The risk/reward ratio is not present to trade metals short term. But after the next correction, everyone is going to want to have a long term metals position into May 2021. We are going go to out on a limb and say it will most likely be the most profitable trade many of you have ever experienced.
Silver and the miners will follow gold. It will not be spared during the coming pullback/mini-crash event.
SPX next resistance is 3,400 which we expect will easily be hit. The largest correction post-Covid is coming in September. This will be an intermediate correction, estimated 2,000-3,000 Dow points into October. A top August 14th-21st in SPX is projected, followed by a pullback and subsequent rally into September 4th. We are unsure if September 4th will produce a higher high in all of the indexes, some may lag. We are in a bull market into 2026. May 2021 should usher in a 6 month peak in stocks. Long term investors do not need to worry. Consider a reduction of position size and/or adding a hedge to your portfolio after September 4th. Most hedge funds hedge with a 1-3% SPY put position before a period of volatility. If they are wrong and the market accelerates higher, they watch their hedge goto zero and their portfolio climb in value. We will go over this later in the month and offer our opinion for good put option choices.
We think September will be very kind to BTC as precious metals take a dive. They often have an inverse relationship. Peaks projected are September and November for BTC as we enter year end. We will be adding BTC/GBTC to our long term portfolio
Steel stocks should accelerate into early September and may continue to rise during the initial pullback in the share market. Steel stocks have had some strong runs during corrections in the broad stock market in years past. The 200 DMA is our first target followed by a retest of $11.
Oil is another asset capable of moving higher during a stock market correction. We think this will occur in September leading up to our $49 price target . USO tracks crude: $34-36 estimated price target for USO in September. Natural gas, UNG, looks strong into the end of November for a cycle top.
Another defensive sector capable of performing nicely during stock market pullbacks is the biotech sector. Add in the Covid treatment and vaccine applications set to come to market and we see biotech performing well into early September.
We closed right at $12 Friday and are optimistic we break through the $12 level for good this week, finally getting our acceleration into the $15 level in the coming days. There was a lot of chatter of fresh hot institutional money bargain hunting in the restaurant sector this past week.
We need a break of the $10 level to gain some acceleration and make a run at the 200 DMA.
Virgin Galactic is a volatile stock. The stock moved up on a series of bullish news releases follow by a dilutive stock offering, quite common. Ultimate support will be the rising 200 DMA, but we are not sure it gets that low short term. The $18 level should offer strong support and give SPCE a new trading range of $18-$22 short term. We have added SPCE to our longterm portfolio. 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