Mind Medicine (MindMed) Inc. (NEO:MMED) is Already Preparing TWO Potential Breakthrough Products for Phase II Clinical Trials

Fascinating stuff everyone….and check out Shark Tank’s Kevin O’leary in the video below.

In the 1970s, a relatively small pharmaceutical company called Eli Lilly developed an antidepressant drug. It was the first major treatment for depression … and ushered in a new era of mental health and created a new asset class of medicines. 

The drug went on to become the company’s first multibillion-dollar drug and its best-seller from 1992-2001. 

Today, it is one of only three drugs deemed an “essential medicine” by the World Health Organization[1], and is still a leading antidepressant—a true household name.

Clearly, Eli Lilly capitalized on being the first to market for a major mental health need. 

In 2019, just in the United States, a shockingly large amount of $225 Billion was spent on mental health services.  This is a really big market ripe for disruptive medicines and therapies. 

And with current lockdowns and stay-at-home orders still in place in markets all around the world, all types of mental health and addiction are going to skyrocket. In fact, according to one scientific study, the consumption of addictive substances can increase 19 times in isolation. [2]

Due to increased anxiety during the Great Lockdown, Xanax prescriptions increased 14.5% during the month of March alone. [3]

We are on the verge of the Great Depression of Mental Health and Addiction

40 million Americans have lost their jobs since COVID-19 started. When someone loses a job they are more likely to develop addiction and mental health issues..[4]

Answering this are innovative pharmaceutical companies seeking an edge by clearly thinking outside the box, and coming from sources previously seen as taboo and unthinkable… PSYCHEDELICS

Since 2018, the US Food and Drug Administration (FDA) has granted “breakthrough therapy” status three times to psychedelics-based treatments for major mental health illnesses.[5] 

Pharma giant Johnson & Johnson was the first pharmaceutical developer to receive the FDA’s approval, through an innovative nasal spray[6], safely derived from… a party drug.[7] 

Next, Compass Pathways (backed by ATAItai Life Sciences AG), received FDA breakthrough therapy designation[8] on a treatment derived from… magic mushrooms.[9] 

ATAItai’s raised over US$100 million[10] to date from major investors such as PayPal co-founder Peter Thiel—and they’re currently seeking an USD$800 million valuation.[11] 

Big league investment is taking notice of this potential psychedelics-led revolution in mental health, as Canopy Growth Founder Bruce Linton, and Shark Tank host Kevin O’Leary have put skin in the game into another leading psychedelic pharma company advancing multiple promising psychedelic medicine prospects.[12] 

This little-known company we’ve highlighted has assembled a compelling IP portfolio, clinical pipeline, and drug development platform for psychedelics—raising approximately USD $40 million since launch. 

Eight Capital, a leading investment bank in Canada, initiated the first ever equity research report of the psychedelics sector on MindMed.  The report named 3 industry leaders : MindMed, Compass, and ATAI.  MindMed is the ONLY publicly traded company of these 3 industry stalwarts. 

And its listing truly hit the ground running… 

On its first trading day on the NEO Exchange, this company broke the record for the most shares traded ever on a single day on the NEO.  The company’s current market cap sits at CAD$152 million as of May 29, 2020,  less than two months into trading.

The Magic of Mind Medicine (MindMed) Inc.

Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM) is a next-gen neuro-pharmaceutical company that discovers, develops and deploys treatments derived from psychedelics to improve health, promote wellness and alleviate suffering. 

It’s clearly doing this by thinking outside the box—and it’s already preparing and soon starting Phase 2 clinical trials for two of its leading programs, each dealing with its own large, critical mental health addressable markets. 

The first addresses the ongoing opioid epidemic that’s affecting millions, and has cost the U.S. economy trillions of dollars since it began.  This crisis is only getting worse during COVID-19.  

MindMed’s proprietary 18-MC program is developing a potential anti-addiction treatment derived from the Schedule I pharmaceutical, ibogaine—a hallucinogenic known to treat addictions since as early as 1962, but only now gaining traction when safely derived and administered.

The other treatment entering Phase 2 trials is MindMed’s Microdosing LSD program, that is evaluating if it can treat Adult ADHD. 

Silicon Valley CEOs and developers have been using forms of this medication for years to improve their work efficiency. MindMed is undertaking to one day make LSD microdosing into a FDA approved medicine if the clinical trials prove it is effective. 

Now the company has also recently announced[14] a third next-generation psychedelic therapy to its R&D pipeline—MDMA (the active ingredient in Ecstasy). 

