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   Strategies & Market TrendsTechnical analysis for shorts & longs


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To: Johnny Canuck who wrote (55263)5/21/2022 3:03:16 AM
From: Johnny Canuck
   of 56054
 
Crypto Rug Pulls Are on the Rise in 2022

Crypto Rug Pulls Are on the Rise in 2022

Nvidia Stock Is Less Than Half Its Recent High. Is It Now a Buy?

Nvidia stock is down more than 50% from its all-time high. Here's how we're trading it now.

BRET KENWELL

MAY 19, 2022 3:00 PM EDT

In the fourth quarter, Nvidia (NVDA) - Get NVIDIA Corporation Report stock was hitting all-time highs. The graphics-chip specialist was joined by Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report and a handful of high-quality growth stocks.

We at that time faced a bifurcated market. The S&P 500 and Nasdaq were at all-time highs, despite several notable growth stocks trading at bear-market levels.

GET THE LATEST NEWS for the top stocks in the electric vehicle space! Sign up for TheStreet's free EV Checkpoint newsletter.

Through the volatility we’ve seen so far this year, most semiconductor companies continue to do well. Qualcomm (QCOM) - Get Qualcomm Inc Report, Texas Instruments (TXN) - Get Texas Instruments Incorporated Report, Taiwan Semiconductor (TSM) - Get Taiwan Semiconductor Manufacturing Co. Ltd. Report and ON Semiconductor (ON) - Get ON Semiconductor Corporation Report all reported solid results with strong outlooks.

Perhaps most related to Nvidia is AMD, which reported a strong quarter and provided better-than-expected guidance. That bodes well for Nvidia, which reports earnings next week.

Positive prospects aside, Nvidia stock has fallen 55% from peak to trough.

Perhaps we’ve seen the low, but perhaps not — no one knows with a high degree of certainty.

What I can say is that long-term Nvidia bulls may be wise to start accumulating the stock since it’s been cut in half from the highs. While the stock and valuation have come tumbling lower, expectations have not.

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JIM CRAMER

Cramer's Mad Money Recap 5/19: Apple, Nvidia, Costco

MAY 19, 2022 6:48 PM EDT

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In fact, revenue estimates for this year and next year continue to climb. Can we hit bottom and turn higher from here?

Trading Nvidia Stock

Weekly chart of Nvidia stock.

Chart courtesy of TrendSpider.com

At its highs, the valuation was a reasonable argument to be bearish on Nvidia. With the stock down 50%, however, that argument seems to have run its course. (Obviously, that doesn’t mean the market won't continue to indiscriminately sell the stock.)

If that’s the case, bulls need to keep a close eye on the $150 to $160 area. Not only did Nvidia stock recently bottom in this area, but it’s a significant area of confluence.

We have the 61.8% retracement, as measured from the all-time high down to the March 2020 covid-19 low, as well as the 161.8% downside extension from the current range. It’s also a prior breakout area from 2021.

If this zone fails as support and the semiconductor space — which has shown some decent strength lately — comes back under pressure, then Nvidia stock could be looking at a test of the $125 to $128 area. Just below this area is the 200-week moving average.

On the upside, it’s clear that the $182.50 level is giving Nvidia stock some trouble. If the stock can clear this level and stay above it, $200 and the declining 10-week moving average are within reach.

Above $210 and the upside really opens up, potentially putting the 21-week and 50-week moving averages in play, currently up near $230 to $235.

Want to read more? Check out TheStreet Smarts: The smartest place to start your investment journey. Learn more!

TECHNICAL ANALYSISINVESTINGTECHNOLOGYNVIDIATRADINGSTOCKSSEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT

BY

BRET KENWELL

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To: Johnny Canuck who wrote (55264)5/21/2022 12:35:00 PM
From: Johnny Canuck
   of 56054
 
A $5 Trillion ‘Wealth Shock’ Is Cracking Americans’ Nest Eggs
Outsized wealth gains that worsened inequality now in reverse

