Nightly Briefing 7/13/20



Plenty of sentiment remaining for a large rally into September in stocks.


Expect our greed index to match that of the fear index. Newton's laws don't change when it comes to the market: every action has an equal and opposite reaction. Plenty of upside left in stocks.


The harder the media tries to crush the economy into the election, the more money the Fed will inject into the system. And if good news materializes, stocks rally. It’s a win-win scenario. Stocks are headed to all time highs in every index by late August/early September. There is a ton of cash on the sidelines. Every dip is being bought. We crashed in March due to the amount of leverage that existed in the system. Major banks and hedge funds levering cash up to 20x capital. The average investor dumping stocks didn’t cause the DOW to collapse 11,000 points. Many of these big players have barely deployed any capital and are underexposed with just negative losses to show for the year. Expect a massive chase for Alpha the next 3 months. We stalled near expected resistance at double top SPX 3230. That will be broken soon enough.


Consolidation is in order. Expect a $17-19 trading range while some short covering occurs and short-term day traders are fleeced.


Crude holding above the 10 day moving average.


A pullback in gold miners was expect by our models and that's what we got. We urged members to avoid leverage this late in the major advancing cycle. We will know within 2-3 days if there is one last push coming in metals before a large profit-taking event occurs. Stay tuned - we may harvest profit if support is held by the miners.


It is possible the top for July is in for the miners. We will know shortly.


This shakeout and consolidation is close to an end. Earnings will most likely be a trigger for restaurant stocks to rally over the next two weeks. Shorts will look to cover the next 10 days as we close in on their release. Restaurant stocks were up all day until they were attacked by shorts, courtesy of the California governor shutting his state down at 3pm EST today.  No large private gatherings, no gyms, no dining out, and no religious congregation.


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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