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
April 11, 2026
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.
The financial markets traded around war expectations over the last two weeks. Since the ceasefire announcement, market moves reflect cautious optimism going into this weekend despite demands from each side being non-starters. The economic data released during the past two weeks was somewhat discounted by the markets. If it was from February, before the war, it was out of date. If from March then it could be ignored if there is a negotiating breakthrough this weekend and the Straits are reopened.
The Consumer Price Index rose 0.9% in March and 3.3% annually (left), with energy prices leading the way. The Core reading (right) that subtracts food and energy rose 0.196% monthly and 2.595% for all of last year. Stock index futures jumped on the lower core reading then quickly gave back gains since all of us have to pay for energy and food. Today's higher gasoline and diesel prices will filter through everything in the coming months.
The Personal Consumption Expenditure Index is thought to be an accurate measure of how much inflation consumers are facing. The latest reading is from February, before the war. Optimists are hoping it reflects how things will be if the war ends quickly. The headline number (left) came in at 0.4% for the month and 2.8% for all of last year, a bit hotter than anticipated. The Core number that subtracts food and energy was a bit higher annually, at 2.96% (right side, green line) and 0.4% for the month.
A subset of PCE, the inflation for services minus shelter index was up only 0.2% for the month (left). On the troubling side, Personal Income (right graph, green line) was down 0.1% in February while Consumption Expenditures (red line) were up. Consumers dipped more heavily into their savings to make up for the difference.
Initial Unemployment Claims rose to 219,000 which is still on the low end of historical data (left). Continuing Jobless Claims (right side, red line) fell below 1,800,000. There is no indication of labor market problems showing up in the unemployment claims data.
On April 3rd, we got last month's payrolls number. Analysts were expecting a gain of around 65,000 jobs. The official reading came in at plus 178,000 (left) with revisions for the last two months resulting in a net loss of 7,000 jobs. The Household survey that comes from calling homes and asking about employment, fell by 64,000. On the right side graph the green line shows the official Establishment Survey and the red, the Household. Take your pick.
The left side graph shows the jump in retail sales for February. Analysts predicted that consumers would run out of spending power but as of February, they were still buying. The right side graph shows the latest Case Schiller reading on home prices in the country's 20 largest cities. The last data available is for January. In some cities, prices are still rising but in more than half, they are falling. This is the most that were on the falling side in years.
Two weeks ago, my most optimistic chart showed the S&P 500 completing an expanding triangle (upper left) which would lead to a final stock market high. The price action since then is consistent this interpretation but it also looks like a typical retracement of the first move down from a major high. The upper right graph of the last six months of trading in the Dow Jones Industrials shows the same strong rebound. The market is approaching resistance levels from last fall. Chart fans will be watching to see if we trace out a head and shoulders pattern with the current rally forming the right shoulder.
Directly to the left is a more detailed graph of the rebound in the Dow. The pattern looks like an advance, a text book contracting triangle then another up move with its own smaller triangle and peak. The mid-move triangle implies that the rally is a correction as opposed to the beginning of a new bull market so if you are a chart mysticism fanatic, you sold late in the week. This does not mean that the market will crash to new lows. The up, triangle, up form could be the first leg of a longer sideways trading range that will last months.
Both the NASDAQ 100 and NYSE Composite had healthy rebounds. If the market is correcting before another sell off, it should stop right around here.
The market caught data center fever again last week with all doubts about future profitability swept away. Coreweave rallied strongly as did Nvidia. However, both of them are well off their highs and had previous spikes up that were quickly erased. Taiwan Semi had a big week on continued strong orders. Naysayers keep pointing out that almost half of the proposed data centers are being canceled due to cities and towns denying permits. They also present data centers as business models similar to hospitals. In a hospital you have to pay your nurses and doctors and everyone else even if the beds are not taken. Data centers are extremely expensive to operate and critics say that the major AI companies are charging a fraction of what their services actually cost which is why they are constantly raising new money in the private market place. Last week, no one cared. We had one kind of world teetering on inflation and depression due to higher energy prices and the possibility that gasoline, diesel and natural gas would not be available in some parts of the world. Then we had another kind of world where the money to build data centers and buy Nvidia chips will be unlimited even though data centers are huge consumers of the same energy that could be extremely expensive in the future.
