0:07

This is Macro Voices,

0:09

the free weekly financial podcast

0:11

targeting professional finance, high net

0:14

worth individuals, family offices and

0:16

other sophisticated investors. Macro

0:19

Voices is all about the brightest minds

0:21

in the world of finance and macroeconomics

0:24

telling it like it is, bullish or

0:26

bearish, no holds barred. Now

0:28

here are your hosts, Eric Townsend

0:30

and Patrick Suresna. Macro

0:35

Voices episode 422 was produced on April 4th, 2024. I'm

0:40

Eric Townsend. Bear traps

0:42

report founder Larry McDonald returns as this

0:45

week's feature interview guest. We'll

0:47

discuss why gold's correlations to

0:49

treasury rates and the dollar

0:51

have broken down, the inflation

0:54

outlook, energy and much more.

0:57

Treasury also has a new book out

0:59

just last week and already it's in

1:01

the number one position in the finance

1:03

category on Amazon. We'll cover what's in

1:05

the book as well. As

1:07

you've probably already surmised, I'm

1:09

suffering the worst case of

1:12

laryngitis of my entire life and

1:14

was only just barely able to get

1:16

through recording the feature interview with Larry

1:18

McDonald this week. So I'll

1:21

be leaving the entire post-game segment

1:23

in Patrick and Nick's able hands

1:25

this week and won't be

1:27

giving my usual report on crude oil

1:29

inventories. Thanks for your

1:31

patience, folks. We should be back to our

1:33

usual format next week. And

1:36

I'm Patrick Suresna with the Macro Scoreboard week

1:38

over week as of the close of Wednesday,

1:40

April 3rd, 2024. The

1:43

S&P 500 June futures down

1:45

79 basis points trading at

1:47

52.66. This

1:50

is the first pause in the uptrend, but

1:52

is it the start of a bigger correction?

1:54

We'll take a closer look at that chart

1:56

and the key technical levels to watch in

1:58

the post-game. The US. index down

2:01

seven basis points trading at above

2:06

the February highs the May WTI

2:09

crude oil contract up 502 basis points

2:12

trading at 85 43 the bull trend

2:15

continues we'll take a look at that

2:17

chart in a postgame the May our

2:19

Bob gasoline contract up 337 basis points

2:23

trading at 276 another

2:26

break to new highs with sites on the 2023

2:28

highs as a target

2:30

the June gold contract up 466 basis points

2:32

to 2315 now that the 2300 levels

2:38

been achieved will there still be

2:40

more strength copper up 475 basis

2:44

points up to 419 approaching the January

2:46

2023 highs uranium up 51 basis points

2:52

trading at 89 even starting its

2:54

uptick but is it the end

2:57

of this multi-month correction the US

2:59

10-year Treasury yield up 16 basis

3:01

points trading at 435 and

3:04

the keen news to watch this

3:06

week is Friday's jobs numbers and

3:08

next week we have the inflation

3:11

numbers the Bank of Canada and

3:13

ECB monetary policy statements and the

3:15

FOMC meeting minutes Eric's

3:17

interview with Larry McDonald is coming up as

3:20

macro voices continues right here

3:22

and macro voices calm and

3:32

now with this week's special guest

3:35

here's your host Eric Townsend joining

3:40

me now is Larry McDonald publisher of

3:42

the bear traps report and author of

3:44

a brand new book which is titled

3:47

how to listen when markets speak folks

3:49

as you can tell I'm suffering some

3:51

laryngitis as we're recording this interview please

3:53

bear with me Larry in the last

3:56

two minutes before we went on the

3:58

air gold took out the 2300

4:00

round number, we're at 2301 as we speak. What's

4:06

really surprising to me is

4:09

there's been a very strong inverse

4:11

correlation between gold and the dollar

4:14

and of course gold's always competing

4:16

with interest rates. So usually as

4:18

interest rates go up, gold goes

4:20

down. We're seeing a

4:23

change in correlations. What's going on

4:25

here? Well, I think the beast

4:27

in the market, Eric, and first of all,

4:29

you losing your voice is like Ted Williams

4:32

losing the bat in the batting

4:34

box. But you've done such

4:36

a marvelous job over the years leading this

4:39

incredible program of micro voices. Thank

4:41

you for everything, all your

4:43

leadership and the whole team. But

4:46

I would say that with gold, the

4:49

beast in the market inside knows the

4:51

gig is up. Usually

4:53

the Fed can't really hike. If

4:57

they were to hike because of inflation

4:59

expectations, then it's going to

5:01

blow up the regional banks. Essentially,

5:05

the beast in the market

5:07

knows that the Fed really

5:09

can't do much. So normally, in the

5:11

last couple of years, if interest rates

5:13

went up, gold was lower.

5:15

And now, over the last couple of weeks, especially

5:18

today and yesterday, gold is moving higher

5:20

with rates. And it's almost like we're

5:23

going back to the 1970s dynamic where

5:25

there's a stagflation probability

5:28

that's rising and Washington

5:31

is really in trouble with that $80 billion

5:33

a month of interest now. And then it's

5:35

going to go up to maybe $80 billion

5:37

a month to potentially annually $1.4 trillion of

5:44

annual interest costs over the next year if

5:46

the Fed hikes or keeps rates here. So

5:49

the beast in the market knows that the

5:51

Fed politically is dealing with

5:53

a troubled Washington, really a spoiled

5:55

brat. And I think that's what

5:58

gold is telling us. We're

6:01

also seeing oil catching a bid. Now

6:03

early in this Gaza conflict, I was

6:05

very outspoken and saying I thought that

6:08

the Gaza conflict was really going to

6:10

push risk in the oil

6:12

market much higher. A lot of people

6:14

who are more experienced than me in the oil market said

6:16

no, not in this case, it's not going to happen. Is

6:19

that what's now starting to happen or

6:21

is it something else that's causing oil

6:23

to catch a bid suddenly? Well

6:26

see that gets back to the whole stagflation problem because

6:29

if the economy, the Fed's potentially cutting

6:31

rates for a reason, we're slowing down

6:33

a whole bunch of reasons why the

6:35

Fed wants to cut rates

6:37

politically. But if oil rips here say

6:39

$20 in the amount of commercial real

6:41

estate on the bank balance

6:43

sheets is substantial, is very interest rate

6:46

sensitive. So we're also seeing a

6:48

relationship between interest rates, oil

6:51

and the banks and that's picking up

6:53

with intensity. So we run a

6:55

Bloomberg chat with our clients are typically

6:58

hedge funds, mutual funds and pension funds. In the

7:00

last like three weeks or

7:02

two weeks, a lot of clients are

7:05

talking about this interest rate sensitivity with

7:07

the regional banks. So the

7:09

higher oil goes, say oil goes up $20 because

7:11

of a geopolitical event which is

7:14

happening. We've already had one this week and

7:16

we're up a couple dollars but we're at

7:18

a threatening level. If oil were to rip

7:20

higher, that puts substantial

7:23

pressure on the banks because of all that

7:25

commercial real estate exposure. Oil up, puts pressure

7:27

on rates. All of a sudden it potentially

7:30

brings hikes into the picture but the

7:32

Fed can't hike at this point in

7:35

the cycle and that really is

7:37

putting a lot of pressure on their super

7:39

regional banks. There are some of these super

7:41

regionals, Eric, are underperforming the SP by like

7:44

40 to 50% over

7:46

the last say since a year

7:48

ago January and that's something you only

7:50

see in a financial crisis. rates

8:00

but maybe having more difficulty than they

8:02

expected. Let's go a little deeper on

8:04

that. What do you see on

8:06

the horizon in terms of inflation? Would you

8:09

agree with Jim Bianco's view that we may

8:11

have already bottomed on inflation? Is that part

8:13

of this and what is tying the Fed's

8:15

hands here? Yes, the global economy

8:18

is in a better spot. So if you look

8:20

at Japanese equities and if

8:22

you look at Italian equities or French

8:24

equities, those markets have been near all

8:28

time highs in the last couple of months.

