MAY 30 - Markets now ready for a move higher in the face of inflation.

Currently, markets are testing valuable TRADE momentum support.  Even though inflation is headed higher, this is not the time or place to give up on stocks or commodities.

Episode Transcript

(00:00):
This is Care for My Wealth withChris Kline of Capstone Wealth Management, your
fee only investment firm. Now here'syour Care for My Wealth guide Chris Clin.
Hello and welcome to another edition ofthe Care for My Wealth Show.
I am your host, Chris Klin. I come to you from Capstone Wealth
Management. We're a private fee onthe investment management firm designed to help you

(00:23):
navigate markets with risk management in mind. What does that mean? Just means
we help you do things without justbuy, hold and forget, like chucking
your money in some fund somewhere andthen never having anyone check in on you
on how you're doing. So wedon't do that. We're very active in
what we do in helping you manageyour portfolio, and we communicate with our

(00:46):
clients via a very quick, can'tspeak today quick three point email that goes
out every single day US markets areopen. So it's just designed to try
and help state in touch, statein contact, help you focus on what
matters with regard to markets, notbe singly factored and focused on one thing,

(01:08):
but looking at everything stocks, bonds, commodities, interest rates, currencies,
not just domestically but globally, andthen giving you some perspective on how
those things are moving and impacting portfolioson a day by day basis. So
if you'd like to find out moreabout us, you can do that online
care for my wealth dot com.That's care formwealth dot com. Okay,

(01:34):
it's a black swan. What inthe world am I talking about? Well,
everybody wants to look for those fattail events, right, Those events
that are designed to either blow somethingup or crush something create an environment within

(01:55):
markets that causes everyone to want tojump off a cliff, you know,
the black swans, the things thatno one could have seen coming, right,
the unknown unknowns. And granted marketshate that. Markets really really dislike
unknown unknowns. But that's why theydislike them is well, we'll be there

(02:16):
because unknown Some things are unknowable,some things are not able to be managed
around, some things are not ableto be discounted, some things are unable
to be risk managed. When you'restructuring things on a day by day basis,
it is what it is. Right. However, when I see a

(02:38):
major news publication come out and saythat the black swan risk is now a
US recession, I tend to takethe other side of that. Why,
Well, first, of all,it was Bloomberg. I mean Bloomberg's,
you know, only like the largestprofessional news gathering information source for for financial

(03:00):
markets on a global scale, thatis highly trusted, you know, I
mean those of us in this businesspay very close attention to the data that
Bloomberg provides. They've got a veryexpensive terminal that provides you pretty much any
detail of any piece of information thatyou could ever imagine or want or hope

(03:22):
for. And you know, thecosts, as I said, are ridiculous.
But nevertheless, they had a newsarticle that came out, came across
there a little wire like it oftendoes, says the black swan risk now
is a US recession. My commentto that is the fact that Bloomberg mentioned
it as a black swan pretty muchensures that it's not. Again, you

(03:44):
got to equate that with theknown unknowns. So is that to suggest that there
is no scenario in which we seea US recession. No, not at
all. Of course, we couldsee a recession, and a lot of
it depends, of course, onwhat happens within inflation. Currently, the

(04:04):
economic cycle that we're in has inflationand growth accelerating at the same time.
On a month month by month basis. There are some things that are happening
here as we slowly look ahead towardsQ three and Q four, where stagflation
probabilities are really starting to move up. Why simply because inflation is in fact

(04:29):
starting to outpace growth. And whenthat happens on a monthly basis, you
start to get markets that get alittle jittery. Now, the things that
could cause markets to not be jitterary, of course, are liquid liquefications,
movements of FED funds, movements ofvelocity of money, movements of the money

(04:50):
stock itself M two, movements ofthe Fed's balance sheet. So there's all
sorts of things, of course,that control, if you will, the
movement of global markets, especially heredomestically. One of them is just simply
the velocity of M two. Whenvelocity of M two, what's M two?

(05:12):
First of all, for those ofyou that have not tuned in to
us before and heard me talk aboutM two, M two is just simply
liquid money. Think of it thatway, right, Cash, cash equivalents,
things that can be converted to cashvery very very quickly, short term
CDs, right, checking savings,blah blah blah. All right, cash
when the velocity of that M two, that money stock is accelerating. It

(05:36):
tends to be very beneficial for riskassets. And you can go and look
at a number of different places.The resource that we use is simply the
Federal Reserve Bank's Economic Data Bank,and it's called fread FREED, and you
can look up pretty much anything thatyou want as it relates to current economic

(06:00):
policy, current economic movement data,balance sheet information from the Fed, M
two, velocity of money, allthis stuff. And if you start to
look at what was happening with thevelocity of money back in say, oh,
I don't know, the mid nineteennineties, it was on a ramp,
and it was on a pretty goodramp too. Same thing happened in

(06:21):
the earlier two thousands after the dotcom blow up occurred. Same thing happened
in the for example, same thinghappened in the late nineteen eighties where we
saw the velocity of money starting toramp up. Well, the velocity of
money has come down so far fromits peak. When was its peak?

