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
June 7, 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.
International events continued to loom large, especially Ukraine's attack on Russian long range bombers. My guess is that this escalation ended peace talks and things will only get worse. War and its effects on markets will have to be weighted more heavily in the future. We are likely to see capital flight from areas threatened by war. That could be all of Europe. The recent gold exodus from London to the U.S. is an example. The same thing happened in the 1920s. Tariff talk was big but there seems be "tariff fatigue" with investors discounting both positive and negative news and reasoning that the end product will be someplace in the middle. The "Big Beautiful Bill" is being exposed as anything but beautiful and Elon Musk and President Trump are at war. The domestic focus shifted away from inflation to jobs with analysts saying that employment is the key factor to watch. Here are some of the reports from the last two weeks.
Every month we get the JOLTS report that tracks job openings, wages for those changing jobs and the willingness of workers to quit one job for a better position. The problem with this report is that the survey has a 30% response rate. Are companies that are doing well with hiring plans more likely to respond to a government survey? The latest tally showed an increase in job openings (left). A year ago, the market was worried about inflation and wanted to see fewer jobs. Stocks rallied on the JOLTS number because traders are afraid of a recession. The stronger JOLTS report made it a less likely scenario. Hiring was up (green line on right side graph) and those willing to quit their current position because other opportunities were available dropped a bit (red line).
Last week, ADP, the huge payrolls processor came out with their jobs number for last month and it went in the other direction from JOLTS. ADP reported only 37,000 jobs added last month (left side). Manufacturing lost jobs and services saw a small increase. You could tell that people are watching jobs related reports more closely than usual because the market reaction was stronger than it normally is for ADP's monthly statistics.
The latest report on New Claims for Unemployment confirmed ADP, at least on a seasonally adjusted basis (left chart, green line), rising to 247,000. The right side graph shows a four week moving average of new claims (green line) and Continuing Claims in red. The four week moving average is closing in on its high for the last year. Bulls will say that it doesn't mean much because the last couple of times it reversed. Continuing claims stayed above the much watch 1,900,000 level.
On Friday the government released its monthly jobs data. After ADP, traders were bracing for a sub 100,000 number while the median consensus was around 126,000. The official number came in at 139,000, dispelling worries about an economic collapse. Additional data (right) revealed that April was revised down by 30,000 jobs and March another 65,000 lower. All four months of the Trump administration had revisions! Analysts are expecting the same for this month when we get the numbers four weeks from now. While the Establishment Survey was OK at 139,000, the Household Survey (where they call a number of homes and ask about employment) fell by a huge 696,000 jobs!
The report said that full-time employment fell by 623,000 jobs! Part time rose by 33,000 (left). The right side graph tracks employment trends for Native-born workers (green) and Foreign-born (red) and both fell with native dropping 444,000 and foreign down 224,000. The stock market soared on the headline number and was up over 500 points shortly after the opening. Bonds sold off (rates rose) as traders saw no reason for the Fed to cut rates with a jobs number over 100,000. Most of the behind the scenes numbers do not look that good but Wall Street does not want you to think about that.
When inflation was enemy number 1, the Personal Consumption Expenditure statistics were a big deal. Now that inflation is not a hot issue the PCE gets less attention. The headline reading came in at 2.1% (left). The Core number that subtracts food and energy (green line, right side) also fell to 2.5% year over year. These were good numbers and surprised analysts who were looking for inflation to skyrocket due to "Orange Man Bad." My wife did a big grocery shopping last week and found that the prices of many things she regularly buys were noticeably higher. It could be that items with tariff mark ups are just now hitting the shelves.
The left side graph shows U.S. Factory orders minus Transportation (Boeing). The month over month decline was 0.49% and the annual minus 0.08%. When aircraft orders are included it looks even worse. The right side chart shows Durable Goods orders minus transportation. They are doing a bit better than total of orders. Durables were up 0.21 month over month and 1.86% annually.
