Many big-name hedge fund managers, including Warren Buffet, have been left in the dust from the V-shaped recovery starting on March 23rd. We purchased our trade of TQQQ @ $33 on that date, and alerted our Gold Members. The largest stock market gain in any 60-day period over the last 100 years has just occurred. So how did so many get it wrong? The global markets have changed over the years and are more than ever driven by capital flows. There are tens of trillions of dollars seeking refuge and safety first - and growth second. This can make valuations excessive and irrational to many value-based, old school investors who sit and watch the paint dry as the stock market rallies. The central banks of the world have certainly helped with their injection of liquidity into the financial systems, but ultimately capital needs a safe parking garage and high-end equities are it. Look for the deterioration of confidence in sovereign debt to continue into 2024. Looking ahead 6 months, the Dow will stay rangebound (24,500-29,000) as vaccine worries, a second coronavirus wave, the presidential election, and corporate debt defaults weigh on the markets. The stock market can squeeze out a little more upside in the coming weeks ahead before a real correction and profit-taking event occurs over the 3rd quarter. After that, expect a choppy advance into November 2020.
Gold had a rough day on the payroll numbers Friday but we continue to look at the big picture as the next generation gold bull market evolves into 2024. Expect much higher prices very soon. Precious metals in our opinion deserve a place in everyone's portfolio.
Crude oil and equity market pricing are often coupled throughout economic recoveries. Like the stock market, crude has a small amount of upside left in the coming weeks before a correction takes place. That correction will be a dip-buying opportunity.
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