Markets are feeling a little fragile at the moment, thus we’ve not produced many offshore trade ideas over the last few weeks. We do at least have one offshore short-term trade idea today that we think is worth looking at.
Some short-term offshore trade ideas for the week, focussed on the U.S. markets.
Gold and silver have been the talk of the town amongst most professional investors in recent months. With the Fed printing the dollar into oblivion, gold caught a decent bid and became massively overbought, along with its cheaper brother silver. Gold and silver sentiment became extreme and as you know, when the hysteria hits the market, it’s normally the end of the bull run. We have now had a decent retracement and believe that we can start looking at gold shares again for a bounce.
So, in the depths of the COVID gloom there was talk of a depression and stocks dropping another 50% from the lows. There was absolute conviction that you should not be buying. Now, after one of the most insane V-shaped recoveries we have ever seen, most analysts tell you to buy Apple, Tesla and anything tech-related as we have entered a new type of world. And yes, a V-shaped recovery… as most analysts say it isn’t happening, but it’s a clear V – as you see in the chart of the Nasdaq. Anyway, the consensus has swung from “don’t buy” when it was low to “buy everything” here and now? We disagree. We think it’s time to go risk-off.
Some of our U.S. trades ideas on GILD, INTC and NFLX.
The Index holding the largest amount of fast money shows that we are still above the famous 20 day moving average. It has now been tested numerous times, as well as, the upward sloping trendline that mirrors the 20 day.
We update our comments on the Nasdaq from earlier this week. We note that there are a few trends that look in danger of being broken.
Markets remain in a tricky situation. The strongest market currently, the Nasdaq, is the one that we are watching. If the QQQ ETF breaks $250, it’s our triple kill zone.
Another quick look at current market sentiment. We notice that the bulls are getting very excited about precious metals (both the Silver and Gold). At present, that is the only extreme we see out there.
Just a quick look at current market sentiment from early this morning. We note excessive bullishness on both the Nasdaq and Gold.