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Last month I was wondering “Is It A Trap?” for the top precious metals, referring to the short term bounce that we have been observing.
Bears have smashed the silver price badly below the former valley. Hence, I would start the update with its monthly chart below.
Source: TradingView
Silver futures topped around the $21 mark the same day the previous update was posted in the middle of August and then it dropped like a rock to the downside.
The price already drills down the largest Volume Profile (orange) support as it entered the $16-$18 range. The peak volume was registered at the $17 level in the monthly chart. Below $16 the support weakens and further down below $14 there is a volume support gap.

I built the black downtrend with a red mid-channel in this big chart above. We could visually distinguish the first drop (large left red down arrow) from 2011 to 2015. The following huge corrective structure emerged during 2015-2021. Now the market could build the second leg down. The mid-channel support is located at $13.5, right below the above mentioned lower volume area.
We can mark the lower supports for the future. The Flash-Crash valley is at $11.6 fortified with the all-in sustaining costs located at $10.9. The valley of the distant 1991 at $3.5 is the next possible support.
Bulls should push the price outside of the downtrend beyond $27 to turn the tables.

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Before we get down to the gold futures chart, I would like to update the U.S. 10-year Treasury yield (10Y) chart posted last March in the “Wake-Up Call For Gold” post. That post was prophetic for several markets as thoughts shared then start to play out now.
The 10Y impacts the gold price strongly as we saw earlier, therefore it is crucial to demonstrate the big picture.
Source: TradingView
The 10Y had been moving down within a huge red downtrend since 1994. There were two false breaks: the minor breakout in 2007 and the larger one in 2018. The mid-channel (red dashed) started to act as a strong support in 2015 as the yield never crossed it down since then. The last episode was in 2020 when this support rejected the huge drop and the price reversed to the upside.
The 10Y eyes to surpass the current resistance based on the former top of 3.25%. There was a puncture of this level earlier this summer, however the price dipped back down below and it fueled the recent short term bounce of the gold price.

The next barrier is at 5.32% or over 200 basis points higher. The Fed is still under pressure over inflation. Last week, Cleveland Federal Reserve Bank President Loretta Mester (FOMC member) said: “My current view is that it will be necessary to move the fed funds rate up to somewhat above 4 percent by early next year and hold it there; I do not anticipate the Fed cutting the fed funds rate target next year.” In this context, the next hurdle for 10Y above 5% looks achievable.
The more efficient the fight with inflation the worse it is for precious metals acting as an inflation hedge.

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The gold futures chart is the next.
Source: TradingView
There are three things in the chart that instantly catch the eye. The 10Y (gray) and the gold futures price move in sync in the opposite direction – as soon as yield reversed up the gold dropped. The second thing is the accurate price action on the 52-week simple moving average (purple) – the growth of the price has stalled right there. And the last observation is the Volume Profile (orange) – the price couldn’t overcome the large volume area.
The gold futures price has dropped deeply, but is still above the black trendline support and the former valley of $1,678. The momentum of the truth is very close both for gold and for 10Y as they approach the barriers simultaneously.
The price is already in the volume gap area as no significant levels are seen until the nearest support of $1,500. Earlier, your largest bet was that $1,500 will hold. Another $200 down and the price will reach the large volume area at $1,300. The die-hard support is located in the valley of 2015 at $1,045 where the possible large sideways consolidation could be completed.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Investors may want to keep an eye on discount retailers, like Dollar General (DG).
For one, the latest pullback may be a great buy opportunity.
If you take a look at this chart, you’ll notice that Williams’ %R, Fast Stochastics, and RSI are all starting to pivot well off oversold conditions. With patience, I’d like to see the Dollar General stock retest $260 resistance, near-term from $241.65 support.

Source: MarketClub
Two, while other major retailers take a hit with inflation, Dollar General is rising because of inflation. In fact, we can see that with the company’s recent earnings report. Not only did Dollar General report second quarter EPS of $2.98, which was better than the expected $2.94 a share, sales were up to $9.4 billion, same-store sales were up 4.6% as compared to expectations for 3.9%. The company even increased its same-store sales forecast to a range of 4% to 4.5% for the fiscal year, from a prior call for 3% to 3.5%.
Three, wealthier people are now shopping at dollar stores because of inflation.
According to Business Insider, Todd Vasos, CEO of Dollar General, said on a call with analysts that the store saw a rise in higher-income households shopping there, “which we believe reflects more consumers choosing Dollar General as they seek value.”
Plus, we have to realize consumers are “trying to make ends meet, and when you have limited funds in your wallet, the dollar stores provide the ability to do that,” added Joseph Feldman, a senior analyst at Telsey Advisory Group, as quoted by The New York Times.
In addition, analysts seem to like the DG stock, as well. Guggenheim analyst John Heinbockel reiterated a buy on the stock. Piper Sandler raised its price target on DG to $273 from $265. Raymond James raised its target price to $285 from $160. Morgan Stanley raised its target to $270 from $250. Deutsche Bank says Dollar General is one of the few stable retailers.  

