The Gilmo Report

January 1, 2017

January 1, 2017

The market ended the year with a nice distribution day as the NASDAQ Composite Index closed down for the third day in a row on Friday. Volume was higher than Thursday. This gave Friday’s action less of a quiet pre-holiday trading day feel and more the feel of a steady exodus of sellers heading for the exits.

So after starting out the final trading week of the year with a breakout to all-time highs, the NASDAQ simply played dead and rolled over to lower lows over the next three days heading into New Year’s Eve. As I pointed out in my Wednesday mid-week report, that breakout on Tuesday “showed up mostly as a churning day with the index closing just below mid-range on higher volume.”

As it turned out, that was a clue that the rally was being sold into, and the selling simply continued for the remainder of 2016’s final trading week. This was particularly evident in a number of big-stock NASDAQ names. The NASDAQ now appears headed for a rendezvous with its 50-day moving average.




The S&P 500 Index also ended the year with three straight down days, but volume on Friday picked up substantially, coming in at above-average levels. That took the index to lower lows as sellers were more intent on unloading shares ahead of the long New Year’s Day holiday weekend. On balance, the action looks bearish on a number of levels.




For example, over the past few days, as the Dow Jones Industrials Index has flirted with the magical 20,000 level, the NASDAQ has made a new all-time high, and the S&P 500 has been pushing up against its own all-time highs, the broader market has lagged. This is seen in the daily chart of the broad NYSE Composite Index below, which has made a series of lower highs and lower lows since peaking in the earlier half of December.




This also adds to the evidence giving weight to my theory that institutions have been using the hype surrounding Dow 20,000 to unload stock. By dangling the Dow just below the 20,000 over the past two weeks, the smarter money has effectively kept the bait on the hook, so to speak. This keeps late buyers interested, and once all the fish have been hooked the index begins to let go.

As I wrote a few reports ago, the idea of Dow 20,000 being the point at which the train is leaving the station, it has instead been more of a final destination that the index never quite reached. And so as the Dow has failed to meet its destiny, many leading and formerly-leading stocks have rolled over in the past few days. (AMZN) led big-stock NASDAQ names on the downside Friday as it broke below the rising trendline extending from the early November lows. Volume was slightly below average, but marked a clear increase from Thursday’s volume levels. As I wrote in my Wednesday mid-week report and blogged earlier on the same day, AMZN was a short at the 50-day moving average on that day as it churned and stalled at the line. The stock paused at the line on Thursday at the open, and then proceeded to move lower on the day.

Friday saw the stock push lower as it moved below trendline support. The action is, of course, bearish, and brings the 200-day moving average at 749.87 as the next potential area of downside support. That would serve as a reasonable downside price target while using the descending 50-day line as a moving, maximum trailing stop.




AMZN’s weekly chart shows a potential head and shoulders topping formation currently in the works. A break through the 40-week moving average, corresponding to the 200-day line on the daily chart, above, might bring about a test of what is so far a potential neckline should the H&S formation continue to evolve as such. In any case, the weekly chart reveals an increasingly bearish set-up taking form over the past couple of months.




Facebook (FB) looks similar to AMZN but is much weaker given that it has been living below its 200-day moving average for the past two months. I have described the action over the past two months as a bear flag, but it can also be viewed as two small right shoulders to what is a larger head and shoulders topping formation.

On the daily chart below we see FB pushing lower over the past three days as it heads for the lows of this current bear flag. It appears that, as I surmised might be the case in my Wednesday mid-week report, institutions “are more interested in trimming their positions ahead of year-end and next month’s earnings report” than supporting the stock into year-end. That may be a clue of more downside to come for FB as the New Year begins.




Like AMZN, FB’s weekly chart also shows a head and shoulders type of formation. We can see below that the six-week bear flag forms what can be viewed as two smaller right shoulders or simply one larger one. Either way, the stock is now testing support around the 115 price level and may be setting up for a move lower on a downside breakout. Whether that happens before or after earnings at the end of the month remains to be seen.




Netflix (NFLX) is one of the strongest-acting big-stock NASDAQ tech names out there currently given that it actually made a new 52-week closing high on Tuesday of this past week. However, that didn’t hold up by Wednesday, and on Friday the stock closed just below its 20-day moving average. Volume picked up slightly on Friday but was still very light. However, the fact that the stock opened to the upside and then pulled an outside reversal back to the downside showed that buyers just weren’t interested in supporting the stock into year-end.

