Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Now here's your chare for my wealth guy, Chris Klein
this morning and happy Friday. So today's top three things
the things on my mind. And I know that some
of these might sound repetitive over and over and over again,
but when you're dealing with macro items trying to work
through market cycles, there is some repetition in what's important.
(00:22):
And so today's important three things are going to be rates, gold,
and then volatility. So for rates, could we have just
experienced an honest to goodness headfake and long term rates?
Maybe it's starting to look that way. Actually, you know, hey,
the markets will always do whatever is necessary to make
the most amount of people look like a monkey. So
perhaps I got to look like a monkey from yesterday's conversation.
(00:45):
I don't know. We'll see. The US tenure Treasury yield
is now testing these trade ranges again that I had
talked about, and it reversed yesterday's clear cut breakdown. So
what do we know? We have? Number One, we've got
higher lows on the signal, and again that's rate of
change of price volume and volatility of rates themselves. The
signal needs to cut back below four percent for a
(01:06):
lower low to be signaled, and I'm not seeing that
right now. Number two, a higher high would be signaled
if the actual yield breaks above or excuse me, if
the signal breaks above four point five percent. That closing
level of yields for the tenure treasury was set on
April eleventh. Number three, we've got to bounce off of
(01:29):
intermediate term trend at four point one seven percent. So
yesterday it cut it, but it didn't hold it. So
we need to make sure that we're actually cutting that
level before we really start to see interest rates collapse
to the downside. And right now we're not seeing that.
So number four, we've got a scenario where a drop
(01:52):
is now being shown in rate cut expectations. Now, why
did rate cut expectations get slack in fed Fund's futures trading?
And when I mean slashed, I mean cut down to
a one percent probability. Now, it's because this morning non
farm payrolls came out and they came out stronger than expected.
(02:12):
The report came out at one hundred and seventy thousand jobs.
Expectations consensus, if you will, was for one hundred and
thirty thousand jobs. But here's the real kicker with all
this job stuff. The last month's number was revised down
from two hundred and twenty eight thousand to one hundred
and eighty five thousand, and the month before that was
revised lower two. So even though we're seeing a reduction
(02:34):
in government payrolls, which was to be expected based on
what's happening with Doge Dog Department of Government Efficiency, we're
just continuing to see a fairly resilient labor market. And
when you've got a resilient labor market, the FED is
not looking at that as a cutting environment. We would
(02:55):
have expected today's jobs numbers to actually be considerably lower
than what they are. Figured it'd be a negative print.
But you know, surprise, surprise, the government data can sometimes
come in and just throw you a loop. Now is
it accurate? Again, you don't trade off of government data.
If you do well, then you know you're likely to
(03:15):
make some problems along the way. But, like I said,
let's just see if we can get the ten year
treasury to break black back below four point seven that's trend.
If it breaks below that, then we certainly are going
to see lower interest rates in the near term, presuming
it can hold that level. So again, four point one
seven percent for the US tenure Treasury is an important
(03:37):
important level for interest rates. Gold. Gold is doing what
we thought it might do, and that could be a
slight bounce, but it's still trading below its intermediate term
trend level of roughly thirty two ninety nine. That's a
pretty strong resistance level. Now this is trading the third
day below that level. When we tend to see things
(03:58):
trade three days below at the resistance level, it increases
the probabilities that the next level of support gets tested.
And that next level for gold is down at thirty
one to fifty. That's three and fifty dollars an ounce.
So let's see what happens. But right now it's giving
us this this trading aspect that it wants to test
(04:21):
the thirty two ninety nine level. If it can break
back above that thirty two to ninety nine level today,
well then it won't have a total of three days
below that intermediate term trend and it will negate the breakdown.
Pretty simple things change, you know, and the things with markets,
you know, that's that's really crazy. That is very very
sometimes very hard for people to get their head around,
(04:43):
is that this is the only business in the world
where you have to change your mind sometimes not just
in the same day, but sometimes in the same hour.
