be short lived. The Fed announcement today that they are buying bond ETFs lead to a rally.

Until people had some coffee  and said “I didn’t know the bond market was that f-ed the Fed has to get involved!” We are, as Koreans say, in deep kimchi. The credit market is failing and its massive compared to the stock market.

I think we are into this correction about where we were in Oct 2008. People seem to believe a bailout will create a V shaped rally. V’s happen in bull markets. Not in  Bears.  Bear markets last 4-9 months. This is month #1.

Last 12 years has been marked by a lot of V’s (Chart below) A decent Bull Market trains people into almost robot like programming “to buy the dip”. The last Bull we had was one for the ages! ITS OVER!

After all the destruction in recent weeks, seemingly people cannot wrap their noggins around that truth. The situation is fundamentally changed since last month. The Fed cannot save this. Neither can Congress nor Trump. Collectively we are in a rough patch and it’s portfolio  suicide to do what TV pundits suggest… “Buy the Dip!” They are paid to say that! Yes, from my perspective its OK for ME to buy a bit on AMZN, NFLX, ZM, RNG. Nibble only! Its not the apocalypse. But its not the end of the Bear, either!

The uptrend that happen in Bear Markets are called either Dead Cat bounces or Bull Traps. They often last 4-7 days. Sometimes longer. Suddenly, people are more afraid of missing out on the rally then they are of follow on losses.

Inevitably, a final fall happens that crushes their hopes and dreams. I suspect we won’t see a final bottom until after they remove the 10% penalty for early withdrawal from retirement funds.  The unemployed will demand that.  The day after that happens, hundreds of billions will head for the exit and never return. Terrified Boomers will bolt too. Then the market will make its final move down. 

That said- I’m nibbling a bit on some Amazon, NFLX, and Ring (RNG). Crime will rise. Ring is a good deterrent . Also the Gold Bugs are starting to make noise. They drove prices higher off the “Dollar is dead” argument.  They were right in 2009. They are more right now.

200319 Position Update

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech   3/19 Sold. Tech is stabilizing.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point. 3/19 added to position
SQQQ- Ultrashort QQQ$45.00$25.20$17.903/19- holding
FNGD- Inverse Fang$15.00$8.90$7.50Sold 3/18 for profit. Expect AMZN and NFLX to diverge and move higher
YANG- 3x short China$95.00$50.64$38.90Sold 3/18 for profit
Carnival Cruise Line Put $8.00$6.40$3.50SOLD 3/13  Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
Carnival Cruise Line Put $20.00$11.50$6.50SOLD 3/13 Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
SW Air Put$24.00$8.50$6.24SOLD 3/13: US Govt says its preparing to intervene financially
Disney Puts$28.00$14.10$10.50Sold 3/18 for profit
Microsoft Puts   Sold 3/19 for 22% profit. 
Visa Puts   Sold 3/19 for 87% profit
Cracker Barrel Puts$24.00$15.40$12.00Jun 19 $90  Bought 3/13 Fast casual food on primary travel routes.  This rallied on 3/19 and missed chance to buy more. Cracker Barrel is in trouble. Looking to add to position
Apple Puts$22.00$12.85$11.25Sold 3/18 for profit

200319 Buy Netflix (NFLX)

Will spare you the chart. Fundamentally, the EU is asking Netflix to slow its streaming lest it drop the entire internet architecture to its knees. NFLX has to be scoring huge customer adds in many countries.

200317 Position update

Based on a belief there is at least another -20% downside, holding EDZ, SQQQ and TECS. On days where market is up +5% or more, buying short term (14-21 day) calls on SQQQ and TECS to escalate gains. No longer trading from TECS to TECL on a hard down day to catch the next days rally attempt- at this point, the bulls have got to be getting tired of getting caught in a bull trap. At this point they are 4 times burned in 10 trading days. Have reduced Puts on Disney and others once they hit 75-100% up so those positions are now house money.

Sold YANG and FNGD. The inverse FAANG ETF has got to diverge at some point- there is a bullish case for NFLX and AMZN. Apple is the one in the FAANG most susceptible to out sized draw-down.

200315 Mondays action:

If market moves down more than 5% on 3/16, will sell YANG and reduce shorts. While there is still $$ to be made in YANG, on a global basis it’s the US stock market that is the most highly over-valued and has the most room to fall if / when draconian measures are put into place to try to get a handle on COVID-19.

Goal will be to get long TQQQ and TECL in anticipation of a sharp move higher ( probably due to Congressional action) on Tuesday.

