Will the Dollar Continue to Dominate? With Dale Pinkert

0:02Hey, everyone. If you like this podcast, go behind the paywall to get privileged access to the smartest minds in finance. Visit realvision.com slash RVpod and use the promo code podcast10. That's podcast10 to get 10 % off our essential membership for the first year. Join the Real Vision community and learn how to become a better investor. And now to the top analysis of today's markets. Will the dollar continue to dominate? Hi, everyone. Welcome to the Real Vision Daily Briefing. With me today is Dale Pinkert, trading coach at TradeGateHub. Hey, Dale. It's great to see you. Hi, Maggie. It's always great to end my week having a conversation with you.

0:40Same. Likewise. So funny way to end the week, too. We saw it was kind of a mixed picture for stocks, really mostly a down day for the broader S &P and Dow. The NASDAQ did manage to eke out a gain. There was initially some relief after that key inflation reading. The PCE came in lower than expected. But it looked like stocks just really couldn't hold on to those gains. I mean, we are, there's no shortage of things to worry about. We've been talking all week. We're facing a government shutdown over the weekend as well. But we did see the yield on the Treasury edge off those 15, 10-year, edge off those 15-year highs.

1:16And the dollar also moved lower, but it had its best quarter of the year. So there's a lot to unpack. Why don't we start with the dollar? How are you feeling about the dollar here? Okay, well, so you put up the dollar chart. I was on with Ash Pennington at the bottom. It was a coincidence. said I was scheduled to come on. But that's where the first little red circle is. And I said, buy the dollar. And if you didn't want to catch a falling knife, wait for it to close over the previous low, which it did. And then I was back with you on August 10th. And I said, buy the dollar. I'm still looking for 108, 109.

1:55And today, as we sit here, it's a little more difficult to give just It's a blanket buy it anywhere call on the dollar because we're approaching important Fibonacci retracement levels. The 50 % level comes in at 107.20, which we almost got to this week. We're at 106.70. 61.8 is my best guess, 109. And people that are even more bullish at 78.6, 111.55. So now it becomes a process. You know, I was talking about 102 euro. We got down to 105. So, you know, that's a bad day or two away from a target where I'm going to be interested in trying it. So it's no longer buy the dollar. Now it's more trade the dollar.

2:46It seems to me when you made that call, it seemed pretty contrary at the time because there were a lot of people who've been calling for the dollar to weaken. The brick currency, de-dollarization. I had farmers call me, Dale, what are we going to do about the dollar? And we talked about that. I said, so many people are worried about the dollar. Now you have a 360. Everyone's embracing it. I saw your header. Will the dollar continue global dominance? Okay, so that's how things have shifted. They've shifted the same way with rates. Back then, everyone was looking for the Fed pivot and the turn. And I said, we would make new lows in TLT and take out the October low.

3:27That business was taken care of this week. Yields on the 10-year went a little further than I thought they would go. But, you know, I'm looking for yields to be in a peaking mode now. So people are wrong-footed. But again, and it won't be the Fed, it'll be the market that takes yields down as people are worried about something else we talked about months ago, that rates could drop and it may not be bullish right away for the market. So we could have a growth scare or a liquidity event and yields will drop. And, you know, that's, I think, what people are unprepared for. Bless you. Allergies are horrible.

4:11We have epic rain. We have allergies. It's, you know, the struggle is real on Friday, isn't it? But you are right. Boy, that bond trade has been so hard for people. Yeah. Well, I think that they capitulated when TLT took out that low. Maybe it goes to 86. It's a process. But a lot of that was also based on the technical factor that when TLT put in its lows at 90 in October, on the weekly chart and viewers could check it, the RSI was confirming the price move. Markets rarely bottom, and it's a simple thing to learn. Markets rarely bottom or top when momentum is confirming the move of price. So if you have a new low in the market and the RSI is making a new low as well, that's a confirmed low, and it's the opposite for confirmed highs.

5:08So you feel like it's peaking here, but is it possible that we go higher still? It is a process, right? How are you feeling about this? With a severe interruption. And something else we've discussed in prior broadcasts is that I think that when it happens, it's going to happen because of, you know, I thought that we would get the confirmation of this next Friday on the NFP, but we're not going to have any numbers. Yeah. Gosh, that's right. All right. So, I mean, that's going on. I wasn't even thinking about that today. Yeah, a lot of FX traders, you know, they're news traders. And, you know, before we leave the dollar, something that's a learning tool and that viewers may want to consider is everyone's looking for the best markets that trend.

