Wall Street Next Week: Financial astrology for the successful investor & trade

1. Sell in May? Sell in June?  Sell in August?

WSNW ALERT!  [Past]Time to Prepare for a Stock Market Correction

I don’t like when  ALL news is GOOD news!

No strong astro view next week only fundamentals & technicals

We recommend raising some cash, especially when nontaxable, lock in profits and protect.

MARKERS: 5/7/2021 MOC DJI 34714  SPX 4226 NAS 13715

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However, given there is mixed Astro in May albeit with bearish bias end of the month, 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 à 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          31242           27480          

SPX 4200        3756             3803             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:              > 1.50-1.75

TSLA:            < 695-666

VIX:               > 26

BTC:              < 30-38K

GME:*           <50-30

*Gamestop & stocks such as AMC [>5] or COIN [>250] 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 or under 1822-1816

Silver            Buy on dips or under $25

Copper         Overpriced > 4.50

Oil                Sell 66 OB   

 

KEY DATES:        May 19, 25-27, June 10 13-17, 25-28

DJIA:                    34800 PIVOT

SPX:                     42000 PIVOT

NASDAQ:             4000 PIVOT

GOLD:                  R1 1808 R1 1850 R2 1902 R3 1925

SILVER:               26 PIVOT R1 28 R2 30

OIL:                      64 PIVOT S1 60 R1 66

COPPER:             4.50 PIVOT R1 4.80 R2 5

US 10 Year:          1.60 PIVOT R1 1.75 R2 2 R3 2.20

CNY:                      6.50 PIVOT

DXY:                      90 S1 92 R1

VIX:                       18 PIVOT R1 22 S1 16

BTC:                       56 PIVOT R1 60K S1 52K

 

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 $1808

Reduce Risk and Focus on Capital Preservation:

THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK.

 

2. A Stock Market Crash May Be Coming: 5 Things to Do Now

HW: We agree with all five suggestions.

We should continue to see 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.  

 

3.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.

 

Gold: Fundamentally the global political and economic situation is very favorable for precious metals.

 

Precious metals remain favorite sections. Many generalist investors now have some interest 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!

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 $1808 = Commodity FV: 1650 + Currency FV: 1790 + Inflation Metal FV: 1760 + Crisis FV: 2032

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 well April on

 

4. May seasoned speculator pick AVIVAGEN

These high risk/high reward market picks 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 due diligence before deciding to act.