200313 Relief Rally!!!!!

Relief rally? That is a suckers bet. A Bull Trap. Stay in cash or stable coin OR be dumb enough to follow my cynic trades. Markets today rallied on the news that President Trump finally declared a National Emergency. The lines at Costco two weeks ago would have told any dummy that something nation wide was amiss! Any American could have told you last week we have hit a crisis.

The US Government is actually going to get serious, but its far too late to stop this from pushing the US into recession. When China closed Wuhan, it gave the world weeks of time to react. To plan. To prepare. The US wasted the advantage it was given.

Federal inaction has allowed this to spread and its impact on the economy will be harsh. For all the people that will die, ten times more will lose their jobs, their houses. Student loans, car loans and personal loans will go into default. The entire debt ridden system is under threat. Bailouts are coming next. Bailouts of under performing debt @ the expense of the US taxpayer for out of control corporate debt.

Don’t buy into today’s Bull Trap where people who perpetually believe that ‘everything is awesome’ lose their money to those that are more grounded. I believe COVID-19 is the Bull Killer & we are at risk of losing another 15-25% of market capitalization. Below in a previous post are my holdings. Lost a lot on paper today. Not worried. This Bubble has found its Pin.

200313 Position changes

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech$12.00$7.82$6.50Today I’ve adjusted SL higher than purchase price.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point
SQQQ- Ultrashort QQQ$45.00$25.20$17.90 
FNGD- Inverse Fang$15.00$8.90$7.50Play on the overvaluation of Facebook, Amazon, Google & Netflix
YANG- 3x short China$95.00$50.64$38.90China may have COVID contained- but economic shock may just be getting felt
Carnival Cruise Line Put $8.00$6.40$3.50SOLD 3/13  Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
Carnival Cruise Line Put $20.00$11.50$6.50SOLD 3/13 Percentage wise, its run itself down to diminishing return. Redeploying cash during todays Bull Trap
SW Air Put$24.00$8.50$6.24SOLD 3/13: US Govt says its preparing to intervene financially
Disney Puts$28.00$14.10$10.50Oct 16 $105 put. Holding. Earnings losses in movie theaters is next to impact this
Microsoft Puts$11.25$19.00$9.50May 15@$140 Bought 3/13 Held up pretty well. Capitulation doesn’t happen until firms like MSFT get crushed.
Visa Puts$21.80$15.25$11.80May 15 @$160 Bought 3/13 Play on slowing economy- defaults will rise
Cracker Barrel Puts$24.00$15.40$12.00Jun 19 $90  Bought 3/13 Fast casual food on primary travel routes. 
Apple Puts$22.00$12.85$11.25May 15 @$250. AAPL may be reopening in China, but US market in jeopardy as new purchases placed on hold due to uncertainty. 

200311 Newsletter holdings

This is a birthday present, of sorts! These are subject to change in the event the market turns markedly bullish. On Monday, with the market down a notable 7%, some didnt realize that a +3% bounce the next day was almost a certainty. Bull markets die quickly, but not easily. Expect more downside moves with rally attempts along the way by the perma- bulls. Drunks are the last one to accept the party is over. Once they do realize its over, expect a significant culmination draw down.

PositionTargetCurrent Stop LossComment
Cash$1.00$1.00NAAll retirement plan accounts
TECS- 3x short Tech$12.00$7.82$6.50Today I’ve adjusted SL higher than purchase price.
EDZ- 3x Short Emerging Markets$90.00$50.74$35.90Emerging markets are in more jeopardy than US is at this point
SQQQ- Ultrashort QQQ$45.00$25.20$17.90 
FNGD- Inverse Fang$15.00$8.90$7.50Play on the overvaluation of Facebook, Amazon, Google & Netflix
YANG- 3x short China$95.00$50.64$38.90China may have COVID contained- but economic shock may just be getting felt
Carnival Cruise Line Put $8.00$6.40$3.50April 3 $26 puts. If hits $8, will move to a Jun/Jul timeframe in money put
Carnival Cruise Line Put $20.00$11.50$6.50Jan 15 2021 $27.5 put. Holding until bleeding stops in travel
SW Air Put$24.00$8.50$6.24Jan 15 2021 $42.50 puts. Holding.
Disney Puts$28.00$14.10$10.50Oct 16 $105 put. Holding

200301 Rethinking Equity position (Fearing Fear Post)

After doing a lot of charting over the past day, the possibility of a short term counter downtrend rally has become more likely. Things don’t fall straight down without even mild attempts of a rally and this fall off has been spectacular. Assuming the financial services folks have spend far more of their weekend trying to engineer a stabilization strategy for the market, it makes sense to expect one- however short or long lived.

The riskiest way to play a bounce is with Leveraged ETFs (3x). UPRO and TECL are candidates I’m considering. If markets in the US open with a significant bounce higher, I am going to wait until closer to 1200 to get a sense of its strength. If markets resume a downtrend, I am going to closely watch levels at 1030 to await a turn of events.

