Fall is coming
YELLOW/RED ALERT: On both Growth, Valuation & Risk Metrics.
IT IS ALMOST CERTAIN (90%) THAT MARKETS WILL CORRECT BEFORE OCTOBER OPTIONS EXPIRATION!
“Managing the risk is a really important part. It’s not about trying to shoot for the highest rate of return you can; it’s about protecting what you have.”
Leyla Morgillo, CFP, Madison Financial Planning Group.
We continue to maintain defensive protection:
High cash levels cash, low or no margin, writing calls, hedging, very short-term trading, some October puts and buying only special situations into early Fall.
We are not buying today’s pyramid games will continue forever. Some possible landmine triggers beyond Delta/Lambda/Mu Covid fears include:
Higher Taxation More Market Stumbles like AMZN..
Bitcoin collapses (28K support broken which it will sooner or later) would do it. Cf: bitcoin-why-you-should-be-terrified-of-owning-btc.
A change in perspective- comparing not to last month or last year, but a longer-term horizon leaves little upside to analyst projections.
Fall FED tapering or warning of future course shift or otherwise losing credibility!
The usual assorted geopolitical threats especially US/China aggressive escalation Q4 2021.
I am unwilling to buy at today’s prices, especially SPX 4000: given the downside risk & its obvious P1 correction target.
Outside of day trading and special situations, we plan to sell/short and wait to buy if/when markets are 12%-20% lower.
|PIVOTS||2020 Close||10%-||Nov 3|
Most computer programs also monitor their 50 & 200 DAY MOVING AVERAGES FOR SUPPORT TESTS.
Inflation is currently solidly above 5% and I don’t believe it is just “temporary”; if/when the global economy slows, we are likely to see STAGFLATION!
Given still high valuations, there are not 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) .
TSLA: < 695-666
BTC: < 42-30K
*Gamestop & stocks such as AMC  or COIN  are like Bitcoin, their trading has little or no relationship to reality.
Public valuations of large, mid and small cap companies remain near their highest levels in recent history.
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).
MARKER SHORTS: DJIA 35051, 35208 & 35150 SPX 4411, 4436 & 4468 NASDAQ 14836 & 14835.
TRADERS DO QUICK DAY TRADES OR HAVE VERY DEEP POCKETS.
After hard rallies or market drops, it is smart to book some profits.
Odds of a market drop before the end of September is EXTREMELY HIGH – We stay prepared!
We are ready to add more TNX (10-year US Bond) shorts this next week plus we may not need to protect/dance around positional shorts now.
Gold: Buy on dips Rinse and repeat & repeat Last buys 1763 [sold 1788 Stop], 1750.
Silver: Accumulate on dips < 24 Buys 25.15, 24.33.
Copper: 4.25 Pivot.
Oil: 69 PIVOT Sell 71-74.
TNX: 1.40-1.75 Targets Short 1.25.
HYDE PARK SOAPBOX: markets-fear-a-different-delta.
Next Wall Street Next Week September 27, 2021.
|RESISTANCE SUPPORT||35000 33000||4500 4000||15500 13000||25 23||1845 1755||4.50 4||1.50 1.25||72 60||50000 31000||6.50 6.30|
KEY DATES: SEPTEMBER 17, 22-24.
DJIA: 35000 R1.
SPX: 4500 R1.
NASDAQ: 15000 S1 14880 S2.
GOLD: 1844 S1.
SILVER: 24 PIVOT R1 25 R2 26.
OIL: 68 PIVOT 66 S1 70 R1.
COPPER: 4.30 PIVOT S1 4.25 R1 4.40 R2 4.50.
US 10 Year: S1 1.40 S2 1.50.
DXY: 92 PIVOT R1 94.
VIX: 16 PIVOT R1 18 R2 22 R3 26.
BTC: 46 PIVOT S1 44K S2 42K.
2020 CLOSE: DJIA 30606 SPX 3756 & NASDAQ 12888.
2019 CLOSE: DJIA 28508 SPX 3231 & NASDAQ 8823.
2018 CLOSE: DJIA 23327 SPX 2506 & NASDAQ 6635.
AFUND Fair Value GOLD $1844.
Reduce Risk and Focus on Capital Preservation:
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK.
2. The Astrologers Fund2021 Stock Market FORECAST update – YouTube.
HW: Outside of special situations we do not plan to add positions until after the Fall equinox.
For our next market update attend Our upcoming September 22 Webinar.
Review your Portfolio Holdings for possible changes.
Prepare a list of GOOD stocks to buy AFTER a 15-20% correction. Choose your favorite stocks and patiently bid for them.
Stock selection is important. Include some stocks sporting strong cash flows, sound balance sheets & growing dividends.
Include some investments that can benefit from higher inflation such as gold, TIPS, utilities, Art/Blue Chip collectibles and selective real estate etc.
Favorite H2 2021 Sectors:
Entertainment, Mining, Technology [AFTER a 20% correction if Undervalued & Highly Scalable] & Distressed Investing (select Real Estate) Currently reducing Health Care (except select lower cost/better outcomes).
3. Gold has entered its favorable seasonal cycle. Algos please note inflation is a positive not a negative for gold investors.
Note: One can only imagine when Bitcoin meet reality, how it would likely to usher in a rapid source of many new gold investors.
Gold Fair Value is $1844 with $1750 support and $1850 & $1925 overhead resistance.
Silver Fair Value $26 with support tests continuing to be an opportunity for long term accumulation: $23 Support & $30 overhead resistance.
There are many good buys in the precious metal space depending on your time frame & risk/reward desires.
See recent AFUND luncheons, conferences & past Webinars have been posted on our YouTube channel] for some investing ideas that may be profitable in 2021.
Gold: Fundamentally the global political and economic situation is very favorable for gold but mixed for Silver (as also an economic metal).
Precious metals remain favorite sections. More generalist investors now have some interest in Metals and Mining.
Note it is under allocated by most investment programs, this gives it even more potential room to run, especially as inflation fears resurface &/or if US dollar weakens!
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, some investors 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 $1844 = Commodity FV: 1680 + Currency FV: 1812 + Inflation Metal FV: 1844 + Crisis FV: 2040.
INVESTORS: We will stay LONG in H2 2021 both as an investment and as a portfolio hedge.
4. SEASONED SPECULATOR picks: On…