Letting The Fed Be Your Friend

Screen capture via Twitter

Letting The Fed Be Your Friend

As Holger Zschäpitz noted in the tweet pictured nearby, global liquidity hit an all time high last week. The Fed opening the monetary spigot in the wake of the COVID Crash has weakened the dollar while fueling spikes in precious metals. As the renowned market technician Tim Knight put it, the spike in precious metals was an "F.U." to the Fed. 

Image via Twitter

Another way to think of it is as tailwind for you if you're long precious metals. If you're looking for precious metals names to consider now, we had four of them make Portfolio Armor's top names on Friday. Before we get to those, a quick note about how we select those top names, and their track record so far. 

Picking Our Top Names

Our system selects its top names by analyzing past returns as well as forward-looking options market sentiment on every security with options traded on it in the U.S., every trading day. That's a universe of about 4,500 securities currently. The names that make it to our top ten tend to outperform the market over the next six months. You can see final 6-month performance of all of our previous top names cohorts here.  

Our Top Precious Metals Names

Four precious metals names made it into Portfolio Armor's top ten names on Friday: the ProShares Ultra Gold ETF (UGL), the VanEck Vectors Junior Gold Miners ETF (GDXJ), the gold miner AngloGold Ashanti (AU), and the iShares Silver Trust ETF (SLV). 

Below is the full ten; readers of our previous post ("Amazon And Tesla: Insanity Defense") may recall that Amazon and Tesla were top ten names on Thursday as well. 

(Click on image to enlarge)

The top-ranked precious metals name there, UGL, was also the least expensive of them to hedge. Below are a couple of ways of hedging it in case we end up being wrong about it. 

In Case We're Wrong About UGL

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