Mind Medicine (MindMed) Inc.’s (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM) full suite of drug development programs and R&D all have the potential to become industry game changers. 

They are gaining all types of attention along the way, from mainstream media write-ups to heavyweight investors.

 

MEDICAL IBOGAINE FOR SOLVING THE OPIOID CRISIS

The opioid crisis is getting out of hand and the Whitehouse Council of Economic Advisors Estimate that the opioid crisis costs the US Economy $504 billion a year.[15]

Now with the current lockdown orders in place, and increased social isolation, the problem is only getting worse[16]. For many struggling with addiction, treatments and support systems have been disrupted—which may increase the risk of overdose deaths.

States are already seeing significant spikes in overdoses in the first half of this year, with an average 20% increase of overdose submissions since the first reported case that kicked off the pandemic lockdowns hit US shores.[17]

What does this all mean?

In short, psychiatric professionals will need more tools and treatment options—especially when they’re being forced to use telemedicine (diagnosis and prescriptions by phone), as they deal with everything from ADHD[18], to anxiety and addictions.[19]

MindMed Is Developing a Treatment for Addiction

 “drug addiction is a disease of the brain”

– Dr. Nora Volkow, MD, Director, National Institute on Drug Abuse

 

Addiction is defined as a disease by most medical associations, including the American Medical Association and the American Society of Addiction Medicine.[20]

Existing medicines, such as methadone and suboxone, that are prescribed for addiction only act as a replacement therapy like the nicotine patch and these medicines are not treating Addiction as a brain disease. (Side note, the inventor of the nicotine patch Dr. Jed Rose is on the Scientific Advisory Board of MindMed).

The reality is that existing treatments just replace one harmful narcotic like heroin with one that is a little less harmful, but can also cause trauma. These treatments do not solve the core problem of addiction, as reflected by high relapse rates.

MindMed wants to actually solve addiction in a new way; not through a pill a day for the rest of one’s life. Instead, MindMed is working to develop treatments that could help patients transition back to a normal life, without relying on opioids and their associated dangers.

To treat this deadly disease, the 18-MC program, from Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM) may finally be the treatment addiction sufferers have been waiting for. 

MindMed is one of the first disruptive companies that intends to truly treat addictions as a brain disease. 

18-MC is a synthetic derivative of the Schedule I drug, ibogaine—which itself comes from a root in West Africa called iboga, long used in religious rituals, and known for its visions

But in 1962, ibogaine’s therapeutic efficacy against addictions was first witnessed[21], in particular when helping patients with detoxification from heroin. 

The original discoverer of this treatment method believed his life’s work held great promise in helping over 164[22] million people around the world who are affected by substance use disorders.

However, ibogaine has some potential drawbacks, so MindMed decided to create its own synthetic version that did not have:

  • Heart complications (inducing cardiac arrhythmias),[23][24]
  • Hallucinations[25]

Enter 18-methoxycoronaridine (aka “18-MC”), which is a synthetic ibogaine derivative.  

The potential of this new anti-addiction drug did not go unnoticed. 

In 2012, the 18-MC program received a USD$6.8 million grant from the National Institute on Drug Abuse (NIDA).[26]NIDA is the leading US Government authority on drug addiction research in America. MindMed is aiming to develop methods to use 18-MC to fight addiction, substance use disorders and tackle the opioid crisis once and for all. 

It eliminates the cardiac risk. It eliminates the hallucinations. 

AND it is ADDRESSING the one of the most severe attributes of addiction, RELAPSE. 

Ask any addict or alcoholic and they will tell you the hardest part of addiction is not getting sober, it’s staying sober. MindMed is trying to solve this problem. Solving for CRAVINGS could potentially crack the code on addiction. 

MindMed intends for 18-MC to keep the patient’s dopamine levels in a normal range, without inducing ongoing addiction. 

Most importantly, it has the potential to BOTH alleviate drug cravings and impede the relapse of drug use. 

… and MindMed has the IP. 

The addiction treatment market is worth a whopping $42 Billion a year[27] in the United States alone. This suggests that 100% of American’s have a drug addiction. The actual stat is “Almost 21 million Americans have at least one addiction, yet only 10% of them receive treatment.” There are 328 million people in America.[28]America is in desperate need of innovative solutions to all forms of addictions. 

On April 16, 2020, MindMed announced it had initiated dosing its first patient with 18-MC in a Human Safety Study of Novel Treatment for Opioid Addiction.[29] 

The company is planning to begin Phase 2 clinical trials by the end of 2020 that will help move 18-MC closer to a potential FDA approval—which would give MindMed the coveted first-to-market advantage that every breakthrough pharma company seeks. 

