The Weekly Trend
The Weekly Trend is a conversation on various publicly-traded markets, seen through the eyes of technical analysis.
The Weekly Trend
Episode 303: Nominal Percent
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In this week's episode, David and Ian discuss the the recent rise in the U.S. Dollar and how that is interesting when paired with Emerging Markets and Small Caps outperformance. They also discuss the current range the S&P 500 has been in since May, the failed breakout in long-term interest rates, market breadth, and thinking in terms of percentages rather than nominal dollar values.
welcome back to the Weekly Trend podcast. Today is Friday, June 26th, 2026. S&P 500 currently sitting at 7375. I'm David Zarling. I'm here with Ian McMillan We had a week off, right? We had a week off
Ian McMillanI don't think our listeners missed anything. It's where we were two weeks ago
DavidYou mean we shouldn't just publish things for the sake of publishing things?
Ian McMillanSame spot we were at when we recorded Friday, May 8th
DavidOh
Ian McMillanSo may go away?
DavidOoh, that's, hmm. That's a good point
Ian McMillannarrow, it's a pretty narrow...
DavidIt's narrow range
Ian McMillanYeah, S is not like we've fallen off a cliff.
DavidThat'd be more intriguing if we were down 15%. But valid, valid. We haven't gone anywhere for a month and a half
Ian McMillanSome things have, I guess
DavidYeah I mean US Fed... Yeah, doll- oh yes, let's talk about this, the dollar
Ian McMillanYeah, so is this gonna... Oh man, I love. Okay, so We gotta set the stage, right?
DavidYep
Ian McMillanWe have been in weak dollar, good for stocks environment Correct.
DavidYeah,
Ian McMillanNow
Davidthat's fair
Ian McMillanwe've had dollar rip higher. We actually bottomed back in, like, February, and,
Davidbeen, we've been talking about, we've been talking about DXY 100, 101 for
Ian McMillanSo long
Davida long time
Ian McMillanas resistance and now it's supporting it.
DavidYeah
Ian McMillanSo we're back up into this range, but I mean, okay, like if you had told me the dollar gonna move from 97 to high 101s in five weeks, then tell me that the S&P really wasn't gonna move I mean, that's kind of, that's intriguing to me
DavidNo, agreed Agreed. And like, what do you think about this? So like
Ian McMillanother strong dollar we have gotten this and, and the markets have panicked. We've gotten like m- you know, 96, I mean, even below this or, you know, October 2024. I don't know, just every time we get like a weird
DavidWell, even think about the strength out of the dollar in '21, '22, which saw a market, the S&P correct into a bear market by some people's terms. I-- we don't really live by this, but sub minus 20%. And here we break an important level. I think your point here is extremely a good one. Like, here we've been below 100, range bound between there and 97 for over a year. We get above there. Are we really seeing that much weakness? I, and then you look at small caps I don't know. Is that a thing? Is this, is, is this, is strong dollar small cap environment? Could be
Ian McMillanCould be. I remember 2022, dollar was ripping,
DavidYep.
Ian McMillanand we had that bear market.
DavidYep
Ian McMillanliterally, I mean, we bottomed in October 2022 as the Dollar Dixie peaked at like 1, 1.13,
DavidYep
Ian McMillaneyeballing on my chart. So y- I mean, yeah. And then right, so... And then, okay, so to your point, that's the next thing. If you go to all four major indices, what has actually moved higher over the last
DavidYeah, year to date.
Ian McMillanIt's Russell
DavidYeah, year to date is the Russell 2000 So is that where, it, you know, it, it, it is evidence towards what are we talking about at the end of the year? Oh, strong dollar, small caps. Oh, it all made sense. Well, not necessarily in the first two quarters, but it might. You know, we're, we're only a couple days away from the fi- you know, completing two quarters. But we might be getting some clarity here where is it strong dollar, strong small caps through the rest of the year? In an environment which would be classic, in an environment where, oh, semiconductors, oh, SpaceX, oh, all these IPOs. Would it be all that surprising if your head was-- your eyes were faced that way and it actually was small caps who led the, for the rest of the year? It's a thesis, but I think you bring up a good point. Above a hundred, small caps have been doing well all year, and here we are
Ian McMillanI would also say that emerging markets
DavidHmm.
