Mad Hedge Technology Letter
July 26, 2018
Fiat Lux
Featured Trade:
(THE TRADE WAR'S COLLATERAL DAMAGE),
(SWKS), (ACIA), (CRUS), (XLNX), (ROKU), (SQ)
Posts
As the trade ruckus rumbles on for the foreseeable future, there are some places to deploy cash and some places to avoid like the zika virus.
The one area of tech to avoid that is clearer than daylight is the small cap chips companies.
Like a fish out of water, you should not feel comfortable holding shares in this type of equity amid the backdrop of an unresolved trade skirmish.
Although the Mandarins ironically need our chips, the uncertainty permeating around small chip firms means it's not time to hold let alone initiate new positions.
Investors still don't know how this standoff with shake out.
Until, there is more clarity going forward, give way to the next guy who can take the heavy loss.
Keep the powder dry for better times.
The long-term demand picture is healthy with IoT, cloud, and software companies never being thirstier for chips.
Short term is a different story with many of these smaller chip companies subscribing to grotesque charts that will make your jaw drop.
Take Skyworks Solutions, Inc. (SWKS) whose shares have spent the majority of 2018 trending lower and are stuck in purgatory.
(SWKS) produces semiconductors deployed in radio frequency (RF) and mobile systems.
This stock has been tainted by the horrid reality that it generates 25% to 30% of revenue from China.
If you have been living in a cave for the past eight months, technology is the battleground for global supremacy pitting two of the leading technological heavyweights in the world against each other in a fiercely contested, drawn-out conflict.
Any American listed chip company doing at least 20% of revenue in China has the same chart trajectory and that is not up.
Adding insult to injury, (SWKS) generates 35% to 40% of its total revenue from Apple.
As we approach every earnings season, the story rewinds and plays again to loud applause.
A slew of analysts appears on air condemning Apple promulgating lower iPhone sales due to surveys taken across various key suppliers giving them a snapshot into production numbers.
Each time, the analysts are proved wrong. However, the avalanche of downgrades that ensues knocks the stuffing out of the small chip companies dipping viciously, at times more than 10% or more on the headline.
One of the larger Chinese contracts that was signed by (SWKS) was with ZTE. Yes, that ZTE, the one the U.S. administration temporarily put out of business for selling telecommunication equipment to North Korea and Iran.
That was the nail in the coffin.
According to the (SKWS) official website, it has an ongoing, expanding relationship with ZTE and its chips would be "powering data cards and USB modems" in ZTE-manufactured next-generation tablets.
Luckily, the American government reversed its initial decision restoring operations to ZTE.
That does not mean it is out of the woods yet as lingering risks still overhang over this company.
This revelation underscores the massive contract risk for companies that unlike behemoths such as Micron, are desperately reliant on just a handful of contracts to propagate short-term revenue.
Effectively, the U.S. administration views American chip companies as collateral damage to the bigger picture.
The only reason the ZTE ban was lifted was because it was a prerequisite to restart talks between both sides.
If the ban was upheld, 75,000 Chinese workers would have needed to polish the dust off their resumes to start a fresh job search.
The inability to sell components to service the Chinese consumer will strike where it hurts most: the bottom line.
Chip producers did $1.5 billion in sales with ZTE in 2017. That business is in a precarious situation when a tweet can just wipe out those contracts in one fell swoop.
Acacia Communications, Inc. (ACIA) churns out high-speed coherent interconnect products.
The stock was beaten down then beaten some more in 2018.
(ACIA) revealed 30% of its $385.2 million revenue derived from one contract with guess who...ZTE.
On word of ZTE ban, (ACIA) plummeted from $40 to $27.50 in one trading day.
The disappearance of a contract this vital to survival is tough for a small business to handle even if temporary.
Layoffs and a squeezed financial situation apply unrelenting pressure on management to find an elixir.
Cirrus Logic Inc. (CRUS) pumping out a mix of analog, mixed-signal, and audio DSP integrated circuits (ICs) was trading more than $62 just a year ago.
Fast forward to today and its shares are at a measly $39.
To say Cirrus Logic's eggs are in one basket is an understatement.
(CRUS) procures 80% of revenue from Apple.
It's all hunky-dory to develop a close relationship with Apple, but in light of this unpredictable economic climate, shares have been hit hard and there is no end in sight.
(CRUS) even won a contract to help produce Apple's noise canceling and water-resistant AirPods, but that does not do anything to change the narrative.
