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
Nov 8, 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.
Last Tuesday, a small bomb dropped on the investment world in the form of an opinion piece in the WSJ by George Gilder. He pointed out that a new technology replacing the microchip is already here and it will allow AI to do what it does now using something that will fit in a Whole Foods walk-in freezer. The energy, water and resources used for the new technology are insignificant compared to the requirements for data centers.
Cerebras is the leading company.
Nvidia, the poster-child for the microchip economy fell on the news and is down more going into the weekend. Over the last year, our whole financial system became leveraged to everything AI with all possible beneficiaries from the build-out in data centers doing well. This included construction and materials companies, copper, cooling companies and utilities. It was not just on the equity side. Billions in debt was issued based on the future profitability of data centers. Among commodities, copper was thought of as a leading beneficiary. Our government even got in on the deal through the CHIPS act and recent investments in what could now be horse carriage type industries. The government participation alone was a warning. Remember when politicians said high definition TV was the most important technology for the future and wanted to subsidize U.S. companies making them? After Tuesday there was no mainstream attention paid to the story and for good reasons. Everything on Wall St. and future growth in the real economy is leveraged to microchip and data center technology. Data Centers are the focus of current industrial policy that is supposed to revive the labor market and jump start the economy. No one wants to think about the consequences of a startup technology making trillions in current expenditures unnecessary. But, you can see by the price of Nvidia that "smart money" is paying attention and it is certain that at Meta, Google, Oracle and Microsoft there are emergency meetings to discuss what it means for the billions they invested in what might be yesterday's technology. If wafers make those dollars disappear they will be left with millions of square feet of useless buildings scattered around the country. Lots of private equity and private credit is also on the hook to finance and build data centers to lease to the big hyper-scales. A number of deals were already signed. It is likely that no one will want to talk about this new technology. This weekend, I will be looking for stories reassuring investors that big data centers are still the future. I just saw an early Saturday morning TV commercial featuring a formerly underemployed Texas worker who is now proud of his job building a data center. If it is so good, why spend money for advertising? Two weeks ago, I wrote that tech insiders were selling their company's shares. Wafer technology had to be known about among Silicon Valley people. I sent the Gilder article to a few people. I am never "early" with anything. Whatever I am doing, tens of thousands are doing the same thing. I am sure that China is working on the technology, eager to tell Nvidia, AMD and Qualcom to get lost. If your money is in an S&P Index fund you are loaded up on data centers and micro chips.
Recently, I have been reading the work of economists who study the world's liquidity. They measure how much money is sloshing around the system, available to go into markets. They see signs of a bit of tightening but not enough to stop the bull market in stocks. A "black swan" type situation caused by a sudden panic over the billions that have been put into an obsolete product will be a defacto contraction in liquidity and confidence.
In recent website updates I warned about the dangers of putting all your money into current technology. I referenced 286 computers we all bought in the mid 80s and military procurement where they learned to never throw everything into a single weapon's technology cycle because history shows that counter measures and something better are just around the corner. If the wafer story is true, we could see a major repricing of the AI universe of assets including chip stocks, utilities and even copper. The debt that was issued could quickly go to a discount to its face value.
How is the labor market doing? This year we found out that the official BLS numbers are not reliable. With the shutdown, we are not getting our weekly claims for unemployment data nor will we get monthly data. Goldman Sachs estimated claims at 228,000 using state data. Other numbers from three private sources varied. Above and to the left is a graph of monthly ADP employment estimates. They showed a gain of 42,000 jobs last month. Small companies laid off people as did small to medium sized firms. Larger companies added workers. Small companies provide most of the jobs in the United States so the data is troubling. The upper right graph is from Challenger, Gray & Christmas and shows their tally of monthly layoffs. October came in at 153,000 jobs. Warehousing and technology led the firings in the private sector. To the right is a graph from Revelio Labs tracking month by month employment. They surprised a pessimistic market in September by reporting a gain of 60,000 jobs. This week they said that their October numbers showed job losses of 9,100 and they revised last month down, from 60,000 to only 33,000. Given the large revision, how good are their initial statistics? Bonds rallied on the Revelio numbers. Economists debate just how many new jobs can be created when the working age population is not growing and illegal immigrants are leaving the country. Are a relatively few new jobs per month enough to maintain full employment?