Ian McMillanHave held up well since... I mean, you've had the dollar move from 95 to 101 in emerging markets. I mean, they sold off like a little bit, but okay, let's look here. Emerging markets are up 16% over the last four months as Dixie's moved higher, and they're staying in line with the S&P are actually kind of... Well, they're actually outperforming the S&P
DavidYeah, they're outperforming. The alpha there is 14%.
Ian McMillanso what, so we have, I'm not gonna say they're red flags, I'm gonna say that they're I mean, things that make me take notice
DavidYeah. Like, oh, this is important information
Ian McMillanHow you how does emerging markets outperform with the dollar moving higher?
DavidIt almost like, it's almost like that
Ian McMillanlike, last thrust, this last thrust from the beginning of May pushed us back over 100, and they... I'm not saying they substantially outper- But I mean, they're... I don't know. I just, I think it's very interesting
DavidNo, I think that's... Well, it's very interesting from multifaceted approach, but one of the biggest ones is, "Ian, that doesn't match the textbooks, man You're gonna have strong dollar and emerging markets outperform the S&P. I mean, there's, there's 14% alpha in emerging markets versus S&P year to date and trade-weighted dollars exceeding one oh one, one hundred
Ian McMillanWhich is a very big... I mean, this is... Oh my God. I mean, we talked about this in, like, client letters for years. Same with rates. I mean, dollars usual- I mean, it's in there 80% of monthly letters. And we talk about 100... And sto- I mean, stocks, right? So just in general, stocks are priced in dollars. Stocks are holding up
DavidYeah, hi
Ian McMillanRichie, so you haven't seen that? Maybe it'll affect one thing that's... I mean, Bitcoins. The Bitcoin's still not too hot
DavidYeah, struggling That's it. Bitcoin's on the struggle bus
Ian McMillanStill.
DavidStill.
Ian McMillanright
DavidRates. Well, we, before, before we get to rates, I just wanna highlight you'd be be- had been better off in emerging markets versus Bitcoin going on almost a full year here. But let's go to rates
Ian McMillanBelieve that. Oh, I believe that, yeah
DavidUh, 10-year yields still below 4.75, 4.78
Ian McMillanYeah, we kind of got some failed breakouts here.
DavidYeah
Ian McMillan30-year more of a failed breakout, 10-year never really
DavidOh yeah, the T- the TYX, the 30-year,
Ian McMillanUIX is
Davidthat's definitely a fail. Looks, appear
Ian McMillanripped Now we're back to where we were in March, so let's not act like we're all getting-- gonna be refinancing soon
DavidBut at the same time, you sit there and look at interest rate sensitive areas like home builders,
Ian McMillanYes
Davidhave recovered, and even like real estate, which is not a alpha generator per se, but is on an absolute basis participating. Or even like utilities, interest rate sensitive. It is notable that since the, I think it's a good term, false breakout in the 30-year yield, these things have done really well. On, on a absolute basis. I'm not saying on a... I'm not here
Ian McMillanown, you wouldn't own real estate?
DavidYeah. You're not gonna ge- you're not gonna generate alpha there. But I think it's notable to say, "Oh, these are participating." You know, this is not, this is not the kid that's pouting in the corner in the classroom. They're actually participating in the class. It's good But they're not the A+ student.
Ian McMillanleader.
