April 15, 2019

Global Market Comments
April 15, 2019
Fiat Lux

Featured Trade:

(SPY), (TLT), (TSLA), (DIS), (FCX), (GOOG), (MSFT), (AMZN)

The Market Outlook for the Week Ahead, or QE is Back!

Let me warn you in advance that I am only going off drugs long enough to write this newsletter.

This year’s flu has finally laid me low and let me tell you it is a real killer. Perhaps it is my advanced age that has magnified its effects. Then I developed an allergic reaction to the flu medicine I was taking. For a couple of days there, I was looking like the Michelin Man.

However, I did have a lot of time to read research. And what I learned was sobering.

For a start, we are fully back to a quantitative easing market. In one fell swoop, the Fed went from an expectation of four interest rate hikes in 2019 to none. By ending quantitative tightening early, it has cut the amount of cash it is withdrawing from the financial system from $4.3 trillion to only $1.5 trillion.

The Fed is in effect reflating the bubble one more time. And what do you do in a QE-driven economy. YOU BUY EVERYTHING! This explains why stocks, bonds, commodities, and energy have all been marching upward in unison this year even though that is supposed to be theoretically impossible.

Yes, the decade long liquidity-driven bull market may have another leg up to go.

A higher high inevitably leads to a lower low. The trades you are executing now may be akin to picking up pennies in front of a steam roller. We are clearly planting the seeds of the next financial crisis. But for now, the pain trade is clearly to the upside.

Those of who who traded through the dotcom bubble are seeing déjà vu all over again. Huge money-losing tech companies are now floating IPOs on a daily basis. This too will end in tears, which is why I have recommended to followers to avoid all of them. This is a sucker’s game.

There is a cloud behind this silver lining. After a ballistic 21.43% move in the Dow Average in four months, markets are trading as if risk is a thing of the past. The euphoria is here and complacency rules. That means the number of new possible low risk/high return trades out there has fallen to zero.

There is another cloud to worry about. The more excess stimulus the Fed provides the economy now, the fewer resources it will have to get us out of the next recession, which might be only a year off. As a result, everyone is long but extremely nervous. They are still participating in the party but are standing next to the exit door. Pent up volatility is building like a volcano ready to explode.

The other great revelation is that markets have been trading extremely short term in nature, only one quarter ahead of what the real economy is doing. So, a stock market meltdown in Q4 2018 discounted a collapsing GDP growth in Q1 2019 of a 1% rate or less. That is down 80% from a year ago peak.

The ultra-strong market in Q1 is anticipating an economic rebound in Q2, After that, who knows?

That’s why I am moving both of my trading portfolios for Global Trading Dispatch and the Mad Hedge Technology Letter to 100% cash positions in the coming week.

Last week was the week when Walt Disney (DIS) morphed from being a has-been media stock hobbled by a failing holding in ESPN to a dynamic company that is suddenly taking over the world. The reward was an eye-popping 25% move in three weeks, which we caught.

Copper demand is rocketing, off of soaring global electric car production. Each vehicle needs 22 pounds of the red metal, and 4 million have been built so far. That number reached 5 million by June. Take a second bite of the apple with (FCX) as well.

General Electric got slaughtered again, with an earnings downgrade from Morgan Stanley. It will take years to sort out this mess. Avoid (GE).

The 30-year fixed rate mortgage plunged to 4.03% and may save the spring selling season for residential real estate.

Apple Topped $200. It looks like the market is finally buying the services story. Stand aside for the short term. It’s had a great run, up 42% from the December low. I’m waiting for 5G until I buy my next iPhone, probably next year.

The Mad Hedge Fund Trader hit a new all-time high briefly, up 15.46% year to date, and beating the pants off the Dow Average. Good thing I didn’t buy the bearish argument. There’s too much cash floating around the world. However, my downside hedges in Disney and Tesla cost me some money when I stopped out. I was late by a day.

We are taking profits on a six-month peak of 13 positions across the GTD and Tech Letter services and will wait for markets to tell us what to do next.

April is so far down -1.50%, as my downside hedges in Tesla (TSLA) and Disney (DIS) cost me some sofa change.  My 2019 year to date return retreated to +13.92%, paring my trailing one-year return back up to +27.22%. 
My nine and a half year return backed off to +314.06%. The average annualized return appreciated to +33.65%. I am now 100% in cash.

