Nightly Briefing 8/16/20


We expect the stock market to inch higher into August 21st/24th before a 2-3 day pullback occurs the week of August 24th. This sell-off will be followed by a strong upward price explosion the week of August 31st into the September 4th Labor Day weekend. After this move, we expect market conditions to deteriorate into early October but do not expect a crash event. Expectations now are for a strong rally mid-October into November 3rd. Before any sizable pullback, we feel the DOW will touch close to 30,000 and play catch-up to the NDX and SPX. The NDX may go a bit higher, but we expect the SPX and DOW to be stronger the next few weeks.


SEC Filings disclosed late Friday indicated Warren Buffett purchased $500 million worth of Barrick Gold, a gold mining company (symbol GOLD). This investment is a small to modest bet for Berkshire Hathaway compared to the billion dollar bet they made in silver bullion back in 1998. It should provide a pop Monday morning for the metals complex, but we do not feel it's a trend or cycle altering event. If the world was about to fall apart, Buffett would have purchased billions in gold bullion which he commonly downplays as just a “pet rock." This is an earnings play given the recent price appreciation in gold bullion - certainly not bad news for the metals complex. Technicals are telling us expect the trend line shown above to be retested and most likely broken near term. Whether it breaks it or not, a bounce will occur in bullion into September. The question is just how high? Our system is telling us to expect a lower high in gold, but possibly a higher high in silver into September. In our opinion, this is not a good set up to go long metals just yet. You can make money with a poor set up, but simple math says there are endless opportunities coming in metals, and we will capitalize on a long trade when it's safe. It’s okay to let the riskier set-ups pass you by. Once we break the trend line and touch the low $1800 futures range, we will issue an alert for a long trade. We are long term bulls in the metals complex, so if you are a long term trader, it'll be great into May 2021.


USO will not produce huge gains, but it will be a steady climber into mid-September.


We feel between this week and September 3rd the 200 DMA of both BLMN and DENN will be tested and possibly exceeded. It can occur as early as this week. If it occur this week we would then expect new post-Covid highs in both stocks.

The same goes for US steel. If we can gain traction through the 200 DMA this week, shown above, then a break to new post-Covid highs can occur, $11+ by early September. After $11 we see $13 as the next target.


BTC is holding strong while consolidating in a sideways coil, very bullish. This adds more credence to our September target in GBTC of $20+.  We feel a breakout should occur over the next 7 trading days.

The same goes for SPCE. We feel a break of the $20 level should occur this week and attack our next area of resistance, $22.50.

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.  

 

No information, nor any opinion expressed on the Site or in the Services, shall constitute a solicitation or an offer to buy or sell any securities mentioned therein.  The information presented on the Site and in the Services has been prepared without regard to any particular investor's investment objectives, financial situation, needs, capacity, and trading ability or experience. Accordingly, you should not act on any information on the Site or in the Services without obtaining specific advice from your financial advisors and should not rely on information herein as the basis for your trading and/or investment decisions.  HFZ cannot claim or represent that any of our Services are suitable for you. 

 

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