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The Market Outlook for the Week Ahead, or Expensive Again

We certainly are having to work hard for our crust of bread in the stock market this year. April brought us the fastest downturn in stocks in 16 years, immediately followed by the sharpest upturn in 21 years.

It's like running for a treadmill heart test, but a sadistic doctor keeps raising the angle of incline.

Still, I was able to deliver the best trading profits since December 2023, up 14.57%. The harder I work, the luckier I get. Buying when everyone else is throwing up on their shoes is certainly a winning strategy, proven yet again.

The truly disappointing thing about this rally is that it has made stocks expensive once again. In valuation terms, we are now back at February’s peak earnings multiple of 22X for the S&P 500, up from 18X a month ago. This is happening because the growth rate of earnings is falling while share prices are rising.

We are now facing record-high share prices in an economy going into a recession, DOGE cutting chunks of government spending, with rising unemployment and inflation, and a budget deficit for 2025 that is likely to hit $4-$5 trillion.

It doesn’t sound like a great bargain to me. Maybe that’s why only 26% of investors are currently bullish.

We are in fact now at the top of a $4,800-$5,800 range while also bumping up against a solid ceiling at the 200-day moving average. If this bothers anyone, please raise your hand.

Looking at the grim, almost apocalyptic data that is marching our way, I think we are much more likely to next hit an earnings multiple of 16X than 23X. There are a lot of great shorts out there right now, but being up 28.45% so far this year, I am being very cautious when to pull the trigger.

One of the countless fascinating experiences in my life was spending a summer living with a Nazi family in West Berlin in 1968. There was a huge housing shortage in Berlin at the time, and I had to take what I could get. Besides, the apple strudel for dessert was fantastic.

And even though WWII had been over for 23 years, they never shed their extremist political beliefs. Over many dinner discussions I was exposed to the full Nazi philosophy. However, they loved Americans, as it were, they who saved them from the Bolsheviks in 1945.

You know, whenever you get a shot, the nurse always squeezes a little bit of the liquid out of the needle first before sticking it into your arm? This is to prevent an air bubble from getting into your heart, creating an airlock, and stopping it dead. One of the many torments the German Gestapo used to inflict on prisoners was to inject them with air bubbles. Then it was just a matter of minutes before the prisoner died or had a stroke.

I mention all of this because the US economy has just been injected with a big air bubble. If you’re looking for a recession, you can see it with a good set of binoculars off the California coast.

I’m watching the movement of this air bubble on a daily basis.

First, there were the prices for an eastbound 40-foot container shipped from China to the US, down from $8,000 to as low as $1,500 each. About 60 very large container ships carrying 1.2 million containers have gone missing.

Then there is congestion at the Port of Los Angeles, where 200 ships are stranded offshore, unable to unload. Truck drivers are now getting laid off because importers can’t afford to pay the 145% tariffs and are abandoning them, clogging warehouses. Store shelves will start to go bare from mid-May onward, with discount electronics going first.

Any positive growth we see in Q1 will be the result of a rush of post-election over-ordering to front-run the Trump tariffs. That creates a big air bubble in the system for Q2 and onward, maybe for years, even if the trade war ends tomorrow. That’s because shutting down and then restarting a massively complex international trade network takes at least a year.

It certainly was a confusing week for economic data. We saw a succession of very weak employment reports from the ADP Private Employment Report, JOLTS Jobs Openings, and Weekly Jobless Claims, which one might expect from trade war-induced economic collapse. Then, out of the blue, we got a somewhat respectable April Nonfarm Payroll Report at 177,000. Something in these disparate things does not compute.

We haplessly slogging away in the economic forecasting industry are constantly thwarted by constantly conflicting data. You’re probably all sick of hearing the words “on the one hand” and “on the other hand.” But could the unimaginable be happening? One thing I know for sure. You are definitely not going to see strong employment figures for health care (51,000) and Transportation and Warehousing (29,000) in May that we saw in April, once the trade war really starts to bite.

It’s not just the jobs figures that are going haywire. You can count on ALL economic data to be disrupted for at least the next year as the trade war unfolds, retreats, and does whatever it is going to do. It all makes my job so much harder. But then, I always love a challenge.

You may have noticed that I have started making a lot of money from Bitcoin plays like MicroStrategy (MSTR). This is not because I have suddenly become a died in the wool crypto acolyte, a mindless true believer, a guzzler of the Kool-Aid at every opportunity. I firmly believe that Bitcoin has another 95% decline ahead of it sometime in the future and that it is nothing more than a Ponzi scheme.

As I watch the many crypto “experts” wax lyrical about their $1 million upside targets, I can’t help but notice that most aren’t even old enough to be my grandchildren. The president has recently pardoned several crypto robber barons convicted of looting customer accounts of billions of dollars. Another term for “anti-regulation” is “pro-stealing.” The SEC has morphed from securities regulation to crypto promotion.

Nevertheless, I DO know what a chart is, downside support and upside resistance, and above all, euphoria and momentum. All of these started screaming “BUY” at me three weeks ago, and I started picking up crypto play with both, and if not three. I merely did what Mr. Market was begging me to notice.

Yes, sometimes even I have to trade charts for a living. But it is definitely a position I am only dating, not marrying. I’ll only be in crypto as long as there are more buyers than sellers and the suckers keep being born. I have a feeling that, at the end of the day, all crypto has really done is to pay for some very expensive parties in Miami and Dubai.

As far as I’m concerned, I’m hoping for the stroke and not the heart attack.

My April performance closed out at a spectacular +14.57%. That takes us to a year-to-date profit of +28.40% so far in 2025. My trailing one-year return stands at a spectacular +89.79%. That takes my average annualized return to +50.61% and my performance since inception to +780.29%, a new all-time high.

It has been another wild week in the market, with the stock market up every day. I used a brief $25 dip in (TSLA) to take profits in my short play there. That leaves me 40% long, with a double position in (MSTR), and longs in (NVDA) and (NFLX). I have 20% short in (SPY) and a “risk off” position in (GLD), and 40% cash. I’m just waiting for this rally to burn out before topping up my shorts, not a bad idea in the wake of the biggest run-up in 21 years.

Some 63 of my 70 round trips in 2023, or 90%, were profitable. Some 74 of 94 trades
were profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.

Try beating that anywhere.

100 Years of S&P 500 Earnings Multiples

My Ten-Year View – A Reassessment

We have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties, is now looking at multiple gale-force headwinds. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old. My Dow 240,000 target has been pushed back to 2035.

On Monday, May 5, at 8:30 AM EST, the S&P Global Composite PMI is announced.

On Tuesday, May 6, at 3:30 AM, the Balance of Trade is released.

