Nightly Briefing 10/11/20


We keep an open mind with respect to when an intermediate cycle bottom, ICL, will or has formed. Central banks are throwing everything they have at the market, knowing that it will shorten and moderate any recession by propping markets up. This reversal has all the makings of an intermediate low. Volatility should pick up after October 15/16 into November 1 with a strong relief rally after the election. Regardless of who wins the US Presidential elections, money will continue to be thrown at the markets by central banks around the globe. If you are using leverage and trading major indexes, we would recommend nothing shorter than March 2021 calls. 


There will still be some wild multi-day swings between now and December, but prices should be supported into year-end and will most likely continue into next March. Our system pinpointed October 5th on a closing basis as a low and possible intra day lows 6-7th. Covid diagnosis for the President and failed stimulus talks could not break markets into our target low dates. Attempts were made for the market to crash into these dates, but were aborted. A 7-10 day short term peak may form over this coming week and give us a sideways pause into Election Day. We will alert different strategies as the week progresses.


It's all about gold for the metals complex as silver and miners follow. A short term peak with stocks may form Oct 13-20th and grind sideways into the election with a downward bias. At this junctur, a collapse below $1800 is very unlikely. Worst case scenario would be a retest of $1850 into early November. We will evaluate the strength of the advance over the next 3 days and make a decision whether to book profits in our most recent SLV option position in order to avoid a drawdown into the US elections. Long term investors can sit and hold through the first half of 2021.


Resistance levels of $1985 gold and $25 SLV may halt our advance this week and give way to a pause in metals with a dollar bounce.


The dollar was driven down by heavy selling this past Friday. Suppression is the name of the game in order to help keep US markets inflated. Central banks will have their hands full into the election keeping the dollar suppressed. Afterwards, expect a large drop into early December and a strong metals rally.


Jim Cramer from CNBC had negative comments on Virgin Thursday night, causing shareholder fear on Friday. Investing in individual stocks will always yield more noise and volatility than index ETF’s. Virgin's launch date could be delayed on October 22nd and cause a pullback. Eventually, rockets will fly with the stock price. We remain optimistic they are on target and will meet their launch date with success.


BTC has become an anti-dollar trade like metals. A short term top may form mid week in BTC and grind sideways into the US election, followed by an upward explosion from November into early December.


Technicals on Denny's chart are looking very positive for a strong week.


Natural gas is on target for a November top. Price should begin to accelerate into month end October. It is a highly volatile commodity - try to ignore day-to-day swings and focus on weekly charts and moves. That being said, tomorrow looks very promising for UNG.

HFZ

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Important Disclosures: Investing in the financial markets can involve considerable risk, including loss of principal. Past performance is not necessarily an indication of future performance.  Actual clients may achieve results materially different from the results portrayed.  All material is for informational and educational purposes only and is not investment advice and is not meant to suggest that any securities are suitable investments for any particular investor.  All information reflects our own actions, beliefs, and processes for purely informational purposes. HEDGE FUND Z LLC IS A FINANCIAL BLOG FOR THE SOLE PURPOSE OF EDUCATION.  HFZ does not represent themselves as acting in the position of an investment advisor or investment manager for funds that are not under their direct control and fiduciary responsibility. 

 

Third party quotes and information may not be representative of the experience of HFZ customers and do not represent a guarantee of future performance or success. Many of the results displayed on our website were achieved using leverage, such as 2x or 3x leveraged ETF's or equity options 

 

The information included at HFZ and HFZ writing, research, and updates is prepared for educational purposes and is not a solicitation, or an offer to buy or sell any security or use any particular system.  Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. HFZ does not represent themselves as acting in the position of an investment adviser or investment manager for funds that are not under their direct control and fiduciary responsibility. HFZ will not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter.  

 

No information, nor any opinion expressed on the Site or in the Services, shall constitute a solicitation or an offer to buy or sell any securities mentioned therein.  The information presented on the Site and in the Services has been prepared without regard to any particular investor's investment objectives, financial situation, needs, capacity, and trading ability or experience. Accordingly, you should not act on any information on the Site or in the Services without obtaining specific advice from your financial advisors and should not rely on information herein as the basis for your trading and/or investment decisions.  HFZ cannot claim or represent that any of our Services are suitable for you. 

 

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