MindMed may also have blockbuster drug potential if it can conduct additional trials for other addictions including : 

  • Alcoholism[30]
  • Methamphetamine
  • Cocaine
  • Nicotine

 

SILICON VALLEY LEADING ‘MICRODOSING’ TO MAINSTREAM

Thanks to Hollywood depictions, psychedelics have since the 1960s been often associated with all types of wild hallucinogenic trips, filled with all types of colors, shapes, and imaginative designs.

But what’s lesser known is how psychedelics have strongly influenced much of the technological advances we enjoy today. 

Apple visionary Steve Jobs was said to have partaken in psychedelics, having chided his rival Bill Gates for being “unimaginative” and recommending he should take some LSD. [31]

Today, many of the greatest minds in Silicon Valley are listening to the late Jobs’ advice, and boosting their careers with psychedelics, through the use of a method called Microdosing.

The concept involves taking tiny doses of psychedelics, often specks the size of crumbs, not to feel high, but to feel more focused, creative, and present

And according to some intriguing research, it appears that microdoses may activate just the right amount of receptors in the brain for us to be our better selves.[32] 

Amid a hyper hustle culture that’s ultra-competitive, professionals in Silicon Valley are seeking a mental edge that could mean the difference between becoming the next big billion-dollar company or the next dud. These white-collar professionals are shelling out thousands of dollars per month just to have a psychedelics guru lead them through microdosing their way to career clarity.[33] 

And it’s not just these high-tech megastars that are seeking a boost from the microdosing trend—it’s even being reported as assisting stay-at-home moms get through the rigours of a typical day.[34]

By microdosing these drugs, the unwanted hallucinogenic effects are removed, while the more pleasant “sub-perceptual” (unnoticeable) effect remains.  

But all these adventuristic “micro-doses” are currently carrying on these activities in an illegal manner, without the necessary research and fine-tuning to back it up. 

Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM) is looking to change that, by becoming the first ever exchange-traded psychedelics company to take microdosing into Phase 2 clinical trials for Adult ADHD.[35] 

If they succeed in their goals of one day gaining FDA approval, their IP and first mover status has the potential to enable LSD ( aka “acid”) to be safely and effectively taken at home. Luckily, the company is already working on improving the safety of taking LSD through new technologies. 

 

MindMed Acquires Exclusive License to Eight Clinical Trials of LSD, Partners with World-Leading Psychedelic Research Laboratory at University Hospital Basel

 

On April 1, MindMed announced the signing of a multi-year collaboration with the laboratory of Professor Dr. Matthias Liechti, the world-leading psychedelics pharmacology and clinical research group at University Hospital Basel in Switzerland.[36] 

Through the collaboration, MindMed gains exclusive worldwide rights to data, compounds, and patent rights associated with the Liechti laboratory’s research with LSD and other psychedelic compounds.

Generated over the course of a decade, the data represents, according to Dr. Liechti, “the largest collection of clinical trials around LSD” that exists!

And MindMed now has the exclusive global rights to file patents and use the patents for it!

“This exclusive partnership puts MindMed at the forefront of efforts to develop LSD and other psychedelics while also setting the tempo and caliber of our growing IP portfolio and clinical trial pipeline.”

– Dr. Nora Volkow, MD, Director, National Institute on Drug Abuse

 

Right off the bat, MindMed will begin exploring the data regarding two potential applications for LSD: 

  1. For the treatment of anxiety, and
  2. For the potential treatment of adult ADHD

The adult ADHD market is under-served because while 4.4%[37] of the general population have been officially diagnosed with the condition, studies have shown that over 20% of the entire adult population show symptoms of ADHD.[38] 

Now coupling in the fact that almost all current ADHD medical treatments involve stimulants that cause a long list of unwanted symptoms, it’s unsurprising that almost half of all young adults stop taking their medications upon entering college.[39]

Add to that, over 50% of people with ADHD also suffer from Anxiety[40], this LSD data from University Hospital Basel is going to be pivotal in creating potentially disruptive medicines that may be able to treat a continuum of mental health illnesses. 

Enhanced focus for college students can be crucial, much like for the Silicon Valley engineers. 

But untreated ADHD is also strongly linked to conditions being exacerbated by the current health crisis, including low self-esteem, struggles with impulsiveness, higher emotional dysregulation, substance abuse, and an overall significantly lower quality of life.[41] 

Adult ADHD affects 10 million adults in the US.[42]  It is a MASSIVE market and it is ripe for disruption. 

