Stick with SPX and NDX (QQQ or SPY) into early September. Small caps, Russell, Transports, and Industrials will lag in our opinion. Funds need performance into the second half of 2020 - expect them to chase.
Silver outperforms at the end of a cycle and we are seeing that now. Gold is limping, trying to make a double top while GDX and SLV make new highs. Not a good sign. Shorts are about to trap longs with a quick, hard correction. Long-term investors have no worry or risk as prices are headed much higher into September. We will provide a better gauge of support levels and targets once the rally begins.
Earnings start this week including BLMN.
We want to look at longer term weekly charts today to keep our eyes on the big picture.
BLMN has been one of the top 25 most accumulated stocks by hedge funds the past 30 days. Citadel, one of the largest hedge funds, just filed their 13F and has taken a significant position in BLMN recently. We are contrarians and we like to buy when sentiment is washed out, as it is now in most restaurant stocks. Many won't and have not survived but the ones that do will reap a bigger slice of the demand that remains. If you don’t have a position or want to lower your cost, it's our opinion that you don’t have much time left. The stock has been blatantly capped sub $11 over the past 30 days as funds maneuver and accumulate while some that were short continue cover. Opportunities like this don’t come around often with a stock that was $24 months ago with a floor beneath it. The stock currently trades below its IPO price and since that date has expanded its brand tremendously. It is a lower risk stock with huge upside potential. Very hard to find.
DENN is putting in a bull flag and should produce a strong rally with other restaurant names.
The death rate continues to drop to below .25%. Americans won't tolerate a lockdown under these risk factors. Hence, expect energy demand to do nothing but increase. Couple that with free Fed money boosting commodities and stock markets across the world and oil should rise all summer.
Unless more meaningful news comes out, we expect SPCE to consolidate between $19.50 and $25 the next few weeks before the next leg up over $30 begins.
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