The vultures are circling around this name and it was time to abort a long time ago.
Xilinx, Inc. (XLNX) is another small chip company and the first to create the first fabless manufacturing model headquartered in San Jose, California.
This company, founded in 1984, procures around 35% of revenue from China
The trade headwinds have set this stock in the crosshairs, being the victim of frequent 5% drops and two 10% slides in 2018.
It is a miracle this stock is slightly in the green this year, and (XLNX) is one of the lucky ones.
Skim through the rest of small cap chips stocks and the charts look the same. Dreadful with massive rally busting sell-offs.
The extreme volatility in and of itself is a sensible reason to steer clear of these names.
The headline risks that splash across the morning news spreads are a daily reminder that chip stocks, big and small, aren't out of the woods yet.
The Johnny-come-latelies must expose themselves to higher quality, unique assets which possess little or no China exposure.
For the experts, trade the volatility at your peril. But if volatility is what you want with scarcity of value, leg into Roku (ROKU) or Square (SQ) on moderate sell-off days.
________________________________________________________________________________________________
Quote of the Day
"Technological progress is like an ax in the hands of a pathological criminal," said German-born theoretical physicist Albert Einstein.
Mad Hedge Technology Letter
July 13, 2018
Fiat Lux
Featured Trade:
(THE FANGS' PATH TO ONLINE BANKING),
(SQ), (V), (MA), (AXP), (JPM)
Mad Hedge Technology Letter
July 9, 2018
Fiat Lux
Featured Trade:
(HOW ENVIRONMENTALISTS MAY KILL OFF BITCOIN),
(BTC), (ETH), (TWTR), (SQ)
If Jack Dorsey's proclamation that bitcoin will be anointed the global "single currency," it could spawn a crescendo of pollution the world has never seen before.
In a candid interview with The Times of London, Dorsey, the workaholic CEO of Twitter (TWTR) and Square (SQ), offered a 10-year time horizon for his claim to come to fruition.
The originators of cryptocurrency derive from a Robin Hood-type mentality circumnavigating the costly fees and control associated with banks and central governments.
Unfolding before our eyes is a potential catastrophe that knows no limits.
Carbon emissions are on track to cut short 153 million lives as environmental issues start to spin out of control while the world's population explodes to 9.7 billion in 2050, from 8.5 billion people in 2030, up from the 7.3 billion today.
All these people will need to barter in bitcoin, according to Jack Dorsey.
Cryptocurrency is demoralizingly energy intensive, and the recent institutional participation in crypto server farms will exacerbate the environmental knock on effects by displacing communities, destroying wildlife, and climate-changing carbon emissions.
This seemingly controversial means to outmaneuver the modern financial system has transformed into a murky arms race among greedy cryptocurrency miners to use the cheapest energy sources and the most efficient equipment in a no-holds-barred money grab.
Bitcoin and Ethereum mining combined energy consumption would place them as the 38th-largest energy consuming country in the world - if they were a country - one place ahead of Austria.
Mining a bitcoin adjacent to a hydropower dam is not a coincidence. In fact, these locales are ground zero for the mining movement. The common denominator is the access to cheap energy usually five times cheaper than standard prices.
Big institutions that mine cryptocurrency install thousands of machines packed like a can of sardines into cavernous warehouses.
In 2015, a documentary detailed a large-scale foreign mining operation with an electricity outlay of $100,000 per month creating 4,000 bitcoins. These are popping up all over the world.
An additional white paper from a Cambridge University study uncovered that 58% of bitcoin mining comes from China.
Cheap power equals dirty power. Chinese mining outfits have bet the ranch on low-cost coal and hydroelectric generators. The carbon footprint measured at one mine per day emitted carbon dioxide at the same rate as five Boeing 747 planes.
The Chinese mining ban in January set off a domino effect with the Chinese mining operations relocating to mainly Canada, Iceland, and the United States.
Effectively, China has just exported a tidal wave of new pollution and carbon emissions.
Bitcoin is mined every second of every day and currently has a supply of approximately 17 million today, up from 11 million in 2013.
Bitcoin's electricity consumption has been elevated compared to alternative digital payment currencies because the dollar price of bitcoin is directly proportional to the amount of electricity that can profitably be used to mine it.
To add more granularity, miners buy more servers to maintain profitability then upgrade to more powerful servers. However, the new calculating power simply boosted the solution complexity even faster.