8:30

The European banks on the RSI

8:33

week daily level are the

8:35

most overbought in 10 years by a big

8:37

factor. So there's something going on there on

8:39

the global side. So in other words, we're

8:41

getting a surprise on the global economy. China

8:44

had a better data this week on the

8:46

manufacturing side. So we're getting a surprise. They

8:48

have surprise demand. Oil markets

8:50

are very tight seasonally. You've got a

8:52

summer driving season coming in. Essentially,

8:55

we're getting this upward pressure

8:57

on commodity prices, very stagflationary. The

8:59

US economy, the bottom 60% of

9:01

Americans are really hurting. You can

9:03

look at data from pet care,

9:06

you can look at data from

9:08

McDonald's. You got Dave and Buster's

9:10

tonight missed. So the bottom 60%

9:12

of Americans, the New

9:15

York Fed has told us many times, Eric, that the bottom

9:17

say 30-40% of

9:20

Americans only have $400 in their

9:22

checking account. The New York Fed has lectured

9:24

us on that over and over again. So

9:26

it's like two economies. One economy is in

9:29

trouble, whereas the top

9:31

20% are doing just fine.

9:34

But politically in an election

9:36

year, with that bottom 60% in

9:38

that much pain with interest rates

9:40

and all of those additional

9:42

costs of oil, it's very

9:44

difficult for the Fed. The political

9:47

pressure to cut rates into that

9:49

environment is extremely high and that

9:52

sets up a real... what

9:55

we talked about in our book, When

9:57

Markets Speak, we're talking about a colossal

9:59

migration. of capital. This is

10:01

one of the most incredible opportunities in

10:04

markets in our lifetimes. The

10:07

S&P 500 has finally

10:09

traded below its 13-day

10:11

moving average just on

10:13

Tuesday for the first time. And

10:15

just looking at my chart here, it looks like

10:18

several weeks. Is this finally the

10:20

beginning of correction lower or is this

10:22

just noise? Well, think about

10:24

this, Eric. So in 2024, oil

10:28

and gas equity is up 16%. Copper

10:30

equities are up 15. Gold is

10:33

up 10%. Uranium

10:36

equity is up about 9%.

10:38

The S&P is up 9%. And

10:41

the super wonder kid, big

10:43

tech, is up 8%. So essentially,

10:46

oil and gas, in

10:48

2024, is doubling the

10:50

performance of the NASDAQ 100%.

10:54

That is just mind-blowing if you just

10:56

think about listening to the media. So

10:58

this trade where capital is

11:01

starting to move into other

11:03

asset classes away from that

11:05

crowded trade. Larry, the

11:07

magnificent seven stocks, of course, have been

11:09

the story for years and

11:11

years, it seems. Is that story finally

11:14

winding down? Is that what we're seeing

11:16

here? And if so, where is that

11:18

capital going to go if that trend

11:20

is ending? Well, we're

11:22

hearing, Eric, from professional investors that

11:25

we talked to. The

11:27

biggest stat is that think of Nvidia

11:29

at $2.3 trillion valuation worth

11:34

as much, almost as much as the entire energy

11:36

sector. But it's a percentage of the S&P, Nvidia

11:40

is up to almost 5%. It's

11:42

about 5% of the S&P, whereas the energy

11:44

sector is about 3% of the S&P.

11:47

So in other words, you've

11:49

got the crowding of these ideas. If

11:51

you look at the NASDAQ 100, close

11:53

to $22 trillion in the NASDAQ 100

11:55

in the first quarter, $22 trillion in

11:58

the NASDAQ 100. Say

12:00

ten years ago the nazdak one hundred

12:02

in the energy sector were about

12:05

the same size right today

12:07

the nazdak one hundred

12:09

is eighteen trillion larger. And

12:11

this is just one of the most

12:14

crowded trades of all time the

12:17

artificial intelligence dynamic

12:19

is sucked in a lot of

12:21

hot money. Reminds

12:24

me of the of the nineties in

12:26

the nineties we created convert bond.com where

12:28

fortunate enough was the trade of my

12:30

lifetime we sold it to mortgage daily. In

12:32

the nineties eric what everybody

12:35

was focused on with the

12:37

lucyn's the global crossing the

12:39

cisco's the jd's is unifaces

12:41

it so when a revolutionary

12:43

game changing technology comes on

12:45

the scene people focus their

12:47

eyes and minds on. Showcase

12:51

trade these high profile trade

12:54

in the end of the day what

12:56

happened in the nineties i think

12:58

is about to happen now where

13:01

it's those second third level trades

13:03

like after the nineties we had

13:05

match.com we had meta we had

13:07

google and all these companies that

13:09

harness the incredible power of the

13:11

internet. It's just like artificial intelligence

13:14

today natural gas probably gonna

13:16

be one of the

13:18

most powerful winners here energy.

13:21

Just energy sources and just the power grid

13:23

alone you talk about copper talking

13:25

about a fifty year old copper power

13:27

grid in the united states fifty years

13:29

old in some spots thirty years old

13:31

and others you talking about we

13:34

need. To supply the

13:36

energy source for artificial intelligence

13:39

in two thousand twenty two is about four hundred and

13:41

sixty terawatt hours four hundred

13:43

sixty terawatt hours but if you

13:45

believe in video and all these great

13:47

sales people that are telling us about

13:49

the potential of artificial intelligence. It

13:52

could be in two thousand twenty six

13:54

twenty seven twenty eight upwards of two

13:56

thousand terawatt hours which is equivalent of

13:59

the amount of. demand of

14:01

electricity and power of

14:03

Germany and France. We

14:06

have a world where we've suppressed

14:08

the supply of energy and

14:11

natural gas because of all these

14:13

things, ESG and all these regulations,

14:15

we're suppressing the supply and the

14:17

demand is about to explode. There's

14:21

this incredible distance, this

14:23

incredible spread between supply

14:25

and demand that's looking out say

14:27

18 to 24 months, we're

14:30

talking about a major energy crisis

14:32

that's coming upon us. You

14:35

and I agree very much on that, but

14:37

I have to admit that what I've gotten

14:39

wrong several times in my career is the

14:42

timing of that energy crisis.

