The Case for 5% Treasuries: Are Yields Set to Explode? — With Dale Pinkert

[00:00:00] Maggie Lake: is the next move a fed hike hi everyone welcome to the market house i'm maggie lake and today i'm talking markets with dale pinker trading coach at trade gate hub hi dale happy hump day it's still in vogue we decided the midweek residency begins yeah so uh maggie i'm trying [00:00:20] Dale Pinker: to chew gum and and walk at the same time here we go here we go i got it okay good all right you're in my screen so we have another television channel right okay great all right hey everybody joining [00:00:35] Maggie Lake: us live on x sub stack and youtube uh it's amazing what a couple of people can do from the comfort of their own home uh but we're excited to have you with us today so interesting day stocks took a hit bond yields rising um dale i know you've been watching all of this um and mentioned some of the setup on friday what you were looking for so walk me through what you see happening in the markets [00:01:03] Dale Pinker: and what's catching your eye today okay well you know how uh you and i and i've been talking about it since i've been on the airs if you get the dollar right you get everything right and the dollar is now here's the s and p's but the key is the dollar um did not follow through to the downside from friday and it was the other option i talked about that we're now challenging 99 and a half and i believe we're about to enter an acceleration phase to the upside which is we'll pressure everything um sorry pressuring uh metals are getting killed um silver you know the gold silver ratio is trying to break out and it hasn't even done it yet so um i think a lot of things will remain under under pressure as a dollar heads up towards my eventual target about 103 104. there'll be some stops on the way but um first we attack this resistance then we have to close over par 50 and then the debasement trade will um have to come upstairs and um you know learn a lesson about being on the most popular side of the market at the end of the petrodollar i mean that's all we've been hearing uh we you know the dollar's doomed because of what's happening in the middle east so um the dollar has one more good hurrah in it to shake out all the dollar bears and then i think you could be sure it's the dollar for long term but that's you know let's take it one step at a time i've been patient for i don't know months waiting for this move to manifest and it looks like it finally is yeah um we're gonna dig into some of [00:02:56] Maggie Lake: some of the other implications around that but while we're on currencies i think i think everyone's on intervention watch again for the yen is that right how about that yeah so it looked like they [00:03:06] Dale Pinker: stepped in a little bit um when i look at the 30 minute chart i guess they were just checking rates because we went to 160 yesterday and you know we came off 50 pips and you know on a 30 minute chart that looks big but on a four hour chart it's just looks like a hiccup so here we are um gonna force japan's hand to raise rates i don't know when the boj meets again um but they're gonna have to spend a lot more money um i think that you know uh i remember a guy on the floor of the imm who used a fade central bank intervention um said it never works and you know that's taking on an elephant um so we'll see uh you know i think they're right now the credibility of the boj is on the line and um if they don't raise rates at their next meeting you know then we're going to have some acceleration which is the last thing they want after spending billions um over here yeah right and you know fighting the central [00:04:16] Maggie Lake: bank in the short term it's hard but long term if the fundamentals are not with them the market knows that right and so i think your your friend was right and that's when ultimately over a long period of time it tends to be unsuccessful boj more experienced at it than others their timing is good they seem to catch the market off um but certainly people watching japan thinks that think this rate hike's coming um if you haven't i had a long conversation with jesper cole who's based over there um and and he thinks hike is coming but also the reasons why and what's happening domestically in the japanese economy really worth digging into if you're interested in that area of the market um he had some really interesting things to say so we'll put a pin in that for now but yes um i think that that hike's coming so interesting because then if they hike it all eyes turn to the fed right because we've got wars coming in and what they do if you look at the bond market we're going to jump around and then stick your questions in we will come back to the areas that you want to and talk about them more in depth but um but so we've looked at the dollar and it looks i just want to stay with the yen as i pull out my [00:05:20] Dale Pinker: telescope the web telescope and this is the the monthly chart and here's drive one confirmed and here's drive two diverged and i'd like to see a third drive up here maybe it's going to