BLMN and DENN both had a great day as Texas, Florida, and California reported lower numbers and deaths. Again, our feeling is yesterday’s decline was pension rebalancing. We expect the sector to go up with the stock market until late August.
Expect a choppy rally until late August in equities before a meaningful pullback. From late August into the election we expect heavy volatility and whipsaw trading action, similar to that we just went through from June to mid July but this environment will be much better for trading with larger price swings and rebounds. Volatility creates opportunity. We will help investors time spikes. We expected a short term top August 3/4. We may just encounter sideways price action for a few days as the market consolidates for an attack at 3400 SPX, our next target. 3600 SPX is our top target for late August.
We expect natural gas and oil to continue to rise with the stock market until late August.
We were stopped out of DUST (inverse GDX ETF) trade today as picking tops is more challenging than bottoms with unlimited QE. We expect a short term metals pull back into next week, nothing has changed. Gold can retest $1900 before tagging $2100 late August/early September, followed by a correction to the $1750 breakout level in late September/early October before an upward assault into January 1st 2021. Some of us have been trading metals since 1980, and have traded a number of prolific bull metals markets. The pullbacks will be 5 to 7 days of bloodbath selling where gold will drop 200+ points. If you are a trader and use leverage such as short term options or 3x ETF's, this is something to keep in the back of your mind. We have not entered the bubble phase yet of the metals market - that’s coming after the breakout of $1750 is retested. That will be a time to take a long-term position and do not touch it as we will expect a parabolic move up into May 2021. For those of you who are new, we can tell you that management at HFZ captured every penny of the rally last summer and this winter. This last rally has been challenging for many of the best analysts to trade. The next advance will be far easier and stronger. We are metals bulls and our forecast has not wavered as we expect pullbacks, but higher prices into early September. We get a lot of emails regarding DUST - it’s a favorite of many of our members so we’ve attempted to time pullbacks for them. We will likely wait for c-wave decline before attempting another dust trade, after our intermediate top has been struck at $2100 late August /early September.
ADT was doing fine until early this afternoon, holding at about $13 for what we feel will be a retest of resistance at the $16-$17 level. The SEC informed investors of an investigation into Kodak which had a prolific trading run last week. This impacted momentum as short term confidence in ADT was reduced and we saw the stock break the $13 level this afternoon, forcing us to execute a stop loss order. We are sorry this occurred, but it’s hard for us to see every land mine all the time. We will continue to provide coverage on ADT this week as they report earnings tomorrow and may trigger another run in stock.
If Bitcoin can attack the $12,000 level again from the past weekend, which would equate to approximately $15 on GBTC, we may consider booking a short term profit and re-entering.
SPCE just executed a 20-million share offering these normally coincide with the run up in a stock and can take some time for price to absorb the additional dilution. We expect SPCE to be range bound between $19.50 and $25 for the next few weeks before a larger run over $30 commences.
Inflation has started to show its face. We see many commodities starting to move from food product to metals. Steel and iron ore are commodities that move when inflation rears its head. We’re watching CLF for an entry in the next 3 to 5 days. This will be a high confidence trade. HFZ Financial Disclosures All opinions, information and illustrations expressed are solely for information and educational purposes and do not constitute investment or trading advice. We bear no responsibility for any actions taken or not taken by third parties after reading the blog. This email content has no regard to your own investment objectives, financial situation or particular needs. We may have an interest and may make purchases, sales or short sales in the securities referred to in the financial educational platform blog. Please ask for our consent before re-publishing blog content. 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 information. 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, bank 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. Hedge Fund Z Terms and Conditions