While it could be premature, and is certainly early, technically it is possible to view NFLX as a short here, using the 20-day line as a nearby guide for a very tight upside stop. NFLX is expected to announce earnings on January 18th, so it will be interesting to see how the price/volume action develops over the next couple of weeks ahead of the report.




Qualcomm (QCOM) continues to move lower, and was last shortable near the 50-day moving average on Tuesday of this past week, as I noted in my Wednesday mid-week report. On Friday the stock gapped up toward the 10-day moving average but ended the day bearishly after generating an outside reversal to the downside on increased selling volume.

Currently QCOM is not in any kind of optimal short-sale position, since the proper short-sale point was at the 50-day line or nearer to it earlier in the week. However, if one were able to start working the stock on the short side near the 50-day moving average earlier in the week, then the prior low at 63.78 serves as your next reference point for a near-term downside price target.




Some members continue to express the idea that the bio-tech sector will become a leading group in 2017. My own view is that there is currently zero evidence to support this premise. I certainly don’t believe that just because a group has been down and out for a period of time it means that it is destined to adopt a leadership role any time soon. That strikes me as overly simplistic.

The big-stock bio-techs like Amgen (AMGN), Biogen Idec (BIIB), Celgene (CELG), and Gilead Sciences (GILD) (3 out of 4 of which I don’t show on charts here) all look more like shorts to me with the exception of CELG. However, CELG looks to me to be more on the fence than anything else. Certainly, the stock is showing some strong earnings and revenue (sales) estimates, but that doesn’t seem to give it any significant upside impetus.

On Friday, CELG broke below its 20-day moving average on increased selling volume, action that would tend to flag the stock as a potential short-sale candidate. In addition, the fact that the stock has gone nowhere since its big-volume gap-up after the election does not strike me as the robust type of action I would look for in the best-looking, big-stock, bio-tech name. That can change, however, so we shall see how this plays out in the New Year.




If we look at a weekly chart of the SPDR S&P Bio-Tech ETF (XBI), what we see is a big-volume upside spike in the group on hopes of a bio-tech-friendly Trump Administration. This turned out to be a short-lived defibrillator shock to the heart of a market sector that has been a cardiac cripple since the summer of 2015.

After that initial pop, the XBI has since drifted back below its 10-week moving average before finally ending the year just below its 40-week moving average. Weekly volume hasn’t been heavy over the past two weeks, but this past week’s reversal off of the 10-week line indicates to me that buyers aren’t all that interested in the sector as a whole, at least not for now. Meanwhile, resistance along the neckline of a prior H&S formation that the XBI formed back in 2015 remains in force.

On balance, the action in bio-techs is erratic and uncertain. Until we see more evidence of constructive action among individual stocks in the group, then as I see it any bullish predictions are simply premature.




It all boils down to what individual names in the sector are doing. I have to say that unequivocally bullish patterns among bio-techs are scarce. If I look at all bio-tech names trading more than 500,000 shares a day, the only one that has had any significant upside thrust more recently is Clovis Oncology (CLVS). And, of course, the daily chart, which I show further below, does look somewhat enticing.

If we look at the weekly chart first, we can see that the stock is moving higher on hopes that it will have better news to report with respect to its product pipeline going forward. That certainly wasn’t the case last year when the stock cratered -69.9% in one day, and -73% in one week. The stock eventually hit a low of 11.57, a -90.1% decline from its prior peak!

This underscores the risk involved in speculative bio-tech names like CLVS with no earnings and no sales, and where the fate of the company’s business relies on the approval of one or two key products. Investors in these stocks should understand the speculative risk inherent in these names and the potential for big price moves in either direction based on the FDA’s approval or non-approval of new products as well as the outcome of testing trials.




On December 19th, the FDA approved CLVS’ Rubraca for the treatment of ovarian cancer. This sent the stock jacking on the daily chart in a big-volume base breakout that stalled sharply at the outset. However, the breakout held and the stock moved back up to the highs of the initial breakout day’s price range. Generally, however, when a bio-tech obtains approval of a new product, the stock will gap up fairly substantially. But the fact is that Rubraca has several competitors, and so will not necessarily dominate the ovarian cancer market.

But since the breakout of the prior week, CLVS has managed to hold up near those highs, giving the 10-day moving average some time to catch up to the stock. Over the past two days the stock has found support at the line with Thursday’s action showing an extreme volume dry-up, otherwise known as “voodoo” at the 10-day line.

