We warned back on June that this 30-day period would frustrate bulls and bears alike with constant whipsaw action. Aside from a handful of stocks in biotech and tech, most stocks have been range-bound. This is coming to an end the next few days. We expect a broad-based rally to occur pulling up most stocks into August. We have been selective with our trade alerts during this period, only holding deeply undervalued names. Most traders want to always have positions and be making money, but forcing trades during periods like these can quickly result in losses. Everyone wants the market to move on their timing but unfortunately that’s never how markets work. This difficult period is fortunately ending and the bright side is that difficult periods like these are almost always followed by very easy periods.
We expect a spike top this week followed by a pullback and one last attempt next week at a fina; top. What follows will be potentially a brutal, sharp reversal trapping traders chasing $1900 gold. Anything is possible but without some binary event we do not see $1900 occurring. This is not the time for leveraged positions in the metals complex. If you are long consider a hedge to protect your profits. Gold is very late in its major cycle advance. August should see the metal trade under $1700.
We will look to short GDX through the use of DUST in the coming days.
We have gone through the single longest period of consolidation since the Covid crash in both DENN and BLMN. We are expecting the strongest rally in the coming weeks in both. What will cause it? We don’t exactly know, but we can see as of July 4th, President Trump is now going on the offensive against the media and political agenda that is calling for every business, school, church, and public building to close down into the November elections. We are politically neutral when it comes to our market bias. We invest to make money.
The at-risk population needs to remain vigilant, but the cold hard data shows a virtual zero death rate for people under 50 with no inflammatory conditions. Every treatment for Covid is dismissed by mainstream news. It is hard to believe there is no treatment for a virus that can be eliminated by washing your hands with soap or using hand sanitizer. Expect the stock market to rally and the propaganda battle to even out going into the Republican and Democratic National Conventions into mid-August.
Crude prices should be supported all summer and see a nice advance over the next few days.
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