The Big Bounceback

April showers brought out May’s flowers. June 03, 2024 [WEBSITE]( | [UNSUBSCRIBE]( The Big Bounceback SEAN RING May 2024 Monthly Asset Class Report In my mind's eye, Jerome Powell will cut rates at this June meeting. Cutting rates so far from the election makes it look like he's not doing it for political purposes. The economic data has been slow enough that he's got cover. Besides, all his fed Governors want to cut as well. I don't have data to back up this assertion; it's just a hunch from many years of being a political spectator. My friend and erstwhile colleague Jim Rickards is right that the Fed doesn't matter as much as it used to. However, Wall Street will use the Fed as the biggest excuse to buy stock. I still love gold and silver and feel they will rally hard over the coming months. Although I don’t include them in this monthly class report, I’m long multiple gold and silver miners. Both the SPX and the Nasdaq are powering along. That the Russell is doing well confirms the stock market trend for us. I’m still not a fan of bonds in an inflationary environment, but crypto did very well last month. And base metals also performed well. With that said, let’s get to the charts. S&P 500 From three months ago: Looking at this chart, there’s no reason in the world to be short. We may take a breather in the coming weeks, but I’d still participate in this rally. The long-term target remains 6,000. After a much-needed rest last month, the broad market came roaring back. Not only did we pop back above the 50-day moving average, but we retested it last week and it bounced up off it. I remain bullish. Nasdaq Composite Although we had a crappy month-end, the Nazzie is still soaring. We simply cannot call time on this rally yet. Russell 2000 (Small caps) The Russell wants nothing to do with its 50-day moving average. It seems to like staying above it. It’s silly to be bearish here. The US 10-Year Yield I may be terribly off on this, but I think Powell will cut in June. Here’s why: it’s far enough from Election Day to make a cut look apolitical. The economic data hasn’t been great lately. And his fellow FOMC members really want to cut. Most importantly, Powell doesn’t want to work for Donald Trump again. In any event, Trump will fire Powell at the first opportunity. How does this affect the 10-year yield? In theory, if the Fed cuts, the 10-year yield should follow it down. But it may not, if we have the rapid curve steepening because the bond market thinks the Fed has lost control. Dollar Index We broke back down after I thought we’d be heading back to 115. Now, I’m not sure. We may get a temporary strengthening when the ECB and BOE cut rates, but right now, it looks like the trend is sideways. USG Bonds We bounced back to 90, but as the Fed starts to unleash another round of cuts, we should be heading back down. Investment Grade Bonds We had a rally last month, but I think this is short-lived. There’s still too much inflation in the system. I can see a retest of 104. High Yield Bonds [Rickards: Trump’s “Project Independence” Will Destroy Biden]( At a private meeting with President Trump’s Chief Strategist… Former CIA and Pentagon insider Jim Rickards was given a special 900-page document. Buried on page 365 of this document is the KEY to what he calls Trump’s “Project Independence”… And it could mean the END for Biden and the Dems. [Click here to discover the shocking truth for yourself.]( [Click Here To Learn More]( Junk keeps moving up slowly. No reason to short this here, yet. Real Estate Another good month, but I think real estate is going to tank soon. Energy: West Texas Intermediate (Oil) Oil is down another five bucks or so. It’s amazing that with this constant stream of inflation, oil is trading so poorly. Next stop: $70, unless the Fed starts cutting prematurely. Base Metals: Copper From last month: We blasted through my 4.30 call to 4.56. But this rally was too much, too fast, and I can see us heading back to 4.30 before taking off again. Precious Metals: Gold ***NEW MONTHLY RECORD CLOSE OF $2,345.80.*** From last month: $2,609 is our new target, but it may take a few months to get there. The yellow metal’s price detail shows a nice consolidation between 2300 and 2450. Precious Metals: Silver From two months ago: Up $2 from last month. When silver awakens, watch out! Above $26, and it’ll start to chase, and then surpass, Gold’s performance. GIDDYUP! We powered past $32 temporarily, and then Mr. Slammy came in to hammer it. But we still closed above $30 for the first time in about a dozen years. Still think we’ll hit $50. Cryptos: Bitcoin We rebounded back to $68,000, but we could head sideways a long way before BTC starts its ascent again. Cryptos: Ether ETH rebounded bigly after it looked like the SEC was ready to approve ETFs for them, as well. Again, this chart, like Bitcoin’s, could move sideways to consolidate before beginning another ascent. Trad Asset Class Summary The dollar won in April, which meant everyone else was down. In May, we had the reverse. The USD was down about a percent, so everything else rallied. The broad market led the way, up a chunky 5%. Commodities followed with a 3.10% return and the long bond was up 1.26%. Crypto Class Summary The April showers genuinely brought May flowers, as everything crypto was celebrated. Ether led the way with a 26.6% return, followed by Dogecoin at 22.14%, Monero at 19.73%, Bitcoin at 15.79%, Litecoin at 3.85%, and Ripple at a nearly flat 0.04%. Wrap Up Buy stocks, commodities, and crypto. I imagine this trend will continue in the medium term, at least. We’re just getting started on the commodities rally, that’s for sure. But even though the stock rally is a bit long in the tooth, there’s no reason to sell them now. Finally, let’s take a moment, courtesy of the Twitterverse: Have a wonderful week! All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Biden Brought a Boomerang to a Bar Brawl SEAN RING In Robin Hood: Prince of Thieves, Alan Rickman’s Sheriff of Nottingham can’t understand why raising the bounty on Robin Hood’s head won’t increase the likelihood of his capture. Sheriff of Nottingham: Wait a minute. Robin Hood steals money from my pocket, forcing me to hurt the public, and they love him for it? [Scribe nods.] Sheriff of Nottingham: That's it then. Cancel the kitchen scraps for lepers and orphans, no more merciful beheadings, and call off Christmas! When he’s lucid enough, I imagine Joke Biden feels the same about Donald Trump. Let’s face it: Biden and his Democrat followers have thrown everything at Trump in his home city to get a guilty verdict. And now, they almost wish they hadn’t. Regrettably for them, the metaphorical weapon they hurled at him was a colossal boomerang, a symbol of their own misjudgment and unintended consequences. A guilty verdict looks like it’ll help Trump, not hurt him. Rabobank’s Michael Every wrote this (courtesy of [Zero Hedge]( We can also expect imminent market headlines from the Trump trial in New York, where the jury is still out. In every trial, there are always two opinions: the prosecution and the defense. In this trial, there are three: anti-Trump, pro-Trump, and anti-Trump, but concerned about the rule of law. Alan Dershowitz, a Democrat, has been withering in his criticism of how this trial has been prosecuted. Legal expert Jonathan Turley notes it “has seemed otherworldly, a vaguely familiar proceeding where common elements of a trial seem to have been flipped,” listing the numerous ways normal practice has not been followed - which those pro-Trump naturally allege have occurred for nefarious political purposes. Given how the judge --‘The Merchant of Vengeance’-- instructed the jury, experts think the most likely outcomes are a hung jury or a conviction. If it’s the former, Trump will gain huge publicity, and cry he was wronged by Democrat ‘lawfare’; and if he’s convicted, that is arguably even more the case (even if the latter will prompt a rapid appeal, potentially all the way up to the Supreme Court, which many observers think will then see the verdict overturned). To presume, as White House strategists must do(?) that being able to call Trump a “convicted felon” on TV will necessarily dent his electoral prospects rather than boost them may be to totally misread the current situation, as in 2016. Why is this the case? After all, aren’t Americans opposed to electing a man who’s been put in The Clink? It seems not, and here are a few reasons why. Base Mobilization Trump's core supporters often view him as a champion against the Deep State. When Trump is seen as under attack, it reinforces the belief that he’s a disruptive force challenging the establishment. This persecution invigorates his supporters, increasing activism, voter turnout, and engagement. The trial narratives of being unfairly targeted by political opponents create a rally-around-the-flag effect, where his supporters feel more united and committed to defending him. [[Claim Your $1 Copy Today] Jim Rickards Endorses New Book From Top Hedge Fund Titan!]( [Click Here Now To Claim Your Special $1 Book Offer]( Media Attention Media coverage is crucial in politics, and the extensive reporting on Trump’s legal battles keeps him in the public eye. This constant coverage helps maintain his relevance in the political landscape. Even negative publicity benefits him by keeping him at the center of political discourse. The trial inadvertently ensured his name remains prominent, which is advantageous in crowded primary fields where name recognition is a critical factor. In fact, he had no real primary rival. Even Nikki Haley said she’ll vote for Trump. The adage "there's no such thing as bad publicity" often holds in politics, and Trump has historically been a master at using media attention to his advantage. Martyrdom Effect Many voters are drawn to narratives of struggle and victimization, especially when going without because of inflation. Trump's portrayal as a martyr fighting against an unjust system resonates deeply with many voters, especially those who feel the pinch of inflation. This effect is particularly potent among voters who are disillusioned or disenfranchised by the current political and economic system, fostering a sense of empathy and understanding. They see Trump as someone willing to take on powerful interests on their behalf, and his legal troubles are perceived as a testament to his commitment to challenging the establishment. This narrative has swayed undecided voters who resonate with the idea of fighting back against perceived injustices. Fundraising and Support Trump's campaign is strategically leveraging the trial to solicit donations, framing the legal issues as attacks not just on Trump, but on his supporters and their values. This strategic approach empowers his supporters, making them feel crucial in combating political persecution. This has led to significant financial contributions from small donors who are motivated by the belief that their support is crucial in combating political persecution. The urgency of the trial has led to more frequent and significant donations, bolstering campaign activities and outreach efforts. Polarization In a polarized political environment, energizing the base is more crucial than appealing to the middle. Trump’s legal troubles deepen the existing divides, reinforcing the us-versus-them mentality. This polarization ensures his supporters, who have shown remarkable resilience, remain fiercely loyal and motivated to turn out in large numbers. While this alienates some moderate and independent voters, the strategy is to secure a solid and highly motivated base to outvote a fragmented opposition. Polarization also discourages defections within his party, as Republican voters may rally around Trump to avoid perceived external threats. Distrust of Institutions There is a growing distrust of institutions such as the media, judiciary, and government among a significant portion of the electorate. By positioning himself as an opponent of these institutions, Trump taps into the sentiments of voters who think these entities are corrupt or biased. This distrust is particularly prevalent among populist, anti-establishment, and blue collar segments of the population. Trump's claim that he’s being unfairly targeted by these institutions aligns with the views of voters who believe that the system is rigged against them, further solidifying their support for him as a candidate who represents their grievances. Wrap Up These dynamics collectively create a scenario where Trump’s legal troubles, rather than weakening his political position, strengthen his appeal to certain voter segments. This is enhancing his prospects in the upcoming presidential race. Biden’s boomerang was a poor weapon of choice. Have a great weekend! All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. 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 [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. 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