- Andrew Keene hits the (market) panic button…
- Mayday: Dow 12,000?
- The new safe haven that might save your portfolio
- Ray Blanco’s halo fi/5G power play
- Second-hand mayhem in Allentown, PA
- Reader’s conundrum: Dejavu…all over again
“Recently you mentioned that one of your experts said he looks at earnings when it comes to investing (and mentioned a lot of successful investors do also),” a reader says. “So what gives with the recent good earnings reports and swan dives in the market by investors?”
There’s no group think here: At Agora Financial, we take a lot of pride in providing a platform for experts of all stripes; opinions among our editors often diverge greatly…We believe that’s a good thing.
And we like to think we have some of the smartest readers out there, readers who weigh the value of an editor’s informed opinion and apply it — or not — to their personal finances.
That being said, we’re not skirting the reader’s question at the top: In fact, we’ll offer two answers…one now and one in the mailbag section below.
So read on for one novel — and we think well-reasoned — perspective….
“By most measures, the economy is doing well,” trading whiz Andrew Keene agrees with our reader. “Economic data and corporate earnings have been strong…And yet, the market continues to sell off, posting massive losses.”
We introduced you to Andrew when he came aboard at Agora Financial in 2018.
Before that, Andrew worked as a proprietary trader at the Chicago Board Options Exchange. In 2011, he turned his experience into a business called AlphaShark Trading where he taught his personal strategies to over 50,000 students.
Andrew’s strategy? He’ll pursue any trading opportunity that will deliver alpha returns.
Back to the sell-offs we’ve seen at the beginning of 2018…not to mention the return of volatility.
Andrew says: “A few key factors tell us that this move could be much more than a simple correction:
- Market volatility is hitting record-breaking highs
- There doesn’t seem to be a ‘buy the dip’ mentality amongst investors in this market
- The sell off hasn’t been contained to U.S. markets — global markets have seen some of their biggest sell offs in the past two years
- There is no clear reason for the market to be selling off this aggressively”
“Is it just the market correcting itself after a massive run higher in 2017? Is it simply moving down to ‘sensible’ levels….?”
Those are rhetorical questions, by the way; Andrew goes on to say…
“I believe the Dow could drop to 12,000.”
“The writing is on the proverbial wall and the panic is setting in on Wall Street. And in markets around the world, for that matter.
The uninterrupted bull market we’ve enjoyed since 2009 is about to be, er, interrupted.
“The next crash — which I believe will be here soon — will create demand for a new safe place for investors to put their money,” says Andrew.
While gold has been the traditional ‘safe haven’ of choice, “during the recent selloff in stocks, gold prices didn’t go up as expected. They fell along with the stock market.
Traditionally, gold’s been negatively correlated to the action of the stock market: When stocks fell, gold floated.
All that’s changed.
“In fact, the gold market has been positively correlated with the stock market for some time now,” Andrew says.
“Cryptocurrency markets will give investors a new asset alternative where they can reposition their money,” Andrew contends.
“But you’re probably wondering…Isn’t Bitcoin just another money-losing bubble?
“Sure, Bitcoin saw a big run-up and then fell even further than the markets.”
But Andrew believes there’s a distinct difference between bitcoin’s surging price and the Dow’s nearly quadrupled value during an unprecedented nine-year bull run.
“Their respective pullbacks are different, too,” Andrew says.
“Bitcoin skyrocketed in value in 2017 because of its undeniably transformative impact on our world.
“You can’t say that about stock prices that for almost a decade have been inflated by phony Fed money and manipulated by derivatives trading.
“The crypto ‘crash’ on the other hand was a case of fear,” says Andrew, “not inflated value.
“The reality is that cryptocurrencies are full of real value that’s supported with deep investments by the biggest names in technology and banking.”
“I realize that it can be difficult to picture this playing out in the market, given the negativity surrounding cryptos,” Andrew says.
Investors looking for a safe haven for their money — that’ll continue to grow in value — will land on bitcoin and other cryptos “as a replacement for crashing stocks and debt-laden U.S. bonds.”
“When the correction occurs,” Andrew contends, “the ability to transfer assets instantly and without risk will be extremely valuable.
“And that’s what Bitcoin and other cryptocurrencies can deliver without any interference from governments or central banks.
“Once investors realize this – and that’s already starting to occur – Bitcoin and other cryptocurrencies will recover from their recent losses and go up much more,” Andrew says.
“Increased adoption of Bitcoin and other assets will continue to drive prices up in the crypto markets.
“I know this might seem like a bold claim. Calling for a major stock market selloff and Bitcoin rally is bold,” Andrew admits.
“Again,” he repeats, “the Dow will correct and Bitcoin will spike.”
In light of which you should change the way you trade.
In this environment, Andrew favors a pair trade: “To set this up you get long one asset and short another with the expectation of their prices to diverge.”
Andrew’s record in Bitcoin and his experience trading through market corrections make this setup his favorite trade opportunity he’s seen in a very long time.
He says: “I couldn’t be more confident of this prediction.”
He lays out three simple steps for this ultimate play…the first is to complete his AlphaShark Crypto Bootcamp.
“Go to the AlphaShark Crypto Bootcamp,” Andrew says, “this will teach you the ins and outs of the crypto markets. Everything from how to set up your first account, to placing your first trade…and how to spot amazing opportunities in cryptos.”
“Oil prices climbed Monday, with the U.S. benchmark pushing above the $70-a-barrel mark for the first time 2014,” according to MarketWatch.
“Iran was first and foremost at the minds of traders on Monday as a decision over whether U.S. President Donald Trump will abandon a nuclear deal with Iran draws closer.”
