(SUMMARY OF JOHN’S JULY 24, 2024, WEBINAR)
July 26, 2024
Hello everyone
TOPIC
The Great Rotation is On
TRADE ALERT PERFORMANCE
July = +5.17% MTD
Since inception = 701.82%
Average annualized return = +51.62% for 16 years
Trailing one year return = +38.93%
PORTFOLIO REVIEW
Risk on
(GLD) 8/$210-$215 call spread 10%
(CCI) 8/$90-$95 call spread 10% (profits taken on this trade on July 25)
(BRK/B) 8/$405 - $415 call spread 10%
(DE) 8/$330-$340 call spread 10%
(IBKR) 8/$110-$115 call spread 10%
(SLV) 8/$23-$25 call spread 10%
(JPM) 8/$190-$195 call spread 10% (profits taken on this trade on July 25)
(DHI)8/$150-$155 call spread 10% (trade added on July 25)
Profits were taken on (TSLA) and (NVDA) put spreads this week.
METHOD TO MY MADNESS
The cool June CPI was a game changer, according to John, assuring a slower economy and lower interest rates.
Leadership flipped from big tech to industrials, precious metals, financials, and bonds. They will all be active for the rest of 2024.
The first interest rate cut in five years in September is now a certainty.
All interest rate sectors catch huge bids.
US dollar gets dumped and could stay weak for years. (So, you should be looking to go long these plays FXA, FXB, FXE. Scale in by buying small parcels of shares at different prices. You are then building a good position)
Technology stocks will recover after a correction lasting months.
Energy gets dumped on recession fears if the Fed acts too slowly.
Buy stocks and bonds on dips.
THE GLOBAL ECONOMY – SLOWING
Fed Beige Book shows a slowing economy, assuring a September interest rate cut.
Inflation plunges to 3.0%, a new two-year low.
US Manufacturing jumps, up 0.4% in June.
US Retail sales hit a three-month high, up 0.4% last month.
Chinese GDP disappoints at 4.7% in the second quarter, missing their 5.0% target. Inflation comes in weak, at only 0.2%.
PPI rises 0.2%, up 2.6% year over year.
Consumer sentiment is at a three-year low at 66.0%, down from 68.5 as the economic slide continues.
STOCK – SUMMER CORRECTION
Money pours into equities. According to LSEG data, investors bought a net $21.7 billion worth of U.S. equity funds during the week.
Bank earnings beat, and the stocks are rising in expectation of falling interest rates, with (JPM), (BAC), and (C) reporting. Wells Fargo (WFC) was disappointed again. Buy banks on dips which have been on a great run all day.
Small cap stocks poised for major chart breakouts, after underperforming for years. Remember, 60% of these are regional banks which would love to see lower interest rates.
Netflix grows subscribers, following a crackdown on password sharing ebbed and viewer attention moved to summer sporting events including the Euro soccer tournament.
CrowdStrike flaw crashes global transportation cancelling 4,000 flights in the U.S. alone, costing airlines billions.
New China chip bans send Big Tech stocks tumbling.
(Buy NVDA if it gets to $100 and/or deep in the money call spreads/LEAPS. AMZN is cheap – buy. ROM – buy pre-election. CAT, DE, and Home builders – all buys on dips. ITB – a great candidate for a LEAPS trade on a pullback).
BONDS – HOLDING UP
Cold CPI assures September interest rate cut. This sends all fixed-income securities soaring.
Bonds holding gains even in the face of a summer stock correction.
Bonds see the biggest cash inflows since 2021.
The top ticker symbols are (SLRN), (BRLN), (BKLN), and (FFRHN).
Buy (TLT), (JNK), (NLY), (SRRN) and REITS on dips.
FOREIGN CURRENCIES – GOODBYE DOLLAR
Dollar falls against all currencies, including the Japanese Yen.
A coming decade of falling interest rates makes the dollar a big “SELL”.
The prospect of falling interest rates means that the greenback is toast.
It’s all in response to the blockbuster negative CPI.
Buy (FXA), (FXE), (FXB), (FXC).
ENERGY & COMMODITIES – RECESSION FEARS
U.S. Oil production hits an all-time high, as are energy company profits, and is producing more oil than any country in history.
The world record was set by the U.S. in 2023, averaging about 12.9 million barrels per day. And this exceeded the Trump-era record, an average of about 12.3 million barrels per day in 2019.
U.S. production of dry natural gas = new high in 2023, as did U.S. crude oil exports.
Overproduction has crushed prices and made energy the worst-performing stock market sector of 2024.
Gasoline demand has been in long-term secular demand since 2019.
Replacement by EV’s and the shift out of cars into planes are big factors.
PRECIOUS METALS – NEW HIGHS
Gold hits new all-time highs.
Silver takes a break from the economic slowdown and enters a sideways range.
Miners have started to outperform metals for the first time in years, indicating an increase in investor leverage.
A global monetary easing is at hand.
Buy precious metals on the dip because rates have to fall eventually.
Miners are expanding their operations and ramping up production as prices for the precious metal climb to decade highs.
Buy (GLD), (SLV), and (WPM) on dips.
REAL ESTATE – WAITING FOR RATES
Single Family Home starts hit 8 month low, down 2.2%.
Higher mortgage rates hurt, suggesting the housing market was likely a drag on economic growth in the second quarter.
The report from the Commerce Department on Wednesday also showed permits for future construction of single-family houses dropped to a one-year low last month, indicating that any anticipated rebound in activity if the Federal Reserve cuts interest rate in September as expected, could be muted.
This market needs actual lower rates to pick up, not just hopes of one.
Record Prices but Scarce Sales Volume. U.S. housing is unaffordable but aggregate demand continues to push prices higher.
TRADE SHEET
Stocks – buy any dips
Bonds – buy dips
Commodities – buy dips
Currencies – sell dollar rallies, buy currencies
Precious metals – buy dips
Energy – buy dips
Volatility – buy $12
Real estate – buy dips
Cheers
Jacquie
