[adzerk adTypes=”3731″ keywords=”jason-bond” utm_source=”wrbrbwad” utm_medium=”w” utm_campaign=”wadproductweb” utm_term=”JRDE” utm_content=”wwjbpnormhdis_jbp_header”]

24 Oct

Monday October 24, 2016

by

Good morning,

Stocks were marginally higher this week, with gains in the DJIA, S&P500 and NASDAQ of 0.04%, 0.38% and 0.83%, respectively, breaking the market’s two-week losing streak, with all three still trading comfortably above their respective 52-week moving averages.

The VIX dropped sharply by 2.78 points, taking the index again back down to a low reading of 13.34.  What doesn’t make sense to me is the sharp drop in the VIX during small moves higher in S&P500 and DJIA.  I’ll be watching this disconnect between the VIX and stocks closely this week.  Usually when the VIX drops this much, the S&P500 rises closer to 1.5% to 2.0% gain.  Is someone messing with the VIX, or is there something else at play here?

Another interesting thought along this line is, despite the West Texas Intermediate Crude (WTIC) price firming above $50 per barrel; a steady gold price; a firm 10-year Treasury; and a sharp rise of 3.45% in the KBW Bank Index (BKX) and a 6.55% spike in Deutsche Bank (DB) following rumors suggesting Qatar, Abu Dhabi and the Chinese may be considering taking larger stakes in Deutsche Bank should have lit a fuse under the market.  But, alas, no.  

Maybe this latest rumor about Deutsche Bank will turn out to be false, as well.  Remember the rumor that Deutsche Bank and the U.S. Justice Department agreed upon a $5 billion settlement?  That rumor turned out to be false!  But DB spiked anyway, twice, triggering a minor short squeeze on both occasions.  DB’s short position stands at a modest 3.52% of outstanding shares.

DONALD TRUMP: WHAT HAPPENS TO STOCKS IF HE WINS THE WHITE HOUSE?

With two weeks remaining until the November election and not much else to report of any gravity this week, I’ll take this opportunity to share with you my thoughts about how stocks may be effected by a Trump win in November.  And before the Mrs. Clinton fans load up their email account to opine about my discussion about Donald Trump and not Mrs. Clinton, I’m sharing my thoughts with you regarding Trump for the simple reason, that he is the new face in U.S. politics, and has a platform of true reformations in Washington, at many and diverse levels.

Therefore, how a Trump presidency may affect our stocks is vital to this report.  We already know a lot about Mrs. Clinton, as she’s been in the political arena at the national level for 25 years with a consistent message of ‘stay the course’.  

Fair enough?

For those who read a lot of mainstream news, you should have noticed fairly early the obvious disdain from reporters for Trump and his presidential candidacy.  Many would agree with me that the bias in reporting has reached all-time-high levels in politics.  In essence, if you’re not with the established line of your party, you’re vilified, no matter with which party the candidate in question is affiliated.  

And I’m old enough to remember the days of thousands of independent news outlets and wide-ranging viewpoints on matters of importance.  Today’s mainstream news has lost that diversity of discussion, and as a result has become complete and utter garbage as a source of news and analysis.  Actually, I shouldn’t complain; I’d be out of business if these guys and gals actually did their jobs.

The bottom line is: the establishment of both parties and big business want Mrs. Clinton as president, very badly.  Trump scares Washington like no other candidate since Teddy Roosevelt (1901-1909), the man who took on the big banks and business and won, breaking them up into pieces through the enforcement of the Sherman Antitrust act of 1890.  Big business and bankers of that time hated Roosevelt.

Trump’s overall message tells me two things.  First, I think Trump’s ego is large enough (like Teddy Roosevelt’s) to actually make an impact on how the U.S. conducts trade, foreign and domestic policy, and to some extent on how money is allocated and controlled in the future.  If you’ve listened to Trump talk about business, jobs and trade, he refers to the U.S. economy as a “false economy” and stocks trading in an “artificial stock market,” and bluntly asserts, “I hope they [Federal Reserve] pop [the stock market] before I become president.”  

