Nick Santiago: Top Trade for 2021, Where Gold is Headed This Year

TL;DR

2021 is expected to be a highly volatile year for the markets, with a potential peak in euphoria and speculative buying. Market strategist Nick Santiago suggests that owning volatility and shorting the market can be profitable strategies. He also sees opportunities in gold and silver, with a focus on physical metals and gold miners.

Transcript

i'm charlotte macleod with the investing news network and here today with me is nick santiago chief market strategist at in the money stocks thank you so much for being here online with me today oh it's great to be back thank you for having me of course so let's jump right into our questions before this interview i was reading through some of your ... Read More

Key Insights

• 🙊 2021 is expected to be a volatile year for the markets, with a potential peak in euphoria and speculative buying.
• 🙃 Opportunities lie in owning volatility and shorting the market, as well as trading gold and silver.
• 🙈 Physical precious metals are seen as the ultimate insurance policy against economic uncertainties.
• 💰 The US dollar is expected to strengthen in 2021, despite current bearish sentiment.
• 😮 Bitcoin's parabolic rise is likely to experience a correction.
• 💪 Copper has been a strong commodity, but caution is advised due to its elevated price.
• ⌛ Understanding charts and time frame analysis is crucial for successful trading.

Questions & Answers

Q: Why do you believe that 2021 will be one of the most dramatic years for the markets?

The markets have been rallying since 2009, and we are now in a parabolic phase. Historically, the one year of a decade is always volatile. Additionally, there is froth in the market, a dash for trash, and a surge in speculative buying.

Q: What opportunities do you see in 2021?

I believe that volatility will be the trade of the year. Owning volatility and shorting the market can be profitable strategies. Buyers should give themselves enough time for the trade to play out.

Q: What is your outlook for gold in the shorter term?

Gold has had a parabolic rise, but a correction was expected after surpassing the all-time high. I think there is more backing and filling to come, and I would be interested in getting long gold around the $1700 level.

Q: Do you recommend investing in gold or silver equities?

Physical metals should be owned as an insurance policy. However, gold and silver equities can be traded and have provided great opportunities. Timing and waiting for the right patterns and levels are crucial for profitable trades.

Q: What can we expect for the US dollar in 2021?

Despite prevailing bearish sentiment, I believe the US dollar will appreciate. It has been hit hard but is bottoming out. The dollar's appreciation is also related to the rise of bitcoin.

Q: What are your thoughts on the parabolic rise of bitcoin?

Bitcoin has had an incredible move, but anything that goes parabolic is bound to come back down. When everyone is on the same side of the boat, it's time to get to the other side. I believe it's time to cash in on bitcoin.

Q: Are there other commodities that interest you heading into the new year?

Copper has been a standout commodity, but it is currently too high on the charts. Waiting for a correction and pullback in copper before considering new positions would be wise.

Q: What is your best advice for investors entering the market?

Understanding and learning the charts is crucial. Charts provide footprints of human nature and can predict market moves. Taking courses and learning from experienced traders can be a good starting point for new investors.

Summary & Key Takeaways

• 2021 is predicted to be a volatile year for the markets after a decade-long rally, with potential euphoria-driven peaks. Speculative buying and a dash for low-value stocks indicate that the market may be reaching a top-heavy state.

• Market opportunities in 2021 lie in volatility, with potential gains by owning volatility and shorting the market. Giving oneself enough time for the trade to play out is important for options traders.

• Gold and silver are still attractive assets, with a correction expected after a parabolic rise. Nick Santiago looks for a pullback to around $1700 before getting long on gold. Silver is seen as even more attractive than gold currently.

• Physical precious metals are seen as the ultimate insurance policy against central bank money printing. While equities of gold and silver mining companies can be traded, owning physical metals is recommended.

• The US dollar is expected to appreciate in 2021 despite current bearish sentiment. Santiago believes that the dollar is bottoming out and will strengthen again.

• Bitcoin's parabolic rise is seen as unsustainable, with a potential correction expected. Santiago advises caution and believes that it is time to sell bitcoin.

• Copper has been a standout commodity, but a correction is needed before considering new positions.