This Week in Barrons: July 7, 2024

• It’s an old trick…? give out the perfect fake number, and then a month or two later (when nobody’s looking) revise it toward the real answer.? Case-in-point, it was reported on Friday that April’s job growth was revised lower by 57,000 jobs, and May’s declined by 54,000. ?It seems our government delivers employment numbers that are much rosier than reality.? Even June’s report included 59,000 fake jobs added as a result of their own ?birth/death model.? Since June 2023, the U.S. has added 1.8m part-time jobs, and LOST 1.6m full-time jobs.
• GOATs don’t seem to try very hard.? They understand their assignment, and don’t confuse effort with results.? They’ve learned:

-?????? To focus on the work at hand,

-?????? To not take on more than they can handle,

-?????? To ignore perfection,

-?????? To realize that questions are far more important than answers,

-?????? Practice, practice, and more practice,

-?????? To consistently add incremental challenges, and

-?????? That panic simply leads to more panic.? Just stop, and begin again.

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The Market:

• I’d like the ‘Other’ choices please.? Our fear indices are hovering near historic lows.? Somehow, we believe that we can mitigate risk through inaction.? Instead, we should be using improved communication, sharper focus, fewer choices, and leadership.? At this stage, asking to see: ‘other sizes’ or ‘other toppings’ – is not the way to choose a new leader.
• Footwear Faceoff vs Sneaker Showdown…? Nike is still the world's most valuable shoe maker, but rivals are stepping up their game. “Chunky shoe” Hoka (owned by?Deckers),?Asics,?New Balance,?and On?have all gained traction – doubling their market share since 2020.
• ?Lessons from a GOAT commodities trader – Rick Rule:

-?????? The cure for high prices is: High Prices.? The cure for low prices is: Low Prices.

-?????? The opportunity to buy low depends upon others making irrational sell decisions.

-?????? If you're NOT a contrarian, you will be a victim.

-?????? Volatility allows you to buy things cheaper.

-?????? Become a student of history, because expanding your vision improves decision-making.

-?????? The 8th wonder of the financial world is compounding.

-?????? Your real journey doesn't start until you fail.? So, fail quickly.

-?????? You were given 2 ears and 1 mouth – use them in that proportion.?

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Things I use:

?I’m a subscriber and user of TheoTrade.? Don Kaufmann and his team are excellent traders and educators.? They will make you smarter, by using their trades to make you money. ?Earn while you learn. ?Please, try it out for free yourself … R.F. Culbertson.??

[ Learn about TheoTrade here… ]

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InfoBits:

• Americans are increasingly hunting for deals.? Chinese titans Shein and Temu are gaining US market share with ultra-affordable offerings. ?Even Amazon is launching a new discount section that will sell unbranded goods from China.
• Bank of America reports a 25% increase in market volatility…? from July to November in election years.
• Disney’s “Inside Out 2”… ?became the first film to top $1B at the global box office since “Barbie.”
• Homebuilding stocks are breaking down to 5-month lows…? warning of further downside.
• The US services sector contracted in June at the fastest pace in 4 years.
• AI audio company ElevenLabs just announced… ?a new ‘Iconic Voices’ feature.? It allows your favorite books to be read by AI-generated: Judy Garland, James Dean, Burt Reynolds, and Sir Laurence Olivier.? [Voice actors just got a whole-new-level of competition.]
• President Biden’s dilemma could be a study in War Games: ‘The only winning move is: Not to Play.’
• Microsoft has initiated another round of layoffs…? It’s third this year.
• The #1 U.S. beer is Modelo…? Bud Light gave a bad taste to some consumers, that could take a decade to go away.
• Former House Spkr. Nancy Pelosi, just bought… ?10,000 NVDA shares, and 20 (deep in the money) call options on AVGO due to expire in a year.
• The UK’s Labour Party won a decisive election victory…? ending 14 years of Conservative rule defined by austerity, Brexit, and an embattled prime minister whose tenure was shorter than the shelf life of a head of lettuce.

??

Crypto-Bytes:

• Above is the daily chart of Bitcoin in 2024… ?and last week it did the unconscionable – it dipped below the $58,500 support level. ?With Germany moving more of their BTC to exchanges, and Mt. Gox moving billions back to individuals – prices are making new 3-month lows.
• The ‘hash rate’ is…? a metric that quantifies the Bitcoin network's computational power.? The higher the ‘hash rate’, the more computing power there is powering the blockchain.? Whenever you have a hash rate trending downward (as it is now), it means that bitcoin miners are turning off their rigs due to the challenging market conditions.? These drops in the hash rate often coincide with market lows.
• Short-term Holders Profit Ratios are less than 1…? signaling that traders are selling BTC at a loss.? Historically, that has been a great time to be a buyer.
• Increased crypto market volatility should be expected… ?for the second half of 2024.? But I would not expect the customary parabolic bull market response.
• Uniswap (UNI) wallet users can now skip the middleman… ?and buy crypto directly with fiat. ?That means you can use Apple Pay, Google Pay, or your credit card to dive into DeFi.
• Bitcoin dropped hard below its trendline on June 24…? and now analysts are watching the 200-day moving average (near the $58,500 value area) as its next critical hurdle.

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Things I read:

?“There’s no organizational problem that increased revenue?won’t cure. If you wish to increase sales, read?Sunday Sales Delight?-?it will definitely be worth your time. ?Please, try it out for yourself … R.F. Culbertson.????

