Gold may bounce for a day or two as sentiment is extremely bearish. Weekly technical sell signals have been triggered. All of the pundits screaming for a gold continuation rally were wrong. We take great pride in our market and metals forecast and dedicate countless hours to capturing trends.
Gold looks lower into September 28-October 2. Early next week $1800 futures is possible.
The dollar closed above 93.50 Today. Expect a quick move up to 95.50. This will pressure metals and to a lesser extent stocks.
We see a potential retest of the lows Wednesday/Thursday. It may or may not happen but it’s a danger period with a 70% chance of occurring. We sold TQQQ today for this reason - the market may continue to rally, but over the next few days there is significant risk of another drawdown. No one wants to sit through a 1000 point drop so we took a small profit. A rally into September 29/30 should resume after Thursday. After October 1, we will have a confirmed outlook for the month ahead. A lot of easy swings are coming in the market once confirmed - there is no need to press positions. There has never been a greater number of factors impacting stock markets. There is a lot of data to process: the presidential elections, a second wave, quantitative easing, sovereign debt default in Europe, a great reset trying to be implemented with a cashless society, and finally massive risk to the credit markets with many debt faults expected in the fourth quarter.
Natural gas should dig in here at these price levels and start its move to $17 in early October/November .
So far only the mega-cap tech names and darlings of Wall Street are participating in this bounce. secondary stocks such as Virgin Galactic have not responded yet but they should bounce over the next few days once the broad market settles down.
Cliff resources is incredibly undervalued. We don’t see any risk of dilution as long as the stock does not break $10. Only at that point the company may look to raise capital.
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