What kind of man says these things in addition to a lot of other politically-incorrect messages?  I think he’s a man who really means business, and who knows he’s tapped into the emotions of a huge electorate who’s become scared, angry and despondent.  To me, he appears to be a man crossed between a Teddy Roosevelt and Ronald Reagan (1981-1989).  Doesn’t he?  If I was a corrupt insider of Washington’s establishment, I’d be scared, too.

Having stated all that, I think if elected as the 45th President of the United States, ours jaws will drop from the sweeping reforms that matter to our business of trading stocks—at the Federal Reserve (no, the bank isn’t independent as claimed), Commerce Department, Treasury and, to enforce a better playing field for the small investor, Justice Department and F.B.I.  

I can tell you, the establishment cannot function with reforms and someone watching their every move; it would be like driving a silver stake in the heart of vampire.  No kidding.  If you think “Brexit” was a big deal, a Trump-led Brexit-times-10 is what’s in store for the establishment and all of us.  Talk of Congress standing in the way of Trump’s reforms was also the theory espoused to a Tip O’Neill-led Congress when Reagan ushered in a new tone to the Executive Branch.  And we know what happened next.  O’Neil got clobbered.

Okay, let’s get down to it.  I’ve heard a lot of banter about what the establishment may do to stocks if Trump is elected.  Let’s consider what Trump, himself, has said.  In an interview on CBS Face the Nation on February 14, he said, “We’re in a [stock market] bubble.  And, frankly, if there’s going to be a bubble popping” Trump exclaimed, “I hope they pop it before I become president, because I don’t want to inherit all this stuff.  I’d rather it be the day before rather than the day after, I will tell you that.”

Okay, like a good salesman, he doesn’t argue the point of whether the stock market is in a bubble or not; he moves right into the cleverly crafted suggestion that the “they,” the Fed, indeed have the power to pop a stock market bubble at any time, and that he “hopes” it doesn’t happen on his watch.  In my opinion, of course he’s correct in both assumptions.  

So, the question is: will the establishment pop a stock market bubble to damage Trump enough to stop his agenda of reform?  Or will a deal be struck to allow for Trump’s massive fiscal stimulus initiatives; draconian corporate tax cuts; his plan to repatriate up to $5 trillion eurodollars hiding in U.S.-based multinational accounts overseas to recapitalize domestic production; and a stop to the budget-busting wars overseas to take shape in the U.S. economy as a means of offsetting a ‘righting’ of Federal Reserve monetary policy?  It’s a bit Reaganesque, but without the benefit of the Reagan charm and healthier fiscal conditions to work with.

In short, I think the answer is clear.  If Trump wins the White House, a deal will be struck.  Trump knows the establishment holds a nuclear option of trashing his popularity overnight at the knees via a stock and bond market debacle.  The remaining and battered ‘middle class’ would be devastated under this scenario, as they watch their pensions and retirement funds leave them suddenly looking like Greeks!  The threat of a true financial ‘winter’ would be a risky extortion waged by the establishment, but Trump won’t take that long-shot chance of raising his stake to call what may appear to be a bluff.

In conclusion, I’m not losing any sleep from this ongoing theory of impending Armageddon in the stock market following a Trump victory at the polls on November 8, and neither should you.

Okay, let’s talk stocks.

This Week’s JBP Stock Ideas

LIQUIDMETALS (LQMT)

Rumors of a meeting between Liquidmetal’s management and executives at Apple Computer popped LQMT $0.03 on heavier-then-usual volume to close at $0.17.  I could not verify the rumor, so I’m watching this week to see if LQMT has additional legs to the initial alleged development at the company regarding its relationship with Apple.  

It was a good week for me, as my 100,000 shares added $3,000 to the valuation of my holdings. The chart shows the nice move back above the 200-week moving average and a continuation of the bullish pattern established that began at the beginning of the year.

lqmt

ABOUT LIQUIDMETALS (LQMT)

Liquidmetal® Technologies researches, developments and commercializes amorphous metals. The company’s revolutionary class of patented alloys and processes form the basis of high performance materials in a broad range of medical, military, consumer, industrial, and sporting goods products.  Discovered by researchers at the California Institute of Technology, Liquidmetal alloys’ unique atomic structure enables applications to achieve performance and accuracy levels that have not been possible before.  As the company controls the intellectual property rights with more than 70 U.S. patents, these high performance materials are dramatically changing the way companies develop new products.