So by improving and refining the process, MindMed presents one of the market’s best hopes to help us be our better selves, through the use of microdosing psychedelics.

 

Next Gen Psychedelics R&D : Combining MDMA with Other Psychedelics

MindMed is also working on MDMA[43]. It recently added MDMA to its R&D portfolio and will be looking how it can combine MDMA and LSD into a next generation psychedelic therapy.

MindMed CEO JR Rahn said “We see an amazing opportunity to optimize the subjective effect profiles of known psychedelics like LSD and MDMA to potentially make a more advanced and comfortable therapeutic experience for the patient,”

 

THE MARKET’S TRIP DOWN THE RABBIT HOLE

While it’s true that Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM) isn’t the only company in the psychedelics-therapy space, its multiple programs and progress through FDA clinical trial milestones make it one of the market’s top publicly-traded pure-play psychedelic contenders.

The company is currently preparing and will soon enter the Phase 2 trial stage for two of its programs, both of which it is working towards being the first-to-market title holder.

As evidenced by Eli Lilly and Company (NYSE: LLY) in the 90s, that first-to-market advantage led to billions of dollars in sales for a single antidepressant drug.

It’s the difference between being the household name, and just another alternative.

With its two platforms underway, MindMed is already poised to go, and having successfully raised approximately USD $40 million since launch.

MindMed has attracted the backing of big league investors, including “Mr. Wonderful” Kevin O’Leary (host of Shark Tank), and Canopy Growth Founder and Former CEO, Bruce Linton.

At March 31, 2020, MindMed’s cash on hand was USD $20.5 million respectively.[44]

Following that, the company raised approximately CAD $13.2 million through a bought deal offering with Eight Capital.[45]

MindMed’s highlights further establish how the market is responding particularly well to this wave of psychedelic-based medicines. Other success stories in the space include:

  • Champignon Brands (CSE: SHRM) (OTCPK: SHRMF) recently went on a major run—gaining 140.4% in just two days.
  • Compass Pathways secured $80 million[46] in financing to boost its depression clinical trial based on psilocybin or “magic mushrooms”
  • Atai Life Sciences AG (largest shareholder of Compass Pathways) is seeking a valuation of $800 million[47] after recently raising $25 million

Amid these comparables, MindMed has more than kept pace, by meeting its milestones and adding new programs, IP and clinical trials acquisitions, successfully raising funds, and capturing the public’s attention with mainstream media coverage.

 

“Through psychedelic inspired medicines, MindMed has the potential to treat the most challenging and damaging mental health issues of our time.”

– James Bailey, Bail Capital

“There’s probably untapped value, which will only go to the people who are at the beginning and bold.” 

– Bruce Linton, Founder and Former CEO of Canopy Growth

“This could save lives, cure depression, help alcoholism, get people off opioids—why wouldn’t I want to be invested?”

– Kevin O’Leary, Host of Shark Tank and Venture Capitalist

 

PIPELINE CATALYSTS

 

MindMed’s Management Team and Advisory Board

JR Rahn – Founder & Co-CEO. Rahn is a former Silicon Valley tech executive who realized that transformational solutions to mental illness and addiction might lie in psychedelic medicines. After 2 years of his own research and investment in psychedelic research, he partnered with drug development veteran Stephen Hurst to start Mindmed in 2019. Before starting Mindmed, Rahn worked in market expansion and operations at Uber, after which he was backed by the Silicon Valley tech accelerator Y Combinator for his company Upgraded, which partnered with Apple to provide device financing for Apple customers in Europe.

Stephen L. Hurst, JD – Founder & Co-CEO. Hurst has 35+ years’ experience in the biopharmaceutical industry, including work for The Immune Tolerance Institute, The Regents of the University of California, The World Bank and BIO Ventures for Global Health. He’s previously advised on psychedelic therapies research and clinical trial designs. He’s also held senior executive positions with Sequential and Inhale Therapeutic Systems (now Nektar Therapeutics, Inc.), where he helped the company grow to over 700 employees and raised +$700 million in investment capital. Steve and Drs. Freeman and Glick co-founded Savant HWP, Inc., in 2009 to advance 18-MC to clinical trials.

