grab home

Hey everybody welcome to the sense of

things It is the week of the 30th the

end of April here April showers are

hitting me here in Austin today which is

good And hopefully that will lead to the

May flowers and getting my stuff done in

the garden But on top of that today’s

show we’re going to really focus on

what’s going on in some of the what I

would consider the more technical parts

of the market Ron’s going to cover some

of that He’s going to cover something

that’s called the death cross and he’ll

be also covering a little bit of a look

at oil and what’s going on I will be

covering some economic issues We had a

couple big numbers come out this morning

in ADP employment and and the GDP and

those were not good So we’re starting to

see some things build up and I think

it’ll be a good show to really follow

through on some of our logic with that

So stay tuned We’ll be right back on in

just one

[Music]

[Applause]

minute Hey everybody it’s Jeff and Ron

here Ron how you doing my friend good

morning You got April showers still good

spring weather here so I hear you But

lots of economic stuff Of course nothing

new on the tariff front but the market

selling off and it’s just getting thrown

around like a rag doll Yeah it’s just so

funny the three days of the market

steadily going up and hearing from

clients again Now it was before it was

“Oh my god what’s going on?” when it was

going down Now it was “What’s going on

oh what are we in participating on the

upside i’m like just wait I think it was

a combination of a bare market rally

deadcat bounce and the end of the short

squeeze I think that’s what it is And I

think now the GDP and you’ll go over

that some of the other numbers I think

they’re settling in also with the

contraction in GDP Yeah that’s Q1 Yeah

that means we will not a for certainty

but that means we’re probably going to

have a contraction two two quarters in a

row because definitely with all the

pullback and the noise now We’ll have to

see what happens that And then the funny

part’s going to be oh it’ll be two

quarters in a row down GDP and the media

is just going to be flush with oh it’s a

recession and all this And I’m like did

this happened during Biden and y’all

said oh no that doesn’t mean just

because it’s down No keep flooding the

market with more government jobs and

money Yeah exactly So there’s there’s

less people in the government in

Washington and it’s they’re not spending

money apparently But yeah I mean it it’s

just so funny I love watching the media

and it makes me laugh But you’ve got

some good stuff to make us laugh to

start us off right 100% Okay so here we

go These these always make me think

because being a sport guy I thought I

knew this but in what I’m saying

professional wrestling baby No really

You I didn’t even think about that with

the mule kick but I don’t think they’re

allowed to kick in wrestling Oh maybe

not They do drop Yeah they are They do

Not in not in wrestling Wrestling but

like professional wrestling World

wrestling entertainment I know what you

meant I know what you meant Yeah All

right So what do you think wrestling I

said wrestling but I It’s not It

snowboard Oh yeah Yeah Okay I got it

I’ve watched snowboarding It’s nice It’s

interesting on the halfpipe but I don’t

remember either of these I could say

probably also curling You got mule kicks

and curling too Who knows i got you All

right Next one

Where did coffee originally come from

this shocked me The what where did

coffee originally come from okay

Originally come from It’s going to be on

the equator because that’s really the

only place it grows I’m going to say

Ethiopia

my man Bam I thought it was a South

American country I had no idea Yeah but

you got to think this was like back in

early on times And that’s I understand

that’s really the only it’s actually the

only part of Africa that’s decent that

you can actually grow it I’ve never had

Ethiopian coffee I have no idea I’ve

never had Ethiopian coffee I’ve had

other subsaharan African coffees and

they’re really damn good All right And

what country has the most volcanoes

volcanoes I’m thinking maybe United

States

Indonesia Okay Yep Okay You could have

given

me 50 guesses Never would have come out

We have to have 51 choices and I

probably still wouldn’t have got

All right Here we go So a lot of people

have heard this because this is

typically a headline in financial media

whether it’s print digital or on TV And

basically what it is you got the 50-day

which is the green line here You got the

200 day which is the red line When the

50-day the green line goes through

meaning through the bottom of the 200

day that’s called a death cross Now

a golden cross is basically when the

50-day crosses above and it’s usually

showing momentum but as you can see here

there was a hell of a bottom here before

we got our golden our golden cross And

then we

had a death cross here But obviously the

crosses are late depending on the

momentum But obviously because of the

precipitous fall that we had just in six

weeks the death cross happened a lot

quicker What does this mean there’s

still bearish sentiment Have we bottomed

out don’t know We were just talking

about this that probably what we’re

seeing is a bare rally a dead cat bounce

and end of a short squeeze I don’t know

what your thoughts are but a lot of

times even when we go up and hit the 50

or the 200 day it’s typically a

short-term top Yeah which we which were

actually we hit yesterday We actually

hit the 50-day yesterday and now we’ve

retracted What are your thoughts i look

at it from the perspective I I think I

agree sometimes the technical stuff

works sometimes it doesn’t And at this

