#955 - Should Dollar Bears Throw in the Towel? With Dale Pinkert

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0:34Should dollar bears throw in the towel? Hi, everyone. Welcome to the Real Vision Daily Briefing. with me today is Dale Pinkert, trading coach at TradeGateHub. Hi, Dale. It's great to have you back on. Happy New Year, Maggie. I hope 2024 is one of your best years ever. Oh, you and me both. I hope it's a profitable year for all of us as well. It's what we try to do here, right? So it's been an interesting start of the year, a little choppy, a little uneven. Everyone's kind of trying to see what's ahead. And it just feels like there's a lot of fog and uncertainty. I think that's fair to say. Interesting trading day today.

1:11We had tech up, led by Apple and semiconductors, bond yields up after surprise drop in U.S. weekly jobless claims, and the dollar up. So what do you make of the action you're seeing, Dale? Well, the way I look at, I think we've talked about if you get the dollar right, you usually get everything right. But I have to give kudos to the market. We've had a nice bounce in the dollar from par 60 up to the 103 level. And here we are threatening new all-time highs in S &Ps, making them in the NASDAQ. It's had some impact on the gold. And I believe the headline for this show is a time for dollar bears to throw in the towel.

1:56Question mark. Yeah, question mark. Importantly, question mark. And I say it's not. I think it's getting to be a pretty crowded trade again. alongside the dollar. Last time I was here, I thought the Dixie could get up to 105. It only got up to 104.20. But I did say buy the euro between 108 and 107. And the low was 107. And we rallied up to 111 before this recent pullback. And the way I see it here, this is going to be a buy for me in the 107 zone, which is way four of lesser degree, 61.8 back, a lot of confluence there, and just enough downside to take out the prior low at 107.20. So I think that this is going to be a very significant low.

2:53And if we move to the next chart, it's the Euro Weekly, and this gives a little bigger picture and you can see look at where it stopped Maggie right at the 200 week moving average it tagged it at 111 40 I had people get out at 111 left 40 pips on the table saying that I think we're going to have a chance to for it to revisit those levels but the key thing is we got through it once about eight months ago if you look left and we tagged it exactly this time. So this 111.40 level is very significant and would be a weekly breakout should we trade back over 111.5. And the measured move off the recent low would take it up to about 118 to 120.

3:44So I'm using dollar strength to be a seller in the dollar up around 105 and to be a buyer in Euro and the 107 neighborhood. Interesting. And we're talking you're a dollar here. So you tell us that with the dollar. We've had Peter Brandt, who, by the way, is on the platform. We'll talk about that a little bit. We're going to have a double dose of Peter in coming weeks. He's always said that as well. I'm wondering, though, do we need to get the dollar right? Yes. But is it rates that are really leading? Is this what's moving the dollar? Yeah, we've had a nice little rebound in yields. We had a 1.2 BIP decline from 5 % to 380.

4:31And if you put up the 10-year yield chart, thanks very much, Brian. And so you could see we've had a nice little bounce. We're right at a moving average here. And it's normal in any market for it to correct. And to me, it looks like we're going to have to reprice some of the easings that the market had priced in. Bonds have come off from the 100 level. That was an 18 huge rally. I left some on the table. It didn't get short. but last time I was on, I said, don't get FOMO at 94. I think that we could go to halfway back would be about 440 on the 10 year yield. And that should coincide with highs in the dollar for this rally and most likely lows for the precious metals as well.

5:26So this, and I have to think that after that kind of huge move in bonds, that you have to buy the pullback because it was strong enough to think that there's another wave of bond bull market action after this pullback ceases and terminates that could take us we if say we bought them at 90 we could go to 108 110 which is another area of major weekly resistance in TLT at 110. So here, if we get, say, to 440, and then we have an equal decline that we had from 5%, that would take us down to about 330, imagine? And, you know, 330, 340, if you have a memory and you look left, that was a very important high, 340.

6:21Once we got through that 340 level, we just went pretty much parabolic towards that 5 % level. So that would be a natural place for tenure to drop to. I actually know people that think 5 % is not the ceiling and we're going to see new highs and yields this year. But for now, I'm going to say that the first break that we have was pretty powerful and that there's going to be one more to follow before I turn around and start looking for higher yields. I think that's down the road after we have a big dollar decline and finally a rally in the miners, which is something I want to talk about. You know, I've kept people away from the miners.

7:10I've set a void for a while and they've had some nice little trading rallies. but I said that there's a major cycle due in the miners in 2024 and that we could be making new lows into that cycle and that's pretty much what's happening if you take a look at something like Newmont, Newmont Mining, we're on the verge of making new lows. I know they've had some issues with the mine but a lot of the goals look this way so we're in a capitulation phase of this decline and maybe Newmont goes to 30 and GDX goes to 25. And I'm looking to be a buyer down there. I'm not saying it's going to be a generational low, but if I'm right about the dollar, it's held 100 twice, right?