Mines are practically outdated upon launch, and profitability could only occur by massively scaling up.
Consumer grade personal computers are useless now because the math problems are so advanced and complicated.
Specialized hardware called Application-Specific Integrated Circuit (ASIC) is required. These mining machines are massive, hot, and guzzle electricity.
Bitcoin disciples would counter, describing the finite number of bitcoins - 21 million. This was part of the groundwork laid down by Satoshi Nakamoto (a pseudonym), the anonymous creator of bitcoin, when he (or they) constructed the digital form of money.
Nakamoto could not have predicted his digital experiment backfiring in his face.
The bottom line is most people use bitcoins to literally create money out of thin air in digital form, rather than using it as a monetary instrument to purchase a good or service.
That is why people mine cryptocurrency, period.
Now, excuse me while I go into the weeds for a moment.
Enter hard fork.
A finite 21 million coins is a misnomer.
A hard fork is a way for developers to alter bitcoin's software code. Once bitcoin reaches a certain block height, miners switch from bitcoin's core software to the fork's version. Miners begin mining the new currency's blocks after the bifurcation, creating a new chain entirely and a brand spanking new currency.
Theoretically, bitcoin could hard fork into infinite new machinations, and that is exactly what is happening.
Bitcoin Cash was the inaugural hard fork derived from the bitcoin's blockchain, followed by Bitcoin Gold and Bitcoin Diamond.
Recently, the market of hard fork derivations includes Super Bitcoin, Lightning Bitcoin, Bitcoin God, Bitcoin Uranium, Bitcoin Cash Plus, Bitcoin Silver, and Bitcoin Atom.
All will be mined.
The hard fork phenomenon could generate millions of upstart cryptocurrency server farms universally planning to infuse market share because new currencies will be forced to build up a fresh supply of coins.
If Peter Thiel's prognostication of a 20% to 50% chance of bitcoin's price rising in the future is true, it could set off a cryptocurrency server farm mania.
By the way, Thiel also believes that there is a 30% chance that Bitcoin could go to zero.
A surge in price of bitcoin results in mining cryptocurrency operations everywhere by any type of electricity, especially if the surge maintains price stability. Even mining in Denmark, where one finds the world's costliest electricity at $14,275 per bitcoin, would make sense.
Recently, miners' appetite for power is causing local governments to implement surcharges for extra infrastructure and moratoriums on new mines. Even these mines built adjacent to hydro projects are crimping the supply lines, and consumers are forced to buy power from outside suppliers. Miners are often required to pay utility bills months in advance.
By July 2019, mining will possibly need more electricity than the entire United States consumes. And by February 2020, bitcoin mining will need as much electricity as the entire world does today, according to Grist, an environmental news website.
Geographically, most locations around the world were profitable based on May's bitcoin price of $10,000.
However, the sudden slide down to $6,556.55 reaffirms why the Mad Hedge Technology Letter avoids this asset class like the plague.
The most unrealistic operational locations are distant, tropical islands, such as the Cook Islands at $15,861, to mine one bitcoin.
If you'd like to drop your life and make a fortune mining bitcoin, then Venezuela is the most lucrative at $531 per bitcoin.
As bitcoin's nosedive perpetuates, Venezuela might be the last place on earth with mining farms.
Who doesn't like free money? Set up a few devices, crank up the power, collect the coins, pay off the electricity bill, pocket the difference and hopefully the world - or Venezuela - hasn't keeled over by then.
_________________________________________________________________________________________________
Quote of the Day
"If privacy is outlawed, only outlaws will have privacy," - said Philip R. "Phil" Zimmermann, Jr., creator of the most widely used email encryption software in the world.
Mad Hedge Technology Letter
June 27, 2018
Fiat Lux
Featured Trade:
(DON'T NAP ON ROKU)
(MSFT), (ROKU), (AMZN), (AAPL), (CBS), (DIS), (NFLX), (TWTR), (SQ), (FB)
Unique assets stand the test of time.
In an era of unprecedented disruption, unique assets' strength begets strength.
This is one of the big reasons the vaunted FANG group has carved out power gains in the business landscape bestowed with a largesse dwarfing any other sector.
As the FANGs trot out to imminent profitability by supercharging massive scale, the emerging tech environment gives food for thought.
These up-and-coming companies fight tooth and nail to elevate themselves to FANG status because of the ease of operating in a duopoly or an outright monopoly.
