Coach Dale was right out the gate on Talking Markets yesterday, saying “sell silver, buy oil” about 10 seconds into our session.
Let’s dig in…
THE OIL BULL CASE
Regular viewers will remember that last week, Dale said he was looking at a target of $78 a barrel.
There was a setback for the thesis this week as President Trump backed off the idea of any military action in Iran, but as of now that doesn’t change Dale’s thesis.
Key factors supporting his outlook include:
Geopolitical Risk: Dale highlights the potential for Iran to take preemptive action, noting that a move above $78 would likely signify a major event, such as a blockade of the Strait of Hormuz.
Potential Supply Chain Disruptions: He points to tankers diverting from the Panama Canal as evidence of a supply-side shock.
Technicals: Describing himself as a “buyer of breaks,” Dale is looking to scale into positions as long as oil holds the $57 support level. His primary long-term objective remains $78.
Overall, Dale sees this as a contrarian trade that “climbs the wall of worry.” He follows the logic of “buy the rumor/worry, sell the fact,” suggesting traders should “ring the register” and take profits if actual kinetic military events cause oil to gap higher. Ultimately, he warns that an oil shock to $78 could be the “nail in the coffin” for economic strength, as “almost every recession starts with an oil shock.”
THE SILVER BEAR CASE
As ever, time horizons matter massively here. Here’s why Dale is bearish on silver over the next couple of months:
US Dollar Strength: Dale is bullish on the US Dollar (DXY), anticipating it will reach levels around 103. He expects this dollar rally to pressure all metals, including silver.
Gold-Silver Ratio: He points to the gold-silver ratio, which dropped nearly 50% from highs of 110. Describing this decline as “parabolic,” he expects the ratio to bounce, causing silver to underperform gold.
Technical Divergence: Silver peaked at a 1.618 extension and is showing “glaring divergence” on daily and four-hour charts. Using Elliott Wave theory, Dale suggests silver is completing a third wave and is due for a “fourth wave pullback” to wash out excessive market enthusiasm.
Dale predicts a significant pullback to approximately $60, and potentially as low as $57, to find support. However, if that happens, he sees it then blasting through $100 or more.
DR COPPER AILING
Dale says copper is his “preferred short” among the metals, noting that it exhibits the “most bearish weekly pattern” in the sector. .
His bearish conviction is driven by a technical “third drive to a top” and a glaring divergence from other metals. While gold and silver surged past major multi-year or all-time highs, copper merely struggled back to its pre-tariff levels before failing. He anticipates a “pretty good correction” toward support between $5.00 and $5.20, with the potential to drop further.
Dale’s macro case for “Dr. Copper” (which he notes has a “PhD in economics”) rests on stalling global growth. He argues that rising energy prices will force consumers to “pull in their horns,” leaving them with less discretionary capital and creating a “nail in the coffin” for economic strength.
There’s a sentiment element to the bear case too: “A lot of people bought copper because they thought it was becoming a precious metal,” Dale said.
DALE ON…
CHINA
Dale is bearish on China, saying it “might be the best short on the board right now,” because the FXI has failed to make a new high since October, and potential global contagion if the US market corrects.
GOLD
Dale see gold’s rally as being in its "eighth or ninth inning,” and foresees a potential pullback to $3,600 before it rallies to $5,000. He believes gold is currently completing a "third wave," warning that any further short-term "pop" would likely create a "glaring divergence" rather than a sustainable new leg higher in the short term.
MAG 7 + TECH
Dale tracks the MAGS ETF, which he says looks “lousy” right now. While S&P and Russell are making new highs, MAGS looks like it’s “on the verge of a breakdown.” Elsewhere in tech, Dale said there is a “lot of damage” in leaders like Broadcom and Palantir, while the semiconductors are currently outperforming.
Aaaand that’s a wrap on a hectic week. Have a fantastic weekend.
Thank you Michael Hughes, DJ, thong doan quoc, PNWtom, Etienne Delagrave, and many others for tuning in live…!
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.
