The Weekly Trend
The Weekly Trend
Episode 256: Dollar Lower for Longer?
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In this week's episode, David and Ian discuss areas of the market trading above their 200 day moving averages and reaching all time highs. They also discuss commodities and if Oil will get back above $65/barrel, if the US Dollar with stay weak, and what they expect from interest rates.
Welcome back to the Weekly Trend Podcast. Today is Friday, June 6th, 2025 D-Day s and P 500, currently sitting at 5,994. I'm David Darling. I'm here with Ian McMillan back from your trip. Ian, welcome back.
ian_1_06-06-2025_133450Thank you.
david_1_06-06-2025_123459Hopefully it was restful.
ian_1_06-06-2025_133450It was. It was hard not to uh, relax when you're at the beach. I think so.
david_1_06-06-2025_123459Dealing with the Godzilla waves.
ian_1_06-06-2025_133450Godzilla waves. Yes. Always a fun time.
david_1_06-06-2025_123459Yeah, it sometimes that sounds like a technical analysis pattern. Godzilla wave.
ian_1_06-06-2025_133450Hey, maybe he is on to something.
david_1_06-06-2025_123459Yeah, maybe we, maybe we caught some, and I know that you and I tried to get into a Twitter argument yesterday. We, we got a little overshadowed, didn't we?
ian_1_06-06-2025_133450Yeah, definitely a hot day. I guess the markets, don't know, I don't know if the market sold off yesterday. Now when I say sold off that like they crashed, but we're above where we were when all that went down.
david_1_06-06-2025_123459Yep.
ian_1_06-06-2025_133450Holding up well. Another pretty solid week for stocks.
david_1_06-06-2025_123459yeah, I find, I find it fascinating. You know, we had a, a red day yesterday but minus 0.5% on something like that and P 500, and I've got my mom texting me, my kids saying something. Soccer players at practice, bringing up this Elon versus Trump interaction just goes to show one day does not make a trend, and I don't think we get to say that the market tanked.
ian_1_06-06-2025_133450No, certainly not. Some stocks, I guess, hit pretty hard. Tesla. Maybe that one's not such a surprise, but we'll see.
david_1_06-06-2025_123459Yeah, we will. And we have the s and p 500 battling the 6,000 level, which it has been for a little while here, but we are su,
ian_1_06-06-2025_133450Yeah.
david_1_06-06-2025_123459we are sustaining trade above a 200 day moving average. You wrote a client letter that's gonna be going out, talking about that, that's an important thing that we wanna see is can buyers sustain trade above a 200 day moving average? And so far, so good.
ian_1_06-06-2025_133450We have we've traded sideways. I mean, really since early May I. Depending on what index, I mean, we were in a two to three week consolidation for the R Nasdaq 100 and both of those moving out of those consolidations Again, not surprising. Russell still, also not surprising that it has the most work to do.
david_1_06-06-2025_123459It does, but I think, you know, going through the, the domestic indices s and p above a 200 day Qs, above a 200 day Dow Jones, above a 200 day, no, no small caps, IWM, but it is above a evaluated average price from all time highs, which began today. And that doesn't hurt. I mean, that's further confirmation. If we're checking boxes of confirmation of, or refutation like. Further confirmation of probable sustained strength. We'll see. And then if we look at different areas of US markets that are doing well, you have your fang stocks making new all time highs. Tech overall, doing well with Microsoft and new all time highs. I mean that's, that's pretty significant. It's one of the most bullish things you can do is record a new all time high.
ian_1_06-06-2025_133450Impossible never happened in a bear market, right?
david_1_06-06-2025_123459That's right.
ian_1_06-06-2025_133450Yeah. Microsoft, a big one. especially with apple bean kind of stagnant.
david_1_06-06-2025_123459Mm-hmm.
ian_1_06-06-2025_133450So yeah, these pockets, and of course I mean, I would say tech as a whole. Continues to lead services. So some of those mag seven-ish and fanish uh, semiconductors similar to the playbook that we have been given the last four or five years.
