Monday, July 22, 2024

♟ If You're Worried, Here's the Play

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"If a worried population is a given, then gold and silver names could remain in-play for an extended period of time."

Bryan Bottarelli, Head Trade Tactician, Monument Traders Alliance

Bryan Bottarelli

Let's rattle off some of the recent Wall Street worries.

First and foremost, we have political uncertainty heading into November...

Then, of course, we have the ever-present suffocating debt levels...

Combined with continuing inflation concerns...

And don't forget the never-ending wars/geo-political escalations happening around the globe...

Then most recently, we're faced with the threat of global IT outages - and the impact those can have on everything from our banks to our airlines to our grocery stores.

Each day, when you turn on the news, there's something new to worry about.

It almost seems like there's a new worrisome news event lurking around every street corner.

That's why I underlined one specific quote in this week's newest issue of Barron's.

It simply said...

"If You're Really Worried, Consider Gold"

Historically speaking, gold is the very best way to hedge against market volatility.

How has this been working lately?

In short... very, very well.

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Year to date, gold is up +22%.

If you're looking to own one of the very best gold stocks, consider Newmont (NEM).

Year to date, NEM is up +14%, which is trailing the performance of gold - which makes the case that NEM could be undervalued at current levels.

Newmont an Undervalued Gold Company
 

Another safe-haven play could be found in silver.

Year to date, silver is up +18% (which is 4% behind gold's performance).

If you're looking to own one of the very best silver stocks, consider Wheaton Precious Metals (WPM).

Wheaton One of the Top Silver Stocks
 
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YOUR ACTION PLAN

No matter what happens in November, we're going to be faced with a situation where half of the voting population (which is among 75 million people, give or take) who will be very worried. If a worried population is a given - which I think it is - then gold and silver names could remain in-play for an extended period of time. That's why NEM and WPM continue to sit atop my metals wish list.

Right now we're positioned on a unique metal play in Catalyst Cash-Outs.

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MONDAY MARKET MINUTE

  • Trading the Political News: Just so we set the proper expectations, the stock market does not pull for one political candidate versus another. Markets do not have political preferences. However, as traders, we do bias certain positions that should benefit (or suffer) under various forms of leadership. Therefore, we could see an unwinding of the red trades that we've benefited from recently. Tracking.
  • Oil Winners Under Republican Leadership: If we still end up seeing a red wave in November, this would prove favorable for old-school oil names like Exxon Mobil Corporation (XOM) and Halliburton (HAL). The "super-majors" will benefit because they'd benefit from a delayed-response to EV's and renewables - which would keep oil and gas demand stronger for a longer period of time.
  • Small Caps Keep Shining: As I'm sure you know, the iShares Russell 2000 ETF (IWM) has been on fire lately - and here's why I think that'll continue. If the Fed comes through and actually cuts rates this fall - and into 2025 - then small cap stocks will benefit. Why? Since smaller companies are far more impacted by interest rates, any and all relief will have a dramatic impact on their bottom lines - which could trigger sharp upside moves.
  • Boeing production on the upswing: The planemaker said it is seeing a significant improvement in production flow at its 737 MAX factory, as the U.S. planemaker battles to overcome a safety crisis, according to Reuters.

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