Following are my personal comments on specific markets and issues. I chart markets for a hobby and my comments are the result. They are not recommendations to buy or sell anything and should not be thought of as such. They are for entertainment purposes only so enjoy.
Please remember, the following is pure speculation based only on my experience and chart patterns. "Every sunken ship has a room full of charts."
David Bruce Edwards
July 4, 2025
Note - I got a new wider screen monitor and when I look at this web site with the screen size in full, the site spacing does not come out properly. By making the window less wide all of the text and graphics slide into place. Perhaps you are having the same experience. DBE.
As usual, I will show pictures and graphs found on Zerohedge.com, Sentimentrader.com, which include the Seasonality charts and charts made on Barchart.com. I will also mention "cycle low timing bands" suggested by another market website to which I subscribe, Cyclesman.com.
Did anything happen in Iran a couple of weeks ago? If so, you wouldn't know it going into the 4th of July holiday. The U.S. and Vietnam worked out a trade deal. We are allowing a resumption of Ethane shipments and chip design software to China in return for concessions from them. The Big Beautiful Bill passed.
TV Economists are in three camps. 1. Trump is in charge and things will be great with moderating inflation and economic growth. 2. Surveys from industry groups show that prices paid for raw materials and parts keep going up. So far, businesses have been eating the inflation but it is just a matter of time before it hits the shelves squeezing consumers and causing a slowdown. 3. The billions going to illegal immigrants was what kept the economy from falling into a recession. That money is being withdrawn along with other DOGE cuts. Employment is looking good only because illegal, unofficial workers are being replaced by more costly legal workers. The Continuing Claims number shows that hiring is slowing. Along with that, we are on the cusp of a decline in home prices due to over supply. The drop in employment and home prices will cause the consumer to limit spending and the economy will go into a recession.
Here are some of the statistics that they looked at to support their theories.
The Fed made no changes to monetary policy because of the potential for tariffs to cause inflation. Last month we did not see much evidence of inflation. On the 27th one of the most watched sets of inflation data was released. The Personal Consumption Expenditures Index (left) came in at 0.1% month over month and 2.3% on an annualized basis. The blue, annual line ticked up a bit but the last three months look good. The green line on the right side graph shows the Core number that excludes food and energy. It is running a bit hotter at 2.7%.
The "Super Core" reading of Services minus housing costs (left) came in at 0.13% for the month and 3.12% for the year. On the right is the read on Personal Income (upper red bar) and Personal Spending. The drop in Personal Income is mostly due to the work of DOGE in removing dead people from the Social Security payments system.
Existing Home Sales (left) are still running at low levels while the inventory of Homes for Sale (right) continues to climb. I get updates from Zillow on some towns around me. One of the locations is Rockport, Massachusetts, a ritzy little tourist town on the ocean. A 2,000 square foot home with a water view fetches a million Dollars or more. I noticed that most of the prices included a note saying "marked down by $100,000." Some of the more expensive properties had $200,000 off the original price.
Imports and Exports (left) both fell. The Red line is the Imports data and much of the drop is from China. You can see why some economists are worried about future inflation. There is a lot of "stuff" that used to be available that is not going to be on the shelves. A drop in exports is not a positive thing either. The right side graph shows the latest on Durable Goods minus aircraft orders. It rose a healthy 0.5% month over month. Boeing got huge orders from the Middle East after President Trump's visit. When included the number came in at 16.4% but it is a one time event.
The Job Openings number is a month delayed so the latest data is for May. They came in at 7.769 million, an unexpected improvement over April's reading. Analysts were looking for a lower number. On the right is the tally of hires (green) and quits. The quits number tracks people who think they can get a better job elsewhere. When it goes up, it is interpreted as a sign that the job market is strong.
ADP reported a 33,000 person drop in employment last month (upper left). The right upper side graph shows the breakdown between goods producing jobs (up), and services jobs (down). If tariffs were to blame you would see the job losses in goods producing areas. The hardest hit services jobs were in financial services. A year ago, I heard an interview with a tech recruiter specializing in AI engineers. He was asked if there was any particular industry where AI programmers were in high demand. He said that financial services companies were his biggest clients. Amazon says it's warehouse workers are now equally split between humans and robots, thanks to AI and the trend towards robots will continue. Microsoft is laying off 9,000 employees with most analysts blaming AI. Guys in the AI tech sector are like the Disney workers who were forced to train their replacements. In this case, their replacements are non-human.
