Most traders thought they'd hit the bottom on Facebook Inc. last week.
Obviously, they were wrong. But Capital Wave Strategist Shah Gilani's price prediction was spot on.
Here's how he's playing the social media giant now...
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Dropbox will "price" its Initial Public Offering – IPO for short – on Thursday and begin trading Friday if all goes according to plan. Reports are that the offering is "oversubscribed" – a Wall Street-speak term meaning that they're hard to get – and that there's a lot of "demand" for shares.
So why is it you shouldn't touch 'em with a ten-foot pole?
Because Dropbox is going to be another company in a long line of "oversubscribed," "in-demand" public offerings that isn't worth the paper its stock certificates are printed on.
Yet.
Newly minted tech companies are a dime a dozen.
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President Donald Trump just imposed 25% tariffs on steel imports and 10% import taxes on aluminum.
Those tariffs aren't ideal – and they could lead to a trade war if Trump's team isn't careful.
But the desperate hand-wringing we're seeing from the Washington and Wall Street crowds is, frankly, unseemly.
The Associated Press says that U.S. steel production is doing just fine, because the economy is now growing at roughly 3% a year.
Trade Partnership, a pro-trade business group, predicts that the tariffs will lead to 146,000 American job losses.
And Ira Shapiro, one of the architects of the North American Free Trade Agreement, told CNBC that President Trump "has done incredible damage to our relationship with Mexico, some to Canada and a lot to the European Union, all of which was not necessary and not desirable."
There's a problem here. All this nay-saying presents a simplistic – and I would say false – narrative.
According to MarketLine, steel will be an $865 billion global industry by 2020. And we here in the United States are missing out… almost entirely. Of the world's top 12 steel producers, only one is U.S.-based.
So if we do this the right way – if Trump's seemingly reckless plan gets everyone rushing to the negotiating table – domestic firms will clearly benefit.
That said, Trump's tariffs are far from a panacea.
The steel industry is a laggard in part because it hasn't kept up with the times. And so steelmakers and other metal firms must invest in the innovative digital tech that is transforming so many other industries.
I'm talking about a technology that unites hardware, software, sensors, robotic systems, and more so that steel factories can operate far more profitably.
Today, factory-floor automation technology is worth roughly $109 billion. MarketsandMarkets says that spending in the sector will swell to $153 billion by 2022.
The firm I want to show you today is transforming steel companies – and firms in other hidebound industries – into advanced tech players.
And it's minting cash for its shareholders along the way...
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President Trump's chief economic advisor, Gary Cohn, resigned last week, throwing global markets into a tizzy over fears of a (now) very real trade war.
I can't say I'm surprised.
Having voiced my concerns on national media for a few months now, Cohn's departure is the last straw for skittish traders who crave stability. There doesn't seem to be anyone in the White House who can tell the president things he may not want to hear.
Like, for example, trade wars don't work… trade wars hurt those he's trying to help because prices rise… trade wars are a "tax" on the American people.
Don't get me wrong, though. I'm not picking a fight with the president or anyone else, for that matter. I don't do politics.
My job as chief investment strategist is to help you make and protect your money no matter who is in the White House and no matter which party he or she represents or even which agenda they advance.
And today I'll show you how to play the current situation for maximum profit potential...
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First Eastman Kodak… and now Starbucks.
Indeed, Starbucks Chairman Howard Shultz recently took to the airwaves to let everyone know that his coffee company is getting into the blockchain business.
"I think blockchain technology is probably the rails in which an integrated app at Starbucks will be sitting on top of," he said during an interview on FOX Business Network.
Blockchain is the digital and decentralized ledger behind Bitcoin and most other cryptocurrencies. Crypto traders depend on blockchain's transparency and unchanging nature to record all their transactions. Now industries beyond digital coins and even fintech are exploring how to use the technology. Blockchain is potentially the perfect technology for everything from running global supply chains to keeping track of medical records.
But Schulz didn't mention any of that.