(06:45):
Well, its peak was actually backin Q three of nineteen ninety seven.
So velocity of M two, themoney stock peaked out Q three nineteen ninety
seven at a value of two pointone ninety two. Now, since then
it really has literally gotten cut inhalf. And Q two of twenty twenty,
the M two, the velocity ofM two money stock hit a low

(07:09):
of one point one two eight,like I said, got cut in half.
However, since then this thing hasbeen moving nicely higher and currently we're
running at about one point three onepoint four. Now, granted that's not
back to where it was in nineteenninety seven. However, going from one
point one to one point four isa pretty good move for velocity of money

(07:31):
and something that we certainly want tolook at and say, oh, okay,
that's nice. M two itself moneyin the system, right, think
of it as gas in the engine. We've we've commented before. I've talked
about how in the past, whenwe're looking at the money in the system,
everybody's worried about the Federal Reserve reducingits balance sheet, right, and

(07:55):
I understand, I get it,But we also have to recognize where we
were in comparison to where we areand M two. If we think about
it pre pandemic stuff like say Januaryof twenty twenty, M two itself was
at about fifteen point three trillion.Now, obviously the Federal Reserve has liquefied

(08:16):
the system in a really, really, really big way since then, because
now M two is sitting up overtwenty almost twenty one trillion, So as
you can see, it's a lot, right, it's a really really big
number. Is it down from itspeak of twenty two trillion in April of

(08:37):
twenty two? Yeah, of course. Now, what I want you to
pay attention to as an investor,an investor that looks at all things,
not just the stock market, butall things and recognize the impact that the
movement of M two has on,just for example, our stock market.

(08:58):
April of twenty twenty two wouldn't havebeen a terrible time to say, you
know, I think maybe I'm goingto cycle out of this stock market a
little bit. Now. If you'dpaid attention to us, if you'd been
a follower, if you'd have beenlistening to my radio shows and my podcasts
that we were producing back in DecemberJanuary of twenty one and twenty two,

(09:18):
you'd have gotten out even earlier.Why, because there were just enough clues
and enough things happening that helped usto recognize that the market was going to
start responding to a Federal Reserve thatwas going to be tightening by reducing their
balance sheet, by taking M twoout of the system, by creating an
environment where it was just time tosay, hey, I need to back

(09:41):
off of the risk, and okay, that's awesome. Right. So,
but here we are today, righthere, we are in a situation where
M two has come down a fairamount from its peak, but now it
appears to have been bottomed and startingto move higher. All right, how
do you view that in the lensof the Fed's balance sheet coming down considerable

(10:07):
from roughly eight point nine trillion tocurrently seven point three trillion. Well,
the Federal Reserve has talked before abouthow it intends to very very carefully taper
its taper, in other words,slow down the rate at which it is
allowing bonds to roll off of itsbalance sheet. Speak English, Chris,

(10:31):
what does that mean? It justmeans that they're going to slow down the
amount of money that they're allowing topull out of the system. What is
that stealth QE? Yeah kind ofkind of is that stealth qy sort of
thing that we need to pay attentionto and recognize that this particular market space
that we're in is very, veryresponsive to what's happening with them too.

(10:56):
Now, I think about the littlesell off that we got in April of
this year, right, SMP fivehundred, pull back about five percent,
And what happened during that time frame, Well, M two dropped, right.
M two went from roughly twenty onepoint one trillion on April fifteenth all
the way down to twenty point seventrillion on April twenty ninth. Since then,
it's popped back up to about twentypoint eight trillion. So all right,

(11:22):
fine, beautiful lovely, we've gota ton of reckless monetary policy and
a ton of reckless global spending goingon by the nut jobs that run this
country. Yeah, someday somewhere that'sgot a find way to get under control.
But until then, we're going tocontinue to live with the lunacy of

(11:45):
these idiots that keep getting in officeand spending your mind, my kids,
and my grandkids and my grandkids moneyinto oblivion. Hallelujah, lovely, thank
you very much for nothing. Sobut as an investor living in the real
world world being dealt the hand we'rebeing dealt, we have to recognize when

(12:05):
is it something that we have toconcern ourselves with, and when is it
not something that we have to concernourselves with. And what we have to
do is just simply pay attention tothe gas in the engine. And the
gas in the engine is in factM two. Interestingly, the US stock
market bottomed in late October November twentytwenty three, and interestingly that's where M

(12:31):
two happened to bottom at twenty pointfive trillion, And now it's going up
and down, but in an upwardtrending fashion, making higher lows and very
very slowly higher highs. And sodoes that suggest that we're likely to see
M two pop back above it's Aprilfirst, twenty twenty four value of twenty

(12:54):
one point one trillion at some pointin time over the summer. Wouldn't surprise
me a bit. Is it possiblethat we then see it back off to
a higher lope, creating an environmentwhere maybe markets want to pull back and
sell off a little bit. Yeah, probably wouldn't surprise me a bit there
either. So markets are responding toa number of different things right now,

(13:16):
and old wall media will tell youthat, oh, look, we just
had an environment where GDP came outand the GDP growth rate on a quarter
over quarter basis for Q two estimateswas at one point three. It forecasted
out at one point six. Growthis slowing. Oh my goodness, cats
and dogs living together, mass hysteria. Yeah, okay, well. The

