We normally reserve detailed short-term forecasts for our Gold members, but from time to time, we will offer our proprietary trading forecast to free members as well - especially in times of need. Many people got caught in Thursday and Friday’s panic sell-off into the holiday weekend. This was very unexpected by most, but Hedge Fund Z has been warning Gold members for weeks a top was in the making, and we expected a pullback to begin no later than September 8th after Labor Day. Many new traders are caught in story stocks and momentum plays, which get hit very hard during pullbacks like these. Our forecast has been to trim positions the past 10 days in such stocks as well as any leveraged positions in DOW, NDX, and SPX names. If you got caught and are nervous about another sell-off like March into the start of a second Covid wave, let us put you at ease. We expect a bottom to occur around September 16th and expect SPX 3220 to hold. A snap-back rally into the end of the quarter (September 23-28) is expected. It will most likely reach SPX 3520-3600. This is a spot to reduce exposure to secondary names. We expect the Russell index to perform well and lead the charge into the end of the quarter. The market has been experiencing rotation since the March 23rd low which HFZ bought. Normally, before a steep decline begins, the small caps will have their turn before the music stops. If new highs are seen into late October by the DOW, NDX and SPX, only a few names will be supporting the rally. The recent sell-off was just the first shot across the bow going into year end. Expect wild swings and heavy volatility into late December. We will continue to forecast these swings for our Gold members as we have done since the crash back in March.
We watched the VIX inch up from late August into early September as the market hit record highs. Smart money was positioning for a coming sell-off - the first of many over the next 3 months. Make sure your portfolio is prepared.
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