Microsoft (MSFT) is the closest substitute to an outright FANG. In many ways CEO Satya Nadella has positioned himself better than Facebook (FB) and Apple.
The Mad Hedge Technology Letter has pounced on the newest kids on the block offering subscribers buy, sell or hold recommendations zoning in on the best first and second tier companies in tech land.
The top echelon of the second tier is led by no other than Jack Dorsey and both of his companies, Square (SQ) and Twitter (TWTR), offer idiosyncratic services that cannot be found elsewhere.
I have devoted stories to Dorsey gushing about his ability to build a company and rightly so.
Another solid second tier tech company bringing uniqueness to the table is Roku (ROKU), which I have talked about in glowing terms before when I wrote, "How Roku is Winning the Streaming Wars."
To read the archived story, please click here.
Roku is a cluster of in-house, manufactured, online streaming devices offering OTT (over-the-top) content in the form of channels on its proprietary platform.
The word Roku means six in Japanese and it was chosen because Roku was the sixth company established by founder and CEO Anthony Wood commencing in 2002.
Cord-cutting has been a much-covered topic in my newsletters and this generational shift in consumer behavior benefits Roku the most.
In 2017, 25% of televisions purchased were Roku TVs. According to several reports, more than half of all streaming players purchased last year were Roku players.
This would explain how Roku has shifted its income streams from the physical box itself to selling ads and licensing agreements.
Yes, Roku earns the lion's share of its profits similar to the rogue ad seller Facebook.
Roku does not actually sell anything physical except the box you need to operate Roku, which earned Roku a fixed $30 per unit.
The box serves as the gateway to its platform where it sells ads. Migrating to higher caliber digital businesses like selling ads will stunt the hardware revenue part of its business.
That is all part of the plan.
A new survey conducted regarding fresh cord-cutters demonstrated that out of 2,000 cord-cutters questioned, 70% already had a Roku player and felt no need to pay for cable TV anymore.
Second on the list was Amazon Fire TV at 34%, and Apple TV (AAPL) came in third at 10%.
The dominant position has forced content creators to pander toward Roku TV's platform because third-party content creators do not want to miss out on a huge swath of cord-cutter millennials who are entering into their peak spending years and spend most of their time parked on Roku's platform.
Surveys have shown that millennials do not need a million different streaming services.
They only choose one or two for main functionality, and in most cases, these are Netflix (NFLX) and Amazon (AMZN).
Roku allows both these services to be integrated onto its platform. Cord-cutters can supplement their Netflix and Amazon Prime Video binge with a few more a la carte channels to their preference depending on points of interest.
In general, this is how millennials are setting up their entertainment routine, and all roads don't lead through Rome, but Roku.
If the massive scale continues at this pace, 2020 could be the year profitability explodes through the roof.
The next 18 months should give way to parabolic spikes, followed by consolidation to higher lows in the share price.
When I recommended this stock, its shares were trading at a tad above $32 on April 18, 2018, and immediately spiked to $47 on June 20, 2018.
The tariff sell-off hit most second tier tech companies flush in the mouth. The 5% and occasional 7% intraday sell-offs churn the stomach like Mumbai street food during the height of the Indian summer.
That is part and parcel of dipping your toe into these rising stars.
The move ups are parabolic, but the sell-offs make your hair fall out.
Well, glue your locks back onto your scalp, because we have reached another entry point.
Roku is now trading back down in the low $40 range, and I would bet my retirement fund that Roku will end the year above $50.
This unique company is expected to grow its subscriber base by at least 20% annually, and in five years total subscribers will eclipse 45 million users.
Reinforcing its industry leadership, traditional media companies such as Disney and CBS do not have built-in streaming viewership that comes close to touching Roku.
This has forced these traditional media giants to push their content through Roku or lose a huge amount of the 18 to 34 age bracket for which advertisers yearn.
These traditional players are armed with robust ad budgets, and a good bulk of it is allocated to Roku among others.
For each additional a la carte channel users sign up for on Roku, the company earns a sales commission.
As a tidal wave of niche streaming channels plan to hit the market, the first place they will look to is Roku's platform and this trend will only become stronger with time.
A prominent example was Sling TV, which showed up at Roku's front door first before circling around the rest of the neighborhood.
The runway for Roku's three main businesses of video ads, display ads, and licensing with streaming partners, is long and robust.
The one caveat is the fierce competition from Amazon Fire TV, which puts its in-house content on Amazon front and center when you start the experience.
