JUNE 10

1.) OIL - RE-flation
2.) NOISE - What trade deals?
3.) VOLATILITY - CPI tomorrow = Vol bump?

Episode Transcript

Speaker 1 (00:00):
Now here's your chare for my wealth guide Chris Cline,
Good morning to how to invest wisely. Today's three things
are oil, noise, and volatility. Number one, Oil, what are
we seeing. We're continuing to see this broadening of this
part of the economic cycle with oil and the Russell
two thousand leading yesterday, both of them recent trend breakouts.

(00:22):
Oil broke above trend on June fifth. The Russell two thousand,
which is a small cap segment, did that on May twelfth,
with a successful test of that trend on May twenty third.
I never remember, and I always have to repeat this
when you hear trend. It is not a single factor
moving average. It's not one input. It's a rate of change,
which means there's a calculus to it of price, volume

(00:43):
and volatility over a period more than three months. Okay,
it's important to remember that this morning is day number
four of oil confirming its bullish trend, with support now
at sixty three dollars a barrel for West Texas intermediate crude.
The reflation in things is becoming more and more obvious.
You've got potatoes and orange juice up twenty seven and

(01:04):
twenty two percent in the last month alone, respectively. So
pay attention to the fact that we're getting a re
emergence of this inflation, but don't get freaked out by it.
Risk assets tend to do well when both growth and
inflation are accelerating together. From it's from its its base, right,

(01:25):
So in other words, it's comp it's year over year data.
If we get that acceleration on a year for year
basis or sequentially quarter over quarter, you're going to see
an intermittent bout of bullishness when those two things happen.
So just recognize it's going to be unfortunate to fill
your car because it's going to be more expensive. But

(01:47):
at the same time, if you have exposure to oil,
you'll make some money. Okay. Noise. Look, there's always so
much noise in the system that investors want to listen
to because they think it's moving markets. Case in point,
the US China trade talks. I'm telling you it's pure noise.
There's been no real progress. We're still at square one.

(02:08):
And look, this is not a political statement. For those
of you that have been reading or listening to my
Morning Notes for years, know that when it comes to investing,
I do not care about the political narrative. But after
the April market crash, Trump's team realized it needs the
market up to avoid political and business pressure, so they've
been pumping out more or less fairly empty kind of

(02:31):
feel good headlines, just enough to keep the algos calm algorithms.
But there's nothing that's super real underneath. So this particular
issue noise is just to remember to ignore it. Ignore
the noise. If you're hearing it on TV. It's mostly
all noise anyway, so one less thing for you to
think or worry about. VIX volatility. So there's some complacency

(02:55):
showing up in short term calendar volatility. It's now down
to thirteen point eight two head of CPI data coming
out tomorrow, which wuld be Wednesday. Vic's daily trade range
is from fourteen seventy seven to twenty ninety two, with
trade resistance at twenty three and continuing to decline. What's
it all mean? We just could see a bout of

(03:15):
volatility depending upon what CPI does. It could be a
buy the room or sell the news event. When it
comes out, the benign data is going to cause people
to go, oh, we're positioned wrong, but it's probably going
to be a short lived if we do get a
bout of volatility, since dealers are still positive gamma, which
tends to equal lesser volatility. Bull Markets come with these

(03:39):
occasional bouts of volatility, and the noise of the day
is what's going to get blamed when all it is
is dealer positioning. So ignore the noise. Think about how
your positioned based on what volatility is doing and where
its range sits. And if you need more data on that,
just reach out to us info at carefromiwealth dot com
or the old fashioned way eight sixty six five nine

(04:00):
six ninety eight eighty six. Thanks for your time and attention.
I hope you have an amazing day. God bless