MAY 13 T3

1) LIQUIDITY
2) SEMICONDUCTORS
3) VIX - Rare occurance

Episode Transcript

Speaker 1 (00:00):
Now here's your care for my wealth guy, Chris Klein.
Good morning, and welcome to another edition of what I
deem to be important. Three of those things here we
go liquidity, semiconductors, and volatility. Of course, so number one, liquidity,
it's just something that can really frustrate stock market payers.

(00:21):
And right now liquidity remains really really ample, and you
can find that out just by simply looking at what's
being held in money market neutral funds, which today is
two point nine trillion dollars. That's a lot, right, That
is a big money and plenty of buying power for
dip buyers if you will. Remember liquidity is the gas

(00:44):
in the engine for stocks, if you will, or investment
markets in general. Semiconductors. Why is that important? Well, the
stock market needs semiconductors, And recently I've commented that watching
SMH spy ratio, it just gives you an indication of
how semiconductors are doing against the S and P five

(01:05):
hundred as a whole. Watch that for strength. It would
be a good indicator that bulls were starting to regain
control of the market. And just recently this ratio broke
out to a bullish trend. In fact, that just happened
on May the ninth, and right now, after a really
strong move, a very short pullback would not be surprising,
but support at that breakout level would probably be likely.

(01:26):
So if you're watching the semiconductor sector, which is symbol SMH,
should a pullback come SMH catching support around two hundred
and twenty six dollars also would not be surprising. Last
thing's volatility. The previous closing low for vis VIIx for
this particular cycle was on March twenty fifth, and it

(01:47):
was at seventeen point one point four. And while right
now we're getting a lower low of sixteen point zero seven,
when you look through the lens of price, volume and volatility,
we also have a very very over sold condition that's
developing for vis as well. Now, does that mean that
it's going to shoot way up into the fifties again,
dropping the stock market indexes to test those lows? No,

(02:09):
not necessarily. The top end of the signal is now
all the way down to two to one point twenty two.
That's a pretty big drop from where it was just
two weeks ago. The inflation data that came out today
was super tame, so there's no real volatility catalyst there.
The next potential catalyst is going to come out on Thursday,
which reports PPI that's Producer price Index, retail sales, and

(02:34):
jobless claims. And if those catalysts turn out to be
viewed negatively by markets, well then the SMP probably could
see a bit of a pullback. But look for support
at fifty seven to twenty and then fifty five to
fifty five. Should fifty seven to twenty break, I don't
think it will. I think fifty seven to twenty is
going to be a good number. I think that there's
momentum that's building underneath this market, and that there is

(02:55):
a lot of catchup that has to happen by some
of the bigger players that currently work inside markets. One
other thing that I'll throw in here that could potentially
be helpful for those of you that are market historians
is that the VICS has fallen five straight weeks with

(03:16):
a total decline exceeding ten points. And if you think
about how that has impacted the S and P five
hundred over a period of time, historically, it's been really significant.
There's only been a handful of times where this particular instance,
five straight weeks of falling vics exceeding a total of
ten points. Has happened happened once on once starting March eighteenth,

(03:38):
twenty sixteen, once on March July twenty ninth, twenty sixteen,
once on January twenty fifth, twenty nineteen, and then April
twenty fourth, twenty twenty, July seventeenth, twenty twenty and now
most recently May the ninth, twenty twenty five. And when
you look out nine months, six months, nine months in
a year, let's give you three three dates. The average

(04:00):
which return for the SMP five hundred over six months
was twelve point twenty nine percent, over nine months was
nineteen point six four percent, and one year later was
twenty six point one seven percent. So amidst all the
bearishness in this particular market, the vast amount of negativity
that's being thrown at you through mainstream press faded. That's

(04:20):
not how markets work. The media is not your friend
when it comes to figuring out how to successfully invest.
So if you have any questions, give me a call.
Eight sixty six five nine six ninety eight eighty six.
Thanks so much for listening. God bless and have a
beautiful day.