Nightly Briefing 8/2/20


The dollar is due for a bounce which will put pressure on metals and stocks, to a lesser degree. As one can see, sentiment is at an extreme and needs to reset.


We expect the $1850-$1870 futures price level to hold on the first pullback. This will usher in a bounce into the second half of August. How high remains to be seen but it will be a tradable bounce as dip buyers come out in force. With no event or crisis, it is highly unlikely gold breaks through $2000 on its first try. A sustained breakout above $2000 will come in the fourth quarter of this year. We have remained firm on this forecast throughout the year. This will be by far the strongest metals rally of recent years in the fourth quarter with gold breaking above $2000 and never looking back. After gold pulls back, our thinking is to take a position in metals, on August 10-11th, for a nice bounce. As of now, a larger sell-off should occur during the second half of August. $1750 should not be breached from here forward.

We expect a strong push in stocks early this week. A 800-1000 point day is not out of the question, striking our 3400 target before some consolidation. Higher prices are coming into late August. Focus on the bigger picture and get rich slowly with your positions. Equity markets will remain supported into early September.

We will sell USO ($33-$35) when crude oil strikes our target of $49. We are confident we will see this no later than early September, but most likely late August. Expect natural gas (UNG) to continue rallying and follow oil higher into late August / early September.



Institutional buyers add to existing positions in DENN and BLMN every day as both continue to receive upgrades from many banks. We need break-outs over $12 in BLMN and $10 in DENN to ignite a strong multi-day rally that should last 3-5 trading days.

Overnight, Bitcoin struck a new yearly high of $12000 (GBTC $15). Our target for September is $15000+, GBTC $22+.


SPCE is on our trade list waiting for a pullback to the $20 level. Virgin Galactic is here to stay.


The steel sector has a cycle low being generated for early August. All of the steel names should perform well. We believe this will be one of the strongest steel rallies in some time. We like CLF due to its current short position and iron ore mining business which supplies other steel companies aside from itself. We are hopeful of a trade to trigger this week in CLF.


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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