Plus, Dollar General will also pay a dividend shortly. On August 23, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.55 per share on the Company’s common stock, payable on or before October 18, 2022 to shareholders of record on October 4, 2022. 
All things considered, investors may want to use recent DG weakness as an opportunity.
Ian CooperINO.com Contributor
The above analysis of Dollar General (DG) was provided by financial writer Ian Cooper. Ian Cooper is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Ian Cooper expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

A few weeks ago, I asked if you believed the current rally was here to stay. At that time, the market had been rallying since the middle of June. Some market participants were calling the June low ‘the bottom.’
Time will tell if June was the bottom, but based on what has happened over the last two weeks of August, I am betting that we have not yet seen the bottom.
Let’s review quickly what just occurred. The Federal Reserve’s President, Jerome Powell, told the country that there would be “some pain” in the coming months. Powell also said that the Fed would “keep at it until the job is done,” referring to getting inflation under control.
Powell didn’t detail how severe the pain would be or how businesses and households would feel it. Still, I think it is safe to say that Powell acknowledges we are likely heading towards a recession.

The market’s reaction to Powell’s comments sent the S&P 500 down 9.2% since the August 16 high of 4,327. The NASDAQ is down 11%, while the Dow Jones Industrial Average is off by 8.2% since August 16.
Not only is the NASDAQ down double digits, but the exchange-traded funds that track the major indexes, The SPDR S&P 500 ETF (SPY) and the Invesco NASDAQ QQQ ETF (QQQ), are both now trading below their 50-day averages. That is in addition to them already having given up their 200-day, 100-day, and 20-day moving averages.
Furthermore, economist after economists, jumped on the ‘recession is imminent’, bandwagon this past week. Most of these economists have even pointed out that the Federal Reserve has miscalculated the intense inflation we are experiencing.
They were referring to when the Fed told us back in the spring that the inflation we were experiencing at that time was “transitory.” The Fed was wrong about that, and it is unlikely that the Fed members want to be wrong again by underestimating the persistence of current inflationary causes.
Due to their previous missteps, many believe the Fed will not take its foot off the gas quickly enough. This makes it unlikely the economy will experience a soft landing which we have been hearing about over the past few months.
And if you don’t know the opposite of a ‘soft landing’ in economics, it’s a recession.
I believe now is the time to start preparing your portfolio for a long-term move lower. There are a few ways you can do that. The first and most straightforward way is to sell everything you own and get cash. If the market tanks another 10-20%, you will not have to worry. You are in cash.
I am not a huge fan of that strategy since history has proven that it is unlikely you will get back into the market in a meaningful way to take advantage of the rebound, whenever that may occur.
What I propose you do, is hedge your portfolio against a downturn. Don’t sell anything you own, but buy some exchange-traded funds that will allow you to profit from a falling market. I detailed several ETFs that you can use to do this a few weeks ago. These products will all increase in value as the markets decline. Therefore if you own one or more of them while the rest of your portfolio is decreasing in value, these ETFs will be gaining value.

I suggest that investors have somewhere between 10-25% of their portfolio hedged when it appears we are heading towards a recession. This hedge will allow you to sleep a little better at night.
It will give you the peace of mind that while your portfolio is losing money, it is not as bad as it could be if you didn’t have the hedge. It will also give you the confidence to hold your long-term positions, especially if things get ugly because we all know that selling during those tough times is always the worst time to sell.
As I mentioned, now is the time to start building your hedging position. Start small and slow, but at a minimum, consider what you want to buy and how large of a position you want. The market has not yet completely cracked, so you still have time to put the hedge on.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

It’s been a volatile month thus far for the S&P-500 (SPY), with the index starting the month up nearly 5% before giving back all of its month-to-date gains.
This sharp reversal should not be surprising, given that the 200-day moving average is often a strong area of resistance for the general market when it’s in an intermediate downtrend.
From a fundamental standpoint, the give-back also makes sense, given that little has fundamentally changed with the Federal Reserve still laser-focused on stamping out inflation, regardless of the collateral damage caused by its hawkish stance.
(Source: Twitter, ND Wealth Management, Steve Deppe)
Given the weak performance, the market is now on track to close August down more than 10% year-to-date, which has historically led to further drawdowns in all cases. In fact, the median forward draw-down over the following twelve months was 15.5%, and even using the best four case drawdowns, the average twelve-month forward draw-down was 5.5%.

