We start with the SPX this evening. Over the next two trading sessions, we expect the 50 and 200 daily moving averages to be tested. We have been posting for weeks to expect somewhat of a V-shaped recovery out of the March 23rd low. We have been constantly reminding our members that the 1980 40 year cycle our Artificial Intelligence Algorithm identified back in early February was in force. For those of you that followed our trades the last 45 days, you have done very well. It has certainly paid off . We don’t expect any meaningful pullbacks in the share market until Mid-May or early June.
All of the big institutional money de-levered in March from their 10-20x leverage and were the sole cause of the severity of the plunge experienced. The majority of them are in cash with tiny positions in a few of the popular FAANG stocks: Facebook, Apple, Amazon, Microsoft, and Google. No one in their right mind has been short at these lower levels due to the risk of a treatment and/or cure for Covid-19. You are going to witness a stampede into the market over the next 2-4 weeks like you have not seen. At higher levels we expect shorts to appear and some profit taking to occur as the poor economic data pours in from Mid-May to early June. Remember - Wall Street, the elite money, is looking 6 months ahead of the market. We will cover possible targets for Mid-May In the next several reports.
We see a huge opportunity in Energy developing soon. Possibly as early as tomorrow. We have futures expiration tomorrow and Energy Traders will roll May futures contracts to June . This can create selling pressure. Oil has a floor on it for several reasons. First, countries of the world cannot survive with Crude Oil at these prices. The average US Oil Fracker doesn’t profit unless Crude is north of $40 per barrel. The Russians and Saudis rely on oil as their main economic drivers. Whether it's more production cuts, a false flag attack in the gulf, or just the countries of the world re-opening the next 2 weeks, oil will catch a huge wind upward. Our fear of futures contracts being rolled is making us wait until tomorrow or Monday. There is a huge gap on the chart in USO which tracks crude oil at 7.50-8.00. We expect USO to rise to at least that level by June 1. These are 1970’s prices for Crude and simply won’t last even with reduced Airline and Cruise Industry activity. We are also entering the most seasonally bullish period of the year for Crude oil, May 1st through September 1. $40 a barrel is coming sooner than most think. Today we put in a double bottom but it's possible a lower low will be made Friday or Monday. Hence, we wait for confirmation of the bottom.
Gold will not interest us until we get a pullback into early May. It is range bound for now. GDX, the gold miner index, may interest us in May also.
We are currently long BLMN for our own accounts. If you heard the highlights of the President's Press Conference tonight then you know America is now open for business. Lightly impacted states will be opening by this weekend with others the following weeks. A small handful of states like CT, NJ, RI, DE, NY, CA, and PA may wait until mid-May. But the President's Phase One opening plan is to open all restaurants with social spacing immediately. Over the next few days BLMN can fly. Boeing, America's largest company is opening back up next week. Also, there has been a treatment case study done in the USA for infected Covid-19 patients yielding incredible results. It is a drug already in circulation used for other illnesses. The sample size just completed had zero deaths. These announcements tonight are the cocktail for exploding stock prices, albeit with volatility, launching much higher into mid-May. The Fear of Missing Out trade has begun: FOMO. We will alert members when we sell our own shares of BLMN. Targets have not changed 12.50-14. It is wise to choose at least two methods of alerts from our portal so you are kept informed. We offer Twitter, SMS, and Email.
We will save our Bitcoin, GBTC analysis for this weekend's report. In short, we expect an intermediate cycle low in June. That will be a large trending move into year end. We will discuss more this weekend.
HFZ