Housing downturn seen having broader impact as rates surge

By
Ben Steverman

May 21, 2022, 1:27 PM UTC

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In this article


SPX
S&P 500
3,901.36
USD
+0.57+0.01%


JPM
JPMORGAN CHASE
117.34
USD
-0.97-0.82%


2896299Z
OAKWORTH CAPITAL BANK
Private Company


AMZN
AMAZON.COM INC
2,151.82
USD
+5.44+0.25%


TWTR
TWITTER INC
38.29
USD
+1.00+2.68%


Open

The world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer.
Americans’ collective net worth had been climbing at a dizzying rate for the past two years, even as families and businesses contended with the ravages of Covid-19. Households piled up an extra $38.5 trillion from early 2020 to the end of last year, bringing their collective net worth to a record $142 trillion, the Federal Reserve estimates.
Just as the US is learning to live with the virus and spending shifts back toward pre-pandemic normal, it faces a new scary threat: A plunge in wealth since the start of 2022 that JPMorgan Chase & Co. estimates totals at least $5 trillion -- and could reach $9 trillion by year-end.
So far, the richest Americans have borne the brunt, with US billionaire fortunes down almost $800 billion since their peak amid the sharp losses in stocks, crypto and other financial assets. But surging interest rates are also starting to rattle the housing market, where middle- and working-class families have the bulk of their wealth.
It all adds up to the sudden removal of a major prop to confidence: ever-bigger nest eggs. And it’s by design. To stamp out the highest inflation in decades, the Fed needs Americans to curb their spending, even if it requires an economic slowdown to get there.






“It’s painful to get back to normal after really being in a fantasy world last year,” said John Norris, chief economist at Oakworth Capital Bank. “It’s going to feel a lot worse than it actually is.”
Since the start of the year, the S&P 500 Index is down 18%, the Nasdaq 100 has lost 27% and a Bloomberg index of cryptocurrencies has plunged 48%.
That all amounts to “a wealth shock that is set to drag on growth in the coming year,” JPMorgan economists led by Michael Feroli wrote in a note Friday.
Fed Chair Jerome Powell and his colleagues have repeatedly said they’re actively aiming for such a slowdown, leaving it unlikely policy makers will move to address the Great Wealth Drop of 2022.
Read More: Fed to Plow Ahead on Half-Point Hikes, Undeterred by Stock Slump
Billionaires were the biggest winners of 2020 and 2021. Now they’re losing more than almost everyone else. The Bloomberg Billionaires Index, a daily measure of the wealth of the world’s 500 richest people, has dropped $1.6 trillion since its peak in November.

Leading the way are the Americans on the index, who have lost $797 billion since their peak. Perhaps the most humbled by it all is the world’s richest person, Elon Musk. He’s lost $139.1 billion, or 41% of his wealth, since November, when his net worth briefly surpassed $340 billion. Amazon.com Inc. founder Jeff Bezos, the second-richest person, lost $82.7 billion, or 39% of his peak wealth.

Today in America:
- the two richest people own more wealth than the bottom 40%
- the top 1% owns more wealth than the bottom 92%
- 45% of all new income has gone to the top 1% since 2009

Is that the kind of economy any working person ought to be satisfied with?
— Bernie Sanders (@BernieSanders) September 5, 2021

While the wealth losses among the top 0.001% reduce inequality, that won’t be much comfort to most people who worry about the U.S.’s widening disparities.
“In a relative sense, it’s going to make the inequity a little lower -- but in an absolute sense, everyone suffers,” said Reena Aggarwal, director of Georgetown University’s Psaros Center for Financial Markets and Policy.
Like many, Aggarwal is concerned that falling markets will create problems for the broader economy. “Some correction was needed but this is a pretty huge correction, and it’s not stopping.”

All Boats Lifted (sort of)
US household wealth surged during the pandemic but mostly for the top

20192021
Bottom 50%50-90%90-99%Top 1%0204060$2.0T3.731.639.342.653.333.845.9

Source: Federal Reserve
Note: 4th quarter data

A downturn in housing -- made likely by a surge in mortgage rates to the highest since 2009 -- threatens wider reverberations. Over the last decade, the robust real estate market added $18 trillion in market value to owner-occupied home valuations.

US spending has been lifted in recent years by owners tapping the enhanced values of their homes for cash. The practice of home equity extraction likely came to a halt this year. More than 40% of refinancings in the final quarter of last year saw homeowners pull cash out of their homes.

Imminent Collapse?
US spending boosted by home equity loans is likely to come to a halt

"Cash-out" refinancing share
01020304050 %2000202019912021

Source: FHFA

Real estate is far more evenly distributed than financial wealth. The top 1% owns more than half of U.S. holdings of stocks and mutual funds, and the bottom 90% owns less than 12%, according to Federal Reserve estimates. By contrast, in real estate the bottom 90% owns more than half of the total, while the top 1% holds less than 14%.
“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” Lawrence Yun, National Association of Realtors chief economist, said in a statement Thursday. “It looks like more declines are imminent in the upcoming months.”
What Bloomberg’s Economists Say...
While the plunging stock market will dent consumers’ net worth this year, the residual effect of last year’s surge in asset values -- and the resilience in home prices so far this year -- are major offsetting factors supporting consumption. As a result, personal spending is expected to grow faster this year than before the pandemic, even after the removal of fiscal stimulus.
-- Yelena Shulyatyeva, economist
For the full note, click here