(13:41):
GDP price index for Q two ona quarter over quarter basis estimated came in
at three point one, forecast atthree last time I checked. That's a
slight acceleration. Core PCEE prices,also known as inflation, came in at
three point six, forecasted at threepoint four, also known as an acceleration.
And when you get both growth andinflation accelerating together, you get an

(14:03):
environment we're more likely than not.Remember these are markets. We live in
an environment of probability. We livein an environment of possibility. We do
not live in an environment of certainty. The best we can do is take
all the probabilities, stack them up, look at them and ask ourselves,
is it on our side to betaking risk or is it on our side

(14:26):
to be taking risk off the table. Those are the two biggest questions that
we always have to ask ourselves,and the best way to do that is
to look at markets mathematically, andthen also look at them not just through
the singularity lens of stocks, butlook at the lens through interest rates,
commodities, currencies, i e.The US dollar, all of those kinds

(14:48):
of things, and ask ourselves,Okay, is the probability that markets are
closer to a bottoming cycle or closerto a topping cycle? And my answer
to that is that we're closer toa bottoming cycle here in the immediate term.
And I'm going to give you someimportant information, some important levels,
and some things that you're going towant to pay attention to. If you're

(15:11):
new to the show. First ofall, thank you so much for tuning
in. I appreciate it very much. I hope your time is feeling as
if it's being spent wisely. Butwhat you'll find when we come back from
the other side of this break isthat I will give you very specific numbers
to pay attention to that if you'relooking to add into markets. And I'm
not just going to talk about marketsin stocks. I'll talk about yields,

(15:33):
i e. Bonds, I'll talkabout commodities, I'll talk about currencies.
I'll talk about gold and silver,because everybody loves those copper uranium. We'll
look at all these things and askourselves where are there opportunities? And once
we do that, I'll give youvery specific numbers that if you intend to
either enter or add to those particularasset classes, you're going to be doing

(15:56):
it with the most probability on yourside. This is what I mean by
risk management, fractally managing the mathematicsbehind markets in a way in which helps
you understand when and how to enterinto a market. So don't go anywhere.
This is the care for my wealthshow. I am your host,
Chris Klin. We will be backin just a few minutes. Hi,

(16:18):
this is Chris Klin, investment managerfor Capstone Wealth Management. They have been
through the early nineties bond market implosion, the late nineteen nineties stock market melt
up, the two thousand to twothousand and two dot com crash, the
rate hike scare of the mid twothousands, the Great Financial Crisis, the
pandemic induced twenty twenty collapse, theinflation madness, and of most recent memory,

(16:38):
the twenty twenty two bear market.You know what these have in common.
We help people just like you navigatetheir finances through it. My boys
say I'm old, but I justsay I'm battle tested. Not only that,
but I've seen the underbelly of WallStreet, and I know how to
call a turd a turd. Sometimesthe best investment is the one you don't
make. But without experience, howwould you ever really know? I can

(17:00):
help. I've been blessed to workfor a lot of people who have entrusted
tens of millions of dollars of theirharder and capital to me and my team.
When you become a part of theCapstone family, you are treated like
family. If you'd like to seehow we can successfully manage your money and
to find out if there's a fit, let's start a conversation. The best
way to do that is to shootus an email info at care for my

(17:21):
wealth dot com. That's info atcare form wealth dot com. One more
time, info at care formwealth dotcom. I look forward to working for
you and your family. When Iwas forty nine, I went through a
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I was concerned that I would notlive as long as my parents who lived.
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Mama was eighty five. That's inmy genetics, and I just I didn't
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(18:47):
your mitochondria, It cleans it allout. It just affects every area of
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That's knew You inside dot Com,New You inside out dot Com. You're
listening to the care for My Wealthshow with Chris Klin of Capstone Wealth Management.

(19:07):
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(20:15):
Hi, this is Chris Klein,investment manager for Capstone Wealth Management.
I've been through just about every marketimaginable since the early nineties, and you
know what they have in common.We helped people just like you navigate them
and that's given our investors peace ofmind. Now, my boys say being
in the game this long just makesme old, but I say it makes
me battle tested. I've been blessedto work for a lot of people who
have entrusted tens of millions of dollarsof their hard ear and capital and me

(20:36):
and my team. If you'd liketo see how we can successfully manage your
money, let's start a conversation.The best way to do that is to
shoot us an email info at carefromwealthdot com. That's info at care Formiwealth
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back. This is the care forMy Wealth show. I have your host,
Chris Klein. Thank you for joiningus. Come to you from Capstone

(22:07):
Wealth Management. If you'd like tofind out more about us, the easiest
thing to do is just go toour website, care for my Wealth dot
com. That's care form wealth dotcom. Very easy to find care formwealth
dot com. You can find uson all the major podcast platforms. You
can find us well all over theplace, So check us out. Take
a peek kick the tires if you'dlike to start a conversation, either give

(22:29):
us a call or shoot us anemail, and you can find both of
those on our website as well careformwealth dot com. Okay, so right
before the break, I said,I was going to give you some very
very specific, very important information aboutthe about markets in general, not just
domestically, but I can talk globallyas well, in case you'd like to
view them. Should I have domestic? Should I have international? What should

(22:55):
I be doing? Where should Ibe going with all of this? Well?
Good question. So, as Imentioned, we're currently in an economic
cycle where both growth and inflation areaccelerating at the same time. And that's
done if this is viewed and lookedat on a month of a month basis.
Right, And so for May andJune we had an environment and still
have here for upcoming of June,an environment where growth and acceler and inflation

(23:18):
are moving upward together, which tendsto do well for risk assets. Right.
However, Q three and Q fourare currently lining up as a stagflationary
cycle, a stagflationary possibility, apotential, right, And remember we we
live in a world of potential.We live in a world of possibility.

