Nightly Briefing 6/23/20


Weekly chart is constructive.

This company is a fringe business and loses money, yet has the potential to be a stock like Amazon, which also was a fringe business back in 2000 losing money for a decade plus. Amazon was a very heavily shorted stock early on as is SPCE. The company burns through cash like water and we are counting on exactly that. We expect a capital raise to be conducted at higher prices as well as a series of positive new releases. We got the first one yesterday. The public float is 130 million shares. SPCE traded approximately 50 million shares yesterday. A move like that should normally propel a $16 stock $7-8 points higher. This name has the potential to rocket, no pun intended. We will give it some time to see if it can break-out over $18.50. It has an excellent risk-reward profile.

Anyone who was shortsighted and sold early or dismissed the trade idea because of a brief pullback will not be happy come July. Today the courts issued a landmark ruling that may be the barometer by which other cases are ruled on in the restaurant-landlord crisis. It allows for landlords to offer rent abatement and concessions during the coronavirus period. Next to labor the largest expense of most restaurants is rent. The news broke around 1pm EST and you saw the entire restaurant sector catch fire. Bottom line, its very undervalued and just required a spark to ignite the bargain hunters. According to the SEC filings for our restaurant stocks, seasoned pension plans across America continued to add BLMN and DENN to their portfolios this month. Pensions are reputable for their extremely low-risk stock choices. Expect to see CNBC commentators in the coming days and weeks talk about bargains in this sector.


All systems go for Dennys.

Look for possible consolidation into Thursday and Friday. There will be large amounts of stocks bought and sold as rebalancing occurs the next 5 trading days. Expect whipsaw action, though the bulls will have the upper hand early next week. An explosive move higher looks to occur mid-July into early August in equities. New highs in the SPX is expected following the Nasdaq.

If you are long metals we can offer our opinion on how to trade them. At $1,800 futures gold we would take profit if you have not already. Bullion banks will defend this line in the sand. We would expect a pullback. If gold is strong enough to break through $1,800 with a daily close, on the following day, we would re-position metals for a try at $1,900. We think this is unlikely but it's a safe strategy to protect profits. One may put up a 10-20% hedge on at $1,800 through the use of puts and if you're wrong and gold does not correct, happily watch your hedge expire worthless as your long position explodes in price. Silver and the miners follow gold so we use it as our trading barometer. As forecasted last week, we favored a top in gold this week June 23 +/- 1 day, possibly in overnight trading tonight or tomorrow. Friday is futures expiration and price suppression into these dates are common. A sharp pullback will occur after this spike completes which we will buy around mid-July. A sustained 2-week rally into early August, more tradable for our members should occur.

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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