14:44

When do you think we get

14:46

to the rubber meets

14:49

the road point where we see

14:51

that divergence between supply and demand

14:53

that just forces prices much higher

14:56

regardless of policy decisions? If

14:58

you think of the COVID world and emerging

15:01

markets and emerging market economies, we've taken

15:03

5 million jobs out of the United

15:06

States over the last 20 years. We've

15:09

moved them into India, Bangladesh,

15:12

China, all these emerging market countries. We've

15:14

decimated the rust belt, which

15:16

has had a major impact on elections. The

15:19

Biden team wants to reshore jobs, so does

15:22

the Trump administration, but a lot of these

15:24

jobs have been pushed around the world. What

15:27

we can see very clearly is

15:29

the energy demand, whether it be

15:32

MOPEDs coming from India in the

15:34

fourth quarter, there's a billion people in India

15:36

that don't have air conditioning. When

15:38

you raise the standard of living

15:41

of people around the world dramatically

15:43

because we did this globalist march,

15:46

we're raising that standard of

15:48

living among consumers, young consumers

15:50

in emerging market countries in

15:53

that consumption. That's why

15:55

you're seeing the India stock market has literally

15:57

been one of the best performing stock markets.

16:00

in the world. So we're

16:02

definitely having this demand surge

16:04

from around the world, from

16:06

developing market countries, from northern

16:08

Africa, from African countries, from

16:11

emerging markets, even from Europe. But

16:14

the supply, because of all the regulatory

16:16

overhang in the United States, supply of

16:18

natural gas, LNG, we can't get it

16:21

fast enough to market. And there's just

16:23

that, I think it's very certain that

16:25

that spread is developing. And then if

16:28

you look at it from a trader

16:30

perspective, if you look at the

16:32

curve in terms of backward ation,

16:34

we've got it to a backwardation that's

16:36

with the front month on the oil

16:39

contracts, is more expensive than the outer.

16:41

So there's a lot of evidence that

16:43

the seasonality with oil and gas and

16:45

all of that short-term trading at

16:47

a one-year view, I think

16:50

extremely bullish. And so I

16:53

know it's very hard to time it

16:55

right, but looking at it at one,

16:57

two, three years, four years, I think

16:59

we have a really outstanding trade in

17:01

natural gas, oil, and

17:04

uranium, and all these metals

17:06

that are supposed to really complete our power

17:08

grid. Our power grid is a $2 trillion

17:12

hole, essentially. We're at a $2

17:14

trillion hole to improve the power

17:17

grid, to make that power grid capable

17:19

of handling all the electric vehicles, all

17:21

that artificial intelligence. And at the same

17:23

time, if you think about metals, I

17:26

mean, for the love of God, we're going to

17:28

have a, one of the things institutional investors are

17:30

talking to our team about every day is the

17:33

Ukraine rebuild, right? And that's going to be tough

17:35

to really time, but that's something that like two,

17:37

three years from now, we're going

17:39

to be trying to rebuild the Ukraine, all that

17:41

demand for the copper, aluminum. At the same time,

17:43

we have this artificial intelligence

17:45

revolution with electric vehicles, and in

17:47

countries like India that are growing,

17:50

if their energy consumption at three

17:52

to four times the developed world,

17:55

it's just, there's just no question that we

17:57

have this energy crisis upcoming upon us.

18:00

Larry, one of the themes that we've been seeing

18:04

in the past is the shift from a

18:07

unipolar world to a multipolar world. It

18:09

really feels to me like

18:12

this conflict with Ukraine is not

18:14

ending. I think that the conflict,

18:16

the real conflict is between the

18:18

United States, Russia, and China. I

18:21

think Ukraine has mostly been a proxy in that. And

18:24

regardless of how the Ukraine thing works out,

18:26

I think we're just getting started in this

18:28

shift. What would that mean

18:30

for markets? How does it change the

18:32

landscape in terms of how portfolios have

18:34

to be designed? What are the

18:36

consequences? And I guess I should start with, do you

18:38

agree that we're moving very much toward

18:40

a multipolar world, and this is a big

18:43

trend that doesn't end with the Ukraine conflict?

18:46

Absolutely. And it's a huge part

18:48

of our book when markets speak

18:50

around that transition. And if

18:52

you think about the whole world and

18:54

think about the investment community, and you

18:56

think about asset classes and past investing,

18:59

everybody is essentially in the 2010 to 2020 portfolio.

19:04

Everybody's long, same stocks. Everybody's

19:07

long, really a disinflationary portfolio,

19:09

a unipolar world portfolio. And

19:12

that's the type of world we were in for

19:14

a long period of time. A unipolar world is

19:16

a world where supply chains are working brilliantly,

19:19

where there's one major power of the

19:21

world, there's less global conflicts. But

19:24

a multipolar world is like a 1960s

19:27

to 1980 world where there are

19:29

more global conflicts. But

19:31

today, Eric,

19:33

today, it's like

19:35

literally watching Terminator. We

19:38

have drone attacks in the last month

19:40

that are taking out ships

19:42

in the Zuez Canal, where they're taking

19:44

out refineries in Russia.

19:47

I mean, for the love of God, if

19:50

Putin, in all his

19:52

advanced technology, can't protect the

19:55

Russian refineries, and that's one of the reasons why

19:57

we've had this big move up in oil and

19:59

recent... Days weeks Because

20:01

of this multi polar will

20:04

be strikes on these refineries

20:06

if ship protect those assets.

20:09

If one attack on the

20:11

Saudi oil fields gets through,

20:14

then we're in a real

20:16

nineteen seventies, eighties eighties problem

20:19

Because the markets tight enough,

20:21

the global demand for underinvested.

20:24

The. Biggest point we make in the book. The

20:27

most important point for our listeners comes out

20:29

of this one part of the book. So.

20:32

Is his ticket by two thousand and

20:34

ten to two thousand and fourteen And

20:37

the investments in oil and gas and

20:39

metals. Everything we needed for the world

20:41

to supply all that energy and all

20:43

those seats commodities, that investment fleeing from

20:46

two thousand and Ten to Two Thousand

20:48

and Fourteen If you move it forward

20:50

to today, We're. Sicily in the

20:53

three trillion dollar whole. The. Three

20:55

trillion dollar whole it. At the same

20:57

time, the global population from two thousand

20:59

and fourteen, two Thousand Twenty Four is

21:02

up almost a million people. One.

21:04

Billie So. Were.

21:06

Massively under invested you know what we

21:08

call a multi polar world with all

21:11

kinds of potential problems in the Middle

21:13

East has been developing through the whole

21:15

this whole year is so every time

21:18

there's any kind of attack the markets

21:20

tight enough that it creates this real

21:22

stress I own terms of higher oil

21:24

prices to with stress on the banks

21:27

of put stress on the on the

21:29

Us consumer in an election year. The

21:31

one thing we've been hearing Eric from

21:34

is a to Supplies last month is.

