Wall Street next week: Will bad news still be “good news” in 2021?

1. WILL BAD NEWS STILL BE “GOOD NEWS” IN 2021? (Bring on more Stimulus packages!)

2. Despite market record highs we do not see GOOD JUSTIFIED FUNDEMENTALS (Fed accommodation, Vaccines & Stimulus Packages vs SP500 22-26X earnings).

3. Our recommendation is maximum portfolio protection into February.

Many analysts recommend sector rotation: Many 2020 winners are not likely to outperform as well in 2021.

Regardless of your risk preferences, precious metals should shine Q1 2021 as gold has moved back to old trading range of 1850 to 2000!

MARKET WATCH

12/7 MOC: DJI 30069 SPX 3691  NAS 12519

VIX: 22<>23

OIL: 48<>50

TSLA: 704 S1 660 S2 630  R1 720  R2 934

BTC: 29.5K  R1 30K  R2 36K  S1 28K S2 26K S3 22K

MARK YOUR CALENDAR KEY DATES

Jan 4/5, 20/21

Commodity Trading

Gold +  Astro  Trading Buy on dips $2000 Coming AGAIN by Chinese New Year P1 1925 P2 2000.

Silver + Astro is mildly positive  R1 30

Copper 3.40-3.65   Intermediate term target achieved.

Oil $45-52   Intermediate term target achieved.   

HYDE PARK SOAPBOX: bitcoin-price-kevin-oleary-regulations-institutional-investors-weep-cryptocurrency

KEY DATES:       January 4/5 20/21

DJIA:                   30533 PIVOT S1 30000 S2 29800 S3 29500

SPX:                    3750 PIVOT S1 3666 S2 3600 

NASDAQ:            12850 PIVOT

GOLD:                 1880 SUPPORT R1 1900 R2 1925 R3 2000

SILVER:               24 SUPORT  30 RESISTANCE

OIL:                      46 PIVOT R1 50 R2 52

COPPER:            3.50 PIVOT R1 3.60 R2 3.80 R3 4.00

US 10 year           WATCH +/-

CNY                      6.50 <>6.66 DUAL PIVOTS

DXY                      90 PIVOT

VIX                       22 <>23 DUAL PIVOTS

2020 CLOSE: DJIA 30606 SPX 3756 &  NASDAQ 12888

2019 CLOSE: DJIA 28508 SPX  3231 & NASDAQ 8823  

2018 CLOSE: DJIA 23327 SPX  2506 & NASDAQ 6635

2017 CLOSE: DJIA 24719 SPX  2673 & NASDA 6903

AFUND Fair Value  GOLD $1715.

Reduce Risk and Focus on Capital Preservation:

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

2. -5-dangerous-bubble-stocks-dont-be-bag-holder

We continue to recommend well protected portfolios into February: SELL/STOP STOCKS you wouldn’t buy at current prices, write Covered Calls & reduce margin/raise cash levels.

Keep a list of stocks to buy AFTER a correction.

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.

Otherwise, we plan to only selectively add stocks in Q1 2021 in our favorite sectors e.g. precious metals, mining and entertainment.

The Contrary View

On  three fronts – political, economic, and health – some uncertainty remains, yet many Wall Streeters profess bullish sentiments.

But the question for investors is whether the uncertainty is rising or falling, and if falling across all three categories – a good sign for stocks.

HW: Time will tell.

Favorite Q1 2021 Sectors

Entertainment, Mining, [Cyber] Security & Technology (Undervalued & Highly Scalable).

Currently we are watching Select Health Care (lower cost/better outcomes & Distressed Investing (New).

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.  

4.  3. “Gold has not gone up because there is a global epidemic, but because global liquidity has shot up.”

5.  Adrian Day, head, Adrian Day Asset Management

6.  HW;  We are in the camp the bull case for both precious metals and base metals becoming stronger 2021.

7.        

1.Despite being overvalued, owning gold and silver into the Chinese New Year should reward investors .

Given newbie gold 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!

Conservative investors would accept $2200-2300, while more aggressive gold and silver bugs previously replaced their previous 2000+ gold targets with 2500-3000+; silver $30 to $50.

Silver $24 support with $30 overhead resistance. Many analysts expect $30 Silver & 2000 gold by 2021 Metal Ox Chinese New Year.

There are so many good buys in the precious metal space depending on your time frame & risk/reward desires.

See WSNW & recent AFUND luncheons, conferences & Webinars [Past Webinars have been posted on our YouTube channel] for some investing ideas that may be nicely profitable upcoming in 2021.

Next up: AFUND Mining & Entertainment Investment Picks for 2021 Webinar Tickets, Mon, Jan 11, 2021 at 12:00 PM | Eventbrite

Gold: Fundamentally Indian & Chinese demand should grow coupled with high global investor interest.

Gold & Silver will remain favorite sections into Q1 2021 with longtime Gold bugs happy that more generalist investors are joining the party:

In addition, many major brokerage houses have keep ~$2000+ price targets in 2021.

Given 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 keeps falling!

We believe gold & silver valuations will largely sport well above Fair Value into the Year of the White Metal Ox (2021).

While fundamentally gold is currently overvalued, silver is currently closer to Fair Value. Just as they were undervalued for a long time, it CAN and is likely to be overvalued for a LONG time.

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 very positive for gold as well as low global bond yields makes gold an attractive alternative risk mitigation hedge.

We expect the gold/silver ratio ~73 to drop ~63 as global economies & clean energy demand improves in 2021

We expect precious metal stocks to outperform physical gold & silver in 2021.

Gold FV $1715 = Commodity FV: 1600 + Currency FV: 1710 + Inflation Metal FV: 1600 + Crisis FV: 1950.

INVESTORS: We plan to stay LONG in Q1 2021.

Note: Our current Fair Value for Silver is $24-$26. 

4. Shortly we will begin a new feature: SEASONED SPECULATOR. This will generally be a very high risk/high reward market pick.  These picks are for speculative allocation, recommended to be bought in groups of 5 to 10 stocks. Position size 10%-20% of your speculative allocation, i.e. “money you can afford to lose without altering your life style.”

5. “This is overall a market that’s setting the stage for 2021 and looking at an economy that is going to normalize, albeit at a probably slower pace than initially projected,”

Quincy Krosby, chief market strategist, Prudential Financial.

HW: For sure.

"We are going to continue to see a push higher."

Peter Essele, head of portfolio management, Commonwealth Financial Network's

HW: How high is Up?  How soon reality?

"The market, overall, does not seem overbought."

Tim Ghriskey, chief investment strategist, Inverness Counsel

HW: Appearances can be deceiving, can they not?

6.look-past-this-santa-claus-rally-and-see-how-januarys-stock-market-return-could-affect-all-of-2021

cry-gold-cry-wolf

stock-market-pros-are-having-a-tough-time-imagining-an-s-p-500-slump-in-2021

1. 7.READER: Should I buy the correction of Tesla?

2. HW: While it has tested $500-550, you must believe it is the great company since sliced bread

3. You don’t mind P/E > 1000

4. READER: Thank you. I didn't know PE > 1000

5. HW: Currently 1349 [1209 when asked].

6. READER: Are you saying Gold to return to $2000 before lunar new year? I should sell it as soon as it hits 2000? 

7. HW: Depends on whether you are holding gold as a trade or a hedge.  If the former, sell or stop.  If the latter, NO.

READER: During 2021 do you see copper possible for $4.00/lb?

HW: Possible, have no real view except now in 3.40 to 3.65 trading range and copper has good fundamentals.