On Wednesday, May 7, at 1:00 PM, the Federal Reserve announces its interest rate decision. No move is expected in the face of a rising inflation rate. A press conference follows at 1:30.

On Thursday, May 8, at 8:30 AM, the Weekly Jobless Claims are disclosed.

On Friday, May 9, at 12:00 PM, the Baker Hughes Rig Count is published.

I’m Always Cautious When Pulling the Trigger

Microsoft Goes Ballistic, with the second 10% move in a month. Indications are that AI spending is continuing unabated, taking the entire tech space up with it.

ISM Manufacturing Index Says the Recession is Here. Economic activity in the manufacturing sector contracted in April for the second month in a row, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest Manufacturing ISM Report On Business^®. Manufacturing in high-cost America has been in a structural decline for three years now and is accelerating to the downside.

US Q1 GDP Crashes in Q1, down 0.3%, thanks to the massive front-running of imports to beat the Trump tariffs. This quarter will certainly be worse as almost all international trade has ceased, giving us a second negative quarter that officially constitutes a recession. A three-quarter recession gives us an S&P 500 of 4,500, four quarters, 4,000.

JOLTS Job Openings Report was Weak in March at 7.1 Million, said the U.S. Bureau of Labor Statistics. Over the month, hires held at 5.4 million, and total separations changed little at 5.1 million. Within separations, quits (3.3 million) were unchanged, and layoffs and discharges (1.6 million) edged down.

Consumer Confidence Collapses, hitting a 15-Year Low, according to the Conference Board. The Index fell to 86 on the month, down a hefty 7.9 points from its prior reading and below the Dow Jones estimate for 87.7. The board’s Expectations Index, which measures how respondents look at the next six months, tumbled to 54.4, a decline of 12.5 points and the lowest reading since October 2011.

New Homes are Now Cheaper than Existing Homes, for the first time. A 30% rise in existing inventories has made the difference. New home builders can more easily discount with free upgrades and offer loan buy-downs. Some 40% of homes on the market have seen price drops, and time on the market is growing.

Weekly Jobless Claims Rocket by 18,000. First-time filings for unemployment insurance totaled a seasonally adjusted 241,000 for the week ended April 26, up 18,000 from the prior period and higher than the estimate for 225,000. Continuing claims, which run a week behind and provide a broader view of layoff trends, rose to 1.92 million, up 83,000 to the highest level since Nov. 13, 2021.

General Motors to take $5 Billion Hit on Tariffs. GM on Thursday lowered its 2025 earnings guidance to include a possible $4 billion to $5 billion impact as a result of President Donald Trump’s auto tariffs. GM said its new guidance includes adjusted EBIT of between $10 billion and $12.5 billion, down from $13.7 billion to $15.7 billion. GM released first quarter results Tuesday that beat Wall Street’s expectations but delayed its investor call and updated guidance details amid expected changes to the auto tariffs.

S&P Case-Shiller National Home Price Index Slows to 3.9% YOY, in February, a sharp slowdown. Home prices are increasingly untenable to potential home buyers. Waning consumer confidence, heightened insecurity over economic uncertainties, and the future of household budgets are impacting the consumer housing market. New York (+7.7%), Chicago (+7.0%), and Cleveland (+6.6%) show the biggest gains, while Tampa showed a (-1.4%) loss. Expect real estate to remain a major drag on the US economy, with mortgage rates at 7.0%.

Bitcoin ETF’s Suck in $3.5 Billion Last Week, as the “Sell America” trade expands. Exchange-traded funds tracking Bitcoin and Ether attracted more than $3.2 billion last week, with the iShares Bitcoin Trust ETF (IBIT) alone seeing a nearly $1.5 billion inflow — the most this year.

Crude Oil Drops on Global Recession Fears. Brent crude futures were down $1.09, or 1.63%, at $65.78 a barrel. West Texas Intermediate crude fell $1.15, or 1.82%, to $61.87 a barrel. The U.S.-China trade war is dominating investor sentiment in moving oil prices, superseding nuclear talks between the U.S. and Iran, and discord within the OPEC+ coalition. Markets have been rocked by conflicting signals from the U.S. over what progress was being made to de-escalate a trade war that threatens to sap global growth.

As for me, by the 1980s, my mother was getting on in years. Fluent in Russian, she managed the CIA’s academic journal library from Silicon Valley, putting everything on microfilm.

That meant managing a team that translated over 1,000 monthly publications on topics as obscure as Arctic plankton, deep space phenomena, and advanced mathematics. She often called me to ascertain the value of some of her findings.

But her arthritis was getting to her, and all those trips to Washington, DC were wearing her out. So I offered Mom a job. Write the Thomas family history, no matter how long it took. She worked on it for the rest of her life.

Dad’s side of the family was easy. He was traced to a small village called Monreale above the Sicilian port city of Palermo, famed for its Byzantine church. Employing a local priest, she traced birth and death certificates going all the way back to an orphanage in 1820. It is likely he was a direct illegitimate descendant of Lord Nelson of Trafalgar.

Grandpa fled to the United States when his brother joined the Mafia in 1915. The most interesting thing she learned was that his first job in New York was working for Orville Wright at Wright Aero Engines (click here). That explains my family’s century-long fascination with aviation.

Grandpa became a tail gunner on a biplane in WWI. My dad was a tail gunner on a B-17 flying out of Guadalcanal in WWII. As for me, you’ve all heard plenty of my own flying stories, and there are many more to come.

My Mom’s side of the family was an entirely different story.

Here ancestors first arrived to found Boston, Massachusetts in 1630 during the second Pilgrim wave on a ship called the Pied Cow, steered by Captain Ashley (click here for the link).

I am a direct descendant of two of the Pilgrims executed for witchcraft in the Salem Witch Trials of 1692, Sarah Good and Sarah Osborne, where children’s dreams were accepted as evidence (click here). They were later acquitted.

When the Revolutionary War broke out in 1776, the original Captain John Thomas, whom I am named after, served as George Washington’s quartermaster at Valley Forge, responsible for supplying food to the Continental Army during the winter.

By the time Mom completed her research, she had discovered 17 ancestors who fought in the War for Independence, and she became the West Coast head of the Daughters of the American Revolution. It seems the government still owes us money from that event.

Fast forward to 1820 with the sailing of the whaling ship Essex from Nantucket, Massachusetts, the basis for Herman Melville’s 1851 novel Moby Dick. Our ancestor, a young sailor named Owen Coffin signed on for the two year voyage, and his name “Coffin” appears in Moby Dick seven times.