I thought that Apple would do better in a relief rally than it did . It could be that investors are worried that consumers might not buy $1,000 phones if they are having a hard time paying for gas and heat. Alphabet, Google's parent company rallied to resistance and might be forming the right shoulder of a head and shoulders pattern. Many analysts say that Google is the AI winner with their more efficient GPU chips and the ability to finance much of their data center activity from their own cash flow.
Software companies were slaughtered over the last quarter because Anthropic and other AI systems can write software for a fraction of the cost that specialty firms charge. Microsoft was one of the losers and an important one because it is one of the biggest components in the S&P 500 and everyone invested in an index fund owns it. To the left is a half hour bar chart of MSFT since its March low. Like the Dow Jones Industrials it looks like it made an up, triangle, up. I have seen similar patterns before an important low so I will be watching the stock as the standard bearer for the software group which could be approaching a trade-able low.
On the practical side of things, are you planning to cancel you Microsoft Family subscription which includes Word, Excel, PowerPoint and others things then ask some AI agent to write you a substitute set of programs that allow you to do something similar? Probably not. COPILOT, Microsoft's AI constantly pesters me to let it do things so I have all the AI I want (or don't want) right now.
The left side graph shows the price action for the front three months of our domestic Crude Oil futures contracts. The upper right side graph is for Brent Crude delivered in June. There is no shortage of Oil in the U.S. The latest government statistics are from the week ending April 3rd. Crude Oil inventories, aside from the Strategic Reserve are at 464.7 million barrels and are 2% above the five year average for this time of the year. The Brent Contract is based on non-U. S. oil and is more sensitive to flows through the Straits. When the lead Brent Contract was for the month of May, it was trading at an $11 premium over WTI May futures. After the ceasefire it is around $5 over our June contract. WTI futures sold off in the last couple of hours of trading in the U.S. on Friday and stock market Index futures rallied slightly. The markets are clearly anticipating a positive outcome from weekend negotiations in Pakistan. The June and July delivery contracts are priced for more oil in the system.
There is a surplus of Natural Gas in the U.S. and the world. A natural gas field shared by Iran and Qatar produces a large portion of that supply and the facilities of both countries were damaged. With the Straits closed there are shortages in Asia and other parts of the world that depend on Liquefied Natural Gas from the Middle East. Prices in some Asian countries are close to $20. To the right is a five year, weekly bar chart of Natural Gas prices in the U.S. The price ratio between Natural Gas and Crude Oil is at an extreme with Natural Gas on the cheap end. I remember a previous time when this was the case. A small industry of shops that converted gasoline powered engines to natural gas were very popular. If we see a sustained closure of flows from the Middle East and persistently high gasoline prices, conversion kits to natural gas and the push to substitute natural gas in other applications will gain momentum in the U.S. and Canada.
Our domestic Gasoline and Distillate (Heating Oil) contracts are also anticipating some kind of breakthrough with Iran and opening of the Straits in the next few weeks. Gasoline in storage is 3% above the five year average for this time of the year. Distillate fuel inventories are 5% below the five year average which sounds bad, but this is actually near the high end of the range over the last few years. There is plenty of gasoline available. If the Straits are opened, pump prices will collapse.
There is a disconnect between commodity futures trading and the prices of the actual physical commodities at different places around the world. On financial TV, when they interview people who buy and sell crude oil, gasoline and distillates at various locations, they are in crisis mode and tell viewers that the contracts traded in New York and Chicago are greatly underpricing what they are seeing in the physical market. Last week, one commentator said that the last tankers that left the Persian Gulf before the war are just now unloading in Asia. With nothing on the way, they expect the prices for physical energy commodities to explode higher at these locations, even if there is some breakthrough in the next week. Commentators who specialize in crop commodities are also predicting a crisis. Much of the world's supply of fertilizer is trapped in the Persian Gulf along with Liquefied Natural Gas, a feedstock for fertilizer plants around the world. This is a time sensitive situation because we are entering planting season in the northern hemisphere and crops will be stunted without fertilizer. The available supplies are getting more expensive with farmers in many parts of the world unable to buy as much as they need. Above are five year graphs of prices for corn, soybeans and wheat in the U.S. We had great growing seasons over these years. We have lots of grain stored and prices are still low. Fertilizer will be more expensive in the U.S. because of foreign demand but there will not be outright shortages. There are weekly tenders for grains where countries around the world bid for tons of our stored grain and next year's harvest. Watch for an increase in the weights acquired for export as countries worry about future supplies. Last week, weather forecasting firms predicted a super El Nino for late 2026 and 2027. These tend to produce stationary ridges of high and low pressure around the globe and alter the path of the jet stream so that some areas get catastrophic floods while others get droughts. In 2008, wheat prices hit $10.82, corn $7.51 and soybeans $15.73. A bad weather year combined with fertilizer shortages could push prices even higher.
