Weekly Briefing 6/14/20


Over the next couple weeks, we expect whipsaw action in the US stock market with no large trending moves. We will have to be nimble and take profits as they come. Focus should be on risk intelligence with stop-loss orders and appropriate position size. At Hedge Fund Z, we do not trade based on headlines but they are commonly attached by the media as causes for the market’s big moves.


First, we expect pressure from North Korea and China, which will leverage the US presidential elections against the Trump administration to obtain sanction relief and other perks. They know the last thing the current administration wants going into November is a volatile Asia on the cusp of an armed or trade conflict. Secondly, the next Covid wave is expected in the fall will cause big money to hedge, reduce, or pull out of the market altogether. They sell well in advance so expect August and early September to be a challenging month for US stocks. Thirdly, we have the election cycle to contend with. Republican and Democratic conventions are schedule for the end of August. Normally, a month prior there will be whispers regarding VP running mates as well as other key positions. If the Biden campaign were to insert a strong VP candidate, increasing their chances come November, the market would react with weakness. Even worse for the market, if the Democrats end up having a brokered convention and someone like Hillary Clinton or any stronger perceived candidate than Joe Biden were inserted into the ticket, stocks would be heavily sold.


The media hates Trump, but the big money crowd quietly loves Trump’s easy money policy. The institutional money will hear whispers before the mainstream so the markets will lead the news cycle. Although we do not trade on the news cycle, outlier events do happen. Ultimately, our trades and forecasts are determined by our proprietary system which is independent of news. Many people thought we were stepping in front of a moving locomotive in late March 2020 when we went long with leverage in the Nasdaq. Nothing but doom and gloom were forecast. Many big name pundits and analysts were calling for the Great Depression and a low into late April of Dow 15,000. How did that work out?  Contrary to the headlines the exact opposite happened. So when our system pinpoints August and October as danger months for the US markets we can certainly match some potential news headlines to the expected volatility.


Trending trades will be difficult to find but we have three of them in our trading queue in different asset classes, ready to be executed over the coming weeks.



HFZ

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Important Disclosures: 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 EDUCATION.  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 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.  

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