21:36

If poop wants to influence them be

21:38

was selection. The.

21:41

Easy as weapon. the world from the

21:43

uses, take down oil production with the

21:45

Saudis and that's what if you look

21:47

behind the scenes at a lot of

21:49

the data is no question that he's

21:51

doing. that is so when you come

21:53

to a seasonal period with the summer

21:56

driving season the United States, lots lots

21:58

The man civically very bullish period. oil

22:01

and if Putin does cut

22:03

back production, remember these got Russian

22:06

producers from like 9 to

22:08

10 million barrels a day. In some

22:10

years, maybe 11 million barrels a day.

22:13

So it's a major global

22:15

producer in an election year. This

22:18

is a big wildcard. If Putin wants to

22:20

influence that US election, all he has

22:22

to do is join the

22:24

Saudis and cut back production even more. And

22:27

then we have a real big election wildcard in

22:29

November 2024. You

22:32

said earlier that if just one

22:34

attack on a Saudi oil field

22:36

got through, that that could really

22:38

change the game. Do

22:40

you perceive a risk of

22:43

an attack on Saudi oil fields and if

22:45

so from whom? Well,

22:47

that's where it gets into. That's why I

22:49

said the Terminator because we're in a period

22:51

where if you create enough drones with the

22:54

better technology and if you have that better

22:56

technology can get through the counter

22:59

forces, those Patriot missiles or the missile

23:01

defense systems, it's really

23:04

an incredible battle. Now granted, when you

23:06

talk to institutional investors, they'll tell you

23:08

that the Saudi oil fields have much

23:10

greater protection than say those refineries

23:12

in Russia or parts of the

23:15

canal, the US canal. So there's reasons

23:18

why there have been attacks on

23:20

the canal in multiple spots, multiple

23:22

ships and multiple

23:25

refineries in Russia. Those areas are not

23:27

as well protected. But it's

23:30

really like a scene out of the

23:32

Terminator where our Schwarzenegger and James Cameron,

23:34

what an incredible movie where those technologies and

23:37

all it takes is one to get through.

23:39

It's still not a high probability, but if

23:41

you just think about the last couple of

23:43

months, we've gone from a problem

23:46

in Israel, a tragedy, then we

23:48

now obviously the entire developed world

23:51

can't protect one of the major

23:53

canals in the world. That's a

23:55

multi-polar situation. Then

23:58

we've gone to refineries. is

24:00

being struck in Russia by,

24:02

I guess, Ukrainian drones. It's

24:05

just escalating to the point where it's like, where

24:07

does this go next? It's very

24:10

clear to us that it's

24:12

a multipolar world with a lot of

24:14

tension. The

24:17

strike this week with

24:19

Israel on that embassy,

24:21

in the Middle East, that Iranian

24:24

embassy, that's clearly another escalation. It

24:27

looks like we're just going to have another

24:29

path forward of more escalation until there's a

24:31

solution that's going to put more pressure on

24:33

oil, more pressure on rates, more pressure on

24:35

the regional banks, and more pressure on the

24:37

U.S. consumer in the election year. Larry,

24:40

I always enjoy our conversations because, like

24:42

myself, you're a big picture thinker and

24:45

you're really seeing all of the different

24:47

facets of this. But let's try to

24:49

take this whole conversation now and

24:51

bring it back to the trades that

24:53

we can actually put on in a

24:56

portfolio. We've talked about

24:58

a number of subjects in

25:00

this interview already, from artificial

25:02

intelligence to the

25:04

energy transition, the metals

25:06

that are going to be needed for that,

25:08

to what's going on with energy.

25:10

Obviously, you want to be buying commodities in backwardation

25:13

wherever you can. I agree with you that there's

25:15

probably a lot of upside for natural gas, but

25:17

that's a tough commodity to be on the long

25:19

side of. So do you trade

25:21

that through the equities? Let's

25:24

just take all of this and try to frame it

25:26

in terms of where the trades are. Well,

25:29

what we've been looking at is, okay,

25:31

value stocks that can benefit from the

25:34

rebuild of the power grid in the United States

25:37

or all this, like I said

25:39

before earlier in the interview, artificial

25:41

intelligence, the best trade is probably

25:45

in the natural gas space, and

25:47

that's going to benefit from this

25:50

incredible explosion in demand

25:52

for electricity and energy over the

25:54

next couple of years. And then

25:56

you've talked about everybody

25:58

knows the LNG experience. trade,

26:01

which Europe wants

26:03

to replace Russia. So there's a lot

26:05

of incredible demand there. That hasn't worked

26:07

out because these LNG facilities haven't come

26:09

online fast enough, and it's been a

26:12

warm winter in Europe. So the bottom

26:14

line is you've got a trade here

26:16

in natural gas companies that

26:19

is powered by both this explosion

26:21

in artificial intelligence and data centers.

26:24

And then this explosion in

26:27

LNG demand that's coming from

26:29

Europe that's massively politically driven.

26:31

So if you look at

26:33

Antero resources, here's an amazing

26:35

stats on Antero. So it's a

26:37

$9 billion market cap company. We

26:39

think they're going to do $1 billion

26:41

of free cash flow in 2025. So

26:44

that's 11% free cash flow yield, 11%

26:46

free cash flow yield, and Antero has

26:48

been buying

26:52

back. And this is the fascinating part.

26:54

These companies are producing cash, they've been

26:56

buying back $1 billion of stock,

26:58

and it's over the last year or so, a little

27:00

bit more. So they've bought back almost

27:02

10%, 10%, 15% of the outstanding shares. You know, one

27:07

thing about this commodity cycle, these balance

27:09

sheets are much less levered than in

27:11

the cycles past. They have only $4

27:13

billion of debt versus equity market cap of $9

27:16

billion. So you look at a stock like that,

27:18

and you talk about if you really

27:20

believe in video, and you really believe in

27:22

this whole LNG export, the name and all

27:24

these data centers and all this demand, you're

27:26

talking about natural gas prices that are going

27:28

to be most likely in the $6 to

27:30

$8 range relative to blow

27:32

to now. And I'm talking in the next

27:35

two, three years. And companies

27:37

like Antero that are on

27:40

the pace to produce 11% free cash flow

27:42

yield, I just see a tremendous risk reward.

27:45

You potentially have, with

27:47

some of these stocks, you get five to

27:49

10 baggers on the upside, and you do

27:51

have some downside 20 to 30% if

27:54

things don't work out. But the upside, you're

27:57

talking about five, 10, 20 baggers with some of these

27:59

names in the now. gas space. Larry,

28:02

you mentioned the power grid. Let's go a little deeper

28:04

on that. Well, I mean,

28:06

if you believe the

28:08

analysts on Wall Street and analysts love to

28:10

upgrade stocks on the highs, I

28:13

mean, the analysts were crickets a

28:15

year ago in the first quarter.

