Markets at a Crossroads!

Summary

In a Trader Summit discussion, Blake Maro and Jim Welsh from Macro Tides analyze the US dollar's sharp decline, predicting a potential drop to the mid-90s. They discuss the significance of the dollar's 100.61 level, its impact on the triangle pattern, and the influence of economic data, particularly the jobs report, on Federal Reserve decisions. The conversation also touches on political dishonesty, economic narratives, and their effects on the market. Jim offers insights into various market indicators, including the S&P 500, treasury bonds, and gold, suggesting the markets are at a critical juncture where future economic data could significantly alter current trends.

Takeaways

• 📉 The dollar is experiencing a significant decline, with the potential for a 'dumpster fire sale' scenario as discussed by Jim Welsh.
• 📈 Jim Welsh anticipates a possible bounce in the dollar before it drops further, with key levels to watch being around 95 and 100.61.
• 🔍 The conversation emphasizes the importance of technical analysis in predicting market movements, with the dollar's triangle pattern being a critical indicator.
• 🗣️ Jim Welsh expresses concern over political dishonesty from both sides, which he believes is detrimental to the country's ability to discern truth and make informed decisions.
• 💼 The discrepancy between the establishment survey and the household survey in job numbers is highlighted, suggesting potential exaggeration in job creation figures.
• 📊 There is a significant revision in job numbers, with an overstatement of 818,000 jobs from March 2023 to March 2024, which is a cause for concern but not panic.
• 🛍️ Discretionary spending appears to be slowing, indicating that even the upper-end consumers may be starting to cut back, which could be a sign of economic softening.
• 📊 The S&P index is close to reaching an all-time high, which according to Jim, could mark an intermediate high if the pattern of a five-wave move is completed.
• 📉 Treasury bond yields have dropped below their channel, which could suggest an uptick if the economy doesn't slow down soon enough, potentially affecting the long-term outlook for yields.
• 💰 The dollar index is at a critical juncture, with the level of 100.62 being a make-or-break point that could determine the direction of the dollar's movement.
• 🏆 Gold prices are near their highs but have not yet made significant progress despite dollar weakness, suggesting a potential upcoming move if certain market conditions are met.

Q & A

What was the main topic of discussion between Blake Maro and Jim Welsh in the video?

The main topic of discussion was the current state of the US dollar, its potential decline, and the impact of various economic factors and political statements on the financial markets.

What was Jim Welsh's prediction about the US dollar's movement?

Jim Welsh predicted that the US dollar could have a bounce before dropping to the mid-90s, with a critical level at 100.61, which if breached, would open the door for a more significant decline.

What is the significance of the level 100.61 in the context of the dollar's movement?

The level 100.61 is significant because it represents the low of wave B in the dollar's triangle pattern. If this level is taken out, it implies a direct decline or a much sooner decline below 95.

What does Jim Welsh believe is the key factor that will influence the Federal Reserve's decision on interest rate cuts?

Jim Welsh believes that the key factor influencing the Federal Reserve's decision on interest rate cuts will be the jobs report, particularly if the job numbers come in much weaker than expected, which could raise the odds of a 50 basis point cut instead of 25.

How does Jim Welsh view the current political climate in the US in relation to its impact on the economy?

Jim Welsh is concerned about the constant lying from both political sides, which he believes is aimed at ensuring that no one believes anything anymore, thus making it easier for those in power to manipulate the populace.

What was the historical context provided by Jim Welsh regarding the US economy's state in the fourth quarter of 2020 and the first quarter of 2021?

Jim Welsh pointed out that in the fourth quarter of 2020, the GDP was up 4.2%, and in the first quarter of 2021, it was up 5.2%, contradicting the narrative that the economy was in terrible shape and needed more than $3 trillion in spending to recover.

What is the importance of the establishment survey and the household survey in understanding job creation?

The establishment survey and the household survey are important because they provide different perspectives on job creation. Jim Welsh mentioned that the establishment survey may have exaggerated job creation numbers, and comparing it to the household survey can give a more accurate picture.

What is the significance of the jobs report in the context of the Federal Reserve's decisions?

The jobs report is significant because it can influence the Federal Reserve's decisions on interest rates. A strong jobs report could potentially lead to a more cautious approach by the Fed, possibly affecting the expected number of rate cuts.

How does Jim Welsh view the current state of discretionary spending in the economy?