It could take a while before Americans realize that their pandemic home-price gains have evaporated. Even the stock market selloff could take a while to translate into spending in a way that could tip the U.S. into recession.
“A general selloff in the equity market may have a dampening effect,” said Chris Gaffney, president of world markets at TIAA Bank, but there’s a lag for investors. “They look at their statements on a quarterly basis and all of a sudden they say, ‘Oh my goodness, my stock-market portfolio is down 20%, maybe I shouldn’t take that vacation,’ or ‘Maybe I shouldn’t buy that larger TV or a new car.’”
— With assistance by Vildana Hajric, and Alexandre Tanzi

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From: Julius Wong5/21/2022 2:07:55 PM
   of 56054
 
Cramer explains why veteran technical analyst Larry Williams expects stocks to rally soon

cnbc.com

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To: Julius Wong who wrote (55266)5/22/2022 2:51:00 AM
From: Johnny Canuck
   of 56054
 
I am not sure we are going to get a "long lasting rally". I expect a bear market rally based on the fact
the SP500 is down 7 weeks in a row and that does not happen very often. Statistically oversold and a reversion to the mean is expected.

This video does a good job of covering a lot of the factors:



I am not sure I agree with him that the SP500 is extremely oversold based on the Bollinger Bands. Depending
on the period it is right at the lower BB (20 period) or only slight outside of the lower band range (50 period).on the weekly.

I do agree the IWM has had slightly better relative strength than the other major indices. SMH is also in that position. As Monday is a holiday here in Canada I took a starting position in SMH at 219 on Friday for a scalp.

As I am normally a trend following trader I normally would wait for the break of 4000 on the SP500, which would be a break of the upper down trend line on the index before going long.

We also need to see the psychology of the last "cult" stocks TSLA and AAPL break and for the "true believer" to giveup before I would call a market bottom. TSLA breaking to $550 would be the start of the process. AAPL has a ways to go.

A more reasonable timeframe for a longer lasting rally is the late fall or early next spring when the Fed sees that inflation is coming down enough to stop raising rates. At that point cash in the form of bonds and short term depoists are less atrractive.

This video from Cathy Woods from Ark Investing covers some of the economic assumptions. I think she a terrible fund manager but she is a decent economist, her background by training.She called the inventory buildup at the manufacturers correctly.



There are some theories that after this last great rally the next 10 years might be a slow growth environment for stocks similar to what we saw after 2001. The current crop of traders would have been sufficiently
burned and it takes a decade for a new group of less experienced traders to drive the markets to new highs. Essentially if you are teenager you have been insulated from what the market is doing and in ten years you will be entering the sophmore years of your working career and starting the have decent money to save towards a house etc ...

I tend to trade scenarios in longer term timeframes. These are the scenarios I have decided on from the sources I have read so far. The scenarios change as new information comes to light.

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To: Johnny Canuck who wrote (55267)5/22/2022 3:09:19 AM
From: Johnny Canuck
   of 56054
 
"Meet Kevin" indicator no longer valid. It looks like he is trying to launch some form of private equity fund.
It is taking a lot of his attention so I am less confident on his calls as not as much of his network worth is
in the market now.

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To: Johnny Canuck who wrote (55267)5/22/2022 7:22:12 AM
From: Julius Wong
   of 56054
 
S&P 3,600 is the new bull case; sell rips and watch yen for a crash warning - BofA

seekingalpha.com

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From: Johnny Canuck5/22/2022 12:38:28 PM
   of 56054
 
Market bottom still elusive.

archive.ph

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To: Johnny Canuck who wrote (55270)5/22/2022 2:33:43 PM
From: Johnny Canuck
1 Recommendation   of 56054
 
Six stock not as cheap as they look

archive.ph

Age old question about stock based compensation. I thought we solved this in the early 2000s when companies had to recognize it as an expense but obbviously not.

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To: Johnny Canuck who wrote (55271)5/23/2022 1:18:54 PM
From: Johnny Canuck
1 Recommendation   of 56054
 
AT&T: The Market Has Been Wrong All Along

May 20, 2022 4:34 PM ET AT&T Inc. (T) WBD, VZ 120 Comments33 Likes

SummaryA growing performance gap between AT&T and Warner Brothers Discovery suggests that investors misunderstood AT&T’s value.The possibility of a recession could widen the performance discrepancy between AT&T and the spun-off content business, as investors value stable FCF more than top line growth prospects.Looking past short term debt repayments, AT&T could start to deliver material stock buybacks in FY 2024.

