Expect a stimulus deal to come to fruition as both parties need it. Speaker Pelosi is playing hardball with the Senate and White House, but this game of poker should end no later than early next week. It will most likely be a sell-the-news event for a few days. After early next week, expect whipsaw action with a sideways bias into November 4th, frustrating bulls and bears alike.
The short squeeze should settle down and other indexes should keep pace or outperform the NDX over the next 5 trading days.
No stimulus deal gave the dollar a boost and hurt risk assets - in particular, metals. Metals had gapped up significantly from Thursday's close and backfilled today clearing the way for higher prices into the next 5 trading days. Like stocks, we expect a choppy sideways to slightly downward bias in metals into the election. The real action should occur post Election Day. We will give multiple strategies to hold, sell, or hedge current metals options trades next week.
Gold leads so know these price levels: over $1985 on a closing basis and a retest of 2020 highs will be seen; a close below $1870 and a retest of the September lows will be seen before a sharp reversal.
Expect a dollar low, $92-$92.50, on the stimulus news announcement then a choppy upward bias into Election Day.
Natural gas will have 3 great days over the next 2 weeks which will give us 80% of the gains. We will watch time and price for a short term top. Goldman put out a strong private note to clients over the weekend to stay long natural gas.
A large upwards surprise is in store for DENN come earnings.
Our next leg higher in SPCE most likely began today with the retest of support and sharp reversal, closing on the highs of the day. We should see $25+ quickly. We will provide hedging strategies into the launch date, Oct 22nd. We will soon provide a breakdown of sectors to watch in relation to the outcome of the Presidential Election. Many asset classes like stocks and metals will not have short term trends changed by the winner, but there are a few which could have a strong change in trend. We will cover them this weekend. HFZ
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