28:17

They barely mentioned this artificial intelligence

28:20

dynamic in last January, February,

28:22

and everybody was downgrading a lot of these

28:24

stocks. But now, the

28:26

analysts are putting up very incredibly

28:28

rosy projections for companies like Nvidia

28:31

in data center demand and

28:33

artificial intelligence. If you

28:36

think about all of that electricity

28:38

demand over the next couple of years coming on

28:40

an aging power grid that's 30 years old in

28:43

some spots, 50 years old in others, and then

28:45

you think about the projections

28:47

on electric vehicles, all of those

28:49

vehicles coming on in

28:52

hybrids and alike, but a lot of stress

28:54

on the power grid. Companies like

28:56

Generac that make backup generators

28:58

in states like Texas, those

29:01

are solutions for hiccups along the

29:03

way. So whenever you see

29:05

these big secular cycle trades, the

29:08

media makes it look like we're going to

29:11

have a straight doorstep to this new

29:13

nirvana. But there's a lot of times there's

29:16

tremendous hiccups along the way, and

29:18

you've got to think, okay, the power grid's

29:20

won. If the power grid breaks down, as

29:22

it did in Texas in recent years, your

29:25

Generacs of the world are going to benefit. Then

29:27

the metals themselves, like copper, you've

29:30

got political crisis in Panama over

29:32

the last year that has been

29:35

suppressing copper supply, same

29:37

thing in Chile and Peru,

29:39

Panama, Chile and Peru, or

29:41

tremendous copper producers. The

29:43

supply of copper relative to man has

29:45

been under arrest. So

29:47

copper itself as a commodity, I talked

29:51

to an institutional investor this week,

29:53

who's a billionaire, great client of ours.

29:55

He's like, Larry, I just want to own the commodity. I

29:57

just want to own copper. You can do that a lot. of

30:00

different ways, a lot of different instruments. But

30:02

if copper gets too expensive over

30:05

the next three to five years,

30:07

aluminum is an incredible

30:09

commodity. Alcoa today reached about

30:11

60% off of

30:13

the lows. In the fourth quarter, the

30:16

street was aggressively downgrading Alcoa. Alcoa's got

30:18

one of the best, obviously, aluminum producers

30:20

in the world. So

30:23

aluminum is a very potential

30:25

solution to expensive copper prices if you

30:27

look at the build out of the

30:30

power grid. And like I said, that's a

30:32

$2 trillion problem. But the only

30:34

way you're going to get all those electric vehicles

30:37

and all of that artificial intelligence, those

30:39

data centers up and running

30:41

is through these second and third level

30:44

trades in aluminum, in copper,

30:46

and things like Geterac. Larry,

30:49

in this global multi-polar world that we're

30:51

talking about, China is obviously one of

30:53

the most important players. Let's

30:56

start with your outlook on

30:58

how US-China relations go, but

31:00

then what are the consequences

31:02

of that in markets? Well,

31:05

what's interesting, Eric, is that

31:07

in the first quarter, there

31:09

was this big move toward

31:11

ownership of

31:13

equities in Japan, equities

31:16

in India, and a

31:18

lot of the momentum players were short China

31:20

and long India and Japan.

31:23

In the second quarter, today we had

31:25

President Biden, I had a phone call

31:27

with President Xi, and

31:29

there's no question that the

31:32

pressure on China now, from what I hear

31:34

from all of our top consultants, China

31:36

equities are the most under-owned

31:40

that they've been in a decade in terms

31:42

of the global position in

31:44

portfolio structure. And

31:46

so China has been through this,

31:48

obviously, these lockdowns over the

31:51

last two, three years. They've had the

31:53

property crisis. And so if

31:55

you're China, you want to try to increase

31:58

incentives on equity ownership. because

32:00

they had a property crisis. Think about the United

32:03

States. When we had the property crisis in 2008,

32:07

what did the Fed do? They kind of emphasized

32:10

or kind of steered people toward taking

32:12

down real estate exposure and increasing equity

32:14

exposure. That's what the big central planners

32:16

do. That's what we think they're going

32:18

to do in China. Then if you

32:20

think of ownership of equities and how

32:22

cheap these companies are, at one

32:24

point within the last year, it could fit 14

32:27

Babas in Apple. When

32:30

you talk to professional investors

32:32

for decades that have been

32:34

managing portfolios around China, I

32:37

talked to a really interesting guy

32:39

last week. He said, they used to

32:41

go to Europe. They used to

32:43

be in the conference rooms. They would run out of coffee.

32:46

They would run out of bagels. They would

32:48

run out of muffins because they're standing room

32:50

only. He said, over the

32:52

last six months, when he goes on the same

32:54

trips, there's nobody in the room. After

32:58

this whole threat, all the threats

33:00

from Russia, the war in the

33:02

Ukraine, and all that, everybody

33:05

took down their exposure to Russian equities

33:07

because of the tragedy there. The

33:10

next level of divesting

33:12

came into China. Everybody is divested

33:14

from China. Not everybody, but there

33:16

aren't many people that own these

33:18

equities. They're extremely cheap. It's still

33:21

a $14 billion economy.

33:23

Most of all, if

33:27

once the Fed starts easing,

33:29

then China can ease in

33:31

a more forceful manner. China

33:33

can't do it without the

33:35

Fed because if China starts

33:37

to ease without the Fed, it weakens

33:40

the Chinese want, the currency that creates

33:42

all kinds of problems internationally. If

33:45

the Fed over the next year,

33:47

12 months, starts to ease,

33:50

starts to cut rates, that's going to be

33:52

extremely bullish for China. The

33:55

US is extremely dependent on

33:57

China for everything from pharmaceutical

34:01

We get a lot of our drugs from China. We

34:03

depend on a lot of things that

34:06

are tech items and so forth that

34:08

are manufactured in China. I

34:10

think there's a lot of complacency in the

34:12

marketplace and the assumption that the

34:14

Chinese need the income

34:16

from exports to the United States.

34:19

They would never dare to

34:21

cut us off from those critical things that

34:23

we need even in a really

34:25

tense geopolitical conflict because

34:28

they can't afford to. I'm

34:30

not so persuaded of that, Larry. Now if

34:32

it turned out that that view was wrong

34:34

and China really was inclined to

34:38

embargo some exports of things

34:40

like rare earths and

34:42

cobalt, what could that mean? First

34:45

of all, do you think it's a plausible

34:47

scenario? And if so, what would it mean

34:50

for markets and how much turmoil would it

34:52

create for the U.S. economy if they were

34:54

to strategically cut us off from a few

34:56

things in order to push a point in

34:59

a geopolitical negotiation? Yes.