This would technically make the stock buyable here using the line as a tight selling guide. The other primary question is whether the general market will begin to weigh on a strong-acting bio-tech as we move into the New Year. My main point with CLVS is that it is one of a very few bio-techs showing constructive action currently. But with a lack of earnings and sales, it carries the typical but often dangerous event risk associated with more speculative bio-tech names.




And this of course leads us right to another speculative bio-tech name, Myovant Sciences (MYOV), which I’ve discussed in recent reports. Unfortunately, MYOV trades 292,737 shares a day, so it did not meet the minimum share volume requirements of my screen. And being paper-thin, it is difficult to work a position in this stock, despite the fact that the action over the past month has been constructive.

After posting a small roundabout type of pocket pivot five days ago on the chart, MYOV failed immediately by dipping below both its 10-day and 20-day moving averages. However, it did hold support along the lows of the current IPO base just below the 11 price level. Ignoring the year-end general market weakness, MYOV launched 14.7% higher on Thursday on a big-volume (at least for MYOV!) pocket pivot back up through the two short moving averages. It then held tight on Friday as sellers pelted the general market on the last day of trading in 2016.

I have to say that as I have watched the stock trade over the past few days I noticed that a buyer of 10,000 shares was able to push the stock up about 5%, which tells me that a seller would likely be able to do the same in the opposite direction. Therefore, for someone like me, who would need to buy at least 25,000-50,000 shares to have any kind of meaningful position, this is unmanageable, at least at its current levels of liquidity.

I would like to see MYOV grow up a bit, so to speak, and this would show up concretely in the form of increasing average daily volume. If MYOV traded at least 500,000 to 750,000 shares a day, I would be much more comfortable trying to work a position in the stock.

On its face the action is constructive, but we must also be aware that the stock is still working its way within what would be its first base since coming public in late October. So in my view the only way to buy something like this is to do so on weakness, even when it doesn’t look so hot, and in small bits, at least until it starts showing higher average daily trading volume.




Whenever I hear someone talk about this group or that group becoming a leading area of the market, it always boils down to what I’m seeing in the individual stocks within the group. I am open to leadership characteristics developing in any group, but I have to see evidence supporting that. Therefore, if bio-techs are truly going to develop in a major area of market leadership in 2017, we will need to see strength broadening out beyond just a tiny handful of names.

It seemed that the theme of the final week of trading in 2016 was Breaching the 20-day Line, which won’t qualify as a new song title any time soon. It did, however, describe the action seen in a number of current leading stocks. For example, Square (SQ) has now dipped below its 20-day moving average, but selling volume has remained light. In addition, the stock has undercut the prior 13.65 low in the pattern from early December, which could set up a possible undercut & rally situation.

So far what we have is the undercut, but we’re still waiting for the rally. SQ did try to rally later in the day on Friday after getting as low as 13.53, but by the end of the day closed at 13.60 and below the prior December low. I would continue to watch for a more sustained move back above the 13.65 price level as a possible undercut & rally buy set-up.




Here we see big-stock materials leader Martin Marietta Materials (MLM) also dipping below its 20-day moving average as selling volume picked up ever so slightly on Friday. While MLM did breach the 20-day line on a price reversal Friday, it did manage to hold along the lows of the current base on either side of the 220 price area.




Delta Airlines (DAL) also dropped below its 20-day moving average in the final trading days of the year as selling volume picked up slightly on Friday, but remained well below average. This brings the stock more or less right on top of its prior flag formation from late November and early December.

I still consider the stock to be on POD-failure watch here, however, based on the macro-pattern seen on the weekly chart. Technically, it could be tested on the short side here using the 20-day line as a guide for a tight upside stop. However, it would take a clean break below the 50-day line to finally confirm this as a POD-failure short-sale set-up.




Steel Dynamics (STLD) continued the theme of broken 20-day moving averages as it has also dipped below its 20-day line over the past couple of trading days. You may notice that the action since early December resembles DAL as both stocks roll below their 20-day lines (CAT, not shown, has also dropped below its 20-day line).

Steel stocks, along with other industrials and economically-sensitive names have all rallied furiously following the election based on the blanket view that a Trump Administration would be good for all things economic. In addition, steel stocks can also be seen as beneficiaries of a perceived infrastructure build-out that will be pushed by a Trump Administration.