8:03Just like the euro has failed from 111 twice. If we revisit par this time, I don't believe we'll hold. It's kind of like trying to knock a door down. You run and put your shoulder into it and it may not open the first time or the second time. And if you don't have to go to the emergency room after that, it'll most likely open for you on the third attempt. So that's something else to keep an eye on. I'm looking for subpar in the dollar. And there are a few different counts that could take it either to the mid to low 90s to the mid 80s. To the mid 80s is a possibility, too. Wow. It's not time to throw in the towel, dollar bears.

8:52it's time to look for entries to do your work and look for reversals of this trend in the dollar to take advantage of what I think is going to be the last good selling opportunity in the dollar for a while and the last good buying opportunity in gold and silver in the miners for a while. I'm not saying generational, but the cycle that's supposed to bottom this year points to at least two good years through 25 and 26. So that may not be generational, but for me, that's like getting married, a two-year position. You're not dating the miners anymore. You're actually getting married to them. Hey, everyone, we're going to take a quick break right now to hear a word from our partners.

9:46We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

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11:11That's when I was a rock star. I'm kidding. That's right. So this is important, though, because it sounds like sort of you're saying don't get faked out by what we're seeing here. We've got another sort of resumption of the former before we see a change in regime again. You know, we're going to see more dollar weakness. We're going to see yields maybe go back down again before we can talk about looking at something different. Is that right? Yeah, the U.S. needs a weaker dollar for a continuation of lower rates and to bring people into the bond markets, into treasuries. In fact, the whole world needs a weaker dollar to take the pressure off their debt markets.

11:58And who knows, maybe that was one of the reasons why Xi went to San Francisco, because of what's happening with the yuan and would prefer a weaker dollar so they could stop having to intervene. Yeah. The dollar wrecking ball has consequences, as we discussed many times on this channel. Not in tech. No. Well, that's what's interesting today, right? There was a time when we would see yields up, dollar up, concern in equities, but that wasn't the case today. No. It hasn't been the case for a few weeks. Actually, I always say, keep an open mind. It'll keep your account open. Most people know I've been pretty bearish.

12:42I was bearish Apple. Apple didn't run over me like the S &Ps would have. And I thought the MAG-7 had run its course, and here they are blowing off to new highs. But I wanted to show at least a technical case on how some of the bulls that are now talking 6 ,000 S &Ps could come to that conclusion. So I brought this S &P weekly chart. And if we take the old high, which we're challenging right here at 4 ,800, and then look at the low at 3 ,450, that low in October, you have 1 ,350 handles. So if you tack that on to 4 ,800 and consider this a breakout, it looks like an ascending triangle. And they usually happen at bottoms, not at tops.

13:40But if you respect the formation, that's how you get 6 ,000 S &Ps. So I bring this out not because I'm telling people to endorse it, but I can understand why people are talking about that. But what's going to be important is that 4 ,600 level was important because that's where we came off from 4 ,600 to 4 ,100 before the turn this October. So if I'm long, I don't want to see the S &Ps close under 4 ,600. That would be saying that something's changing. So once we start, should we start to make progress and start trading$4 ,900,$5 ,000,$5 ,100, you can now move your risk up to$4 ,800. So if we break out, and you believe it's a breakout, you can let it go.

14:35But next time back under$4 ,800 is going to be an exit signal for you. Right. So that's what the risk line goes up. Yeah, you reduce your risk. You just go with the market and get out at the first important level that's being negated. So right now it's 46 down the road. If we're trading 4 ,900 to 51, and even if we're not going to 61, next time it trades under 4 ,800, there's a problem. I want to underscore something that you've said a couple of times here. In addition to just saying, pick your spot, watch that spot. If it starts to go under, you mentioned a couple of different times. I took some money.

15:20I left money on the table. I got out of the trade, but I left money on the table and you don't worry about that at all. I think that's really important discipline to have. How do you, is that, is that how you do it by picking the spot that you're going to say, if it goes below this, I need to take a certain amount off so that I make sure my lock in my gains and I don't just let this thing reverse on me. Right. One of the most important things in trading is to eliminate risk as quickly as possible. So if you're a futures trader and, say, for example, you sell the euro at 111, and initially you have to have risk in that trade, you have to give it room to breathe, at least its daily range minimum for a swing trade.

16:07But say you're short at 111 and it takes out support at 109. So now you move your stop down from where you had risk to perhaps break even. So then the worst thing that could happen is you break even and you take something off the table so that the worst thing that could happen is that you make money. So you want to get your stops to break even as soon as the technicals give you the next level that's taken out, either on the upside or the downside. I think that's fantastic advice. And that's why, you know, as you go on your knowledge journey, your learning journey, or even if you've been at it for a long time, but just sort of, you know, need to reboot and just sort of get your discipline back in.

