Weekly Briefing 5/16/20

As the country begins to reopen, expect global stock markets to rally before any real correction takes place. As shown above by this Goldman Sachs indicator, the vast majority of the economy has not even begun to turn its wheels yet.

When we examine term sentiment one can see the correlation between smart money and price. Now what exactly is the smart money? Put simply, the 1%.

This bull market is not dead by any means. The Federal Reserve and US Treasury are injecting massive amounts of liquidity to revitalize it. There will be a monetary moment of reckoning but it's not now. Some time in the first half of 2021 there will be an economic shock for all the debt issued, defaulted on, and inflation sparked as a result. First, the US markets, comparable to the best house in a rundown neighborhood, can reach back to all time highs and in some cases like the NASDAQ, new all highs. 

The Federal Reserve banks responsible as dealers of freshly-minted Treasury Bonds will be helping sell close to a trillion in new debt the end of May. Expect market liquidity to mysteriously dry up into this time period and the stock market to experience weakness. The Fed knowns when markets drop T-Bond demand soars. The last thing the Fed wants is a weak treasury auction which will undermine confidence in the almighty US dollar and economy. This event will be followed by a rip-your-face-off rally into the June Federal Reserve meeting and ultimately higher prices into summer. Embrace the V-shaped stock market recovery. The Main Street recovery will look more like a U.

At HFZ we focus on the equity, metal, and volatility markets. We recently tangled with an energy trade which we were stopped out of for our first booked losing trade of the year for our platform. No one has a crystal ball and can be 100% even with all of our tools. There is no single algorithm you can devise that will predict every turn of a market. Markets are not isolated. If they were 100% success ratios would be possible. Wildcard events create panic in markets and are usually the result of overseas events. With that said, a 100% hit ratio is not required to make exponential gains on your capital and build geometric growth. There is a once-in-a-decade opportunity which has developed in the metals markets and will be a trend for the next 4 years. We focus on the metals markets because what an average trader can make in a good 2-3 month trending trade in the metals market is comparable what an average good investor could make in an entire year investing in the stock market. We have been in a highly profitable metals trade for week and will continue to take advantage of this generational opportunity for the next 4 years while we harvest incredible gains. We urge all investors to take advantage of this incredible opportunity and gain more financial security in each of your lives.

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