35:01

And this is a big part of our book,

35:03

When Markets Speak, where we talk

35:05

about geopolitically in the most

35:07

dangerous position that the United States sent

35:09

because when you're a

35:11

dictatorship, whether it

35:14

be Russia or China, they've been able

35:16

to think about hard assets versus financial

35:18

assets. The U.S. is

35:20

essentially long, lots of financial

35:23

assets, lots of stocks, paper, securities,

35:25

and lots of bonds. And

35:27

a lot of that wealth is in

35:29

paper assets, financial assets. Whereas

35:31

if you look at the last five years,

35:34

10 years, and 15 years, if

35:36

you look at Russia, these

35:38

countries have been loading up and backing

35:40

up the truck on all kinds of

35:42

hard assets. We mean, you know, whether

35:45

it be rare earths, cobalt. So

35:48

think about this. One stat from the book

35:50

is China controls 75 percent of cobalt. I

35:53

mean, think of the iPhones. I think of

35:55

everything, the lithium and everything you need for

35:58

cobalt. And they control about... eighty

36:00

two percent of rare earths and

36:02

so if you think about

36:04

rare earths, we need them for wind farms,

36:06

we need them for car batteries and electrical

36:08

energy. We

36:11

have this incredible sales

36:13

pitch from all of Wall Street

36:15

and all of Washington around the

36:18

Green Revolution and windmills and

36:20

solar panels, but when you

36:23

look behind the scenes, the

36:26

emperor has no clothes in terms of

36:28

those key strategic metals that will

36:31

be needed to supply

36:33

all of our green metals and

36:35

produce that green metal to get

36:37

us to that promised land to

36:39

that carbon neutral 2050. A

36:42

lot of those strategic metals and

36:44

key metals are controlled by Russia

36:46

and especially China. If you

36:49

think about it, okay, if the world flips, this is kind

36:51

of one of the lines from the book, but if the

36:53

world flips from fossil fuels

36:55

to solar, let's just say

36:57

we want to flip

37:00

tomorrow or the next five years from

37:03

fossil fuels to solar, you would need

37:05

a solar field as big as France.

37:08

That's about 150 million acres

37:11

and more plastic than there is

37:13

on the planet. It means miles

37:15

and miles of cables and so

37:17

the amount of materials and strategic

37:19

metals and rare earths to

37:21

get us to that promised metal and that

37:23

promised land of carbon neutral 2050

37:26

is just mind blowing and nobody's

37:28

doing the math. I

37:30

think you want to look at companies

37:33

like MP materials or companies like Hecla

37:35

Mining in the Silver

37:37

Space and MP materials in the rare

37:39

earth, companies that produce metals

37:42

that are in what we

37:44

call geographically safer communities or

37:46

have less jurisdictional risk. My

37:49

friend Adrian Day, the famous metals

37:52

analyst always says less jurisdictional risk.

37:56

That's companies that own lots

37:58

of assets and can. in

38:00

the United States where those

38:02

assets are more secure and those

38:05

investments in those areas I think

38:07

we'll start to develop a premium

38:09

in the coming years. Larry,

38:11

you've mentioned several topics that are covered

38:13

in your new book which is titled

38:15

How to Listen When Markets

38:18

Speak. It's currently number

38:20

one on Amazon in the finance category

38:22

and it is available for shipment now.

38:25

It's not just a pre-order. So the book just

38:27

hit the streets last week. Tell

38:29

us a little bit more about it, why this

38:31

particular title, what is the theme of the book

38:34

and beyond what you've already said about some of

38:36

the trades, what can people expect to learn when

38:38

they read it? Well,

40:00

Larry, I can't thank you enough for a

40:02

terrific interview, but before I let you go,

40:04

please tell our listeners where they can follow

40:07

your work and how they can contact you.

40:10

Well, I think the two best

40:12

areas, our website is the beartrapsreport.com.

40:14

We work with family offices, financial

40:17

advisors, high net worth individuals,

40:19

hedge funds and mutual funds and pension funds. And

40:22

on Twitter, I'm at Convert Bond. And

40:25

over the years, I'm really proud of the

40:28

relationship we've built with the Twitter and the

40:30

X community. And those are two

40:32

great spots to catch up with us and we really appreciate

40:35

all the support for the book. Patrick

40:38

Suresna, Nick Galarnik and hopefully my

40:40

voice will be back as

40:43

Macro Voices continues right here at

40:45

macrovoices.com. Now,

40:54

back to your hosts, Eric Townsend

40:56

and Patrick Suresna. Oh,

41:01

it was great to have Larry back on

41:04

the show for an update. Now, Eric will

41:06

be sitting out this postgame segment, so Nick

41:08

Galarnik and I are going to get straight

41:10

to the chart deck here. Listeners, you're going

41:12

to find the download link for the postgame

41:15

chart deck in your research roundup email. If

41:17

you don't have a research roundup email, that

41:19

means you have not yet registered at macrovoices.com.

41:22

Just go to our homepage, macrovoices.com and

41:25

click on the red button over Larry's

41:27

picture saying looking for the downloads. Now

41:30

I want to just start off with the crude oil

41:32

chart here, Nick. And

41:34

it's been a really good run.

41:36

I've more or less been bullishly

41:38

siding with the trend because the

41:40

price action has been accumulative. It's

41:42

been staying above its 50-day moving

41:44

average and working higher. The key

41:46

is that we actually now have

41:49

beat Fibonacci retracement zones from

41:51

the 2023 market

41:54

correction. And so at this stage,

41:56

I'm really curious whether the bulls will be

41:58

able to get this up

42:00

to the highs that we both saw in November of

42:02

2022 and in September of 2023, especially in

42:07

light of escalating geopolitical tensions,

42:09

maybe a little bit of oil

42:12

premium might be coming in here. Well, that's

42:14

just it, right? I mean, you look at the

42:16

Fed and their decision making right now, and a

42:18

lot of it, it's predicated upon inflation. If we

42:20

get energy prices skyrocketing again, that's going to make

42:22

it very hard for them to cut rates, and

42:24

it's going to actually guide markets probably lower in

42:26

the shorter term, which leads us to the discussion

42:28

on the S&P. All right. Well,

42:30

let's jump straight to it. Let's first start off

42:33

with you giving the levels. What

42:35

are the levels on the S&P? Right now, we

42:37

have a spot price of approximately 5210 on SPX. We

42:41

have an implied move for the April 19th

42:43

monthly OpEx, plus minus 110 points,

42:45

which gives us an upper implied

42:47

move of 5320 and a lower implied move of 5100. What

42:54

I'm seeing is that we're seeing a lot

42:56

of consolidation in this area, perhaps a pause

42:58

overall, but the last three days or so

43:01

have given me a little bit of jitters, so

43:03

to speak, in terms of saying long

43:05

in the market. I mean long in terms

43:07

of the short term positioning, not my

43:10

long term positions, because oftentimes before a

43:12

larger correction, we see these downward cycle

43:14

moves. With the Fed members

43:16

yesterday discussing possibly only one cut this

43:19

year, going from four initially to now

43:21

one cut, that's a big change

43:23

in overall theme that a lot of market

43:25

participants were expecting. Yeah. So

43:28

on page four, I have that S&P 500 chart. Normally

43:31

I show the yellow 50-day moving

43:33

average, but in this case,

43:36

I put the 20-day moving average on here

43:38

because it really has

43:40

contained almost every short term

43:42

correction the S&P has had.