take it up towards you know 170 and then i'd be interested um but i i'd like to see this formation continue to develop and that means it's going to look like the bank of japan um can't stop it if we're going to rally another 10 10 points in the end so anyway i do think that we'll uh i'd love to see it take out this high this is 61.95 so once we start taking out 62 i'll be looking for um topping action for the big long-term play because it won't work now but it may work later so um that's what i'm looking for right now yeah and especially especially if the dollar is going to remain strong they're really fighting a headwind they are fighting so if i'm looking for 112 euro and 129 cable and 102 103 dixie that's a strong dollar environment they'd be better off waiting for that rally to complete and then start shorting us dollar yen or intervening yeah yeah they don't like uh even more important the level is the speed if you [00:06:51] Maggie Lake: go up there quickly that that is usually what gets their attention and you know watch treasury last time besant checked rates right and that's what really got the market moving so let's see if we start to drift into the coordinated king dollar king dollar okay that's again like let's remember all the things that the administration wants and wanted white weaker dollar lower rates uh you know it's this is a a challenging environment that warsh is walking into so um we're gonna talk uh let's talk bonds since we're on the fed first and then we'll get to stocks uh yields moving up on uh it looks like what do we what do we think in there i mean we've got payrolls we had some strong 80 weekly adp the big uh kahuna is friday though with the with the monthly jobs report but we had strong manufacturing i mean the data is looking macy's came out with strong earnings you can find weakness housing looks terrible but you know it's bifurcated but there are there are certainly signs of weakness or signs of inflation a lot of people think the next move has to be a hike is that what the bond market's telling us [00:07:56] Dale Pinker: yeah uh so you know this to me looks just like a pullback that 450 was a big area you know if we get a weak number it's a binary event friday you know maybe we could pull back to 4 30 but i still think the tenure has a shot to go over five percent okay so what i'm going to be looking at is should that happen and tlt which is pretty far above this low from a few weeks ago puts in a higher low while 10 years making you know at 450 that would be um i'd be interested in maybe the long side or new lows and bonds with divergence would be interesting to me so that's my take the 10 years my uh what i'm keen on because i still think there's 50 bips in it and um we'll see how the long end acts long end might like [00:08:55] Maggie Lake: that that the fed might be considering about well that's it right right that's that's exactly what i was thinking dale right we'll see we could see different you know different moves in parts of the duration but that we were so convinced that he was he was a sock puppet a couple weeks ago remember he was just like he was trump's sock puppet um and now if if they come out um and especially if it looks like he's gonna be tougher and and talk hawkishly even if he does nothing that that could impact the market [00:09:24] Dale Pinker: for sure well what what is the key issue in our country right now that everyone's talking about affordability okay so um if they want affordability uh that's what you need for to win elections they're gonna the feds gonna have to be hawkish and engineer some type of correction eventually in our equity market because that's part of the inflation so you know that's what i think you know if you want to win you want to say look how much this has dropped look how much what we have done so um i think that warsh uh you know he was put in because the president wanted uh the same rates as switzerland and uh i think that he's you know he's gonna see what's going on i don't think he'll capitulate with [00:10:17] Maggie Lake: lower rates we'll see but it's only a couple weeks away this is sort of uh it's so interesting that you're saying this because we always say history doesn't repeat but it rhymes and you know if you're a fly on the wall one one has to wonder what the conversations are going to be because now you know again this is his guy in there and you've got besant and warsh talking to trump and it's you know remember the famous story of robert rubin having to go to clinton and saying like you need to get the bond market on side those aren't the words he used um and you know the the reports were that clinton was not happy with it but they convinced him to go along with it do we have another episode where trump does not come attacking him and lays off and let's lets them kind of run that playbook a little bit that would be [00:11:06] Dale Pinker: that would be interesting yeah well i i think that yield curve control is going to be implemented [00:11:12] Maggie Lake: eventually yield curve control they are already uh doing volatility control right um michael how's been