Scott Freeman, MD – President and Chief Medical Officer. Dr. Freeman has extensive experience in clinical trial work and FDA regulatory strategy. As the CMO of Savant he was the primary lead behind the National Institutes of Health (NIH) grant in bringing 18-MC to IND and its first-in-human clinical trial. He served as VP of Clinical Development at Onyx Pharmaceutical and was head of both the clinical development and operations groups, which lead to FDA approval of Nexavar for kidney and liver cancer. He was an Associate Professor at Tulane University and guest researcher at the NIH in basic and clinical research.

Donald Gehlert, PhD – Chief Scientific Officer. Dr. Gehlert has extensive experience in drug discovery and expertise in key functional areas of exploratory development and disease biology. During his career at Lilly, he led or participated in teams that introduced 19 molecules into the Lilly pipeline including both small and large molecule therapies. He also participated on Phase I and II clinical development teams that designed and delivered translational proof of concept studies in the areas of ADHD, obesity, AUD, depression, pain and migraine. He’s a co-author on 182 publications and a co-inventor on 15 issued and pending patents.

Carol Nast – Chief Operating Officer. Nast has spent her career in executive level positions with large multinational companies and early stage companies in the medical industry. She’s a recognized expert in product development and commercialization and is experienced in the management of complex, multinational partner programs and has successfully led the development and commercialization of 100+ products. She was COO at NuGen, a genomics company, and served in executive level positions at Inhale Therapeutics (Nektar), Syva (a division of Syntex Pharmaceuticals,) BioRad and Pfizer.

Jeanne Bonelle – Executive Vice President, Global Quality. Bonelle has 30+ years’ experience developing quality organizations within startup firms and transitioning to commercial operations. Her last four positions were to establish quality systems within the developmental phase for a wide range of products, including Senior Director of Quality Assurance at Inhale Therapeutic Systems (now Nektar Therapeutics); Director of Quality Assurance at Cholestech (now Alere); Manager of Quality Assurance at BioTrack, (now a subsidiary of Roche Diagnostics GmbH); Manager of Quality Assurance at BioResponse (now Baxter HealthCare).

Bruce Linton – Director. Founder and Former CEO and Chairman of Canopy Growth, Linton brings a wealth of experience in building strong tech-driven companies and developing world-class teams. He chairs MindMed’s Board’s Compensation, Governance and Nomination Committee. He’s currently Executive Chairman of GAGE Co., Special Advisor with Better Choice Company, and an Activist Investor with SLANG Worldwide, and OG DNA Genetics Inc., which has built and curated a seasoned genetic library and developed proven standard operating procedures for genetic selection, breeding, and cultivation.

Brigid Makes – Director. Prior to serving as an independent consultant for private medical device companies, Makes served as Senior VP and CFO of Miramar Labs, which was acquired by Sientra in July 2017. From 2006 to 2011 she served in the same roles for AGA Medical (acquired by St. Jude Medical). Prior to AGA Medical, she served in a variety of executive positions, including as CFO, for Nektar Therapeutics (formerly Inhale Therapeutics). She also served as CFO for Oravax, from 1998 to 1999 and Haemonetics Corp, from 1995 to 1998. Ms. Makes chairs the Board’s Audit Committee.

Stanley D. Glick, PhD, MD – Director, Chair of Scientific Advisory Board, and Senior Clinical Advisor.  Dr. Glick is a former professor of pharmacology at Mount Sinai School of Medicine, and once chaired the pharmacology and neuroscience program at Albany Medical College. Funded by the National Institute on Drug Abuse (NIDA) for 40 years, his major research focused on the neurobiology of drug addiction. Dr. Glick is a co-inventor of a novel group of agents for treating drug addiction, including 18-methoxycoronaridine (18-MC). He’s authored or co-authored 450+ experimental papers, reviews and abstracts, and has served on journal editorial boards and NIH advisory committees.

Matthew W. Johnson, Ph.D – Advisory Board. Psychedelics and addictions expert Dr. Johnson is a Professor at Johns Hopkins, current President of the International Society for Research on Psychedelics, and former President of the American Psychological Association Psychopharmacology Division. He’s published ~50 scientific papers on psychedelics, the largest study of psilocybin in cancer distress, research on psychedelic treatment of tobacco addiction, and helped resurrect psychedelic research by writing psychedelic safety guidelines. His 2018 psilocybin review recommended Schedule IV upon medical approval.

