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December 23, 2018

The Fed, the markets and tech stocks - FAANG - NVDA and others

The Fed, the markets and tech stocks - FAANG - NVDA, FB and others


Well the Fed showed that it has balls and is not dictated by markets or politics - and this is what would be expected if they are truly independent and focused on maintaining their mandate of full employment and low inflation - the previous two Fed generals or chairman/chairwoman did a terrible injustice by not raising early enough and leading to a massive ALL asset bubble - not just in good old USA, but all over the world. We were not aware but Chairman Powell has been an investment banker and a hedge fund manager. We hope he saw that the bubble was brewing in the markets and that valuations were truly over extended to a level that matched the 2000 bubble. Along with this we have a massive debt issuance from corporates that are rated at grade "BBB" - when companies issued bonds at cheap rates and this number has ballooned to $4T (yes TRILLION) from 1.5T in 2008. Watch the FAANG stocks - these are broken..

We have provided here a link for a very good article from Mauldin economics (one of the better ones written) - 

We are down a mere 6% and everyone is panicking - imagine that - a mere 6% and apparently a growing economy (bustling as they say) - where it cannot handle a Fed funds rate of a mere 2.5% - what is wrong with a 2.5% fed funds rate - that is just 50bp over the 2% mandated inflation rate. Really - how is that our wonderful economy cannot tolerate such a normal Fed funds rate.. All the idiots on CNBC and Bloomberg - are nothing but a bunch speculators who have never experienced a bubble.   As we mentioned in our previous blog post - not a single soul has mentioned the word bubble - or how truly overvalued the markets are still - even after this pullback. We also stated that bear market rallies are fierce and vicious - so watch for many more of these in 2019 - but the trend is still down and there will be a reversion to the mean - it is called the law of nature and physics. Drumpf panicking as is Mnuchin - such morons.. Do check our comments on our last blog on how tops are marked with 3 different events.

We would like you to refer to our previous posts on stocks and why these were overvalued - stocks like NVDA, ALGN, ADBE and NOW. Check the charts we had posted and we are still recommending to sell these if you are making money. NVDA and ALGN are both down over 50% - and do you recall the analyst who upgraded the stock at 290 along with the analyst who upgraded ALGN. Well these guys still have their jobs and the stocks are down over 60%. We picked ADBE as our next big short - as it has a market cap of over 100B - for a company that does only 10B in revenue - what is that - a P/S of 10x.. Again overvalued and over hyped stock. We keep track of our key indicators and our indicators are saying there is more downside and there will be rallies on perceived good news and from oversold conditions - but these will be rallies to sell into. Here is our updated short portfolio;


We are still recommending shorting HD and LOW - the retailers will have a tough time in 2019 and this is being reflected in their stock prices - shorting Macys (M) would be a good idea here.

Again we will are in process of revamping our site - expect to launch in January - new features along with direct trading from our platform. Can't wait..

We want to wish everyone a merry Christmas and Happy New Year and wishing everyone good luck in their trading and some sound advice - to stop listening to the bozos on TV - Cramer, CNBC and Bloomberg. Too much analysis and non stop gibberish. Do your own work and analysis - it does not take that long to make sensible decisions.

Trucharts.com Founder

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