The latest Conference Board reading on Consumer Confidence showed a mixed picture. Respondents were more positive about their current condition (left side green line) but pessimistic about the future (red) so the composite was down a bit. On the right is a quarter by quarter measurement of cardboard box shipments from major box suppliers. The number of boxes used is considered to be a coincident economic indicator. The drop is not a good sign.
The Fed released its latest statistics on Consumer Debt. It hit a new high of 18.59 trillion Dollars (upper left). Mortgage debt is the biggest factor. Last week, I watched more pod casts on the coming decline in residential real estate. Home prices are one of the legs of confidence that keep high income earners buying things and planning vacations so I hope the pod casts are wrong. The latest Case Schiller reading on the 20 largest cities showed a mixed picture with the net being a small increase in home prices. Even within cities, some neighborhoods are weak and others strong. The upper right graph shows the percent of different types of loans that are 90 plus days in arrears. Now that student loans have to be paid, many borrowers are ignoring their payments. These delinquencies are showing up on credit reports making it harder for borrowers to get credit elsewhere. My guess is that lenders will ignore student debt when making decisions. Years ago, I was talking with a Mexican businessman on a trip to S. America. He told me that when modern banking first came to Mexico in the 1980s, everyone got credit cards, quickly maxed out then stopped paying. The banks warned borrowers that not paying would ruin their credit scores. Mexicans thought, "Six months ago I couldn't borrow anything. Was life so bad?" So, they never paid. A few years passed and the banks were back issuing cards again. The same thing happened. He told me that they were now on their third round of stiffing the banks but no one cared because the banks yell and threaten then always return to the market. My guess is that lenders will ask borrowers to list their liabilities and income aside from student debt then use the unpaid debt as an excuse to charge them an extra lending fee or a slightly higher rate. The banks can't help themselves.
We got two different surveys for manufacturing activity and growth in services. The Institute for Supply Management data (left graph, red lines) was more pessimistic than S&P Global. Services led the way in both categories. New Orders and employment were up (right side, brown and green lines) but what caught the most attention was the big ramp up in prices paid for things (red line) which showed inflation.
The biggest government news of the last two weeks (aside from the shutdown) was the Fed decision to lower overnight lending rates (Fed Funds) by a quarter of a percentage point. The move was already priced into the market. Bulls were hoping for a half a point cut and language implying more cuts ahead. Instead, Chairman Powell said that another cut in December was not a given and that the Fed would have to see that data over the next month. The orange line is how the yield curve on U.S. debt obligations finished the week. The upper left side graph shows the very short end of the yield curve with the yellow zone being the new Fed Funds target rate. The only beneficiaries are those using overnight borrowing to fund their businesses. Our Treasury is concentrating borrowing on short term debt. Chairman Powell said that the Fed would stop selling their hoard of government debt (quantitative tightening) but, he also said that the Fed would reinvest interest payments in very short term debt as opposed to longer duration securities. Rates across the curve, except for very short maturities, rose.
Liquidity watchers are talking about the spread between the Fed Funds rate and SOFR, a rate at which large banks are willing to lend overnight to other banks that post Treasury Securities as collateral. This is the bit of tightening mentioned above. The last time this happened it was because big U.S. banks did not want to lend to European banks whose balance sheets looked shaky. So what is causing big banks from issuing over night, collateralized loans? Is it not enough cash in the system or is there genuine worry about the leveraged risk in the system due to the extension of credit to AI projects that have no chance of generating enough cash flow to repay the debt? Last week, a big shareholder in Open AI asked Sam Altman how his company could commit to 1.4 trillion Dollars in investment when their current annual revenue is only 13 billion Dollars. Altman responded by telling the shareholder that if he wanted to sell his shares, there were others who would buy them.
With no commitment to more rate cuts, the Dollar rallied, hitting its end of July high before backing off a bit. Red arrows mark Cyclesman.com's theoretical 23 trading day timing bands for lows. One is coming up next week. The Euro has the opposite trading pattern with a bounce off of a previous low.
The left side graph shows the path of December Gold Futures following the recent peak. I would like to be more positive about my favorite metal but the contracting range following the sell-off looks more like a weak upward correction that will be followed by another drop. On the right is a chart of the weekly closing price of spot gold in NY and a simple RSI momentum oscillator below. In the past, the RSI reading usually fell to somewhere around 0.50 before you saw a good entry point for buying.
December Silver Futures have the same look and the weekly graph of the difference between silver and its one year moving average is still very high. No one knows what silver is going to do so the best way to avoid losses is to buy when it is unloved. We are no where near unloved territory.