Jim Welsh noted a bifurcated economy where the bottom 40% of wage earners are struggling with discretionary spending, while those at the upper end have been spending more freely. However, he also observed signs of slowing spending among the upper end, indicating a potential pullback.

What is the potential impact of a strong jobs report on the financial markets according to Jim Welsh?

A strong jobs report could potentially upset market expectations, especially if it shows a lower unemployment rate and strong job growth. This could lead to a rise in the US dollar and an uptick in treasury yields, contradicting current market expectations for rate cuts.

What advice does Jim Welsh give regarding the current market conditions for gold?

Jim Welsh suggests that gold is at a critical juncture and needs to move quickly. If the dollar rallies towards 104, gold could face selling pressure. Conversely, if the dollar breaks below the critical level, gold could easily move towards 1300.

Outlines

00:00

📉 Dollar's Downfall and Economic Concerns

In the opening paragraph, Blake Maro from Trader Summit interviews Jim Welsh from Macro Tides about the recent downturn of the US dollar. Jim discusses the expectation of a dollar rebound before a drop to mid-90s, with key levels to watch on the charts. He mentions the critical level of 100.61 as a make-or-break point for the dollar's triangle pattern. They also touch upon the upcoming jobs report and its potential impact on the Federal Reserve's decision to cut rates by 25 or 50 basis points. Jim emphasizes the importance of watching the data and not jumping to conclusions based on short-term market reactions.

05:00

😠 Political Dishonesty and Economic Misrepresentation

Jim Welsh expresses his concern about the political climate in the US, highlighting the constant lying from both political sides, which he believes is aimed at confusing the public to the point where they can no longer discern truth from lies. He criticizes the narrative that the economy was in terrible shape when President Biden took office, pointing out that GDP growth was already positive before he took office. Jim also disputes the claim that inflation is due to corporate greed, comparing profit margins of grocery stores to those of tech and automotive giants. He calls for objectivity and critical thinking regarding the political rhetoric around economic issues.

10:03

📈 Market Reactions to Jackson Hole Speech and Jobs Data

This paragraph delves into the historical market reactions following the Jackson Hole speech, noting that in 16 out of 24 years, the S&P has moved more than 1%. Jim and Blake discuss the significance of the recent large jobs revision and its implications on the perception of the labor market's health. They argue that while the unemployment rate has risen, it may be due to an increase in labor force participation, including non-native born Americans. Jim suggests that the data may be overstating the softening of the economy and advises not to overreact to it, anticipating that the Federal Reserve may take a similar stance.

15:03

🛍️ Discretionary Spending and Economic Indicators

The conversation shifts to discretionary spending, with Jim noting a slowdown in areas such as airline travel, cruise lines, and accommodations, suggesting that even the higher-end consumers may be starting to cut back. Blake and Jim discuss the bifurcated economy where the bottom 40% of wage earners are struggling financially, while the upper end has been faring well until recent signs of a pullback. They also mention the importance of non-farm payrolls and participation rates as key economic indicators, with Jim arguing that the labor market is not as dire as the recent job growth slowdown might suggest.

20:04

📊 S&P 500's Potential All-Time High and Market Inflection Points

Jim and Blake analyze the S&P 500's trajectory, with Jim arguing that the index's movement above 5391 indicates a continued upward trend towards a new all-time high. He discusses the potential for an intermediate high following this move, suggesting that markets are at a critical decision point. They also touch on treasury bonds, with Jim noting the importance of the 30-year yield staying below a certain channel. He advises caution, suggesting that if the 30-year yield falls below 3.99%, it might be time to sell, as this could indicate a temporary uptick in yields.

25:05

💵 Dollar Index's Critical Levels and Gold's Performance

The final paragraph focuses on the dollar index, with Jim emphasizing the importance of the 100.62 level, which if breached, could signal a significant decline in the dollar's value. He also discusses the potential for a short-term rally in the dollar before a larger drop. Regarding gold, Jim notes that despite the dollar's weakness, gold has not rallied to new highs as expected. He speculates that gold may face selling pressure if the dollar finds support and rallies towards 104. Jim concludes by highlighting the uncertainty and the importance of watching key levels for clues on market direction.