point I do agree I think it is I think

it’s still a little bit early Like I

said I had clients reaching out to me

going “Okay are we back in the market

now?” And I’m like “We’re not we’re

maybe stepping our toe a little bit into

this but until I see some skins on the

wall with the trade stuff I think we’re

just going to continue The market is

just literally on pins and needles and

everything is so headline dependent that

we’re at a situation where you just

don’t know what it’s going to do on any

given day And I’m you we’re sitting here

taking a look at the stock market had a

three-day rally and everything was good

and then boom the employment numbers and

the this number comes out really bad on

GDP and everybody the market just boom

sells back off and who knows where it’s

going to go from here Is it going to

test the bottom again which we’ve tested

the bottom twice at this point Well and

the other thing too is when you’re

looking at technicals you’re looking at

the black line which is the which is the

trend line Yeah And you have a

confluence of factors here where when it

hits the bottom or the bottom of the

trend line along with a moving average

that’s pretty strong resistance Well one

thing I think it’s interesting here we

are two days away

from a one-month announcement From April

2nd to May 2nd not one deal has been

signed not even with a tiny country

trade partner Yeah If this doesn’t tell

you that we’re in for a bit of a

longhaul sideways rocky action I don’t

know what else to tell you Yeah Like I

said I think they’re close on a couple

countries like India and stuff like that

but quite frankly we don’t trade a whole

lot into India I just heard this morning

about India here What they’ve got to do

is even if they come to some type of

term of agreement they still have to go

through their government process to get

approval Yeah And I think that’s going

to be true of all these countries

They’re most of them Yeah They’re going

to have definitely Britain and France

Yeah Britain and France Britain’s fine

because they’re their own And certainly

they’re going to have to you know go

through the parliament and everything

else but France then you get then you

start digging in the euro or the EU and

you got to herd those cats to get them

all in the order and everything else And

yeah it’s interesting I was looking at a

little bit shorter term six-month chart

looking back to basically the beginning

of the election and we saw a point on

the S&P 500 This is what I’ve been

watching to see if we could get above

There is a resistance point on the S&P

the SPY so the S&P spider at 550 And

I’ve been looking at that number and it

keeps hitting 550 and then bouncing off

and then yesterday we just accident we

actually went through that and I like to

see a follow-through day and today bam

again So it’s like there’s the three-day

rule You got to be there at least above

or below trend lines for 3 days Okay so

the next chart I think is interesting

and

this is Look I know we’re like an echo

chamber here with a lot of the

bearishness but this is the percent of

S&P companies with positive

year-over-year price change We’re

looking at about 42% Yeah this means

58% has negative price action meaning

that they’re lower than they were a year

ago And if you just look at the chart

when we hit the low on the pullback on

April 11th essentially we wiped out one

year’s worth of gains literally six

weeks This is not a good sign Obviously

we should get a couple of snapbacks here

but even this is not positive Well and I

mean you look at the if you looked at

the in that price movement there if you

looked at the drivers of the market

prior to that the Mag 7 they have all

been down miserably at this point in

comparison Way more than they’re all

down pretty big today Yeah I think more

than I’m point one and a half to 2% But

here we go So it’s funny I haven’t

really brought it too much up in in many

podcasts but I look at this every week

probably not every day and oil is a

canary in the coal mine It’s basically

an indicator of demand which is why I

don’t recommend energy stocks especially

ones that are pegged to oil because

nobody can really tell me why oil goes

up or down And here we are on the left

We have the 50week average We are below

the 50week average and came up and

whacked against the trend line and has

gone down Now here’s and of course on

the right side we got the 50month

average Same thing Look at that It’s

amazing We kept bouncing up off the

50month moving average line down We’ve

been trending down and now we’re down

below that trend line again And this is

the interesting thing that I watch about

oil

Two things About 10 12 years ago I can’t

remember They had one of the Saudi oil

ministers on CNBC or one of the channels

and he said “We’d like to see the price

of oil between 80 and

$100.” And I’m nodding my head and I’m

thinking I’m like “How do they know

that?” How do they know that and dig

into the numbers a little bit deeper I

don’t know what the exact numbers are

and I should have been more prepared

today The average

cost in the US to pull out a barrel of

oil is somewhere in the

5455 range Yeah In Saudi Arabia because

of their cost of labor it’s in the teens

It’s like 12 to$15 a barrel Yeah Of

course they wanted 80 to 100 because

they know over a hundred US oil petro

explorers make more money under 80 they

got tighter margins So they know 80 to

100 is probably right They’re not dumb

They know but they know at any point

because of their cost to pull the barrel

out of the ground they know what they’re

going to make But this is a little bit

of an ominous sign at least in the short

term as far as where the trend is And