43:45

More importantly, going back to the

43:47

start of the year, there's been

43:49

this upwards channel in the S&P

43:51

500 drawing between those red lines

43:53

that has defined that

43:56

escalator ride higher that these markets

43:58

have been systematically doing. What's

44:00

really interesting is now

44:02

these trend lines and moving averages

44:04

are just sitting north of 5,200

44:07

which is not far from where the

44:09

low from yesterday came in. And

44:12

so what will be interesting to see is

44:14

whether or not the bulls do

44:16

what they have successfully been doing

44:18

all year which is they buy

44:20

this dip and they work it to

44:23

the top of the channel. The way

44:25

it's interesting that Nick that we're going

44:27

into the jobs numbers tomorrow and the

44:30

jobs have not played a big role

44:32

in creating market volatility in

44:34

the last half year. But it's

44:36

interesting that we're at this key

44:38

pivot moment right along a very

44:41

key support line at the moment

44:43

when a relatively important news release

44:46

or economic release is coming out. It

44:48

would be interesting to see whether Friday

44:50

brings about some volatility that breaks any

44:53

of those downside support lines. Right now

44:55

though, the bulls are in control and

44:57

while certainly that first day of selling

44:59

this created a little bit of nervousness,

45:02

by no means are the bulls

45:04

in trouble yet. But at

45:06

some point when this trend line breaks,

45:08

a proper 300 to 500 S&P

45:11

point mean reversion will get started.

45:14

It's really just now solving

45:16

the puzzle piece as to whether this is the

45:18

point where that turn is happening. That

45:20

makes a lot of sense to me actually

45:23

because when you look back to last year

45:25

when we finished the year up 23%, we

45:27

had two instances of the market correcting by

45:29

about 10%. So

45:32

we're already in April right now. If

45:34

we predict that we're going to finish the year up around

45:36

15-20% this year, despite this nice

45:39

bull run, we should expect some pullbacks

45:41

at some point. When I shoot straight

45:43

up nonstop. So what you

45:45

mentioned about the 300 to 500 S&P point correction

45:47

makes a lot of sense because that's about 10% or

45:49

so to the downside. So again, I'm always

45:52

very cautious about this because it's when

45:54

you have those pullbacks where the greatest

45:56

opportunity resides. Those

45:58

insane opportunities where it's always certain names

46:00

that should not be beaten OpEx

46:19

of plus minus 11 points. That

46:22

gives us an upper implied move of

46:24

$454 and a lower implied

46:27

move of $433. As

46:29

I mentioned in previous weeks I'm bullish on

46:31

certain names namely Google, Apple

46:33

right now. Google has done very very well

46:35

the past few weeks. I caught that bottom

46:38

around $132 or so. It's

46:40

up at around $155. Apple

46:42

is still sitting around support area at

46:45

$169 or so but short term I

46:47

see those two names being strong. I'm

46:49

going to see names like Tesla roll

46:51

over. They had poor sales numbers early

46:53

this week and it's possible we

46:55

see Tesla roll over to $150 or so area. I

46:57

do like Tesla in the long term for reasons I

46:59

won't get into but in the short term I think

47:02

it could pull back down to $150 or so. Well

47:04

you know when we look on page 6 and

47:06

I have the NASDAQ futures chart on

47:08

there the interesting thing that we're seeing

47:11

is that there clearly is evidence

47:13

of a sector rotation and while

47:16

certainly Google had a nice

47:18

good run on the upside in the

47:20

last little bit it's also countered by

47:22

the fact that Nvidia has more or

47:24

less been correcting for now six seven

47:26

days and the buy

47:28

on dip traders that normally would come in at

47:31

these levels have at least not at this moment

47:33

showed up. But the interesting part here when we

47:36

look at this chart is that

47:38

really the NASDAQ has not participated on

47:40

the upside at all in the last

47:42

month. It really has been

47:45

an S&P 500 rally

47:47

and the NASDAQ has been flat and you

47:49

can really see that Nick when we go

47:51

to page 7 and look at the breadth

47:54

of the market and what I have is

47:56

the breadth of the market on the left we

47:58

have the NASDAQ and on the right. S&P.

48:01

And what you can see is that we

48:03

have a breadth based upon the percentage of

48:05

stocks above their 50-day moving average on the

48:07

NASDAQ of 42%. Even

48:10

during this entire month of March when

48:12

there's been this big rally, it

48:14

barely could get above 50% of stocks

48:16

on the NASDAQ above their averages, which

48:19

basically is showing that there's a

48:21

pretty distinct distribution in that NASDAQ basket.

48:24

At the same time, that S&P 500

48:26

got up to 85%. And that really

48:28

was a

48:33

broadening of the market, particularly a

48:35

few sectors like energy. And that's

48:37

where on page 8, I am

48:40

showing the sector performance for the

48:42

one month. And you can see

48:44

the energy sector up 11%, communications

48:47

up 8%, basic materials up

48:49

6%, even utilities up 4%.

48:52

And yet those

48:54

areas like consumer defensive,

48:57

consumer cyclical, and technology,

48:59

including real estate, have actually

49:02

all been distributing. And so that

49:04

sector rotation has really been the

49:06

name of the game here. And

49:09

the question here is that can

49:11

the market have another significant move

49:14

higher when the distribution

49:16

in the NASDAQ continues? Yeah,

49:18

Patrick. So looking at the communication services

49:20

in particular, that sector to me is

49:23

more of a tech basket. Because if

49:25

you look at the holdings in that,

49:27

you see that Meta and Google are

49:29

the top two holdings in a lot

49:31

of communication services ETFs. So

49:33

right now, that to me is more of a tech performance.

49:35

So we're seeing energy and tech up perform handily, basic

49:38

materials obviously as well. And we're seeing

49:40

tech not really so broad, as you

49:42

mentioned, because a lot of this is

49:45

selective choosing of names like Apple,

49:47

Google, Amazon, Meta, as

49:49

well as Nvidia. All right, Nick, let's

49:51

get on to that volatility index. We've finally seen

49:53

a little bit of a spike, but I mean,

49:56

nothing to write home about. I mean, we are

49:58

at the 14 handle, still within the the range

50:00

that we have seen all year. We bounced around

50:02

from the mid-12 range on

50:04

the VIX, always got up to like

50:07

towards 15 and then right back down.

50:09

What are the current levels on the

50:11

VIX telling you? Right now

50:13

with the VIX sitting at approximately 13, that

50:16

tells us that we should see intraday top to bottom moves of

50:18

about 0.75% roughly. We're

50:21

seeing these implied ranges stick for the

50:23

most part each and every day. What I'm

50:25

tracking is, for example, around noon-ish each day.