History doesn’t repeat itself, but it often rhymes, and assuming the S&P-500 closed at 4000 for August, this would point to a drawdown to 3380 between now and summer 2023, or a best case drawdown (average of four smallest draw-downs) to 3780. With even the best-case scenario points to a meaningful downside, caution remains warranted.
The good news is that it’s a market of stocks, not a stock market. Even in intermediate bear markets, investors can enjoy alpha by hunting down the best growth names that exhibit unique relative strength characteristics.
With many FAANG names down over 50%, finding stocks in intermediate uptrends is challenging, but there are a few stand-out names that also have impressive growth metrics. This combination is a recipe for success in all markets, and in this update, we’ll look at two names that fit this bill:
Driven Brands (DRVN)
Driven Brands (DRVN) prides itself on being a one-stop shop for comprehensive car care and has a portfolio of brands that include Maaco, Meineke, and CARSTAR, as well as Take-5 Oil Change, 1-800 RADIATOR & AC and Driven Brands Car Wash.
Maaco and Meineke provide auto repair, paint repair, and other maintenance/repair services, while CARSTAR focuses on collision work, and Driven Brands Car Wash is the world’s largest car wash company, cleaning 35+ million vehicles per year. This makes Driven Brands the leader in the automotive aftermarket and the US’s largest automotive franchise (4,400+ stores).
The company was founded in Charlotte, NC; it has a market cap of $5.2 billion, went public in Q1 2021, and has held its ground since. In fact, it’s up 17% from its IPO debut in a period when the Nasdaq-100 (QQQ) has lost over 5%.
The outperformance can be attributed to the company’s strong earnings growth and its relatively recession-resistant business model, given that car repairs are more of a need than a want. Meanwhile, though car washes are discretionary, they do not break the bank.
This recession-resistant business shone in the most recent quarterly results, with quarterly earnings per share up 40% year-over-year to $0.35, while sales soared 36% to $508.6MM. On a full-year basis, DRVN is expected to grow annual EPS by 36% ($1.20 vs. $0.88), with double-digit growth on deck in FY2024 as well.
However, the most impressive part about the stock is its relative strength, which shows that it continues to outperform the S&P-500 by a wide margin, and the stock is above all of its key moving averages.
(Source: TC2000.com)
If we look at the chart above, we can see that DRVN’s relative strength line (bottom pane) continues to trend up vs. the S&P-500, suggesting that the stock may be under accumulation, evidenced by its ability to shrug off general market weakness.
In addition, the stock looks to be building a 30+ week cup base since the start of the year, and while we often see breakouts from cup-shaped bases in bull markets, the typical scenario is that handles or pullbacks on the right side of the base emerge in bear markets for the S&P-500.
I believe a further handle-building period would be a bullish development, given that it would allow DRVN to re-test its rising moving averages and shake out any weak hands. So, for investors looking for growth with momentum at their back, I see DRVN as a name worth considering on any pullbacks below $29.15.
Staar Surgical (STAA)
The second name worth keeping an eye on is Star Surgical (STAA), a mid-cap stock in the Medical Devices Sector best known for developing, patenting, and licensing the first foldable intraocular lens [IOL] for cataract surgery.
However, the company’s newest product that recently received FDA approval in the United States appears to be the real game-changer from a growth standpoint. This is its Visian Implantable Collamer Lens [ICL], a proprietary biocompatible Collamer lens material that’s implanted behind a patient’s iris, designed to treat myopia, hyperopia, and astigmatism.
For those unfamiliar with the benefits of its ICLs sold by Staar Surgical, it is that they allow another option for those looking for freedom from glasses/contacts with minimally invasive surgery and with no corneal tissue removed.
This is superior to LASIK eye surgery, given that it allows flexibility for future operations and can treat thin corneas, unlike LASIK, which is permanent due to corneal tissue removal. So far, the demand for the product is quite strong, and the total addressable market is massive, with over 100 million adults being potential candidates for its EVO ICLs.
Staar reported revenue growth of 30% ($81.1 million vs. $62.4 million) in Q2, despite limited marketing for its EVO ICLs, given that the FDA only approved them in March. On a full-year basis, the company is on track to report 28% revenue growth, or a 2-year average revenue growth rate of 34.5%, having to lap 41% growth last year.

