Nightly Briefing 5/20/20


It is highly unlikely for Gold to break through $1800 futures on the first attempt unless a binary event develops. We will use that as a trigger point to take profits in some or all of our mining stocks. The miners have had 4-5 days of upside. It’s normal to have a 1-2 day consolidation occur. This may happen Thursday and Friday. We are adding these dips as higher prices await into June. For those asking about Silver let us say this: Silver is one of the most heavily manipulated and controlled markets on the planet. We can point to countless times where it did not break out with Gold bullion. We trade what we know will move. From January to early March if you invested in Silver and Miners you made 50% of what we made in bullion, GLD. Once the miners broke out we began to buy them knowing the consolidation period was over and they had become a leveraged play on Gold. Silver has yet to produce a breakout. We clearly see higher prices for senior and junior miners into June and July. Those are our metals vehicles at this time. Again, on the dips that may develop the next 48 hours know this, we will be adding. These trades will not be posted or alerted as we already have posted our first buys back in April at the start of the miners' breakout.

$75/76 is now our downside support for NUGT. The miners, bullion, and Silver are headed into the stratosphere into September/October. That is a 4 year cycle top which will have the most strength of any rally seen in the last 4 years. Then we will pause and resume into May 2021. A small fortune can be minted over the next 12 months in the metals complex.

We were surprised by the strength in the Dow today. Do not look to trade every wiggle of this market especially on the short side. In the metals markets, we fight short-selling bullion banks but in the stock market the Federal Reserve is your best friend, constantly flooding markets with liquidity to induce stock prices higher. The US stock market is the world economy. Let US stocks stay depressed for any period of time and you will get your wish. We have a very fragile economy as the common person knows. The Fed also knows this and so does President Trump. We have a service and consumption-based economy. We manufacture virtually nothing in the USA. Our GDP is based on consumer spending. If consumers have low confidence due to their 401k’s being in the gutter you can bet it will show up in their spending.


Bottom line, we repeat again that shorting should be done only a few times per year in the stock market into Intermediate declines. We are not due to have one until late July or September. We remain open to a short next week into our cycle low, June 2nd.  We are in a medium term uptrend so dips should ultimately be bought. We stand by our June 2nd low and expect stocks to remain choppy into that date. The 200 daily moving average on SPX at 3000 will represent stiff resistance. We still expect our path to follow lower into June 2nd but the level of the pullback may be less due to the amount of hot money on the sidelines still not deployed. The May 14th low at 2770 SPX should be broken into the first few days of June. 


HFZ