Roku has head and shoulders above the biggest library of content, and the Amazon effect could scare traditional media for licensing content to Amazon.
We have seen the trend of major players removing their content from streamers because of the inherent conflict of interests licensing content to them while they are developing an in-house business.
It makes no sense to voluntarily offer an advantage to competition.
Roku has no plans to initiate its own in-house original content, and this is the main reason that Amazon and Netflix will lose out on Disney (DIS), CBS (CBS), NBC, and Fox content going forward.
These traditional players categorize Roku as a partner and not a foe.
To get into bed with the traditional media giants means digital ads and lots of them. In terms of a user experience, the absence of ads on Netflix and Amazon is a huge positive for the consumer experience.
But traditional players have the option of bundling ads and content together on Roku making Roku even more of a diamond in the rough.
In short, nobody offers the type of supreme aggregator experience, deep penetration of cord-cutting viewership, and the best streaming content on one graphic interface like Roku.
It is truly an innovative company, and it is in the driver's seat to this magnificent growth story.
It's hard to argue with CEO Anthony Wood when he says that Roku is the future of TV.
He might be right.
If Roku keeps pushing the envelope enhancing its product, it will be front and center as a potential takeover target by a bigger tech company.
Either way, the scarcity value of these types of assets will drive its share prices to the moon, just avoid the nasty sell-offs.
_________________________________________________________________________________________________
Quote of the Day
"Google's not a real company. It's a house of cards," - said former CEO of Microsoft Steve Ballmer.
Global Market Comments
June 25, 2018
Fiat Lux
Featured Trade:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD, OR IS THIS A 1999 REPLAY?),
(AAPL), (FB), (NFLX), (AMZN), (GE), (WBT),
(JOIN ME ON THE QUEEN MARY 2 FOR MY JULY 11, 2018 SEMINAR AT SEA),
(JUNE 20 BIWEEKLY STRATEGY WEBINAR Q&A),
(SQ), (PANW), (FEYE), (FB), (LRCX), (BABA), (MOMO), (IQ), (BIDU), (AMD), (MSFT), (EDIT), (NTLA), Bitcoin, (FXE), (SPY), (SPX)
Below please find subscribers' Q&A for the Mad Hedge Fund Trader June 20 Global Strategy Webinar with my guest and co-host Bill Davis of the Mad Day Trader.
As usual, every asset class long and short was covered. You are certainly an inquisitive lot, and keep those questions coming!
Q: What are your thoughts on Square (SQ) as a credit spread or buyout proposition?
A: I love Square long term, and I think there's another double in it. They were a takeover target, but now the stock's getting so expensive it may not be worth it. So, Square is a buy. However, look for a summer sell-off to get into a new position.
Q: The FANGs feel a little bubbly here; will they pull back on a market dip?
A: Yes, my entire portfolio of FANG options is designed to expire on the July 20th expiration. In fact, I may even come out before then as we reach the maximum profit point on these option call spreads. Then look for a summer meltdown to get back in. The FANGs could double from here. If I am wrong they will just continue to go straight up.
Q: Palo Alto Networks (PANW) has a new CEO; are you concerned?
A: Absolutely not, I love Palo Alto networks, as well as the (FEYE) FireEye. It's just a question of getting in at the right price. It's one of the many ballistic stocks in Tech this year that we've been recommending for a long time. Hacking an online theft is never going to go out of style.
Q: Is it time to sell Facebook (FB)?
A: Yes, if you're a trader. No, if you're a long-term investor. There's another double in it. You're going to have natural profit taking on all of these Techs for the short-term, and possibly for the summer, because they've just had enormous runs. If you aren't in the FANGs this year, you basically don't have any performance because almost all of the rest of the market has gone down.
Q: What are your thoughts on Lam Research (LRCX)?
A: The whole chip sector has had two big sell-offs this year because of their China exposure and the trade wars. Expect more to come. China gets 80% of their chips from the U.S. This is normal at the end of a 10-year bull market. It's also normal when a sector transitions from highly cyclical to secular, which is what's happening in the chip sector. Twice the volatility gets you twice the returns.
Q: Would you stay away from Chinese stocks like Alibaba (BABA), Momo Inc.(MOMO), IQ (IQ), and Baidu (BIDU)?
A: I have stayed away because of the trade war fears, and it was the completely wrong thing to do, because they've gone up as much as our Tech stocks, except for the last week. So yes, I would be buying dips on these big Chinese Tech stocks, because they are drinking the same Kool Aid as our Techs, and it's working.