also another reason why I could bring up

Chevron Kico Phillips Exon Mobile and

look at these charts and they’ve gone

nowhere Pay a good dividend I hear that

but they’ve gone nowhere So if you’re

looking for growth in your portfolio why

are these energy stocks being considered

it was a bit of a rant but this is

something I look at frequently Well but

I think it’s always funny when you know

okay so we’re going to loosen up

restrictions on drilling and everything

else That just means there’s more

production which means the price is

going to go down I look at oil from a

different aspect I look at oil As that

oil goes down that means the cost of

fuel goes down which means all of the

cost of goods typically is going to go

down as a result There’s more spending

money in people’s pockets Yeah there’s

more spending money but also it’s okay

It doesn’t cost me as much If if fuel’s

down if petroleum’s down that means that

my fertilizer as a farmer is going to be

less My diesel fuel as a trucker is

going to be less all those things that

that input is such an important part of

inflation And you look at you wonder why

we had inflation through the roof you

know in 2022 2023 there Oil’s up over

$100 a barrel Diesel was5 or $6 a gallon

which is

insane Somebody’s going to have to

absorb that And unfortunately it was all

of us that had to absorb that Yeah I I

think it’s an interesting thing I think

we’re going to have to we’re going to

have to actually see that come down a

little bit more So yes investing in oil

companies not exactly the best plan at

this point It is not What do you got let

me quickly do some of my favorites which

are talking a little bit about the

economics and this was not necessarily a

good economics morning for those of us

that are in the market We got the ADP

report which you and I have discussed

before I don’t necessarily put a whole

lot of credence into this

because they are all over the fence and

they are inaccurate as hell a lot of

times But this was a big shocker for the

market because the previous was 155 that

was revised down to 147 The consensus

for this month was 125,000 with a range

between 80 and 150 which I think is

hilarious You could drive a truck

through that and it came in at 62,000

That’s private employment largely and

that’s saying that companies are still

on the fence on should we be hiring

should we not be hiring at this point

and I think it’s something we need to

watch very carefully if that trend

continues because Uncle Sugar is not

there to hire employees anymore in the

government side So I think the ADP and

the and the Friday employment reports I

think are going to be a little bit

closer now because they’ve been skewed

so much by by government employment over

the last couple years Other biggie today

was GDP consensus was prior it was 2.4

consensus was

0.2 with a consensus range of neg five

to 1.1% it came in at.3% So the first

quarter of negative GDP growth since

2022 that’s that starts to look at okay

now we come out of the Q1 which is the

president just got in started doing some

stuff market has been slowing for

several months or already have been

slowing towards the end of last year now

with all the tariff talk and all that

it’s very likely that we’ll see another

negative GDP growth quarter

But like I said of course the media will

immediately jump on that and say it’s

all a recession and

okay why wasn’t it the last time this

happened but right they call it a

technical recession Yeah Technical Only

the NBER National Bureau of Economic

Research calls the official recession

Yeah Which they end up calling like two

and a half years later it seems half the

time So okay what good are you because

you don’t really help me know what’s

going on right now But we’ve been saying

this for a while you just you were

seeing it in a lot of different factors

and it’s starting to the cracks are

starting to show a little bit from the

employment situation as well as the GDP

situation So something we need to keep

an eye on and I don’t think it’s a real

driver of the market going up anytime

soon Nope If nothing else until there’s

positive prints Yep I think sideways

action and probably a rush to to

treasuries Yeah Yeah which we’ve seen

going up really dramatically in the last

week I I’ll and I’ll cover that in just

a second too By the way real quick

they’re not expecting I saw the list of

they’re not expecting the first rate cut

until July that may get pulled forward

Yeah I could see that happening just

because of the craziness even in the in

the Treasury markets A couple of other

numbers that just they were they’re ones

that were in the econo day calendar

Consumer confidence another one where we

were coming out of a prior n

92.9 came in at 86 this time below

consensus It’s just showing everybody

starting to get a little uncomfortable

with things International trade and

goods was down below what the consensus

was as well It was even below the

consensus range So once again it’s all

this stuff is out of whack and we’re

starting it supports the

administration’s belief that we’re not

winning in the trade route So hopefully

this will get balanced out with some of

these trade deals Um couple things to

just keep an eye on the rest of this

week Thursday we’ve got jobless claims

coming in That’ll be interesting to see

because this should be the beginnings of

a lot of those government jobs So you

might see a spike up there on the

jobless claim side the manufacturing

index ISM and then employment situation

on Friday I think are interesting areas

that I think are going to be watched

very closely And just to address what

Ron was just saying if you look at the

PH oh crap sorry SH Y Yep here we go Shy