david_1_06-06-2025_123459Yeah, I mean, if you're gonna talk about. Tech stocks doing well, semiconductor stocks doing well. Your MEG seven hanging in there. I, I forget if I said semiconductors, communication services, and we even haven't talked about financials, whether it's domestic or international. And if you have those doing well, it's really hard. Those are not bearish characteristics to have those areas doing well and leading the way.
ian_1_06-06-2025_133450Speaking of foreign stocks, is it time to, are we going all, are we going all in?
david_1_06-06-2025_123459I think there's time yet, you know, if you look at something like EU versus s and p, which we've talked about which feels like the last two months still below a downward rate of trend versus the s and p. But there's definitely pockets. I mean, you can, you see the Dax going out at all time highs. You see things like Austria or Spain. So there's definitely pockets internationally worth having exposure to. But as far as flipping the entire book and being international, I mean, the signs are starting to continue to build for that. But we need, we need further evidence for that to be a sustained case. I mean, European financials going out to new highs is pretty important and it, it's a, you know, ETF and indices makeup consideration here too, right? US indices are tilted towards tech growth. Internationals tilted towards financials. So seeing that international financial strength, I don't think that that hurts for the bullish case for stocks overall. But as far as flipping the book, probably not yet.
ian_1_06-06-2025_133450Yeah, pretty flat relative charts. I look like a EFA pretty flat since mid-March, coming up on the last two, three months. Not a big not a lot of alpha one way or the other, I would say.
david_1_06-06-2025_123459Yeah, that's fair.
ian_1_06-06-2025_133450the big move. Got a lot of attention. And they look good. They do look good on an absolute basis, but yeah, waiting to see if this kind of turns out, I mean, right. We saw this kind of like January 20, 23, big move. Foreign starts to outperform form, we peter out and then we go lower for another year in the relative relationship. It feels better though. It feels better under the surface this time. Maybe that's anecdotal. I don't know.
david_1_06-06-2025_123459I think that's fair. I mean, it's, and, and when you look international, what's interesting about it is just, you know, let's, you know, you look at a VEA developed markets versus emerging markets.
ian_1_06-06-2025_133450mm-hmm.
david_1_06-06-2025_123459I mean, it's since the beginning of the year or late last year and arguably since 2021, it's been developed markets over emerging markets. It'd be interesting to watch that continue.
ian_1_06-06-2025_133450yeah, it's quite the chart. If that were to, yeah.
david_1_06-06-2025_123459So if you're gonna, if you're gonna be international, it, it goes to, you know, just the same as not all US stocks are the same. Not all international stocks, not all international areas are the same. So can you own some international? Absolutely. Uh, our clients are familiar that we do. But nothing crazy at this point. You know, it's not, it's not taking on and, and flipping completely away from domestic all the way into international. Plenty of time for that, if that's gonna be a, a multi-year, multi-decade move.
ian_1_06-06-2025_133450Yeah, we're not just throwing out p like that.
david_1_06-06-2025_123459right.
ian_1_06-06-2025_133450What about Bitcoin?
david_1_06-06-2025_123459Coin's a bit. Yeah.
ian_1_06-06-2025_133450a little bit. Having a good day today. It's of a, I, I mean, I put it, I would, I'd qualify certainly as a failed breakout. So yeah. Get back above 1 0 7, right? Or at least to me
david_1_06-06-2025_123459Yeah.
ian_1_06-06-2025_133450and the relative chart, Scott. I mean, the relative chart hasn't fallen apart, but I need some more short term. Short term, obviously long term. We know Bitcoin is. Pretty solid outperformer has been, can go through some pretty strong uptrends, so we'll see.
david_1_06-06-2025_123459Yeah, I think your point is just on an absolute basis, getting back above that 1 0 7 level would be nice and would provide a consolidation above the prior highs that you can operate off of and manage risk with. But definitely just have to be aware that false breakouts on the table. Be patient. Let it develop. Let the buyers and sellers interact and see where demand and supply take Bitcoin. You know, I know for example, ripple, you know, whether you look at it on a relative basis versus the s and p or you just look at it straight up, you know, it's, it's at the lower bound of the range that it's been in since late 2024. So if that can hold, definitely can move higher. So Crip, crypto's been, uh, meandering. What are we seeing out of commodities?