(23:40):
We don't. We don't live ina world of Hey, that's for certain,
that's exactly how this is going tohappen. Now that that doesn't work,
however, there are lots of thingsthat we put on our side to
help us understand where probabilities lie andwhether or not we're going to see a
those probabilities come to fruition. So, without further ado, let's talk about

(24:03):
the SMP five hundred, and wecan talk about a few different things with
regards to the SMP five hundred.One of them that we can talk about
is something called flows. What areflows? Well, flows are just simply
the movement of money, not alittle bit of money, but big money
into markets. And one of thethings that we watch all the time are

(24:26):
in fact flows into markets, andin fact I talk about them with clients.
I talk about them in the emailsthat I send, and as I
mentioned in the previous segment, Isend an email to all the clients that
were blessed to work for on adaily basis. Anytime US markets are open,

(24:47):
those go out. If US marketsare closed, we take the day
off sorta. And there's always workgoing on behind the scenes to some extent,
but you don't get an email onthose days. And one of the
things that I've talked talked about herejust this week with regards to flows is
that and what we've seen over thepast week are massive inflows into US large
cap equity exchange traded funds. Inother words, the S and P five

(25:12):
hundred, right, global equities hadstrong interest, followed by aggregate bond funds.
But the money that's coming out ofthe market flowing away from something are
government bond funds. Those had thelargest outflows, followed by investment grade bonds.
Why, well, it's just areaction to interest rates. It's a

(25:33):
reaction to the higher for longer scenariothat's likely to play out because the FED
is continuing to be well for themost part, behind the curve as it
relates to inflation, and so marketsare to some extent responding to that.
But the bottom line is that we'reseeing flows of markets, very very strong

(25:55):
into S and P five hundred relatedUS large cap type names. And so
with that, what do you got, Well, you've got a situation where
the S and P five hundred itselfand we'll talk about the proxy. How
about that? So the proxy forthe S and P. Five hundred is
spy spy, right, We'll talkabout some levels that historically are very very

(26:18):
valuable for how markets function regarding thoseflows, and they are a function of
a mathematical process combining price volume andvolatility and then looking at it on a
rate of change basis. So getback, get to your old calculus days
and then comparing that over very specifictime frames time series. The machine loves

(26:45):
to function on one month momentum,and as one month momentum is moving itself,
well, then oftentimes markets tend tofollow, right, and so as
long as the momentum is reasonably strong, that thing will take continue too.
In most cases garner and gather flows. So the S and P five hundred
is definitely there spy trade value,which is price volume of volatility over a

(27:10):
period of less than a month.Why, well, we kind of want
to get in front of that.We want to get we want to get
in front of the machine, notbehind it. We don't want to get
run over by it, right,So we want to be in a position
to be able to take advantage ofthe flows as they start to come in
and then markets respond to that.And so one of the things that we
look at is price volume in volatilityover a period of time of less than
a month, and that level wecall trade and that for the spy is

(27:34):
at five twenty three. Now that'svery very interesting. Why because well this
week we saw it hit five twentythree. Now, if it moves below
that level, there's a real possibilityit wants to at least test trend.
And in the midst of a bullishtrending market, which it still is signaling
higher lows, that trend level becomesvery valuable in a very important spot in

(27:59):
which to either very largely increase yourposition or at the very least, if
you're not yet in, buy in. And that trend level for spy is
at five to eleven, now doI expect to see five to eleven?
Well not currently. Just because themathematical process is signaling high or lows,
does that mean that we can't getsome catalyst out of nowhere to cause that

(28:22):
to happen. No, it couldhappen, And if it were to happen,
okay, fine, beautiful, lovely, we would just want to be
taking advantage of that and not beafraid of it. And so currently it
wants to find some support at fivepoint twenty three. If it doesn't like
that support, then it might wantto see five eleven. So we'll see
how that goes. The important thingto consider and recognize as it relates to

(28:48):
the US equity markets also are notjust tied up in the stocks themselves,
but also a function of what's goingon in the currency market. The US
dollar right now has a negative corewith US equity markets, the SMP five
hundred, to the tune of abouta negative point eighty one. Now what's
that mean. It almost means thatthe dollar moves on a negative one for

(29:11):
one basis with the SMP five hundred. And currency markets are huge, they're
very, very large. The dollarsnot going away anytime soon. I want
people to recognize that's the case.Why okay, quick sidebar here. There
are always a lot of thoughts,in questions and fears about the US dollar
getting replaced or going away. Look, don't bet on it. The US

(29:33):
remains the most attractive destination for globalcapital period end of statement. Overseas investments
in our markets right now exceed twentyfive trillion dollars. And that's just one
reason why the dollar just isn't goingto go away. Anytime soon, and
those foreign investments in our markets continueto escalate, they continue to go up.

