Nightly Briefing 8/17/20


Industrials were weak today after tagging new post-Covid recovery highs last week. We expect a few days of consolidation from the DOW and other major indexes before a rally to new highs into early next week and ultimately early September.


If we can get a break over $15 in GBTC and $12,500 in BTC, a test of $13,500 and $17.50 would be our next stop. $15,000-$17,000 is the target for late September in BTC.


The metals complex is likely to give us back and forth action over the next 2 weeks, staying range bound (gold $1,875-$2,000). Ultimately, gold is the driver here but the miners can send early signals. Today GDX closed back over the 10 DMA. We expect a pop into tomorrow AM to $44 then a reversal mid-day followed by possible weakness into Friday. If GDX can hold up and not break $42 again, we would have a rally into late next week. Our larger expectation is for an Intermediate correction to occur in the entire metals complex by no later than mid-September. Four daily cycle advances in gold have already occurred since the March 19th low. To expect a 5th daily cycle to bring in a new high before a correction would be a first for us. Bottom line, this rally is getting long and we are staying cautious. Gold received the expected Buffett bounce today, courtesy of his gold purchase, and we will need to see gold close back above the 10DMA tomorrow to make us believe this time is different. As we have disclosed all along for the past 3 months, our system is looking at $2300 gold this year sometime in the 4th quarter. Could it occur late September/early October? Yes, but not likely. We favor a stronger rally into year end starting in October. We will have an excellent metals entry over the next 45 days. Now is not the time for leverage in the metals sector if you are a trader. If your a long term investor, old turkey, you can hold with confidence into 2022 and ride out any intermediate degree corrections as metals enter the potential bubble phase and poor entries are erased as the bull market carries price much higher.


US Steel attempting to close over $8.



Both crude and natural gas are projected higher into September and are following our forecast perfectly. Natural gas may have more strength into November. Crude may not follow.



Morning headlines from the media were plastered with Covid case spikes as testing increases, but a decrease in the death rate remains constant. There will be a political war into the election on Covid, and this partisan struggle will produce constant negative and positive headlines. Between case spikes, new treatments, and vaccines volatile trading in Covid-sensitive stocks like restaurants will be commonplace. We have to downgrade our short term targets to the 200 DMA in both DENN $13.50 and $15 BLMN. Still nice profits when struck into our late August/early September time frame.



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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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