But all of this will depend on the precise legislation that Trump and his cohorts in Congress get passed, and this may not happen all at once. Some of it may not happen at all. So it is quite possible that some of these economically-sensitive names will have to at least spend some time basing for a period of time after the sharp rallies that characterized their action in November and early December.

So with STLD now dipping below its 20-day line, a test of the 50-day line may be in the cards. If we see downside volume pick up sharply as the New Year begins, then we can probably bank on that occurring. Notice that selling volume picked up sharply after the first few days of December, but has dried up sharply over the holiday season.

What I find interesting here is that institutions did not seem all that intent on supporting STLD going into year-end, and in fact we have seen more volume selling in the month of December. This bears watching since I believe where these steels go, particularly a strong fundamental name like STLD, will provide a strong clue as to the direction of the general market at the outset of the New Year.




Selling volume in what is the big-stock name among the steels, U.S. Steel (X), was a fair bit higher on Friday than STLD. Both stocks look similar on their daily charts, but note that X’s breach of the 20-day line on Friday had a little more downside authority (read: selling volume). STLD sold off on volume that was -60.9% below average, while X sold off on volume that was -20.6% below average.

This may indicate that a test of the rising 50-day line lies ahead for both names. In the interests of objectivity, however, we might also consider that both stocks are currently undercutting the prior lows within their December price ranges. This may also set up some sort of undercut & rally move, depending on how the general market starts out the New Year. Note that STLD is expected to announce earnings on January 23rd, while X is expected to do so the day after, on the 24th. Both names are expected to post triple-digit earnings growth, based on current analysts’ estimates.




Finisar (FNSR) gave short-sellers another shot to hit the stock on the short side Thursday as it bumped up into its 50-day moving average. This led to a reversal back to the downside on Friday. This remains a late-stage failed-base (LSFB) short-sale set-up using any rallies back up into the 50-day line as more optimal short-sale opportunities.




Because names like FNSR and Lumentum Holdings (LITE) look similar as they breach their 50-day moving averages, I think it is better to focus on the name that trades better daily volume. LITE trades $39.6 million a day in average daily dollar volume while FNSR trades $66.1 million a day in average daily dollar volume.

LITE does trade 992,000 shares a day on average, which is close to my general share minimum of 1,000,000 shares a day on average. However, when faced with a choice between similar stocks in similar groups, I will go with the one that trades higher share and dollar volumes. LITE finally broke below the 50-day moving average on Friday as selling volume picked up, but held the prior mid-December low at 37.90. From here I’d watch for any rallies back up into the 50-day line at 39.25 as potentially lower-risk short-sale entry opportunities.




Tesla Motors (TSLA) has been getting some play in the comments section of the Gilmo Live Blog page these days, so I think it’s worth a detailed discussion.  First, I will preface the discussion by noting that my longer-term view for the stock has been that it will eventually sell at much lower prices than it does now.

That view is based on the fact that it is still a car company, and over time it is likely to sell at valuations more typical of auto manufacturers like Ford (F) or General Motors (GM). Currently F sells at 7x forward estimates and GM at 6x. TSLA sells at infinity times forwards estimates. On the surface, this might seem to confirm my concerns for the stock longer-term.

But let’s think about where I could be wrong. I think it’s always important to avoid confirmation bias by constantly examining your views and trying to poke holes in your argument. After 26 years as an investor and trader, I think I have come a long way in being able to remain open-minded and open to new information that necessitates a shift of one’s view or strategy.

As I’ve written before in this report, this was one of the great abilities I observed Bill O’Neil exhibit back when I ran money with and for him. I mean, after all, this was a guy whose initial impression of the internet was that it was “just a fad.” It didn’t take him long to change his mind on that one and consequently make massive butt-loads of money playing internet stocks, not the least of which was America Online (AOL).

And I had the great privilege of talking to him on the phone every market day, often more than once, as he was playing the move in that stock with a massive position back in 1998-1999. AOL was the big-stock internet name, and it was from those conversations with Bill that a light went off and I was suddenly overcome with the revelation of what I have dubbed “The Big Stock Principle.”

In any case, you couldn’t have asked for a more amazing and fascinating learnings experience. It reminds me of that credit card commercial, which might go something like this: “A weekend IBD seminar: $2,995.95, talking with Bill O’Neil on the phone every market day as he traded – priceless.”

