Markets are consolidating which is healthy in an uptrend. Nothing has changed on our month-end targets of SPY 340, SPX 3400.
Many members have asked us about the Russell. When it starts to move it can really fly. It normally lags and then quickly plays catch-up, so traders often enjoy the large, quick gains it can produce. August is normally a very bullish month for small caps. We may make a trade in the Russell shortly.
You will not find bigger metals bulls than Hedge Fund Z. But, corrections do occur and can oftentimes be violent and fast. Tomorrow is options expiration and we expect bullion banks to put exert pressure to maximize profits into this date. Strange things can and do occur, but over the next few weeks gold will need to recharge and re-energize. Spot gold closed below $1800 today (not good) and could plunge down to $1760-1780 short term.
Silver normally has a blow-off top at the end of a move up and outperforms gold as it has done recently. Sentiment is extreme and we expect a pullback. We are long term bulls and expect a buying opportunity in early August with peaks in September and December. Much higher prices are expected into 2021.
We will take the DUST trade day to day as the swings can be extreme and we need to limit significant drawdowns when possible. We don’t want to give targets on this trade, but significant potential exists.
Within minutes of the open SPCE was over $21, making it hard for us to chase sadly. We thought about alerting in extended hours trading yesterday after the key employee hire and CEO appointment, but most members don’t trade in after hours. We're always looking for feedback are happy to change this if there are those indifferent to trading in the premarket or after hours.
We received many emails today from the members who own SPCE from our alert weeks back and are in significant profit. It is a volatile stock, subject to many large swings which can trigger stop loss orders, as ours was triggered. Near term it could gap to $22.50-$24 tomorrow, then pull back to $20 next week and fade as day traders take profit early on Friday. SPCE has a cult following and attracts many short term traders. We are adding this name to our long term model portfolio as we believe it is here to stay. If you are long sub $20 do nothing but hold and enjoy the ride. We will still look for safe low volatility entries for shorter term traders for our members.
A catalyst is coming for the restaurant stocks. It may be a value investor like Warren Buffet adding shares, or a release of Covid treatments disclosed by the media, or even a firm vaccine release date. As earnings come next week, expect some big PR moves by both DENN and BLMN to bolster shareholder value. Big money is always looking 6 months out. Any of the above would trigger an influx of buying into this sector and most oversold names like BLMN and DENN would gap 50% within days in our opinion. Holding relatively safe value stocks, like BLMN and DENN, for a 20-40 trading day window which could produce returns of 50% plus are hard to find.
DENN daily chart is improving and corroborating our short term outlook.
Oil/USO is also projected higher into next week and help up nicely today when the broad market sold off.
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