The world runs on borrowed money. Interest rates are an indication of how much money is available for loans (liquidity) and how much trust there is in the ability of a debtor to pay the interest and eventually the principal on the loan. The blue line on the left side graph shows the current yield curve for U.S. Government debt. The right side chart shows that as of Friday, the rate on a 10 year U.S. Government Note was in the middle of its range for the last few years. The governments in the Middle East that are not getting their regular revenue from oil and energy related products are heading into crisis mode because they still have to pay salaries and subsidies. They either borrow or they begin selling assets such as U.S. Government Debt, stocks in their sovereign wealth funds or gold. In February, Turkey sold gold. The longer the Straits are closed, the greater the odds that there will be fire sales of assets. I subscribe to the Substack of Michel Howell who tracks global liquidity week by week. His work shows that its rate of growth peaked and is headed down. This resulted in lower prices for Financial Markets of all types in the past with Bit Coin and Gold being the first to respond.
Above on the left is a six month moving average of U.S Government expenditures versus money coming in from all sources. Outflows are up and the incoming is down. The red line on the right shows the cost of interest expenses along with other government expenses. It is amazing that interest rates are as low as they are! The numbers for March were released last week and they showed that our government had to borrow 7.81 Billion Dollars per business day to stay afloat in March. Last night, as the space craft bobbed in the ocean, I listened to a NASA official complain that the budget for some space related programs such as Mars rovers, is going to be cut. Welcome to the future.
On the left is a graph showing the growth of debt for the U.S., Europe and China. One of the themes of our time in history is the willingness to lend at low rates. This is a consequence of confidence and there is a reason for it. One of the first financial crisis situations during my adult lifetime was the Argentine and Latin American banking crisis in the fall of 1982. At the time, commentators said it would put the major European and NY Banks out of business. It didn't. Since then, the financial system rebounded over and over again because our government and others nationalized problem loans so that the accumulated debt was passed from the private sector on to the tax payer. Governments around the world are planning to do something similar with the current energy price crisis by offering subsidies. This means they will take on more debt.
On the left are weekly bars of spot gold in NY with Cyclesman.com's theoretical 18 week cycle lows. The next one is due in the middle of July with a probability of the actual low taking place within four weeks of the ideal mid-July date. There is a light blue rectangle highlighting a previous correction that lasted approximately one 18 week cycle. This is a reminder that given the big up move, we could trade sideways for months. A break of the recent 18 week cycle low would be evidence of a major top. On the right are daily bars with the 21 trading day cycle. The timing band for the next one starts at the end of next week.
The left side graph shows hourly bars of June Gold Futures. I drew in two channels of decline. We finished the week within the range of the red channel. Bears will see this as a correction of the channel decline that is likely to give way to another sell off as we go into the timing band for another daily cycle low. On the right are GDX, the popular Gold Mining Company Company ETF and a gold line showing the path of June Gold Futures. In March, the mining shares made a high on the first upward correction in gold, something I pointed out at the time as evidence that gold topped. Last week we saw another Hope trade with shares doing better than the metal. On Bloomberg, I heard an analyst refer to gold as "no longer a safety trade but more a source of liquidity." The simple way of saying this is that when countries run out of cash they will sell their gold to stay afloat.
On the left is a graph of daily spot silver prices in NY. Silver is not as strong as gold and any retreat in gold could draw silver down to new lows for the cycle. Gold is considered a tier 1 asset for banks. Silver is just a metal that has been used as money at times and has demand for industrial use. I read that copper inventories are climbing. Much of silver's mine production is as a by-product of base metal mines including copper. The recent "shortages" in silver were driven by investor demand as opposed to industry. Purchasing managers for industrial users also bought to avoid higher prices but the impetus was from speculators. How many months or years of inventory do real users have? On the right are weekly bars. Was the spike a wave 3 with a wave 4 correction and final wave 5 yet to come or was it the final wave 5? The next level of support is in the $50 range where silver paused on the way up.