The Mad Hedge Technology Letter has gone ballistic, with an aggressive and unhedged 30% long which expires this week. It is maintaining positions in Microsoft (MSFT), Alphabet (GOOGL), and Amazon (AMZN), which are clearly going to new highs.

It’s going to be a dull week on the data front after last week’s fireworks.

On Monday, April 15 at 8:30 AM, we get the April Empire State Index. Citibank (C) and Goldman Sachs (GS) report.

On Tuesday, April 16, 9:15 AM EST, we learn March Industrial Production. Netflix (NFLX) and IBM (IBM) report.

On Wednesday, April 17 at 2:00 PM, we get the Fed Beige Book Indicators. Morgan Stanley reports (MS).

On Thursday, April 18 at 8:30 the Weekly Jobless Claims are produced. At 10:00 AM EST, we obtain the March Index of Leading Economic Indicators. American Express (AXP) reports.

On Friday, April 19 at 8:30 AM, the markets are closed for Good Friday.

As for me, I am staying planted in my bed reading up on research and watching HBO until I kick this flu. After that, I should be good for the rest of the year.

Good luck and good trading.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader







Flat on my Back

March 22, 2019

Global Market Comments
March 22, 2019
Fiat Lux

Featured Trade:

(BA), (FCX), (IWM), (JNJ), (FXB), (VIX), (JPM)

March 20 Biweekly Strategy Webinar Q&A

Below please find subscribers’ Q&A for the Mad Hedge Fund Trader March 20 Global Strategy Webinar with my guest and co-host Bill Davis of the Mad Day Trader. Keep those questions coming!

Q: What do you make of the Fed’s move today in interest rates?

A: By cutting short their balance sheet unwind early and ending quantitative tightening (QT) early, it amounts to two surprise interest rate cuts and is hugely “RISK ON”. In effect, they are injecting $2.7 trillion in new cash into the financial system. New highs in stocks beckon, and technology stocks will lead. This is a game changer. In a heartbeat, the world has moved from QT to QE, and we already know what that means for socks. They go up.

Q: Why buy Boeing shares (BA) ahead of a global recession?

A: It’s an 18-day bet that I’ve made in the options market. The US economic data is already indicating recession. The data will continue to worsen and that will continue until we go into a recession. But that’s not happening in 18 trading days. Also, we’re getting into Boeing down 20% from the top so our risk is minimal.

 Q: Why are we in an open Russell 2000 (IWM) short position?

A: We now have three long positions— 40% on the long side with the Freeport McMoRan (FCX) double position. It’s always nice to have something on the other side to hedge sudden 145-point declines like we have today. Ideally, you want to be hedged at all times. But it’s hard to fund good companies to sell short in a bull market.

Q: Do you need some euphoria to get the Volatility Index (VIX) to the $30-$60 level?

A: No, you don’t need euphoria. You need fear and panic. The (VIX) is a good “fear index” in that it rises when markets are crashing and falling when markets are slowly rising. And for that reason, I’m not buying (VIX) right now. With a sideways to slowly rising market, we could see the $9 handle again before this move is over.

Q: What should be the exit on the Russell 2000 (IWM)?

A: One choice is taking 80% of the maximum profit when you hit it—that’s where the risk-reward tips against you if you keep the position. The other option is to be greedy and run it all the way into expiration, taking the full profit. It depends on your risk tolerance. Remember, we hit the 80% profit three times in March only to stop out of positions for a loss. The market just doesn’t seem to want to let you take the whole 100%.

Q: Why are all your expirations on April 18?

A: That’s when the monthly options expire; therefore, they have the most liquidity of any other option expiration. If you go with the weeklies before or after the monthlies, the liquidity declines dramatically, which can be very frustrating. Since I used to cover only the largest clients, we could only trade in monthlies because we needed the size.

Q: Will Johnson and Johnson (JNJ) survive all those talcum powder lawsuits?

A: They’ve been going on for 10 years—you’d think they’d know by now if they have asbestos in their talcum powder or not. I highly doubt this will get anywhere; they’ll probably win everything on appeal.

Q: What do you anticipate on Brexit?