ian_1_06-06-2025_133450Commodity commodities. We still got your crude. All the crude is kind of. It brought itself back up to like 65 bucks, which is a pretty big area. We'll see if this turns into some type of, I don't know. Okay. I'm gonna segue here with the question. Do does a failed breakdown have a time limit on it?
david_1_06-06-2025_123459Okay. Do you, do we have a, do we have a chart?
ian_1_06-06-2025_133450okay, so. Crude if it gets back above 65, is that a failed breakdown?
david_1_06-06-2025_123459Hmm. I mean, I like where you're going with this. You're saying like this breakdown has taken too long in your mind potentially,
ian_1_06-06-2025_133450Yeah, and I'm not saying that
david_1_06-06-2025_123459I.
ian_1_06-06-2025_133450it could clearly can go above back above. So I'm not trying to say like, no, we've spent too much time below 65. I'm just saying if it does go back above, does that fall into like a failure category or do failures need to be quote unquote quicker?
david_1_06-06-2025_123459Oh yeah. I mean, I, I think that's a, I think that's a fair question. You know, I, I would think if, if I can flip it a little bit, if we're above 65, all I know is you don't wanna be short oil.
ian_1_06-06-2025_133450It's true.
david_1_06-06-2025_123459Um, and if shorts were piling up in this area between, you know, 56 bucks and 64 bucks a barrel, that they could be in a world of hurt pretty quick here and. And a lot of times that's actually what's happened is you get a breakdown below a certain level, the shorts pile in, it reverses on'em, and the short squeeze is on. So I guess it all depends on what our short, short positioning is in oil. And if that's the case, I mean, you could see, you could see oil move quickly here. Doesn't have to. I mean there you see plenty of times where price gets back above and. Then consolidates and breaks back down and moves further down. I mean, it is still below a falling 200 day on an absolute basis. But if you were gonna get, if you were gonna get long crude oil here, I've, I've seen worse spots to try to do that. I mean, you're basically a buck away from being wrong. So that's low risk. But yeah, I don't, I don't know that they're, I, yes, I, I, the ones that seem to be the most powerful are the ones that are quicker.
ian_1_06-06-2025_133450Yeah,
david_1_06-06-2025_123459I think that's a fair,
ian_1_06-06-2025_133450that we're looking for here.
david_1_06-06-2025_123459yeah, no, I think that's a, a great question. And I think the faster the, the move, right, the, the more likelihood of a reversal that happens quick and. So your point is just simply it's been below, you know, 64 bucks going on since the beginning of April. You know, what does this look like if we get above 65? It'd be interesting to watch.
ian_1_06-06-2025_133450For sure.
david_1_06-06-2025_123459What about transportation stocks?
ian_1_06-06-2025_133450Terrible. Terrible, terrible. Part of that's to do with the waitings. But yeah, I mean even your classic transportation stuff, old Dominion, things like that. FedEx. What's FedEx? See, I mean, none of this stuff ever pops up on my screens. FedEx terrible
david_1_06-06-2025_123459Yeah. UPS, I mean, UPS is still,
ian_1_06-06-2025_133450in general is just rough.
david_1_06-06-2025_123459I mean, UPS remains in a 57% drawdown. FedEx remains in a, what is this? If I can get my mouse to work. 30% draw down and IYT representing transports overall. I mean, we're still at the same price level. We were back in May of 2021, so nothing but a bunch of heartburn in between May, 2021 and now for transports. For all those Dow theists out there, you'd kinda like to see that. Confirm.
ian_1_06-06-2025_133450Yeah, that's a good point. But they have gone nowhere.
david_1_06-06-2025_123459No, not great.
ian_1_06-06-2025_133450You asked about commodities. I don't know. Pr, I mean pretty, I mix. I think silver got to new highs this week. Palladium's having a good time.
david_1_06-06-2025_123459Yeah, palladium doesn't get a lot of, uh, air time on here.