(29:56):
I mean, if we go backjust to oh, I don't know,
go back to twenty sixteen, youwere looking at a level of about
seventeen trillion, eighteen trillion, right, which is still a lot, but
now we're over twenty five. Goall the way back to two thousand and
four, and foreign investments in ourmarkets we're around five trillion, and now
they're twenty five. Look. Justmy point is is, don't expect the

(30:18):
US dollar to just go away.Don't believe the fear hype that goes on
all over the place on the internet. Just get rid of that junk because
it's junk. It's not going tohelp you be a good, successful investor.
And that's important. Another thing thatwe look at very very carefully is
something called implied volatility. Now,implied volatility is it gives you an indication

(30:41):
as to whether or not people arebuying protection. And when consensus people the
machine, if you will retail,if they buy protection, chances are there
wrong. And what ends up happeningis dealers have to take the other side
of that and they create an environmentwhere the market gets bid up after implied

(31:03):
volatility goes up a lot. Justlet's just rest it at that. Okay,
a week ago, the S andP five hundred spy proxy, it's
implied volatility is eight percent. Impliedvolatility right now is running forty percent.
That's a strong escalation. Now whenyou see a market get closer and closer
and closer to the lower end ofits calculus range price volume in volatility,

(31:30):
which, by the way, wewatch this stuff moment by moment and it
gets calculated moment by moment. Rightthe current low end of the calculus of
the trade range of spy spy isfive point twenty one. Trade support price
volume of volatility with a momentum levelof less than a month is five point
twenty three. They're very very close. Will at the same time, we've

(31:52):
watched implied volatility escalate from eight percenta week you go to forty percent.
Now that means people are buying protection, they're getting scared. Creates an environment
of a kind of like a coiledspring getting squeezed, and as it gets
squeezed, people want to be ins sphere mode. Ol I got as
you get out, No, thisis the time that when it's pulling back,

(32:15):
you enter into it. You don'tget afraid of it and jump out
of it. Let's add to thatone other thing. As I mentioned,
the US dollar kind of got offin a tangent there with the US dollar.
But this is important if in factit's got a negative correlation with the
US dollar. If the dollar goesdown, does it mean that it's going
to automatically push the SMP up.No, No, not at all.

(32:35):
But it does mean that if thedollar drops, it does have a tailwind
effect on stocks versus A versus A. You know, it's something different.
And so as long as we seea negative correlation in the dollar, we
have to at least recognize it andunderstand that. Okay, that's possible.
So the US dollar got to thislast week a high of dun duh,

(33:00):
one oh five spot eighteen. Whatwas the top end of the range,
one oh five thirty pretty darn clothes, and so old wall media will tell
you, oh whoa. Well,then the dollar dropped to just because uh,
you know GDP figors and you knowPCU price number. Now it dropped
because it went up number one,number two, because it got to the

(33:20):
top end of its trade range.Well, where's it headed next? Possibly
down to the low end of itstrade range, which is one oh three
spot eighty. Okay, fine,If it does that, that just means
that it's more of a tailwind forthat S and P five hundred than it
is anything else. Let's add somethingelse. Can you see how it's never
just one thing? Can you seehow it's a multi factored approach to help

(33:45):
you make good and better decisions onhow and when your money is invested.
Can you see can you understand therisk management that goes on in how we're
employing a very mathematical process, avery significantly thought up process behind money management,
versus just chucking it in a fundthat you don't know and you'll never

(34:05):
talk to the fund manager ever.I'm hoping you can see that it's important.
But let's add this to it.How about volatility? So markets tend
to move the opposite of volatility vix, vi IX being the S and P
five hundreds volatility metric. Right,VIX is currently in a bearish trend,
meaning that it goes up and down, but in a downward fashion. It

(34:27):
wants to move itself downward. That'sbearish in its trending cycle right, top
end of the VIX range roughly fifteen, bottom end of the VIX range roughly
eleven. Well, what did wehit well, top end of the range
this week or the top end ofthe movement, I should say a VIX
hit fourteen eighty eight. Now againyou're going to hear all sorts of reasons

(34:51):
what's going on with volatility? Andthen it's dropping because of you know,
pick and excuse A. It wentup because over the last week it had
gone up, and b it hitthe top end of its trade range.
However, its trade range price filmingvolatility of volatility. Yes, that is
the thing. Volatility has its ownvolatility metric, and looking at it on

(35:14):
a one month cycle, fourteen pointtwenty four, that was the level.
Oh goodness, it hit that andfailed. Oh yeah, that's good.
So we've got the S and Pfive hundred itself via the proxy spy,
hitting the low end of its calculus, and it's doing it on fairly low
volume, by the way, whichjust suggests nobody's selling the market. It's