Platinum and Palladium have yet to move away from gold's influence. If we get social unrest in S Africa (89% of platinum and nearly 60% of palladium) that could change. The other thing to watch would be issues with Nornickel's mines in Siberia that supply 40% of the palladium and 10% of the world's newly mine platinum.
After the Dollar sold off on news of a ceasefire, the stories about a Dollar collapse started again. Two weeks ago I thought there would be more back and forth action to complete a wave 4 pull back before a fifth wave up move and we got it. Friday was the middle of a timing band for one of Cyclesman.com's 23 day trading cycle lows. The right side chart is a close-up look of the action following the top I labeled as "3." Oil and many other commodities are priced in Dollars so if the Dollar rallies again it is bad news for consumers in other currency blocks. The Wave 3 surge was from a war inspired flight to safety. Hopefully, Wave 5, if it happens, will be for another reason.
Best Guesses -
Stocks - As I type on Saturday, there is neither good news nor bad news coming out of the negotiations. Last week's market action tells us that traders are optimistically positioned. If this is just an upward correction in a down market then it should stop around current levels. The upward pattern shown above favors the correction theory. If stocks sell off again next week, is it the beginning of a major leg down? Not necessarily. Markets got extremely pessimistic in March so even if they are eventually headed lower, they may need some more sideways action as shown by the red dashed lines in the graph to the right.
Bonds - I think rates are headed higher (bonds lower) over the next few years as entities, both private and public, compete for borrowable funds. If traders think a recession is looming you could see the yield curve flatten out with shorter rates up on borrowing demand and longer term rates not rising as much.
Dollar - The Dollar should be close to a short-term low.
Gold and Silver - We got a good bounce in gold and silver but the patterns over the last few days don't look good. Let's see what happens as we move into the cycle low timing bands late next week.
Commodities - During COVID, we all learned that you needed to have "stuff" stored nearby because you never knew if it would be available on the store shelves. The world is learning this again.
Oil - The government insiders in Iran who are getting the money from oil sales and tolls for safe passage have no incentive to end the war. This is the best payday they will have in their lives and they know it. The longer they can keep things in limbo, the more money they make. I am less optimistic about a real end to this war than most traders. I hope I am wrong.
Uneeded Commentary - The Sovereign Individual, AI, Luddites and HP Tornado calculators.
One of my favorite reads is "The Sovereign Individual" by James Dale Davidson and Lord William Rees-Mogg. It was the third book they wrote over a couple of decades projecting current trends into the future and guessing the results in the markets, the world economy, politics and the lives of individuals. The book, written in the very optimistic, late 1990s, is interesting for what they got right and more importantly, what they got wrong. They saw a synergy between micro-computing, its availability on cheap, portable equipment, encryption and crypto currencies. Their thesis was that these advances in technology allow smart people to do business from anywhere in the world and hide their incomes and activities from governments. Because wealth creation would be unanchored from any particular locality, people who mastered the new technology would move to tax havens. Welfare states around the world would collapse as those paying the highest taxes escaped. There would be no need to cater to any politician, left or right and loyalty to a country that could send your children off to war would become a thing in the past. In fact, with wealth, now being generated through intellectual property instead of physical property, wars to gain control over geographical areas would no longer make sense. Countries would splinter into territories. Some would cater to the untethered Sovereign Individuals by offering safety, low taxes and amenities favored by elites. Other regions would depended on ever increasing taxes and control to support crumbling welfare states. The last of these scenarios is coming true as we see high income earners flee aggressive taxation and wealth confiscation in liberal states. Many of the other predictions didn't work out. Why? A few things happened down the road to theoretical Sovereignty. Governments around the world have their own think tanks and futurists and saw the same trends as the authors. The events of September 11, 2001 gave them the excuse they were looking for to pass legislation allowing them to monitor all communication in the name of National Security. As we found out from Edward Snowden and James Clapper, they also collected data that was illegal, but it didn't matter. They still do it. Another impediment was the rise of a small group of internet search and email providers and a decade later, social media companies who captured the vast majority of internet searches and communications. The government did not have to convince and twist the arms of thousands of entities to cooperate. Everything was going through a few pipelines and the managers of those pipelines were happy to work with leftist governments around the world. The founders of Google, Larry Page and Segey Brin, were big supporters of the political left as were most of the other high tech titans. There was an open door between the big tech companies, the FBI, CIA and other security agencies. Mark Zuckerberg opened Facebook's data banks to Democrat strategists in 2012 and allowed the DNC to have access to the personal data on millions of people so that they could target them individually with messages that convinced they to vote Democrat. Bank of America was happy to turn over data on who made purchases around Washington DC on January 6th. A third factor was that during the 90s and early 2000s pro-market and lower tax governments were coming into power in many parts of the world. These countries strenghthend private property rules and opened themselves up to investment which made them live-able, offering amenities similar to what you could find in the U.S. This made the idea that you could live anywhere in the future seem likely. Starting in the mid-2000s and especially after the Great Financial Crisis, many countries turned back to socialism and went down hill. A nice suburb in a higher taxed jurisdiction in the United States remained attractive.