6:07And foreign currencies have always had the reputation of being trending markets, some of the best technical trending markets of all the instruments out there. And if your viewers pull up a weekly chart of the dollar, we've had nothing but green or blue candles up weeks, 12 weeks in a row. Not one down week, not any interruption. You just bought it and let the trend go. If you got cute trying to counter trend trade, which I do occasionally, you probably gave some of that back. But what a trend. 13 weeks in a row up with blue candles. Yeah, what do you make of that? Because that's an extraordinary run, right?

6:58What do you make of this? I think that it's, you know, you just had so many people bearish your dollar. Funds now have liquidated. They were long euro all the way down the large specs. And now they're out. They're out of their euro longs. So now, I think over the next couple months, there's going to be a nice peak in the dollar. In fact, I think the dollar will be the sacrificial lamb to bring back things in the economy as things slow. So you weaken the dollar, which can bring risk appetite back, make commodities more expensive, and even have nominal gains in the stock market. If the dollar drops 30%, the market will be up 30%.

7:46That happened in, you know, 08 and 2020. So the dollar will be something that, you know, the Fed's going to let go, even though they say, you know, it's a treasury's purvey. So, you know, plus if they let it go and people get worried about a dollar, the dollar, and we really have a severe sell off over the next year, it'll be easier to introduce the idea of a CBDC as a fix. Mm-hmm. Yeah, you've been thinking about that intersection. It's a nightmare. I think that what you're bringing up is so interesting, though, because we're at a moment where there are so many layers. We talked to Jem Carson yesterday about all of the kind of flows and things that are happening with derivatives and structured products.

8:38It's not just as straightforward as the economic data. You've got all of these different factors kind of layered on, and it's pretty complicated. And certainly people have had the, you know, you were very contrary on the dollar. You were very contrary on the bond trade. There's been a lot of pain across both of those. It's been volatile. And the people we've been talking to throughout the week, throughout the content campaign we just ended, don't see that anytime soon. Here are some highlights from just this past week. Typically, you want the bond exposure to protect you in times of turmoil. And really, if you look over the past two to three years, that has not been the case.

9:20Every time you needed the bonds, they did not perform. You said something in one of your notes that nobody gets out alive. So here's how I see this playing out. We're going into a recession. It's happening. I have 98 % confidence on that. Well, I think the challenge is that, you know, most investors have some version of 60-40. What is 60-40 particularly good at? When does it outperform? It outperforms in an environment where, you know, there's disinflationary strong growth. And instead, what we're sort of seeing here is an environment of, you know, inflationary weak growth. Look, the politics is going to get worse.

9:59I can't express how bad next year is going to be. Nobody's prepared for it. Nothing you see written or visually is easy to verify. And the sole purpose will be to divide you. And everyone has to keep their shit together and step back, verify everything. We take the politics out of it and give you the information that you can turn into knowledge and then wisdom. And it's vital. So the alternative lenders, some of them are hedge funds. Some of them are factors. Some of them are supply chain businesses. They are providers of loans and other types of financial accommodation that are privately held or publicly held, but are not regulated financial institutions.

10:43I would say, you know, do some investigating about who these non-bank lender clients are, the large ones. They're in a bit of a sweet spot right now, I would submit to you. And that's worthy of some thought. That has always been the case that markets have gone into bonds as interest rates go higher and that sucks money out of risk premium. This time, though, last time during the last inflation push in the 70s, we didn't have something called derivatives. We didn't have the ability to layer on top of bonds other structured yields to enhance our yields. And so there's a big demand not just for that 4.65 % 10-year or that 5.7 % one-year or whatever you're doing.

11:24You can now put stack selling kind of way out of the money puts, way out of the money calls, all kinds of different structures to enhance that yield, have very low leverage on your portfolio, non-correlated and get something closer to seven and half, eight percent. Hey, everyone, we're going to take a quick break right now to hear a word from our partners. We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo.

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12:51So if you see the comment that was under Jim, a lot of members have been asking for a follow-up on some of what he was talking about. It was so important, maybe an academy session. And we took it on board. We're working on that already. So stay tuned for that. And Lon Singer, if you haven't had a chance to watch that, he and Ash had a conversation all about the private debt market. Ash has been really following this. It was super interesting. And again, one of the members said, I didn't know about this. I probably wouldn't have tuned in unless you did this interview, and I just learned so much.

13:26And we love that. We love trying to push the knowledge envelope. Super fantastic stuff. To be able to hear it all, to use the new platform, to interact with our community, you need to become an RV member, not just subscribe on our YouTube channel, although we love having you here. The platform is where all the good stuff is happening. So jump on that birthday, ridiculous birthday offer that we still have going. It's only through Sunday, though. You can go to www.realvision.com forward slash birthday. Do this for yourself. So, Dale, really interesting to hear all those different views. There's definitely still a lot of difference of opinion.