writing some good stuff on that they're they're you know suppressing volatility in the bond market as a way to sort of hold that beach ball down do they actually move to direct yield curve control i mean this is i think what people but if the market sniffs that out i don't know does it you know like yeah i [00:11:40] Dale Pinker: don't know i i've never lived through it the last time was uh world war ii here in the u.s yeah so i'm not sure if the you know uh if that basically takes a market away from us but i think the result is going to be a very weak currency in the u.s dollar would really take a hit and so that's also part of the scenario of the dollar having shake out all the bears that universally uh have embraced in basement to basement and even living there and so we're going to see them being taken out of it but uh yield curve control is real bearish the dollar and i also think it's that's going to be inflationary yeah that's [00:12:28] Maggie Lake: that that's that later wave that you and many people are looking at but interesting that you think because that that crowd that debasement crowd they're you know they've set up permanent shop in that basement like they are very committed to that thought but do you do you have something else it's not working yeah [00:12:45] Dale Pinker: i mean you know if they're buying gold if they're buying silver since the highs it's not working um you know if they've been shorting uh the euro uh i mean buying the euro you know we were at 118 you know just a few weeks ago 121 a month ago and now the euro is trading about one what 150 116. so you know i'm looking for these lows to be taken out in fact my big picture is x marks the spot or this is when i'm going to start turning bullish euro uh bearish a dollar and i think it's you know this summer sometime so but this will be enough for everyone who's been buying for what's this uh june of 25. so they've been buying for a year you know trying to make money on the debasement trade which would mean a higher euro and you know we have to take their stops out here under 114. and then it'll start getting more [00:13:51] Maggie Lake: interesting so let's uh let's talk equities because we we fought it i mean it's been relentless and even days when we started out weak we were able uh the bulls not we i mean yeah i have no skin in this game but the bulls were able to those tech bulls especially come in and move the market and and you just were not the sellers were losing that fight look like today uh they were it was not able to pull back and then not major losses it should be said but a little bit of red on the screen the russell the worst but the nasdaq got down over three quarters of a percent does it feel like something's different [00:14:26] Dale Pinker: or changing or is this just a little backfill yeah i think some of the complacency is coming out of it in fact you know i've been posting the vix from up here saying we could get one more low for three drive at 15 20 and it closed pretty ugly but even though the market was rallying um it was holding and i think that you know right today wasn't a big val day but we circled back over 18 i wouldn't be short val and and i i the s p's uh really sold off at the close so you know uh the boy who cried wolf still believes in a pullback to at least 7100 and possibly halfway back nasdaq held up better but it's not anymore broadcom must be getting hit that's my guess um because the semis have been you know uh to my financial disadvantage uh they've been um they've been defying gravity for a long time oh yeah broken down about 30 bucks 40 yeah 35 bucks that's that's a loss of over seven percent [00:15:38] Maggie Lake: picking up steam they had earnings after the close folks so somebody's seeing something um thank you flap of dirt yep they uh selling off after earnings so um so we'll have an island top tomorrow and this has been one of the strong ones so and that's in the semi space so we saw the sell-off but you've been saying that you know semis have have been the kind of holdout yeah look it's the opposite kind of day [00:16:01] Dale Pinker: that we had in the s p's we had pressure everywhere but semis so if you're conservative um you just you know this will be a problem if you get uh smh back under 6 15 which is still 20 points away and that would negate the breakout it's even a little more clear in socks because there was uh some kind of double top where are you where are my socks i i can never find one i can only ever find [00:16:31] Maggie Lake: one by the way it's florida play dirt florida pay dirt sorry i i gave you something that sounded much less cool because it comes all squished together yeah so i mean my apologies florida yeah so yeah and [00:16:45] Dale Pinker: there's the socks we're almost confirming but you know i i you know cash and chips uh you know you it would have been great to do it today i didn't add uh you know short positions uh i i said you know there are other things that are working but you know i wouldn't be surprised if we don't get this thing but i think something resolved in the gulf and the straits is that we start