That can be very weird for people. Now, as an investor,
we want to elongate that mind changing capacity as much
as we can so as to not get headfaked. Right, So,
we're still of the belief that in terms of interest rates,
(05:05):
they ultimately are headed lower. However, we're testing people's patients
right now by not allowing a breakdown through that trend
level that I talked about. We're starting to test some
people's patients with gold because, as I mentioned in yesterday's report,
back in the beginning of April, Google searches for how
to buy gold were through the roof, and so therefore,
(05:27):
you know, more likely than not a lot of retail
buyers went out and bought a lot of gold. So
wouldn't it just be like a market to completely frustrate
retail investors. Yeah, it would, Okay, last thing is volatility VIXX.
This is the SMP five hundred standard volatility matrix. And
what have I got, Well, we've got day three of
(05:50):
a buy signal on vix and day one of a
buy signal on VVIX. Excuse me, day two of a
buy signal on VVIX. And what is that. Well, VVIX
is just simply the out of the box volatility of
volatility indicator, right, it's just going to give us an
indication of how much volatility is actually in volatility. So
(06:11):
what's likely to come next, Well, a couple of things
are happening. First of all, we're seeing lower highs in
the signal for VIS it's down to eighteen forty five.
We continue to see lower highs for VVIX, it's down
to one oh nine spot thirty seven. These are all
very good things, right, It would not surprise me, even
(06:33):
all that being true, it would not surprise me to
see VIX try to test the top end of its
current trading range, which is at twenty seven. If it
breaks above twenty seven, it'll want to test thirty two.
If it does that, the stock market is going to
have a bad day. But if it does, it's more
likely than not a biable opportunity. Again, we can't forget
(06:54):
about that Zweig breadth thrust that was initiated last week.
It is powerful, it does have very very good history
behind it. And so for now, what we've got, we've
got volatility just continuing to break down, getting to the
point where it may be a little bit over sold,
and people might want to increase protection, And as they
do that and they buy protection, it increases VIX, and
(07:15):
VIX goes up and taps the top end of its
range at twenty seven and probably fails. That's the likelihood
of what we see now. But we'll see what next
week brings. We'll see how the day trades, and will
continue to make adjustments as necessary and needed. However, we
do have a fairly bullish stance at the moment. We
do for our diversified portfolios have continued increased amounts of
(07:40):
seven to ten year treasuries along with approximately a grand
total exposure of about forty nine fifty one percent in
US and international equities, and for our more AGGRESSI accounts
that's much much higher than that all the way up
to for those who use leverage one hundred and forty percent.
(08:00):
So do we think that we could see a higher
market going into the end of the day, yep. Absolutely.
Do we think it's possible that next week could give
us an additional pop higher yep? Is it possible we
could see the market pullback some? Yes, But the first
line of support for the S and P five hundred
is going to be at fifty five twenty, and if
(08:22):
it taps that, chances become fairly good that it wants
to hold and that we start to see an increased
movement from there. If it doesn't hold, well, then we
just have to see if it makes another higher low.
And if it makes a higher low, which would mean
a closing price higher than fifty one fifty eight, we'd
be in good shape. And right now the signal suggests
(08:44):
that would be a true statement because the current signal
is trading at on a low end, fifty three to ten.
Fifty three to ten is higher than fifty one to
fifty eight. I know, signals and prices and all that
stuff can get confusing, but all we're simply doing is
utilizing a rate of change of price, volume and volatility
to be a leading indicator for us on how markets
(09:07):
are reacting to the overall global movement of money and
the flows of capital as they trade through markets. So
that's that. If you have any questions, feel free and
reach out Info at carefromwealth dot com, Info at carefromwealth
dot com, or the old fashioned way eight six six
five nine six ninety eight eighty six eight six six
five nine six ninety eight eighty six. Thanks so much.