Another prediction was that there would be a widening wealth gap between people of higher cognitive ability and those who were not able to master modern technology. The Bell Curve, another one of my favorite books, published in the 1990s and its follow up book, Coming Apart highlighted this. The top quintile of income earners in the United States went into a small cluster of the highest paying professions with lawyers getting a large share. Sovereign Individuals would be like major league pitchers, paid a fortune for their superior acumen. Compensation would drop off steeply from there. This prediction proved to be somewhat correct. By the early 2000s, being smart was more important than any other attribute. This was reflected in TV shows. CSI featured forensics nerds who solved cases through brain power. Criminal Minds had geniuses who profiled criminals. Marriage statistics showed that high IQ men were in demand because of their future earnings potential. The Big Bang Theory TV show parodied what was happening in the work world and culturally. This movement reached its peak as Silicon Valley companies were forced to offer outrageous perks to compete for the small pool of intellectually gifted computer scientists. Davidson and Rees-Mogg anticipated a reactionary movement where those who were unable to compete in the IQ driven world would push for socialism and redistribution with attacks on the most successful and productive by politicians and leftist media. They gave the example of the Luddites in England who opposed automated machinery that put them out of work and said we could see the same in a future world dominated by intellect.
In the mid-1980s, if you wanted to be proficient on a personal computer you had to learn DOS,a Microsoft program that depended on written commands. By the the 90s, icons replaced commands. I was angry because I had learned the commands and now, things were being dumbed down. The upside was that it allowed new groups of people to accomplish tasks that had been done by more motivated workers. .My daughter was in high school in the 1990s and was very good at math and science. In a year that I thought she would be learning trigonometry, she was told to buy an HP hand-held calculator. (I kept it and it is near me, on a shelf as I type.) I was outraged. I thought (and still do), that smart kids should learn the calculations and exercise their brains. What I eventually understood is that many technological advances allow less cognitively gifted people to accomplish tasks previously reserved for those who possessed more brains or superior specialized skills. The HP calculator democratized certain tasks while decreasing the demand for math specialists.The Luddites were not low paid workers who didn't have a job because of automation. They were a group of skilled workers who earned above average pay in the pre-industrial weaving businesses.
Now we have AI and regular readers know I have been critical but there is a positive side emerging. AI is like the calculator. It allows people with average intelligence to accomplish tasks reserved for specialists just a few years ago as shown by the chart of software company stocks above. A family member recently went into business for themselves and had to write a business plan for the bank. They wrote what they thought was a convincing plan then submitted it to an AI program. They were astounded at how much better their venture sounded. A few years ago, their alternative would have been to find and pay a specialist to write the plan for them. This is happening in thousands of applications. For businesses, it means that they can use a less skilled and cognitively elite workforce to accomplish tasks that required them to compete for a small pool of gifted individuals in the past. It will also lower their costs. Will they become more profitable? Only for a short time. The history of productivity is that competition tempts competitors to pass savings along to consumers to gain market share. The immediate windfall disappears quickly with the consumer being the ultimate winner.
The Sovereign Individual predicted that less gifted people would be the new Luddites. AI is making it likely that those with the most to lose will be intelligent people whose knowledge commanded a premium paycheck before AI was available. There will always be a place for intellectually gifted people, the very people who developed AI but the monster they created makes them less necessary. The winners will be fairly smart people, the same type who mastered Windows icons and the H P Calculator 30 years ago.
Best of luck,
DBE