A: I think eventually Brexit will fail; we’ll have a referendum which will get voted down, Britain will rejoin Europe, and the British pound (FXB) will go to $1.65 to the dollar where it was when Brexit hit three years ago, up from $1.29 today. It would be economic suicide for Britain to leave Europe, as they would have to compete against Europe, the US, and China alone, and they are slowly figuring that out. Demographic change alone over three years would guarantee that another referendum fails.

Q: My partner owns JP Morgan (JPM). Do you still say banks are not a good place to be?

A: Yes. Fintech is eating their lunch. If they couldn’t go up with interest rates moving up in the right direction, they certainly won’t be doing better now that interest rates are going down. Legacy banks are the new buggy whip industry.

Q: Why are commodities (FCX) increasing with a coming recession?

A: They are a hard asset and do better in inflation. Also, they’re stimulating their economy in China and we aren’t—commodities do better in that situation as China is the world’s largest buyer of commodities, as do all Chinese investments.

Q: Would you buy Biogen (BIIB) on the dip? Its down 30% today.

A: Canceling their advanced phase three trials for the Alzheimer drug Aducanumab is the worst-case scenario for a biotech company. Some $12 billion in prospective income is down the toilet and many years of R&D costs are a complete write-off. Avoid (BIIB) until the dust settles.






March 18, 2019

Global Market Comments
March 18, 2019
Fiat Lux

Featured Trade:

(FCX), (AAPL), (IWM), (SPY), (BA), (FXI), (FXB)

The Market Outlook for the Week Ahead, or a Stiff Dose of Humility

Sometimes markets have to give you a solid dose of humility, blindside you with a sucker punch, and slap you across the face with a wet kipper. Last week was definitely one of those weeks for me.

It was only just a matter of time before this happened. We posted new record gains for the first ten weeks of 2019. It was just a matter of time before the reality check kicked in.

I believed that we have seen the sharpest rally in stocks since the 2009 bottom, we were overdue for a respite. That respite came and only lasted a week. It has been an especially frustrating week for those few of us who watch economic data because it has been unremittingly awful while stocks rose daily.

There were really no reasons for shares to rise that week. There were also no reasons to sell, other than a dozen or so complete disasters that are looming just over the horizon. Still, to quote an old friend of mine, “Markets can remain irrational longer than you can remain liquid.”
The bull market reached ten years old last week, and if you read this letter you caught every dollar of the move up since then, plus some. But how much longer will it last? The technicals say it’s already in its death throes.

China trade negotiations (FXI) endlessly continued as they have for a year, but now the Chinese have thrown up a roadblock. They want everything in writing. In the wake of the North Korean disaster, can you blame them? This will weigh heavily on stocks until it’s done.

Another day, another Brexit vote failed again. The pound (FXB) is doing the Watusi. Avoid all UK plays until the issue is decided.

The share buyback blackout started on Friday for many companies which are not allowed to repurchase their own shares up to 30 days ahead of the Q1 earnings reports. If you take the largest buyers of shares out of the market, what is left? Look to play the short side for the market.

Boeing (BA) hit bottom as the US became the last country to ban the 737 Max 8. Imagine being 35,000 feet in the air and you find out your plane is grounded for safety reasons, as 6,000 people did last week. Buy more (BA) on the dip. The next move is from $360 to $450.

Weekly Jobless Claims jumped, by 6,000 to a seasonally adjusted 229,000. Notice claims aren’t falling anymore. Another sign the tax cut stimulus is shrinking? Or that there is no one left to hire with any skills whatsoever?

Tesla (TSLA) released its Model Y SUV, but the cheaper $39,000 version won’t be available until 2021 and the stock dove. We are approaching the make or break level for the stock, the bottom of a two-year range. Get ready to buy on the meltdown. This is a ten bagger in a decade. Buy (TSLA).
The Mad Hedge Fund Trader lost ground last week. The tenth rally in 11 weeks made my short positions lose money faster than my long positions could make it back.

The Mad Hedge Technology Letter was stopped pit of a short position in Apple (AAPL) for a small loss a heartbreaking three days before its options expiration.

February came in at a hot +4.16% for the Mad Hedge Fund Trader. March started negative, down -2.18%.

My 2019 year to date return retreated to +11.46%, a new all-time high and boosting my trailing one-year return back up to +23.72%. 
My nine-year return pared back to +311.60%. The average annualized return appreciated to +33.69%. 

