I thank my lucky Starlink for turning back on so I can write this piece at all.

Of course, Telecom Italia installed the fiber optic cable… but on the non-residential side of the street, so the wire doesn’t quite reach my new house.

So I opted for Starlink, which was taking more of a siesta than the average Italian shopkeeper. As soon as I complained, it miraculously started working.

Could traders' vocal complaints lead to a potential cut by Powell in July?

There are a couple of concerning signals out there, but none of the “sell right now” sort. I’ll keep watching out for those.

But let’s do a premature and mini asset class report. I want to see what’s going on.

Foreign Exchange (The Dollar)

My good friend and Paradigm options expert Alan Knuckman thinks the dollar will weaken under a Trump 47 Administration. I agree DJT will do everything to weaken the dollar. I’m just not sure it’ll be enough.

Remember, the dollar index is the dollar against other currencies like the euro, sterling, and yen. All of those currencies are a disgrace to the countries (or regions). The dollar will have a tough time falling against intentional European and Japanese currency destruction.

As you can see in the chart above, the dollar has recorded higher highs and lower lows since the end of 2023. This indicates the USD rally isn’t over yet.

Interest Rates (The US 10-Year)

The 10-year yield tells a slightly different story.

This chart looks like it’s rolling over. The highs in April 2024 failed to reach the highs of October 2023.

The 50-day moving average is declining toward the 200-day moving average. This is positive for stocks, as this is the rate by which bankers discount stocks (plus other risk factors). This chart makes 3.8% look like a feasible next target.

Bonds (TLT, LQD)

Thanks to the 10-year falling, these charts make complete sense.

My friend and Paradigm Income Guru Zach Scheidt has been talking up bonds for a while. After the huge end-of-year rally in 2023, bonds fell off a cliff until May. The last two months have been good, though, and may be poised to get better. I’m still not a huge fan, if only because I think there are other opportunities elsewhere and I don’t think the inflation story is over by a Biden longshot.

As for the LQD (liquid corporate bonds ETF), this looks like a great bet. If we break above 109, the next target is a lusty 122 – above there, then it’s an effervescent 132. Perhaps gentlemen should prefer bonds right now…

Stocks (SPX, Nasdaq, Russell)

Put this chart in front of your grandchild:

They’d say, “Buy!”

This is a gorgeous chart and a life lesson in why it pays to be optimistic. Bull markets “climb a wall of worry,” and this one just keeps climbing and climbing.

Yes, NVDA is an outsized player in the index. Yes, the top 5 stocks in the SPX make up 21% of the index. Who cares? Just don’t own bad stocks.

Next target: 6,000.

As they say in Asia, “Same, same. But different.” A raging bull at the moment. No reason to sell.

I must state, though, the last candle is known as a “gravestone doji” and may indicate a reversal. I’d take it more as a breather, for now.

As for the Russell:

This chart is a mess. I’d prefer it not to break down below 195.

But it looks like it’s rolling over. If it does, that may be an earlier indicator to start selling. The Russell usually leads the other equity indexes.

Let’s move on to the metals.

Metals (Gold, Silver, Copper)

How’s the yellow metal doing?

Gold is clearly in an uptrend. And gold is, to my mind, clearly consolidating in the 2,300 - 2,425 range. This is healthy in a wild uptrend like we’ve seen.

I wouldn’t be surprised if we don’t get the next kick-up until another round of ridiculous fiscal stimulus is announced. And that may not be until the real estate developer-in-chief gets back behind the Resolute Desk.

Still, we’re looking at 2,500 by the end of the year.

As for silver:

It’s more volatile lately than gold. Mr. Slammy has hit silver harder than Spanish Conquistadors. And yet, it hovers around $30. We’ll get to $35 eventually, but patience is indeed a virtue.

Copper rallied to the moon for a bit, but has since come off the boil. I know The Journal and Bloomberg have printed crazy stories about copper being in demand. Yes, it’s true, but it doesn’t last forever.

In fact, the next price target for copper is $2.25. Yikes!

Energy (Oil, Natural Gas)

With yields being down, this makes sense. Oil starts to rally. If it gets above $88, then look to $97. We’ve had higher lows, but we’ve also had lower highs. This is a triangle pattern without a current resolution.

But again, with Ukraine, Palestine, and Taiwan (imminent) going on, and the Suez blocked, how can oil only be trading at $80 a barrel? It’s because the world economy is in the toilet.

As for natty gas:

Ok, we’re off the lows, but we’re not in the clear.

Though natural gas is clean burning, the Greens still hate it. That’s why nuclear is a much better bet.

My friend and Paradigm Tech Wizard Ray Blanco made a stunning call on May 14, 2024, in a nuclear stock. It’s been up nearly fourfold since then.

Wrap Up

There you have it. Stocks and bonds still look robust.

Metals have cooled into consolidation patterns (gold), bounced off their 50-day moving averages (silver), and got trounced unexpectedly (copper). Oil and natural gas have rallied but are still cheap, depending on your view of the world.

But it comes down to rates and the dollar. Will a dollar rally crush stocks and metals eventually? Or will rates bring down the dollar and lead to a YUGE rally?

It’s unfolding before our eyes. Let’s be slow to pull the trigger.