🚀 Anticipating a Market Curveball from Economic Reports

In the closing paragraph, Blake and Jim discuss the potential impact of an upcoming jobs report on market expectations. They suggest that a strong jobs report could disrupt current market sentiments that anticipate significant interest rate cuts by the Federal Reserve. Jim warns that such a report could strengthen the dollar and push treasury yields up, contrary to current market pricing. Blake thanks Jim for his guidance and invites viewers to engage with the content, while Jim emphasizes the importance of watching upcoming economic data closely.

Keywords

💡Dollar

The term 'dollar' in the context of the video refers to the United States currency, which is a central theme as the speakers discuss its potential decline in value. The dollar's performance is a critical economic indicator, and its depreciation is colloquially described as a 'dumpster fire sale' in the script, indicating a significant and rapid fall in value.

💡Macro Tides

Macro Tides is likely the name of the service or company that Mr. Jim Welsh represents. It is mentioned at the beginning of the script, suggesting that it specializes in macroeconomic analysis and forecasting, which is relevant to the discussion of the dollar, interest rates, and other economic factors.

💡Triangle pattern

In technical analysis, a 'triangle pattern' is a chart pattern that indicates a period of consolidation before a breakout in either direction. In the video, Jim Welsh discusses the dollar's potential movements based on this pattern, suggesting that a break below a certain level could lead to a further decline.

💡Basis point cut

A 'basis point' is one hundredth of a percentage point, and a 'basis point cut' refers to a reduction in interest rates by that amount. The script discusses the Federal Reserve's potential actions, with a focus on whether they will cut rates by 25 or 50 basis points, which is a significant decision impacting the economy and financial markets.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. In the script, it is mentioned as a concern, with discussions about its causes, including the narrative that it is due to 'greedy corporations' and not government spending.

💡GDP

Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. The script references GDP growth rates to discuss the health of the economy, with a comparison between the last quarter of 2020 and the first quarter of 2021 to challenge the narrative of a weak economy.

💡Unemployment rate

The 'unemployment rate' is the percentage of the labor force that is unemployed but actively seeking employment. In the video, the speakers discuss the implications of changes in the unemployment rate, suggesting that it may not accurately reflect the labor market's true state due to various factors.

💡Discretionary spending

Discretionary spending refers to expenditures that are not necessary for basic needs, such as travel or entertainment. The script mentions a bifurcated economy where the upper end of wage earners has been spending more on discretionary items, which is an indicator of economic health among certain segments of the population.

💡Treasury bonds

Treasury bonds are debt securities issued by the U.S. government to finance its spending. The script discusses the potential movement of treasury bond yields, which are closely watched by investors as they can influence interest rates, borrowing costs, and the direction of the economy.

💡Gold

Gold is often viewed as a safe-haven asset and a hedge against inflation and currency devaluation. The video script mentions gold's price action in response to the dollar's weakness, indicating that gold could be a significant investment in the current economic climate.

💡Oversold

In technical analysis, 'oversold' refers to a situation where an asset's price has fallen to a level that may be below its fundamental value, and it may be due for a price increase. The script discusses the concept of being 'oversold' in the context of the dollar, suggesting that despite the currency being oversold, it may continue to decline.

💡FOMC

The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve responsible for making monetary policy decisions. The script mentions FOMC members and their projections for the unemployment rate, indicating the importance of their decisions in shaping economic expectations.

💡Participation rate

The 'participation rate' is the percentage of working-age people in an economy who are employed or actively seeking employment. The script notes an increase in the participation rate, which is a positive sign for the labor market, despite the rise in the unemployment rate.

💡Non-farm payroll

Non-farm payroll is a measure of the number of jobs added or lost outside the agricultural sector. It is a key economic indicator that the script mentions as being very important for the Federal Reserve's decision-making process and for market expectations.

Highlights

Dollar expected to drop but not to the extent of a 'dumpster fire sale' as it's currently experiencing.

The dollar could bounce before dropping to the mid-90s, with a critical level at 100.61.

A break below 100.61 for the dollar would indicate a direct decline or much sooner drop below 95.

The current situation is a critical juncture for the dollar's future movement.

The upcoming jobs report in two weeks will be pivotal in determining the Fed's rate cut decision.

Political lying from both sides is causing a loss of trust and ability to discern truth in the population.

Economic narratives from politicians are often misleading, with GDP growth in 2020 and 2021 contradicting claims of a weak economy.

Inflation is not due to price gouging but rather policy decisions and economic conditions.

The S&P's reaction to the Jackson Hole speech historically shows significant market movement.

A large jobs revision indicates potential exaggeration in job creation numbers.