In the South Pacific, 2,000 miles west of South America, they harpooned a gigantic sperm whale. Enraged, the whale turned around and rammed the ship, sinking it. The men escaped to whale boats. And here is where they made the fatal navigational errors that are taught in many survival courses today.

Captain Pollard could easily have just ridden the westward currents, where they would have ended up in the Marquesas Islands in a few weeks. But these islands were known to be inhabited by cannibals, which the crew greatly feared. They also might have landed in the Pitcairn Islands, where the mutineers from Captain Bligh’s HMS Bounty still lived. So the boats rowed east, exhausting the men.

At day 88, the men were starving and on the edge of death, so they drew lots to see who should live. Owen Coffin drew the black lot and was immediately shot and devoured. The next day, the men were rescued by the HMS Indian within sight of the coast of Chile and returned to Nantucket by the USS Constellation.

Another Thomas ancestor, Lawson Thomas, was on the second whaleboat that was never seen again and presumed lost at sea. For more details about this incredible story, please click here.

When Captain Pollard died in 1870, the neighbors discovered a vast cache of stockpiled food in the attic. He had never recovered from his extended starvation.

Mom eventually traced the family to a French weaver 1,000 years ago. Our name is mentioned in England’s Domesday Book, a listing of all the land ownership in the country published in 1086 (click here for the link). Mom died in 2018 at the age of 88, a very well-educated person.

There are many more stories to tell about my family’s storied past, and I will in future chapters. This week, being Thanksgiving, I thought it appropriate to mention our Pilgrim connection.

I have learned over the years that most Americans have history-making swashbuckling ancestors, but few bother to look.

I did.

Good Luck and Good Trading,

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

USS Essex

May 2, 2025

Diary, Newsletter, Summary

Global Market Comments
May 2, 2025
Fiat Lux

Featured Trade:

(APRIL 30 BIWEEKLY STRATEGY WEBINAR Q&A),
(FXI), (AGQ), (NVDA), (SH), (UNG), (USO),
(TSLA), (SPX), (CCJ), (USO), (GLD), (SLV)

April 30 Biweekly Strategy Webinar Q&A

Diary, Homepage Posts, Newsletter

Below, please find subscribers’ Q&A for the April 30 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Incline Village, NV.

Q: Why is the Australian dollar not moving against the US dollar as much as the other currencies?

A: Australia is too closely tied to the Chinese economy (FXI), which is now weak. When the Chinese economy slows, Australia slows. Australia is basically a call option on the Chinese economy. So they're not getting the ballistic moves that we've seen in, say, the Euro and the British pound, which are up about 20%. Live by the sword, die by the sword. If you rely on China as your largest customer for your export commodities, you have to take the good and the bad.

Q: I see we had a terrible GDP print on the economy this morning, down 0.3%. When are we officially in a recession?

A: Well, the classical definition of a recession is two back-to-back quarters of negative GDP growth. We now have one in the bank. One to go. And this quarter is almost certain to be much worse than the last quarter, because the tariffs basically brought all international trade to a complete halt. On top of that, you have all of the damage to the economy done by the DOGE cuts in government spending. Approximately 80% of the US states, mostly in the Midwest and South, are very highly dependent on Washington spending for a healthy economy, and they are going to really get hit hard. So the question now is not “do we get a recession?”, but “how long and how deep will it be?” Two quarters, three quarters, four quarters? We have no idea. Even if trade deals do get negotiated, those usually take years to complete and even longer to implement. It just leaves a giant question mark over the economy in the meantime.

Q: Is SPDR Gold Trust (GLD) the best way to play gold, or is physical better?

A: I always go for the (GLD) because you get 24-hour settlement and free custody. With physical gold, you have to take delivery, shipping is expensive, and insurance is more expensive. Plus, then you have to put it in a vault. Private vaults have a bad habit of going bankrupt and disappearing with your gold. You keep it in the house, and then if the house burns down, all your gold is gone there. Plus, it can get stolen. There's also a very wide dealing spread between bid and offer on physical gold coins or bars; usually it's at least 10%, often more. So I often prefer the ease of trading with the GLD, which owns futures on physical gold, which is held in London, England. So that is my call on that.

Q: Is ProShares Ultra Silver (AGQ) the leveraged silver play?

A: It absolutely is, but beware: (AGQ) is only good for short, sharp rises because the contango and the storage operating costs of any 2x are very, very high—like 10% a year. So, good if you're doing a day trade, not good for a one-year hold. Then you're just better off buying silver (SLV).

Q: What is more important with the Fed's mandate—unemployment or fear of inflation?

A: That's an easy one. Historically, the number one priority at the Fed has been inflation. That is their job to maintain the full faith and credit of the U.S. Dollar, and inflation erodes the value, or at least the purchasing power of the US dollar, so that has always historically been the priority. Until we see inflation figures fall, I think the chance of them cutting interest rates is zero, and we may not see actual falls until the end of the year, because the next influence on prices is up because of the trade war. The trade war is raising prices everywhere, all at the same time. So that will at least add 1 or 2% to inflation first before it starts to fall. You can imagine how if we get a 6% inflation rate, there's no way in the world the Fed can cut rates, at least for a year, until we get a new Fed governor. So that has always historically been the priority.

Q: Do you think the 10-year yield is going down to 5%?

A: You know, we're really in a no-man's-land here. Recession fears will drive rates down as they did yesterday. I haven't even had a chance to see where the bond market is this morning because. So, rates are rising on a recessionary GDP, which is the worst possible outcome. Rates should be falling on a recessionary GDP print. Of course, Washington’s efforts to undermine the U.S. dollar aren't helping. Threatening to withhold taxes on interest payments to foreign owners is what caused the 10% down move in bonds in one week—the worst move in the bond market in 25 years. So, the mere fact that they're even thinking about doing something like that scares foreign investors, not only from the bond market, but all US investments period. And certainly, we've seen some absolutely massive stock selling from them.

Q: Why won't the market go down to 4,000 in the S&P 500?

A: Absolutely, it could; that is definitely within range. That would put us down 30% from the February highs, it just depends on how long the recession lasts. If you just get a two-quarter shallow recession, we could bounce off 4800 for the (SPX) until we come out. If the recession continues for several quarters, and it's looking like it will, then 4,000 is definitely within range. So, it's all about the economy. And remember, stocks are expensive. They don't get cheap until we get a PE multiple of 16, and even then, that alone, just a multiple shrinkage would take us down to 4,000.

Q: Would it be a good idea to buy the S&P 500 (SPY) as it falls?

