Nightly Briefing 8/18/20


We are getting late in this rally which started March 23rd. After September 4th, smart money will have hedges on long positions and/or will have sold or lightened up short term trading positions. There is presently a bull trending market until May 2021, when a 6 month pause may come into play into early January 2022. It is impossible to get every last bit of a trade. You have to leave something on the table. The only conceivable way to get it all is to hold long term. We strongly believe you are never wrong for taking a profit no matter what happens afterwards.


There is a peak coming in the metals complex over the next 8 trading days and it possibly may have been struck today. Like the stock market, this rally from March 19th is overextended. Traders always seem to think 'this time will be different and no correction will occur,' but it rarely is ever different. Barring a binary event, banking collapse, war, etc.. expect a correction into September.

Miners topped first which is common. We feel the top is in, but completing a top is a process. We will get an intermediate degree correction into late September.



Once schools open, we expect to see more Covid cases broadcast by the media and the negative, sensationalist reporting characteristic of the past several months push to lock down and close schools. We are looking to exit and remove restaurant stocks from our short term portfolio in the near future. It was a great trade March through early June but has been a slow grinding recovery trade since mid-June. The looming presidential election, in the most divisive political climate we have seen in our lifetimes, will not make things any easier. We would like to take profits from both positions and are optimistic this can occur by September 4th. There will be other easier short term trades available to us. We feel long term investors, 3+ months, can hold for much higher prices in both BLMN and DENN. We see debt default risk being very low for both.


Recent trading action suggests someone very powerful with a lot of capital is keeping pressure on the steel sector, as they continue to quietly scoop up shares. We are days away from a recognition day in the sector. The Republican National Convention next week may be our catalyst. President Trump has hinted at a new infrastructure program.


We are looking for $15.50 near term with a pullback and ultimate spike over $20 come September.


Kodak has a great story. We like the picture technically and fundamentally. We may attempt to catch a bottom here in the days ahead.



A member asked us to look at DELL and run it through our system. We see a strong outlook for the computer maker ultimately putting in a 6 month top next May 2021 with the rest of the tech sector. We have outlined long term price levels we like for accumulation. Although it is not in our long term model portfolio, it looks like a respectable investment over the next 9 months.


USO and UNG are both slow crawling ahead. We will look to exit crude most likely in mid-September. Natural gas holders have until November for a top in our opinion.

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. 

 

By your use of the Site and Services, you're agreeing that you bear responsibility for your own investment research, trades, and investment decisions. Only you can decide whether or not a trade is right for you and you agree to be liable for any trades you initiate at your brokerage using research and/or tools that we provide. If you ignore our advice to do independent research and choose instead to trade solely on information, analysis, alerts or opinions found in our Service or website, you have made a conscious, willing, free, and personal decision to do so. You also agree that HFZ, its directors, its employees, subsidiaries, affiliates, and its agents will not be liable for any investment decision, trade made or action taken by you and others based on news, information, opinion, or any other material published through our Site and Services.  

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