Nightly Briefing 6/18/20

Before we start tonight’s briefing we want to go over several important basic trading points to increase our members' success.


1. Do not short - Only a few times a year we will place shorts when we are entering the final phase of a significant correction (intermediate cycle decline or ICL). It takes experience and many tools to differentiate a minor decline (daily cycle decline or DCL) from a more significant ICL that can be safely shorted. The stock market is constantly propped up with liquidity from the Federal Reserve. Bet with the manipulation, not against it. Buy stocks at correction bottoms as they tend to fire out of a correction low. Bottoms are much easier to pick than tops as there is no telling when the Fed will stop supporting the market. In the future we will go over a few techniques for our members on what to look for in a cycle bottom for stocks. Our system won’t get you in at the exact day of the bottom, unless we are lucky like in March, but will get you in extremely close to it.

2. Don’t trade during tough periods - Recognize periods of chop and consolidation in markets, like what we are experiencing now. These are difficult to trade, make money in,  and do not produce any trending moves. They make many traders burn a lot of mental capital which leads to a series of bad trade decisions and revenge trading. Humans are emotionally wired beings.  Saying one needs to be more disciplined in their trading approach and doing it are two different things. We are selective in what we buy and hold through periods like this.


3. Have a contrarian approach - We buy when sentiment is poor and our cycles align with our artificial intelligence algorithm. If one is going to buy stocks based on fundamentals and current market conditions you are going to be hard pressed to make money consistently. The markets are looking 6 months ahead. If we had waited to buy the Nasdaq back in March or BLMN in April due to poor fundamentals and bad headlines we would have missed out on a very profitable burst.

During an Intermediate advancing cycle in stocks you will have anywhere from 2-4 daily cycles embedded in it. We have had two already and a third is getting ready to start as soon as next week.




We are long restaurant stocks during this sideways chop because they are capable of an explosion upward at any point in time. One single sector upgrade from a large bank or merger activity would create a spark. Trading 60% off of their February highs while the Nasdaq is at all time new highs can’t and won’t last for long. We certainly expect an advance during the next cycle and it should begin any day now.


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. 

 

By your use of the Site and Services, you're agreeing that you bear responsibility for your own investment research, trades, and investment decisions. Only you can decide whether or not a trade is right for you and you agree to be liable for any trades you initiate at your brokerage using research and/or tools that we provide. If you ignore our advice to do independent research and choose instead to trade solely on information, analysis, alerts or opinions found in our Service or website, you have made a conscious, willing, free, and personal decision to do so. You also agree that HFZ, its directors, its employees, subsidiaries, affiliates, and its agents will not be liable for any investment decision, trade made or action taken by you and others based on news, information, opinion, or any other material published through our Site and Services.  

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