A: I'm getting emails from readers asking if it's time to buy Nvidia (NVDA) or time to buy Tesla (TSLA). What I've noticed is that investors are constantly fighting the last battle. They're always looking for what worked last time, and that does not succeed as an investment strategy. As long as I'm selling rallies, I'm not even thinking about what to buy on the bottom. The world could look completely different on the other side. The MAG-7 may not be the leadership in the future, especially with the Trump administration trying to dismantle four out of seven companies through antitrust, and the rest are tied up in the trade wars. So, tech is still expensive relative to the main market, and we're going to need to look for new leaders. My picks are going to be mining shares, gold, and banking. Those are the ones I'm looking to buy on dips, but right now, cash is king unless you want to play on the short side. Being paid 4.3% to stay away sounds pretty good to me, especially when your neighbors have 30% losses. You know, I've heard of people having all of their retirement funds in just two stocks: Nvidia and Tesla, and they're getting wiped out. So, you don't want to become one of them.

Q: After a tremendous run in Gold, is Silver a better risk-reward right now?

A: I would say yes, it is. Silver has been lagging gold all year because central banks, the most consistent buyers for the past decade, buy gold—they don't buy silver. But what we may be in store for here now is a prolonged sideways move in gold while the technicals catch up with it. And in the meantime, the money goes elsewhere into silver and Bitcoin. That's my bet.

Q: Is Apple (APPL) a no-touch now?

A: I’d say yes. The trade war is changing by the day, and Apple probably does more international trade than any other company in the world. Also, Apple gets hit with recessions like everybody else. There was a big front run to buy Apple products ahead of tariffs—my company bought all its computer and telephone needs for the whole year ahead of the tariffs. We're not buying anything else this year. And I would imagine millions more are planning to do the same, so you could get some really big hits in Apple earnings going forward.

Q: Should I sell my August Proshares Short S&P 500 (SH) LEAPS?

A: No, I would keep them. If the (SPX) IS trading between 5,000 to 5,800, your $4-$42 SH LEAPS should expire at max profit in August, so I'm hanging on to mine. Next time we take a run at 5,000, you should be able to get out of your SH LEAPS at 80% to 90% of the max profit.

Q: What car company stock will do the best in a high-tariff global economy?

A: Tesla (TSLA), because 100% of their cars are made in the US with 90% US parts (the screens come from Panasonic in Japan). Their foreign components are only about 10%, so they can eat that. For General Motors (GM), it's more like 30% of all components are made abroad, and they can't eat that; their profit margins are too low. (GM) expects to lose $5 billion because of tariffs. By the way, the profit margins on Tesla have fallen dramatically from 30% down to 10% in two years, so it's not like they're in great shape either. Also, Tesla hasn’t had a CEO for ten months, which is why the board is looking for a replacement.

Q: Is it a good time to buy the dip in oil (USO)?

A: Absolutely not. Oil is the most sensitive sector to recessions, because if you can't sell oil, you have to store it, very expensively. It costs 30 to 40% a year to store oil—that's the contango; and once all the storage is full, then you have to cap wells, which then damages the long-term production of the wells. I think at some point you will expect an announcement from Washington to refill the Strategic Petroleum Reserve, which was basically sold by Biden at $100 a barrel. You can now get it back for $60. That may not be a bad idea if you're going to have a strategic petroleum reserve. What's better is just to quit using oil completely, which we were on trend to do.

Q: Will interest rates drop by year-end?

A: They may drop by year-end once unemployment runs up to 5% or 6% —which is likely to happen in a recession—and inflation starts to decline, even if it declines from a higher level. Even if they don't cut by year end, they'll still cut in a year when the president can appoint a new Fed governor. What the Trump really needs to do is appoint Janet Yellen as the Fed governor. She kept interest rates near zero for practically all of her term. We need another Yellen monetary policy.

Q: The job market here seems to be slowing quite fast. Is there any way this will rebound and stave off recession?

A: No, there is not. Companies are going to be looking to cut costs as fast as they can to offset the shrinkage in sales, but also to help cope with tariffs. So no, the job market is actually surprisingly strong now. That means future data releases are probably going to get a lot worse. In April, we saw job gains in Health care, adding 51,000 jobs. Other sectors posting gains included transportation and warehousing (29,000), financial activities (14,000), and social assistance. I highly doubt any of these sectors will show gains next month.

Q: What about nuclear energy plays?

A: I like them, partly because people are buying stocks like Cameco Corp (CCJ) as a flight to safety commodity play, like they're buying gold, silver, and copper. But also, this administration is supposed to be deregulation-friendly, and the only thing holding back nuclear (at least new modular reactors) is regulation. That and the fact that no one wants to live next door to a nuclear power plant, for some strange reason.

Q: What do I think about natural gas (UNG)?

A: Don't touch. Don't buy the dip. All energy plays look terrible right here, going into recession.

Q: What are your thoughts on manufacturing returning to the U.S? And how will that affect the stock market?

A: I think there's zero chance that any manufacturing returns to the U.S. Companies would rather just shut down than operate money-losing businesses. You know, if your labor cost goes from $5 to $75 an hour, there's no chance anyone can make money doing that, and no shareholders are going to want to touch that stock. That is the basic flaw in having a government where no one is actually running a manufacturing business anywhere in the government. They don't know how things are actually made. They're all real estate or financial people.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com , go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.

Good Luck and Good Trading

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

April 29, 2025

Diary, Newsletter, Summary

Global Market Comments
April 29, 2025
Fiat Lux

Featured Trade:

(THE NEXT THING FOR THE FED TO BUY IS GOLD)
(GLD), (GOLD), (GDX), (NEM)

The Next Thing for the Fed to Buy is Gold

Diary, Homepage Posts, Newsletter

A huge new buyer may eventually enter the gold market.

That could be a year off, maybe two, or three at the most.

I’ll give you a hint who: your taxes will pay for it.

If true, it could send the price of the barbarous relic soaring above $5,000, or even $50,000 an ounce, a target long led by the tin hat Armageddon crowd.

When I spoke to a senior official at the Federal Reserve the other day, I couldn’t believe what I was hearing.

If the American economy moves into the next recession with rising inflation, a near certainty, its hands will be tied. It dare not cut rates for fear of further fanning the flames.

At that point, our central bank’s primary tool for stimulating US businesses will become utterly useless, ineffective, and impotent.

What else is in the tool bag?

How about large-scale purchases of Gold (GLD)?

You are probably as shocked as I am by this possibility. But there is a rock-solid logic to the plan. As solid as the vault at Fort Knox.

The idea is to create asset price inflation that will spread to the rest of the economy. It already did this with great success from 2009-2014 with quantitative easing, whereby almost every class of debt securities was hoovered up by the government.