Over the last few months I wrote about the rising inventory of unsold homes. On the left is a graph showing the unsold inventory in terms of dollars. A Redfin report said that there is a huge imbalance of sellers vs buyers . The latest Case Shiller report on the 20 largest cities also shows softness in the market. On the right is a graph tracking construction spending and you can see the recent down turn. One of the theories of markets is that they exist to facilitate transactions. When few transactions are happening and there is a big imbalance between the number of sellers and buyers, the price is the next thing to move and in this case, it will be down. People are somewhat used to their stock portfolios suffering what they hope are temporary setbacks but are not used to seeing declines in the value of their homes. We know that everyone is watching because of the popularity of websites like Zillow where you can enter your address and get an estimate of the selling price of your house. When home prices begin a noticeable slide it causes confidence to erode and less spending on other things like expensive trips. Vacation homes will see a lot of ""FOR SALE" signs in front of them as owners realize that they are more of a liability than an asset.
Analysts who look at the behavior of past markets in terms of price movement and participation say that the rally from April's low compares favorably with markets that extended those gains into the next year. I am still looking for a sideways trading range. On the left is an example of what it might look like. In August of 1982 the stock market moved dramatically higher on record volume and breadth. It consolidated again in 1984 then in August, rose 20% in a week's time. Expectations for more gains were overwhelming. It happened eventually but stocks traded sideways for a while. The 01 to 04 labels are just markers to show how the 1984 trading range could correlate to this year's moves. On the right is the NYSE Composite that includes all stocks traded on the New York Stock Exchange. Remember, this is pure Chart Mysticism speculation.
Most market measurements and individual stock patterns look like the S&P 500 and Dow Jones with a big sell off in April followed by a partial rebound. The action from the last two weeks on the S&P 500 graph has a purple line above it slanting upward. The RSI reading below has a downward slanting line highlighting the recent loss of upward momentum. In a trading range market you want to buy low momentum readings and lighten up on high readings.
The biggest buyers in the last couple of months were corporations, buying back their own shares followed by retail investors (you and me), convinced that the Trump economy will result in great earnings in the future even if the the current stretch of road has some potholes. The most bought stocks were Tesla, Nvidia, the SPY S&P 500 ETF, Palantir Technologies, the data mining and analytics company and CoreWave, a cloud computing company. Because of the focus on tech, the post-April rebound in the NASDAQ 100 is almost matching its all time high. On the right is a graph that tracks the performance of the NASDAQ Composite relative to the Dow Jones Industrial Average. Analysts keep saying that there should be a "reversion" back to some historical average performance between tech and value or tech and some other market segment. So far, it isn't happening. The analysts that use historical comparisons to predict the future say that in past markets with similar characteristics, tech continued to out perform.
Mid-Cap stocks and smaller companies are way behind mega-cap and tech leaders. Both these charts go back years to illustrate the lackluster performance of the "value" side of the market. Every week you hear analysts predicting that these segments will catch up to the rest of the market. Some day they might be but right now there is no sign of it.
We can blame two companies for much of the recent move in the major averages. Microsoft has a 6.57% weighting in the S&P 500, 12.6% in the NASDAQ 100 and 6.7% in the Dow Jones Industrials. It is also the only mega-cap issue to better its previous high point. NVIDIA has a 6.42% weighting in the S&P 500 and 12.45% in the NASDAQ 100. Investors are buying both as part of the AI theme. Last week I heard an analyst say that 80% of all Cap-Ex expenditures in the last year went into Artificial Intelligence. These two companies are considered to be the hardware and applications winners.
On the left, the blue line is the latest read on the yield curve for U.S. Debt Instruments. The right side graph shows the historical path for yields on a 30 Year Treasury Bond. Despite all the hand-wringing over our debt load, recent auctions of tens of billions of shorter and intermediate term paper went very well. On May 29th the Treasury sold 44 billion Dollars worth of 7 Year Notes. The bid to cover ratio was 2.7, higher than the 6 month average of 2.64%. Foreign money bought 71.5%! So much for the theory that our debt will be rejected by investors from non-Dollar countries. Domestic buyers took another 23.6% leaving the big dealing banks with only 4.85%, a record low amount.