The latest report on New Claims for Unemployment (left) showed no sign of distress in the labor market, coming in at 233,000. The four week moving average (right side, green line) fell a bit while Continuing Claims rose to 1,964,000.
After the weak ADP report, analysts were expecting a soft number for Non Farm Payrolls (left), with the consensus just above 100,000. The official tally was 147,000 jobs added. April's numbers were revised up by 11,000 jobs and May's by 5,000. The unemployment rate dropped from 4.2% to 4.1% and average hourly earnings rose only 0.2% month over month. The Labor Force Participation Rate was 62.3% the lowest in two years. What drove the surprise increase? Government jobs were up by 73,000, mostly in state and local governments. The right side graph shows the breakdown of non-government jobs and the gains were more in line with the soft number the Street forecasted. The stock market didn't care about the government versus private sector job creation. Stocks opened higher with investors no longer worried about a recession and looked forward to the best of all possible worlds.
So far, the "Trump in charge=things are fine" theory is holding up with inflation moderate and the jobs market still doing well. Investors are certainly convinced that it will continue. Going into the 4th of July they pushed some of the major averages to new-highs. On the left is the capitalization weighted S&P 500 with a simple RSI momentum oscillator below. The oscillator reading is above 0.80 where it was a year ago when Fourth of July optimism ruled the day. On the right is RSP, the equal weighted S&P 500 ETF. It is not yet at new highs but it is "good enough for government work."
Financials, Industrials and Tech are leading the way higher so if your portfolio is weighted toward these companies you are doing well. All three have high RSI oscillator readings on their daily bar charts. This is not a "sell" signal but it does tell you that you are very late to the party. How much of the Big Beautiful Bill is already priced into the shares?With the oscillators this high, if you buy now, it increases your risk of losing money over the next year.
Momentum trading programs disagree with this. They say that winning will beget winning as more money piles into things that are working.
Buyers are fully anticipating that the economy will accelerate in the next year, employment will look good and inflation will be tame. At these levels there is little room for bad news.
The other index making new highs is the NASDAQ 100 which mirrors the S&P 500 InfoTech sector above. Computer chips led the way with NVIDIA back near its highs. A Bloomberg article says that China is adding to its huge investment in computer chip technology and AI. Evey other first world country is doing the same by subsidizing computer chip manufacturing and data centers. In past technology boom cycles (rail roads, cars, radio, dot.com) the build up cycle was the most fun. Making enough money to pay back the investment costs proved to be more challenging. I live in the Boston area and every town has "rail trails" These are pathways for hiking and biking that were railroads a couple of centuries ago. The investment burst raised enough money for tracks to be laid down everywhere but there was only so much paid demand. In the world of computer chips and AI, lots of track is being laid down..
Mags, the Magnificent 7 ETF that out performed everything else in past years, is lagging thanks to Apple and Tesla. The Big Beautiful Bill phases out subsidies for EVs and Elon Musk's popularity among liberal Tesla buyers is way down. In countries that allow Chinese EVs, those cheaper models are gaining market share. Apple is less loved because it does not have an "AI Strategy." If analyst mean that it is not spending billions of share holders Dollars on Nvidia chips and data center construction then I see that as a positive for Apple. With all the entrants in the market, Apple will be able to buy AI services at bargain prices.
The Dow Jones Industrial Average is doing its best to catch up to the S&P 500. On the left is a wave count of the post April rally that sees all the good news priced into the market. The RSI reading is high and we could be in the fifth and final wave of the rally. Bulls will see the right side graph with prices mid way through a Big Beautiful Bill price explosion.
Here is an update on the similarity between the sideways move in 1984 and this year. Both consolidations followed strong up moves with most stocks and industry groups participating.