“QE on steroids” would involve large-scale purchases of not only gold, but stocks, government bonds, and exchange-traded funds as well.

If you think I’ve been smoking California’s largest cash export (it’s not almonds), you would be in error. I should point out that the Japanese government is already pursuing QE to this extent, at least in terms of equity-type investments.

And, as the history buff that I am, I can tell you that it has been done in the US as well, with tremendous results.

If you thought that President Obama had it rough when he came into office in 2009, it was nothing compared to what Franklin Delano Roosevelt inherited.

The country was in its fourth year of the Great Depression. US GDP had cratered by 43%, consumer prices had crashed by 24%, the unemployment rate was 25%, and stock prices had vaporized by 90%.

Mass starvation loomed.

Drastic measures were called for.

FDR issued Executive Order 6102 banning private ownership of gold, ordering citizens to sell their holdings to the US Treasury at a lowly $20.67 an ounce.

He then urged Congress to pass the Gold Reserve Act of 1934, which instantly revalued the government’s holdings at $35.00, an increase of 69.32%. These and other measures caused the value of America’s gold holdings to leap from $4 to $12 billion.

Since the US was still on the gold standard back then, this triggered an instant dollar devaluation of more than 50%. The high gold price sucked in massive amounts of the yellow metal from abroad creating, you guessed it, inflation.

The government then borrowed massively against this artificially created wealth to fund the landscape-altering infrastructure projects of the New Deal.

It worked.

During the following three years, the GDP skyrocketed by 48%, inflation eked out a 2% gain, the unemployment rate dropped to 18%, and stocks jumped by 80%. Happy days were here again.

However, in the 21st-century version of such a gold policy, it is highly unlikely that we would see another gold ownership ban.

Instead, the Fed would most likely move into the physical gold market, sitting on the bid for years, much like it did in the 2010s Treasury bond market for five years. Gold prices would increase by a multiple of current levels.

It would then borrow against its new gold holdings, plus the 4,176 metric tonnes worth $40 billion at today’s market prices already sitting in Fort Knox, to fund a multibillion-dollar tax cut.

Yes, this all sounds like a fantasy. But negative interest rates were considered an impossibility only a few years ago.

The Fed’s move on gold would be only one aspect of a multi-faceted package of desperate last-ditch measures to resuscitate the economy at some point in the future. The time to start buying gold is RIGHT NOW!

Persistent urban legends and Internet rumors claim that the vault is actually empty or filled with fake steel bars painted gold.

That is, until Treasury Secretary Steven Mnuchin visited the vault on his way to view the solar eclipse at government expense in August 2017.

He says the gold is still there. But only if you believe Steve Mnuchin. A lot don’t.

We’ll never know for sure. Visitors are not allowed.

The Next Economic Stimulus Program?

April 17, 2025

Diary, Newsletter, Summary

Global Market Comments
April 17, 2025
Fiat Lux

Featured Trade:

(THE MAD HEDGE TRADERS & INVESTORS SUMMIT REPLAYS ARE UP)
(APRIL 16 BIWEEKLY STRATEGY WEBINAR Q&A),
(SPY), (SH), (SDS), (TLT), (MSTR), (GLD),
(GOLD), (SLV), (AGQ), (NEM)

April 16 Biweekly Strategy Webinar Q&A

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Below, please find subscribers’ Q&A for the April 16 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Incline Village, NV.

Q: Is it time to get out of the (SH), which is the short S&P 500 LEAPS?

A: I would say no. We're still very deep in the money for the LEAPS I put out two months ago. I doubt we're going to new highs by August when that LEAPS expires, so I would hang on to it, especially if you have other longs on the stock market. But if you're nervous, you probably have at least a 50% profit in that anyway, so take the money and run.

Q: Could the S&P 500 trade down to 4,500?

A: Absolutely, yes. China is kind of in a good position. They can wait. They can wait a very long time until they get what they want. We can't. Trump needs China to fold immediately, or the trade with China will cause a never-ending recession in the US. Remember, we have elections here—in China, they don't. That puts them in a very strong negotiating position. That's why you're seeing basically all economic data roll over and point to a recession. Even if some settlement is negotiated, there still will be some tariffs left. They just won't be at 145%. You know, it’s not a great investment environment to bet your retirement savings on, and certainly not an environment to engage in very rapid short-term trading unless you have 50 years of experience like I do. That's why I'm up this month, and the rest of the world is getting absolutely crushed.

Q: Are you going to send more LEAPS?

A: LEAPS are something we do at market bottoms, not tops, because we have such enormous leverage in the LEAPS trade—they’re usually 10 - 1 to 100 - 1 leverage. At some point, there'll be a lot of fantastic LEAPS in technology stocks, but I don't think we've hit bottom yet. In fact, at best, they've mounted weak bounces over the last few days. So, the charts still look terrible—not a good time for LEAPS.

Q: When do you see the bottom?

A: I have no idea, nobody has any idea. It's like economic policy is changing hour by the hour. Best thing to do is nothing in that situation—and that's what most of the economy is doing. That's why the economy is shutting down. Nobody knows what the final picture will look like—the uncertainty is the greatest since the uncertainty of the pandemic, or 9/11 before that.

Q: Should I hide in a money market fund?

A: No, with the money market fund, you run credit risk with the issuer of that fund. With 90-day US Treasury bills, there's no risk, so you have a government guarantee to get all your money back on the maturity date. If your custodian goes bankrupt, you can always get the T-bills back. It may take you three years in custodian bankruptcy proceedings to get your money market fund back. That’s what we saw with MF Global in 2011.

Q: What is the end game of the China-US trade dispute? How does it affect the stock market?

A: Well, we can't see an end game. Basically, you have two counterparties who are stubborn as heck, and we could be stuck in no man's land for a very long time. You'd have to think eventually a settlement of some type comes. Is that worth a recession for the U.S? For most people, I doubt it. And what if China just wants to wait out Trump and wait for the tariffs to go away in four years? That is a possible outcome. Stock markets always discount the worst-case scenario first before they discount anything else. I think that's what we saw last week, when we broke 5,000 in the S&P 500.

Q: Are you optimistic about bank stocks now?

A: No. They will lead the downturn along with technology stocks. But when this all ends, they will also lead the upturn, and that's why you're seeing bank stocks have such hard bounces off their bottom. It's another one of two sectors that people will be first to rush into—banks and technology stocks. And while tech is expensive, banks are cheap.

Q: How can interest rates fall when government policies, interest rate policies, are causing them to spike?