14:07How are you? This issue about government bonds and the 60-40 construction has been coming up a lot. Does it feel like government bonds are riskier than they used to be? Well, you know, TLT used to be 145, 150, the time to be worried about risk. Do you know that when the bonds were there, Maggie, they were the lowest interest rates since the Civil War? Not this Civil War. Yeah. The one, okay? The OG. The one with guns and cannons. All right. So, which I hope doesn't happen again. And anyway, so that was a time to worry about risk. Now it's time to think about potential opportunity. Elliotticians would say that this last wave in the bonds is five.

15:00So five means we're finishing. It doesn't mean we finished this week. It means we're completing this decline. And what should ensue should be a pretty good bear market rally. So it's a little late to be thinking about risk. Ask any regional or money center bank treasurer if they should have thought about risk of duration two years ago. Yeah. When I was talking about it. Great point. Not now. Now they should be looking to buy them. but they'll be selling them. And yet they probably won't, further exacerbating the problem. It's a great point, Del. It's hard. It feels hard sometimes. It's late to be concerned about the risk in Treasuries.

15:48I'd say, you know, 11.30, 11 o 'clock, midnight being that there could be a turn. And, you know, the Fed could always come in and buy bonds if there's a problem. You know, so they're talking about all the buyers that have gone away. And I'm not a super Bob Bull. I see, you know, better opportunities and trying to, because I believe long term it's a bear market. But there's a vicious bear market rally coming if I'm right about risk. Fantastic. Well, we know, and by the way, so many of the viewers love that you track your performance from time, from appearance to appearance. Thank you for doing that for us.

16:30great. So it's going to be really interesting to watch. And by the way, Jared was on earlier this week and he is also kind of feeling that it's just that the timing has killed so many people that it's been a hard one. But yeah, great point. And we're going to keep an eye on that. I want to turn our attention back to stocks a little bit. By the way, after Brian, I don't know if you could pull this up. After the conversation with Bob and Andreas, I added XLE to my watch list on the platform just because so many people are talking about energy maybe as being part of the composition. I don't know if you, for those of you who are migrating on, and I know some of you still are, check your email, follow the instructions.

17:10You need to create a new account. The sort of rollover is still happening. If you have trouble, email us, but you can create your own watch list. So XLE is on there, but I also put, before I had any idea what we were going to talk about, Dale. I put Google, Amazon, some of those big tech names, because as we saw today, it's been interesting. They've been defying. We've been covering AI a lot. They're all over those stories as well. We're looking at Brian. Brian's got Ford. We know he's down the EV rabbit hole forever. And of course, we have the UAW strike. So Brian being the news hound he is, is keeping current with what's happening in the headlines.

17:48But just go to that right-hand section you see down below, that's where Brian's cursor is. That's where you create your watch list. And it's so helpful to have up, especially when we have a guest on, so you can put the things that you want to track and ask us a question about them. I would love to know what's on all of your watch lists. If you've created them already, drop it in the chat. Tell me what you're looking at. But Dale, I know what you're looking at are some of these big tech names because you sent over charts for that. So what's going on? Why are Apple, Amazon, and Microsoft sort of top of mind for you?

18:25Well, did you ever see the movie The Magnificent Seven? I have not. Okay, well, you know they were calling all these stocks a few months ago The Magnificent Seven. They were. And I brought three charts of three of The Magnificent Seven that are now on their way up to Boot Hill. they kicked out and you know Apple Maggie what did someone you had on the air several months ago you've had a bit in with Apple and very concerned about its China exposure I said that she would retaliate against an American icon like Apple and that they would stop using Apple phones that was before And then a newsflash come across about government workers having to adopt another device, some of which was already underway, and that hurt Apple.

19:26Yeah. First, the first gap was earnings. And then after that rally to 190, that was Xi's announcement. And I think it's just the tip of the iceberg. If you lived in a totalitarian regime and they were making all their government workers use other phones besides Apple, would you still use an Apple? Yeah. Okay. Anyway, let's talk about the technicals. So we're down about 15%. Goodbye, Magnificent Seven. You see the moving average there is coming in around 165. You know, I'm looking for a general market sell-off. So the week will become weaker. We take out 165. I think you're talking 140 and eventually$100 Apple.

20:20So I'm pretty bearish Apple. It's held up pretty well, but that's not a bullish chart. It could rally, but I'd sell all rips in Apple. I think it has destiny 140, 150, and then lower levels like 115 to 95. Wow. Avalander, 100. Yeah. Basically, I'm looking for this stock sell-off that started at 4 ,600 to last until the first quarter of next year. But the initial stop that I'm looking for, I said that 4 ,200 last time I was on, I was bearish and that was against 4 ,600. I said the major battleground would be the 4 ,200 level. So far, we haven't gotten there and everyone's looking at 4 ,200 in the S &Ps.