On the left is IEF, an ETF that tracks 10 Year Government Notes. On the right is LQD, an ETF that follows high grade corporate bonds. IEF looks like it is making one of those patterns that leads to a thrust lower then an upward correction. If so, there is a point of pessimism coming, perhaps having to do with an impasse on The One Big Beautiful Bill. For fixed income investors, if we get the thrust down, LQD might be a safer bet since most of the corporate issuers have the cash flow to pay interest and eventually repay principal. The government does not.
Regular readers know that I have been waiting for the enthusiasm shown towards gold to spread to other things associated with "Precious Metals." Over the last couple of weeks it happened. Silver finally caught on fire. I wrote favorable things about silver over the last month, something I rarely do so I am glad it worked out. Investors discovered platinum (and palladium to a lesser degree) especially after a not so friendly meeting between our President and the President of South Africa. They also bid up the price of gold and silver mining companies last week. Spot gold in New York, hit its intra-day high slightly above $3,500 on April 22nd and closed Friday around $200 lower.
Silver bulls frequently point to its use in solar panels as an important source of demand. Subsidies for green energy projects are getting cut in many countries amid massive deficits. Hydrogen fuel cells use platinum. Platinum fans talk about the "hydrogen economy," where the world will run on "green hydrogen" made from the electrolysis of water with the electricity being supplied by solar and wind power. This kind of hydrogen production costs five times more than getting it from using steam and methane. It requires huge government subsidies. The Big Beautiful Bill cuts these subsidies and hydrogen projects are being canceled around the world.
This leads me to believe that the recent enthusiasm is "late cycle" behavior.
The RSI momentum oscillator on a weekly closing graph is still too high for a lower risk entry point. It is the same with silver on the graph showing the difference between its spot weekly close and one year moving average. Gold and silver could both go higher but if you are looking for a great buying opportunity, now is not the time.
Next week we enter the timing band for one of Cyclesman.com's 21 day lows. These cycles can run a bit short or long. The back and forth trading pattern following the April high tilts the odds toward another rally. I drew in lines for my favorite chart pattern, a contracting triangle. These lead to a final surge higher then a correction so if you see something like this be warned that a high is in the making. On the right is a long term graph of silver. Last week's sudden enthusiasm is suspect. If gold has a new high, watch for silver fans to pile into that metal.
A couple of months ago I included a weekly chart of platinum and suggested it was consolidating. I favored an up-side breakout. Last week we got it. Most likely it is a spin-off from gold's rally but once a commodity shows positive momentum characteristics, computer driven trading programs will buy it and not worry about the reason for its movement. The dashed red lines on the upper left graph are the same size. If the thrust higher matches the first rally in length, the price target is just above $1,500. On the right is a graph of the weekly closing spot price and a simple RSI momentum oscillator. The dashed green line above it sits at 0.80, a level that is considered "over bought." Going into this weekend it is still below it.
If platinum can maintain its strength, it is just a question of time before it rubs off on palladium. Forty percent of the world's newly mined palladium comes from Russia. If the war intensifies and spreads, Russian exports of the metal will be in jeopardy. On Friday, the most active gold future traded 183,467 contracts. Platinum's most active traded 55,835 but palladium's traded only 6,571. This makes it difficult for an institution to put a lot of energy into palladium because a small bit of buying or selling causes a big move. If real fundamental news hits the tape that is favorable for the metal, you could see it jump hundreds of Dollars in a few days.
I always encourage my clients, who use these metals, to have their own supply. A couple of weeks ago, lease rates for platinum briefly hit 17% as users scrambled to make sure they had enough. Owners didn't have to worry about it.
