While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
June 2, 2020
Fiat Lux
Featured Trade:
(CYBERSECURITY IS ONLY JUST GETTING STARTED),
(PANW), (HACK), (FEYE), (CSCO), (FTNT), (JNPR), (CIBR)

Today, I would like to make one more suggestion. And it is going to be an outright stock purchase.
I do believe the risk on this position is small because it is trading just above the lower band on the daily chart.
The stock is ProAssurance Corp. (PRA).
PRA does not have weekly options, but I am not going to suggest you sell calls against the position at this time.
As I write this, PRA is trading around $14.27.
My suggestion is to buy PRA at the market.
Based on the nominal portfolio, limit the stock buy in to 400 shares or 5.7% of the portfolio.
Today, I would like to make a suggestion on a stock that we traded a few weeks ago.
And that stock is AMN Healthcare Services, Inc. (AMN).
It appears like it is setting up for another run.
I am going to suggest a debit spread and I will suggest you use the July monthly options.
Here is the trade:
Buy to Open July 17th - $45.00 call @ $3.30
Sell to Open July 17th - $50.00 call @ $1.55
The net debit will be $1.75 per spread, with a maximum gain of $3.25 per spread.
The maximum return on the position would be 186% or just under a 2 to 1 return.
Based on the nominal portfolio, limit the trade to 6 spreads or about 1% of the portfolio.
Mad Hedge Technology Letter
June 1, 2020
Fiat Lux
Featured Trade:
(HOW DEEPFAKES WILL DOMINATE THE COMING ELECTION),
(DEEPFAKE TECHNOLOGY)

There is a dark side of technology that, if not tackled head-on, could result in the breaking of the internet.
That technology is deepfake.
Deepfakes are doctored media forms in which a person in an existing image or video is replaced with someone else's likeness.
To read up on examples of deepfake video content that inserts Leonard Nimoy in a 2009 movie, click here.
Sure, you might have heard about it before.
This is old news, right?
Photoshopping a friend’s face and repurposing onto a famous artist’s face is child’s play.
Or so you thought.
It’s all fun and games when doing it for a little laugh, but doctoring videos to spark a world war is another matter entirely.
So why do I bring up deepfakes now?
It just so happens that the development of deepfakes has accelerated to the point where the real and fake are just about indistinguishable.
The main machine learning methods used to create deepfakes are based on deep learning and involve training generative neural network architectures, such as autoencoders or generative adversarial networks (GANs).
Photo manipulation was developed in the 19th century and soon applied to motion pictures. Technology steadily improved during the 20th century, and more rapidly with digital video.
At the start of 2019, deepfakes were easy to spot, within 5 seconds, there was a high probability that something in the content tipped off its fakeness.
As we push against a point of no return with this specific technology, social unrest has exploded with over 75 cities mired in police protest and public trust at its lowest point in history.
Marry up the social chaos with an upcoming U.S. presidential election and one could understand how events could turn sour if ugliness is supercharged with deepfakes.
It is entirely possible that an offshore deepfake going viral on the internet could unlock the election stalemate.
It is truly a scary situation when doctored media has pulled itself up in quality and the average person does not know when reality stops and starts.
We have already seen a plethora of crude pornography harnessed by deepfake technology in the past two years and that is just the beginning.
With digital storage service space cheap and Facebook allowing any type of extreme content to go live on its platform, the wielding of deepfakes mixed with heavy investment could cause every negatives trend in business and U.S. society to supercharge.
The U.S. think tank The Brookings Institution summed it up concisely by listing the risks that deepfakes will pose: “distorting democratic discourse; manipulating elections; eroding trust in institutions; weakening journalism; exacerbating social divisions; undermining public safety; and inflicting hard-to-repair damage on the reputation of prominent individuals, including elected officials and candidates for office.”
How do tech companies make out in the deepfake world?
As long as Section 230 absolves big tech from content posted on their platform, several monopolistic platforms will come out winners.
Can you imagine Netflix and Apple Plus creating the majority of its content with computer software?
Well, content already exists in the form of Japanese anime, but Netflix will be able to double or triple the amount of software-generated content cutting back on the need to pay humans to produce content that is live in living flesh.
Hollywood and its human actors are already on the ropes, will there be any room for their existence in this deepfake social distance, remote office world?
As the global pandemic has exacerbated negative and positive trends in technology, the volume and quality of fake news will continue to explode to record levels.
This is just the tip of the iceberg.
As it stands, I can barely find what I need when I am searching on Google search anymore because of the clutter of marketing and clickbait that hinders my objectives.
Will users still go on Facebook and watch YouTube videos if the percentage of fake content goes from 10% to 90% because they are bombarded with institutional deepfakes?
I can tell you that these social media platforms aren’t investing in their defense of deepfakes even if they are already banned on their platform preferring to turn a blind eye.
The development of deepfakes is increasing at such a rate that it dwarfs the development of defending authentic content.
To read an instance when Alphabet’s YouTube refused to remove deepfakes of American rapper Jay Z, click here.
That is what happens when the monetary incentives are perverse with the goal of selling the technology to the highest bidder, whoever it may be.
This could truly be the technology that breaks the internet as the law cannot keep up with the pace of fast-developing technology as big tech runs in circles around the White House.
It will be interesting to see if big tech firms monetize it to the extreme or try to do what is best for society. My guess is that corporations will see this as a golden opportunity to get into the world of digital content with famous stars and athletes licensing out their faces.


DEEPFAKES ARE HERE TO STAY
“I know tech better than anyone.” – Said Current President of the United States Donald J. Trump on his Twitter Account in 2018

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
June 1, 2020
Fiat Lux
Featured Trade:
(JOIN THE JUNE 4 TRADERS & INVESTORS SUMMIT),
(MARKET OUTLOOK FOR THE WEEK AHEAD, or THE COUNTRY THAT IS FALLING APART),
(SPX), (INDU), (TLT), (TBT), (GLD),
(AAPL), (FB), (JPM), (BAC)

As much as I loved hosting my annual Mad Hedge Lake Tahoe Conferences, it looks like this year, it is not meant to be. I doubt guests are racing to get on airplanes anytime soon. The desire to sit shoulder to shoulder with your fellow investors has also probably waned as well, no matter how profitable they may be.
I am therefore hosting the Thursday, June 4 Mad Hedge Traders & Investors Summit.
The event will be bigger and better than the old analog bricks and mortar version. I will be hosting nine expert traders from all over the world speaking on the hour every hour starting from 9:00 am EDT.
Some of these speakers I have known for decades. Every trading style and asset class will be covered, including stocks, bonds commodities, foreign exchange, precious metals, energy, and real estate. It will be the best investment educational opportunity of the year.
I will also be offering $100,000 in prizes to attendees in the form of free subscriptions to my newsletters, as well as those of the other speakers.
I will be at Lake Tahoe, and you will be wishing you were here. As far as I know, human viruses can’t travel over the Internet….yet.
To register for the event and view the list of speakers and their topics, please click here.

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There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.