Q: I hear that short selling of volatility is coming back; is that a good thing?
A: Actually, it is a good thing, because it creates buyers on these dips when you had no short sellers left. The entire industry got wiped out in February creating $8 billion in losses. There was no one left to cover those shorts and support the market. Of course, the result was we got a lower low down here because of that. It's always better to have a two-way market to get a real price. Now professionals are sneaking back in on the short side, which is as it should be. This should never have been a retail product.
Q: Why are international markets so disconnected from the U.S.? Many Asian markets are down heavily while the U.S. are up.
A: The U.S. stock market benefits from a rising dollar and rising interest rates, whereas international markets suffer. When you have weak currencies in the emerging markets, people sell their stocks to avoid the currency hit, and that takes the emerging markets down massively. A lot of emerging market companies have their debts denominated in U.S. dollars, so they get killed by a strong greenback. Also, the emerging markets make a lot of money selling goods into China, so when the Chinese economy gets attacked by the U.S. and growth slows, it has the byproduct of attacking all our other allies in Southeast Asia.
Q: Is it a good idea to sell everything for the summer and just de-risk for my portfolio?
A: That's what I'm doing. Summer trading is usually horrible, and now we're going into the summer at close to a high for the year, with a terrible political backdrop and possible economic growth peaking right here. So, yes, it's a good time to sit back, count your money, and maybe even spend some of it on a European vacation.
Q: When do you think the yield curve will invert?
A: In a year, and that is typically when you get a peaking of economic growth and the stock market.
Q: Is the Fed's faster-than-expected desire to raise rates good for equities, or will investors likely sell this news as quantitative tightening continues?
A: Short-term they will buy the market on rising rates, they always do at the early part of an interest rate rising cycle. They sell stocks when you get to the middle or the end of a rate rising cycle.
Q: Do you think large Tech stocks are expensive here?
A: No, I think the Large-Cap Tech stocks can potentially double here. It can take another year to year and a half to do it, and if they don't do it in this cycle they will certainly do it in the next one, after the next recession in the 2020s. So, long term you want to think FANG, FANG, FANG, TECH, TECH, TECH. You really shouldn't have anything else in the long term, except for maybe Biotech, where you can now get in at a multiyear low.
Q: Can I buy a chip company like Advanced Micro Devices (AMD), or should I buy a cloud company, like Microsoft (MSFT)?
A: I would go with the Cloud company. The innovation there is incredible. Cloud is growing like the Internet itself was growing on its own in 1995, and with chip stocks like (AMD), you're going to get much higher volatility, but more gain. So, pick your poison. But I would go with the Cloud plays.
Q: Can we watch the recorded version of this webinar later?
A: Yes, we post the webinar on our website a couple hours later, if you're a paid subscriber.
Q: What about the CRISPR stocks?
A: They are a screaming buy right now, buy Editas Medicine (EDIT) and Intellia Therapeutics (NTLA) on the dip. The paper that triggered the sell-off saying that CRISPR causes cancer is complete BS.
Q: Only 30 million in Bitcoin was stolen in South Korea so will that still have an impact?
A: Yes, but there have been countless other hacks this year and the total loss is well over $500 million. In addition, Bitcoin is now down 70% from its December top so not all is well in cryptocurrency land.
Q: Should we expect any Trade Alerts before August 8?
A: Yes, some of my best trades have been done while only vacation. I once sold short the Euro (FXE) from the back of a camel in Morocco. Another time, I bought the S&P 500 (SPY) while hanging from a cliff face on the Matterhorn. Both of those made good money.
Q: Will the S&P 500 reach new highs before the end of the year?
A: Yes, once you get the election out of the way, that removes a huge amount of uncertainty from the market. If we could end our trade war before then, I think you're looking at another 10-15% in gains from this level by the end of the year. That takes you to an (SPX) of 3,100 by the end of 2018, which was my January 1 prediction.
Q: What does all the heavy mergers and acquisition activity mean for the market?
A: It means fewer stocks are left to trade. Stock shortages leads to higher prices, always, so it is a big market positive this year
Good Luck and Good Trading.
John Thomas
CEO and Publisher
The Diary of a Mad Hedge Fund Trader
Mad Hedge Technology Letter
June 14, 2018
Fiat Lux
Featured Trade:
(THREE RULES FOR JACK DORSEY),
(TWTR), (SQ), (MSFT), (FB)