The participation rate in labor force surveys has been increasing, despite unemployment rate rise.

Discretionary spending shows signs of slowing, indicating potential economic softening.

S&P is nearing an all-time high, suggesting a continued market rally.

Treasury bond yields could potentially tick higher if the economy doesn't slow as expected.

The dollar index is at a critical level that could determine its short-term direction.

Gold prices are near their highs but have not surged as expected with dollar weakness.

Markets are at a crossroads with various indicators suggesting potential shifts in direction.

A strong jobs report could disrupt market expectations and impact the dollar and treasury yields.

Transcripts

hey Traders this is Blake marrow with

Trader Summit and it happens to be

Friday and I have Mr Jim Welsh from

macro Tides he's here and J Jim I I

gotta I gotta say and let me bring you

in I'm sorry didn't there we go I

brought you in here I have to

say you you said the dollar is going

down but you didn't say it was going to

be a dumpster fire sale I mean come on

the dollar is just getting smacked cash

here what's uh what's up with that well

you know the thought has been that the

dollar could have a bounce before it

dropped to the mid90s you know below

95 and the key level was I think it was

100.61 or something it's on the chart

I'll be able to read it um because my

assumption has been is that the dollar

was in a triangle yeah A B C D um would

be finished now a wave e would take it

towards 104 and then we drop below 95 so

that level of

100.61 which was the low of uh wave

b i is the make or break level for the

triangle and we talked about that last

week and so if you take that out that

opens the door for a direct decline or

much sooner decline below

95 uh the triangle is still alive as

long as you hold above that wave below

it implies a rally to 104 for wave e and

then you get the dump so we're at a

critical juncture well we we are and

we're gonna talk more about the

technicals and and half the charts in

front of us is going to be a lot easier

I'm sorry about that I just it is I know

you get you get so excited talking about

things and and I I gota say hey Jim hold

on hold on we're almost getting there

we're getting there but you know um it

it is really uh today Pal's uh Speech I

mean really confirms you know we're

going to get a cut just the question I

guess is and this is my takeaway is you

know we really have to watch the data uh

especially the jobs report this next um

in about two weeks because that's going

to determine whether it's going to be a

50 or a 25 did you pull the same thing

yeah I mean again I think their bias is

to stick with 25 when they met in July

you had a small number probably three

people who were in favor of cutting then

the majority wanted to wait and be

patient so I think that was the

consensus where it's like okay we're

willing to go in September not quite so

soon in July and I think their bias is

for 25 basis point cut if the jobs

number comes in much weaker than

expected and what we have seen um that

will raise the odds from 25 to 50 uh the

key point that I think people have well

we're gonna get into that in a little

bit with charts and stuff I'd rather not

jump the gun so to yeah let's let's do

I'm already jumping the gun once yeah

since you brought all these charts Jim

let's let's start with the first one and

and you're gonna have to do a little

explaining here yeah explaining as they

say Okay expain us what what are we

explaining all right one of the things

that I've been writing about in macro

ties um is and honest ly I am frightened

by what I see happening uh from a

political standpoint in our country and

so I'm going to tick off probably

everybody because I'm going to point a

finger both to the left and the right uh

and I'm going to read something which I

included in the August macro tides and I

think it's really worth people no matter

what your political bias may be is to

try to be objective and think about the

power of this statement

uh this constant lying is not aimed at

making people believe a lie but at

ensuring That No One Believes anything

anymore a people that can no longer

distinguish between truth and lies

cannot distinguish between right and

wrong and such a people deprived of the

power to think and judge is without

knowing and willing it completely

subjected to the rule of Lies with with

such a people you can do whatever you

want so when I look at the landscape I

see Lying by both sides you know Trump

this week said oh you know I'll drop oil

prices by 50% and he tossed in for good

measure that he's better looking than

kamla okay um I want to go back to this

is one of the themes that President

Biden has sounded for the last several

years and numerous

Democrats have pounded the table that

when we got into office the economy was

in terrible shape it was in the tank it

was awful right well let's look back and

see exactly how bad the economy was in

the fourth quarter of

2020 GDP was up

4.2% uh President Biden took office in

January of

2021 and in the first quarter of 2021

GDP was up

5.2% so the the whole narrative that the

economy was so weak we need needed then

to pass more than3 trillion dollar worth

of spending to pull it out of that tank

is completely unjustified and it goes a

little bit further Blake in terms of oh

the inflation that you're experiencing

is not because of Any spending we did

was because of greedy corporations and