hearing stories in a couple of weeks about uh helium shortages and possible force majeure maybe even in taiwan i don't think they had big reserves so that's one thing that could throw the semis for a loop is a supply constraint of helium [00:17:34] Maggie Lake: because this is parabolic yeah this is silver before it top yeah i mean and so so so two things i i want to just say nice flag on the helium because we've all been counting oil reserves and fertilizer reserves and supply change and helium was mentioned but we haven't really been talking about it in the context of reserves so that is probably something that's going to come up and you know when everything was flying and parabolic no one traded on that headline when things are selling maybe they'll be more vulnerable to headline risk yeah so you know now we're gonna have to go find a helium person to talk about the reserves but um the parabolic when you said this was silver there is a momentum thing happening right there's a lot of money that is just chasing the momentum trade so semis where does it go [00:18:25] Dale Pinker: spacex well you remember we were talking about um the fact that some people were shorting semis and buying software yeah a month ago so the software part of the trade worked maybe they're going to things like btu [00:18:45] Maggie Lake: energy related things is that is that is that in that gas uh i'm not sure what people does probably [00:18:51] Dale Pinker: someone in the body i think they're yeah maybe it is natural gas btu um that's right i think that's how they're measured but um you know maybe they rotate into some of the defenses oh you're getting you know what peabody is coal oh is it okay yeah leading coal producer okay that i'm telling you that's why we [00:19:16] Maggie Lake: that's why we didn't have it off the top of our head dale because we thought coal was dead yeah well [00:19:21] Dale Pinker: it had a nice three drive looked like it was dead but it looks like it wants to blow absolutely listen [00:19:26] Maggie Lake: a lot of people a lot of interviews i've been having on energy uh lately have been talking about uh the fact that coal's coming back a whole bunch of them and and you know that may horrify people you know given some of the environmental concerns but um but that but that's been frequent so super [00:19:44] Dale Pinker: interesting if that's not active well you know the environment the environmental reason aside it's uh people will be horrified because it's going to be a huge huge demand backwardation and coal around christmas because that's what santa's going to leave to people that have not been kind to each other all year well so if you don't like to be nice to people or you're going to end up with a lump in [00:20:13] Maggie Lake: your stocking i mean i don't even think we can keep up with that demand i mean i'm seeing fly around [00:20:20] Dale Pinker: online so good luck on that most of the country's getting cold this year most yeah most most of it [00:20:29] Maggie Lake: uh so um dr divergence mentioning for s p for those who are following that um 7137 on spoo's b equates to a 38 yeah fibonacci pullback right in line with dale's target so there's multiple things reinforcing that for you who for those of you who are really dug in on the technicals and we know both dale and [00:20:48] Dale Pinker: dr divergence and it could happen fast you know it could happen in a few weeks uh and then um we've got so [00:20:58] Maggie Lake: we've got a couple questions uh i want to just squeeze a couple in um many people agreeing that it may not be resolved in the way that transpires and and having to watch that um you know that is still i i think a wild card that most of us can't wrap our heads around and dr divergence mentioning one of the you know uh theories that's flying around now that the u.s ends up mining it um much like kind of the blockade like if we if they can't get a resolution they'll kind of close it forever type thing so there's there's going to be so much headline risk around this i think we can't understate enough um question about and this is like a hard turn outside but you know we take whatever questions you want to throw in there jillor must be a coco trader because i think jillor you ask about coco every time we're on but we might as well talk about some of the commodities because i saw jp morgan talking about an earnings super cycle i don't know what that means in terms of commodities that sounds that sounds uh at you know in contrast with a sell-off that might happen quickly so i'm not sure time frame wise how that matches up but what are we seeing when it comes to commodity like cocoa what [00:22:03] Dale Pinker: are you seeing there dale well i talked about buying a pull back into the gap we actually got it when um one of our fans asked about it i said wait for a pull back into the gap and we almost filled it and then risk the lows so it looks okay uh coco there's you know nothing wrong with it i'd continue to buy dips you know this may have been the last bus stop and that was friday may 22nd when someone may have asked me [00:22:37] Maggie Lake: about it yeah it was probably jillor he's been holding it for two years oh okay well i i hope you break even yeah i've been there yeah exactly and then and then you and then you get a fresh start you can figure out if there's opportunities elsewhere if you want to you want to stay in that you know well you know if [00:22:57] Dale Pinker: you did it right uh you had capital to uh add to it at better levels so here's sugar i i think and i i've always there's times i've made mistakes where i just can't put any more on i'm taking enough heat so i like to sleep uh sugar looks vulnerable maybe for one more push down and i'd say you know some of the best trades are the ones you don't do or get out at the right time and uh one of the best exits this year for me was getting out of grains at the highs yeah i'm saying wait till the solstice to buy them look at that so i mean i was telling people about it here and i was telling people here and here to get out and book and look for maybe 540 and that's happening the beans are still holding up the best but they look vulnerable and what's so unusual and strange about this i've watched some videos from the farm journal and the drought that's happening um in the wheat belts um little west of the midwest red basket they they don't have they're not getting rain they're um the the people that irrigate um aren't getting water because they've already drained the groundwater and the wells and they're backing up there are huge um so even if you're irrigated you don't have water um this i think um you know a lot of people come into the game a little late like you know after the war started but i have to believe that this is going to be one of the best long entries um that's going to pay off big next year uh the long side of food but again we have to get the people who thought we were going to have a famine right away and just load it up on dba and everything else for them to say oh crops look good okay so um but i i do think that these will be great uh buying opportunities but the point is just like bad trades that you don't do they don't show up in your account but they're important well so are your exits because look at the give back if you didn't didn't book up there you're almost back to the lows so you never go broke taking profits [00:25:37] Maggie Lake: absolutely um and as jillor said he's not he's not even yet but it's a it's a learning process and that's what some of this is if you size yourself appropriately this is this is how you do it and gain [00:25:47] Dale Pinker: that you learn patience you learn patience which is really difficult so long longer this may be an [00:25:54] Maggie Lake: opportunity for grains with a longer horizon sometime you know based on this what about gold uh dale how are you thinking about metals here because they've you know they we've seen them come down i think they were almost with like they went from 20 up on the year i don't know if they're even break even now or or up just a single digits but is this a consolidation and will we see another move higher or is this this just sideways action that doesn't interest you well i don't think it's sideways i think just like the [00:26:24] Dale Pinker: dollar is going to accelerate i would look for the gold market to accelerate to the downside targets are even lower than 38 now because of where this line comes in the gold silver ratio kept me straight about not getting bullish metals while many have been over the last few months because i saw this as a continuation formation which meant we were going to have something like this from a higher low and we haven't even broken out yet so uh people to follow me know i've been taught i've been bearish gold for quite some time and silver for quite some time next level of support 70 um but i think we're going to take that out too i think i think that you'll have a chance to buy 50 silver or lower wow [00:27:17] Maggie Lake: all right we're gonna have to watch that uh you you uh the nat gas trade has worked out for you are you still in that how are you feeling about that now yeah last friday i said looks like a little [00:27:29] Dale Pinker: profit taking and uh that's pretty much what it was it's a little pull back last week was uh the important week when we pulled back to the breakout of the neckline and we started heading up so songs were over 282. uh this market has legs i think it's embryonic i think we're going to see six ten dollar natural gas by the end of the year or next year maybe higher i'm bullish unless it takes out 282. it's just that's where you protect if you got long good you don't want to see it negate the breakout but you know just a correction from you know two and a half bucks to six you know could take us into some of these gaps here's one 380 here's another one or just use your fib tool and do retracements from this high to low and you know make 50 back 618 your profit target for being long uh let's touch on bitcoin uh oh look oh you have hope you have a bitcoin shirt yeah it's the last day i'm wearing it because i'm taking it in to be altered to hopeless you have to hand write it scribble