(35:37):
more of a lack of buyers thanit is a confluence of sellers. At
this point in time, we've gota US dollar that tapped the top end
of its trade range with a negativecorrelation, now looking as if it wants
to at least test the low endof its range. We've got volatility tapping
the top end of its range,now looking to reverse by failing at trade,
which is again fourteen twenty four.And if in fact it does fail

(35:59):
there, it looked like it mayin fact want to at least go and
tap the low end of our trainedown near twelve. Declining and decelerating volatility
is good for price of the thingit tracks. VIX tracks the S and
P five hundred. It's a wayto look at it. Decelerating, leaking
out volatility is good for price moneyflows where it's best treated. It tends

(36:22):
to be better treated in places wherevolatility is either declining and decelerating. Right,
something important to consider, something importantto at least recognize and view in
the context of, well, whereare we in the current market cycle?
Right? Okay? Look so muchto do, so much to go over.
I've just even scratched the surface ofthis, but I got to take

(36:43):
another quick break. So when wecome back, I'm going to talk more
about this specific very important levels.I won't get into as much detail with
volatility and with the dollar and withsome of these other elements. But I'm
going to talk again specifically about impliedvolatility of the importance as it relates to

(37:04):
some of the indexes that I'm goingto cover. I'm gonna go over nasdek
Russell two thousand, Dow Jones IndustrialAverage, and I'll give you very specific
levels from there. Also talk aboutgold and silver, talk about bitcoin.
All right, Bitcoin and crypto ingeneral is in a very very very interesting
cycle right now, and so wewant to talk about that and give you
some levels. So don't go anywhere. This is the care for My Wealth

(37:25):
Show. I'm your host, ChrisKlin. If you'd like to find out
more about us while you're listening tosome of these sponsors, which we so
are very very thankful for, pleasego to care formwealth dot com. That's
care formwealth dot com and find outwhether or not there's a fit between you
and us. I think we mightbe able to help you take some stress
out of markets. All right,don't go anywhere. This is the care
for My Wealth Show. We'll beback in just a few minutes. Hi,

(37:46):
this is Chris Klin Investment manager forCapstone Wealth Management. They have been
through the early nineties bond market implosion, the late nineteen nineties stock market melt
up, the two thousand to twothousand and two dot com crash, the
rate hike scare of the mid twothousands, the Great Financial Crisis, the
pandemic induced twenty twenty collapse, theinflation madness, and of most recent memory,

(38:08):
the twenty twenty two bear market.You know what these have in common.
We help people just like you navigatetheir finances through it. My boys
say I'm old, but I justsay I'm battle tested. Not only that,
but I've seen the underbelly of WallStreet, and I know how to
call a turd a turd. Sometimesthe best investment is the one you don't
make. But without experience, howwould you ever really know I can help.

(38:30):
I've been blessed to work for alot of people who have entrusted tens
of millions of dollars of their hardearned capital to me and my team.
When you become a part of theCapstone family, you are treated like family.
If you'd like to see how wecan successfully manage your money and to
find out if there's a fit,let's start a conversation. The best way
to do that is to shoot usan email info at care form wealth dot

(38:51):
com. That's info at care formwealth dot com. One more time,
info at care formwealth dot com.I look forward to working for you and
your family. Well, I lovethe hair, I love the nail,
I love the skin and the beautythat everybody talks about. Those are the
obvious benefits. But one thing Idon't think people understand is what it does
to the inside in terms of yourjoints, inflammation. Those are two things

(39:13):
that are huge to me getting older. My gym workouts hurt a lot more,
you know, time after time,so my body's starting to wear down
a little bit. My health interms of my post workout inflammation and the
recovery in the next few days afterthose heavy workouts is just it's changed dramatically.
There's nothing that has had an impacton me like this has. But
I have a whole medicine cabinet,and it's not for prescriptions. It's for

(39:37):
fullic acid for my hair. It'sniosin for my immune system. It's collagen
pills that I was taking off ofAmazon, it's protein powders. What has
changed is now I have one boxand it's filled with collagen elixir, and
it essentially covers everything that all thoseother products did. And I mean that
with all my heart. For moreinformation, go to new You side out

(40:00):
dot com. That's new You insideout dot com. New You inside out
dot com. You're listening to theCare for My Wealth Show with Chris Klin
of Capstone Wealth Management. Check usout online at care formwealth dot com or
on Twitter now X at care forMy Wealth and also all the major podcast
platforms. I got sold about agame chick me from Okay, we are

(40:27):
back. This is the Care forMy Wealth Show. I am your host,
Chris Klin. I come to youfrom Capstone Wealth Management. If you'd
like to find out more about us, please do so online at care for
my Wealth dot com. That's carefor my Wealth dot com. If you'd
like to interact with us, youcan do all you can do that on
X used to be Twitter now it'sX really really good platform. By the
way. Anyway, our handle thereis at care for my Wealth at care

(40:50):
for my Wealth, and I tryto post some things that are oh interesting,
maybe sometimes provocative, you know whatever, But there are some things in
there that I see from people thatI think are valuable to understand where we
are in the context of current markets. And one of the things that's important
to recognize is the inflation that we'redealing with today and its current cycle and

