10-29-21 Gamblingdemics: The Stock Revaluation Madness

Wallstreet has recovered the falls of October closing at highs again, European indices have finished in green, Asian market weak. Apple and Amazon are facing serious logistical problems that are holding back their profits, as are many industrial companies. Launch of powerful SPACs such as WeWork or Terran Orbital corp. The options market is highly active, generating up and down movements. Facebook is renamed. Gold is weak and oil is still in a bullish channel. Alt Season is supported by meme coin and Altair.

Despite closing the day negative, the major global indices have had a positive week. The North American DOW JONES, S&P 500, and NASDAQ Indices have finished with an average, with the latter being the best weekly performer. The S&P 500 VIX Volatility Index has increased its volatility from last week by over 10%. Wall Street has rebounded from a hesitant previous month in October, the best earnings and positioning at highs have made the month have a golden ending with DOW JONES up 4.35%, S&P 500 up 5.70%, and NASDAQ up 67.16%. The reason for this was the positive results of almost half of the listed companies' accounts. Of note is the large banking sector, which reduced its provisions in the face of the credit losses from the pandemic and a sign of confidence in the recovery. The technology sector, with the largest listed companies in the market, and its digitization of labor, education, and entertainment in the wake of the pandemic, with mixed prospects. US macroeconomic data marked the third quarter at 2%, lower than the first half of the year, associated with lower consumer spending.

The week in Europe, DAX, FTSE 100, CAC 40, EURO STOXX 50, FTSE MIB, and IBEX 35 have ended in positive, the last one being the one that has had the best development in the week.?On a monthly basis the AEX closed with an increase of 5.77%, EURO STOXX 50 5.33%, FTSE MIB 4.92%, CAC40 4.8%, DAX 3.51%, IBEX 35 2.93%.

The HANG SENG index is currently touching the 23-year trend line. This is due to the inflation crisis, energy crisis, and the problems that the Chinese market has to worry about such as Evergrande weathering its financial default. Which has turned the Chinese market to trade lower. HANG SENG closed up 3.26%. NIKKEI 225 closed the month up 0.42% and closed the day up +0.25%. The Australian index closed the month positive with a 1.92% increase, despite Friday's negative close at -1.44%. It happens in the wake of the conflicts of China's coal purchases from the Australian country, among other things.

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This comes against a backdrop where Amazon and Apple have been affected by inflation, and the distribution problem, which seriously affects the United States. Apple has made a profit of $83.4 billion, and Amazon $110.81 billion, missing the estimate of $111.6 billion.

The problem is that there is a shortage of more than 400,000 truck drivers in the United States to meet the demand for carriers, something that has happened not only there, but globally and not only in this transportation industry. According to the Wall Street Journal, even though the number of unemployment benefits claimants has dropped to its pre-pandemic level, employers are competing for employees, making it a real challenge for employers to keep people on staff, especially in low-wage jobs.

Google, has maintained good results, while Microsoft, has exceeded revenue and profit expectations, although Windows sales have been affected by the shortage of PCs and Azure has seen a cooling in its growth. Twitter showed growth on par with AMD which showed 54% growth due to demand for server and console chips.

Companies such as Royal Mail have seen their share price highly revalued during this pandemic episode that does not seem to end. Ken Fisher, living up to his name, has fished part of the shareholding of Japan Post Holdings, a Japanese banking and courier services company. These movements come as a result of the pivot of the postal sector towards the logistic transport of parcels.

The results of oil majors Chevron and Exxon Mobil offer positive results due to the increase in the value of black gold. Third Point LLC, one of Shell's major shareholders, has asked the company to split in two. The reason is that the fund believes that it should take pressure off the business of a lifetime and create a new line of business that can venture into renewables that require investment, thus attracting the right investors for each line of business.

The Federal Reserve continues to emphasize trying to control inflation, which remains elevated, although not as high as in August. Aeronautical companies such as Boeing have had a long process of recovering credibility after the incidents with the 737 MAX model and cargo planes, which have caused losses in the last quarter due to the production problems of the 787 Dreamliner, and all this happens in a context in which its main rival Airbus has not been able to surpass it in sales, which is produced by the lack of global demand for aircraft due to the affectation of transport companies in the sector.

Coca-Cola is close to closing an $8 billion deal to acquire sports energy drink brand BodyArmor according to Bloomberg, taking a 23% stake in Powerade, a brand 68% owned by PepsiCo. The stock when it began its acquisition process was valued at a hefty 43.4%.

Terran Orbital Corp, a low-orbit satellite launch company and competitor to Starlink and Virgin Orbit, will launch through a SPAC valued at $1.5 billion. Ford has been the surprise of the week doubling its profit expectations, raising its projections for the second time this year. WeWork also launched this week, via a SPAC after its disastrous IPO attempt in 2019.

One out of every two dollars in the options market on Monday and Tuesday this week went to Tesla, a sign of investor optimism about the company's medium-term results. The options market expiring this week has prompted a massive move by institutional and retail investors who have been betting on companies like Tesla, and there has been a return of bettors and euphoria. And not much seems to have changed despite Thursday, putting stocks through the roof despite being unrealistic. The massive pump-and-dump going on in companies like Tesla as a prime example of predators pumping and exploiting the rallies of companies like Amazon, Apple, etc. have caused the options game to become the equivalent of roulette.

This Delta-Hedging, which occurs inorganically, seeks only to reduce, or hedge, the directional risk associated with the price movement of the particular asset. The approach uses options to offset the risk of either a single stock or an entire portfolio. The investor seeks to obtain the status of a delta neutral variable, and not have a directional bias in their hedging of longs and shorts on an underlying.

