Nightly Briefing 7/29/20

Nightly Briefing 7/29/20


Goldman Sachs came out with a Covid forecast today, declaring the worst is over and cases have topped. Also forecast was that the trajectory of Covid cases should drop significantly into October. This is highly bullish for the beaten down Covid sectors like restaurants. Expect a mad dash to put money to work in this space shortly.


The spike which occurred over the last 7 trading days that most experts missed - including us -came from insider buying off the Goldman Sachs price target upgrade to $2300, in addition to the anticipated Fed language that was issued today in their policy statement. The Fed basically said they will be buying each and every dip into early 2021 until Covid is not a factor on the economy. Wall Street is forward looking and big money knew what was coming, buying metals in advance.

They will off load to day traders who are currently euphoric on gold. Today, you saw the first of many tranches of heavy selling with more to come in the days ahead. At first, the dips will be bought aggressively, but this eventually will lead to a sell off into $1810-1840 spot price over the next 7-9 days. We will look to buy that dip for a possible double top or at least a large bounce to nearly the previous high. We are medium and long term metals bulls, nothing has changed.


GDX may have one more spike up into Friday, but the early warning signs are here.



A short term top may come on August 4th before a small pullback. Higher prices are coming into late August and early September before a potentially more serious pullback occurs. In our opinion, focus on the big picture and don’t try to serial trade every wiggle of the market.



You will be hard pressed to find trades that have 100% return potential with limited downside risk. If you are betting on Covid, you are betting against America and American ingenuity, not good odds. The Russians will start their vaccinations next week with their approved vaccine. The momentum vs Covid has turned in our opinion. The risk/reward from this space is excellent after one weeds through the sector and picks out the survivors. You can feel the momentum building as the Covid picture improves and many pundits start to discuss these names. BLMN needs a close over $12 and DENN $10 to ignite larger moves. Once they do the 200 DMA will pull like a magnet on price for both names to $15+. 


GBTC and BTC may or may not fill the gap on the chart before they tag $13,400-$13,900. If they retest the break-out, it will be quick with a sharp reversal from what we see. BTC likes to move when gold sells off, so the stage is set.

HFZ

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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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