(41:13):
how it's functioning along with the currentcycle of inflation as compared to what we
saw back in the nineteen seventies.And interestingly enough, it's kind of close.
I mean, it's something that grabsyour attention and says, huh,
that's sort of rhyming. And that'simportant because markets don't necessarily markets don't necessarily

(41:36):
repeat, but they do rhyme,and there is some rhyming tones to the
things going on inside the world ofinflation. Okay, so back to very
specific levels. Let's jump over ifwe could, to the NASDK. Nas
dek is also very interesting and obviously, as you know, loaded with lots

(41:57):
of text names and so we couldview this in a couple of different ways.
But I'll give you the levels forthe NASDK real quick trade level for
nas deck sixteen thousand, seven hundred, sixteen thousand, seven hundred hits there.
It's by if it decides that itwants to test its trend level sixteen
one twenty five. I don't knowthat it's going to go that far.
There's a lot of strength behind someof the biggest of big names like oh

(42:20):
Navidia and Google and so on andso forth. So all right, that's
fine if you want to invest justin the NASDK one hundred that's called QQQ,
and there's also other ones that youcan use some leverage if you want
to get dicey, spicy and fun. But I'll let you look those up.
But anyway, QQQ NASDEK one hundredtrade level is four fifty goodbye.

(42:43):
It's an area where if it hitsthat, I'd be buying it. If
it goes to four thirty six,I would definitely be buying it. I
don't anticipate that that's going to bethe case. There's a higher probability of
seeing it move up than down,but again, catalysts being what they are,
it could happen, and if itdoes, is still a bull market.
Right, We're still in that kindof an environment where we have to

(43:06):
respect to the we have to respectthe bowl. Right, So how about
the dow. Everybody loves the doll, right, Doll's a little bit different.
It has recently moved below its trendlevel, which it did the same
thing back in April. Now,we got to buy on that back on
April seventeenth and eighteenth, and obviouslythat wasn't a bad time to go back

(43:29):
and review some of my shows.I was talking about it. But the
dow back then was it about thirtyeight thousand, and then of course over
the next month or so, itmoved up to about thirty nine to nine,
almost forty. And now we're kindof getting back into that same level
again. So I anticipate pretty soonthe doll's going to signal a bye and
then that'll be on its way.Volatility talked about that already. Interest rates

(43:53):
the US ten year treasury is ina bullsh trend. It's just it's reflecting
higher for longer on inflation, andwe just have to respect that. But
it got to the top end ofits trade range add four sixty four.
Well, that's interesting. What didit hit this week? It hit a

(44:13):
high of dunt dunt the four sixtyfour. Oh, it's magic. No,
it's math, that's it. That'sall it is. So what does
it want to do after it hitsthe top end of its range? Wants
to go down. Where could itgo down to? Well, it's trade
support level now is at four pointfour eight percent, low end of it
of its range, if you will, three point three eight percent. So

(44:35):
we'll see what happens. But rightnow, i'd expect to see a successful
test of four to forty eight,and then it might want to move higher
from there. We'll see how itgoes a lot of it's going to depend
on volatility of the bond market.You can track that by something called the
move index MVE. And if youget the move index right, you can
get bond trading right. And ifwe get bond trading right, then everything

(44:59):
else well. So the move indexis currently in a position where it's testing
its trend level at ninety seven.Is it going to fail there? Hard
to say. It could very easilymove up to about one hundred. That's
another very important level for the moveindex. What's the move index? It's
just bond volatility, right, Bondmarket volatility. Bond market's a pretty smart

(45:20):
place. Bond market volatility is currentlyan ambarished trend, the same thing as
vix or S and P five hundredvolatility. So we'll see where that goes.
But I would anticipate a failure ofbondvall, which would be a decent
thing for bond holders. Being abondholder has been a very hard thing.

(45:40):
Long term treasuries continue to just getpummeled. But that said, one month
momentum has shifted a bit over thepast month. A we can look at
long term treasury bonds via the proxyTLT one month movement on that's up one
point six percent. Okay, that'sa start. It's still down over three

(46:01):
months. It's still down almost eightand a half percent year to date.
It's still down almost twelve percent overthe last year. It's still down over
thirty five percent over the past threeyears. Being a long term bondholder has
been terrible and definitely not something thatI would just recommend holding a pile of

(46:21):
and saying, oh, I forgetabout it. You know they're not.
You just have to be careful,as with any other asset class. Right,
So, how about commodities. Commoditieshas been the place where it's provided
a fairly significant amount of decent returnto help diversify your portfolio in better ways.

(46:43):
Now there are a bunch of waysyou can actually access the commodities market.
But what you have to be carefulof is whether or not the thing
that you're buying issues at K one. I've talked about this a lot in
the past. We hate K one'swhat is it. It's just a tax
form, but it drives CPA's nuts. It drives clients nuts. It drives

(47:04):
me nuts because it drives clients nuts. Why does it drive them nuts?
Because these producers don't send these thingsout until, in many cases, after
tax returns are filed. So oursuggestion is that if in the event you'd
like to have broad based commodities exposure, to do it in a way that

(47:24):
doesn't produce a K one. Now, for us, we've found that the
way to do that is to purchasean exchange traded fund that does not generate
a K one. And what weuse is symbol pd BC, right pd
BC, And we found that tobe a decent exposure to the commodities market.

