The big question about America is how much more money the Fed can print while the government runs a program of borrowing money to infinity… before hyperinflation turns the fading empire into a fire pit.

The debt-themed empire is in tatters already, but it has yet to become an inferno. The world watches aghast, as Americans blow each other away on the streets and the government loses yet another war (this time Corona).

The big caveat is that if the Fed keeps the stock market levitated and races to the rescue after each crash, the US empire train somehow doesn’t completely derail.

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US stock market chart

After a Fed-juiced rally from my key 21,700 and 18,300 buy points for investors, the Dow has stalled out at my first sell point of 27,000. 

Can Fed chief Jay once again save the stock market day, as states like California close big parts of the economy again?

Ominously, the start of my annual stock market “crash season” (Aug 1-Oct 31) is now just two weeks away. 

Whether the stock market breaks higher or lower from here is likely to be determined by the number of state closures and the response (or non-response) to those closures by the Fed.

Because it’s an election year, the Fed is likely to “fix” any breakdown.

I don’t see the Dow going to a new low this year, but a scary pullback to the 22,000-23,000 range could occur.

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important GDX chart

The short-term outlook for gold stocks may appear shaky after yesterday’s hard sell-off, but the strength of gold bullion and the “Fed Fix” are supportive factors.

These two price drivers could create one of the most spectacular buying opportunities in the history of gold stocks.

The uptrend is intact. Tactics? We sold all leveraged gold-stock ETFs last week. In the short-term, we are focused on holding just modest positions in some big senior producers.

If GDX can trade above the recent $39.44 high, we’ll rebuy NUGT and JNUG, but with Corona-related closures accelerating, and the Fed yet to act, I want to see the market prove itself. 

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Gold is technically solid, and there are numerous lines of support just below the current price.

The recent breakout above $1800 was important, and the ensuing pullback is orderly.

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SIL silver miners ETF chart

A lot of amateur investors don’t understand that while the price of a stock making a new minor trend high demonstrates great market strength…

 A modest pullback soon after making that high is usually the next price action that occurs.

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My most recent key recommendation for investors who want senior silver production and mid-tier gold production has been Fresnillo (FNLPF). The stock soared higher yesterday, while most big miners swooned. 

A key mantra for gold-stock traders is this: Sell trading positions when the mood is joyous and account profits are great. That time is now for companies like Fresnillo.

Core positions need to be held with an iron hand and accumulated on a break above GDX $39.44, or during the current price dip. 

The bottom line: This gold market is sound, and investors can confidently hold their ground!