1. OCTOBER MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
5. ON THE WEB
1. Buy or Sell Markets? This depends on your time frame!
As traders we are liquid, positioned long but with Monday hedged.
Should the US/China Trade issues become happy midmonth, we can expect US & Chinese markets to approach and possibly take out YTD highs.
If so, thereafter we will then reduce and hedge until Thanksgiving.
If not, we will lay low until news OCO late November/early December for the classic XMAS rally (with some astrological help also from President Trump),
THE 64K QUESTION: WHITHER STOCK MARKETS NEXT: How High is Up? How Low is Down?
SPX 3030, 3057 or Higher? SPX 2850, 2800 or Lower?
Unless you closely track the horoscopes of President Trump, Chairman Xi AND Fed Chairman Powell, the RIGHT answer is probably unknown.
Note: We already tested 2850 so it is likely a SPX 3000 test comes next-- If Monday is down we will be buying.
We continue to modestly & selectively nibble long undervalued stocks as investors into a projected Fall/October rally to retest YTD market highs.
It is NOW possible the recent bottom IS in, but also possible it is not! There are several mixed scenarios possible.
Unless/until there is REAL US/China Trade deal progress, markets will continue be TRADING MARKETS.
IMHO “Improper” Valuations
US 10 Year Bond < 1.80
TIPS > 115
COPPER < 3.20
BITCOIN > 7500
GOLD > 1430
BP < 125
CNY < 7.08
FIRST EPISODE OF YOU BETCHA YOUR LIFE (SAVINGS):
Sell SP 2954, Sell 2945 KACHING: Both Covered 2840!
SECOND EPISODE OF YOU BETCHA YOUR LIFE (SAVINGS):
Sell SP 2888, Sell 2880 KACHING: 2812 & 2750 Buy Gold 1286, 1280 KACHING 1400, 1410
THIRD EPISODE OF YOU BETCHA YOUR LIFE (SAVINGS)
Sell SP 2954, Sell 2964, & 3000; KACHING Closed 2940 & 2925 & 2925 Buy Copper 270, 266 & 260
H2 2019 POSITIONAL TRADING:
Copper 274, 266 & [292 Copper open from H1 2019]
Sell SPX 3057+; Buy SPX 2860, 2900; Stop 2900
HYDE PARK SOAPBOX: The chameleon effect: Why investors need to understand the indices their passive ETFs track
PLEASE NOTE I WILL BE IN HONG KONG FROM OCTOBER 19 TO NOVEMBER 2.
I MAY OR MAY NOT BE ISSUING WALL STREET, NEXT WEEK NEWSLETTER THEN.
KEY DATES: OCTOBER 4-7
DJIA: 26500 PIVOT
SPX: 2950 PIVOT S1 2925 S2 2900 S3 2880 R1 2988 R2 3000 R3 3030 R4 3057
NASDAQ: 8000 PIVOT
GOLD: 1508 PIVOT 1430 SUPPORT R1 1525 R2 1550 R3 1566
SILVER: 17.50 PIVOT S1 17 S2 16.80 S3 16.50 R1 18 R2 18.50 R3 19.50
OIL: 52 PIVOT 50 SUPPORT 56 RESISTANCE
COPPER: STEADY ACCUMULATE: 2020 à 3.50+
US 10 year WATCH
BITCOIN: 8500 RESISTANCE 7500 SUPPORT
2018 CLOSE: DJIA 23327 SPX 2506 & NASDAQ 6635
2017 CLOSE: DJIA 24719 SPX 2673 & NASDAQ 6903
2016 CLOSE: DJIA 19762 SPX 2238 & NASDAQ 5383
AFUND Fair Value: GOLD $1405
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK.
2. BUSINESS & BANQUETS
Upcoming AFUND Luncheons Symposiums Oct 16 New York October 24 Hong Kong.
Stock selection remains important. We recommend buying stocks sporting strong cash flows, sound balance sheets and growing dividends.
Actively managed portfolios should continue to outperform index funds in current bifurcated markets and into 2020.
3. Copper is the most undervalued commodity we track.
It is a pawn of the US/China trade spat. Below 12/31/2018 close of 2.63 it is a STEAL.
Should CNY move back to 7, we can expect a quick retest of 2.80-3.00 OB! Above 7.18, it would be negative for Copper & select other markets
While Silver $20 & $25 is possible someday in the future, we do not see it short term. We do want to see lower prices, so we can again be on the long side. Ditto with Gold.
However, we note gold is generally under favorable astrological influences this year and next.
Gold bugs are happy now that more generalist investors are beginning to join the party:
Gold bull’s forecasts for $1500 were right [not by me] & calls $1600+ gold are frequent. However, we see it as too expensive just now.
We believe gold valuations will largely sport at or above Fair Value into the Year of the Earth Rat (2020).
Just as it was undervalued for a long time, it CAN and is likely to be overvalued for a LONG time. While fundamentally gold is currently overvalued, in much of the Fall, the astro is positive for gold.
We advise precious metal investors to pay attention to stock selection and only selectively add FALL 2019.
- 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!
Gold FV $1405 = Commodity FV: 1358 + Currency FV: 1388 + Inflation Metal FV: 1366 + Crisis FV: 1508.
INVESTORS: We plan to stay LONG in H2 2019 (recommending a precious metal sector buy/hold rating and occasional hedging, selling or profit taking).
However as traders we may periodically short gold $1510+. For silver our best selling numbers remain $18-20.
4. “The Fed paused.”
Chris Dillon, capital markets investment specialist, T. Rowe Price
HW: As well they should. If they use up all their bullets now, they will have no ammunition left in 2021. Lowering rates more now is THE WRONG THING to do!
“While the bears may take this [Friday Labor Report] as a further confirmation of a slower economy, it is actually a pretty strong read, especially when you factor in previous revisions.”
Mike Loewengart, vice president of investment strategy, ETrade Financial
HW: So Chicken little is wrong- the sky is NOT falling!
"Total S&P 500 buyback amounts seem to have peaked while the share of R&D spending has remained constant since the Great Financial Crisis."
Sean Darby, global equity strategist, Jefferies
HW: Another reason, we would be selling/hedging if/when SPX approaches 3050-3100.
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