FOOLS GOLD

On October 15^th in my last letter, I emphasized caution on the Trump/China drama and a potential pullback. While we dropped quickly around 150 points, we bottomed around 6500 (higher than I expected) and quickly resumed the path upwards on a classic Trump jawbone. No matter the path, we’ve come into a major target I’ve had for a while now – in the 6860-6900 range on the S&P. Today we have the FED, and later this week the much anticipated Trump/Xi meeting. Everything has been priced for perfection, which makes the market vulnerable here to another pullback.

The gap at 6830~, then the 6750~ area look like support for any selloff. I’ll be holding off on adding anything new until this week is done.

Last letter I emphasized a potential 100k~ test on BTC before higher. We tapped 103k, but didn’t quite get to 100k. My ultimate target is higher in the 160k~ range+, and heading into the catalysts this week, it’s not an easy read in the shorter term. For now risk is to the downside and that 96-100k level would still be a great buy, IF we got there.

On miners, the last newsletter was written on the 15^th for a reason – I saw an incredible confluence of both technical and date timing on the $WGMI index, which covers BTC miners/AI datacentre plays. I called for a correction, sold many of our holdings, and the index topped that day with over a 30% correction. It’s since put in an impressive recovery, but is not a sector I want to buy back into just yet.

In my last newsletter I emphasized how vulnerable precious metals were, and the likelyhood of a top. We ended up getting a $500+ correction in gold, and I think we can go lower before the move is done.

1. I mentioned the record high call buying in the GLD in the last newsletter – that is a sign of retail investors being wildly emotional. Those are the kind of traders that buy at peaks and are left “holding the bag”.

2. Did you also notice all the headlines about people lining up to buy physical gold around the world? That is a peak retail buying signal. Generally when something is pushed heavily in the media, one should consider doing the opposite, particularily in markets…

   Part of my goal in emphasizing these kinds of signals is teaching you how markets actually work, and how to look at them differently.

For now, IF gold were to get to the 3780-3800 level, I would consider a BUY. However I am letting the dust settle on this and happily sold many of my miners into the recent top. While this top call was incredibly precise, it would not have been an easy short either, simply due to the current cost of options…

Last week we filled the TGT Call option order (December 110C), I have a “target” on those shares of $100-105~ area before selling any of the calls. They should be up 3-4x once we get there.

On the watchlist for the coming days IF we pullback, is Block Inc. $XYZ. This is a crypto exposed payments processor Jack Dorsey built – It looks ready for a breakout.

For the rest of this week I am keeping the high cash I built in the last few weeks, and waiting for a potential shakeout/pullback in markets across the board. Risk is to the downside in the short term, and if we get a dip of substance, I’ll issue a short report with some buys.

Next week, I’ll dive into some narratives we’re likely to see in the rest of Q4 - the world of humanoid robots is about to hit the mainstream :). In the meantime, if there are any sectors or tickers you want charted, reach out to me here, or on twitter @WLinvestment.

TLDR;

1. I gave the EXACT top in $WGMI last issue, and the exact top in Precious Metals, both remain vulnerable to further downside

2. Xi/Trump Meeting, and the FED is PRICED IN, exercise caution here

3. Dips still to be bought but we need a good rinse 😊

Trades:

Nothing new this week – watching $XYZ (Block Inc)