Trump must make his decision by Saturday; he’s expected to scrap the deal and reimpose sanctions, driving the price of oil higher.
We’ll keep you updated on that…but you’ll probably feel the effect of Trump’s decision next time you fill ‘er up!
At last check, the Dow is 50 points shy of 24,500 — tacking on another 185 points to the 300-point gain Friday.
Gold is still stagnant at $1,313.
4G created hundreds of billions of dollars worth of new wealth,” our tech maven Ray Blanco says. “But 4G will pale in comparison to the 5G tsunami.”
When 4G got rolling in 2011, it made iconoclasts like Uber, Instagram, Square and Tinder possible — just to name a few.
Now — as we reported last week — “we’re in a race to be the first country to deploy 5G wireless networks,” Ray says, and “the Trump [administration] is putting 5G deployment at a high priority.”
One of the big stories in the 5G space is the potential merger of T-Mobile and Sprint in a $26 billion all-stock deal.
“If the deal goes through, it will create a new $146 billion company that will vie for the No. 2 spot versus AT&T while shooting for the top spot occupied by Verizon,” says Ray.
“The new company will be using its combined resources,” he says, “along with a $40 billion investment to build out the nation’s fastest fifth-generation wireless network.”
The 5’s followed Ray’s enthusiasm for Halo Fi technology — a system of satellites that orbit close to Earth, providing wireless signal — and, if the T-Mobile/Sprint merger is approved, it could prove very profitable for 5G and Halo Fi.
The common denominator is a telecommunications company that’s “aggressively pursued the opportunity for fast and available-everywhere space-based internet connectivity through its large investment in satellite startup OneWeb.”
What’s that got to do with 5G?
“The new [5G] wireless technology will be a ‘network of networks’ that will seamlessly combine multiple wireless communications technologies…including satellite networks,” Ray says.
And one mighty telecom “is in the thick of the Sprint/T-Mobile merger deal,” he says.
At the beginning of the 2018, this company escalated its investment in Sprint — and now owns 84% of the smaller telecom.
“If the Sprint/T-Mobile deal passes government oversight,” Ray says, it will put this company “in play to be a major 5G player in the United States.” Check out how you can profit from this play right here.
“Would you agree to have your photo taken to swap a vintage LP at your local record store?” asks an article at The Morning Call. “How about your fingerprint?”
That’s exactly what’s happening in Allentown, Pennsylvania.
In an effort to prevent unloading stolen goods at local pawn shops, the powers that be started requiring all pawn shops to catalog incoming merchandise, including a picture and fingerprint from anyone pawning goods.
But it’s not just pawn shops that have been swept up in the dragnet.
The law — passed in December — requires pawnbrokers as well as second-hand and precious metal dealers to take a digital photo of sellers, request a valid i.d. and record a clear thumbprint. At the close of business, the dealer must upload this information to police.
“When grandma comes in with records and I’m buying, I don’t want to fingerprint her,” says James Holmes, owner of Allentown’s Double Decker Records. “I’m 43 and I don’t know that I’ve ever been fingerprinted in my life.”
To further complicate matters, “Any items bought or exchanged by the dealer must be segregated from normal inventory and held for 15 days.”
Candida Affa, vice president of Allentown City Council, believes the law should be limited to pawn shops.
“That’s where the criminal activity happens, people bring in hot merchandise,” she says. “It doesn’t happen in comic book stores or record stores.”
Ahh…a voice of reason.
Allentown’s police department, on the other hand, is not “recommending any changes to the ordinance.”
Perhaps Billy Joel’s Rustbelt anthem — sing it with me now, “Well we’re living here in Allentown” — should be updated to include the plight of the hipster vintage-vinyl dealer?
Mailbag Redux: Recently you mentioned that one of your experts said he looks at earnings when it comes to investing (and mentioned a lot of successful investors do also),” a reader says. “So what gives with the recent good earnings reports and swan dives in the market by investors?”
We offer a second opinion — as promised at the top — on the following conundrum: Strong earnings vs market volatility.
This one comes from Alan Knuckman…someone who rubbed elbows with Andrew Keene on the floor at the CBOE.
Alan says: “We’ve witnessed yet another epic comeback this week…
“Stocks erased early losses on a daily basis and have pushed up off the lows to boast a miniscule drop for the week, with a few hours to go.
“We have seen this pause in prices before. And each and every time in history, the stock market has made new highs after a selloff.
“I know it may be tough to swallow, but things aren’t different this time!
Investors are stepping in on stock slides to buy bargains — and they’ll continue to do so as fear fades.
“The fundamental factors of earnings growth and record corporate profits will support stocks once again, traders.
“To be sure, stocks are still in a rut and can’t quite find their footing.
“But once investors separate their emotions about politics from the fantastic fundamental facts we’re getting from corporate America, expect them to resume their epic rise.
“Before you write off stocks, remember this…
“The broad market barometer has rallied 299% from its March 2009 lows…Don’t underestimate the power of this bull market!”
So, reader — again — there’s no group think at Agora Financial.
And just as our editors come from all walks of life, so, too, our readers — from rookie investors to retirees looking to protect — and grow — their nest eggs…There’s something for everyone.
The 5 Min. Forecast
P.S. Andrew Keene believes a major market correction is inevitable and imminent. And, he says: “That’s not necessarily a bad thing.”
For someone who made millions in the housing crash of 2007, he views market corrections as great opportunities.
Andrew believes the coming market crash will boost the upside in crypto markets — where bitcoin now sits at $9,300.
You won’t want to miss out on this chance of a lifetime to capture some big profits in a very short period of time.