November 22, 2024
(SUMMARY OF JOHN’S NOVEMBER 20, 2024 WEBINAR)
November 22, 2024
Hello everyone
TITLE – Trading One Uncertainty for Another
THE MAD HEDGE TRADERS AND INVESTORS SUMMIT
December 3-5, 2024 (9:00 am – 5:00 pm EST
24 professionals will be sharing their knowledge and expertise. They will be showing you their favourite trading strategies in all asset classes, including currencies, commodities, precious metals, and energy.
Lots of prizes.
Sign up for the link we will be sending out shortly.
Attendance is free.
PERFORMANCE
November - +15.01 to date
Since inception - +744.68%
Average annualized return - +53.02% for 16 years.
PORTFOLIO
Risk On
(JPM) 12/$210-$220 call spread 10%
(NVDA) 12/$117-$120 call spread 10%
(TSLA) 12/$230-$240 call spread 10%
(TSLA) 12/$250-$$260 call spread 10
(TSLA) 12/$270-$275 call spread
(MS) 12/$110-$115 call spread
(C) 12/$60-$65 call spread
(BAC) 12/$41-$44 call spread
(VST) 12/$115-$120 call spread
Risk Off
No positions
THE METHOD TO MY MADNESS
The election brought a total strategy flip.
All interest rate plays were dumped, including gold, silver, homebuilders, bonds, and REITS.
US dollar rockets at higher rates for longer.
Technology stocks fade on threats to international business.
Energy swings lower on coming overproduction and oil glut.
Buy the election winners, sell the losers.
THE GLOBAL ECONOMY – IN TURMOIL
Fed cuts interest rates by 0.25%, taking the overnight rate to 4.50%, but future rate cuts are now in doubt.
CPI comes in line at 2.6%, up 0.2% in October. The Core CPI accelerated 0.3% for the month and was at 3.3% annually.
Retail sales come in hot, up 0.4% in October.
PPU roses 2.4% YOY, some 0.2% in October.
China stimulates again with a $1.4 trillion package while signaling more economic support would come next year.
University of Michigan Consumer Sentiment Index comes in hot.
US Wholesale Inventories turn down in September amid a sharp decline in motor vehicle stocks.
STOCKS – THE NEW GAMES
Get out of all falling interest rates plays, like homebuilders, real estate, home repair, precious metals, and fixed income.
Get out of international commitment plays like defense and any exporters.
Go into deregulation plays like brokers, banks, money managers, and nuclear.
Defense stocks swing lower on Peter Hegspeth Defence appointment.
JFK Health & Human Services Appointment crushes Pharma stocks.
Morgan Stanley reverses bearish tilt.
Now predicting that the S&P 500 will reach 6,500 and possibly 7,400 in 2025.
Investment Guru Ron Baron sees Tesla at $1,200 in 5 years and at $7,200 someday.
NVDA's target could be around $180.
May see Tesla hit $500 in 2025.
BONDS- BEAR MARKET
Inflation fears are the next big trade.
Since Trump’s victory, the benchmark U.S. 10-year Treasury yield has risen 20 basis points.
Bonds plunge on Trump's win, with the (TLT) down $12 from the recent high, anticipating higher for longer interest rates.
Moody’s getting ready to downgrade US on the prospect of massive Trump borrowing.
Money Market Funds top $7 trillion for the first time as bond investors flee the market.
Expect (TLT) to decline to $82 as the National Debt increases by $10 trillion.
Avoid (TLT), (JNK), (NLY), (SLRN) and REITS.
FOREIGN CURRENCIES – US DOLLAR REBORN
Dollar hits two-month high on rising US interest rates. Ten-year Treasuries have risen from 3.55% to 4.50%.
Higher for longer interest rates mean higher longer US dollar.
Don’t sell the US dollar until the next recession is on the horizon.
Avoid (FXA), (FXE), (FXB), (FXC), and (FXY).
ENERGY & COMMODITIES – CRUDE AWAKENING $60 IN PLAY
Crude Oil is now down on the Year after a precipitous selloff.
Blame a weak China, lost OPEC discipline, and overproduction by Iraq.
Avoid the worst-performing asset class in the market.
US Oil production hits an all-time high. In August 2024, U.S. oil production hit a record 13.4 million barrels per day, according to the U.S. Energy Information Administration.
Unlimited new drilling and opening up of federal lands will crash oil prices.
Big Oil has become more productive as horizontal drilling and hydraulic fracturing, which is also known as fracking, have seen technological breakthroughs.
Russia bans Uranium Exports in response to American sanctions.
PRECIOUS METALS – GAME OVER
Interest rates higher for longer is a death knell for precious metals, with gold down 8.3% since November 5.
The opportunity cost of owning gold is about to rise sharply.
Gold is up 40% in a year, so it was ripe for profit taking.
$600 million in selling of gold ETF’s last week.
Gold has become the only way the average Chinese can save as they can no longer speculate in real estate or copper and don’t trust the Chinese Yuan, so there is support lower down.
Central banks in emerging market countries are continuing to buy gold, with 693 metric tonnes of buying, or $5.3 billion this year.
Avoid (GLD), (SLV), (AGQ), and (WPM).
REAL ESTATE – POST – ELECTION FREEZE
Post-election interest rate rise is postponing any real estate recovery.
Mortgage Rates are rocketing, off the back of a Trump win, taking the 30-year fixed-rate conventional loan up to 7.12%.
But transactions are coming back from a pre-election Zero for all cash transactions.
Apartment vacancies fall in Q3 for the first time in more than two years, down 0.2% to 5.3%
Renters are soaring to new all-time highs as the cost of home ownership rises beyond reach.
Average age of a homebuyer rises to 56 as prices and mortgage payments soar beyond the average working people.
That is up 7 years since July 2023.
TRADE SHEET
Stocks – buy the next big dip
Bonds – stand aside
Commodities – stand aside
Currencies – stand aside
Precious Metals – stand aside
Energy – buy nuclear dips
Volatility – sell over $30
Real Estate – stand aside
NEXT STRATEGY WEBINAR
12:00 EST Wednesday, December 11, from Lake Tahoe, Nevada.
Housekeeping
The recording of my October Zoom Monthly meeting will be shared next week.
Cheers
Jacquie