Instead, he talked about the possibility of expanding digital customer relationships using blockchain, or even the possibility of launching a proprietary crypto coin. "I believe that we are heading into a new age, in which blockchain technology is going to provide a significant level of a digital currency that is going to have a consumer application," he said during an earnings call.
Hold on, buddy. That sounds an awful lot like gimmickry to me – tweaking some technology and then using the "blockchain" name to rebrand an already existing customer rewards program.
That's not going to "move the needle" on a big company like Starbucks – and it doesn't make the Seattle company a blockchain investment.
However, there's another company out there that didn't just talk about the blockchain in the past week or so, but made some noticeable moves with it.
It's making blockchain technology a key part of its business – and it's doing so in a huge and growing market.
Plus, now is the perfect time to buy - here's why...
by Tom Gentile
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To say the markets have been volatile is quite the understatement.
For instance, The Dow Jones Industrial Average has seen a 1,000-point price swing in one day. It's not uncommon to see less "severe" price swings of 300 to 400 points these days, too. And while the S&P 500 is up, it's only by 0.66% – a measly less than 1% that was far more stressful for many people to attain than just sitting out altogether.
To make things even more difficult for investors and traders alike – these aren't one-directional swings. So one second, the market's skyrocketing 400 points, and the next, it's taking a 500-point plunge.
Needless to say, 2018 has not provided us with the consistent and stable market that 2017 did at one time.
by Shah Gilani
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Volatility comes in all shapes and sizes. It affects every stock, every market, and every asset class, everywhere around the world.
It can be your best friend or your worst enemy.
Either way, as Sun Tzu said, "Keep your friends close and your enemies closer."
But whether or not volatility is your enemy today, tomorrow, or next week, you have to know how to manage volatility in your trading.
Here's why you have to embrace volatility, how to see it coming, and how to trade it...
by Lee Adler
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The Fed has begun to accelerate its balance sheet shrinkage according to the schedule it set forth last September. Not surprisingly, the effects are beginning to be felt in the markets, just as I had warned. Only the timing was in question, but my technical work took care of that, and it got us heavily short by the time the slide began on Jan. 29, reaching 90% short on Feb. 3.
This balance sheet shrinkage program, which the Fed calls "normalization," actually removes money from the banking system and financial markets. It is the opposite of quantitative easing (QE), so we may as well call it quantitative tightening (QT).
The rate of withdrawal doubled in January and will go up by $10 billion per month every quarter until it hits $50 billion per month in October. If $20 billion a month in QT can cause the kind of damage we saw over the past two weeks, what would $50 billion do?
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The stock market freak-out hit a crescendo on Monday, with the Dow plunging nearly 1,600 points at its lows – marking the biggest intraday point drop in history.
The Dow fell 1,175.21 points, or 4.6%…
The S&P 500 lost 113.17 points, or 4.10%…
And the Nasdaq Composite dropped 3.78% to 6,967.53…
However, even with Wall Street stocks posting record losses over the past few days, oil prices have not suffered to the same extent.
WTI (the New York benchmark for crude oil futures) was down 2.5% over the same sessions, while Brent (the other and more widely used global dollar-denominated benchmark set in London) shed 3%.
Of course, two days does not a trend make.
But the relatively "less bad" performance by oil gives us some pause.
Unlike earlier bouts of investor angst, this time around, the swoon in oil wasn't about a decline in the broader markets.
Rather, it appears to have been the other way around...
by Shah Gilani
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Last week, it looked like the raging bull market in equities came to a screeching halt.
Don't believe it. The equity bull market only hit the brakes because it drove full speed into a real wreck: the bond market.
There's no mystery to it.
It's not time to worry and definitely don't panic; there are two sides to this story.
There's some good news, and there's some bad news. I'll give you the heavy stuff first.
The bad news is that there's more to come; markets aren't done falling.
But the good news is that stocks will self-correct, and there's lots of money to be made as markets adjust.
Here's what happened, what's next, and how to play this opportunity for profit...
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