Nightly Briefing 7/28/20


The Industrials are poised to play catch up post FOMC. They have lagged the SPX and NDX. Everyone is on edge about the FOMC meeting tomorrow and nervous (selling today) about a repeat of the 2,000 point drop after the meeting in June. That was the first real correction the markets experienced since the March 23rd Covid low. We do not expect to see anything like that post FOMC. The Fed policy statement will be released tomorrow at the usual 2pm EST. Expect supportive policies to remain in place. The dollar should form a bottom and get a serious bounce which will put pressure on metals and stock market. Expect some back and forth the next few days as Washington negotiates its next round of stimulus. We think the next advance in the markets will take place over 1-2 days and is most likely after a stimulus deal is reached early next week. An 800-1400 point day in the DOW is possible early next week for a short term top followed by 3-5 days of consolidation.

The FOMC meeting should trigger a decline in gold in the days that follow it. We do not advise shorting. Gold is now in a major bull market and the pullback will be either shallow or a sideways consolidation event. We are in buy-the-dip mode. There were too many warnings signs the last 7 days to be long and stay long metals as a trade. All of our peers saw the same thing and only long term investors benefited from the past 7 day spike. However, we knew a reason would surface to explain the outlier buying, and yesterday after the close we found out why: Goldman Sachs upgraded their gold target to $2300. When Goldman speaks the street listens.

We expect new support at $10,500 BTC to be tested in the near future after this spike has exhausted. Big picture - BTC is going much higher during the rest of the year along with the metals. Buy and hold will pay dividends. Short term we would like to see $12,000 tested first.



Denny’s reported after the bell with poor results as expected. It should bounce tomorrow and is trading at 40%of its pre-Covid value and not going out of business anytime soon. 


Our AI has a target for the end of August / early September in crude as a summer top.

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.  

 

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