 

 

 

Investment highlights for Mind Medicine (MindMed) Inc. (NEO: MMED) (OTCQB:MMEDF) (FRA:BGHM):

  1. MindMed is a pure-play psychedelics medicine company soon entering Phase 2 Clinical Trials for not one, but two psychedelics programs: 18-MC (Ibogaine Derivative) for opioid withdrawal treatment, and Microdose LSD for Adult ADHD.
  2. 18-MC is an anti-addiction treatment seeking to address an ongoing opioid crisis that costs American society $504 billion annually.[48]
  3. MindMed is the first ever exchange-traded psychedelics company to undertake Phase 2 trials of Microdosing LSD—a treatment growing in popularity among some of the top minds in Silicon Valley.
  4. Currently co-developing a new  LSD Neutralizer Technology and if the patent filing is accepted will hold exclusive, worldwide rights ato shorten and even stop LSD trips—ie. an LSD ‘off-switch’ through this tech.
  5. Currently financially healthy position with cash on hand of $20.5 million respectively at March 31, 2020, and an additional $13.22 million CAD raised through a bought deal offering with Eight Capital on May 26, 2020.
     
  6. Support from high-profile investors, and scientific advisory board members, including Canopy Growth Founder and Former CEO Bruce Linton, Shark Tank host Kevin O’Leary, 18-MC inventor and leading addictions researcher Dr. Stanley D. Glick MD and leading psychedelics researcher Dr. Matthew W. Johnson of Johns Hopkins University.
     
  7. Management team and board with an extensive amount of industry experience attached to a variety of companies and approved drugs, including Lilly, Nektar, BVGH, Strattera, NuGen, Onyx, Roche, Pfizer, Nexavar, Allelix, SGC, Y Combinator, and Uber.

 

Please See Disclaimer

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  45. https://www.mindmed.co/press-releases/mindmed-announces-increase-in-bought-deal-offering-to-approximately-11-5-million
  46. https://news.crunchbase.com/news/compass-pathways-secures-80m-series-b-to-boost-depression-clinical-trial/
  47. https://www.bnnbloomberg.ca/ipo-beckons-for-magic-mushroom-research-into-depression-1.1146829
  48. https://www.whitehouse.gov/briefings-statements/cea-report-underestimated-cost-opioid-crisis/

 

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Gaps Now Filled – Apple And Tech Stocks Maxed Out

Depending on your general trade knowledge, you may or may not consider “gaps in charts” as being significant but….

You need to understand this.

Let’s have a look at Apple for an example:

Gaps Get Filled So Order Book Reconciles

Gaps Get Filled So Order Book Reconciles

You can cleary see the small “gap” in the price chart back in Feb.

Gaps are areas on a chart where the price of a stock (or another financial instrument) moves sharply up or down, with little or no trading in between. As a result, the asset’s chart shows a gap in the normal price pattern.

Orders that have been placed in this general “price zone” are essentially caught up in the system so when a stock price gap is observed, by a chance of 91.4% it will get filled in the future. In layman’s terms, 9 in 10 gaps get filled; not always, but pretty close.

Now that the gap “has been filled” in both Apple’s chart as well the Naz in general….the door is essentially “totally wide open” for prices to “now fall”.

This “bounce” has been epic but make no mistake….now that Naz gaps are filled, these 5 big stocks( FAANG)  that are essentially “driving this bounce” ( thru buy backs / not true retail investing ) can roll over on the realities of coming earnings news. = the most horrible print any of these will ever report.

Every investor group on the planet knows that global GDP, is gonna print some of the worst numbers in our lifetimes in the coming quarter. The stock market is now just machines, as essentially 80% of America is flat busted…let alone the government.

Hold or sell? You know where I’m at. If you’ve weathered this storm or even better…made good on this bounce – my hat goes off to you. Truly incredible you all should be very proud.

If you want to hold on to any of the gains…..now would be a good time to do so.

 

 

 

 

Get Macro – The Wilshire 5000 Index

Have you ever followed / watched the charts on the Wilshire 500?

What the hell “is” the Wilshire 500?

The Wilshire 5000 Total Market Index, or more simply the Wilshire 5000, is a market-capitalization-weighted index of the market value of all US-stocks actively traded in the United States.

As of December 31, 2019, the index contained 3,473 components.

The index is intended to measure the performance of most publicly traded companies headquartered in the United States, with readily available price data, (Bulletin Board/penny stocks and stocks of extremely small companies are excluded). Hence, the index includes a majority of the common stocks and REITs traded primarily through New York Stock Exchange, NASDAQ, or the American Stock Exchange. Limited partnerships and ADRs are not included.

It can be tracked by following the ticker W5000.

A look at the current status:

Wilshire 5000 Index

Wilshire 5000 Index

It’s fair to say that “stock picking” during this tenuous time can be “extremely difficult” whether you are looking to get short OR remain long…..