(47:46):
It is signaling higher lows, that'sgood. It's in a bullish trend.
It's approaching its trade level. That'simportant because that's a level where well,
you wouldn't be afraid to be takinga shot at it. Those are
things that I would consider the CRBCommodities Index just real briefly continues to show
US three month momentum. So it'strending in a bullish fashion. That's good,

(48:10):
that's what you want. Let's moveon to gold. I talked about
that gold's trend is at twenty threeto twenty seven, and what has it
hit twice now over the past weekand a half, trend twenty three twenty
seven. I do think that it'slining up for a much higher move as
gold volatility breaks down. Gold volatilityhas been continuing to be breaking down in

(48:36):
a bear's trend. That's good.Remember, volatility leaving an asset class is
a positive thing, it's not anegative thing. And we just want to
recognize that. So gold anywhere neartwenty three twenty seven twenty three point thirty
is a bye. Trading at twentythree forty okay, fine, close enough,
not a bad area. Just knowthat you could see it test maybe

(49:00):
twenty two ninety, you know,before it wants to slingshot itself higher.
I don't know that we'll get there. I think that that twenty three twenty
seven area is pretty strong. Silver, Yeah, it's in a bull market,
right. Silver is in a bullmarket, and if it got near

(49:21):
thirty fifty announce it's a bye.That's its trade level. Twenty nine forty
is its trend level, you know, And realistically, when you look at
this thing, somewhere to the tuneof forty five could be where we where
we go to on on silver?Why no, Why am I saying that
we could see the forty five area, Well, just simply because that's where

(49:45):
it peaked out quite some time ago, way back in twenty eleven, we
saw it peak out at about fortyfive, and so is it possible we
could see that it is? Why? Well, it's been in a very
long, secular down trending motion sincethen, and it has broken out of
that back on March eleventh, andit hasn't looked back. It's gone.

(50:08):
It's created an environment where it's movingup and down, but in an upward
fashion. So silver remains bullish,signaling higher highs, higher lows. Anywhere
near it's anywhere near its trade ortrend levels, I'd be looking at buying
it for sure. Copper, well, you know the whole narrative around copper,
right, we just simply don't haveanywhere near enough electricity to create the

(50:31):
electrification that every government in the worldseems to want to generate or create.
So if you're looking at spot copper, we look at it via the futures
market. So you know spot copper, you know, if this thing got
near four dollars and fifty five centsa pound, it definitely would be a

(50:52):
buy. Now you can buy anexchange traded fund that resembles the movement of
copper futures. Just know that it'sgoing to generate a case which may or
may not make you crazy. Ifit's isolated to a retirement account like an
IRA or four OL one K,won't matter. Those things don't have any
relevance inside of a four oh oneK as long as it doesn't produce unrelated

(51:13):
business taxable income u BTI, andcopper does not. It does not generate
UBTI, So you'd be safe tohave that inside your IRA or four oh
one K if your four O oneK creator whoever handles that offers it,
and in most cases my experiences,most for one ks just do a terrible

(51:35):
job of giving you commodities exposure.But that's that on copper. How about
oil West Texas Intermediate crude is veryinteresting because it just keeps balancing between a
decelerating trade level and trend trend.On West Texas intermediate crude is now at
seventy seven barrel dollars a barrel seventyseven bucks a barrel. Is it possible

(51:58):
that we could see the summer drivingseason for whatever reason, drive price is
lower. That's possible. Seasonality isone of these things that you don't hang
your hat on, but it's somethingthat you look at and recognize. And
seasonality for unleaded gas is kind ofstraight down from here. Okay, well,
that's interesting. As a driver ofa gas engine, I'm fine with

(52:20):
that. I would like that oil. Could that be a scenario where it
just moves lower? Possibly, verypossibly. Seventy seven dollars a barrel has
been important. It's bounced off ofthat level which it's trend on May the
eighth, It bounced off of iton May the fifteenth, It bounced off
of it on May the twenty fourth. Three successful tests of trend so far

(52:45):
is pretty good. I don't thinkI would bet against oil at this point.
In other words, if you're risky, and I don't think i'd be
shorting oil at this point in thecycle. I think I would want to
be very very careful of that.So those are kind of the big ones,
right, Commodities, stocks, bondsin general. Yields in a two

(53:07):
year treasury is still bullish trend.It's got a trade support level at four
eighty five. It is the proxy, if you will, of monetary policy.
You know, lots of people thatlook at current monetary policy and say,
oh, what a mess. TheFed's going to have to raise rates
again because inflation keeps going up.Yeah, all that's on the table.

(53:27):
It just is. So we justhave to recognize it and manage risk around
it. Okay, here we areat the end of another program. Thank
you so much for joining us.Go to our website care formwealth dot com.
I'd love to have the opportunity tohelp you manage your money better,
more smartly, with managed risk versuschucking it in something and forgetting about it.
We pay very close attention to youand your needs, and I'd love

(53:49):
to be able to serve you soagain. Go to our website care formwealth
dot com and find out more aboutus. Thank you for joining. God
bless you and have a beautiful weekabout to get there.