Key Tactical Takeaways:
> As we get ready to give thanks, I am so incredibly thankful for my health and my amazing wife that has stuck by me as I try to build Extract Analytics into a trusted and recognized name. In addition, I am thankful for your support during this journey.
> The growth/value ratio has now rotated below our line in the sand, signaling a sustainable reversal in favor of value (see page 9).
> As USO approaches ..., some tactical profit taking will be warranted. This report will stay long, however, against ....
> A GRADUAL rotation from Bitcoin to gold is expected to begin in the days-weeks-ahead.
> This report's tactical QQQ short was stopped out on Tuesday. Don't be surprised if it's put right back on, though.
Some Quick Thoughts:
You may recall that back in the early part of summer, I tried to get long Bitcoin via GBTC (Grayscale Bitcoin Trust), but was stopped out due to a strict adherence to a volatility-based protection system. I do not profess to be an expert on the space; however, I am a big believer in the blockchain’s potential and an even bigger believer in the generational favoritism that Bitcoin enjoys over gold. I mention this because as Bitcoin sits with a gain of 170% for 2020, it's nearing a test of the 19,666 all-time high, after recently satisfying 2 important Fibonacci-based extensions off of the March lows. If this starts to make the move to higher highs increasingly sticky into year-end, I like the idea that some of that money will start to move into gold as gold's 200-day line now enters the picture at $1800. Remember, this is a long-term smoothing line, so slippage to $1750 is still possible before gold's next major bottom forms.
A quick check up on oil reveals that "black gold" has likely reached sustainable upside escape velocity after Tuesday's surge to new post-crisis highs. If you bought USO when it was added to the trade ideas sheet on 11/10, some tactical profit taking is warranted on the approach to USO .... Long-term, though, the fact that Russian equities are rotating out of a base relative to the S&P 500 hints that oil can continue to trend higher well into 2021.
When it comes to equities, those of you that have been following me this year know that I am a contrarian that understands full well the risks of betting against a manipulated market. Before I end today's note with some heart thoughts (below), think about this for a moment. As the great rotation from growth to value is producing some wonderful trading and investing opportunities, you'll be hard-pressed to find some of the top minds on Wall Street who base this bull market action on anything other than the fact that things are so bad in the real economy that it is actually good for stocks. Now that the joining of the Fed and Treasury will essentially be complete with the appointment of Janet Yellen's expected appointment as Treasury Secretary, we'll all be forced to play the game that, deep down inside, we also know will end very badly one day. Stocks can never go down, say the sheep.
Lastly, as we get ready to give thanks, let's not forget the countless people who have been taken from this world far too soon by this deadly virus, as well as the millions of people who are newly out of work due to no fault of their own. For me personally, I am so incredibly thankful for my health and my amazing wife that has stuck by me as I try to build Extract Analytics into a trusted and recognized name. In addition, I am thankful for your support during this journey.
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