Palladium and Platinum have the same look and are trading off of gold.
Before last week's sell-off, the major market measurements were dragged higher by AI related tech stocks but underneath the surface the action didn't look good. On a few days, the averages showed gains but many more stocks were going down than up. AI Tech stocks were sucking up all the oxygen in the room. Carmax, Chipolte and the makers of Trex, artificial wood for decks reported poor earnings and talked about soft consumer spending. You could see it in the action of the other market sector ETFs. Instead of seeing this as a warning, investors doubled their bets on AI. On the right is the NYSE Composite Index. The green line marks September's low point. A sell-off below this range will take out two months of trading and be evidence of a larger correction.
Two weeks ago I wrote that by the time of my next update, we would know if the "seasonals" were working. I was referring to the multiple articles in the financial press telling readers that the market always goes up between mid-October and the end of the year. Now we know. The Dow Jones Industrial Average sold off within a disciplined channel. Mid-afternoon Friday, the Democrats offered a plan to extend Obama Care subsidies by a year and stocks rallied on the chance of some agreement being reached over the weekend. As I type, there is no agreement. The NASDAQ 100, heavily weighted with AI issues saw the heaviest selling. The blue line marks October's lows and just below it the green line is the low point for September.
I don't include much on individual stocks but I do watch a lot of them. Here are some companies and quick comments on them based purely on chart mysticism theories that are totally subjective.
On the left is ADM, the huge grain processing company. It sold off last week on poor earnings. The simple RSI Momentum reading is at 0.20. I am hoping that it sells off more during some general market jitters. If so, there could be a good entry point. On the right is Boeing. The up and down contracting pattern following the COVID and plane crash low has the look of a consolidation that leads to a final thrust lower. Going into this weekend, there is nothing on the horizon that hints of another strong sell-off in the stock.
On the right is Conagra, a food company whose brands include Slim Jim, Healthy Choice meals, Duncan Hines cakes, Hunts tomato paste, Reddi Wip, Birds Eye frozen veggies and others. The stock is way down on fears over the health of ordinary consumers who buy their products and now, with payments to food assistance recipients in danger, the stock fell more. The dividend yield is over 8%. Eventually, when the government is up and going again, the shares are likely to do better. On the right is FCX, the big copper, gold and silver miner. I was surprised to see that it is trading at levels hit in 2021. They have some problems with a big mine in the Pacific but you would think that with all the hype around copper and gold they would be doing better.
On the left is Hecla, a silver mining company. One could make the argument that it is finishing an upward correction with the contracting sideways "B" pattern leading to a thrust. For art's sake the thrust could extend a bit higher but most of the move should be finished. On the right is EIF an ETF that tracks 7 and 10 year Treasury notes. Most analysts are thinking that the economy will slow a bit, the Fed will keep lowering overnight rates and eventually, longer dated rates will fall too. If you just look at the pattern of trading, the consolidation in IEF looks most likely to lead to lower prices (higher rates), similar to the short-term patterns in gold and silver shown above. I hope I am wrong because the real estate market needs lower rates to unfreeze.
I am watching Tesla and Toyota carefully because one could make the case that both are finishing upward corrections and are about to turn lower. If consumers cannot afford Slim Jims and Duncan Hines cake mixes, how are they going to pay for a new Tesla or a Toyota. Sure, it is a different kind of buyer but another week or two of bad stock market performance will shake the confidence of everyone who thought their retirement investments would keep growing at 20% per year.
On the left is a graph of WTI crude oil, the U.S. domestic contract. Analysts are convinced that the world is headed into a glut of crude oil in the market. OPEC + is increasing production in December. Our domestic production has been inching higher. On Friday, China reported lower export activity than anticipated. They have been stock piling crude. If they decide that their tanks are full enough, what happens to demand? Other commentators note the build up of crude being stored on tankers and say it is a sure sign of too much oil. Despite all of this analysis, crude hit a low last spring, a slightly higher low in mid-October and we went into the weekend above that level. Seasonal tendencies favor lower prices into late December or early January. When I see a divergence between well thought out commentary and price action, it usually means that something unanticipated is about to happen. If they can't take out last springs's lows over the next month, shorts will get nervous and start to cover. On the right is XLE, an ETF that tracks big energy companies. The brown line is the path of crude oil. Recently prices diverged with investors bidding up the companies despite crude heading lower. One reason is that gasoline and distillate prices didn't fall as much as crude. Companies with refining operations saw margins improve a bit with diesel in particular doing well. I would like to see a "moment of truth" kind of week where energy company investors lose confidence and the shares sell off. The shut down is causing flight cancellations which should reduce jet kerosene demand. Perhaps that will be the catalyst for weakness in the group.
