Nightly Briefing 8/31/20


We had projected some weakness into August 31st and that’s what we got. We now expect to see a rally into September 7/8 without all indexes participating equally. The NDX and SPX have hit all time highs, but the DOW has not done so yet. We look for divergent tops at major peaks, with different major indexes breaking out at different times. If this scenario plays out, it will give our forecast of another peak come September 22nd more credence. It may be a lower high or double top. We will see. The DOW should tag 29,500+, making fresh all time highs. They can come as early as the next 5 trading days, followed by consolidation into the FOMC meeting on September 16th. The market had a lot of selling during the last 5 minutes today due to end of month rebalancing. Expect fresh money flows tomorrow to potentially lead to a big up-day. If for some reason more weakness is seen, SPX 3,430 should hold any decline and unleash a large rebound into next Tuesday. Day-to-day is challenging to call, but supported markets are favored into early next week. Remember, risk increases for equities after Labor Day, September 7th, and heavy volatility is expected to wait until after September 22nd.

The big steel infrastructure explosion may occur after the US elections. We will be happy reaching our first target of the 200 DMA over the next few days, $8.75.


The metals are currently slave to the USD. Our most likely pattern is a top tomorrow in metals with a pullback into September 8th, followed by a nice tradable rally into October 1-3. We will monitor the breadth and action tomorrow in metals to determine if we will exit SILJ prior to the pullback and re-enter. Long term investors can simply hold into the next major peak of January for silver, $35-$40. After our peak in early October, which may be a new high for silver but a lower high in gold, we expect a strong sell off into the end of October. This should be an ICL decline and low.


The dollar is flirting with a strong Fibonacci retracement level of .318 at $91.80. We do not think it trades below this. We have an 85% probability of a reversal tomorrow and putting in a short term low. It may or may not occur during US market hours. This will put heavy pressure on metals and fit with our projected metals sell-off into September 8th.

Oil should continue to creep upward into September 22nd.


The large September BTC rally may occur in the first or second half of the month. We will know soon.


Virgin Galactic starting to look better technically.


We would like to see a spike in DENN up to $13+ for an exit. Likewise, BLMN tagging $15 is a spot to harvest profits for remaining short term holders. It's crucial to keep in mind that the establishment will not halt Covid hysteria during the coming months. In our opinion, it will be an uphill battle for all Covid-sensitive stocks like restaurants. A lot of company specific risk remains.


We have updated the market snap shot in the gold portal with a detailed forecast for stocks, metals, energy, currencies, crytpocurrencies, and bonds.

HFZ

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