TESLA! Cathy Wood ARK Funds Bubble BURSTS!
Stock-Markets / Tech Stocks May 12, 2021 - 10:40 AM GMTBy: Nadeem_Walayat
The stock market is now entering my forecast window for a significant correction which should present an opportunity to accumulate into most the AI mega-trend stocks many of which have galloped ahead to new all time highs this year, trending in the opposite direction to the much higher risk stocks such as those that heavily populate the media blitzkrieging Cathy Wood's ARK funds i.e. their biggest holding Tesla is down 4.5% year to date whilst AI numero Uno Google is up 32%! Which this analysis seeks to resolve in high probability buying levels in advance of an expected correction during May.
This is the first installment of my most recent extensive analysis that concludes in updated buying levels for AI tech stocks in advance of a May stock market correction the whole of which has first been made available to Patrons who support my work.
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction
- TESLA!
- Cathy Wood ARK Funds CRASH!
- India Apocalypse Heralds Catastrophe for Pakistan and Bangladesh
- Covid-19 in Italy in August 2019!
- Stock Market Early Summer Correction Trend Forecast
- Stocks Expensive or Cheap Indicator (EC)
- AI Stock Buy % Rating Review
- 1. GOOGLE - $2398
- 2. AMAZON - $3312
- 3. MICROSOFT - $252.5
- 4. APPLE - $130
- 5. FACEBOOK - $320
- 6. NVIDIA - $592.5
- 7. AMD - $78.8
- 11. IBM - $145.5
- 12. INTEL - $57.7
- AI Stocks Buying Levels Update May 2021
- So what am I going to do
- GPU Mining FREE MONEY!
- CHIA Crypto Farming with Your Hard Drives Insanity!
So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.
TESLA!
Tesla's chart does not look good! The chart implies $400 is probable in the not too distant future which so happens to be what I had penciled in at where I would consider buying Tesla in my analysis of 28th of Feb (AI Tech Stocks Buying Ratings, Levels and Valuations March 2021 ). Though more recently I have penciled in buying in a range of $200 to $300.
So what does this mean?
It means the investing public is going to be subject to a lot mass misinformation from vested interests such as Cathy Wood who will be hell bent on not seeing the corner stone of ARK funds being decimated and along with it her funds performance. Gone will be the Tesla price targets of $2000, even $3000, to be replaced with loony toons targets of $5000 even $10000, to try to encourage investors to stay invested, so basically pumping Tesla stock! And probably similar for her funds other big large high risk holdings.
Where Tesla is concerned the FUNDMENTAL FACT IS TESLA IS VALUED AT ABOUT 4 TIMES GOOGLE! WHEN TESLA IS NOT EQUAL TO ONE GOOGLE! Tesla does weak AI, Google does strong AI. Tesla is like the Aldi version of AI to the Google's Waitrose AI, and that's why I CANNOT invest in TESLA, not when there's GOOGLE sat there trading at 1/4 the valuation of Tesla!.
Tesla is in a bubble, the stock valuations is crazy, it's as though everyone assumes Tesla will be the only automaker to produce self driving cars! that all of the major auto players are just sat on the sidelines waiting to die whilst Tesla takes over the world! Well taking a look at just one automaker, BMW reveals the extent of their strategic partnerships that ensures that Tesla will NOT be dominant in the auto sector, not with the likes of BMW, AUDI, Toyota, Nissan and the rest all fast playing catchup. Note don't take this as a recommendation to invest in BMW!
Tesla stock is heading lower, a quick analysis suggests the stock could easily trade to under $400 during 2021, that's more than a 60% drop off its $900 high, a Tesla stock BEAR MARKET that the likes of Cathy Wood are desperate to avoid materialising, though if she really is intelligent then whilst she has been busy pumping Tesla in the media she will have also been busy selling Tesla stock at the same time.
(Charts courtesy of stockcharts.com)
Tesla is a sign that the market needs to correct! Which will pull most stocks down with them, especially those that have had a spectacular bull run year to date. A stock market plunge during May will be good timing for my next analysis on high risk stocks that will be focused on the Life Sciences that I aim to complete within a weeks time.
Cathy Wood ARK Funds CRASH!
Whilst the Dow has been trading at NEW all time highs, supreme media high risk stocks pumper's ARK funds have entered into a severe bear market as ARK bubble finally bursts. Those invested in ARK funds are in for a more pain over the coming weeks and months as reality catches up with the fantasy valuations that the Cathy brigade had lifted the likes of Tesla to.
In fact in response to Patron queries I recall warning investors in ARK funds over 2 months ago in the comments section of AI Tech Stocks Buying Ratings, Levels and Valuations March 2021.
"Hi Nadeem, wonder if you know about Cathy Wood and her Ark Invest ETFs? What do you think about them?"
"I'm not a funds guy, I prefer to own the actual stock. Contrary to what most understand, funds are RISKIER than holding invidual stocks, they can implode, get paralysed, enter death spirals. Not saying it will happen to Ark, but if its investing in small and medium cap speculative tech stocks than its ultimate fate could be an investors nightmare. At least I know Google will come good whatever happens short-term."
