Nightly Briefing 8/6/20


3400 SPX is going to act like a magnet and mark a double top for this move. A multi-day consolidation event should follow. The NASDAQ hit new all-time highs and the S&P is next in line. It will happen later in August - 3,600 is on the table. The Fed has aborted several natural corrections over the past several months. The effects of this will be a sharp, dramatic plunge several thousand points from September into early October. The market will then recover into the election. Everything in our forecast is lining up. We have a large move in gold from November through January which will most likely be fueled by protest riots and possible indecision in the presidential election.


We have a pattern we are watching for gold: $2,075-$2,120 futures is the top for this move in our opinion. The first pullback will be followed by a bounce, which may double top with a retest of the high or fall slightly short of the previous high. After that bounce, expect a minimum $300 point drop. This will be required to create the slingshot effect for the parabolic bubble phase to start into next spring. Gold is up 15 days in a row and everyone is stressed they missed it, please don’t panic. Silver and the minors will follow gold. We will be shorting the C - wave drop in this decline. Our best guess is that sometime in September will usher in the largest percentage of the decline. This will coincide with the projected four-week correction in the stock market.


We have a 50-50 shot tomorrow for Bitcoin/GBTC to go through $15. If it breaks through this key level, expect $18 quickly.


Oil is our inch worm making small gains daily, doing its job into early September.



Denny’s and Bloomin' will most likely break through their respective resistance levels of $10 and $12 the same day. We need a recognition day in the restaurant stocks. It’s building - but we will need some type of catalyst. Our expectation is for an advance through resistance sometime in August with moves to min. $15 in BLMN and $13 in DENN.


Before we take a position, our system analyzes many facets of implicated risk. Our staff have been relentlessly researching the steel sector during this past week. We will publish a dominant steel cycle which will be the catalyst for us taking a position in a steel company during the next several days. By far, CLF resources has the largest upside. However, after careful consideration we see a 60% chance of a capital raise and dilution in CLD  between $10 and $12 per share, not good for the short term as witnessed recently in SPCE. They have $80 million in cash and several billion in debt. CLF has chewed off a lot with their acquisition of AKS steel this past year, using much of their cash and issuing more deb so they may be players in the iron ore mining industry. While they earn more money than US Steel (X), X enjoys a better balance sheet with billions in cash and a similar amount of debt. We feel the momentum players will be drawn to the American favorite: US Steel (X),  more so than CLF once pundits start talking about the steel breakout. Other names to consider are STLD and NUE.  We like the price point in US steel.


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