Correction by May 50% June 66% August 82%
+ Gold 1767 1764
– SP 4185 NAS 14K DJI 34111 ES 4206.50 [B 4176.50] 4196.50
TIME: ANY DAY.
PRICE: ~SPX 4200 is our latest intermediate term sell.
However, given there is mixed Astro in May albeit with some bearish bias, we plan to play this close to the vest.
There is little REALITY to today’s markets – and until a swan event &/or Robinhooders learn trees don’t’ grow to the sky, pyramid games can continue.
The trigger?
- if Bitcoin collapses (which it will sooner or later) would do it.
- Another landmine would be TNX a 2 = 20% Nasdaq correction.
- In addition to “I” word inflation, the dreaded “T” word- not the Trillion Dollar infrastructure package but TAXES!!!
- A change in perspective- comparing not to last month or last year, but a longer term horizon leaves little upside to analyst projections.
I am unwilling to buy at today’s prices.
When will investors ask “How low & How long” instead of “How far is UP” or will it always be “Buy the Dip again?
Inquiring minds want to know – WE CONTINUE TO HEDGE/BET SO.
Outside of day trading and special situations, we plan to sell/short and look to buy if/when markets are 10%-20% lower.
If markets disagree with me, we will stay with long/short strategies and/or very short term day trading.
PIVOTS 2020 Close 10%- Nov 3
DJI 34000 30606 30780 27480
SPX 4200 3756 3796 3369
NAS 14K 12888 12789 11160
BE PREPARED FOR MARKETS GO IN REVERSE vs MAKE HAY WHILE THE SUN SHINES
Some analysts are forecasting 2.5, 3% even 4% but of course just “temporary”.
Given market sky high valuations, we do not see sufficient FUNDEMENTALS (Fed accommodation, Vaccines & Stimulus Packages) to justify SP500 earnings.
Our recommendation continues to be maximum portfolio protection.
TSLA, BTC, VIX, GME & TNX are our five market “canaries in the coal mine”:
When three or more canaries sing, be ready to Head for the Hills (&/or your nearest bar) 
.
TNX: > 1.60-1.82
VIX: > 26-30
TSLA: < 695-666
BTC: < 30-33K
GME:* <48-30
*Gamestop & stocks such as AMC or COIN are Like Bitcoin, their trading has little or no relationship to reality.
Short of a reality check that the emperor has NO clothes, newbies learning that all stocks do NOT go UP ALL the time can also time market tops (May/June).
TRADERS SHOULD DO QUICK DAY TRADES OR HAVE VERY DEEP POCKETS
- After hard rallies or market drops, it is smart to book profits.
- Current odds of a market leg down this coming week 50%.
Commodity Trading:
Gold Buy on dips under 1767
Silver Buy on dips or under $25
Copper Expensive above 4.30-4.50
Oil Overpriced > 64 sell
KEY DATES: May 3, 5
DJIA: 34000 PIVOT
SPX: 42000 PIVOT
NASDAQ: 4000 PIVOT
GOLD: R1 1800
SILVER: 26 PIVOT R1 28
OIL: 64 PIVOT S1 60 R1 66
COPPER: 4.50 PIVOT S1 4.30
US 10 Year: 1.60 PIVOT R1 1.78 R2 2 R3 2.20
CNY: 6.50 PIVOT
DXY: 90 S1 92 R1
VIX: 18 PIVOT R1 22 S1 16
2020 CLOSE: DJIA 30606 SPX 3756 & NASDAQ 12888
2019 CLOSE: DJIA 28508 SPX 3231 & NASDAQ 8823
2018 CLOSE: DJIA 23327 SPX 2506 & NASDAQ 6635 any
AFUND Fair Value GOLD $1800
Reduce Risk and Focus on Capital Preservation:
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK.