ian_1_06-06-2025_133450Platinum, even better. Platinum. Very, very strong. I mean, Gold's still doing well. Just, I mean, we mentioned silver, lean hogs, new highs.
david_1_06-06-2025_123459Does, doesn't lean hog sound like an oxymoron?
ian_1_06-06-2025_133450I, I mean, I hope, yeah. I don't want my, my hogs to be lean.
david_1_06-06-2025_123459Yeah. You're such a pig, but you're one of the lean ones.
ian_1_06-06-2025_133450Cattle new highs, live cattle.
david_1_06-06-2025_123459Live cattle that are eventually gonna not be live.
ian_1_06-06-2025_133450Yeah.
david_1_06-06-2025_123459So some things, and when you look at commodities overall, like, you know, you look at something like A GCC,
ian_1_06-06-2025_133450Yeah.
david_1_06-06-2025_123459interesting consolidation that's been going on an absolute basis since the beginning of 2024, that if that breaks to the upside, maybe you are seeing oil clear. 65 bucks in, in commodities moving higher, which you would think, you know, your textbooks might say, that means the dollar staying below 100 on a trade basis doesn't have to happen. But another one of those where if that's gonna be a false breakdown in the dollar, boy, it feels like a little while here.
ian_1_06-06-2025_133450Well, haven't the dollar and crude been more correlated this year, or am I
david_1_06-06-2025_123459Yeah.
ian_1_06-06-2025_133450that up?
david_1_06-06-2025_123459No, no, you're on. So all, all these things, you know, it makes sense, right? If we're gonna have a weak dollar, commodities would be perked up. You'd see some international strength, which we've seen in some areas. We'll see if, if I would say the next level on the dollar that if it can't hold, would be 98 bucks. If we can't stay above 98 bucks on a trade weighted dollar. I probably seeing some of these commodities breaking further to the upside, more strength internationally. We'll see. I mean that, that's a thesis. Price has to confirm that that's how we should operate, right? Nothing is,
ian_1_06-06-2025_133450they're
david_1_06-06-2025_123459things go,
ian_1_06-06-2025_133450at 98. They're trying hard to dig their heels in the sand. We'll see.
david_1_06-06-2025_123459you got some bellwethers out there like JP Morgan holding up really well. You know, you look at JP Morgan on a relative basis to the s and p, you know, that's a, a level that goes back in time
ian_1_06-06-2025_133450Yeah, when are we gonna do this?
david_1_06-06-2025_123459all the way to the late eighties. Um, I know in our workbook coverage this week, you know, American Express
ian_1_06-06-2025_133450Hmm,
david_1_06-06-2025_123459versus the s and p major level, that goes back to 1973.
ian_1_06-06-2025_133450all the credit card looks, so credit card companies look so good. Thanks. Not so much, but.
david_1_06-06-2025_123459Defense stocks, aerospace and defense remains strong. You know, some areas industrial, even global, global, industrial look good. So none of these things are screaming. Hey, get ready for the next. You know, major correction couldn't happen. I mean, if we lose a 200 day moving average, if we lose some of the levels that we talked about before, like an election gap, you lose some of these areas or these, some of these do turn into false breakouts. Yeah. That then, then a correction could be upon us. We can change our opinion in a week here. None of us are just married to our opinions. You know, after all, we've. Married our wives. That's who we're committed to. We don't have to be committed to our opinions. We can let price change our mind. Anything else that you're looking at that you'd like to highlight For our listeners, it could be bullish case, bearish case. Just interesting thing. Like for me, I look at housing. Like if I look at XHB,
ian_1_06-06-2025_133450Yeah,
david_1_06-06-2025_123459interesting to note how weak that is. You know what, what, where, where's that gonna be? Six to 12 months out.
ian_1_06-06-2025_133450I like industrials. They don't get a lot of attention. Important spot on a relative chart. A lot of, a lot of very strong individual. Stocks in the industrial space. A lot of mid cappy stuff. That looks good.