50:27

If I notice that the implied range exceeds

50:30

the current range of top to bottom for a

50:32

given day, that tells me that

50:34

we should see some activity into close which

50:37

has happened the last few days. We've had

50:39

these violent runs up or down, mostly to

50:41

the downside where we dropped 20 points in the

50:43

last hour for example which happened yesterday. Tracking

50:46

the VIX right now is not really so useful

50:49

for short-term movements. In the longer

50:51

term, what I'm seeing is that insurance is still very

50:53

cheap and if you want to hedge

50:55

your portfolios and makes a lot of sense to purchase

50:57

insurance longer term, perhaps using spreads because spreads are going

50:59

to be your friend and you're going to offer incredible

51:02

asymmetry of risk where you can, for example, risk

51:04

$1 to make $9. So

51:07

Nick, I want to move on and talk

51:09

about commodities but I really wanted to step

51:11

back and look at them on weekly charts

51:13

in the real big picture and just to

51:15

see what kind of major trends could potentially

51:17

be getting underway. I thought the best way

51:19

to start is to look at that Bloomberg

51:21

commodity index on a weekly chart basis and

51:23

you can see that epic bull run in 2021 and

51:25

into the start of 2022. But we've now been in about

51:27

a two-year correction in

51:35

the commodity basket. It's been consolidating

51:37

off of its highs but in

51:40

the last couple of weeks, we have

51:42

seen that commodity index actually attempting to

51:44

break out. We

51:47

obviously have the third

51:49

and fourth quarter highs of last year

51:51

but it's certainly an uptick that is worth

51:54

watching. There's still

51:56

a lot of commodities that are not

51:58

participating such as grains, and

52:01

other types of soft commodities. But

52:03

at the same time, the fact that

52:05

energy has turned up is a real

52:08

big plus for this. It'll be interesting

52:10

to see whether that actually creates any

52:12

further follow-through. So on page 11, I

52:15

have the gold chart

52:17

and this is again the weekly

52:19

chart. All of those major highs in 2020 and 2022

52:21

and 2023 that all happened around the 2000 level, we've

52:23

now definitively

52:29

and decisively broken out of that

52:31

range in a very bullish manner.

52:33

Now a lot of technicians are

52:35

very quick to point out some

52:38

of the measured moves of the 2700 as

52:40

reasonable targets. But right now this 2300 was

52:42

actually a very key

52:45

target and this is

52:47

actually a natural place for gold

52:49

to pause and consolidate

52:52

the breakout. Now

52:54

to me that's not bearish. In fact

52:56

if gold here pulled back a hundred

52:58

plus dollars towards 2200 but decisively stayed above

53:03

the 2000 level, it

53:05

would just offer a compelling buy-on dip

53:07

for a continuation pattern. But right now

53:10

on the very short term, I'm not

53:12

as optimistic that this just goes in

53:14

a straight line to 2700 but

53:17

it remains very bullish. Yeah

53:19

I agree with you on that. I've been holding

53:21

gold for the past 10 years or so, physical

53:23

especially, and watching this long base form,

53:26

you know the saying, the longer the base, the

53:28

harder the move up. So right now what I'm

53:30

looking for is a break toward

53:32

2500 or so and I do

53:34

see a very very strong move toward 5000 an

53:37

ounce in the next few years after this

53:39

long long base. It's interesting

53:41

in terms of that kind of a target.

53:44

When we look at silver on page 12, this is actually

53:47

a really interesting chart to

53:49

me because I wanted to capture more than

53:52

a decade because I wanted to go back

53:54

and look at that silver bubble that happened

53:56

in 2010 to 2011. It

54:00

was just a melt up in silver where it

54:03

went from the teens all the way towards $50

54:05

an ounce and

54:07

since then there was this

54:09

prolonged period of consolidation. Now

54:11

back in the 2020s has

54:14

seen a bullish breakout in

54:16

consolidation for three years of

54:18

silver sideways and we're now

54:20

approaching once again the highs

54:22

of that last three, four

54:24

years. It would

54:27

be incredibly technically significant if

54:29

a silver was able to break

54:31

out of this area to confirm that

54:33

the precious metals markets are running. I

54:36

don't have a chart on it for

54:38

platinum and palladium but they've really not

54:40

participated at all yet but silver might

54:43

be the first precious metal outside of

54:45

gold to really confirm a new bull

54:47

breakout. Yeah with silver you have

54:49

a lot of industrial applications for it. So

54:51

for example right now approximately 56% of its

54:53

supply is used in industry whereas for gold

54:55

it's about 12% or so. So

54:58

it makes sense that if we're

55:01

using silver for actual applications it

55:03

would have a nice run as well. I think a target

55:05

of around 30 or so in the short

55:07

term would make a lot of sense. But moving on

55:09

to page 13 we have this copper chart. Patrick

55:12

what are you thinking over here? Nick

55:14

copper has been in a consolidation for

55:16

two years no different than that commodity

55:18

index we talked about earlier and

55:21

similar to the chart

55:23

trying to break out there we're

55:25

now approaching the 2023 highs and

55:28

a lot of people are getting excited about the

55:30

short term upside of copper. I

55:33

think that as we approach this 430

55:35

we're going to get a really important

55:37

tell. Typically when we test

55:39

an area like this is where the

55:41

market pauses and mean reverts and corrects.

55:44

As long as old dips are being

55:46

bought and the price action stays accumulative

55:49

it will be interesting to see whether

55:51

the bulls can put together a further

55:53

run up towards $475 or even

55:56

$5 going into the year end. I

56:00

overall remain quite bullish

56:02

commodities in general. I

56:04

just am trying to

56:07

decipher whether or not it should be

56:09

as immediately bullish here in the second

56:12

quarter of the year or really whether

56:14

it's something that is a fourth

56:16

quarter of the year going into next

56:19

year kind of story. Right

56:21

now we're going to get a lot of information about

56:23

whether or not these follow through when

56:26

looking at that. Finally, Nick, I wanted to

56:28

just touch on these uranium charts.

56:33

With this uranium, we

56:35

haven't seen it clear

56:37

any major hurdles. For

56:40

me, with the Spa Physical Uranium Trust, I was

56:42

looking for it to get above 30 for the

56:45

U308. I wanted to see it

56:47

clearing that 90 to 93 level area. We

56:51

just haven't seen the physical uranium

56:53

get any traction on the upside

56:56

yet. What I'm curious

56:58

about is whether or not the uranium

57:00

stocks are signaling something because

57:02

on page 15, I have

57:04

the GlobalX Uranium ETF. In

57:07

the last week, we have

57:09

seen a legitimate bullish breakout

57:11

of uranium miners. They

57:14

have now shot right back up

57:16

towards year highs. Curious

57:19

whether or not the investors

57:21

are sniffing out that another upleg

57:24

in uranium may be starting that

57:27

hasn't yet reflected in spot prices. We

57:29

saw that similar thing happen in

57:31

copper where the copper miners have

57:33

been running for a month before

57:35

the copper commodity actually broke out.

57:38

It's certainly something to watch. Folks,

57:40

if you enjoyed Patrick's chart deck, you can

57:42

find them every single day of the week

57:44

with a free trial of Big Picture Trading.

57:46

Just go to the last pages of the

57:48

slide deck or just go to bigpicturetrading.com. Patrick,

57:51

tell them what to expect to find in

57:53

this week's research roundup. In this week's

57:55

research roundup, you're going to find the transcript for

57:57

today's interview and the chartbook we just discussed here

57:59

in the post-game. including a link to a number

58:01

of and

58:19

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58:23

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Patrick Suresna. On behalf of

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58:48

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