Source: Liquidmetals Technologies

FIREEYE (FEYE)

Shares of FireEye (FEYE) soared $0.36, or 2.93%, following reports on Friday of an attack on Internet company Dynamic Network Services (Dyn).  Friday’s surge in the stock price, however, wasn’t enough to erase earlier losses during the week.  FEYE closed the week down $0.11, or 0.86%, to $12.64.

feye

Reports by the Wall Street Journal (WSJ) on Friday indicated attacks on Dyn began at approximately 7:10 a.m. (EST), with follow-up reports by the WSJ of an additional attack taking place at Dyn close to noon time, emboldening traders to bid stocks along the entire cybersecurity complex.

Has anyone noticed the increase in DDoS attacks this year?  I have, but not sure of the reason except to ponder a connection between Washington’s recent  escalated aggressive posture toward Russia and China, fomented by the U.S. Vice President Joseph Biden two weeks ago.

A cold war with these two superpowers may in part be waged through cyberspace as many security analysts have warned, so holding a basket of well-positioned cybersecurity stocks is looking better by the day.

“A series of major hacking incidents in late 2014 and early 2015 led corporate cybersecurity spending to spike, and markets are betting a fresh round of attacks will provide another boost,” Eric Jhonsa reported for TheStreet.  “It’s unlikely we’ll see a similar surge this time, but a lot of CIOs get reactive when they see an attack do major financial damage to peers.”

Ha, that’s what Mr. Jhonsa thinks.  I think we may see a surge, if hostilities between the U.S. and Russia intensifies further.  I don’t think the U.S. is willing to let Syria go, and Russia won’t let go of her either.  I’d sell the cybersecurity complex, however, if Donald Trump wins the White House.  Apparently, the money is on Trump to de-escalate tensions between the two nations.  I agree.

I’m waiting for a significant development from FireEye before becoming interested in buying the stock at the sub-$13 level.  Although $13 had been my target, the action at the present levels isn’t quite bullish yet.

Here’s an article of import to those fond of the cybersecurity industry. Fortune Magazine cites an article published by Reuters, entitled, ‘Federal Regulators Want Banks to Follow Better Cybersecurity Practices’.  Hmm.  There’s nothing like mandates from Washington to create a bull market in the industry.  Another Dodd-Frank mandate?  Yup.  

ABOUT FIREEYE (FEYE)

FireEye, Inc. provides cybersecurity solutions for detecting, preventing, analyzing, and resolving cyber-attacks. The company offers vector-specific appliance solutions that provide threat protection from network to endpoint for inbound and outbound network traffic that may contain sensitive information.

Source: Finviz.com

LIVE VENTURES (LIVE)

As I alerted on Tuesday (September 28), I bought 10,000 of LIVE at $1.76.  My exit price target is $2.20.

Well, we had a decent move in LIVE this week, up a healthy $0.07, or 3.66%, on better-than-average volume.

live

In one month, I’m up 12.5%, or $2,200, with an objective of $2.20 per share as an exit of the trade.  The $2.00 level appears to be significant resistance, as I noticed more aggressive selling coming at that level on Thursday and Friday.  

A breakout above $2.00 may trigger the 5% of the stock’s outstanding shares to cover and may be the day I close out my trade in LIVE.  We’ll see.

There was no company-specific news about the stock this week.  

For new subscribers, if you don’t already have a copy of my analysis of LIVE, email me and request the LT Report, dated October 3, 2016, for more complete analysis of the company.  