it on i i tried a crayon but we have it professionally done yeah you know i talked about 72k being key and uh we took that out with uh with a vengeance so what's the next downside that we're looking at 10k 10k no i don't know if i take a a measurement so this was the channel okay here was 72 there was no reaction off it at all and you know what i think this is right and there's going to be a mean reversion in the market because this has to be about people needing liquidity if sailor is selling bitcoin right so uh i you know if you think this is a bear flag uh you know what 125 to 60 grand breaking down at 70 i i i'll make i'll piss off too many people yeah it measures 10 grand 10k yeah but i know people looking for 40 and you know right but this is look at all this was consolidating through you know from january so and all it did was get back to the neckline this is classic ta from edwards and mcgee you have a head and shoulders breakdown the market retest to the neckline and it's rejected and the next wave to the downside is underway [00:30:38] Maggie Lake: thank you mr edwards and mcgee you you helped me out a lot it holds up and it says that stands the test of time there's a meme on x i think uh making the rounds where there's just all these cars racing over bumpy road um and everyone's saying that's bitcoin liquidity just rushing to the spacex ipo you know maybe you think that could be it when is it uh soon it's this month right they priced yesterday or today i can't even keep my days straight because they're so long um but they set the price i think it was 135 um you know these ipos i mean we haven't ever seen anything like this so it's gonna it's hard to say but i mean when i was said before if everyone's leaving semis that momentum look where's the next stampede momentum trade that will go parabolic i think there's a good argument for it to be that since it's going to be shoved in all the indexes right away but i mean yeah june 11th that's what i was thinking too dr divergence thank you um which is coming up fast that would be next week so we'll see what if it's uh not successful uh i think that there are enough people who have their hands in this and i don't mean in an illegal way but there are enough people with vested interest to make sure this is successful you know like an unsuccessful ipo is a little unusual in the beginning because the way it's set up it's supposed to pop and it's supposed to do really well i think the test for this will be right over like six months a year what do we see happening and that's when we've got much better track record of what how do i get into your hedge fund god help you all if that was the case i want in oh gosh but it is going to be it is going to be really wild and and and importantly like what are the market conditions right and can all three of them make it out before something starts to happen with the stock market i think those are the questions that we're going to be yes everyone's talking about their favorite ipo they watched wither and die um you know and and really struggle beyond meat someone just remember that one um yeah oh and don is saying all about software stocks that's where the money will flow to okay what you mentioned before that's entirely possible although you know it's bumping up against that fundamental question have we figured out whether i ai is going to kill software or not obviously everything got thrown out the baby in the bath water but have we figured out who who's going to survive that and who might actually be uh you know compromised for their business i don't think so so is the stampede really going to go back there i don't know maybe i don't know i'll talk to my hologram about that yes we'll consult we'll consult your crystal ball that someone made oh yeah on your birthday we'll consult that too anyway uh fantastic stuff dale love chatting to you midweek so let's finish it off since since it is midweek how are you going to set [00:33:32] Dale Pinker: up for the payroll number well you know i i say that payroll besides you know positions that you already have earmarked for long term but if you're a trader um i don't like to bet on the reaction of a number i'd rather react to the reaction than try and predict that's more like roulette to me so i'll have powder dry to react my my bias is that um yields are going higher so if it's a soft number um i may buy you know i'll look for the 10-year yield to be a buy at 4 30 if something like that happens because i still believe in five percent or higher and if the dollar weakens on it i'd sell a rip if metals rally on it i'd sell the rip [00:34:30] Maggie Lake: good stuff all right dale it was a pleasure you revived us midweek we appreciate it you gave us lots of good stuff to watch we will see you same time next week all right maggie have a great end of week uh same thing to all of you have a great end couple of days to your week as we head into the weekend i feel like we should be already in the summer right feels like the week should end on wednesday in the summer but we got a few more days to get through but good luck and take care out there