THE LAST BULLS STANDING
The stock market is tiring and many indices have fallen in five waves suggesting that from a late August low, a bounce in September may be the last bull bounce. We have outlined many ugly background noises including China’s problems, higher interest rates that are not going to stop, geopolitical tensions and the end of the leftover free Covid money as people are spending and running up their credit cards. The banking mess will not go away either despite Yellen’s continual Pollyanna-like statements. By early October, you are going to have to make money with short stratetgies.
If there are last plays for longs, we are looking at late August pullback lows. Energy seems the safest and best play and you can add or buy this Wednesday on pullbacks. We like ETFs like USO and UGA for oil and gasoline as crude oil futures project 9150 into mid-August. Metals will have a final fall into August 21st but then look positive into early November so GLD, SLV and GDX for miners will do well. We also think Cryptos will come back into mid-September and later in the year.
There may be a few safe sectors to be long during September like XAR for Defense and Health Care is doing better than average so watch XLV. The DOW has been holding up the best and the ETF for the DOW DIA will be a buy at the August low for a nice run in September. Tech may come back also in September so we are always liking MGK for the Megacap techs. If you look around, most other sectors are starting to fail.
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For short-term traders and moderately active swing futures traders. Markets covered: S&P 500 T-notes Dollar Euro Gold Silver Crude Oil Bitcoin Futures.