So I would not be surprised if what I warned of comes to pass as over the decades I have seen it happen many times before, panicking investors seeking to exit funds results in forced selling in high risk stock holdings driving stock and fund values sharply lower thus resulting in more panic selling amongst investors, a death spiral to the point when funds suspend withdrawals.
In quick technical terms ARK has fallen to support so probably will bounce from here but that does not mean that the ARK bear market is over let alone to expect a resumption of the rally into the Feb highs..
India Apocalypse Heralds Catastrophe for Pakistan and Bangladesh
India's covid-19 double mutant B.1.617 apocalypse continues with the actual numbers of deaths and infections many times the official numbers of 400,000 infected and 3,500 deaths per day as we witness the collapse of India's healthcare system. that could see the number of total number of deaths exceed 2 million before the end of May, with the peak seeing as many as 100,000 deaths per day. Meanwhile indian politicians live in an alternative universe, making announcements that all indians over the age of 18 now being eligible for the vaccines, despite the fact that most of the vaccination centres have closed due to lack of vaccines which means only 10% of Indians (higher castes) have had 1 dose and 1.5% 2 doses. If those in charge of India had any sense of intelligence then they would be focused on vaccinating the most vulnerable i.e. the over 45's and not opening up vaccinations to all adults (higher castes)! Instead of which India's government is primarily focused on peddling misinformation in trying to hide the magnitude of the catastrophe underway which includes instructing twitter to delete tweets critical of their mismanagement of the pandemic.
Covid exposes the myth that is multi-racial India, where covid has once more brought forth of the dominance of the caste system into stark focus, lower cast lives don't matter, so as long as the higher castes have been getting vaccinations in private hospitals then the likes of Modi could not care less about a few million lower caste deaths, hindu fundamentalism in action. India is probably the most racist pseudo democracy on the planet where skin tone matters! The darker ones skin tone then the greater the racism experienced.
Which is why vaccines produced in India have vaccinated about the same number abroad then in India, with Indian politicians from Modi downwards demonstrating that they just could not care less about the lower caste poor.
Meanwhile whilst mainstream news media is focused on what is taking place in India, however neighbouring states such as Pakistan and Bangladesh with even weaker healthcare systems are in for a catastrophic May as the Indian strain becomes dominant, again the actual number of cases and deaths will be grossly under reported in both nations with even fewer rates of vaccinations than India. Therefore rather than sending vaccines to India because it is basically too late for them to have any effect now as what is going to happen is already baked in, then its much wiser to concentrate on vaccinating neighbouring countries which are likely some 3 to 4 weeks behind where India is today.
The current state of the pandemic in the West has the UK trundling along at a low of 32 cases per million with the US stagnating at 150 cases per million, whilst Europe remains high due to incompetence in the roll out of their vaccinations programmes, and thankfully all appear to finally turned the tide. Though all are awaiting the consequences of new emerging strain out of India that so far more infectious given that it has displaced the UK strain in India to become dominant due to having double the mutations of the other strains. Still so far for the UK and US it's steady as you go with the US moving ahead of the UK in terms of taking steps to come out of lockdown's even though the death rate looks a little higher than it should with about 40% of adults remaining to be vaccinated in the US. Whilst the UK is adopting a more cautious approach to coming out of lockdown with the next major relaxation in rules to come on the 17th of May, thus allowing more time for vaccinations to take effect.
Covid-19 in Italy in August 2019!
An open source peer reviewed study in Italy states that anti-bodies for covid-19 were detected in blood samples in Italy as early as September 2019!
https://journals.sagepub.com/doi/10.1177/0300891620974755?url_ver=Z39.88-2003&rfr_id=ori%3Arid%3Acrossref.org&rfr_dat=cr_pub++0pubmed&
Blood samples taken from 959 asymptomatic patients as part of a nationwide lung cancer screening program subsequently showed contained 111 (11.6%) antibodies to SARs Cov2 in the receptor binding domain which means they were definitely infected with Covid-19 over 4 months BEFORE Italy's first official cases of Covid-19, 2 chinese tourists on the 30th of January 2020 who had traveled form China to Rome. Whilst the first italian confirmed case of community spread of Covid-19 was on the 20th of Feb 2020 in Lombardy.
Out of 111 positive antibody results, 23 were in samples form September 2019, 27 in October 2019, 26 in November 2019, 11 in December 2019, 3 in January 2020 and 21 in Feb 2020.
The earliest sample for a positive test for antibodies was on the 3rd of September 2019, which means they would have been exposed to the virus at least during August 2019.
This map shows where the blood samples were taken and the number of covid-19 antibodies detected.
What this implies is that chinese travelers / migrant workers had been spreading the virus long before the story first started to break early January 2020 and thus it is highly likely the virus was endemic in China Mid 2019, valuable information that the Chinese authorities had suppressed knowledge of right up until Mid January 2020 when the exponentially expanding epidemic could no longer be covered up.
This illustrates why one cannot invest in China because one just cannot trust any of the facts and figures that spew out of this orwellian totalitarian state given the states criminal suppression of the facts concerning Covid-19 that predates official announcements by a good 6 months!