A: Well, it's very simple: when foreign investors lose faith in the U.S. Government, they have, they pull their money out. They don't need to be here. It's a situation of, “Well, if you don't need us, we don't need you.” And foreigners own about 25% of all of the $36 trillion in national debt out there, or about $9 trillion. And in stocks they own here and the number goes up to $12 trillion. It doesn't take much selling to cause a panic in the bond market. That is what we have been seeing. Whether that continues, I have no idea—it depends on the next tweet coming out of Washington.

Q: What about Bank of America (BAC)?

A: Yeah, it will also bounce the hardest off the bottom—great buy, and these things are all cheap relative to technology stocks. You know, banks still have PE multiples in the low teens. Tech stocks are all the way down to the low 20s from the 30s and 40s, so they're roughly trading at double the multiples of bank stocks. That's one reason people are rushing back into these.

Q: What's the basis of your prediction on a falling US dollar?

A: Again, it's foreign selling. I don't think I've ever seen a falling dollar and rising interest rates in 60 years of watching. It goes against all economic fundamentals in the currency markets. But when there's a panic, there's a panic. People want out of everything at any price, and that's what's happening now. As long as foreigners are dumping our assets, the dollar will keep going down—dumping our assets means dollar selling after 80 years of dollar buying.

Q: Is gold the only safe haven?

A: Yes. We'll get into this in the gold section, but even gold went down for three days, and then wiser heads prevailed and it actually triggered a panic melt-up in gold assets. The miners were up 25% in days. That is another great weak-dollar play.

Q: How do you protect the US from a dollar fall?

A: Change our economic policies; end the trade war.

Q: Is it a good time to buy a house?

A: No, it is not, unless you can wait out the current downturn. High interest rate mortgage rates shot up from 6.5% to 7.1% in a week, and that basically kills off the housing market for the foreseeable future. And of course, when people are worried about their futures, their savings, and their assets, the last thing they do is go out and buy a house.

Q: Is there enough negative sentiment around now for us to go back into the bond market?

A: No. There is no precedent for the type of market action that's going on now. Will the U.S. government suddenly become reasonable? I doubt it. You can expect tweet bombs to happen at any time. So, people are just hoarding cash and avoiding risk at all costs. It used to be that bonds were the safe place to go. No longer. Not with 10% moves down in a week like we saw last week. Sorry—T-Bills are the only actual safe play out there, and their yield is the same as Treasury bonds without the risk.

Q: Will crypto keep going down?

A: If we continue with a risk-off market, I think you can expect crypto to keep falling. Crypto fell 30% from its top—at least Bitcoin did. It's basically matching the downside with tech stocks one for one, so no protection in crypto, no diversification. The protection aspect that was promised by crypto promoters lever shows. No flight to safety is happening there whatsoever. And that's why I'm looking to add to my short in MicroStrategy Inc. (MSTR)—they're a leveraged long Bitcoin play.

Q: Is the U.S. economy set for a hard landing?

A: I think absolutely, yes, the hard landing is in progress. That's what all of the economic data says. It's hard to find any positive news coming out of the economy—people are running for their lives, essentially.

Q: Do you expect inflation to return and take stocks lower?

A: Absolutely, yes. The highest tariffs in history start hitting retail prices in the next month or two, and the price increases should be dramatic, especially on anything from China. So yeah, we should see that come out in the data in the next few months.

Q: Do you expect silver to follow gold?

A: Yes, I do, but it hasn't been performing as well because there is a recession drag on silver, which you don't have for gold. Silver (SLV), (AGQ) are used in a lot of electronics and solar panels.

Q: When do you get back into gold (GLD)?

A: Whenever we get a dip. So far, any dips have been very brief and short-term. It's kind of reminiscent of the 1970s when gold moved from $32 an ounce to $900. That’s when you found me in a line in Johannesburg, South Africa, waiting to sell all my Krugerrands.

Q: Which countries will benefit from manufacturing moving out of China?

A: The answer is really no countries. As soon as manufacturing moves from China to another one like Vietnam, the US then puts punitive tariffs on that second country. So, there's no place to hide. It's really a war against the world. That's the message that the administration is putting out: if you don't want to build a factory here, we don't want to do business with you. We don't want your products. And most companies will do nothing. They'll wait this out, wait for a future president to eliminate all tariffs. Until then, international trade grinds to a halt. No trade makes sense at 145% tariff. Just to give you some idea on how much that is, if you buy a top end MacBook Pro for $8,000, and you pay the full 145% tariff, that is an $11,600 tariff if you have to pay it, which brings the total cost of a MacBook Pro to nearly $19,600. How many are you going to buy at that price?

Q: Do you think the Fed will cut interest rates?

A: No, we haven't seen the inflation data yet. They are backward-looking, and only after we see a sharp rise in prices will they raise rates. Chances of them cutting now are zero with all the risks in inflation to the upside right now and unemployment still under control. So, no interest rate cuts this year.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.

Good Luck and Good Trading

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

Testimonial

Diary, Homepage Posts, Newsletter, Testimonials

Just a quick note of appreciation for your helping me decide to get my clients into (GLD) with a 15% allocation early this year.

It sure has helped me to be more of a hero to my clients this year than a goat...

Best wishes to you and yours! Keep 'em coming.

Brad
Bakersfield, CA.

April 14, 2025

Diary, Newsletter, Summary

Global Market Comments
April 14, 2025
Fiat Lux

Featured Trade:

(MARKET OUTLOOK FOR THE WEEK AHEAD or REARRANGING THE DECKCHAIRS ON THE TITANIC),
(SPY), (GLD), (NFLX), (NVDA), (TLT), (MSTR), (SVXY), ($VIX)
(AMZN), (AAPL), (GOOGL), (PANW), (NFLX), (CORN), (WEAT), (SOYB)

The Market Outlook for the Week Ahead, or Rearranging the Deckchairs on the Titanic

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Back in 1987, I flew my Cessna 340 twin from London to Rome to visit Morgan Stanley’s high-end Italian clients. Held over by meetings, I got a late start, and I didn’t get as far as the French Champagne country until midnight. Right then, at 20,000 feet, the gyroscope suddenly blew up with a great resounding “thwacking sound.”

I instantly lost all instruments and lights, but still had a radio. I commenced a very wide spiral dive in the pitch-black darkness. Paris control started yelling at me because I was deviating from my approved flight plan. I started to pass out from vertigo.

Then I did what all Marines and Eagle Scouts are taught to do in this situation.

I improvised.

I pulled a flashlight and canteen out of my cockpit side pocket. By steering to the water level, I was able to use it as an artificial horizon level and straighten out the plane. Then I used the Girl Scout compass I always kept around my neck and plotted a rough course to Paris. Then I got on the radio.

“Mayday, Mayday, Mayday, N3919G complete instruments failure, request emergency landing at nearest airfield.” The air went dead for 30 seconds.