david_1_06-06-2025_123459I like that. So in your work this week, you're just saying underneath the hood,
ian_1_06-06-2025_133450Yeah,
david_1_06-06-2025_123459when you're looking at individual stocks, a lot of mid-cap industrials also does not scream risk off.
ian_1_06-06-2025_133450global infrastructure funds have been good.
david_1_06-06-2025_123459Mm-hmm.
ian_1_06-06-2025_133450Those types of names. So I'd put that in like the industrials category. Obviously we know about aerospace and defense. I mean, probably one of the, I mean maybe this, one of the, maybe the strongest sub-industry out there, up there with like the gaming eSports stuff. Aerospace, very strong. Your PPAs and its And all that
david_1_06-06-2025_123459And then when you throw like an international tilt on it, like shield, SHLD pretty strong, you know, you highlighted even like nuclear, like nukes and.
ian_1_06-06-2025_133450looks good. There's definitely things in the. Arrow, but, and you, you know, you mentioned home builders, but then you see some, like the other pieces of home building like a badger meter,
david_1_06-06-2025_123459Yeah.
ian_1_06-06-2025_133450like those have stayed pretty strong. Builder them, builders themselves. Yeah, definitely not so much. But there's pockets there. There certainly are not. I mean, I say not enough to make XLI, but XLI looks good.
david_1_06-06-2025_123459Right.
ian_1_06-06-2025_133450And I think there's something to be said for getting back to all time highs before the broad index does.
david_1_06-06-2025_123459Yeah, no, that's fair. Right? That, that, that the first ones to. Get the beach ball above the water or the,
ian_1_06-06-2025_133450When you look back six months from now when we're sitting here post Christmas, is industrials gonna be, will it have been a leader? I mean, yeah. I think this is definitely, that communication services, I.
david_1_06-06-2025_123459yeah.
ian_1_06-06-2025_133450And even stuff like, I mean, staples is holding up. I hope Staples doesn't become a leader. Of course, I think it got hit less during the correction, so
david_1_06-06-2025_123459Well, and it all matters the context of when it is a leader,
ian_1_06-06-2025_133450yeah.
david_1_06-06-2025_123459it, is it in an absolute uptrend or is it in an absolute downtrend and just going down to a less rate than everything else? Well, then that's a definitely a warning sign, and I think the, the sketchy ones that I look at are like Home Depot and Lowe's. On a relative basis, you know, you tie that in with XHB and maybe there's some things going on in housing, but you brought up badger meter. So time will tell. It's, it's some mixed, a mixed bag there for sure. But anytime you've got aerospace and defense tech, semiconductors, international financials. I mean, even some of the domestic financials, like capital markets and broker dealers, uh, industrials, like these are all risk on type of envi, you know, that's a risk on metric. And things like healthcare, not really participating in this. Materials, utilities,
ian_1_06-06-2025_133450Yeah,
david_1_06-06-2025_123459mean, there's.
ian_1_06-06-2025_133450happened to our friends over at UNH?
david_1_06-06-2025_123459Huh?
ian_1_06-06-2025_133450Yeah. They haven't really recovered, have they?
david_1_06-06-2025_123459Yeah. Well now I know if you call me a friend to, to consider it loose,
ian_1_06-06-2025_133450Oof. Yeah.
david_1_06-06-2025_123459but yeah, you, you, you and h still remains brutal.
ian_1_06-06-2025_133450You know another area ETF that is at. New highs today. Not all time highs, but above. Its February highs ARC W.
david_1_06-06-2025_123459Yeah, a lot of the ARC funds,
ian_1_06-06-2025_133450Arc F is it was. It is there now. It was not there a couple hours ago, but it is now. Crypto stocks look good like a block. BLOK right there.
david_1_06-06-2025_123459yep. Yeah, I think that's a good eye on, on Arc WI mean, that's next generation internet. Definitely some strength in that area worth paying attention to. What about rates, bonds, rates?
ian_1_06-06-2025_133450Great. The big, what everyone wants to, uh, talk about. So up today. Mean, we're still at the upper end of that range. Can't quite break 5% on a 30 year treasury yield, but still sniffing around 4.96.