Delta-Gamma Hedging, another strategy combines two strategies to mitigate the risk of changes in an underlying asset, having a Gamma strategy gives us a long-term view as opposed to Delta which is a short-term view. The analogy is that Delta is velocity, while Gamma is speed. Gamma decreases as an option gets deeper "in the money or ITM", and Delta approaches 1, i.e. "out of the money or OTM". That is to say, the first one approaches an attractive market value or lower than its real value and in the second case just the opposite, an overpriced market value. But in this case, we are dealing with a pure Delta-Hedging betting game that seeks to be OTM instead of the rational middle ground.

If we look at the chart of the S&P 500 earnings yield versus Inflation you can see that from 1954 to 1970 the relationship went from having the index soaring to falling to its lows, in the 90's the bubbles point as they raised the index in the real estate crisis and Leman Brother's index rose again and now we are at a point where it is at a low, exceeding the limits of what is considered safe. In other words, in 1970 we had the same situation as now, with zombies buying like gamblers without looking at the nature of the jungle we are working in.

It can be seen in magazines like Forbes, that this last quarter Las Vegas chains like "Las Vegas Strip" have issued results of 2.1 billion dollars in profit on gambling in their casino. The highest quarterly result in the history of the city of Las Vegas. This is just a symptom of the money they have given away at the FED to the citizens of the country and they have taken to spending it this way. This just represents the sensation of mindless bullish Euphoria. Profits made for free, this helicopter money only helps to generate a false sense of security, excess, and frugality. This is also part of what has pushed Cryptos upwards, as yet another gamble in this zombie mentality of flight forward for some and as a potential safe zone for others.

I call it: GamblingDemics, the mindless and senseless flight forward that has caused inflation to continue to rise unchecked, and people to gamble their wages unchecked in a situation of abundant liquidity with free money checks that make people addicted to the game of gambling to win more money with that free money that causes the gap in the valuation of jobs, better or worse.

This is reflected in companies like Facebook (will change to METAVERSE: MVRS), which has done a brand Re-Branding to integrate all of its signature concepts into a single name with a concept that allows Facebook, Instagram, WhatsApp, and Oculus to be integrated into an ambitious experience in its metaverse that integrates offerings through Connect, sports apps in Oculus, and other features such as the Horizon Home interface to create a virtual environment in which to socialize and work within the metaverse in a Web3 environment, where NTF’s are part of the plan and will make it easier to sell limited edition items and display them in their digital spaces, and resell them securely. Zuckerberg has stated that "the metaverse is the next frontier" and according to decentralized service provider DappRadar, the metaverse could not and should not be controlled by a single entity. This move has to do with the circumvention of the American Billionaires Tax.

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The currencies this week have been led with the Dollar revalued against all currencies except for the currencies of Oceania. It has led the changes USDMXN with 2.13%, AUDUSD 0.75%, USDJPY 0.42%, NZDUSD 0.11%, USDCAD 0.06%. The declines have been led by the weak euro against the dollar EURUSD -0.76%, EURJPY -0.33%, and the pound GBPUSD -0.39% and EURGBP -0.33%.

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Gold (XAUUSD) values this week have fallen from $1,798.15 to $1,771.92 closing at $1,784.85. The decline, which began in the European session, came as gold futures for December delivery fell 1.3% to $1,778.60 an ounce. The consumer data fueled concerns the Fed's monetary policy to combat rising inflation has caused the 10-year bond yield to rise to 1.6190% and the dollar to gain 0.9%. Although gold is seen as a hedge against inflation, stimulus tapering and interest rate hikes tend to push up bond yields and the dollar, weakening gold's appeal as it does not generate interest. (Reuters) Philip Streible of Blue Line Futures in Chicago has added that funds become active sellers whenever gold crosses the key $1,800 per ounce level. Silver (XAGUSD) has fallen to $21,411 closing at $23,889.

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Cryptos have been booming this week. Bitcoin (BTCUSD) has started Monday touching $63.666 falling on Wednesday to $58.056. On Friday it has closed the bearish gap closing at $61.600. Ethereum (ETHUSD) hit an all-time high of $4,459 on Friday, coinciding with the release of Altair, its new upgrade, closing at $4,178.38. This is up around 46.6% since the beginning of October, with a previous all-time high just 8 days ago at $4,308.48.?

All of this has come at a time of frenzied craze for AltCoins and the Dodge Coin Shiba Inu token that has risen over 300% in a short period, leading its developers to create their blockchain network. This has caused meme-coins to sweep the dog pack into mass adoption. Also the Squid Game series NTF token has seen a meteoric rise this week. (Cointelegraph) U.S. Senator Bill Hagerty has called on the director of the Consumer Financial Protection Bureau, to try not to stifle innovation in the crypto arena, as it offers promises of innovation and financial inclusion compared to china which has done the opposite. Ubisoft has reported its interest to invest in the creation of blockchain games is another of this expected news.

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Next Thursday the organization of oil-exporting countries and their allies along with Russia (OPEC+) are expected to add 400 thousand barrels to monthly production between now and April 2022 to meet the demand for crude oil.?Crude oil futures have been trading in the $84-82 range, closing at $83.25 per barrel of West Texas. Brent has touched $82.58, rising to $84.27, closing at $83.66.

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Happy Trading and Happy Friday!

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This article only expresses my opinion and under no circumstances represents an investment recommendation, but a purely educational document.

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