July 2 Biweekly Strategy Webinar Q&A

Below, please find subscribers’ Q&A for the July 2 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Incline Village, NV.

Q: What kind of market are we in right now?

A: We’re in what I call a “Looking Glass Market” — everything you see is the reverse of reality. Despite extreme volatility, the broader market is flat year-to-date. Meanwhile, Mad Hedge Fund Trader is up 45.17% thanks to disciplined risk management and aggressive short positioning when volatility spikes.

 

Q: Is a recession already underway?

A: Absolutely — depending on your sector. Agriculture, construction, restaurants, and anything tied to real estate are already in recession. If you’re in Bitcoin or banking, you’re in boom times. It’s a bifurcated economy, and I’ve been calling this recession since January. This explains why only 50 stocks in the S&P 500 are up this year. We currently have the most concentrated new all-time high in market history.

 

Q: Are mass layoffs, like Microsoft’s, good or bad for the stock?

A: They’re good. Replacing 9,000 jobs with higher-skilled AI hires improves efficiency and cost structure. These companies will likely create even more jobs downstream. My own daughter is graduating with an AI degree in a year and already has a job offer at a fantastic salary. That tells you where the trend is headed.

 

Q: How bad is inflation, really?

A: It’s worse than reported. Tariffs of 20–100% are just part of the story. Add a collapsing dollar, and you’re effectively looking at 40–120% increases in the cost of imported goods. Fed governor Jay Powell says inflation will surge this summer — and he’s right.

 

Q: Will the Fed hold or cut rates this year?

A: I don’t expect any changes this year unless inflation data forces their hand. If inflation comes in hot, we’ll see a 10% selloff. If it stays muted, we might get a small year-end rally. Either way, I’m preparing for both outcomes.

 

Q: What’s your projected S&P 500 range for the rest of 2025?

A: I see us stuck in the 5,500 to 6,500 (SPY) range. Best-case scenario, we get a low single-digit return. But with tariffs, inflation, and political dysfunction, the risks are tilted to the downside.

 

Q: Is this a good time to buy stocks?

A: No — in fact, it’s the worst day in five years to buy. We’ve had a 26% rally in under three months. The price earnings multiple has just risen from 18X to 23X, the fastest ever. This is the time to sell rallies, not chase them.

 

Q: What sectors do you like for long-term growth?

A: Big Tech, cybersecurity, and financials. These three sectors will account for 90% of U.S. corporate profits over the next five years. Buy them on dips.

 

Q: Are REITs a good buy right now?

A: Yes. They’ve been crushed on interest rate fears, but when rates finally drop, REITs will come roaring back. Many have yields of 6–10% down here. I’m accumulating selectively. The latest that rate cuts can happen in May 2026, but institutions are starting to buy now.

 

Q: What’s your current cash position and why?

A: I’m 80% cash, 20% short — including a double short in Tesla. I’m parking capital in 90-day T-bills yielding 4.2%. In this market, cash is king. A dollar at a market top is worth $10 at a market bottom.

 

Q: Why are you short Tesla?

A: Sales are collapsing in Europe and China, down 13% YOY as of this morning. Competition from BYD is eating their lunch. I’m using vertical bear put spreads, and they’ve already gone deep in the money. It’s been one of my best trades this year.

 

Q: Which tech names are you watching?

A: NVIDIA (NVDA), Microsoft (MSFT), Meta (META), Snowflake (SNOW), and Alphabet (GOOGL). I’ve traded them all. But many are overbought — I’ll be looking to sell calls or wait for dips before going long again.

 

Q: What’s your outlook on energy stocks and oil?

A: Bearish. Oil failed to hold gains even after the Iran spike. The SPR won’t be refilled any time soon — the new Budget bill cuts funding by 90%. Costs are high, and demand is weak. I’m selling energy rallies and steering clear of producers. President Biden sold off half of the oil at $100 a barrel during the Ukraine war to cap prices, making him the best oil trader in history.

 

Q: Is Apple still a good investment?

A: Apple’s a public utility now. Revenue growth from iPhones is weak, and they still haven’t made a meaningful AI move. I’m selling calls against my position — the rallies are shallow and the upside is capped.

 

Q: What’s happening with housing and homebuilders?

A: Housing is on life support. High rates, oversupply in rentals, and weak starts. But I do think homebuilders will bottom soon. Stocks like (DHI) and (LEN) will become buys as we get closer to rate cuts in 2026.

 

Q: Where are foreign investors moving their money if they’re not buying U.S. bonds?

A: They’re going home — buying Eurobonds and investing in appreciating currencies. With the dollar down 20%, U.S. assets aren’t as attractive for them right now.

 

Q: Are there any currency trades worth making?

A: Yes. The euro (FXE), Australian dollar (FXA), Japanese yen (FXY), and British pound (FXY) are all buys. I’ve been saying it all year — the weak dollar trend will continue as long as the current administration is in office.

 

Q: What’s your view on precious metals?

A: I’m long-term bullish. Gold will hit $5,000 by 2028. As stocks peak, gold is finding a floor. Miners like Barrick Gold (ABX) and Newmont (NEM) are back on my shopping list.

 

Q: Any favorite lithium stocks right now?

A: Albemarle (ALB) is my top pick. (SQM) in Chile is another. Lithium has bottomed out, and demand will only grow — even if EVs stall. It’s a long-term bet I’m making again.

 

Q: What’s the game plan for summer?

A: Sell strength in stocks and bonds. Stay long cash, buy dips in quality sectors, and get ready for better entry points. We’re halfway through a volatile year, and patience will be rewarded.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, TECHNOLOGY LETTER, or JACQUIE’S POST, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.

 

Good Luck and Good Trading,

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader