We expect possible weakness into early next week in the stock market. We will most likely hold our position in BLMN through it. If you don’t have the stomach to sit through a possible 2 day drawdown you may want to sell on strength tomorrow. With the Federal Reserve helping the market, there's enough liquidity to abort any multi-day sell off. We choose to look at what is more of a certainty and that’s higher prices into the end of June and a $16+ share price for BLMN. So you can try to be a serial trader and avoid a “possible” point draw down in BLMN but may end up getting whipsawed and chasing to get back in at higher prices if the weakness does not occur. Regardless, we see strength into the June 9th Fed meeting and all time highs in the Nasdaq by the end of June. There is no right or wrong. We will most likely hold. Bloomin currently trades like a stock option, very volatile with large price swings in both directions. One may want to move their stops up to their breakeven point. We have given our opinion on multiple strategies but ultimately people must do what’s right for themselves. It is hard to find good companies with decent balance sheets and post corona-crash they are still off 65% of their February highs. Bloomin' Brands isn’t going out of business. It is owned by some of the largest institutions in the world. Black Rock owns 12.5 million shares as well as many pension funds and large banks. This isn’t the cruise ship industry or airline industry which may suffer until a vaccine is developed. The blue print of BLMN and its restaurant properties is coronavirus friendly. We have full confidence in this position.
Bloomin' is rapidly expanding its Aussie Grill fast-casual restaurants which further bode well for the company's future. This model is already dominating the food service industry in light of the pandemic. First locations were opened in Florida in April and many more in the months to come. It's market share is growing. Just take a look at Chipotle.
Rotation into steel companies is happening. President Trump may help our cause with an escalation of the trade war with china. With or without US Steel should move to our targets, $9.90 first stop. US Steel does not trade with the same volatility as Bloomin.
Dow top June 30 - July 2nd
We may take profit prior to the FOMC meeting, next week. We will make a real time call next week. We will certainly have some metal assets into our Gold spike coming post FOMC.
Gold's outlook into June.
There is still hope for UNG. Oil had a strong rebound expect natural gas to have its burn too in June.
Expect volatility tomorrow into and after the President's China press conference. Some type of whipsaw action is expected.
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