Transformity Research

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China SARS/CoronaVirus Update: Time To 100% Hedge NOW!

Dear Subscriber,

When I want to track international events, I stay away from US media and go with Canada or the BBC. What this video tells me is there is an ALL HANDS OF DECK emergency with this SARS-like coronavirus.

In addition, we have multiple reports from our Transformity Experts Alliance members working in China, and specifically at the Micron semiconductor plants in Wuhan and other locations that they have gone to FULL pandemic mode not only in China but in other Asian fabs.

According to our experts embedded in Micron, “this is NOT A Drill. They are locking down Wuhan to ANY travel in and out. And since its now late February, it is HIGHLY likely with 700,000+ Chinese from Wuhan and other regions traveled to Europe, the United States, and around Asia, that this coronavirus has JUMPED into a full-blown pandemic.”

Give this report and look: https://www.youtube.com/watch?v=cmgPVhubmQA  

As a veteran of many Chinese business trips, I can tell you ONLY the Chinese could build a 1,000 room hospital in 10-day---and they WILL. 

Key Point: The QQQ Chart is SO OVEREXTENED it warrants our attention and action: IF as we can only assume that come Monday the new is WORSE and not better, it becomes a giant sell signal by the black box algo traders. LOOK at the green stripe at the top of the chart--Relative Strenght indicator (RSI). As you know, above 70 is "overbought." The QQQ has been overbought for 40 days in a ROW! 

Thus if China is a bigger shit show on Monday, the momentum algorithm trading systems will scream SELL and they will sell the most overbought/overextended stocks like TSLA SPCE and prolly our semiconductors NVDA AMD as well. 

I am using QQQ as the proxy for the most extended technology stocks. NOT A PANIC here--don't go there. But 20 years of portfolio management (and memories from the last SARS epidemic) says caution is warranted. 

Actions to Take: HEDGE YOUR PORTFOLIO IN THE MORNING—BUY April 7 2020 QQQ 04/07/2020 220.00 PUTS @ MARKET  + APRIL 7 $320 PUTS @ Market + April 7 XOP $75 PUTS at Market

Don’t forget to do this—THIS IS NOT A FIRE DRILL!!!!

Toby