(09:30):
I hope your weekend is RESTful and blessed, and we'll
talk to you soon. Bye bye,
Now here's your chare for my wealth guy, Chris Klein
this morning and happy Friday. So today's top three things
the things on my mind. And I know that some
of these might sound repetitive over and over and over again,
but when you're dealing with macro items trying to work
through market cycles, there is some repetition in what's important.
(00:22):
And so today's important three things are going to be rates, gold,
and then volatility. So for rates, could we have just
experienced an honest to goodness headfake and long term rates?
Maybe it's starting to look that way. Actually, you know, hey,
the markets will always do whatever is necessary to make
the most amount of people look like a monkey. So
perhaps I got to look like a monkey from yesterday's conversation.
(00:45):
I don't know. We'll see. The US tenure Treasury yield
is now testing these trade ranges again that I had
talked about, and it reversed yesterday's clear cut breakdown. So
what do we know? We have? Number One, we've got
higher lows on the signal, and again that's rate of
change of price volume and volatility of rates themselves. The
signal needs to cut back below four percent for a
(01:06):
lower low to be signaled, and I'm not seeing that
right now. Number two, a higher high would be signaled
if the actual yield breaks above or excuse me, if
the signal breaks above four point five percent. That closing
level of yields for the tenure treasury was set on
April eleventh. Number three, we've got to bounce off of
(01:29):
intermediate term trend at four point one seven percent. So
yesterday it cut it, but it didn't hold it. So
we need to make sure that we're actually cutting that
level before we really start to see interest rates collapse
to the downside. And right now we're not seeing that.
So number four, we've got a scenario where a drop
(01:52):
is now being shown in rate cut expectations. Now, why
did rate cut expectations get slack in fed Fund's futures trading?
And when I mean slashed, I mean cut down to
a one percent probability. Now, it's because this morning non
farm payrolls came out and they came out stronger than expected.
(02:12):
The report came out at one hundred and seventy thousand jobs.
Expectations consensus, if you will, was for one hundred and
thirty thousand jobs. But here's the real kicker with all
this job stuff. The last month's number was revised down
from two hundred and twenty eight thousand to one hundred
and eighty five thousand, and the month before that was
revised lower two. So even though we're seeing a reduction
(02:34):
in government payrolls, which was to be expected based on
what's happening with Doge Dog Department of Government Efficiency, we're
just continuing to see a fairly resilient labor market. And
when you've got a resilient labor market, the FED is
not looking at that as a cutting environment. We would
(02:55):
have expected today's jobs numbers to actually be considerably lower
than what they are. Figured it'd be a negative print.
But you know, surprise, surprise, the government data can sometimes
come in and just throw you a loop. Now is
it accurate? Again, you don't trade off of government data.
If you do well, then you know you're likely to
(03:15):
make some problems along the way. But, like I said,
let's just see if we can get the ten year
treasury to break black back below four point seven that's trend.
If it breaks below that, then we certainly are going
to see lower interest rates in the near term, presuming
it can hold that level. So again, four point one
seven percent for the US tenure Treasury is an important
(03:37):
important level for interest rates. Gold. Gold is doing what
we thought it might do, and that could be a
slight bounce, but it's still trading below its intermediate term
trend level of roughly thirty two ninety nine. That's a
pretty strong resistance level. Now this is trading the third
day below that level. When we tend to see things
(03:58):
trade three days below at the resistance level, it increases
the probabilities that the next level of support gets tested.
And that next level for gold is down at thirty
one to fifty. That's three and fifty dollars an ounce.
So let's see what happens. But right now it's giving
us this this trading aspect that it wants to test
(04:21):
the thirty two ninety nine level. If it can break
back above that thirty two to ninety nine level today,
well then it won't have a total of three days
below that intermediate term trend and it will negate the breakdown.
Pretty simple things change, you know, and the things with markets,
you know, that's that's really crazy. That is very very
sometimes very hard for people to get their head around,
(04:43):
is that this is the only business in the world
where you have to change your mind sometimes not just
in the same day, but sometimes in the same hour.
