ALL-ACCESS Member Heads Up SQQQ and SKYY Options Hedge Trades--The Heavy Digital Platformity QQQ is Rolling Over As Predicted!
Subscriber,
As well stated earlier this week, the "Platformity Stocks at Any Price!" rally was long in the tooth and a Microsoft EPS report and guidance would tell us if the PSAAP rally was out of steam and financial gravity would take ahold of the QQQ and rollover.
Well, today at the QQQ the rollover was almost complete on less than expected numbers from Microsoft. The chart on the QQQ bubble breaking down past the 10-day 20-day support on this epic rally off the bottom on March 24.
The Digital Platformity SKYY chart is right there at the precipice, too.
Like Shakira says, "The charts don't lie!" Here is the Platformity Index chart ready to roll over
The broader QQQ aka Nasdaq 100 stock index did break down the sacred 10-20 day moving average support late in the trading day today:
Here is a QQQ support line graph from my option guru Kevin Blaine aka @PrivateMalibu on Twitter
Bottom line: IF this move does not correct itself by noon EDT tomorrow, or we go nowhere on larger than average volume, we will establish a long option position in the short QQQ ETF the SQQQ and buy put options on the SKYY or IVC Digital Platformity ETFs.
The Inverse QQQ ETF the SQQQ on the other hand looks ready to break its downtrend support line as well:
The reason? On the Microsoft revenue/EPS/forecast call yesterday, they did not beat on revenues, beat of EPS nor did the guide up for their Q1 forecasts. Microsoft (NASDAQ: MSFT) provided fiscal Q1 guidance with the Productivity and Business Processes segment below consensus, following a FQ4 segment miss as well.
Revenue forecast breakdown: Productivity and Business Processes, $11.65-11.9B (consensus $12.09B); Intelligent Cloud, $12.35-12.8B (consensus: $12.6B); More Personal Computing, $10.95-11.35B (consensus: $11.14B).
Now obviously those are amazing numbers if you multiply them by four. BUT as we said in Part III of the July newsletter when Digital Platformity stocks became the "Safe Secular Growth" trade, they sucked in the momentum CTA algo trade bots that sell based on technicals and any negative "beat, beat, raise" miss print.
Update: Our snazzy new Ultra Income portfolio & Buy Under tracker is done and we are loading up our stocks and dividends paid--and the numbers as you would expect are astonishing. When ready, we will post on a Google Sheets link with automatic price updating. Next up the Ultra Growth portfolio gets loaded in and again they automatically update (God bless Excel macros!).
PS--the breakout of Gold and Silver prices after the EU approved their 1.3 trillion euro bailout plan is very interesting. With zero and negative real 5-10 year sovereign bond rates, and the Europe stimulus plan voted in, wealthy institutional investors have turned to gold and silver bullion as the best hedge for their equity exposure and not negative rate bonds.
With the US, EU, Japan, and China all printing history-making amounts of cash and sending checks to keep their middle and lower socioeconomic class households solvent and economies running, we have an obviously unprecedented monetary and fiscal stimulus all over the world. As I shared this week, none of this emergency bailout money is inflationary given the 20%+ unemployment rates. But the break out is telling us that the epic global money printing has to devalue fiat currencies starting with the already weak US dollar.
So sports fans, since the historic Silver/Gold price ratio is 55X -- at $1800 Gold that makes for $33 silver--and a great hedge on "risk asset" portfolios. And silver demand is exploding which to my mind is the pricing in the history-making printing of fiat currencies only backed by the faith and credit of currency printing nations.
That is a "transforming monetary event" and worthy of our attention. Here is the SLV Silver ETF that holds about 60% of the world's silver reserves in its vaults.
In other words, things that make you go "hmmm."
Cares Act 3.0: Our insiders on the Hill in DC say 70% of the $600 weekly Federal unemployment stipend to be added retroactively to the 20 million-ish Americans. Congress has no choice--20 million Americans now face eviction/foreclosure and that sure would burst the "we have this pandemic under control" narrative from the White House. Money for States, hospitals, kids, and Covid-19 testing too.
When the CARES Act 3.0 is finalized and signed, that should stabilize the stock and bond markets. But if money printing on a never seen global scale is good for precious metals demand, we will ride that wave of Gold/Silver buying for all it's worth.
Have a great night--BASEBALL IS BACK!!!