david_1_06-06-2025_123459When you, you did a good job highlighting for our clients in the writeup this month. Just the evidence still there, still building that we're a new 35 4 year cycle for rising rates. We don't know what it looks like. You know, we don't know what that cycle is gonna look like, but obviously there'll be consolidations in there. But the evidence continues to suggest that, you know, when Connor's an adult. He will have some higher interest rates.
ian_1_06-06-2025_133450Yeah. Yeah. I, you know, we don't know what it looks like. There's gonna be periods like this. I mean, like we just laid out. We're at the same spot in the 30 year that we were in September, 2023. I. That doesn't mean we're not in a rising rate cycle. We just have to think about this in the context of 30 to 40 years. And yeah, there's gonna be, I mean, there's gonna be periods get a 9% mortgage are gonna be able to refinance it at seven, like that's going to happen during the cycle. But over the long, long, long term. Next three to four decades. Yeah. Like you are gonna see And I don't know if we get up to 13%, I don't know if we have 18% mortgages. There will be volatility, of course there will be. There's gonna be times when we think, oh, it's over. Rates are going back down. They're probably not. I'm probably not going back to 3%. So yeah, just trying to provide context. Interest rates are something we talk about in the client letter every month. Think it is an important topic. probably not so much during the Zer era, people certainly care now. And usually those charts are like two to three year charts and we talk about this kind of current range and everything. Yeah, just wanna take some time to zoom out and say, Hey, this is likely what I mean here. Here's the direction we're going and here's the 85 different paths it could take. But we are probably going this direction.
david_1_06-06-2025_123459Yep, for sure. Well, at this time I wanna highlight the supporter of this podcast, the adapt, the select ETF listed on the New York Stock Exchange under ticker A DPV, which helps investors access two of the most prevalent factors in markets, momentum and relative strength. Using proprietary identification methods, the Adaptive Select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, adaptive select seeks to prevent extended declines by moving to short-term treasury bills and cash during long-term market Downtrends investors can find out more including how to invest in A DPV by visiting ad pv etf.com or calling 1-833-880-FIVE two. Investing involves risk, including possible loss of principle. Ad PV is distributed by Quasar Distributors, LLC. Anything else, Sian you wanna touch base on for our listeners
ian_1_06-06-2025_133450No,
david_1_06-06-2025_123459we ask them to give us a high ranking? I.
ian_1_06-06-2025_133450I think that is it. Uh, we've talked on international, to that we touched on the dollar. So many things. uh, Dependent in this environment, I feel like we could really actually see dollar weakness mean something.
david_1_06-06-2025_123459Yeah.
ian_1_06-06-2025_133450We get, we've been in this big range and yeah, we see quote unquote dollar weakness, but between 1 0 7 and 1 0 1. I mean, it was kind of a nothing burger. Now that we're below one-on-one and sustaining that, does seem like there's some real interest in, okay, what does it mean if we go into a multi-year period with a weak US dollar?
david_1_06-06-2025_123459Yeah, I think that's a great point. I. You know that, that, that likely, cause really you can make the argument that the trade weighted dollar hasn't been in any type of trend since the beginning of 2023. And your point is that if we see a new trend develop here to the downside for trade weighted dollar, that's when you really are gonna probably gonna see some of these things. Materialize and sustain in such a way that maybe we are seeing a new uptrend in international stocks, commodities even your crypto, things like that because of a downtrend in the dollar. Is that a fair summary?
ian_1_06-06-2025_133450Yeah, I think that's a great way to put it.
david_1_06-06-2025_123459Yeah. So we'll, we'll be able to look back at this episode and, and, and say, okay, does this was this period of time confirming a nude. Down, like new downtrend in the trade way to dollar with some, with some impact behind it. Time will tell. Well, I appreciate you doing this with me again, Ian. All those listening, we, we appreciate your listenership. We hope you guys appreciate this and are able to share with others and give us a high ranking on your platform of choice. Until next week, enjoy your weekend.
ian_1_06-06-2025_133450Everybody we getting, everyone I.