Sometime a wider view of “macro markets” can give you a better idea as to “where we are at”….as traders have a tendency to get “tunnel vision” on a specific stock or two…then grow frustrated in not understanding the “broader market trends”.

At this point it’s fair to say that the macro damage to this chart will take considerable time to repair. We’ve now retraced a good 50 – 68% of the entire fall, and things finally appear to be stalling out.

Bulls are gonna need “a whole lot more squiggles” to even consider this a “V Shaped Recovery”.

Most of the “good news” is now cooked in with the Fed in full effect, and the tech companies first quarter earnings done ( short of Apple’s miss tonight ).

I would encourage longs / bulls to again “seriously think about taking some profits here”.

I’m popping in short for a few days here.

 

Hopium Is Not A Plan – Case For New Lows

You all know I trade with a very keen eye on the technicals, “coupled” with an “extremely keen eye” for the fundamentals.

I think we can all agree……the fundamental picture is clear. The bubble has been popped ( as foreseen many MANY months ago ) and the “recovery” will be an arduous journey spanning months ‘n months “if not years” if we consider the sociological and even cultural impact.

Do you honestly think things will simply “get back to normal”? Do you really think you’ll be shaking strangers hands / interacting in society “as per usual” in coming days / months? If ever?

Perhaps you’ve already second guessed your “humanitarianism” walking by a stranger in a mask? Or if I dare suggest…”someone from China”??? ( oooooooooooh ) = ridiculous. He he he….caught you. Shame on you really. Shame on us.

You don’t even exchange eye contact…and god forbid you actually “touch”.

You think you’re gonna get all “warm ‘n snuggly” a few months from now? Common…….yet expectations are that the ENTIRE WORLD just gets back to “normal”? Please.

Technically – here is a look at what a “typical” next wave down would look like, considering the severity:

Next Wave Down - One Scenario To Consider

Next Wave Down – One Scenario To Consider

Take it for what it is. We COULD rally a touch further, as its impossible to nail it exactly but..

If you don’t have a plan ( whether it is the right plan or not ) you stand zero chance of effectively trading this.

“Hopium is not a plan”.

 

 

Prepare For The Next Leg – Lower

Ya ya….I get it. You don’t want to hear it.

“Sunshine, lollipops and rainbows..Everything that’s wonderful…blah blah blah. Yes yes well…..such is not the case – currently.

Social Distancing From Kong

Social Distancing From Kong

I can go on and on with a million “technical reasons” this market will roll over ( and take another leg lower ) then I could spend days ‘n days outlining the “fundamental reasons” this market will roll over ( and take another leg lower ) – but you don’t want to hear that.

I guess a firm recognition, and solid understanding of “what we’ve just witnessed” is necessary, in order to formulate a reasonable idea of “where we’re headed next”.

You get it…obviously.

We have just witnessed the largest economic / market “TURN” of our lifetimes.

You would honestly have to be living under a rock to even “consider” this a “passing concern” or a “blip”.

World governments throwing everything / literally “everything they’ve got” at keeping populations calm and assured that monetary relief will come, and that everything will be fine.

Small businesses will die and never come back. Earnings reports over coming quarters will puke, mortgage market may implode, dollar printing will accelerate at such a pace as to “keep up” with the flood of bailouts / defaults / support programs etc…..take your pick.

This is not a bottom – this is a “dead cat bounce”, which looks to be in jeopardy of rolling over “even sooner” than I might have expected.

Do what you will….but do yourself a favor.

This is the beginning – not the end.

I am LOOKING SHORT and will plan accordingly over literally………the next 48 hours.

 

 

 

 

USD Double Top = Change In Direction

Scary Thought: the Fed just injected in one week almost the entire amount of liquidity it did in all of QE2 and it is barely enough to keep stocks from plunging.

The mass selling of stocks = massive amounts of U.S Dollars coming into the pool no? Sell your shit….what have you got?

Cash yes. Dollar index rises. Eezy Peezy.

All those margin calls and portfolio liquidations ( of whatever is still left ) have to go into “something” right?

= Cash. Yes.

= U.S Dollar and Japanese Yen as……these are the currencies that are so rapidly printed and used to fuel these bubbles, as they can be borrowed at near 0% interest.

When shit hit’s the fan….everybody sells stocks….and these two currencies rise “dramatically” in the wake. Kapeeeeesh? It’s call “repatriation”.

 

The U.S Dollar Double Top

The U.S Dollar Double Top

This “Dollar Double Top” is effectively “done”.

