Nightly Briefing 8/23/20

We again show the Weekend Briefing chart of the McClellan oscillator which follows overall market breadth. A pullback is coming after Sept 7th, Labor Day weekend in the United States.

After a market pullback starts September 7th into mid-month, we will know what kind of bounce to expect into October. There is an outlier rogue-wave advance possible into October, SPX 3600. We do not view this as likely, but it is on the table. Up next for the stock market is a daily cycle low correction lasting 5-8 trading days starting after Labor Day into mid-September. We will have one more bounce or potential new high after the pullback. Long term investors are fine into mid-May 2021, with the expectation of having to endure an intermediate degree correction, ICL. We have not had one since March.  The quick sharp ICL correction in March lasted only 4 weeks, rare. Short ICL’s are normally followed by very long advancing cycles. For every action there is an equal reaction in the markets. We are experiencing this long advancing intermediate cycle now.  Our current ICL share market low is currently forecast for December. It won't be straight down, but filled with many bounces and counter-trend rallies. A great buying opportunity in our opinion.

If there is one stock that is the most capable of lifting an entire market that would most certainly be Apple. One can see how far it is stretched above its 200 DMA. This would only be acceptable if we were in a bubble phase advance/blow off top experiencing a parabolic finish. This is simply not the case, yet! With the Fed constantly propping the markets. they create a series of violent mini-crash events that occur due to normal corrections not being allowed to run their course. Just as we alerted members in early August to expect a violent downturn in gold, after Labor Day, we may witness a sharp pullback.

Everything is connected in capital market money flows. Expect the USD to break out of its downtrend and hit the first trend line soon, confirming it has put in a short term bottom. This will likely occur during the stock market pullback in early September, coinciding with a correction for precious metals. Before the USD rolls over to its 3 year cycle low, expected May 2021, we anticipate a tag of the 200 DMA which is declining and currently near 97. Once the dollar breaks through the daily cycle trend line, it will most likely trigger the next violent spike down for precious metals.

Gold won't be straight down into our target buy zone. Expect whipsaw action in the metals as they work towards their ICL lows.

Poor money flows into precious metals are confirming our outlook.

More warning signs for gold. Silver and the miners will follow gold.

We have a 6pm EST press conference today from the White House to discuss a new Covid treatment. The FDA is currently not supporting any Covid treatments. Hopefully this will change after the elections. In our view, it has become simple with the Covid-sensitive stocks. To continuously forecast broad market direction without reward because of pandemic-affected areas does not do our capital justice. Given their hysteric tendencies, there is a chance the media hounds the public to shut down each and every school in America into the election, fear mongering over a second wave. Pressure will be on schools to only permit online learning. The FDA has revoked each and every Covid treatment into the election, offering Americans no hope and a dark image of the near term future. We did not want double exposure in our short term model portfolio in the restaurant space. Both BLMN and DENN are great long term holds in our opinion. DENN trades at a steeper book discount and we feel has less downside, having recently done a secondary offering, which was our logic in taking profits in BLMN and holding DENN.

Crude continues to look bullish into our September $49 target. USO will follow.

BTC’s advance has been inverse to the dollar collapse. We expect BTC to break this cycle by mid- September. The GBTC trade should advance nicely into year end with higher highs and higher lows.

SPCE is bottoming and a $3-$5 point bounce looks imminent into early September.


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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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