In past updates I wrote that if you want to "buy low," wheat and natural gas were two commodities trading at low prices relative to their historical ranges. Both markets showed some life over the last few weeks. Some kind of agreement with China would be good for grains in general. Next year, more LNG plants are supposed to come on line. Reports are that there are more and more shipments of LNG to Asia. Three weeks of upside does not equal a bull market and both these commodities are tied to the weather.
Best Guesses -
Stocks - There is a good chance that the Cerebras wafer technology is real and that could be the reason for the tech sell-off. No one is going to talk about it because so much has been bet on microchips and data centers. The slight distress in the credit markets might be reflecting worry over the billions in debt issued to fund what could be obsolete technology. Normally, banks might be OK with lending to another bank but who have those counter-parties lent money to?
Bonds - Aside from the shortest dated debt, rates are not falling. If stocks sell off into Thanksgiving like they did in 2007, you could see a temporary bid for bonds as a flight to safety.
Dollar - We got some good upside action but need more to confirm that the trend is turning up.
Gold and Silver - Sideways action following a steep decline is usually not good. The charts look like they need another leg down.
Commodities - So far, so good for wheat and natural gas. We need more good news from China for everything else.
Oil - Despite calls for lower prices, we are above October's lows. If they can't knock it down in the next month, shorts will get nervous and cover.
Best of luck,
Unneeded Commentary - In the 1990s, the Atkins diet took the country by storm. You had to stop eating sugary stuff, bread, pasta, rice and grains. You could have as much meat and fat as you wanted. Veggies and salads (not tubers like potatoes) were fine. Some fruit was OK but Atkins warned that many fruits were full of sugar so only have a small amount. Before the diet got popular, bagel shops were the new thing. My neighborhood had a few of them. Around the corner from where I lived was Harvest Bread, a specialty bread shop. The smell was intoxicating. My favorite was a dark molasses bread. The Atkins craze stopped millions of people from eating bread. The bagel stores and my bread store saw business drop and they went out of business. Snack companies did poorly and I heard people debate having birthday cake at parties their relatives were throwing. I tried the diet and had to stop after 3 weeks because I dropped 10 pounds and didn't want to lose more. I think we are about to have Atkins, round 2. I have a close family member who is 73. She suffered from Fibromyalgia, lots of aches and pains and was frequently depressed. She decided to go on a Carnivore (meat, fat and veggies) diet. Within a few weeks, the Fibromyalgia, aches and pains and depression were gone and she now weighs the least she has weighed in decades. I started watching You Tube videos on Keto Diets and Fasting. It turns out that low carb diets were effectively used a century ago to reduce seizures. Many people with severe mental problems such as schizophrenia, bi-polar, sever depression and psychotic conditions such as hearing voices see their symptoms greatly subside or disappear. Studies show that the symptoms of people with ADHD and Autism improve on keto diets. How does it work? Find out the scientific details by watching this - The Keto Psychiatrist: What Keto Is Really Doing To Your Body! Can It Cure 43% Of Mental Illness?
The reason I am writing about this is twofold. First, you might know someone who has health or mental difficulties and this could help. Second, recently, when I talk to people and mention keto diets, they are watching similar videos and pod casts. It is becoming something many people are considering even if they don't have mental health issues. The reason is that high carb and sugar consumption is also linked to Alzheimer, type 2 diabetes and cancer. Some people with active tumors see them shrink drastically by fasting for a number of days and nearly everyone with type 2 diabetes gets better on a keto diet. If it catches on, drug and food companies in particular could take a hit. The top drug costs for Medicare are Eliquis, a blood thinning medicine, followed by diabetes and weight loss drugs. The weight loss drugs are temporary solutions and effective on only some of the people who take them. The stomachs of a certain percent of users freeze up and don't return to normal, even if they stop taking the drugs. Many users lose interest in other activities that they enjoyed for years. Studies show that people regain weight after stopping because they never changed their eating habits. Psych drugs are huge money makers for drug companies. If Keto goes mainstream and is as effective as studies show, sales of these drugs are likely to fall and so are the share prices.
DBE