DavidThey're not the leader
Ian McMillanThey're not like Team Kafka at recess kickball
DavidNo. But they're out there playing. They're not out there pouting, but they're out there playing. They're not out there being the alpha, and that's fine. But I think, I think it's notable that those areas, I, I think the... What you've highlighted with rates in conjunction with the dollar is, I think that's what our listeners should be kinda like Paying attention to here, like, oh, dollar's moving above 100 on a trade-weighted basis, but here we have emerging markets doing well, and we've got yield, 30-year yields way out on the spectrum coming in, potential false breakout. That, that's a pretty significant development considering you brought up at the start of this episode, we haven't really gone anywhere since using the S&P 500 since middle of May. There might be some development here
Ian McMillanI guess the other theory would be that one of them is lying, and that is gonna be like a failed breakout on the dollar, emerging markets doesn't continue to outperform. Although, I mean, we're fe- we're I don't know. It's kind of far into it for that to be the case. Or, or people are willing to say, "I wanna own emerging markets so bad I don't care about the Forex headwind." May, I mean, that's also a legitimate case
DavidWhich that would be risk on
Ian McMillanYeah, that would be, I mean, that's really saying something
DavidIt is. And I, you know, I think you and I were talking earlier this week, what, what's interesting at this particular point in time for the market is the uptrend is intact. You have... You don't have financials outperforming, but they're participating. You have some of these areas that we just talked about, real estate, utilities, participating, not outperforming. But what's notable is that the uptrend is intact, broadly speaking. Semiconductors may not have-- It's really hard to say, "Oh, this is where high, high reward to risk exists for semiconductors." So it's a little bit, there's a little bit of fog of unknown right here in this particular spot in the market where you don't get to say, "Oh, yeah, clear leader, this is what's happening." But yeah, you don't get to say the uptr- the uptrend is over Is that a fair, is that a fair way to say it? Like, it's not like the, the prior leadership out of semiconductors and space and quantum and all those things are super clear
Ian McMillanI mean, all that is still Hanging in there
DavidCorrect And, you know, we've heard about negative breadth. What do you think about participation and breadth of this market?
Ian McMillanthought I s- and then I thought I saw Dietrich said NYSE Advanced Decline made it to new highs
DavidYou were right there You look at the show notes
Ian McMillanAnd yeah, you looking at the workbooks? Pretty solid. Pretty solid from Industrials. Now, you know, now Industrials is a spot where It's tough on a relative basis. I don't know what they're doing today. But yeah, I mean Caterpillar's ripping. we stressing over the market if Caterpillar is all time
DavidRight.
Ian McMillanhigh?
DavidYeah, I think that's completely a valid point I mean, there's a lot of things that can
Ian McMillanWhat do you think about
Davidwork like...
Ian McMillanbreadth is okay?
DavidI do. I mean, we have most percent back in Xs
Ian McMillanYeah. Boy, can bullish percent consolidate
DavidSure
Ian McMillanAnd then does that lead like, is there a history of it leading to,
DavidYeah, I don't have a research report on that, but it might be worthwhile. But I mean, if, okay, year to date Russell 2000 is the best index here today Second best is Nasdaq 100. You have the NYSE advanced decline line, new highs
Ian McMillanS&P advanced decline line looks like it's a new highs
DavidNew highs. Bullish percent in Xs and not like to these extreme lever- levels. We're talking about like in the You have a put-call ratio in a lot of different metrics near one, which is way higher than I was expecting. And what I mean by that is the amount of hedging potentially going on right now is pretty impressive, and I'll always go back And I actually don't know who I first learned this from, and so if there's any way that that person is listening to me and like, "Dave, I'm the one who told you that," please speak up. You don't get nervous When they're shorting, continually shorting the market. You get nervous when they stop shorting the market, and they've continued to short this market. I mean, the fact that we have put-put call ratios across the board near one does not reek of throwing up the shorts, throwing up their hands. It's more same old, same old what we've seen over the past 12 months, which is over-hedging. And this is all happening, to your point, with a trade-weighted dollar above 101. You do sit there and wonder, okay, is it possible that the last six months... 'Cause we're coming up on six months for this halfway point. Are we gonna continue to see this move forward for the rest of the year, and how aggressive is it? Cause people are try- are still super skeptical of this market I don't know. Do you, do you have a sense in your, you know, in the, in your analysis and what you look at? Is it
Ian McMillanjust got like the longer we go on without I don't, I don't know. I don't know what people want. I definitely think that there's s- I think skepticism It's just probably frustration Um Right? 'Cause we just got another V bottom
DavidOh, like frustration of being, like, not overly exposed
Ian McMillanExact-- Yes. Yes Of like, how can this keep going? Why can this keep going? SpaceX at 2 trillion, this is so dumb. And like, I'm not saying $2 trillion IPOs are not dumb. I'm not saying they are. I mean, I don't know. I don't just- it kind of is what it is. gonna... There will be an IPO before I die that's probably like $20 trillion. I assume so. Definitely before my kids die
DavidYeah
Ian McMillanRight, and 'cause it's so du- like, it's just always gonna be, and it always just feels. The first time there was ever a billion-dollar IPO, I bet people It's the same thing. I bet there was tons of newspaper articles about, oh my gosh, a billion dollars for an entire company, and how absurd that sounded.
