Monthly Asset Class Report

Another Sucker’s Rally? Or has the trend truly changed? Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] Monthly Asset Class Report - Everything is up this month. - Stocks, bonds, commodities, the dollar, and crypto all rallied. - But is it a trend change or just another sucker’s rally? Recommended Link [Biden Just TORPEDOED the U.S. Dollar]( [Click here for more...]( This is the scenario we’ve been fearing… Instead of President Trump… We’ve got “Sleepy Joe” Biden behind the wheel. And now, a [sinister move that Biden just made]( could TORPEDO the U.S. dollar once and for all. In fact, thanks to this one move… Your dollars could be made worthless, or even CONFISCATED. Do NOT get caught off guard. [Click Here Now]( Sean Ring Editor, Rude Awakening Happy Monday! I hope you had a wonderful, restful weekend. My goodness, did I have to eat some humble pie this month! Literally, everything was up in July, and that’s no good for a bear like me. In my defense, this may be - and probably is - a big sucker’s rally. But still, I prefer reporting how well I did rather than how bad I did. Stocks were up. Big caps, tech stocks, and small caps alike. Bonds were up. Commodities were up, though more muted. And crypto was up. What a mess - or is it something I should celebrate? Here’s my issue: combining the charts and the economic data, I’m just not seeing the bull case. Sure, AMZN’s earnings were up. But we’re in a manufacturing and services recession. And that’s no good for stocks. Or so I think. But instead of making more excuses, let’s get into the charts. S&P 500 Ok, we’ve pretty much recovered June’s losses, but that’s all. Not that it’s insignificant. We’re now above the 50-day moving average, and that average is turning north itself. However, we’ve got to be careful. We’re still well below the 200-day moving average, a prior peak of 4,500, and the all-time high of 4,800. My gut tells me this rally may turn soon, as the underlying macro numbers are crap. Nasdaq Composite Last month I wrote to avoid the Nasdaq, which turned out to be wrong. I’m a tech bear, and I don’t think this rally will last much longer. Though we were up 1,300 points last month, we’re still in deep bear market territory. Russell 2000 (Small caps) Even the small caps had a great month, up nearly $20. But I’m still looking at this chart and thinking, “I can’t get excited yet.” Maybe I’m being too timid. But this may be another furious sucker’s rally. The US 10-Year Yield The Fed boosted rates by 75 bps this month for the second month in a row. The problem isn’t the market. The problem is the FOMC’s dot plot reveals most FOMC members think they’ll have to start cutting again. That’s why the 10-year hasn’t rallied above 3% for a sustained period. Yet. Dollar Index From two months ago: 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 broke through 104 and headed straight up to 109 before retreating. I still think the USD has more to go - and I stick to my 120 call. But Powell’s moves over the next few months will determine whether I’m right. USG Bonds TLT continued to rally to 117.43, but I’m still looking for more downside. We seem to have overhead supply at 119. Still, we’re above the 50-day moving average for now, so that’s something. Investment Grade Bonds We clearly bounced off my 107 level and proceeded to make the 114s. Again, this could be the beginning of the end, as we need to break through 115. My guess is that we’ll head back down to 107 shortly. High Yield Bonds Another incorrect call here. High yield bounced and is now at the 78 handle. I’m not convinced we continue to rally here, though. We’re still in an ugly downtrend. Real Estate Yet another one that caught me flat-footed. This may have rally legs to it. But we must get above 100 first. Then, we’ll see the 110 levels before challenging the all-time high. Still, watch the downside here. It’s still a scary chart. Recommended Link [Trump’s Secret Legacy]( [Click here for more...]( In late July, the Trump administration oversaw a RADICAL change to the tech world… one that could unleash a huge wave of disruption… prosperity… and wealth creation in the near future. Chances are, you haven’t heard about it until today. But according to one of America’s most respected tech forecasters, it’s set to create small fortunes right here in this country. He recently went on camera to explain why... [See The Footage Here]( Base Metals: Copper Dr. Copper made a nice recovery in the last half of the month. That was after a staggering selloff to end last month and start July. This looks like a dead cat bounce to me. Precious Metals: Gold Hey! Gold finally rallied! That’s about it. However, there is plenty of upside to $1,880 to get excited about. Long here looks like a good idea. Precious Metals: Silver Yawny McYawnface had a nice little rally to cap off the month. Above $22.50, we can start getting excited. To me, this looks again like a dead cat bounce. Cryptos: Bitcoin Ok, we didn’t hit $10,000. There was a rally in crypto overall, and BTC benefited nicely. Will it last? My guess is no. Cryptos: Ether I completely and utterly got this wrong, as well. I simply didn’t see a 63% rally coming at all. Kudos to those who did. But again: context. Between here and $3,600, anything can happen. So though I love ETH’s use case, I’m not inclined to buy here. Trad Asset Class Summary Though we had another 75-bp hike this July, the SPX recovered most of last month’s losses. Bonds rallied as well, up 3.53%. The USD was up nearly 1% against the basket of world currencies. Commodities were pancake-flat this month, barely registering on the plus side. Crypto Class Summary Yes, these are positive numbers for the first time in months. Ethereum, my coin of choice, had a rocking month, up over 62.78%. But that’s still nearly 75% off its peak of $4,800. Monero, the most secretive of coins, recovered as well. But it’s also still down nearly 75% from its peak. Currently, at over $23,000, Bitcoin has miles to go before it recovers its value. So, a good month all in all, but lots of road to make up. Wrap Up I’m sorry my predictive powers took July off. It was a crap performance for me, and the charts don’t lie. But maybe they’re telling little fibs for now. And that our reckoning is coming just a bit further down the road. Before I go, here’s the meme of the month, courtesy of good friend and Rude reader, Moose of Ohio: Have a wonderful week ahead! 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. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [unsubscribe](. Please read our [Privacy Statement.]( If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting us.]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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