Market Backdrop
My forecast model, built on cycle analysis, volume work, and historical seasonality, called for weakness at this time of year. The market shows the warning signs: divergence across the Dow transportation average, the midcap index, the Russell 2000, and the Dow industrial. These splits have flagged a coming correction for weeks. Worry over the midterm elections adds to it.
I have stayed cautious. Micron (MU) and Nvidia (NVDA) are being used to prop up the tape - Nvidia held up about 2.3% on a down day. When Nvidia buys back its own shares instead of investing in the business, that is financial engineering, and it makes me less impressed with the stock. Until the other indices, mainly the Dow transports and the Russell, show a clear positive divergence, be careful. Many people note September and October often bring corrections, so this may just be seasonality playing out.
Pick One: Bitwise XRP ETF
I am very bullish on crypto. Bitcoin put in a cycle top last fall and ran through the 6-to-12-month correction I expected. It has bottomed, and I look for new all-time highs above 126,000, maybe as high as 200,000, over a year or two.
XRP is a different animal - a new institutional favorite for payments, execution, and liquidity. It reached as high as $3.60 about a year and a half ago, fell to roughly a dollar a couple weeks back, and has turned up again. From around $1.50 now, my target is $26. That could take one, two, or three years, and even $26 may be conservative depending on usage and congressional action. There was a delay in the Senate on the Clarity Act, but the CFTC and SEC have moved to legitimize XRP and make it more useful. At $1.50 or lower, accumulate and hold. This is not a short-term day trade, though there have been good trades: XRP hit 99 cents recently, rallied to $1.59, and sits near $1.40.
You can skip the crypto and use an ETF - there are six or seven. My favorite trades under the ticker XRP, around $16.40 a share today. If I am right, that becomes a $50 or $60 stock, if not more, in the next couple years.
Technicals: XRP crypto sits at $1.48; the ETF is down close to 6% today, with all cryptos lower (the coin itself down about 3.25%). The chart shows a rising wedge between two white lines. The first red line at 17.30 is key - price topped there several times, recently broke above, and now sits just below. The second red line at 22 marks a January gap. To the downside, $14 is a relative low and the trend-line base, with a gap from 12 to 13.30. The 20-day simple moving average (olive) meets the 200-day (purple) near 15.90, giving support. RSI is trending lower but holds above the 50 midline. A break above the downward trend line is the bullish trigger; a break below 50 is bearish. The volume profile shows a heavy node from 15 to 16.50, point of control at 15.33, and an upside resistance pocket from 20.80 to 21.80.
Pick Two: Gold
My big-picture gold target is 38,000, maybe as high as 140,000, over four to six years. The math: US debt is unsustainable. The country spends roughly a trillion a year on Social Security and defense and pays two trillion a year just on interest. Take the 40 trillion in real debt and divide it by the 261.5 million ounces the US government supposedly holds, and you get about 152,000 an ounce. Apply a 25% settlement using only a fraction, and the lower target comes out to 38,240.
There is real talk of revaluing gold. Dollar weakness is a given while rates are suppressed. Secretary Bessent has been buying bonds, possibly up to 660 billion. The government cannot afford over 5% interest on its debt. Recall 1980: under Volcker, rates surged to 20% and gold still surged to $800. Higher rates are not bearish for gold. Today's drop looks technical, possibly manipulation - gold has been suppressed for decades, with court cases and the GATA record to check.
If gold does not hold the 3,900 area it could reach 3,600, but that is irrelevant given the numbers I expect. Miners like Newmont (NEM) are printing money at these prices and Newmont pays a nice dividend. Accumulate and nibble here; if it slips into the 3,600-3,700 range, add. Gold is a hedge against the debt, dollar weakness, and government mismanagement, and the ultimate safety asset. Silver is a similar play, but gold is the clean one. I have been buying since 1100 in 2021, so this is more than an 800% move higher from there.
Technicals: The blue upward trend line broke after price failed to top the prior highs near 4760 (the pink top line). A downward channel formed between two white lines. Today's drop pushed below the first red line at 4285. The shape resembles a head-and-shoulders - left shoulder near 4500, head at the highs, then decline - though patterns are not guarantees. First support is the green line at 3960; below that, the 52-week low of 3785.50 from a year ago. Price sits under the moving averages, the key one being the 251-day EMA (one trading year) at 4269. RSI is below the 50 midline and nearing the 30 oversold mark. The volume profile is heaviest from 3970 to 4113, point of control 4044, where bulls could find a foothold.
Pick Three: SpaceX (SPCX)
SpaceX trades near its first-day opening price. My target is 165 to 170. There was decent news today on the SpaceX 14 liftoff. Support sits around 135-136, the original public deal price. This is one of my favorite trading stocks - it moves 5 or 10 points and offers good intraday swings. I am positioned long for a move through the 155 high into the mid-160s toward 170. A sharp correction to the mid-130s is possible, but I am not betting on it; there is too much good news ahead and the charts lean more positive than negative. The stock is cheap, and some institutional analysts project $200 to $1,000 a share over the next few years.
SpaceX launched its Starship rocket into orbit for the first time and released about 26 satellites - a success.
Technicals: The 130 level (second green line) lines up with the high after a downside gap and later lows. The second red line at 157 marks a break above recent highs. The upper red line at 172.40 is an old high from late June. Price hangs near the 20-day simple moving average while drifting below its upward channel; the 50-day sits at 136.40 below. RSI holds above 50. Volume runs from 136 to 158, point of control 150.29. If price pushes well above 155, expect fast moves given the thin trading history. Despite the historic launch, the stock traded lower today, down about two-thirds of a percent with the broader market.
