Watch Gold, Leave Silver Alone

It is time to update the charts as gold triggered the former valley of $1765 last Friday.

The U.S. dollar index (DXY) opens this post.

Dollar Index

Most of you agreed last month with the plan that the dollar index will extend its consolidation to the upside, making a zigzag first to the downside and then to the upside with the target area between 91.40 and 91.80 (blue box). The former was your favorite goal, and it was hit with a margin as the price reached 91.60 at the top of this month. Continue reading "Watch Gold, Leave Silver Alone"

Disney - 146 Million Streaming Juggernaut

The Walt Disney Company (DIS) expects its Disney+ streaming platform will have up to 260 million subscribers by 2040. The company continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. The company has been posting phenomenal streaming numbers that have thus far negated the COVID-19 impact on its other business segments, specifically its theme parks. Disney has had to shutter all its worldwide Parks and Resorts, and ESPN has been hit with the cancellation of virtually all sports worldwide. There have been ebbs and flows with reopening efforts across the globe with mixed results followed by rolling lockdown measures. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. This streaming bright spot, in conjunction with the optimism of its Park and Resorts coming back online, has been a perfect combination as of late, especially with the vaccine rollout picking up steam.

Disney+ has racked up 94.9 million paid subscribers, Hulu has 39.4 million paid subscribers, and ESPN+ has 12.1 million paid subscribers. Collectively, Disney now has over 146 million paid streaming subscribers across its platforms (Figure 1). Disney+ has been wildly successful via unleashing all of its Marvel, Star Wars, Disney, and Pixar libraries in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts versus the success of its streaming initiatives, with the latter winning out. Thus far, its streaming success has changed the narrative as its stock has broken through all-time highs and nearly breaking through $200 per share. Disney is a compelling buy for long-term investors as its legacy business segments get back on track in the latter part of 2021 in conjunction with these successful streaming initiatives.

Disney
Figure 1 – Streaming initiatives across its platforms with over 146 million paid subscribers in total

Post Pandemic

Disney’s business segments will inevitably recover as the pandemic Continue reading "Disney - 146 Million Streaming Juggernaut"

Yellen Calls For More Stimulus

The stock market was on the move higher in early trading Friday after Treasury Secretary Janet Yellen said a large Covid-19 relief package is needed for a full recovery in the U.S. However, it has slipped to a mixed-mode as it headed into afternoon trading to close out the week with the DOW gaining roughly +48%, the S&P 500 and NASDAQ fighting to stay in positive territory for the day.

Yellen told CNBC Thursday after the bell that more stimulus is necessary even as some economic data suggested a rebound is already underway. She added a $1.9 trillion stimulus deal could help the U.S. get back to full employment in a year. Continue reading "Yellen Calls For More Stimulus"

World Oil Supply And Price Outlook, February 2021

The Energy Information Administration released its Short-Term Energy Outlook for February, and it shows that OECD oil inventories likely peaked at 3.210 billion in July 2020. In January 2021, it estimated stocks dropped by 15 million barrels to end at 3.030 billion, 127 million barrels higher than a year ago.

The EIA estimated global oil production at 93.95 million barrels per day (mmbd) for January, compared to global oil consumption of 93.89 mmbd. That implies an oversupply of 60,000 b/d, or 1.9 million barrels for the month. That implies non-OECD stocks dropped by 17 million barrels.

For 2021, OECD inventories are now projected to draw by net 86 million barrels to 2.959 billion. For 2022 it forecasts that stocks will draw by 24 million barrels to end the year at 2.935 billion.

Oil

The EIA forecast was made incorporates the OPEC+ decision to cut production and exports. According to OPEC’s press release January 5, 2021: Continue reading "World Oil Supply And Price Outlook, February 2021"

Gold Could Be Setting Up For A Breakout

There has been quite a bit of chatter related to precious metals lately. The rally in Cryptos, particularly Bitcoin, and various other stocks have raised expectations that Gold and Silver have been overlooked as a true hedging instrument. As these rallies continue in various other stocks and sectors, Gold and Silver have continued to trade sideways over the past 6+ months – when and how will it end?

Gold Support Near $1765 May Become A New Launchpad

My research team and I believe the recent downside trend in Gold has reached a support level, near $1765, that will act as a launching pad for a potentially big upside price trend. This support level aligns with previous price highs (May 2020 through June 2020) after the Covid-19 price collapse, which we believe is an indication of a strong support level. As you can see from the Gold Futures Weekly chart below, if Gold price levels hold above $1765 then we feel the next upside rally in metals could prompt a move targeting $2160, then $2400.

Gold

The February 2021 Gold contract expires on February 24 – only a few days away. The CME Delivery Report shows an incredible amount of contracts already giving notice of a “Delivery Request”. This suggests that on or near February 25, a supply squeeze for Gold and Silver may become a very real component of price. Continue reading "Gold Could Be Setting Up For A Breakout"