[?Learn about Sunday Sales Delight here…?]

TW3 (That Was - The Week - That Was):

• Tuesday:? The degree of S&P stock concentration is extreme; the top 10 companies have the highest weight in the index since 1929. ?Meanwhile oil has been climbing to multi month highs and gasoline is at its highest levels since early April.?
• Friday:? The Tech sector’s (XLK) YTD gains are +20%, with Communications (XLC) next at +18.5%, and Financials are third at +10.5% YTD.? The Jobs Report is out and we made 206k new jobs in June, but revised the previous months down -110,000 jobs – wow.? The unemployment rate moved up to 4.1%, and the labor force participation rate also ticked a bit higher. ?To some extent a weakening jobs reports means it's easier for the fed to cut rates.? Some ‘on-the-radar’ stocks include: CDE, FIP,?and ICE.

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Morgan Moments… ?

• Bitcoin is down 13% in the space of four days… ?and most altcoins have fallen into pretty disastrous drawdowns. ?Mt Gox is distributing $9B worth of Bitcoin over the next three months.? I need to see Bitcoin back above 58,500 in the short-term, then a recovery above 60,000. ?I think a failed breakdown and a recovery back above these levels is the higher probability outcome, but until that happens – I'm watching from the sidelines.
• In Options Trading = Timing is everything.? If you are buying premium then you want to give your trade just enough time.? Some people think buying more time is better, but you are paying for that additional time.??If you think a move is going to happen within two weeks, why do you need to get options that expire in three months? ?This may sound simple but you’d be amazed how many traders fumble a trade by getting the idea right but the timing wrong.? Don’t believe that more time is better or worse.? Make sure your option trades match your thesis.
• Hedra Labs now transforms static photos… ?into dynamic talking images, bringing your selfies to life with synchronized speech and facial animations.? For best results, use a photo where you're not smiling, and where there is a high contrast between you and the background.

1.?? Go to Hedra Labs'?website?and create a free account.

2.?? Upload a high-quality, clear photo of yourself facing the camera.

3.?? Generate audio by typing text or by importing your own audio file.

4.?? Click "Generate video" to create your talking photo.

5.?? Preview, download, or share your special selfie!

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Next Week: It remains a 1-Stock Market…

• Bkg:? While stocks continue to happily head higher and cyclical bull market signs are everywhere, the period of volatility compression that we have seen – may be coming to an end. ?Seasonality, geo-politics, and longer-term indicators all point to increased volatility / VIX.? And then there’s Bitcoin losing $15,000 in 2 weeks – ouch.
• Tesla saved the NVDA out of this market…? The Tech/AI bifurcation continues in this marketplace.? Last week we rotated from NVDA to TSLA and it exploded higher for a +4 std. deviation move.? When you volatility weight Tesla, it carries the equivalent marketplace weight of AAPL. ?Then TSLA passed the torch to META, and META doubled its expected move higher.? Over one quarter of all options traded are with Mag-7 companies.? It’s clear that tech ignites the rally, and everything else follows.
• Why META and Why NOW?? To keep the dispersion trade alive, we’re seeing companies within the Mag-7 rotate marketplace leadership. ?The current trade has large hedge funds selling premium in the SPX – in order to finance their options buying within one of the Mag-7 companies. ?We’re seeing actual moves within some of the Mag-7 companies that theoretically should never happen – strictly due to the volume of the hedge fund option buying.?

Tip #1:? Bitcoin tanks – What are the implications?? (a) Gold is breaking out to the upside, (b) Capital is rotating into Mag-7 Tech/AI names, and (c) watch out for other underlying energy assets such as oil.?

Tip #2: Go Long Volatility…? by buying out-of-the-money call spreads – 30 to 60 days into the future – and waiting for a government data drop / geo-political event to act as your catalyst.

• SPX Expected Move (EM):

o?? Last Week’s EM was $58, and we moved $110 (2 std. deviations) – based largely on the moves of META + TSLA.

o?? Next Week: $63 EM. ?We just moved $110 last week – in only 3.5 trading sessions. ?This reeks of volatility suppression – take advantage of it.

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TIPS:

Tip #3:? RDDT is moving to all-time-highs, and it also causing a lot of shorts to get squeezed.? The all-time-high + short-squeeze combo makes it a BUY in my book.? [ BOT the October: +$70/-$100 Call Spread ]

HODL’s: (Hold On for Dear Life)

-?????? 13 to 17-Week Treasuries @ 5.44%

-?????? Physical Commodities = Gold @ $2,399/oz. & Silver @ $31.5/oz.

-?????? **Bitcoin (BTC = $57,650 / in at $4,310)

-?????? **Ethereum (ETH = 3,010 / in at $310)

-?????? HROW – Harrow Health == $22.1 / in at $12

-?????? **IBIT – Blackrock’s Spot Bitcoin ETF ($32.2 / in at $24)

-?????? INDA – India ETF ($56.66 / in at $50) / BOT Nov, +$53 / -$55 Call Sp.

-?????? **MARA – Marathon Digital = ($20.17 / in at $12) / Sold Sept $30 Cov-Calls

-?????? **RIOT – Riot Bitcoin Mining ($9.6 / in at $12.5) / Sold Sept $16 Cov-Calls

** Crypto-Currency aware

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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