I am now 60% in cash, 20% long Freeport McMoRan (GLD), 10% short the S&P 500, and 10% short the Russell 2000. My short bond position (TLT) expired at its maximum profit point of $1,140.

As for the Mad Hedge Technology Letter, it covered its short in Apple (AAPL) for a small loss.

Q4 earnings reports are pretty much done, so the coming week will be pretty boring on the data front after last week’s fireworks.

On Monday, March 18, at 10:00 AM EST, the March Homebuilders Index is out.

On Tuesday, March 19, 8:30 AM EST, February Housing Starts is published.

On Wednesday, March 20 is the first official day of Spring, at last!

Thursday, March 21 at 8:30 AM EST, the Weekly Jobless Claims are announced. At 10:00 AM, we get a new number for Leading Economic Indicators.

On Friday, March 22 we get a delayed number for Existing Home Sales.

The Baker-Hughes Rig Count follows at 1:00 PM.

As for me, it’s fundraising time here in the San Francisco Bay Area for local schools and gala balls are now a weekly event. I, who have pursued a lifelong pursuit of low prices and great deals, ended up paying $1,000 for a homemade coffee cake, $7,000 for tickets to the Golden State Warriors, and $10,000 for the best table in the house. Hey, what’s the value of money if you can’t spend it? You can’t take it with you.

Good luck and good trading.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader








March 11, 2019

Global Market Comments
March 8, 2019
Fiat Lux

Featured Trade:

(SPY), (SDS), (TLT), (TBT), (GE), (IYM),
 (MSFT), (IWM), (AAPL), (ITB), (FCX), (FXE)

The Market Outlook for the Week Ahead, or the Canaries in the Coal Mine are Dying

Well, that was some week!

After moving up in a straight line for ten weeks, markets are now doing their best impression of a Q4 repeat.

The transports Index (XTN), the most important leading indicator for markets, has been down for 11 straight days, the worst run in 40 years.

And now for the bad news.

Look at a long term chart for the S&P 500 (SPY) and the head and shoulder top practically leaps at you and grabs you by the lapels (that is, if you are one of the few who still wears a suit).

It makes you want to slit your wrist, jump off the nearest bridge, or binge watch all nine seasons of The Walking Dead. It neatly has the next bear market starting around say May 10 at 4:00 PM EST, a rollover point I put out two years ago.

However, hold that move! As long as we have a free Fed put under the market in the form of Jay Powell’s “patience’ policy, we are not going to have a major crash any time soon. That is 2021 business.

It’s more likely we trade in a long sideways range until the economy finally rolls over and dies. So when we hit my first (SPY) downside target at the 50-day moving average at $269, which is a very convenient 5% down from the recent top, could well bounce hard and I might add some longs in the best quality names. It all sets of my dreaded flatline of death scenario for the rest of 2019.

Last week saw an unremitting onslaught of bad news from the economy.

The February Nonfarm Payroll report came in at a horrific 200,000 when 210,000 was expected, sending traders to man the lifeboats. The headline Unemployment Rate dropped 0.2% to 3.8%. Average Hourly Earnings spiked 11 cents to $27.66, a 3.4% YOY gain and the biggest pop since 2009.

Construction lost 31,000 jobs, while leisure and Hospitality added no jobs at all. The stunner is that the U6 long term structural “discouraged worker” unemployment rate dropped an amazing 0.8% to 7.4%, the sharpest drop on record. Fewer jobs, but at higher wages is the takeaway here, the exact opposite of what markets want to hear.

US Construction Spending fell off a cliff, down 0.6% in December. It seems that nobody wants to invest ahead of a recession.

The dollar soared (UUP), and gold (GLD) got hammered. You can blame the slightly stronger GDP print on Thursday the week before, which came in at 2.2% instead of 1.8%. As long as Jay doesn’t raise interest rates this is just a brief short covering rally for the buck.

China cut its growth forecast from 6.5% to 6.0% GDP growth for 2019. The trade war with the US and the stimulus hasn’t kicked in yet. The last time they did this, the market fell 1,000 points. Buy (FXI) on the dip.

US Trade Deficit hit ten-year high at $59.8 billion for December, and a staggering $419 billion for the year. It’s funny how foreigners stop buying your goods when you declare war on them. Even Teslas (TSLA) are being stopped at the border in China. Who knew?

