Weekly Briefing 7/26/20

Every 10-20 years we experience a precious metals bull market. There are many reasons which cause these explosive moves but they all boil down to one main theme: people lose confidence in government. It may be from war, hyper inflation, or political unrest, but it always come back to the people of the world losing faith in their leaders. The amount of money which can be made as a trader during such periods would normally take years to harvest investing in the stock indexes. We entered one of these periods last June and it should not stop until 2024. Our think tank thought this would be a good time to educate investors in the simple patterns of precious metals and to get you comfortable investing in this asset class.

Gold is the ultimate driver of any precious metals bull market and it always moves first. Gold miners then normally follow gold. Last but not least is silver, which rallies at the end of most cycle moves in metals but normally produces some of the largest moves in all of the sector.

We have a major cycle top in May of 2021. This will not mark the end of the precious metals bull market but will usher in a 6 month peak that will hold and allow the sector to consolidate before the bubble blow off phase begins. At Hedge Fund Z, we have traded our own capital in the gold markets since the inception of the break-out in gold last June. We followed up with the winter rally into early March and then again the break-out in May. We attempt to time 1-2 month peaks during these runs to harvest huge profits. This past week's rally has surprised us as we had strength into July 17th before an upward explosion in August, but that is what happens during these bull periods - the surprises are to the upside, not downside. On a weekly closing basis, last week's closing high should hold before a brief pullback occurs into early August which will present a buying opportunity. If you are a longer term investor in our opinion you can buy any of the asset classes we cover in this article and hold with comfort until May of 2021. Silver offers the greatest upside potential followed by Junior miners . We favor the following ETF’s for exposure in the metals markets, GLD, SLV, GDX, and GDXJ. Avoid triple levered ETF’s as they are for day-trading in our opinion. Not an asset class to hold.

GDX, the senior gold miners, were next in rotation and broke out of their May 2016 high in May of 2020 through the $32 level. These miners typically produce a nice profit and are comprised of popular mining companies with strong balance sheets.

The junior miners, GDXJ were third to break out of of their 2016 baby bull high in June of 2021 through $53. These miners are more speculative and typically don’t produce earnings. They prove out gold claims and sell them to the larger producers.

Last but not least is silver, which just broke out last week over $20 and should pullback quickly into early August for a buying opportunity. Higher prices are projected into May of 2021 for silver. Silver is important because when it accelerates, it normally is at the tail end of a cycle advance and can be used to time a correction for the entire metals market. So when silver starts to move keep your eyes peeled for a correction in the entire metals complex in the weeks that follow. Get familiar with the rotation and timing of each of the major metals asset classes in order to help you time entries and exits during this next 4 year bull market in metals, in which you can potentially create tremendous wealth.

And  when you're at a barbecue this summer and people are talking about why metals are going up, just remember: metals rise when people lose confidence in government, period end.


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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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