If we look out to FY2026, these industry-leading growth rates should be maintained, with revenue on track to increase 168% from FY2022 to FY2026 ($782MM vs. $294MM). However, this will have an outsized impact on its bottom line, with the EVO ICLs having higher margins than its current product mix.
Based on what I believe to be a fair revenue multiple of 14 and FY2024 revenue estimates of $472MM, I see a fair value for the stock of $139.60 (18-month price target).
(Source: TC2000.com)
While the fundamental story is rock-solid with accelerating earnings growth on deck, the stock’s relative strength makes it stand out. As shown above, STAA is also building a cup & handle base, saw significant accumulation with 2x average volume four weeks ago, and has given up ground grudgingly in the recent market correction.
Meanwhile, it continues to make higher highs vs. the S&P-500, suggesting that it’s under accumulation. So, like DRVN, if we were to see further market weakness, I would view this as a buying opportunity for STAA.
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing.

For the dividend-focused investor, nothing is better than one of your stocks announcing a dividend increase. So you can be assured that this Seeking Alpha headline caught my eye: 100 REIT Dividend Hikes.
Investing for dividend growth is a sure-fire way to build your wealth over the long term. The article explained that 100 real estate investment trusts (REITs) had increased their dividend rates so far in 2022. Last year there were 120 rate increases in the REIT sector.
This many increases bodes very well for one of my favorite investment strategies…
REITs own commercial properties or invest in real estate-related debt securities. The Nareit includes 213 publicly-traded REITs in its All REITs Index. These companies operate as pass-through businesses, which means they don’t pay corporate income taxes as long as they pay out at least 90% of net income as dividends to investors. The REIT dividend rules make the sector a good place to look for attractive dividend-paying stocks.
A few years ago, I researched the returns from growing dividend stocks. I found that investors earn an average annual compound total return that, over the long term, will be very close to the average dividend yield plus the average dividend growth rate.

For example, if an REIT (or shares of any stock with growing dividends) has an average yield of 4% and the dividends grew by an average of 10%, investors in that stock will have seen a 14% compound annual total return.
While the shorter-term market cycles will pull returns above and below the expected results, owning a dividend growth stock for ten years or more will push the returns very close to mathematical expectations.
When researching dividend growth stocks, look first at the historical dividend growth rate. You want to see the average growth rate and how many years the company has been increasing its dividend. For example, industrial property REIT Prologis, Inc. (PLD) has increased its dividend for eight consecutive years with an average of 10.5% dividend growth. Add in the current 2.5% yield, and you have a low-teens return potential.
I like putting together a list of growing dividend stocks with the yields, growth rates, and how long the dividends have increased. With such a list, you can create a portfolio of stocks with the most attractive total return potential.
It’s an approach that can fast-track your retirement by increasing your income by up to 108% in just seven months.
Once you invest in this type of stock, you must watch the annual dividend growth rate to ensure the company keeps increasing the payout to meet your expectations. If the growth rate slows, you should consider selling and replacing that stock with better total return potential.

National Storage Affiliates Trust (NSA) is one of my recommended REITs, having grown its dividend rate by almost 15% over the last six years. NSA yields 3.5%, putting the total return expectation close to 20% per year.
Hoya Capital Real Estate put out the article referenced above. The firm launched its own fund, the Hoya Capital High Dividend Yield ETF (RIET), a year ago. The fund invests in the REIT sector for a combination of high current income and dividend growth. The current yield is 6.9%.
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About the Author
Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory focused on creating a high-yield income stream, Weekly Income Accelerator, a covered call trading service, and for investors looking for long-term total returns from their income investments using stocks with ever-growing dividend payments, he offers Monthly Dividend Multiplier. Prior to his work with Investors Alley, Tim was a stock broker, a Certified Financial Planner, and F-16 Fighter pilot and instructor with the United States Air Force. During his time in the service he was stationed at various military locations in the U.S., Europe, and Asia. Tim graduated from the United States Air Force Academy with a degree in mathematics. In his free time he tours the United States parks, campgrounds, and wilderness areas in his travel trailer.