Shares of AT&T Inc. (NYSE: T) have kept surging after the completion of the media business spin-off last month, as investors are now ready to value AT&T’s free cash flow at a higher valuation factor. Shares of Warner Bros. Discovery, Inc. ( WBD), however, made new lows recently, indicating that the market has been wrong about AT&T all along. With AT&T earning billions of dollars in free cash flow, the company’s shares could be an attractive investment during a recession period!

Performance gap between AT&T and Warner Brothers DiscoveryAT&T completed its spin-off and the merger of WarnerMedia with Discovery on April 8, 2022. Post-separation, AT&T has out-performed Warner Bros. Discovery. While this short term performance discrepancy is not indicative of future performance, it does nevertheless show that the market is growing more fond of AT&T, in part because of the telecom’s massive free cash flow, attractive stock yield of 5.5%, and changing investment landscape. The content business is currently not much appreciated by the market, which has likely to do with recession clouds gathering on the horizon.

Data by YCharts

AT&T has high value during a recession, an attractive stock yieldAT&T represents better value for investors during a recession than Warner Brothers Discovery. This is because AT&T generates a ton of free cash flow. Investors value stable and predictable free cash flow much more during recessions than during economic expansions. During growth periods, investors are willing to tolerate higher risks, while during recessions free cash flow becomes more important for investors. Now, with the U.S. economy possibly being at the brink of a recession, this free cash flow weighs more heavily for investors that want to take risk out of their portfolios. Due to the rise in AT&T’s stock price lately, the dividend yield has dropped to 5.5%, but AT&T still remains an attractive investment for investors that want to buy a FCF-strong company without worrying all the time about valuation.

Looking past the short term, stock buybacksAs I said in my last work on the telecom, AT&T’s short term corporate priorities will be the repayment of its significant debt, which will create a healthier balance sheet in the process. AT&T repaid $10B in bank loans in April and will like use the majority of its free cash flow going forward to repay its massive debt that has accumulated over the years. While I don’t see AT&T’s debt as an existential risk, it will take a few years, at least, for the telecom to stabilize its balance sheet.

AT&T

I expect AT&T to initiate large stock buybacks again by FY 2024. The company will likely focus on debt repayments in the next two years. By FY 2024, however, the balance sheet could look much better and AT&T could resume major stock buybacks. The prospects of stock buybacks (or a higher dividend) could help the stock revalue higher as well.

Momentum in 5G/fiber businessAT&T has a huge opportunity to grow in the evolving 5G and fiber markets. 5G and fiber are AT&T biggest growth drivers with significant net-adds in both segments in the first-quarter. AT&T’s fiber business had 289 thousand net adds in Q1’22, showing 23% year-over-year growth, in part due to a growing penetration rate. The fiber penetration rate was at 37% in the first-quarter, up from 35% in the year-earlier period. Postpaid also sees strong momentum, with net adds totaling 691 thousand in Q1’22.

AT&T

Long term growth trends support AT&T’s plan to invest $24B into its 5G and fiber capabilities in 2022 and 2023. The broad acceptance of remote work, the rise of 4K streaming, and the proliferation of connected devices drive demand for more bandwidth, which AT&T can capitalize on. The pandemic only accelerated these trends, and demand for bandwidth has been soaring since 2020.

AT&T

AT&T’s investments in 5G and fiber are expected to result in a changing revenue mix going forward, with 44% of AT&T’s wireline EBITDA expected to come from fiber and fixed wireless services. AT&T's 5G and fiber opportunities create upside in free cash flow for AT&T.

AT&T

Cheap free cash flow valuation factorAT&T has said that it is looking to generate $16B in free cash flow in FY 2022, which would represent a drop-off of $3.2B compared to FY 2021. The expected year-over-year FCF decline is the result of higher expected capital investments in 5G and fiber infrastructure. AT&T has launched an expense savings plan to help FCF growth, and it covers product simplification, network efficiencies, and a crackdown on overhead costs. The plan is designed to deliver $6B in cost savings by FY 2023.

AT&T

AT&T’s free cash flow is expected to grow to $20B in FY 2023. Based off of $20B in FCF expected for next year, shares of AT&T are currently valued at a P-FCF ratio of 7.2 X.

AT&T’s rival, Verizon ( VZ), achieved $19.3B in free cash flow in FY 2021. I estimate that the telecom can grow its FCF to $23B in FY 2022 and to $25B in FY 2023. Based off of $25B in free cash flow, Verizon has a FY 2023 P-FCF ratio of 8.2 X. From a free cash flow point of view, AT&T is a better deal than Verizon.