21:12So when everyone's looking at one number, either doesn't achieve it or melts right through it like it doesn't matter, I think that the market will try and make a stand there. But the general theme that people can take a look at is I'm looking for markets to reset to the levels they were at in March. Okay. So that means that was 3 ,800 in the S &Ps. I'm looking for S &Ps to trade about 3 ,900 before they mount a better counter trend rally and do it in a hurry. Wow. Okay. And do you think that all, so your bearish Apple, what about the rest of those big tech names? Do they leave the way to go? Amazon is worse.

21:56If you pull up the Amazon chart, this is not corrective action. Do you know that in two weeks, Amazon went from 146 to 125, 15 % in two weeks? That's a broken stock. Even on days when the market's rallying, it can't rally. I'm looking for 110. Amazon could be there when we're at 3 ,900 S &Ps. Very ugly. So another of the Magnificent Seven did not draw fast enough when he was faced with risk. Okay, so Magnificent Seven is definitely a Western. It is a Western. I probably did see it. You'll watch it this weekend. Anyway, these gunslingers are in retirement for a while. We're going to take another quick break to hear a word from our partners.

22:48We'll be right back with more of the day's top analysis on the Real Vision Daily Briefing.

22:57And what about, what was the other one? It was Amazon. Microsoft. What about Microsoft is in the whole AI game? All right. Well. Insulated? I see a big descending triangle. Maybe it could rally 10, 15, 20 bucks. But look at the major support level we're at. And then when the S &Ps were rallying, look at that weak rally on the right to about, what was that, 340. Under this 310 level, closing under 310, you definitely have the 200 within sight. But it actually measures about to 260, 270. So, again, that would be near the March lows. Okay, so, and the metals, I'm looking for them to be at the March lows.

23:44and currencies are almost at the, you know, March highs, some of the currencies. The miners, the silver miners are underneath their March lows, some of them. So everything is coming back to March. Beware of the odds of March when it strikes in October. So, you know, that's really what I'm looking for. And then some markets, I think there'll be a true bottom from those levels. the S &Ps at this point, the rally from 3 ,900s could be important to see what the character of the rally is. And if it's weak and only rallies back to 4 ,250 and rolls over again, that's how I could come up with 3 ,100, 3 ,000 S &Ps into April.

24:34So is this retracement? So let me put it in the words of some of the questions coming in.

24:43And it's still contrarian. I mean, most people are saying, which is great, that this is a pause to refresh. We needed a pullback. It's still healthy. It's still a bull market. and most people aren't buying protection or hedging. And there is a lot of put buying. There's contrarian signals to be long. And I'm just saying, if we start taking out 4 ,200, that's where the blow-off started. That's going to be a very ugly sign and throw a lot of the algos onto the short side. 4 ,200 S &Ps. So Bo asking, are you saying the handful of stocks which have been propping up the index are starting to revert.

25:28Yeah, I'm talking 10, 15 % already. Apple was 200. It's 170. So, you know, that's$30. That's 15%. You have 15 % in Amazon. You have 15 % in Microsoft. So what led on the way up will lead on the way down. So, G. Blackburn, underscoring what you just said, pretty cheap to hedge equity risk, if Dale is right about index levels.

25:58So what do you, Ralph asking, how soon do you think it will get back to the March levels? I would be surprised if it's by Thanksgiving. Wow. Well, you know, October is, although we were. It might even happen in October. As we learned from Jem yesterday, but we do tend to see that kind of action happen around that time of year. I'm interested in seeing what the market's doing into the middle of the month. Okay, I'll get a little kooky with you. We have an annular solar eclipse, and it's a ring of fire eclipse that has never been seen on this continent. Never is a long time. We had the comet, a 400-year messenger, flashing across our skies a week or so ago.

26:54I don't know what the country was doing in, you know, 1623. I don't know what we were trading back then. But, you know, there are some signs of, you know, from the heavens. Comets were never interpreted as good omens by the ancients. They thought about war and famine. And I found it a coincidence that, you know, that all of a sudden and people weren't expecting it. It was newly discovered. It's a message. There's also two weeks ago on the Jewish New Year was the end of the Jubilee year on the Hebrew calendar. And Jubilee meant in biblical times that all your debts were forgiven and you had the chance to start over.

27:49And when you think about it, in our secular society, we had a bit of a Jubilee. People didn't have to pay their student loans. There was still COVID money floating around. You see commercials promoting, if you had any employees, call us, we'll get you government money. Well, all those things are coming to an end in October and the jubilee is over and it's time to pay the piper. Yeah, that's what a lot of people are worried about, all of that. Certainly, the student loan thing is a big thing in this country. We have a couple of questions. I want to just go through them a little bit all over the place, so let's just knock them out as we go.