TSM - Taiwan, Your Semiconductor Long HedgeAt present, the US equities markets are at a critical inflection point, especially tech.
We're still in the bear side of a correction in an extremely major bull market impulse fuelled by Party Central's COVID stimulus programs, and yet flirting with all time highs.
Sometimes markets top without a blow off. Nasdaq's daily chart, above, shows price raided the 16,000 psychological level and the January 2022 pivot that ended the bull market.
This is really significant in and of itself, but even more significant in that the 3% rejection thus far indicates that tech *may* have truly topped already.
In my recent call on NVIDIA, some people correctly criticized that I have the problem of being bearish when a stock is clearly bullish.
I have thought about this quite a bit and think the criticism is fair.
With NVIDIA, I believe the stock has either topped or will top before/at $500 in a coming impulse. However, if one had have just gone long on the dips from low $400s to the $480 mark, they could have financed a freeroll "Short God From The Top" dream trade with potentially huge upside.
And that brings us to Taiwan Semiconductor, a company that I believe is a clear long on all time frames and has several significant advantages:
1. It's Taiwan's gemstone and thus highly relevant to the geopolitical concerns I will outline below
2. Producer of much of the world's most advanced chips
3. Market cap still under $500 billion (Thus, room to 2 or 3x in the future)
4. Is not a component of the Nasdaq, the SPX, the Dow, or the Russell, and thus can impulse long even if the equities market corrects
5. Accounts for only 3.4% of the index the SOXX/SOXL/SOXS ETFs underlie, and thus can impulse long even if the semiconductor industry corrects sharply
6. Washington is banning NVIDIA and ASML from selling to China, but never mentions TSM
7. If TSM pulls out the "AI" marketing card with a new offering, watch out for fire.
In previous posts I have mentioned that the Chinese Communist Party is about to fall. While people may find that unbelievable or too good to be true, it's worth noting that when the USSR was brought down by Gorbachev and friends on Christmas Day 1992, nobody believed it was possible then either.
Those of us who are old enough to remember know you woke up one day to see it all over the news and nobody knew how it would happen.
Many entities are considering how to take control of China and its 5,000 year old culture, history, natural resources, and land when the Party falls.
The International Rules Based Order wants China for its own reasons, and the reason "Washington" has made itself so close to Taiwan isn't because Xi Jinping intends to invade Taiwan (The CCP is too weak after so many people died from Wuhan Pneumonia), but because the IRBO intends to use The Republic of China to replace the Communist Party for its own ends.
The ultimate purpose is to install genuine communism (note the CCP only still practices socialism according to its own dogma) worldwide via panopticon social credit systems and central bank digital currencies.
If you want a future you and your family can live in, you want our traditions, imparted by God, and not this junk imparted by Karl Marx and the specters that belied him.
I've mentioned before that Xi, an ostensible Chinese nationalist, has the option of weaponizing the 24-year persecution and organ harvesting genocide against the 100 million practitioners of the Falun Gong/Falun Dafa spiritual cultivation practice by the faction of his predecessor Jiang Zemin and the CCP in order to ensnare the IRBO and its banking cartel.
However, all of the world's critical pieces (Yellen, Musk, Kissinger, Dimon) visiting Beijing "for talks" combining with a recent significant strengthening of the yuan and a potential recovery of China tech stocks indicates that the IRBO is now onside with the Xi administration.
Which means that Xi may have sold out China and the future in a Faustian Pact with the IRBO in order to maintain his power, because he's too much of an idiot to throw away the CCP, return to China's 5,000 years of dynasties, and enter the future.
Either way, once there's some kind of news cycle about "Taiwan" (just go look at all the war clamoring that appeared this month in The Economist et al), TSM can moon no matter what the rest of the equities market does, and counts as an excellent long hedge during catastrophe.
I can only say that if you go long, especially significantly long, on anything right now, you really ought to be hedging volatility long while the VIX is maintaining a 13-handle.
So here's the trade.
TSM dumped some 6% on earnings under $98, which is a hell of a dip to buy.
It's a dip to buy because daily price action on the way up stopped just short of the curiously-numbered $111.11 (the Chinese are extremely numerological/superstitious), which naturally makes this figure a target for a retrace
It's only that on the hourly,
TSM doesn't show any signs of having bottomed beyond not making a lower low on the first day.
But with the biggest FOMC of the year on Wednesday, July 26 (big hike possible, next meeting not until Q3 end September 20), longing today may have been too early.
But not too early by much. Arguably only 3%. The most bullish continuation for TSM would be to maintain a "higher low" formation, protecting the wick of the June low at $94.25.
Upside targets are immediately $113+ (Masonry, roar?) and $130 (Masonry, rawr!) if bearish.
If all things Taiwan become memefied like artificial intelligence did because of what's going on in China, then there's little to stop TSM from becoming a $1 Trillion market cap company like NVIDIA et al, which would actually mean upside over $200 is in the cards through the 2024 Presidential Election.
But mankind's best laid plans are merely those of mice. This race is like bacteria and this planet is little more than a speck of dust when viewed from higher places in the enormous and boundless Cosmos we currently sit in.
What the Cosmos looks at is a race, a planet, and an individual's moral standard and spiritual realm.
Thus, the more calamity is on deck the more critical it is to take good care of your family and friends and use the time that we all have left before the world changes forever to make up for the things from the past that have been done wrong, when they should have been done well.
Take good care of yourselves.