ABOUT LIVE VENTURES (LIVE)

Live Ventures Incorporated is a diversified holding company with several wholly-owned subsidiaries and provides, among other businesses, marketing solutions that boost customer awareness and merchant visibility on the Internet. They operate a deal engine LiveDeal.com, which is a service that connects merchants and consumers via an innovative platform that uses geo-location, enabling businesses to communicate real-time and instant offers to nearby consumers. In addition, they maintain, through their subsidiary, ModernEveryday, an online consumer products retailer and, through their subsidiary, Marquis Industries, a specialty, high-performance yarns manufacturer, hard-surfaces re-seller, which is a top-10 high-end residential carpet manufacturer in the United States.

BALLARD POWER SYSTEMS (BLDP)

I alerted on October 7 that I bought 10,000 shares of BLDP at $2.39.  I’m underwater on this stock at the moment.  As the chart depicts, the stock price may test the 50-day moving average this week.  I expect the stock to hold and resume the rally once further good news about the stock hits the wires prior to the company’s earning release and on Wednesday, the day of the earnings release.

bldp

Oil held above the $50-per-barrel market on the NYMEX.  Higher oil prices may provide a lift to BLDP in addition to the impact on the stock from the strong possibility of an announcement of a deal with Nikola Motor Company to begin supplying fuel cell technologies and products for Nikola’s new zero-emission truck scheduled for a prototype unveiling on December 1.

I also anticipate a bump in the stock from an announcement of more details to the signed joint-venture Memorandum of Understanding (MOU) with Guangdong Nation Synergy Hydrogen Power Technology, wherein the two companies tentatively agreed to produce fuel cell stacks in China.  

Ballard is scheduled to release Q3 earnings on October 26.  The company’s method of operation, its MO, if I may, is to also schedule a “good news” announcement leading up to the earnings report.  News concerning additional details about the agreement with Guangdong is indeed possible by the 26th, this Wednesday.

ABOUT BALLARD POWER SYSTEMS (BLDP)

Ballard Power Systems Inc. engages in the development and commercialization of proton exchange membrane fuel cells worldwide. It is primarily involved in the design, development, manufacture, sale, and service of fuel cell stacks, modules, and systems for various applications. The company also develops methanol clean energy backup power systems, as well as provides engineering services for various fuel cell applications. Ballard Power Systems Inc. offers its fuel cell products for various applications, including portable power, material handling, and telecom backup power, as well as power product markets of bus and tram applications.  Source: Finviz.com

Trade Green!

Jason Bond

[adzerk adTypes=”2733″ keywords=”jason-bond” utm_source=”wrbrbwad” utm_medium=”w” utm_campaign=”wadproductweb” utm_term=”JRDE” utm_content=”wwjbpnormfdis_jbp_footer”]

2 Comments

  1. Rick Parrin

    When I joined the Long Term Trading program, it was billed as focused on long term investments with specific emphasis on a new channel of ETF portfolio building. While I appreciate your market insights, they compliment what I can get for free. Since I signed up, the most activity I’ve seen with the membership are more requests to join additional paid services. I followed and agreed with you on LIVE but am disappointed that there was no prior dialogue with this group of Long Term members about your change of mind and sale of the equity (I sold on 10/20 at $2.04 because the indicators you mentioned regarding your sale were evident on that date). Please don’t take my comments as a complaint. But there is a value proposition here for $800. When will we see the ETF portfolio building and trading strategy? How about 2 – 3 solid long term equity investments (Growth, Growth and Income, some basis for the recommendation).

    LQMT is just a hope and if it works, great but that’s more of a day or swing trade at this point since a long term hold is not based on the fundamentals of the equity. Thanks for listening. Rick

    Reply
    • Jason Bond

      While I appreciate your feedback, I’m making good money and winning consistently with my long term trades and have no plans on changing what’s working. ETFs are coming on board as noted, with the help of Jeff Bishop.

      Reply

Submit a Comment

Your email address will not be published.

Choose From The Topics Below To Receive Jason Bond’s Market Insights & Alerts:

[adzerk adTypes=”162″ utm_source=”wrbrbwad” utm_medium=”w” utm_campaign=”wadproductweb” utm_term=”JRDE” utm_content=”wwjbpnormsbar_jbp_sidebar” keywords=”jason-bond”]

[adzerk adTypes=”3834″ popup=”true” delay=”3″ cookie=”1″ keywords=”jason-bond”]