20200229 Fearing Fear itself

My thesis is that COVID-19 is an awful flu that is feared more for its unknown impact to the economy and everyday life than the actual disease impact itself. My approach to investing in this chaotic period is towards the bottom of post.

Markets hate uncertainty, and there is no historical model available to attempt to model the potential impact of this form of Coronavirus. Latest data suggests that container ships arriving in China was down 30% compared to same month last year. China is the worlds builder of “stuff”, and the US its best customer. The movement of that ‘stuff’ is clearly dwindling rapidly- which portends a significant global slowdown.

Lets look at rough numbers:

MarketChange from latest high:Why?
Dow Jones Industrial Average-13.80%Fear of unknown
Nasdaq Composite-12.50%Fear of unknown
Asia DOW Index-10%Fear of unknown
Nasdaq Europe-12.80%Fear of unknown
Gold-5.30%I don’t know
Silver-12.20%Fear of industrial demand drop
Bitcoin-19%Declines started before COVID Panic hit full force. Unknown why it hasn’t reversed. Seems to be a “sell anything with a Ask/Bid mentality”

In theory, as the global markets turned south, Precious Metals and ‘Digital Gold’ should have appreciated in value. What we are seeing in all markets currently is a flight to liquid fiat. Concurrently, markets are expecting a Central Bank global intervention reducing interest rates. The world is already awash in paper money and its derivatives! No form of currency has ever cured a disease! This is a nonsensical, “lets do something to look like we are doing something” self distructive trap.

As indicated in Para 2, the world might be facing a Supply Shock of goods. Last one I remember was the 1973 Oil Embargo, the 1979 Oil Crisis and then the impacts of the Hunt Brothers trying to corner the Silver market in the late 1970s. Supply shock brings panic and reckless behaviors out in the most rationale of people. A supply shock in tandem with a flood of paper money is a recipe for an inflationary spiral. If inflation gets out of hand, most of the governments of the world to include the US will face an existential crisis. A huge portion of the US debt is in short term notes, so inflation will significantly alter its ‘refinancing rates’. A spike in inflation may become an existential crisis to fiat currencies on a global basis.

My ST investment Equity Market Strategy is to maintain my SQQQ and TECS (inverse ETF) positions. The market should bounce up before falling further and setting a bottom. This is not a time to be hoping for a “V” shaped bottom. It won’t happen. If you are not currently Inverse, its prudent to wait for a move up before betting on further drops. Assume that this weekend that all the global financiers and bankers are trying to plan a market intervention intent on pushing indexes up in order to soothe fears. I expect a move higher in equities starting Monday. Due to the never ending stream of bad news / COVID-19 Panic, that may not work.

My ST Precious Metals Strategy: (not physical here- market related assets like SLV, GLD, PAAS, JNUG, NUGT). I was stopped out of all of my PM positions in last 2 trading days. Gold: Anticipate continued weakness. Silver: Expect heavy short selling. Remember that in 2008, $SILVER futures were pushed down to $8. If silver gets anywhere near that level, I am backing up the truck & going all in.

Crypto: Wait and see from the sidelines. Will do a BTC, ETH and LINK update this weekend. Crypto is a hopeful asset, in that these assets are not fully established as legit and for the average Joe to put hard earned money in this seems a gamble. Since average Joe is getting more fearful by the day- lets assume that new money will be unlikely to enter this space in the short term and what we will be seeing is mostly current participants trading in and out of fiat in a zero sum game against each other.

20200225 $COMPQ (Nasdaq)

The Nasdaq Composite Index closed today near session lows at 8965. While it may bump higher ST next significant support is at 8494 and then at 8069. Those would be drops of -13% and -18% from all time high. $COMPQ has already lost 9.2 % from ATH, so neither of these are a stretch.

If this was a normal correction, I would be looking for upside from current levels. The index has fallen hard and fast and usually one can expect a bounce. COVID-19 has too much of an X factor to potential news at this point that the sidelines are a decent place to sit, rather than anticipate a rapid “V” shaped turn around now.

200206 GBTC Update

Greyscale Bitcoin Investment Trust (GBTC) is a U.S. exchange based trust that represents a fractional amount of Bitcoin. For details, see: https://grayscale.co/bitcoin-trust/

GBTC has many downsides to just outright owning Bitcoin, but it has convenience and also can be placed in retirement accounts. GBTC is a derivative investment- so charting it has risks not inherent to the underlying. Because GBTC trades at a premium (that shifts constantly) to the price of bitcoin, it is a great indicator of the opinions of stock market investors.