WALL STREET, NEXT WEEK FEBRUARY 11, 2019;
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER
- FEBRUARY MARKETS
- UP STARS/DOWN STARS
- GOLDEN OPPORTUNITIES
- ON THE WEB
- MARKET RESEARCH
1. DJIA: 26K before 24K? - 74% current odds.
The odds favor markets will continue to rally more than fall until at least the until first round success of the US/China Trade War given Trump aims for a 'very big deal' with China ahead of March 1 deadline However, we repeat:
Unlike 2018, Markets in 2019 will NOT be easy to forecast - requiring both alonger investment horizon AND a shorter trading one!
- WE BELIEVE US MARKETS WILL CLOSE HIGHER IN 2019 than 2018! Additionally,
- We expect it to continue TRADE ABOVE ITS 2017 CLOSE – DJIA 24719 SPX 2673 & NASDAQ 6903 - below them are obvious trailing stops as well as
- Be defensive H1 2019 (esp. Q2); Be more aggressive H2 2019.
Our 2019 recommendations:
- Be Selective - Stock Picking will outperform Index Investing
- We continue to recommend trailing profit stops and hedging, raising cash and/or writing calls to promote sound sleep.
- New trades & investments best in Long/Short Pairs in H1 2019
Four major concerns we are watching AHEAD OF A MAY CORRECTION
- The market’s short term reaction to trade wars progress;
- China Internal & External response to its 2019 Saturn influence;
- The May FOMC meeting anticipation & reactions;
- US geopolitics games & potential global swan events
WE THINK MARKETS WILL CONTINUE TO REACT POSITIVELY NEAR TERM, BUT THERE IS CONSIDERABLE RISK WITH SUCH A BET.
HENCE WE ADVISE INVESTORS TO BE LARGELY CONSERVATIVE & DEFENSIVE, ESPECIALLY Q2 2019.
DJIA 24, 719+
IMHO “Improper” Valuations
US 10 Year Bond < 2.70
COPPER < 3.20
BITCOIN > 2500
GOLD < 1375
SILVER < 18
February, like January, is potentially an up month but also with potential major hiccups: given a positive Q1 US economy [1.8%+ growth] but a mixed horoscope for President Trump in H1 2019.
DJIA, NASDAQ & SPX can rally as THE US TRADE WARS ARE WON and especially since the FED signaled it is taking it foot off the breaks [as forecast]!
Remember our Trading Plan: Not to short aggressively before SPRING 2019.
Sell Oil 73.50/Buy Copper 2.95
Oil unwound 68.00 Resold 72.50 Unwind 64 Long 50 Sell 54
Sell Oil 74.00/Buy Copper 2.83
Oil unwound 66.20 Resell 74 Unwind 66 Long 50.50 Sold 55
Sell Oil 73.33/Buy Copper 2.75
Oil unwound 68.20 Resell 76 Unwind 68.65 Long 46 Sold 52
Buy Gold 1188/Sell BTC 6380
Buy Gold 1182/Sell BTC 6650
Buy Gold 1196 /Sell BTC 7370
Long Copper 2.70/Short BTC 6666
HYDE PARK SOAPBOX: Political Risk Remains Dominant Factor For the Stock Market
ON THE ROAD IN MARCH:
We will be at PDAC IN TORONTO & 121, AFUND as well as MINES & MONEY in Hong Kong and possibly AFUND Singapore.
MARKERS DJIA COPPER SPX NASDAQ SILVER GOLD BONDS OIL BITCOIN
KEY DATES: February 14, 19, 22 March 1/2, 29
DJIA: 24719 SUPPORT 25000 RESISTANCE
SPX: 2700 PIVOT
NASDAQ: 6965 SUPPORT
GOLD: 1300 SUPPORT 1310 PIVOT R1 1325 R2 1350 R3 1365
SILVER: R1 15.50 R2 16 R3 18
OIL: 52 PIVOT S1 52 S2 50 S3 48 R1 55 R2 58 R3 60
COPPER: STEADY ACCUMULATE: H2 2018-2019 à3.50+
US 10 year WATCH
BITCOIN: 3800 RESISTANCE S1 3400 S2 3300 S3 3000 S4 2500
The Market Marker remains some cautious concern.
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 $1369
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: HEDGE AND PROTECT AGAINST DOWNSIDE RISK.
2. BUSINESS & BANQUETS
This past week we attended several interesting analyst presentations of companies that we will be watching and potentially buying circa 52 week lows OCO post May Markets: ChemBio Diagnostics (CEMI), IDT (IDT), RestorBio (TORC) & Urovant Science (UROV).
However, we will do little in February until seeing more about the market’s reaction to Trump, corporate earnings & progress of CHINA Trade talks.
We continue to recommend Maximum Allocation to precious and base metal investments for the intermediate and long term, given that the precious metal sector and copper are obviously very undervalued!
On the plus side there are lesser headwinds from US interest rates rising as well as less competition from MMJ & Bitcoin “investors”.
A $1350 target test was close; we are happy to see Goldman Sachs give it a $1425 price target. Still, we see both astrological and seasonal headwinds short term. We advise patient precious metal investors to pay attention to stock selection as a slowly rising tide does not float all boats equally.
- 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 $1369 = Commodity FV: 1340 + Currency FV: 1368 + Inflation Metal FV: 1368 + Crisis FV: 1400.
Gold/Silver ratio à 75 Silver FV $18+.
INVESTORS: We plan to stay LONG in 2019 (recommending a precious metal sector hold rating and only hedging and/or selling Q2 or profit taking).
We remain disinclined to short or sell until gold is overvalued e.g. $1415-1450. For silver, our first selling numbers remain $19+.
However, after the Chinese New Year, some hedging or profit taking/protection will not be unwarranted:
We advised Traders in our 2019 Market forecasts, BUY FEB 2019 GOLD; THEN SELL JUNE GOLD & BUY DEC GOLD
- “It’s [March] a pivotal month from a geopolitical standpoint.”
- Randy Frederick, vice president of trading and derivatives, Charles Schwab
- HW: You betcha!
"Earnings are coming in good -- we're seeing over 15 percent growth -- but there are some concerns about the next quarter that growth is going to be pretty close to zero."
Karyn Cavanaugh, senior markets strategist, Voya Investment Management
HW: 1.8% (1.5-2.5%) IMHO.
“The advantage of joining a [South Arica] rand monetary union would be that it would foist some much-needed discipline on the Zimbabwean economy.”
Tendai Biti, former Zimbabwe Finance Minister
HW: I believe it would be a wiser approach for a fixed basket combination of US$, Rand and RTGS$.
5. The Stock Market: A Look Ahead
Think the stock market will rally once a U.S.-China trade deal is struck—think again, says one Wall Street vet
Why Bonds Keep Doing The Unexpected
6. Where Policy and Markets Have Been, Where They're Headed
7. THIS LEFT INTENTIONALLY BLANK
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