Nightly Briefing 7/16/20


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.



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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