DavidYeah
Ian McMillandon't know. We'll see. I don't know. They're saying SpaceX is gonna buy T-Mobile now. So
DavidThat's a thing?
Ian McMillanthere's a rumor. Well, they've already been making a lot of acquisitions. Bill Ackman, he said it horribly and got flamed online, but part of SpaceX's value, like, is its value Like they can just go buy whatever they wanna create almost. They're gonna be given the ca- they, they were, they were just given the cash to do that. Whether you agree, I mean, the market, capital markets just gave them money to go built
DavidRight
Ian McMillanYou and I couldn't do that
DavidSo the first billion-dollar IPO in US history appears to be Conrail in 1987
Ian McMillan1987, the year I was born. So in my lifetime, we've gone from one billion to $2 trillion IPOs. I'm just... Okay, like, let's... It's just numbers, people.
DavidYes, it is.
Ian McMillanIt's just numbers like this, and it will contin- At one point, there was probably a $10 million IPO, and people
David10 trillion? 10 trillion
Ian McMillanAnd, and yeah. Well, 10, 10 million. At some point, do you think someone's IPO'd their company at a value of $10 million? Like
DavidOh, you mean back, back in history? Yeah.
Ian McMillanback when,
DavidYeah, yeah, yeah. Yep
Ian McMillanAnd they're like- When we talk about inflation
DavidYeah. Well, and okay, and this goes back to like are you living the nominal life or the percent- or the percentage life?
Ian McMillanExactly. That's a whole nother second level of thinking that many people never get to
DavidAnd the best way I c- I know how to explain that is, and we experience this and educate our clients all the time about this, there's a point where your retirement account beta fluctuation of that account exceeds what you earned on an annual basis, on a nominal basis, on a dollar basis. And so you freak out, right? "Oh, my account's moving $120,000." Like, what?
Ian McMillanI never freak up when it goes up 120
DavidNo, no, no. It's what it goes down. But as a percentage, you're fine, and that's throughout the history of the world
Ian McMillanIt is. It takes a lot to get used to that
DavidYeah. A- a- and throughout the history of the world though, it's, you gotta live the percentage life. And, and that's, that's-
Ian McMillanbig numbers are, they, they suck the first few times it happens.
DavidYeah
Ian McMillanIt sucks. I like,
DavidI'm not here-- Yeah, I agree. I'm not here sitting here saying it's, it, it doesn't feel like that. I'm here to remind you that
Ian McMillannest egg and watched it go down 10% You
Davidnothing, but it might be the nominal amount that might be the dollar
Ian McMillanyeah, yeah, that's what I meant. Like, if you've got, let's say you You know, 70, 80 grand a year, saved up, and you got a million-dollar nest egg when you retire. People under 40 are gonna laugh at me. That, hey, the way it used to be. Right, you lose 100 grand in a year when you used to bring in before taxes 70 or after taxes 50, 55?
DavidUp
Ian McMillanYeah, I mean, it's, it can definitely be a gut punch. And eventually you get used to it
DavidYeah, you have to think in percentage terms. If you are thinking in dollar terms, you are not thinking in the way that...
Ian McMillanit'll only get worse,
DavidRight.
Ian McMillanthe accounts are rallying
DavidYes And that's, again, that's inflation. Like, you- inflation doesn't think in dollar terms
Ian McMillanYeah, if there is still the same amount of US dollars floating around today that there was 40 years ago, and we wanted to have a conversation about different size IPO values, okay, we could have that. But that's not the case. We don't have the same amount of money in the system I don't know, what is, what's 2 trillion in 1987 dollars?
David2 trillion and 87. So what are we sitting? We're sitting 26. We're sitting 30 years in.
Ian McMillanNine zeros?
DavidYeah, that sounds right I mean, I feel like, I mean And this is why as well, like when you think about governmental systems, why are we using what we're using for certain retirement calculations? Very frustrating But 2 trillion is just indicative of why we are involved in markets. Again, we are not involved in markets because they're fun, entertaining, even though you have apps like, I'll just call them out, Robinhood putting gambling on their app. Crazy. Being involved in markets is not the same as gambling
Ian McMillanyou doing like the prediction stuff?
