Dear Transformity Ultra Income Investor,

Not very often in the stock market that we have literally two stock markets: A bear market for completely insane 40-81X 2021 SALES valuations in the ARKK/CLOU/QQQ--and the rest of the stock market in a mild downturn and our TR Ultra Income Portfolio hitting 52 week highs!!

As we alerted you last week with our TQQQ Hedge --HOLD IT--the TSLA/ARKK manic mania bubble looked like it was going to burst with the 10-Year Bond bear market that "came out of nowhere". Eh...we have been talking about the WAY overcooked ARKK/CLOU/QQQ since early January.

BASED on the next bear market short-covering rally, we will try to produce another TQQQ and ARKK put option hedge.

TQQQ Mar 12 2021 80 Put (Weekly) UP TO $3.50 4 Days to Expiration

So LISTEN my friends: In sector bear markets (down 20%+) there WILL BE HUGE short-covering rallies--like last FRIDAY.
Action to take: USE Short Covering rallies in overvalued secular growth tech stocks to CLOSE positions and build cash.

That includes HTOOW, FSLY and even profits on SONO since ALL stocks in the QQQ and techland will be OVER sold in the final whoosh down. Why?

The biggest reason is the QQQ Volatility Index (the VIX for the QQQ) $VXN is not CLOSE to indicating a washout capitulation exploding above 35-40 or higher.

Here are the charts that scream "The TREND in OVER Valued TECH Land is DOWN below 200-day Price Moving Averages

If this swoosh lower bear market goes parabolically lower, there WILL BE a durable bottom put in and some actual bargains to be had. But I repeat--this beheading of the parabolic moves UP is RATIONAL--the adult professional investors and the momentum black boxes are taking enormous profits when they CAN--which is what WE have been doing since early January.

I will NOT bore you know with my nerdy bond market analysis--but simply what we have talked about for years into the 10-year bull market: 1) Bull markets need fuel...2) the fuel of parabolic sector moves are self-fulfilling stories/narratives and 3) new marginal (price-insensitive buyers) and 4) algorithm based momentum black box buyers of stocks going up.

WHEN the marginal buyer is done (aka the bagholders who threw $20 billion into ARKK ETFs in January and February) there are NO MORE GREATER FOOLS to buy-in! Boom--the dream is 150% or more priced in and even EPS or revenue BEATS do not bring in more greater fools.

When the last skeptical buyer finally sees the narrative "truth" aka "every car is going to be electric by 2025, crypto is replacing gold at banks, and we all will be hopping on air taxis for our flight to Mars (thanks to my old pal Andy Kessler for the inspiration today in WSJ) guess what? When the last skeptical investor becomes the last marginal buyer who believes there is NO DOWNSIDE from here...in every bear market I have lived since 1982 that is the BOOM SHAKALAKA burst of the bubble.

The parabolic story/narrative bull market leaders get gored (see ARKK and TSLA), the bagholder wail now on Reddit and show their 50% down "portfolio's" and THEY have received their first lesson in the stock market: If something is priced at a too good to be true valuation...eventually...the mania/fever bursts and the stair-step 700-1200% parabolic move (see our beloved NKLA in May/June 2020) takes the high-speed elevator to 50-70% haircuts.

As AK always told me "It all fun and games until the million share market orders start pouring in" and "faith becomes scarce in Death Valley" when the newbie stock market "investors" get their hearts and wallet broken.

"Fair" on Wall Street is a weather report.

IN this case, the bond market popped the parabolic 40X 2021 revenue story stocks mania and the nuevo inflation inflection point came Sunday night from the Senate with their Oprah moment aka "You get a check, and you get a check" $4.5 trillion ocean of borrowed monetary stimulus and Fed Chair Jerry Powell last Thursday said, "We'll let the 10-year bonds rise and not intervene."

This is the 2021 version of the 2016 Taper Tantrum, ok?

What your email...a 45 $VXN would signal some capitulation. HOLD your Ultra Income plays and figure out HOW MUCH $$$ you have been paid since March 26th-April 16 2020 as we stepped in and doubled our income investment portfolio value and now generate 18%+ annual income doing nothing.

NOTE: We are finalizing our "Re-Open/Critical Elements & Metals/TravelGeddon plays and will start with a fantastic opportunity to buy a $1.25 North American graphite mining and processing company in a few years for .15 cents or better.

Cheers!

Toby