Our expectation is for price to be supported into next week’s Fed meeting occurring on June 10th. A small pullback may occur the following week. Higher prices are favored into early July. The economy is lackluster at best with 98% of people struggling, the worst job market since the Great Depression, civil unrest, and Covid. But the trillions of dollars that exist in the world need a home. US equities are the safest house in a bad neighborhood.
We are getting a double bottom or slight undercut low in the metals complex from last week's DCL, daily cycle low. We failed to get over the 10 day moving average at $35.50 in GDX as our final confirmation. This should give us the sentiment we need to give us a final test of minimum for $38-$40 in June. We realize metal traders tend to be very emotional and want gold to rise every day and when it does not they panic. Gold is in a bull market and is not far from its all time highs. We are having a normal correction, but invested in a leveraged asset like NUGT, traders tend to panic. Stay calm and wait for our sell-spike. This advance isn’t done in our opinion. Just remember all the people who were panicking during the stock market crash in March. Look at the reward if you bought like we did on March 23rd, kept cool and held. May was a whipsaw month in many markets which frustrates a lot of traders who don’t make any real money. Unfortunately, no market is capable of producing non-stop trending moves and sometimes many of them whipsaw together. Many traders give up during this period right before the environment is about to become very favorable for profit-harvesting. This horizon is the silver lining in all this choppy action. These periods are followed by explosive moves. We believe you will see the stock market shock people to the upside along with metals. The Eurozone central bank is expected to announce more stimulus on Thursday to keep the European Union alive. A sharp reversal in metals is close and may occur Tomorrow. June 11th-17th looks like a strong bull move in metals. We expect several $4-6 consecutive days in NUGT.
NUGT tracks GDX.
Next resistance is $13.50. Once we break through expect $17 quickly.
We have a second round of the trade war heating up with China. Today the President banned many commercial flights from China into the USA starting June 16th. China will reciprocate. Steel has been a hot button in the talks and China has been getting around the steel tariffs by having other countries to wash the imports. This could ignite the beaten-down steel sector like we have seen in the past to give us explosive upward trade. At a minimum we expect the 200 DMA to be hit soon.
We are close to executing a trade in the junior silver miners.
UNG is testing the 10 day moving average, the first step in igniting our June rally. The natural gas market is dominated by several large firms which create a lot of unpredictable trading patterns to say the least. We expect higher prices into June/July. We have members still long so we will continue to provide coverage.
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