the idea we're going to have price

controls on food and the thing I did a

tweet earlier this week is if you look

at the profit margins of uh grocery

stores it's less than 2% you compare

that to Microsoft at 35% Apple at 26%

and GM at 6.2 so the idea that inflation

was caused by price

gouging is a lie it's not a truth and it

was founded though on the idea that the

economy was in such horrible shape we

needed to do all this spending and the

reality is facing us right here all

right and so to me again my fear and why

I feel frightened is because I see both

political parties lying and now it's a

question of who can lie better to get

more votes in swing States it isn't

about policy it isn't about really

what's they're planning to do for the

country so um again I just would like

everybody whether you're lean left or

right to try to be more objective about

the lying that's taking place by both

candidates both parties and what does

that mean for our country so end of end

of Grant okay yes well let's talk let's

talk about today and know we're filming

on Friday uh August 23rd uh shortly

after pal speech what uh what are you

looking at here well this is just very

simply is going back to 2000 and looking

at okay in the week after a Jackson Hole

speech what has the S&P done and what we

can see is in 16 out of 24 years uh the

S&P has moved by more than 1% sometimes

to the downside a little bit more

frequently to the upside and obviously

we've already done that today all the

S&P was up over 1% right so the point is

is that there's always or consistently

there's a lot of expectation going into

Jackson Hole and the you know what the

FED Governor or chairman says matters so

that's all just a little historical

perspective okay well thanks for

bringing that up uh so move moving right

along um the next one you you want to

talk about the the huge jobs revision I

mean this was yeah this was on

everybody's radar this week and what did

you make of it well again you and I

spoke for you know over a few months

that the establishment survey was

exaggerating the number of job creation

especially when you compared it to the

household survey and so forth so what

they did is they said you know from

March of 23 to March of 24 we were off

by 818 th000 the only time it's been a

bigger Miss was in 2009 which obviously

was a pretty bad year now again what

complicates this so you know some people

like oh my God you know the the labor

market is is really in bad shape no no

no again we have to keep in mind that

the unemployment rate has gone up in

part because more people are entering uh

the the labor force and some of those

people are not native born Americans and

so the way the labor department

calculates these numbers is that

potentially again the unemployment rate

in part has gone up because of U this

influx of supply

some of it um is under the books so to

speak and so what that implies is that

we can you know I think we talked a

month or two ago about the data

collection process and the participation

rate on uh various surveys that the

government takes and it's gone from like

you know 60 65% in some of these surveys

down to 30 well you know that is going

to obviously have an impact in terms of

the quality of the output and so again

my point is is the economy softening yes

is the labor market easing yes I think

this number probably overstates it a

little bit and you know as such I I just

think one does you shouldn't overreact

to it and I doubt the FED members will

overreact to it okay all right good

point um you know I'm glad you brought

that up but it's still going to be

non-farm payroll is going to be very

important this uh in two weeks right oh

absolutely absolutely and but again also

things like participation rate which you

know most people never pay any attention

to but have been really important over

the last six months there's been a nice

increase in the participation rate well

what is that that means more people want

to get involved in the labor market and

that's happened while the unemployment

rate has gone up so that is contributing

and has contributed to the increase in

the unemployment rate which is why I

think Paul and other fomc members have

not been hitting if you will the panic

button remember they projected I think

four or 4.1% on the unemployment rate at

the end of this year well last month it

was 4.3 but when they look underneath

the surface they can see that all right

there's extenuating circumstances which

suggest that that number is overstating

the true level of unemployment the other

thing I'll mentioned uh warn notices

which are basically companies that are

going to plan to lay off somebody Blake

uh have to give a warn notice it has to

be 60 days in

advance um those are still very low so

what we're seeing is companies have cut

back on hiring which is why job growth

has slowed but we haven't seen the next

phase which is letting people go and and

until that happens you know the economy

is going to continue to kind of chug

along I think it's coming but we're just

not there yet all right well tell us

what's up going on with discretionary

spending because these charts don't look

like they're bullish we have a

bifurcated economy the bottom 40% of

wage earners have burn through their

savings they're they are having trouble

going to the grocery store and so forth

uh paying rent and so on at the same

time you have those at the upper end

that have been having a great time in