That can be very weird for people. Now, as an investor,
we want to elongate that mind changing capacity as much
as we can so as to not get headfaked. Right, So,
we're still of the belief that in terms of interest rates,
(05:05):
they ultimately are headed lower. However, we're testing people's patients
right now by not allowing a breakdown through that trend
level that I talked about. We're starting to test some
people's patients with gold because, as I mentioned in yesterday's report,
back in the beginning of April, Google searches for how
to buy gold were through the roof, and so therefore,
(05:27):
you know, more likely than not a lot of retail
buyers went out and bought a lot of gold. So
wouldn't it just be like a market to completely frustrate
retail investors. Yeah, it would, Okay, last thing is volatility VIXX.
This is the SMP five hundred standard volatility matrix. And
what have I got, Well, we've got day three of
(05:50):
a buy signal on vix and day one of a
buy signal on VVIX. Excuse me, day two of a
buy signal on VVIX. And what is that. Well, VVIX
is just simply the out of the box volatility of
volatility indicator, right, it's just going to give us an
indication of how much volatility is actually in volatility. So
(06:11):
what's likely to come next, Well, a couple of things
are happening. First of all, we're seeing lower highs in
the signal for VIS it's down to eighteen forty five.
We continue to see lower highs for VVIX, it's down
to one oh nine spot thirty seven. These are all
very good things, right, It would not surprise me, even
(06:33):
all that being true, it would not surprise me to
see VIX try to test the top end of its
current trading range, which is at twenty seven. If it
breaks above twenty seven, it'll want to test thirty two.
If it does that, the stock market is going to
have a bad day. But if it does, it's more
likely than not a biable opportunity. Again, we can't forget
(06:54):
about that Zweig breadth thrust that was initiated last week.
It is powerful, it does have very very good history
behind it. And so for now, what we've got, we've
got volatility just continuing to break down, getting to the
point where it may be a little bit over sold,
and people might want to increase protection, And as they
do that and they buy protection, it increases VIX, and
(07:15):
VIX goes up and taps the top end of its
range at twenty seven and probably fails. That's the likelihood
of what we see now. But we'll see what next
week brings. We'll see how the day trades, and will
continue to make adjustments as necessary and needed. However, we
do have a fairly bullish stance at the moment. We
do for our diversified portfolios have continued increased amounts of
(07:40):
seven to ten year treasuries along with approximately a grand
total exposure of about forty nine fifty one percent in
US and international equities, and for our more AGGRESSI accounts
that's much much higher than that all the way up
to for those who use leverage one hundred and forty percent.
(08:00):
So do we think that we could see a higher
market going into the end of the day, yep. Absolutely.
Do we think it's possible that next week could give
us an additional pop higher yep? Is it possible we
could see the market pullback some? Yes, But the first
line of support for the S and P five hundred
is going to be at fifty five twenty, and if
(08:22):
it taps that, chances become fairly good that it wants
to hold and that we start to see an increased
movement from there. If it doesn't hold, well, then we
just have to see if it makes another higher low.
And if it makes a higher low, which would mean
a closing price higher than fifty one fifty eight, we'd
be in good shape. And right now the signal suggests
(08:44):
that would be a true statement because the current signal
is trading at on a low end, fifty three to ten.
Fifty three to ten is higher than fifty one to
fifty eight. I know, signals and prices and all that
stuff can get confusing, but all we're simply doing is
utilizing a rate of change of price, volume and volatility
to be a leading indicator for us on how markets
(09:07):
are reacting to the overall global movement of money and
the flows of capital as they trade through markets. So
that's that. If you have any questions, feel free and
reach out Info at carefromwealth dot com, Info at carefromwealth
dot com, or the old fashioned way eight six six
five nine six ninety eight eighty six eight six six
five nine six ninety eight eighty six. Thanks so much.
(09:30):
I hope your weekend is RESTful and blessed, and we'll
talk to you soon. Bye bye,
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