Market volatility, gold and copper, bonds: Trading Takeaways

The Dow Jones Industrial Average (^DJI) ends the day and the trading week in the green, red-hot as it blazes a trail in its eight-day winning streak.

As the market recovers from a downbeat April, Yahoo Finance Senior Markets Reporter Jared Blikre reviews the biggest patterns emerging in May, including market volatility for equities, the push in metal commodities, and the fortitude of the bond market.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Luke Carberry Mogan.

Video Transcript

In here with some of these trading takeaways is Jared Glicker.

Jared.

Yes, thank you.

I thought we'd focus on the People's Index here.

Let's go to the Wi Fi Interactive where I'm gonna show a year to date chart and I'll put some candlesticks on.

So you can see the eight days here.

And that is also the number of trading days that we've had in May.

So every single day has been green for the dow, this is a record high right there and we are now less than 1% away.

Probably a cinch that will get there.

But the question is, can we get meaningfully beyond that when we were at these lows a couple of weeks ago?

I said there's going to be more seasonal weakness potentially into June, but we're due for a bounce.

We got the bounce.

So what's the next catalyst?

I got to think it's going to be CP IC P I probably makes, makes or breaks next week.

And probably the fate of this rally, whether it continues on or whether it reverses probably in its hands too.

And I know you're also taking a look at VX.

Yes.

The V of the VV of the VICS.

I do like to monitor a few different things here.

So we talk about the VX, which is the Fear Index, but we also have the vix of the VIC and the point of volatility.

And I'll show you both here on the Wi Fi Interactive.

First.

Here is the VIX here's year to date and you can see we're at basically the lows of the year.

And now here is the v of the vs, we are at multi year lows.

I'll put a five year chart on here.

This is just to say that complacency is very high right now.

It doesn't mean that we're going to necessarily see a spike, which would mean that stocks are selling off rather aggressively.

But nevertheless, we have to be mindful.

You want to buy protection when it's cheap, which is right now when we're at all time highs, that's the time to be thinking about protection.

Um The other point I wanted to make was about futures.

And uh if we can go to the Wi Fi, oh, we're already on the Wi Fi Interactive here.

Uh This is what's happened today in futures.

I wanna check out this week.

Uh Copper has just been on fire, so has gold, so has silver and I'm actually gonna skip right to the miners here.

This is a five day price action in here.

We have individual miners.

We also have some of the underlying ETF, so cer copper is an ETF that invests in copper.

So it's kind of like USA or US O which is oil for oil.

We also have GLD.

But the miners of these things are facing a multiple.

So they are higher beta.

Here's CB X 2.8%.

That's an ETF of miners.

That's basically almost double of what the underlying copper is doing.

GDX.

I'm gonna put this chart up.

That's a 5% this week.

Check out the year to date.

Gold has been on a nice run here and you can see over the last three months, GDX up 30%.

So these are, if you look at a long term chart of some of these miners very, very much a mean reverting asset and that's kind of because commodities are themselves, this is not something you buy and hold for 10 years, but you can use it to trade in and out of positions and with the fed on hold here with the A I play goose and copper.

I gotta think that these guys have more room to run.

And copper is also really interesting because often if you saw that chart a lot of times Jared, you would think.

Ok, well, that's telling me good news about economic growth or China.

Yeah, but to your point, you'll hear economists saying that actually something else is going on, they'll call it kind of like a perfect storm of sort of tight market and these kind of uncommon unusual supply.

Yeah, I think the the A I story is finally broadening enough that we see uh utilities is another great example.

Utilities was the best performing sector this week.

Why is that?

Because it takes electricity to run these data centers, it takes copper wiring, you know, for the wires to or for the memory chips, for the microprocessors.

So you put all this together, we're seeing basic materials.

If we can go back to the Wi Fi Interactive, I'm going to show you a year to date Charlie of all the sector action.

Here, here's materials up 7.4% here's utilities up 12.5%.

Both of those are higher than tech, which is up 6.8%.

So I think that says something itself well and what remains, what continues to blow my mind is that that's in the face of higher for longer rate perceptions which usually hurts utility.

So speaking of rates, I wanna mention something else that I know you've been watching, which is the inflows we've been seeing into the bond market.

Yes.

Um So we've seen the greatest inflows over the last week into the bond market.

Uh since 2021.

I think a lot of this has to do.

Uh Michael Hartnett from Bank of America B A was writing about this in his weekly missive flows.

That's where I got the stat from the bond market has not been loved over the last few months since it became a question of whether or not the no landing scenario might be front and center.

That is what if the fed has to raise rates again.

Well, I think this last week, the Powell press conference that we had last week, or was it this week, I had to think there was last week.

I think since that Powell press conference, the thinking is no landing is finally on the shelf.

We don't have to worry about the fed raising rates anymore.

And that's why we've seen this huge influx into bonds.

Once again, it's just safe.

It's safe to be safe.

If you think about it, the volatility of volatility, it's safe to be safe.

Yes.

The interactive of the interactive, we got derivative of the derivative.

Thank you, Jared.

Appreciate it.