terms of traveling and what this shows

is a airline travel uh Cruise Lines

accommodations and there has been a

noticeable slowing so this is just a

hint that woo wait maybe some of the

people at the top who have the

wherewithal to spend are starting to

scale back a little bit it's just one of

those an I would call it anecdotal

pieces of evidence yeah that you know

again around the edges things are

softening but obviously um you know as I

noted last week when we talked about the

retail sales number oh was up

1% yeah but the reason it was up because

Car

Sales uh added 6% and the reason that

happened is because in July there was a

uh you know a Cyber attack on all the

dealerships in the United States and

they really couldn't conduct business so

again we're at in an inflection point

one has to dig deeper when you look at

these numbers Blake um because at

inflection points you get if you were

cross currence and so this is just one

more sign to me that all right the upper

end may be starting to pull back a

little bit all right well tell us what

that means regarding the markets because

S&P yeah you would you'd argued that we

could indeed hit alltime highs this was

two weeks ago and we're less than a

percent away maybe yeah we got well we

got within I think 27 points yesterday

yeah and probably 30 points today um now

the pattern once the S&P got above

5391 to me the chart then changed in

sense of okay we're not going down for a

retest or anything like that we're going

up toward a new all-time high and you

know what you can see is from that low

at

5119 um to me that was wave four from

the low back in April we're in wave five

um it implies a move um wave one of five

was about 200 points if we had 200

points on top of

5561 you're talking

5760 um a and anyway so to me yes I just

think the you know that the chat chart

pattern has changed I thought two three

weeks ago when people were like oh my

God the unemployment rate went up lot

and that was a total misinterpretation

of just how weak you know like oh my God

the S rule says we're in a recession my

take was no that's not the reality and

um I think as the data has come in to

kind of comfort people this is why we've

seen a pretty dramatic reaction um so I

think we're going well we're going to

get to a new high uh high probability

given that we're so close um but thank

you for noting that you know we talked

about this a couple weeks ago um now

once we finish this move up Blake um

potentially that will mark an

intermediate High uh because it'll be

five up and you know we'll see um well

you

got you got to sucker the last amount of

people in

right yeah yeah you know and what's

interesting to me is a lot of the charts

of various markets are at a decision

point you know it's like okay we're

coming to the fork of the road which way

are they're going so the S&P make a new

all-time high has the potential of

completing uh the rally that we've seen

at least from April and maybe even

further back um and you know when we

look at treasury

bonds they're coming I think to a fork

in a row and I think that's the next

chart I think well the next chart would

be the 30 year yes it is wow what do you

know so what we've talked about is

treasury bond yields dropped below that

channel that they've been been in after

topping in April they got below that and

so to me staying below that channel is

important um without getting too crazy

here uh there is a chance that treasury

bonds are if the economy doesn't slow

soon enough if you will then I think the

treasury yields and the chart for the

ten years is pretty much identical get

back in that channel that opens the door

potentially Blake to treasure yields

ticking higher and then tagging or

getting darn close to the black channel

line so it doesn't negate the long-term

Outlook that okay I think yields are

going down but what it implies is that

we're going to have another one of these

upward adjustment in

yields um and um you know so my take

would be is if the 30-year gets below

3.99 you know what I've recommended in

my letter is that TLT getting above the

high it reached a week or two ago I

think it was

9993 it's time to do some selling and I

would say that if the 30-year you know

be the same thing in a sense gets below

that $

3999 time to let up a little bit because

I I I just think that there's the risk

here that we're going to see treasury

yields uptick for a little window of

time um again people are

so certain that the FED is going to be

aggressive do you know that the Market's

been pricing in and it's probably gone

up since yesterday 100 basis points of

cuts before the end of this year there's

only three meetings right so that means

one of the meetings has to include a 50

basis point height and then they're

looking for I think five or six basis

point or five cuts next year yep uh I

just think that that

doesn't

apply uh in unless the econom is weaker

and we're not there yet I think it is

going to weaken okay so um that's where

we are in Treasure we talked a little

bit about the dollar Index here's the

chart as I said the

100.62 really important it holds that

because if it takes that out then the

idea of a triangle that pattern breaks

down and instead you had from the high

in October of 22 in the dollar it it

dropped from

11478 down to 1015 so it dropped 13

Points

Plus what that this if it takes out that

100.62 what that says is ah you had this

big decline you had a rally to