Last week I read a well reasoned and well written newsletter on various markets. The writer is convinced that we are in the middle of a commodities super-cycle fueled by a declining U.S. Dollar. Above and to the left is a five year, weekly graph of the U.S. Dollar Index with a simple RSI momentum oscillator below. A quick look at the picture should tell you that when the oscillator is bouncing along the bottom of its range it is usually a bad time to short Dollars. The upper right side graph shows daily bars of the last 9 months with arrows pointing to theoretical 23 trading day cycle lows as put forth by Cyclesman.com. We are in the timing band for a low right now. Most of the time, the low is not exactly on 23 days but it is within a week. Directly to the left is a chart from Sentimentrader.com showing the path of the Dollar Index in black and their "Optix" reading below. This is a combination of sentiment indicators based on things such as futures positioning and options trading that shows how traders feel about a market. In the past, when they were very negative, as they are now, the Dollar was close to a low.
Moral of the story - Yes, something dramatic could happen that would push the Dollar lower but the stars are lined up for some kind of low in the not too distant future. There could be other reasons why commodities rally such as wars or shortages.
Gold hit its all-time high more than two months ago then traded sideways. Usually, when a market has a big up move then trades sideways in a tight range near the peak, it eventually breaks to the upside. I say "usually" because in some cases, the sideways move fails and accelerates down as months of buyers realize they are sitting on a loss and that they got sucked into buying at prices that are likely not going to be seen again for a long time. Next week is a timing band for one of Cyclesman.com's 21 trading day cycle lows. On the upper right is a chart of the daily spot closing price in NY and a simple Relative Strength Index momentum oscillator. For art's sake I would like to see an early decline next week that pushes the RSI reading toward the lower blue line at 0.20.
Directly to the right is a weekly bar chart of spot gold prices in NY with arrows pointing to Cyclesman.com's 18 week cycle low timing bands. He calls them "timing bands" because some run short and some run a few weeks long. We had two sell offs that could be the last 18 week low. The red arrows point to February 28th with the current low, due now. The blue arrows point to the May 16th alternative that puts the next timing band in late September.
Over the past months I wrote that July is usually a good month for silver and gold and that this time, the love could spread to platinum and palladium. These days, due to all the computer programs using data-base retrieval, comparisons with past markets, patterns and seasonal tendencies is public knowledge. Traders are taking it as a "given" that July will be a great month for precious metals. I have to wonder how much of the "good July" has already been bought. If you wanted to go on vacation at a fancy hotel in July and you were told that if you booked by June 30th you would get a 20% discount, wouldn't you buy before June 30th?
Will July give silver a rally? The daily chart of spot prices in NY on the upper left shows a sideways move over the last month. The upper right hourly graph of of September Silver Futures shows the detail of part of it. Half the financial articles I see are talking about how gold and silver can only go higher. If we don't get some good action soon, there will be a lot of disappointed buyers.
The graph directly to the left shows the weekly closing price of spot silver in NY, its one year moving average and the difference between the two. Red ovals mark highs in the difference between the two. Greens mark lows. I have no insight into silver. The secret is that no one else does either. I will wait for green oval territory before I touch the stuff.
Past updates included warnings that platinum and palladium mines in S Africa were losing money, shutting down or curtailing production. I urged my platinum and palladium using clients to buy some supply when prices were in the doldrums and noted that the best time to buy a commodity is when no one cares about it.
My guess is that the current rally phase in these metals has more to do with the gold and silver rally spreading out into other "precious metals." As such it could be a sign that we are in the mature part of this rally. Both these metals are thinly traded and it is likely that much of the buying is from computer run commodities trading funds following moving average cross overs. Both charts above have 10 and 50 day moving averages. If platinum closes below its 10 day, you could see some selling that spills over into palladium.
Directly to the right is a close up of the last few weeks of palladium. It could be forming one of those contracting coiling patterns that leads to a final burst higher then a reversal. If you see it happen it could be a warning for gold and silver too.
On the left is a weekly bar chart of copper prices. It closed last week near all time highs. On the right is a daily bar chart of DBB, an ETF that tracks a basket of base metals. Its top holdings are aluminum, zinc then copper. With all the talk about data centers and investment in power plants to run them, copper is leading. Base metals also tend to do well when stocks are strong. It is assumed that stocks must be going up because the economy will do better and some of that should flow into the demand for industrial metals.
On the upper left is a 3 year graph of XLE, the big energy ETF with Crude Oil below. After the Iran bombing, oil dropped towards the lower end of its trading range. Energy Patch stocks didn't pull back that much. On the right is an ETF that tracks oil refinery stocks and Crude Oil underneath. The refinery stocks continued their advance despite the plunge in Crude.