So this is the one to threeyear Treasury

bond We saw this was that right around

the time where treasuries really started

dropping This was around the beginning

of or yeah close to the beginning of

April We saw that little drop or pretty

big precipitous drop in a few days uh

when some foreign governments and I

think some hedge funds were unwinding

but you can see the SHY has moved itself

back up and we’re actually at the high

point of six months at this point and

then TLT which is the little bit longer

20-year Treasury that one got walloped

really hard and it’s also on its way

back up as well So what that’s saying is

we’re starting to see the Treasury

yields come back down They had spiked up

dramatically around this time period

They’ve stabilized and started to move

in the positive direction or negative

for yields positive for prices I think

part of that is President Trump laying

off Jerome Powell for a while and

basically saying “No I’m not going to

fire him.” Which that was a major factor

I think for the the Treasury markets had

We’re not seeing that anymore And I

think if they can they if Pal did it to

himself in a lot of instances for going

out and speaking in that one instance

where he probably should have just shut

his mouth and same thing with our

president should have shut his mouth in

these cases Can’t help himself There’s a

microphone Yeah there’s a microphone And

like I said it’s this is not something

that you want to monkey with the

Treasury markets It’s a huge thing It’s

confidence it’s stability in our dollar

and everything else Stop monkeying

around with that Just focus on okay if

you’re going to get trade deals get them

done at this point And I like I said I

don’t think we’re going to see much of

anything until we get some big skins on

the wall with some of these deals

There’s five major countries We know who

they are India great But yeah India any

of those countries yeah Japan China EU

Canada Mexico Until three of them are

done es and specifically China I think

look I’m trying to tell clients now in

our reviews I think it’s a coin flip in

the next six months whether we’re going

to be 10 to 15% higher or 10 to 15%

lower Don’t know I think it’s a coin

flip from this spot here And I think

quite frankly in six months we could be

just about even at this point That’s the

coin flip Honestly I could see it just

moving sideways but during that time

period I can see 10% movements either

direction Exactly As we go that band

could be that 10% swing either side of

the coin Choppy rangebound action Yeah I

could easily see us in six months being

absolutely flat with where we are today

just because it’s every positive thing

the market’s going to go up like a

rocket ship and every negative thing

it’s going to go down like a rocket ship

And it’s just it’s a bit of craziness

right now And I think people have got to

calm down and just let things be at this

point Like I said I make adjustments to

portfolios and allocations based on what

I see from the momentum of the market

But yeah like I said I can see being

sideways and I don’t really want to be

heavily towards the stock market either

Here’s the last quick point to wrap up

Other than what happened in the last two

months or two and a half months Yep And

other than

COVID people are used to looking at

their monthly and quarterly statement

balances just goes up because either

they’re adding more to it if it’s flat

or the it goes up So people are just

like this is the American way I was

looking at a stat or I saw the stat

since 1854 we’ve had 35 recessions We’ve

only had 13 since 1944

And I believe the reason for that is

because we became the world’s reserve

currency in 46 So we had more

flexibility to control either avoiding

or getting out of recessions So looking

at all this folks these are contractions

are normal Work and live through it And

there I there’s not much else to say

other than yes we’ve been spoiled But

guess what sometimes credit purges need

to happen Whether you want them or not

they’ve got to happen And the other part

is economists have predicted 45 of the

last 17 recessions that are out there

You’re going to hear the economist wa

babbling on about recession and oh it’s

a foregone conclusion that this is going

to cause a recession Yeah it might You

and I were probably 18 to 24 months too

late or too soon Too soon Too soon Yeah

honestly I would have said just from

what I was seeing but somehow

resiliently the market the economy kept

pumping along but I just think there’s a

point where you just run out of juice

and I think

the employment situation has been really

good and that’s helped an immense amount

but starting to see a few cracks there

and talking to just anecdotally talking

to like people that I know especially in

the tech industry it’s really difficult

If you get laid off it’s really

difficult to find a new job right now I

have two friends and clients right now

one in tech and one in biotech pharma

They’ve never seen this type of job

market as far as difficulty to get a job

with their experience Yeah And skill set

They said that I’m literally they’re

getting emotional about it now because

it’s been so long and so difficult Yeah

Yeah And a lot of them were I think a

lot of them are living off of their

retirement savings and everything else

Yes Unfortunately and then watching that

dwindle with the markets be down I think

it’s going to be it’s going to be a

challenge We know that and we’ll

navigate that here on the show So folks

thank you for joining us We’re glad that

you’re here Hopefully you enjoy these

Please feel free to comment I love to

answer questions on this stuff And we’ll

see you guys back here the very next

time