10734 and now you're in the process of

dropping over 13 points from 107 and

that gets you to

9361 so that again we're at a Crossroads

if the dollar digs in a teal it's

oversold sentiment is obviously quite

negative netive at this point in time

and you know and I've talked about this

for several months I thought the dollar

would weaken as people realize that the

you know the FED is going to be cutting

rates at some point in time and if we

get to the point where the economy slows

even more materially that would be even

worse for the dollar so short term I

thought last week there was still a shot

for a rally up towards 104 for wave e

and then we'd get the big dump so we're

at across roads um in the dollar Index

well it is been it's been a hell of a

hell of a decline the last couple of

weeks but you know a lot of people will

say oh it's oversold but you guys can't

forget oversold can be more oversold

overbought can be more overbought so um

you know I I always try to remind people

of that because I've seen too many moves

in my career that they look overbought

but they continue to look overbought or

oversold as as as price continues so

yeah well go just look at the dollar

chart Blake real quick you can see where

I over to left one two three you see

that low at number three well the RSI

was oversold at the bottom of three okay

you got to bounce then I went from 104

it dropped Four Points yeah you know so

gee Oh I thought it was oversold yeah

but then it dropped you know beyond that

wave three low which is typical and

that's why the idea of using momentum is

very helpful but that's why I think you

need price filter if you will and one of

the things I've talked about is the the

five versus 13 exponential moving

averages because what you can see is uh

you can get things

oversold and like we saw back in

December of last year I think that is um

you know that 513 if you went in because

it was oversold you got to bounce and

then you can see the quick reversal the

five and 13 or the five Crossing below

the 13 would have been a nice signal to

say you know what I'm a little early um

so you know you can see right now the

red is the five the green is the 13

moving average um they're not even close

to being Crossing in a positive sense so

okay so U gold is your last chart and

gold has been you know frustratingly

pegged near its Highs but you would

think that with the dollar weakness that

uh gold would have rallied a new Highs

but it it it's stall it it did it got up

to 2529 which obviously was a new high

but it's kind of St as you noted this

red trend line I I I'm assuming that the

probability is it's going to pop above

that

line and um does it make it to 2600 I

don't know again markets are at a

juncture if the dollar starts to dig in

its heels and the triangle is is if you

will uh

reconfirmed um and get that bounce

towards 104 it's hard to believe that

gold isn't going to get hit with some

selling so to me is like okay we're at

this window where gold needs to get

going here really quick and if the

dollar digs in then the gold is going to

I think be set up for another decent Siz

pullback uh if the dollar indeed rallies

to 104 conversely you take out that

triangle L you know that we talked about

just now on the dollar that should be a

green

for gold to move easily to

2300 so you know I again markets I think

are at uh

Crossroads and you know uh I have no

idea with any degree of

certainty how it's going to play out

other than knowing what levels to pay

attention to as providing clues in terms

of how this whole piece will come

together all right Jim well then you're

no help this

week just kidding you know you know what

I I've heard my wife say that you know

you you've you've been a great guide uh

through especially through these summer

months it's been so wild in the markets

um and and I want to thank you for for

taking us every day and if you guys do

appreciate these conversations that we

have with Jim make sure you're jumping

in the comments below uh telling them

how how much you appreciate him uh give

him a thumbs up and subscribe to the

channel on and also uh contact Jim at

macro Tides what's the email Jim Jim

Welsh uh macro Gmail or macro.com one

thing I'll point out real quick here the

markets are more vulnerable I think

Blake if we get a healthy jobs

report and I think there's a really

decent probability that the unemployment

rate will tick down from

43 to

42 so again in terms of all all the

expectations oh the fed's going to be

cutting 100 basis points this year what

could really upset that apple cart would

be a report jobs report that's you know

back to 150 or whatever and the

unemployment rate ticks down all of a

sudden can the dollar make 104 in that

environment yes can treasury yields tick

up in that environment absolutely you

know so um that J report has the pot

potential of providing a real curveball

for markets given where psychology is

right now well the good news is we'll

have another meeting between now and

then and so so make sure you catch us

here next week on on on uh on Trader

Summit with Jim and Jim thank you so

much for guiding us each and every day I

do appreciate you or each and every week

excuse me and I do appreciate you I know

Folks at home do as well I appreciate

you Blake thank you so much all right

you guys have a great one and we'll talk

to you next week Jim you got got it hey

Traders Blake Maro here thanks for

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