Risks with AT&TA recession is likely to impact AT&T much less than Warner Bros. Discovery. This is because content consumption falls into the discretionary category, which often sees spending cutbacks during recessions. AT&T’s services, however, are likely to see more stable demand patterns during a recession, as customers will not stop using 5G and fiber services. For this reason, I believe AT&T is set to deliver stable dividend income during a recession. The biggest risk for AT&T, in the short term, is the balance sheet. AT&T is committed to lowering its debt and the company should see a much sounder balance sheet by the end of FY 2023.

Final thoughtsThe market has been wrong about AT&T all along, but still underprices the firm's free cash flow. Shares of AT&T have surged post-separation and materially out-performed shares of Warner Bros. Discovery. I believe this performance discrepancy is the result of investors now being more open to buying value stocks that promise high free cash flow and stable dividends as recession risks are growing. Going forward, I expect AT&T to continue to outperform AT&T’s former content business and believe the stock is worth buying despite its recent share price increase!

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To: Johnny Canuck who wrote (55272)5/23/2022 3:58:11 PM
From: Johnny Canuck
   of 56054
 
Jefferies cuts a wide swath; cuts price targets on more than two dozen software stocks

May 23, 2022 3:23 PM ET Microsoft Corporation (MSFT), ORCL, VMW AVGO, IRNT, S, CHKP, VRNS, CRWD, CRM, DBX, UPLD, FRSH, LAW, PCOR, IAS, ASAN, SMAR, NET, SUMO, ESTC, DDOG, SNOW, ADBE, TEAM, SPLK, AMZNBy: Rex Crum, SA News Editor 8 Comments

Analysts at Jefferies led by Brent Thill took an axe to the software sector, Monday, and cut the share-price targets of more than two dozen companies, including Microsoft (NASDAQ: MSFT), Oracle (NYSE: ORCL) and VMware (NYSE: VMW).In a research note, Thill said that the moves were being made to factors related to "stiffening economic headwinds and the risk of recession looming" over the economy. Other issues listed included companies with "high exposure" to European matters, deferred orders and those with a large presence among small-and-medium-sized businesses.Among the companies Jefferies assessed was Microsoft ( MSFT), which was taken down to an estimate of $325 a share from $400. Thill said that Microsoft ( MSFT) is in position to gain from more growth from the PC sector, but could see challenges if its transition to the cloud takes longer than anticipated and begins to weigh on its margins.Oracle ( ORCL) had its target cut to $75 a share from $80. Thill said that while the business-software giant can grow as its moves most of its installed customers to software-as-a-service [Saas] platforms, it will face challenges catching up to Microsoft's ( MSFT) Azure offering and Amazon Web Services ( AMZN).The Jefferies analyst cut VMWare's ( VMW) price target to $105 a share from $125, saying it is making solid moves to bring customers to the cloud over time, but it could face challenges with new licensing models.The other software stocks that came under Jefferies knife were:Splunk ( SPLK), down to $125 a share from $160.Atlassian ( TEAM), cut to $180 a share from $275.Adobe ( ADBE), down to $550 a share from $570.Snowflake ( SNOW), down to $150 a share from $230.Datadog ( DDOG), which was cut to $125 a share from $170.Elastic ( ESTC), lowered to $60 a share from $90.Sumo Logic ( SUMO) cut to $8.50 a share from $12.Cloudflare ( NET), cut to $55 a share from $75.Smartsheet ( SMAR), down to $50 a share from $75.Asana ( ASAN), down to $23 a share from $40.ProCore Technologies ( PCOR), cut to $75 a share from $90.CS Disco ( LAW), down to $35 a share from $40.Freshworks (FRSH), trimmed to $17 a share from $18.Upland Software ( UPLD), cut to $14 a share from $17.Dropbox ( DBX), which was cut to $30 a share from $35.Microstrategy ( MSFT), lowered to $215 a share from $225.Salesforce ( CRM), cut to $260 a share from $330.Crowdstrike ( CRWD), cut to $200 a share from $275.Varonis ( VRNS), which was lowered to $40 a share from $60Check Point Software ( CHKP), down to $130 a share from $145.SentinelOne ( S), cut to $25 a share from $40.IronNet ( IRNT), which was trimmed to a target of $2.75 a share from $3.25.VMware ( VMW) shares surged by more than 21%, Monday, amid reports that it may soon be acquired by Broadcom ( AVGO).

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