A continuing shift in performance away from investments that benefited from the pandemic and lockdowns – such as technology and health care stocks and bonds – to investments that will benefit from a slow but continuing recovery – like resources, industrials, infrastructure, tourism stocks and financials.
Keep a list of stocks to buy AFTER a 20% correction.
SELL/STOP STOCKS you wouldn’t buy at current prices, write Covered Calls & reduce margin/raise cash levels.
If this is not upcoming soon, then we will remain highly liquid and wait for the music to stop or Godot to arrive, whichever comes first.
Outside of Special Situations, we plan to only VERY selectively add stocks largely in two of our favorite sectors – metals & mining and entertainment.
Favorite Q2 2021 Sectors:
Entertainment, Mining & Technology [AFTER a 20% correction if Undervalued & Highly Scalable]
Currently we are also watching some Select Health Care (lower cost/better outcomes, Energy & Distressed Investing for Q3 2021.
Stock selection is important. Whenever possible, we prefer to recommend stocks sporting strong cash flows, sound balance sheets & growing dividends.
Choose your favorite stocks and patiently bid for them.
HW: Good to know.
Given newbie gold and silver investors have little knowledge of the industry and many are accustomed to Tech valuations, is there an upper limit to Gold or Silver pricing? Maybe not!
Should/When Bitcoin meet reality, it is likely to usher in a rapid source of many of these new investors.
Conservative investors would accept $2200-2300, while more aggressive gold and silver bugs have gold targets of 2500-3000+; silver $35 to $50+.
Silver $25 support with $30 overhead resistance.
There are many good buys in the precious metal space depending on your time frame & risk/reward desires.
Gold: Fundamentally the global political and economic situation is generally favorable for precious metals.
Precious metals remain favorite sections. Many generalist investors have interest now in Metals and Mining.
Also it is under allocated by most investment programs, this gives it even more potential room to run, especially if/when inflation fears resurface &/or US dollar weakens!
Currently fundamentally gold and silver is Undervalued!. We expect that to change late Spring.
Hence we recommend a full and over weighted precious metals portfolio allocation.
However, we advise long term precious metal investors to also pay attention to stock selection.
Gold remains cheap geopolitical crisis insurance.
For investors who cannot or will not buy the $US currency as well as investors who wish to safely and cheaply hedge their US$ exposure,ONLY GOLD IS AS GOOD AS GOLD!
Once again someinvestors are hedging record equity prices by buying gold.
Low real interest rates is positive for gold as well as low global bond yields makes gold an attractive alternative risk mitigation hedge.
We expect precious metal stocks to outperform physical gold & silver in 2021.
Gold FV $1800 = Commodity FV: 1650 + Currency FV: 1790 + Inflation Metal FV: 1730 + Crisis FV: 2030
INVESTORS: We will stay LONG in H1 2021 both as an investment and as a portfolio hedge. Despite seasonal trends, we expect gold to largely perform better April on
These are high risk/high reward market picks but could be potentially very rewarding and/or interesting to watch. These picks are best for speculative portfolio allocation and often bought in groups of 5 to 10 such stocks. Remember NOT to ignore their High Risk – meaning use speculative allocation i.e. “money you can afford to lose without altering your life style.”
Always do your own due diligence first before deciding to act.
Chris Murphy, Cohead Derivative Strategy, Susquehanna International Group
HW: None based in fundamental reality that is.
“Gold continues to digest the large upward move in U.S. rates, and the now-prevailing consensus that inflation will rise as the economy rebounds. We believe the primary reason for gold’s pullback is growing complacency regarding deficits and debt buildup.”
Peter Grosskopf, chief executive officer, Sprott
HW: And I thought it was “because we live in the best of all possible worlds”!
“There is a sense that maybe next quarter is as good as it’s going to get, and we’re going to roll over, particularly among the Nasdaq stocks and Big Tech stocks that benefited from the pandemic.”
Jack Ablin, chief investment officer, Cresset Wealth Advisors
HW: We agree with this view.