Every Wednesday morning the US Energy Information Administration releases official data on how much crude oil, gasoline and distillates are currently stored above ground aside from the Strategic Reserve. Oil is around 9% below its five year moving average for this time of the year, gasoline 1% below and distillates (diesel, heating oil, jet kerosene) a stunning 21% below. What caught the market's attention is that crude oil stored in Cushing, Oklahoma fell close to multi decade lows. The Cushing Storage area is huge and has pipelines with oil flowing in and out to many destinations. It is used by gulf coast refineries and is an exchange approved delivery location for physical crude oil for NYMEX crude oil futures. The low levels caused massive short covering in the futures market on Wednesday and into Thursday.
My guess is that much of the recent draw-down from Cushing and other official storage areas was from refiners and traders buying crude in anticipation of higher prices because of the Iran situation. It is also peak demand season for gasoline with oil refineries running at slightly above 94% capacity for the last two weeks.
This weekend, OPEC + is expected to announce an increase of 411,000 barrels per day in August. This is also the time of year when unleaded gasoline prices usually peak along with demand. Oil refinery shares in particular look vulnerable to a correction if oil opens lower next week.
Everyone wants to be a philosopher these days or to sound "deep" when discussing issues. Books about long term cycles and generational tendencies (The Fourth Turning Is Here book) are very popular and often quoted. I travel a lot and have time on flights so I actually read them. Many of them are predicting that we are entering a period of prolonged conflict and social unrest. The Iran bombing was not a closing door. It was the next push open following Ukraine's suppression of its Eastern Russian population following the U.S. backed unconstitutional takeover in Kiev in 2014, the Russian invasion of Eastern Ukraine, Oct. 7th in Israel and their response in Gaza, Lebanon and Syria and Turkey's continued push to reestablish the Ottoman Empire. You are hearing a thunder storm approach. The latest rumble was very loud and you think the storm is right over you and at peak intensity, but it isn't. There is much more to come. In past cycles there were always crop failures and food shortages. One of my core strategies has been to buy the ETF WEAT that tracks wheat prices as they declines. On the right is a graph from Sentimentrader.com showing the seasonal price tendency for wheat. It is the end of harvest time for spring wheat and often, prices bottom this week. Remember - I am talking my book here and it could be that all these snobby cycle theories will not work out this time so please don't bet the farm on Wheat then send me an angry email when it tanks.
Best Guesses -
Stock Market - All historical correlations point to higher prices. I am still watching the 1984 trading range pattern. The time around July 4th is often an emotionally optimistic time that is reflected in the stock market. If you run, lift weights, golf, play soccer, cycle or if in business and you are over 30 you probably had a race or day in the gym or the golf course when you felt like superman or couldn't miss a putt. At work it could have been a two month span when orders broke records and at the next management meeting they talk about the need to raise prices on marginal accounts and if they leave for a competitor, who cares? But that race, day in the gym or morning of golf turned out to be a peak performance day that you remember for years and didn't repeat. At the management meeting while they are making a list of marginal clients to dump, an older employee asks, "Didn't we do this in 2018 and when things fell apart two years later we had to go to all these guys and beg them to come back?"
Hopefully I am wrong, but last week felt like one of those peak weeks for President Trump. Much of the energy for the market has come from a belief in the MAGA future for our domestic manufacturing. I worry that if we hit "peak Trump" we are close to the same in stocks.
Gold and Silver - We are in July, a favorable month and the short term cycles look good. Let's see what happens. If we get a whimper instead of a roar then I worry that the best days are behind us. Watch the palladium pattern. If it gets the surge up and reversal it could be the canary in the coal mine for the group.
Oil - Domestic storage levels are down with Cushing critically low but that might have been from hoarding during the Iran build up. World-wide, analysts are saying that absent a war disruption, there is plenty of oil around. Refinery shares in particular look worrisome.
Other Commodities - I am watching Wheat, but, remember, I am biased.
On Friday, President Trump stirred the pot again with more tariff threats. The exchanges were closed but stock index futures sold off and oil retreated a bit. Let's see what Monday brings.
Best of luck,
DBE