New trade tariffs hit US consumers the hardest adding $69 billion to their annual bill. Falling real earnings and rising costs is hardly a sustainable model. Will someone please tell the president?

US growth is fading, says the Fed Beige Book, slowing to a “slight to moderate rate”. The government shutdown is the cause. With Europe already in recession, I’ll be using rallies to increase my shorts. Sell (SPY) and (IWM).

The European Central Bank axed its growth forecast sharply, from 1.7% to 1.1%. Stimulus to renew on all front, including more quantitative easing. It’s just a matter of time before their recession pulls the US down. Sell the Euro (FXE).

You lost $3.7 trillion in Q4, or so says the Fed about the decline of national personal net worth during the stock market crash, the sharpest decline in a decade. You’re now only worth $104.3 trillion.

The Mad Hedge Fund Trader actually gained ground last week, thanks to profits on our short positions rising more than our offsetting losses on our longs.

I have doubled up my overall positions, finally taking advantage of the rollover in all risk assets from a historic ten-week run to the upside. I added shorts in the S&P 500 (SPY) and the Russell 2000 (IWM) against a very deep in-the-money long in Freeport McMoRan (FCX) the world’s largest copper producer.

The thinking here is that with China the only economy in the world that is stimulating its economy and the planet’s largest copper consumer, copper makes a nice long side hedge against my short positions.

The Mad Hedge Technology Letter is happily running a short position is Apple (AAPL) which is now almost at its maximum profit point. We only have four days to run to expiration when the position we bought for $4.60 will be worth $5.00.

February came in at a hot +4.16% for the Mad Hedge Fund Trader. March started out negative, down -0.84%, thanks to a wicked stop loss on Gold (GLD). We had 80% of the maximum potential profit at one point but left the money on the table at the highs.

My 2019 year to date return ratcheted up to +12.84%, a new all-time high and boosting my trailing one-year return back up to +29.92%.

My nine-year return clawed its way up to +312.94%, another new high. The average annualized return appreciated to +33.83%. 

I am now 50% in cash, 20% long Freeport McMoRan (FCX), and 10% short bonds (TLT), 10% short the S&P 500, and 10% short the Russell 2000.

We have managed to catch every major market trend this year, loading the boat with technology stocks at the beginning of January, selling short bonds, and buying gold (GLD). I am trying to avoid stocks until the China situation resolves itself one way or the other.

As for the Mad Hedge Technology Letter, it is short Apple (AAPL).

Q4 earnings reports are pretty much done, so the coming week will be pretty boring on the data front after last week’s fireworks.

On Monday, March 11, at 8:30 AM EST, January Retail Sales is ut.

On Tuesday, March 12, 8:30 AM EST, the February Consumer Price Index is published.

On Wednesday, March 13 at 8:30 AM EST, the February Durable Goods is updated.

On Thursday, March 14 at 8:30 AM EST, we get Weekly Jobless Claims. These are followed by January New Home Sales.

On Friday, March 15 at 9:15 AM EST, February Industrial Production comes out. The Baker-Hughes Rig Count follows at 1:00 PM.

As for me, I’ll be headed to the De Young Museum of fine art in San Francisco to catch the twin exhibitions for Monet and Gaugin. When it rains every day of the week, there isn’t much to do but go cultural.

Good luck and good trading.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader








Good Trades are Getting Harder to Find

March 8, 2019

Global Market Comments
March 8, 2019
Fiat Lux

Featured Trade:

(SPY), (SDS), (TLT), (TBT), (GE), (IYM),
 (MSFT), (IWM), (AAPL), (ITB), (FCX), (FXE)

March 6 Biweekly Strategy Webinar Q&A

Below please find subscribers’ Q&A for the Mad Hedge Fund Trader March 3 Global Strategy Webinar with my guest and co-host Bill Davis of the Mad Day Trader. Keep those questions coming!

Q: Are you sticking to your market top (SPY), (SDS) by mid-May?

A: Yes, at the rate that economic data is deteriorating, and earnings are falling, there’s no prospect of more economic stimulation here, my May top in the market is looking better than ever. Europe going into recession will be the gasoline on the fire.

Q: Where do you see interest rates (TLT) in 1-2 years?

A: Interest rates in 2 years could be at zero. If interest rates peaked at 3.25% last year, then the next move could be to zero, or negative numbers. The world is awash in cash, and without any economic growth to support that, you could have massive cuts in interest rates.