DavidYes We're involved in markets that protect our purchasing power. Inflation is real. It always will be real. There's no avoiding it. IPOs are an example of that
Ian McMillanSo it's the equivalent of a $674 million IPO
DavidYeah, think about that
Ian McMillanSo all right, let's go look at like, I don't know, what's worth 670 million? I guess that's like your large mega cap-ish I don't know. What did Palantir tr- what does Palantir's IPO valuation, I don't know
DavidSo you're saying that
Ian McMillanPalantir is
DavidYou're saying, what were, what were the numbers? That a couple trillion dollar IPO today is equivalent to- A couple
Ian McMillanmillion
DavidIn '87
Ian McMillanIn '87
DavidEverything is relative
Ian McMillanWhich was probably a lot back then. I
DavidNo, it i- it, it was a lot back then. But it, okay, this goes back to the human nature of Let's, let's talk baseball contracts Every time there's a new record...
Ian McMillanPretty,
DavidWhat's that?
Ian McMillanthat's pretty pertinent. It's pretty pertinent given things going on
DavidI know, I know. I agree. I've- we're probably getting a lockout. All those things aside, you look at contracts of baseball players over time, when has there ever been a year where a new contract is signed and, and, and some, I'm gonna say it, some old man goes, That's ridiculous. That's the biggest contract we've ever..." Yes, it always will be
Ian McMillanIt always will be
DavidIt always will be. Like why do we fight?
Ian McMillanlaugh, are gonna laugh that Patrick Mahomes was only making 50 million a year at some
DavidI, I'm actually laughing at that right now. Like, that's ridiculous So, and we see this across sports, it's the same thing across markets, and it's actually the reason why you're involved with markets, 'cause you can't stuff cash in your mattress. That's not how it works There might be a time for that. I'm not saying you don't have risk management. I'm just saying the reason why you're involved in markets and the reason why we see the pro sports contracts that we see is, is inflation's all around us. It's, it's a normal part of economics. And you can like it
Ian McMillanlike, everything costs more
DavidYeah And it's also the same environment that provides economic ladders to people who wanna progress. Like, I don't... You can hate on it all you want
Ian McMillanbe- we're gonna buy like four Tauruses for 120 grand one day, just so people are aware
DavidFor Taurus
Ian McMillanDo they still make those?
DavidI have no idea, actually
Ian McMillanWell, whatever the equivalent at the time of a Ford Taurus is. They will be
DavidA Ford Taurus wagon With, with climate control Can you imagine, like, what our grandkids will say? Like, "What do you mean climate control? Like, you didn't have climate control?" No, I rolled my, do- down my window. That's what I did
Ian McMillanI hope we're done with that
DavidYeah.
Ian McMillanI
DavidCrazy
Ian McMillangrandchildren never hear about climate control
DavidUgh Crazy
Ian McMillanwe've gotten
DavidWe're all over the place
Ian McMillanreally on a big detour here
DavidWe have, and we need to get you out of here, so I better highlight the support of this podcast, which is the Adaptive Select ETF listed on the New York Stock Exchange under ticker ADPV, 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 ADPV, by visiting adpvETF.com or calling 1-833-880-5200. Investing involves risk, including possible loss of principal. ADPV is distributed by Quasar Distributors LLC. Ian, did you have anything else to add for our listeners? Cause I feel like I might have interrupted you there
Ian McMillanNo, no, no, you didn't. Yeah, definitely one of those wait and see. I think I about it earlier in the week. I mean, I blow... Let's call it 7260 and 7620. I don't know. Probably better off. I'm just gonna try my hardest to be twiddling my thumbs until we get out of this little range.
DavidYep.
Ian McMillangame plan.
DavidAllow the market
Ian McMillanbest suited to twiddle my thumbs
DavidMm-hmm. Hey, sometimes the best moves you make are the ones you don't
Ian McMillanYeah, and it's like I mean, what is this? A it's a 5% range
DavidNormal considering the aggressive move we had from the, quote-unquote, Iran, Iran lows. Not too bad. Not too shabby Anything else you wanna highlight before I get you outta here? We ask our listeners to give us a high ranking on their platform of choice. Anything else?
Ian McMillanI don't. Have a great weekend everyone