Vaccines
Delving deeper into the world of Corona viruses then I am afraid that Covid-19 is just the tip of the iceberg as there are literally hundreds of corona viruses which given that there are 8 billion people on the planet then any one of which could also make the jump to humans over the coming years. So covid-19 vaccinations are just the first phase of what's to come which means it is wise to remain invested in pharma stocks, and especially those producing vaccines the demands for which are only just beginning which is why life science stocks are the focus of my next analysis.
DISCLAIMER - The analysis in this article is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis derived from sources and utilising methods believed to be reliable, but I cannot accept responsibility for any trading or investing losses that may be incurred as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any investing or trading activities
Stock Market Early Summer Correction Trend Forecast
The stock market is now moving into my forecast time window for a correction to begin of approx 10% decline as illustrated by my trend forecast graph-
9th Feb 2021 Dow Stock Market Trend Forecast 2021
(Charts courtesy of stockcharts.com)
Current price action has the Dow breaking to a New all time high of 34,548, running the short stops (including mine) built up during the past 2 weeks of consolidation near the last high. So where the Dow is concerned right now the start of the correction remains pending.
However, the correction in tech stocks that we want to see correct has already begun! So it is possible we may see continuing divergence to some degree between the general stock market indices and the tech sector, with likely the pseudo analysts that populate the media will refer to it as sector rotation, when instead it is a a case of many tech stocks such as Tesla being bid up to trade on ridiculous valuations. Whilst the post covid Fed induced economic boom is lifting the downtrodden stocks sectors of 2020 higher, hence the divergence.
So lets see if the ongoing sell off in tech stocks can resolve in buying opportunities in AI stocks.
GPU Mining FREE MONEY!
Meanwhile crypto mining in the background on ones desktop PC with Nice Hash Quick Miner (payout's in Bitcoin), continues, yielding about £160 cash per month after electricity costs, the requirement being an Nvidia GPU with at least 6gb of vram. Whilst AMD GPU's can use the regular Nice Hash miner though that uses third party algorithms so is higher risk to install and use.
Whilst all those who think is too late then consider this, the yield in bitcoins keeps increasing as the Ethereum price goes up! Remember one mines in Ethereum and gets paid in bitcoin. Here's what a RTX 3080 currently yields on Nicehash, $14.74 per day! That' is a good 30% higher then a month ago! So it's not too late to start crypto mining in the background with ones GPU.
Again the current state of affairs of being able to get FREE money is time limited i.e. I can not see it lasting for more than a couple more months, especially as EIP 1559 is coming in July 2021 when ethereum mining payout's are expected to fall by about 50%. So profit from the crazy crypto mania bubble free money bonanza while you can, and just as I do, don't hold on to your crypto's! What I do is transfer from Nicehash to Coinbase which is pretty straight forward to do and does not incur any fees (minimum payout from Nicehash to Coinbase is about £21 / $29), and from there I can spend the bitcoins, convert to other crypto's or withdraw to my bank account, whilst US users can also withdraw to their paypal accounts, but for now I mostly spend the crypto's given that a number of services offer discounts when paying in BTC, in fact over the past couple of months I have mined and spent £370 in BTC generated from one desktop pc, at $3 per month that would be enough to cover my patreon fee for the next 14 years!
So if you have an Nvidia GPU with at least 6gb of vram then you are literally throwing free money away by not mining in the background with Nicehash. Note I do not advocate buying hardware specifically to mine with as GPU prices are double to triple what they should be, just if ones existing hardware is upto speed then well you are passing up free money.
Step 1 - Mine with Nicehash (affiliate link)
Step 2 - Transfer bitcoins to Coinbase (affiliate link)
Step 3 - SPEND IT!
The rest of this extensive analysis has first been made available to Patrons who support my work:
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction
- TESLA!
- Cathy Wood ARK Funds CRASH!
- India Apocalypse Heralds Catastrophe for Pakistan and Bangladesh
- Covid-19 in Italy in August 2019!
- Stock Market Early Summer Correction Trend Forecast
- Stocks Expensive or Cheap Indicator (EC)
- AI Stock Buy % Rating Review
- 1. GOOGLE - $2398
- 2. AMAZON - $3312
- 3. MICROSOFT - $252.5
- 4. APPLE - $130
- 5. FACEBOOK - $320
- 6. NVIDIA - $592.5
- 7. AMD - $78.8
- 11. IBM - $145.5
- 12. INTEL - $57.7
- AI Stocks Buying Levels Update May 2021
- So what am I going to do
- GPU Mining FREE MONEY!
- CHIA Crypto Farming with Your Hard Drives Insanity!
So for immediate access to all my work do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.
My analysis schedule includes:
- More High Risk Tech Stocks - 30% done
- Bitcoin Trend Forecast - 40% done
- UK House Prices Trend Analysis - 10% done
- How to Get Rich! - 70% done
- US Dollar and British Pound analysis
- Gold and SIlver Price Analysis
By Nadeem Walayat
Copyright © 2005-2021 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.
Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
