The AAPL momentum continues with now further fundamental reinforcement:
Important portfolio developments over the weekend...Bloomberg’s Mark Gurman reports Apple is planning to release a version of its smartwatch that can connect directly to cellular networks, a move designed to reduce the device’s reliance on the iPhone. These new LTE-enabled Apple Watches are expected to be released in time for the holiday shopping season. This is an Apple moments we’ve been waiting three years for. An untethered watch opens the market to tens of millions of consumers who want either a part-time or even a permanent smartphone replacement. All iPhone users are candidates to use the watch as a part-time replacement; consumers younger than 18 and older than 70 qualify as unique candidates to use Apple Watch as a permanent replacement. Parents will be able to communicate with children and know their whereabouts at all times. Caregivers will be able to monitor the elderly. Those in between may eventually rely on Apple Watch as a backup wallet/key, digital ID, and convenient communication device. Fitness consumers will use the untethered music and tracking apps. Additional apps need to evolve for this product to really take off, we think it will happen over the next two years. Tim Cook said last week that Apple Watch sales grew by more than 50% in the third quarter as it cements its lead as the best selling smartwatch on the market. Although watch earnings have yet to move the needle for the company, this existing user base has allowed Apple to fine tune Watch OS in advance of critical mass adoption. Watch OS 4 will be released this fall with more Siri voice-enabled features, the ability to connect to gym equipment, send payments in iMessage and display news stories. From our perspective, the launch of this cellular enabled Apple Watch should be considered a transition from Apple Watch as a beta product to Apple Watch as a legitimate new product category. So that's on the fundamental side of catalysts that are on slate...and we have technical momentum matching up with the fundamental catalysts with AAPL being up today on above average volume $2.25. That's a big day for APPL. To ride the momentum for the next wave we're buying straight calls today with a 5% allocation of AAPL April 2018 $150 calls @ $16.50.
The Bitcoin Momentum continues by breaking out to new all time highs after crossing the $3,000 mark here currently above $3300.
Bitcoin has surged $600 over the last three days as investors return to the digital currency after its August 1st hard fork. Not only are digital currencies the only asset currently pricing central bank risk, but they also offer a much needed solution in an era of globalization. Trade between countries can be a cumbersome and expensive transaction process. By cutting out middle men, these instantaneous transactions enabled by universal digital currency can make commerce more efficient and trustworthy. Living in the privileged United States often makes us blind to the real beneficiaries of a global currency, those in Asia and South America are jumping on it.
So for those who have not yet gotten into cryptocurrencies and wish to have exposure to Bitcoin's price appreciation...there are several ways to do so in the stock market:
Although the best way to invest in Bitcoin is to setup a simple coinbase.com account, a prominent Bitcoin brokerage exchange...you can also let an expert do it for you. Our expert of choice is John McAfee. This is the same John McAfee who was the computer programmer that developed McAfee anti-virus software. He sold to Intel, retired and disappeared into the jungles of Belize for ten years. Well, McAfee is back. Last year he took over as CEO of a gaming company called MGT and immediately transferred all resources into Bitcoin mining. The entire market cap of MGT is only $40 million, it trades publicly under the MGTI ticker symbol. McAfee made headlines a few days ago when he announced his forecast that Bitcoin will be worth $500,000 within 3 years. The truth is that he believes each unit of Bitcoin could hit as high as $2.4 million from its current price of $2,650. His plan is to turn MGT into the worlds largest miner of Bitcoin and Ethereum. He’s running 1,360 supercomputers that are expected to mine at least 225 coins per month which equates to annual revenue somewhere around $7 million at the current price. If he expands operations, maintains a strong balance sheet of digital currency, and the demand for Bitcoin rises then that $7 million in annual revenue will surge exponentially. There’s a chance that this second iteration of John McAfee will yield some excellent results. We’re adding MGTI to the portfolio watchlist at a momentum purchase point of $1.25. Currently MGTI is around $1.21...if and when we see it cross $1.25 on volume...you can expect that we'll be getting long. We still need to see a few more things to confirm that buy signal.
As John McAfee’s MGTI remains stuck in a trading range (we expect an eventual breakout), NVDA is emerging as the clear winner in the digital currency space. Although NVDA is now trading above its next momentum purchase point at $170, we will refrain from additional exposure until its earnings announcement on August 10th. The momentum sell point is being raised from $159 to $164.
Alibaba has also broken out above its momentum point at $155, likewise we will refrain from additional exposure until its earnings report on August 10th.