But I digress. Let’s get back to my argument that TSLA will eventually be like F and GM by considering how it is different. First, based on the infinite P/E compared to F and GM single-digit P/E’s, it’s pretty obvious that what makes TSLA different from F and GM is that it is clearly a more forward-looking situation.

Very good. So let’s look a little further out in the future. Currently TSLA is expected to lose money in fiscal 2016, the 4th quarter of which will be reported in early February. So the current stock price divided by 0 earnings = infinity. TSLA is expected to earn $1.34 a share in 2018, however, which means the stock is selling at 159.7 times earnings.

This is where things start to get interesting. In 2019, analysts expect TSLA to earn $8.13 a share in annual earnings, and then $10.71 in 2020. So currently it sells at 20 times 2020 estimates, which may have cosmic implications for anyone enamored with the fact that there are three “20’s” in that statement! ;-p

For a dynamic company, 20 times estimates is essentially the market multiple. In that sense, it could seem reasonable given that TSLA is also trying to simultaneously succeed at two business lines that are supposedly ancillary to their car business. The first is the battery/energy storage business with their construction of the Nevada Giga-factory and the rooftop solar panel business with their acquisition of Elon Musk’s cousin’s company, SolarCity (SCTY).

So there is some dynamism here, which I would define as the potential for changes and developments that could alter the profitability of the company. Keep in mind that such alteration could be just as negative as it could be positive. What makes it all fun in terms of seeking out a long or short trading opportunity is seeing how this plays out in terms of the precise, real-time price/volume action.

Real-time price/volume action in a forward-looking market is far more important than static opinions and assessments. It is also often more important than “five quarters of earnings growth of 25% of more,” which TSLA has proven since it began its price run back in April of 2013.

If we simply focus on the current price/volume action of TSLA, and nothing else, what we see is a stock that has posted two roundabout/bottom-fishing pocket pivots over the past month. The first occurred at the 50-day moving average in the early part of December, and the second occurred at the 200-day moving average on Tuesday of this past week, the final trading week of 2016.

At that point the stock began to stall on heavy volume, and spent the last two days of the year backing down below the 200-day moving average. The question is whether this dip back below the 200-day line puts this into play as a short-sale target right here, using the line as a guide for a tight upside stop. I would have to say that this is not so cut-and-dried.

As I wrote on Wednesday, “What I would watch for here is how the stock acts on any pullback to the 200-day line.” So what we see is that the stock has dipped below the line, but there are a couple of other factors to consider here. The first is that while it did not hold the 200-day line on the Friday pullback, it did hold the 10-day line. It also showed some minor supporting action as it closed a little more than a third off the intraday lows and the 10-day line on higher volume.

We can also consider that the prior upside move from the pocket pivot at the 50-day moving average back in early December has been a bit steep. Within this context, a pullback that holds the 10-day line while dipping below the 200-day line seems reasonable. Therefore, if the stock can quickly regain the 200-day line, it might become buyable at that exact point, using the 10-day line as a tight selling guide.

Conversely, if it busts the 10-day line on heavy selling volume, it is probably game on for the short side of this stock. So in essence I have no real opinion about TSLA, I am only ready to act based on what I see in the real-time price/volume action. And the bottom line for now is that anyone who acted on that initial pocket pivot down at the 50-day moving average, which was the precise real-time price/volume evidence available at the time, has been on the right side of the trade, end of story.




So we can see how the price/volume action on the daily chart tends to lean toward the bullish side, but still remains fluid at this precise point in time. On the weekly chart below, we get a better sense of the macro-pattern, which is basically a choppy, trendless mountain range type of formation. However, there is one interesting detail here, which is that while TSLA closed Friday below its 200-day line on the daily chart it closed just above the corresponding 40-week moving average on the weekly chart.

A clue perhaps? Maybe so, but we would have to see how things develop on the daily chart first. Meanwhile, other than noting that this big choppy range over the past three years has had some tradeable moves both up and down, the overall macro-trend is fairly non-existent. Therefore, what we have seen over the past month might just be another one of these moves, but still one that can be traded profitably by someone who knows what to look for and how to handle it.

Overall I think TSLA might be an interesting stock to watch in 2017 because I think that either way, long or short, it may represent one of the better trading opportunities in the New Year. But of course, that’s just an opinion, and we already know what those are worth.




In most of the examples I’ve discussed in this report, we can see leading or formerly leading names breaking key levels of short-term support on increased volume, but volume that is still well below average. Some of that is obviously due to the slower holiday trade over the past two weeks.

