We wrapped up the week on Talking Markets with our resident Coach Dale Pinkert. And, well:
… THERE IS NO NORM ANYMORE
“I think we could delete the word ‘norm’ from the dictionary,” Dale said. “There is no norm anymore.”
First up under Dale’s microscope was the Dow, which he said is currently “Niagara Falls.”
Dale says it’s now “very oversold,” but that “sometimes things get oversold or overbought and stay that way for a while.”
As for oil, Coach isn’t trading it here because he doesn’t want to take overnight risk in WTI, but he said that normally he’d be looking at it (chart above) as a potential failing rally, kind of like what silver did before it cracked.”
Then to the S&P, which Dale pointed out gave up its whole recovery to close at lows for the week:
6,540 is Dale’s next support line to look for the market to make a stand. He thinks the market is now beginning to price risk adequately “but it’s like an avalanche - it takes that one last snowflake.”
Still, retail continues to buy the dip, “because they’ve been rewarded for doing it forever,” Dale said.
ANOTHER CRISIS BREWING
While everyone is focused on Iran, Dale said there’s another crisis brewing - in private credit. Dale said BlackRock limiting withdrawals from one of its debt funds is a “big deal.” And the banks “have led this down,” he said. “Look at Citi, look at Bank of America - it’s almost saying financial crisis to me… There is something happening within the financial system that banks are worried about - and I don’t think it was just the move in crude.”
DXY UPDATE
The dollar has “exploded”:
Dale has been been looking for a move to 103 but he didn’t think we’d get so close to it so soon - he thought it would take months. And while he says that sometimes “you can’t define what’s leading what, I just think it has be oil.” As he said last week, “Sometimes crude and the dollar run together. I know everyone says it’s not a petro currency, but it sure acted like one this week.”
As for where it ends, Dale said he thinks the dollar will be a sell around 105. As ever, Dale thinks “the dollar is the fulcrum of the wheel. All other asset classes are the spokes that revolve around the fulcrum. A strong dollar pressures markets; a weak dollar lifts markets… So when the dollar turns, buy the world again… That’s probably when we have our melt-up, and that’s when gold and silver bottom.”
GRAINS
“Wheat is trading with oil,” Dale said. “It’s almost an identical chart.”
It’s been a massive move in wheat since Dale first mentioned it on Talking Markets. Because of the size of the move, even though he thinks it’s going to new highs, Dale said he recommended that people take profits on half their position on Monday (if you’re not in Dale’s Discord, here you go).
Corn and beans look great too, he said. Partly because of the Strait of Hormuz shipping problems, and partly (and potentially) because of El Nino, Dale he thinks the grain move is “just beginning… buy dips.”
DALE ON…
BONDS
“Bonds are on the verge of making new lows… The 10-year is on the verge of a breakout, and TLT is on the verge of breaking out.”
NVIDIA
It’s relentlessly “chop, chop, chop,” and Dale thinks “eventually we’re going to break down under $170 and could go to $140.”
CONSUMER STAPLES
Consumer staples is “normally where people go to hide,” but XLP had “kind of an ugly week,” Dale said. While he said he’d “probably buy it on a break,” he reconfirmed what he said last week - that there isn’t really anything he wants to be long right now.
AND FINALLY…
“It’s not illegal to liquidate and stay in cash,” Dale said. “You don’t have to rotate.”
Thank you Ravi, MP, and many others for tuning in live! We’ll be back Talking Markets on Monday with Blake Morrow, co-founder of Forex Analytix.
Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.