Then I heard “N3919G, cleared for approach Charles de Gaulle, steer 240 degrees and change over to 118.15.” As I made my final approach, the Eiffel Tower sparkled off my starboard wingtip. I could see the entire Charles de Gaulle fire department (Sapeurs Pompiers in French), blinking their blue lights. When I hit the runway, they chased me all the way until I stopped.

Then a captain elaborately dressed in firefighting gear stepped out of his fire engine cabin and asked, “Are you alright?”

The experience reminds me of the government’s current economic policies. They are attempting to rebuild the engines of a plane while flying at 20,000 feet in the dark with no tools or instruments. Except there are 340 million passengers this time, not just one.

Will we pull out of the dive before we crash?

Back in January and February, my biggest concern about the markets was complacency. It is safe to say now that this concern has completely vanished, not just by me but everyone.

I have been looking for parallels to the current crisis, and there are few to choose from. Stocks, bonds, oil, commodities, and the US dollar are all crashing at the same time. S&P 500 multiples (SPY) have been marked down from 22X to 18X in a mere two months, and 16X or 14X beckon. The NASDAQ multiple has collapsed from 31 to 21. Small caps (IWM) were hit the hardest, falling to 2016 levels.

It was the action in the bond market that was most concerning, which was hit by massive waves of selling from both foreign investors and hedge funds facing margin calls. Liquidity has disappeared and the Treasury was ill-equipped to deal with this because DOGE just fired 10,000 of their people.

Most don’t realize that US bonds are the lifeblood of the global financial market. When they drop 10% in a week, as they just did, ripples become tidal waves. Suddenly, banks are undercapitalized, central banks and companies have to mark down reserves, and margin calls run rampant.

A national debt of $36 trillion, which was happily ignored for 25 years, instantly becomes a crisis. Is US debt headed for junk status? Will Trump impose capital controls to stem the outflows? You might call these questions fanciful or born of conspiracy theories, but I was woken up every morning last week from European banks asking exactly this. When they start asking in the debt markets, you have a problem.

All earnings reports coming out now can be torn up and thrown out the window. That’s because they reflect profits from an ancient economy in the distant past that no longer exists, like January-March 2025.

Back then, it was about a growing globalized economy spinning off ever-increasing profits and higher multiples and share prices. Now it’s about a shrinking global economy at war with itself, declining profits everywhere justifying lower multiples and share prices.

Last year, S&P 500 earnings came in at $240. Two months ago, the consensus forecast for 2025 was $270. Now it’s moving towards $230.

The average price earnings multiple is now back up to 20X. The 120-year average is 14X. American exceptionalism picked up another 8 multiple points after WWII. If we give all that back and the multiple returns to 14X that gets the (SPX) down to $3,220, or off 47.5% from the February high.

Confidence levels are collapsing at 50-year lows. We’re rearranging the deckchairs on the Titanic while we’re headed straight for a giant iceberg, and it's dark and darn cold outside. We are not getting a reversion to the mean in stock markets; we are getting a reversion far beyond the mean. Markets won’t bottom until all the worst-case scenarios out there are fully discounted.

The shock to the global financial system is of the same magnitude as when Nixon took the US off the gold standard in 1972. That’s why gold is rocketing now as then. The US dollar then lost half its value.

This is the first bear market created by government policies since 1930, back when the Smoot-Hawley Tariff Act started the last major trade war. When the current policies end, the bear market will end and not before then. We are now within days, if not hours, to the complete collapse of the global financial system. The global economic pie is rapidly shrinking, and everyone is fighting over the scraps that are left.

Trillions of dollars of capital from corporate America have been stranded abroad in the wrong countries because Trump convinced them to move there eight years ago, like Vietnam. Millions of small businesses unable to eat the tariffs or pass them on to consumers will go out of business.

With no policy changes from Washington expected any time soon, it’s likely that we will eventually exhaust selling and enter an “L” shaped bottom. That has stocks bottoming out and then moving sideways in a range for a long time. You can forget about any immediate sharp “V” type recovery that takes us back to the all-time highs we saw in February.

So you should use any rally in the stock market to sell short calls against the long equity positions you want to keep. If you want to be more proactive than that, I have some clever ideas for you.

We now know that Trump is willing to resort to gaming the market by talking it up whenever the S&P 500 hits 5,000. That’s because he is taking immense heat from Americans who have lost 20%-30% of their retirement funds in two months.

You can use the next plunge to 5,000 in the (SPX) to buy the best quality technology names like (AMZN), (AAPL), (GOOGL), (PANW), and (NFLX), which likely won’t go to new lows on the next crash and will rocket on any trade war success.

There are other fish to fry.

Let’s say that a tweet hits that the trade war is progressing or is about to end. What are China’s biggest US imports? Corn (CORN), wheat (WEAT), or soybeans (SOYB), which all have actively traded ETFs just above four-year lows. They will take off like a scalded cat on any good news.

The next time the Volatility Index ($VIX) takes a run at $60, buy the Proshares Short Vix Short Term Futures ETN (SVXY), an exchange-traded fund that sells short futures in the ($VIX). You can buy shares in it like any ETF. There is no expiration date. It hit a low of $32.90 on Thursday, but traded as high as $40 the week before, and $50 in December.

By the way, icebergs don’t enter the Atlantic shipping lanes anymore. Global warming has melted them before they do. The few that do drift south are tagged with transmitters that show up on ship radars. So if you’re planning a trip to Europe this summer on the Queen Mary II, you don’t need to worry about suffering the fate of Leonardo DiCaprio.

The Financial Crisis Trade is Still On, with 10-year US Treasury bonds hitting 4.6% yields, the US dollar plunging to 3-year lows, and gold at an all-time high. Foreign investors are abandoning the US at an unprecedented pace. It turns out that confidence in the US was worth a lot more than we thought. You don’t know what you have until you lose it.

Trump Cracks, Caves, and Does a U-Turn, announcing a 90-day delay in trade tariffs forced by the imminent collapse of global financial markets. The 10% tariffs remain. Inflation is still on track to skyrocket. A Fed interest rate cut is now on the table for June to head off a recession. What is the long-term trend now? It’s anyone’s guess. But Christmas shopping is certainly going to be a lot more expensive this year.

China Imposes 125% Retaliatory Tariffs, and Europe is yet to come. China’s biggest US imports are all agricultural, and many commodities hit multi-year lows on Friday, delivering a knockout blow to US farmers just as the planting season begins. Shiploads of American grain may be left to rot in the ports as Chinese importers refuse delivery due to the dramatic price increase. Also announced were antitrust investigations of US tech companies and export restrictions on rare earths needed for tech products. It’s 1930 all over again.