If you follow news on the oil market you come away one day thinking oil is going to rally based on wars then on the next day they talk about a possible price war between Saudi Arabia and Russia. Saudi Arabia says that OPEC + will ramp up oil production late this summer and into fall. If war intensifies in Europe it is likely that additional sanctions will be applied to Russian exports. Will Iran come to some kind of an agreement with the U.S. that will allow their oil to go freely onto the world markets? There are just too many unknowns to say anything certain. From a pure chart perspective it looks like oil is finishing up an "N" after breaking support. If reality follows art it should resume its sell off.
There were more articles in the financial press about a Dollar collapse. Above, I included some statistics about the most recent Treasury auction and they looked great. Logic would say that money is flowing into the Dollar and away from a Europe that is more and more in favor of war. On the left is a five year graph of the Dollar Index. If the Dollar is making a simple correction before another rally then we should be close to the low. If both legs of the sell off are similar in size, 96 would be the target. The right side graph of daily bars shows the trading pattern following the low on April 21st at 97.92. Gold made its high within 24 hours of the Dollar low. The Dollar could be in a trading range before a final low.
Investors are betting on war or at least enough fear of war that governments spend more money on defense. Exactly what defense is will be debated. We saw cheap drones take out multi-million Dollar aircraft in Russia on June 2nd. We have large aircraft sitting on the ground at our air force bases. According to www.airplaneupdate.com a Boeing B-1B Lancer costs between 315 and 350 million Dollars. It would only take a small explosive device to make it a piece of junk. Our Navy wants more large ships. Before he was involved with the Trump administration, Peter Navarro wrote books on China that included their military tactics for sinking our large ships. They made thousands of cheap missiles that can be launched at billion dollar aircraft carriers. All they need is for one to get through. We see this nightly in Ukraine, Russia and Israel where multiple drones and missiles are inbound for a target. Even if most are destroyed, the mission is achieved by one or two. Will the future of war be large, ultra expensive military equipment that is a sitting duck for much cheaper projectiles or small robots that crawl in to a military base and detonate an explosive device next to a 300 million Dollar airplane? We admitted millions of people into the county over the last four years. It would only take a few who are dedicated to destroying some of our defense infrastructure to hurt us. The basis of wealth is no longer land and in many business cycles, natural resources are produced at close to break even or at a loss. After you factor in the cost of money, exploration, development and current production, you are better off buying at market rates than being a producer. Taking over the population of any modern country means having to assume the costs of pensions and medical care that were already bankrupting the country before it was taken over. Last week we heard about two Chinese nationals involved in smuggling Fusarium Graminearim, a fungus, into the U.S. It destroys wheat, barley, corn and rice. It also releases a toxic byproduct that makes humans and livestock sick. My guess is that most of the farmland bought by Chinese citizens is part of a personal plan to diversify wealth away from China, but all it would take is one farm willing to spread the fungus in their fields. Is this the profile of the next war? Is all the intellectual theft from hackers part of the new war? An invasion smashes and breaks things. Stealing designs and codes creates productive capacity and wealth with little in the way of consequences. Governments are scrambling to integrate AI and robotics into their defense plans. Will this also make big bombers and aircraft carriers obsolete? The nature of offense and defense are evolving. Today's winners might be ineffective in the next war.
Stock Market - For now I am still betting on a trading range market like the 1984 pattern shown above. If I am right then we should be close to a short term peak.
Bonds - I want to see a final thrust down on some bad news before I allocate money to fixed income and even then, it will be in corporate bonds, not sovereign debt.
Gold and Silver - I am looking for more sideways to down action in gold and a pull back in silver before another rally attempt. If we get another rally watch for the love to spread to platinum and for palladium to be "discovered."
Oil - Same as last time - On a purely chart basis, the market looks bad. Lower prices will only curtail production and set the market up for another rally. If war intensifies, oil will benefit.
Other Commodities - Wheat ticked up last week on harvest delaying rains in areas that grow spring wheat. Lately, wheat also rallies when it looks like the war in Ukraine will intensify because both combatants are major wheat producers and exporters.
Remember, in many modern countries, the government is the biggest consumer either directly or indirectly. Cutting back is necessary but it will mean less demand for things and less profits for companies.
Best of luck,
DBE