Q: Will (TLT) be going higher when a market panic sets in?

A: It will, which is why I’m being cautious on my short positions and why I’m only using tops to sell. You can be wrong in this market but still make money on every put spread, as long as you’re going far enough in the money. That said, when the stock market starts to roll over big time, you want to go long bonds, not short, and we may do that someday.

Q: Do you see a selloff to stocks similar to last December?

A: As long as the Fed does not raise interest rates, I don’t expect to get a selloff of more than 5% or 6% initially. If we do get a dramatic worsening of economic data and it looks like we’re headed in that direction, the Fed will start cutting interest rates, the recession signal will be on and only then will we drop to the December lows—and possibly as low as 18,000 in the Dow.

Q: General Electric has gone from $6 to $10; what would you do now?

A: Short term, sell with a 66% gain in a stock. Long term, you probably want to hold on. However, their problems are massive and will take years to sort out, probably not until the other side of the next recession.

Q: Microsoft (MSFT): long term hold or sell?

A: Absolutely long-term hold; look for another double in this company over the next 3 years. This is the gold standard in technology stocks today. Short term, you’re looking at no more than $15 of downside to the December low.

Q: Would you short banks (IYF) here since interest rates have failed to push them higher?

A: I would not; they’ve been one of the worst performing sectors of the market and they’re all very low, historically. You want to short highs like I’m doing now in the (SPY), the (IWM), and Apple (AAPL), not lows.

Q: Is the China trade deal (FXI) a ‘sell the news’ event?

A: Absolutely; there’s not a hedge fund out there that isn’t waiting to go short on a China trade deal. The weakness this week is them front-running that news.

Q: Do you see emerging markets (EEM) pushing higher from the 42 level, or will a global recession bring it back to earth?

A: First of all, (EEM) will go higher as long as interest rates in the U.S. are flatlining, so I expect a rally to last until the spring; however, when a real recession does become apparent, that sector will roll over along with everything else.

Q: Would you buy homebuilders (ITB) if this lower interest rate environment persists?

A: I wouldn’t. First of all, they’ve already had a big 28% run since the beginning of the year— like everything else—and second, low-interest rates don’t help if you can’t afford the house in the first place.

Q: Would you short corporate bonds if you think there’s going to be a recession next year?

A: I’m glad you asked. Absolutely not, not even on pain of death. I would buy bonds because interest rates going to zero takes bond prices up hugely.

Q: Should you buy stocks in front of a blackout period on corporate buybacks?

A: Absolutely not. Corporate buybacks are the number one buyers of shares this year, possibly exceeding $1 trillion. Companies are not allowed to buy their own stocks anywhere from a couple of weeks to a month ahead of their earnings release. By removing the principal buyer of a share, you want to sell, not buy.

Q: What are the chances the China trade deal (FXI) breaks down this month and no signing takes place?

A: I have a feeling Trump is desperate to sign anything these days, and I think the Chinese know that as well, especially in the wake of the North Korean diplomatic disaster. He has to sign the deal or we’ll go to recession, and that would be tough to run on for reelection.

Q: Which stock or ETF would you short on real estate?

A: If you short the iShares US Home Construction ETF (ITB), you short the basket. Shorting individual stocks is always risky—you really have to know what’s going on there.

Q: What’s the best commodity play out there?

A: Copper. If China is the only country that’s stimulating its economy right now, and China is the largest consumer of copper, then you want to buy copper. The electric car boom feeds into copper because every new vehicle needs 20 pounds of copper for wiring and rotors. Copper is also cheap as it is coming off of a seven-year bear market. What do you buy at market tops? Only cheap stuff.

Q: Why did you go so far in the money in the Freeport-McMoRan (FCX) call spread with only a 10% profit on the trade in five weeks?

A: In this kind of market, I’ll take 10% in 5 weeks all day long. But additionally, when prices are this high, I want to be as conservative as possible. Going deep in the money on that is a very low-risk trade. It’s a bet that copper doesn’t go back to the December lows in five weeks, and that’s a bet I’m willing to make.

Q: Will a new round of QE in Europe affect our stock market?

A: Yes, it’s terrible news. It will weaken the Euro (FXE), strengthen the dollar (UUP), and force US companies to lower earnings guidance even further. That is bad for the market and is a reason why I have been selling short.






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