By far the leader of the US stock market over the last year has been SOXX, the semiconductor index. When big money sniffs out major turns in the market, the first asset class they buy is the SOXX. Look at the March 23rd SPX low and you will see SOXX bottomed days earlier. It is favored among modern day money managers. All of the leaders in this current bull market (AI, robotics, human sciences, etc) necessitate semiconductors. Although the DOW and SPX finished down, the NDX stayed green led by earnings and the relief rally after testifying in Washington DC the past few days. Over the next 3 trading days, we should see a blow-out up day with large gains across the indexes. SOXX is sniffing this out early. After a quick spike top over the next 2-3 days we expect another pullback, which will then usher in a stock market rally into late August. We may look at SOXL when the pullback is finished later next week. Bottom line, we are still in buy-the-dip mode.
Large support for the metals is at XAU 147, which held today. It was a 50/50 proposition how this pullback in metals would occur but both roads led us to gains in DUST. There are too many dip buying day traders to blow through support currently so more trapping is needed. Metals may bounce Friday/Monday before rolling over next week and probing lower price levels. Silver is also in sync with US stock markets, making us cautious on holding DUST into Monday/Tuesday. If you thought the move in silver in the third week of July was big, wait until you see the move late in August and early September (our largest silver AI target of the year). We will be long after the pullback occurs and support is tested (more on this over the weekend). Gold will have the largest pullback of all the metals in the coming week.
BLMN held up well on a tough day for the DOW. Restaurant stocks are seeing capital flows value buying. The move through $12 will most likely be an explosion - not likely giving traders time to get in. We have potential for a Friday through Tuesday move. If it doesn’t materialize this week, don’t panic as it's days away.
DENN bucked the market trend and traded green today. Value investors have taken notice of the risk/reward and are positioning for the impending run.
Oil tested support and closed back above the 10DMA, a good sign. Higher prices are coming into our AI target of mid to late August.
Expect GBTC to grind between $11.85-$13.25 for a few days before another leg higher to $15+.
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