16:57This is where charts can be really helpful. Raul talks about this all the time. It takes so much pressure off you once you're in a break-even position. Yeah, absolutely. And you want to have the discipline to do that. Yeah. And that's where we all fail, and I still do too. You know, I was long January 180 Apple puts that I was going to hold into expiration, and we tested 180. It was a major, major breakdown. If you're long Apple and we had this upgrade at, you know, once it tested the 200 day moving average, who knew with yesterday's action in Apple that there'd be an upgrade? Someone did. So if we take out 180 now, you don't want to be long Apple because there's a lot of space underneath Apple.

17:44It could trade 160. It could trade 140. But if you were long Apple prior, maybe you had a lower stop. But now, if you're long apple from 188, 186, wherever it is, you have your stop under 180. It might even be a reverse stop under 180. And that was what Luke was asking. Coach, how about them apples? Nicely timed upgrade today. Is this the last squeeze before the blender? I'd like to put some applesauce in my kid's lunchbox. Thoughts on price and timing. So that's kind of how you're, does that answer your question, Luke? Yeah, it may. But, you know, I have a hard time wanting to be short anything if I'm going to be right on the dollar.

18:26So, you know, I have a tendency to be skeptical about equities. But how can I be skeptical if I'm looking for dollar weakness and some pretty good dollar weakness? That's not exactly bearish risk. Okay, so, you know, we could be into a phase that could be parabolic melt-ups that some people are talking about. And if I'm right about yields, the market could go to that 6 ,000 level. So that to me is a little more cloudy until I have a technical signal. My next technical signal will be, break out, please, over 4 ,800. Then I'll know if we're back under$4 ,800, the market's giving me a message. It's talking to me.

19:16That's a tell for me. But in the meantime, you're looking at historically low valuations in the miners just on their own in history. We're on the verge of taking out the lows in several miners that go back to 2021. Majestic, I think it was$420. We're trading$460. So we're not just making new monthly lows. We're taking out lows from the last major bottom in the miners. And when you think about it, metals haven't performed that bad, right? They've performed. The miners have not performed. And, you know, they have every reason to perform now because gold, their production costs are$1 ,200. They're more at break-even on silver.

20:07but they have profits in their production from gold. Energy prices are a huge component of mining and everything else. So those costs are down and could continue to go down. I think we could see$60 crude. I've been pretty negative crude since I've been on the air with Real Vision, and$60 looks doable. Saudi's running out of patience. So I really want to not spread my focus around too much when I think these are such important turning points and inflection points for the dollar and the miners, which could lead to a continuation in equities of risk on and blowing off to the upside. We're going to take another quick break to hear a word from our partners.

20:59We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

21:08It's so important you really laying out the sort of interconnectedness. If you've got a point of view somewhere, you have to make sure that everything else you're looking at, like people think they have either diversified or that they've got. And a lot of times there's conflict and it doesn't make sense the way the trades line up. I know that's why a lot of you roll up here and ask questions, really smart ones because of that. So well done on thinking about, well, if I think this, what are the knock-on effects? Macro Butler, I think that answered your question about WTI. He had another one about the Russell, Dale.

21:44What's your view on the Russell 2000, which is retraced to the 61.8 Fibonacci retracement? Higher, at least one more high. That was pretty powerful. The KRE went right to weekly resistance and came off. That would be a pretty good all clear if KRE takes out the highs it made late last year. So the financials led the way. They're coming off with yields going up. The banks are under pressure because of yields going up. If I'm right about yields and they peak at 440, that may be another entry for financials on the long side.

22:27What, I'm just looking through these questions. I wanted to ask the one that was Bose. Regarding the bond market, should we be more concerned about a bull steepener, a bear steepener, volatility? How are you thinking about this? I mean, you've laid out the fact that we could get to that 440 before we see another run lower on the yield side of things. Are you looking at the yield curve? Are you looking at, you know, that sounds like the more of the volatility we saw last year. I'm looking at that we are in a corrective period in the bond market after the worst bear market in the history of the bond market.

23:06I still think we're in a sovereign debt crisis, but nothing goes straight down. And we had this huge rally that we're currently correcting, just like Bitcoin. and I'm looking for a low around 61.8 back would be, you know, 89, 90, and then another advance equal to. As far as a curve, it's above my pay grade. I just trade price and direction. I'm not a, you know, yield curve trader, but I would assume that your bang for your buck will come on the long end after this pop in yields because people got used to being paid 5%. And as yields drop, it'll drive them into bonds because they want to capture it.