If we see selling volume increase once we get past the holidays and into the New Year, then we can consider this as confirmation of the bearish action over the past three trading days. Otherwise, we have to remain cognizant of the fact that many stocks could simply go about the process of building bases as the new Trump Administration begins to sort things out.

Obviously, a more favorable business environment, particularly after eight torturous years of an administration that was hostile toward some business sectors with respect to regulatory and taxation policy, can be a catalyst for economic growth and a strong market. With so many new technologies furiously bubbling under the surface of the economy, all it needs is to have the lid taken off to set off boom times again.

This would all represent the tail-wind for the market, but there still exist many head-winds. Among these are a global debt bubble, a rising interest-rate environment, bank troubles in Europe, and the potential for regional military conflict, including terrorism.

So perhaps before the lion lays down with the lamb, the bull begins to roar, and the Dow clears 20,000, maybe we need a little clearing of the decks first in the form of a nice correction or even a bear market. I’m open to that, and I’m sure many answers will be forthcoming as we move into the New Year this week. Frankly, I find myself bubbling with excitement (no, that’s not the champagne) over the prospects for profiting in the markets in 2017, one way or the other.

I know that there is no shortage of 2016 in Review type of gibberish out there, so I have nothing to offer in this regard. I will only say that I am very happy to have achieved my fourth straight up year in a row, something I’ve never achieved before. Prior to this latest run, I have never been up more than two years in a row throughout my 26-year career. My four-year average annual performance over this streak is 49%, and my four-year mean performance is 41%.

Those are unaudited numbers, and I have no plans to pay some accountant several thousand dollars to have them audited since at this point of my career I have nothing to prove to anyone but myself. Plus, I have nothing to sell to anyone on the basis of some over-hyped “be like me!” marketing pitch. That’s mainly because nobody can be me, they can only be themselves. And as Bill O’Neil once told me, “The hardest thing in the world to be is what others want you to be, but the easiest thing to be is yourself.”

As traders we must all be ourselves, and find our own recipe for success. All I can do is provide this report as a way for less-experienced investors to shorten their learning curve as they figure things out for themselves. I know that the biggest catalyst for my own success in the markets was being able to watch Bill O’Neil do what he did and learning from it, not imitating it, as he explained what he was looking at it and his general thought process. That was invaluable.

Meanwhile more experienced traders might find my input and ideas useful. I know that another one of the great benefits of managing money for Bill O’Neil was being able to rub shoulders with other talented traders that we had on the internal portfolio management team. It was a great environment to bounce ideas around. It is this spirit that I write this report, and also provide a comments section in the Gilmo Live Blog so members (the “Community of the Gilmo”) can throw out their own ideas and thoughts for debate and discussion.

As I’ve become more experienced, my objective has been to become a more consistently successful trader while also avoiding the mental traps posed by a rigid approach to the market. In my view this derives from recognizing two critical components of successful investing, and both are what I would call “evolutionary” in nature.

The first is know thyself. Since we are all individuals, by definition we will all be different traders from a psychological perspective. Therefore, a one size fits all approach to investing is not entirely valid – we all have to learn and understand what works best for us given our particular psychology. That is why one cannot necessarily become successful by simply imitating another guru trader. You have to learn to think and act for yourself within the context of your psychology and skill level. The truth is that there are no gurus out there, there is only the guru within you, and that is what you need to learn to access.

The second is to remain flexible and open-minded, with a distinct ability to recognize both confirming and dis-confirming evidence in real-time and then being able to act upon it instantly in a fluid and effortless manner. We’re all smart people, and there is nothing smart people like to do more than be right. The key is in being able to recognize when you are wrong, and shift accordingly.

So if you need to come up with some New Year’s Resolutions I think that working to improve your trading and investing in these two critical areas would make a fine start! Here’s to a Very Prosperous New Year for us all. Cheers!

Gil Morales

CEO and Principal, Gil Morales & Company, LLC
Managing Director and Principal, MoKa Investors, LLC
Managing Director and Principal, Virtue of Selfish Investing, LLC

At the time of this writing, of the stocks mentioned in this report, Gil Morales, MoKa Investors, LLC, Virtue of Selfish Investing, LLC, and/or Gil Morales & Company, LLC held no positions, though positions are subject to change at any time and without notice.

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2018 Gil Morales & Company, LLC. All rights reserved.