Monthly Asset Class Report: July 20222

Commodities finally had their reckoning, crypto was crushed, and stocks were also down. Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] Monthly Asset Class Report - Commodities finally got their smack, down over 9% this month. - Both copper and silver tell us the economy is slowing down. - Stocks, bonds, and real estate were also down. The USD is up, but that’s not great news. Recommended Link [FDR did it first; Biden plans much worse…]( [Click here for more...]( On April 5, 1933, President Roosevelt signed Executive Order 6102 — changing the U.S. dollar forever… On March 9, 2022, President Biden signed Executive Order 14067 — which could change the dollar again, into something much worse… See the potentially sinister outcome of Biden’s new executive order. [Click Here To Learn More]( Sean Ring Editor, Rude Awakening Happy Friday! I rarely get to say that while handing you your Monthly Asset Class Report. But I must warn you: it’s ugly reading this month. And what’s worse, the charts foreshadow worse to come. Commodities finally ended their winning streak, down 9% for the month. What’s worrisome is that both copper and silver were down and down hard. Both have myriad industrial uses. If their prices are down, that means industry isn’t buying them. And if industry isn’t buying them, they’re not making anything with them. And if they’re not making anything with them, retail can’t sell anything. And that’s a slowdown, or in today’s parlance, a recession. Moving from the metals, we see stocks struggling again, with the SPX and Nazzie down roughly 8% this month. Bonds did poorly as well, fulfilling a few of my price predictions. But crypto is uglier than a drunk carpenter’s thumb. One of the Rude’s Four Pillars For Financial Freedom is to “dip your toe into crypto.” Right now, I’d limit that toe-dipping to reading up and learning about crypto. BTC’s and ETH’s charts aren’t just bearish. They’re broken. With that said, let’s get into the charts. S&P 500 What an ugly month for the broad market! The SPX was down 7.7%, which capped the worst first half of a year since 1970. Geez, even I wasn’t born yet! Our bear market rallies aren’t lasting as long as they should, which isn’t good. My call that we’ll head down to [3,213 or thereabouts]( remains in force. Nasdaq Composite The Nazzie was down 8.05% this month, thanks to a 4.99% drop in the last week of the month. This is a godawful chart. Tech - and as you’ll see, crypto - are amid ugly bear markets with terrible sentiment to match. Avoid. Russell 2000 (Small caps) From three months ago: The Russell has held steady to its great credit, but I stick to my $160 call. We’re at $169 now, and there’s no reason to stop here. Beyond $160, I’d start looking at the $140-145 zone. The US 10-Year Yield The Fed boosted rates by 75 bps this month. Powell and Co are still expected to go again with a 75 bps hike in July. Yet, the 10-year yield hasn’t moved much above three percent. And when it has, it’s come right back down. That’s because the market believes Powell will cower and not do a Volcker. It frightens me to agree with them, but I can’t see the FOMC going the entire distance to defeat inflation. Dollar Index From last month: My guess is the USD will hover between 98 and 104 until Powell convinces the market he’s going to squash the inflation threat. Fed Board member Waller wants hikes until rates hit at least 2.5%, but is happy to go higher. If the rest of the Fed Board feels that way, the USD will retest 105 and breakthrough. We’re at 104.46 after bouncing off that last Fibonacci level of 103.75. I’m on a call every Monday with a bunch of astute investors. We agree that dollar strengthening, and not dollar weakening, will destroy the financial system. Crazy call: I think we’re hitting 120 in the dollar index. And that spells enormous trouble both at home and abroad. USG Bonds We had a nice little rally in the TLT to end the month. I still don’t think it’s enough. $105 remains my next target level. Investment Grade Bonds We got to 107, which is a mere buck above my next level. But then we had a nice rally to end the month. My guess is more selling to start July with the 107 level very doable. High Yield Bonds That big up candle to close out May threw me for a loop. But junk got crushed in June, and now we’re at the 50% level on the Fibonacci chart. Do we bounce, or do we fall to 70ish? I’d bet on the latter. Real Estate From last month: I’m starting to think we’re at the end of a distribution area, rather than just being rangebound with false breakouts. That is, I think a whole bunch of investors got out of the ETF in the past few months. In fact, this chart looks eerily similar to the SPX chart above. I’m puzzled, as real estate usually likes inflation. But the chart doesn’t lie. It’s bearish. Yup. VNQ was down nearly 10% this month because most Americans can’t afford houses anymore. The inflation play is officially off. Recommended Link [Free Crypto “Internet Hack” Demonstrated Live on Camera]( [Click here for more...]( This viral video is spreading across the internet. Crypto millionaire James Altucher demonstrates a [“free crypto hack”]( live on camera. And you can generate up to $167 of FREE crypto without risking a single dime of your own money. I’ve checked it out and it’s completely legitimate. [Click Here To Learn How To Claim Your Free Crypto]( Base Metals: Copper From last month: Again, we were sitting rangebound in copper for ages. Now I’m beginning to think stupid economic policy is finally weighing on this leading indicator. We’re right about at a death cross (when the 50-day moving average cross below the 200-day). This could be bearish for the economy. I should’ve been bolder. Dr. Copper got crushed. He’s telling us economic production is slowing down. Really not good. Precious Metals: Gold As Tom Jones once sang, “Why, why, why, Delilah?” Gold’s been terrible this year. It annoys me to no end. Precious Metals: Silver Yawny McYawnface is down this month. Silver has many industrial uses. So this move corroborates Dr. Copper’s story for me. The economy is in deep trouble. Cryptos: Bitcoin This chart isn’t bearish. It’s broken. See you at $10,000. Cryptos: Ether For this mess of a coin, I’ll see you at $400. Trad Asset Class Summary Commodities, long the winner in the asset class derby, took a massive hit. Seventy-five basis point hikes will do that to you. Stocks also took a drubbing, with the SPX down 7.70% for the month. Bonds were pretty flat, just down -0.53%. The USD gained again, much to the chagrin of foreign USD debt issuers, up nearly 2%. Crypto Class Summary Monero finally had its reckoning in the “sell what you can, not what you want” crypto sell-off Olympics. ETH, my favorite coin, had another harrowing month. The granddaddy of them all, BTC, was down over a third. The crypto world is as ugly as it gets… but may still get uglier. Wrap Up I’m sorry I couldn’t bring you cheerier news. But we seem to be unwinding the most significant period of excess credit expansion in history. And that unwind is taking everything down with it, except the USD. That may be God’s final joke for this era. It won’t be a hyperinflationary Gideon Gono/Zimbabwe-like experience that brings the world financial system to its knees. It’ll be the almighty dollar! The Big Man Upstairs has some sense of humor, aye? And here’s the meme of the month, courtesy of the [Babylon Bee]( Have a wonderful weekend!. All the best, Sean Ring Editor, Rude Awakening [Whitelist Us]( | [Archive]( | [Privacy Policy]( | [Unsubscribe]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. 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