23:57Yeah, absolutely. And it is right pointing out that what we have seen going on in the bond market, I mean, we know it was so painful for so many last year. So the fact that we're swinging around again, I know it's going to cause a lot of indigestion to say the least and hand wringing. because it's been tough. Well, I remember a couple of shows ago, you asked me, Dale, is it time just to de-risk and get out of the bond market? I said, well, we're in wave five, which means we're completing. And we had that low at 82. And I think there's, you know, could be another three to six months of upside in bonds.

24:37I think the market peaks first quarter, maybe second quarter. And where the market is this summer and fall is going to pick our president for us. Oh, wow. So we might be, you know, it depends on, you know, who you prefer, you know, blowing off to 6 ,000 and then coming off in the summer and fall wouldn't be as good as coming off now and rallying to 6 ,000 in the fall for the incumbent. Yeah. So, you know, it looks to me like we're just following through from last year. And sometime this year, I'm looking for this to end. And I think it maybe has probably by June, just a guess. I just want to circle back to the minors before.

25:35I like that you said, you know, not spreading yourself around. This is something we hear from the very smart folks who come on, is that they identify where they think the opportunity is and really pay attention to it. If you get a zillion trades on your screen, hard to stay across all of them. So I think that there's a lot of wisdom in that. And if that's where you see the value, are you doing that? Are you looking at that through individual miners? Are you playing it? Are you looking at an ETF of miners? Well, you could do an ETF, SILJ. We'll see if that process is low at eight. But I also look at individual issues And a lot of these are going to be making new yearly lows.

26:18So I think that down there you'll probably be able to throw a dart. Because after this, and I'm figuring gold 1940 to 1880, I did bring a gold chart. And after that occurs, I'm looking for 24, 2500. So this is just correcting that whole move from 1800. And you see, that was a very, and that's something else last time I said, don't get FOMO. Now, if you were quick on your feet and you were up at night to trade Asia, you got that spike. But by the time we woke up here in the States, that$100 rally was gone. And a pretty important, significant top that set up this correction. I said, don't have FOMO and Bitcoin.

27:10That was at 38. It went to 49. So if you held it and got out the day they launched the ETF, congratulations. I don't move as quick as I used to both when I'm walking in and in the market. I did say don't chase the short side of the dollar. I said wait for the euro to pull back to 107.5 approximately. So that was smart. and said, wait for the miners. So, you know, perhaps you miss these moves. And I preach that there's always another bus around the corner. And here we are setting up this opportunity. I'm sure that a month ago people were going, oh, I missed the gold. That's going to 2 ,500. And then I missed Bitcoin.

28:06I thought I was going to peak at 40, went to 49. you're going to have another opportunity. In fact, I have a convergence of moving averages in Bitcoin, weekly moving averages that come in right around 32 ,000, which is halfway back. Say the move started at 15 or 16, and it went to 49. So 61.8 would be about 30 or 29. But the next rally, this one could be$50 ,000,$60 ,000 from wherever the low comes in that could take us to$80 ,000 should we bottom at$32 ,000. And this is just a pullback before the next advance. Wow. So, yeah. So, I mean, if the dollar's bad, everything else is good. That's right.

28:59Right. So, you bring up – we had some questions about Bitcoin. So thank you for Oliver. I think that answers your question. And we're halfway there. I mean, we're at 40 ,000. It's a bull market. When's Bitcoin going to realize it's a bull market? LOL. That is very funny, Oliver. Maybe not until it gets to 32 ,000, according to Dale. However, you bring up something, a really interesting point, Dale. And Peter Brandt was on talking about this. And Dale and I were just talking about Peter before we came on. So if you missed it, Peter Brandt's on the platform with Ash today. walking through his thoughts on Bitcoin, crypto in general, but Bitcoin specifically he's focused on, again, under Dale's thinking, don't spread yourself too thin, really understand something.

29:46And I think, Dale, this will sound familiar to you because it sounds like you've done this as well. Everyone you talk to will say that this asset trades unlike any other. It's different because of the tendency to have these parabolic moves regularly, you know, like as part of the. So Peter talks about how he went back to the drawing board. You know, it was it was frustrating him in the beginning. He was sort of, you know, at first he was like, I don't know what this is. But he really took the time to sort of study it, look at it, figure out how this thing moved and then create some frameworks around it so that he can withstand the volatility, figure out how to trade this thing, how to keep the profits from the big moves without losing it all when it inevitably has a volatile next move.

30:37And it sounds very much like that. These altcoins, they move to 300 % and then give it all back. Yeah. So he's not looking at that, but it sounds like you're both sort of using a lot of the skills that you built up over the years and just trying to sort of understand how this trades because it's so new. I mean, it is different. So I encourage you to go take a look at that on the website. If you're not a member, join and sign up, even if you are signing up for a freemium account so you can figure out when things are coming and then dip in if you're able to access it. But some really, really wise.