Chinese Tariffs Raised to 145%, in a US retaliation to the retaliation. Markets tanked again. Most of the goods and parts cannot be obtained elsewhere. Recession fears are now going mainstream, it’s not just me.

Unemployment rises to 4.2%, a multi-year high, says the March Nonfarm Payroll Report. Nonfarm payrolls in March increased to 228,000 for the month, up from the revised 117,000 in February. Health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average.

Federal Reserve’s Powell Says Inflation to Rise, as a result of the larger-than-expected tariffs. But don’t expect any interest rate cuts until yearend when the Fed has the benefit of 20/20 hindsight on inflation.

Volatility Hits 16-Year High at 60, in overnight Asia trading. The ($VIX) peaked at 95 during the Financial Crisis in 2009. ($VIX) may not have peaked yet.

Oil Crashes, down an amazing $13, or 18% in a week, from $72 to $59. High dividend-paying (XOM) has collapsed by 18%. It is the sharpest fall in Texas tea prices since the 1991 Gulf War. Recession fears are running rampant, and no one wants to pay for storage until a recovery, which may be years off. Sell all energy rallies.

JP Morgan Raises Recession Risk to 79%, while credit investors remain sanguine even as funding stress threatens to build. The small-cap focused Russell 2000, which has been battered in the recent selloff, is now pricing in a 79% chance of an economic downturn, according to JPMorgan’s dashboard of market-based recession indicators. Other asset classes are also sounding alarms.

Q1 Gold Inflows Hit Three-Year High, according to the World Gold Council. Gold ETFs saw an inflow of 226.5 metric tonnes worth $21.1 billion in the first quarter, the largest amount since the first quarter of 2022, when global markets were grappling with the immediate consequences of Russia's invasion of Ukraine. This raised their total holdings by 3% to 3,445.3 tonnes by the end of March, the largest since May 2023. Their record was 3,915 tonnes in October 2020.

Canadian Visitors Fall 32%, in line with other forecasts of a collapse in international travel. That is why Delta Air Lines (DAL) crashed by 50% in three months. Conditions will get worse before they can get better. A weak dollar has caused the price of my Europe trip this summer to rise by 20%.

Consumer Confidence is in Free Fall. Friday brought a fresh signal that consumers were queasy even before Wednesday’s policy shift. US consumer sentiment tumbled to the second-lowest level on record in a University of Michigan survey, as inflation expectations soared to multi-decades highs. That result was based on interviews from March 25 through April 8, before the change in tack on tariffs.

Delta Pulls Guidance, citing the trade war’s impact on sales. The stock is down 50% in three months. No guidance from any company is possible or credible, as Q1 earnings took place in an ancient, more business-friendly world.

April is now up by -1.13% so far due to the explosion in implied volatilities in our hedged positions. A lot of the Friday options prices made no sense and may reflect broker efforts to increase margin requirements. That takes us to a year-to-date profit of +14.96% so far in 2025. My trailing one-year return stands at a spectacular +75.65%. That takes my average annualized return to +50.28% and my performance since inception to +765.85%, a new all-time high.

It has been another wild week in the market. I was forced out of longs in (GLD) and (TLT) thanks to panic-inspired out-of-the-blue freefall. I managed to hang on to my longs in (COST), (NVDA), and (NFLX) because they were so far in the money. I used a 25% rally in the leveraged long Bitcoin play (MSTR) to add a short. I also used a run by the Volatility Index ($VIX) to $54 to add the Proshares Short VIX Short Term Futures ETN (SVXY). Unusual times call for unusual trades.

Some 63 of my 70 round trips, or 90%, were profitable in 2023. Some 74 of 94 trades have been profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.

Try beating that anywhere.

My Ten-Year View – A Reassessment

We have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties is now looking at multiple gale-force headwinds. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old. My Dow 240,000 target has been pushed back to 2035.

On Monday, April 14, at 8:30 AM EST, the Consumer Inflation Expectations are announced.

On Tuesday, April 15, at 8:30 AM, the New York Empire State Manufacturing Index is released.

On Wednesday, April 16, at 1:00 PM, the Retail Sales are published.

On Thursday, April 17, at 8:30 AM, the Weekly Jobless Claims are disclosed. We also get Housing Starts and Building Permits.

On Friday, April 18, markets are closed for Good Friday.

As for me, in 1987, to celebrate obtaining my British commercial pilot’s license, I decided to fly a tiny single-engine Grumman Tiger from London to Malta and back.

It turned out to be a one-way trip.

Flying over the many French medieval castles was divine. Flying the length of the Italian coast at 500 feet was fabulous, except for the engine failure over the American air base at Naples.

But I was a US citizen, wore a New York Yankees baseball cap, and seemed an alright guy, so the Air Force fixed me up for free and sent me on my way. Fortunately, I spotted the heavy cable connecting Sicily with the mainland well in advance.

I had trouble finding Malta and was running low on fuel. So I tuned into a local radio station and homed in on that.

It was on the way home that the trouble started.

I stopped by Palermo in Sicily to see where my grandfather came from and to search for the caves where my great-grandmother lived during the waning days of WWII. Little did I know that Palermo had the worst windshear airport in Europe.

My next leg home took me over 200 miles of the Mediterranean to Sardinia.

I got about 50 feet into the air when a 70-knot gust of wind flipped me on my side perpendicular to the runway and aimed me right at an Alitalia passenger jet with 100 passengers awaiting takeoff. I managed to level the plane right before I hit the ground.

I heard the British pilot of the Alitalia jet say on the air, “Well, that was interesting.”

Fire engines flashing lights descended upon me, but I was fine, sitting in my cockpit, admiring the tree that had suddenly sprouted through my port wing.

Then the Carabinieri arrested me for endangering the lives of 100 tourists. Two days later, the Ente Nazionale per l’Aviazione Civile held a hearing and found me innocent, as the windshear could not be foreseen. I think they really liked my hat, as most probably had distant relatives in New York City.

As for the plane, the wreckage was sent back to England by insurance syndicate Lloyds of London, where it was disassembled. Inside the starboard wing tank, they found a rag that the American mechanics in Naples had left by accident.

If I had continued my flight, the rag would have settled over my fuel intake valve, cut off my gas supply, and I would have crashed into the sea and disappeared forever. Ironically, it would have been close to where French author Antoine de St.-Exupery (The Little Prince) crashed his Lockheed P-38 Lightning in 1944.

In the end, the crash only cost me a disk in my back, which I had removed in London and led to my funny walk.

Sometimes, it is better to be lucky than smart.