USD now to be printed to the degree we’ve never seen before….

Scary Thought: the Fed just injected in one week almost the entire amount of liquidity it did in all of QE2 and it is barely enough to keep stocks from plunging.

 

The Bounce Cometh – Closing Shorts

There is divergence everywhere……the down move has been historical.

It’s getting close to “bounce time”.

I assume we make a short term bottom here in coming days….then bounce thru April. This could very well be an “epic” bounce – but please keep in mind – a bounce all the same.

Hot Air Kong

I’m closing shorts, and keeping a very close eye on The U.S Dollar as we now know the Fed will begin formal QE operations once again ( hmmm…….I remember saying something about that months ago )

You know what that means right? Printing more confetti = US Dollar Down. Stocks will bounce and USD will fall. Thursday’ish?

This trade is setting up 100% totally classic Kong.

We bounce before the “real downturn” begins.

Bitcoin Becomes Digital Gold – May 18th

Well….not May 18th “exactly” but right in / around there somewhere.

With May’s Bitcoin halving event drawing ever closer, Coinbase recently took to pushing the “Bitcoin as digital gold” narrative. In a tweet-storm to promote an accompanying blog-post published Feb. 7, it covered the key reasons why the halving and subsequent supply rate reduction will further cement that link.

btc gold

btc gold

Scarcity creates value

Since the gold standard was broken in 1971, the dollar’s value has declined and gold’s value, in dollar terms, has risen over 4000%. Gold has more value than similar metals such as copper due to its relative scarcity and difficulty to acquire.

Bitcoin has been designed to be scarce like gold and is very difficult to acquire through the Proof-of-Work process of mining. However, it also has an advantage over gold in being transferable through a communications channel.

Coinbase concluded:

“Armed with a myriad of technological advantages, accelerating development, and maturing global market, Bitcoin is a store of value to rival gold in the digital age.”

Halving increases scarcity

The supply of Bitcoin is limited by design, with new tokens being minted as a reward every time a block of transactions is mined. The initial reward level of 50 BTC per block has already undergone two halving events, bringing it down to the current 12.5 BTC per block.

After the May 2020 halving, mining rewards for each new block, mined approximately every ten minutes, will reduce to 6.25 BTC. This will bring the supply issuance of Bitcoin to a rate of around 1.7% per annum.

Stock-to-flow (S2F) is a measure of new supply rate over total supply, and post-halving, Bitcoin’s S2F scarcity will be on a par with gold’s.

“Gold’s stock to flow is higher than any other metal commodity, and bitcoin is set to soon follow,” notes Coinbase.

Why Bitcoin Has Value

Why Bitcoin Has Value

No value without demand

S2F forecasts for the price will fail if there is no demand, and this holds true for fiat money, as much as any other commodity. As central banks increase the money supply, economies can sometimes prosper. However, if money supply overwhelms demand then hyperinflation events can occur.

Such events drive demand for safe havens such as gold and Bitcoin, and recent economic fear is reaching all-time highs, according to the Global Economic Policy Uncertainty Index.

This, along with Bitcoin’s myriad of technological advances and accelerating development, justifies Bitcoin’s title as digital gold, according to Coinbase.

Me? I couldn’t agree more.

Ask yourself this……how many millennials will “ever” “EVER” consider buying Gold?

 

Recession Is Already Here – Prepare For Disapointment

I don’t know what all the doom ‘n gloom is about. Considering the “12 year run straight up” –  doesn’t it just makes sense ( as we’ve seen repeated time and time again ) that things take their “more than expected” turn lower?

This is far to early in the daily cycle to consider “a bottom” and we’ve also got to take into consideration the weekly, monthly and yearly cycles now in play.

There are millions of ways to play down turns via Vix purchase or short U.S.D trades….there’s inverse ETF’s and crypto currency which is now expected to rise moving into the Bitcoin halving. One could even consider gold but as you’ve recently seen –  Bitcoin is the new gold. 

forex_kong_ashamed

               forex_kong_ashamed

Most overvalued stock market ever

Tavi Costa and Kevin Smith of Crescat Capital presented their updated macro model in a recent YouTube video. This is a good article: https://www.zerohedge.com/news/2020-03-02/these-recession-signals-are-flashing-red

Based on fundamental measures they track, the stock market is the most overvalued it has ever been. They describe it as a “speculative mania,” adding that the measurements are higher than the tech bubble.

But people still think this time will be different? Isn’t this the definition of insanity? Doing the same thing over and over with expectations of a different result?