Is The Correction Over?

DANO WEIR: We are live and we are On The Markets. Welcome to On The Markets from Sonoma Wealth Advisors. Thank you so much for clicking on this, for checking out our show. Who are your hosts? My name is Dan O'Weir. I'm the Marketing Director for Sonoma Wealth Advisors. I'm joined by our Managing Principal and Founder, Darren Blonsky, CFP AIF.

DANO WEIR: An interesting week in the market as we make our way through this tariff event. We've got a little bit of a bounce this week. Is it false confidence and maybe things just going to turn around and be turbulent again in July when the reprieve is over? We're going to look at all of it today, but first this.

DANO WEIR: Daren, our good friend, your business partner, our co-host Chris Sipes on assignment this week. But he did make sure to provide us with a meme to get things going. And it's nice to see the dinosaurs. Being compared to the stock market.

DANO WEIR: An extinction event, just what you wanted compared to the stock market.

DAREN BLONSKI CFP®: Yeah. Well, you know, that's the thing up until that moment of the, I guess, the asteroid hitting the earth and the extinction event happened. Everyone was saying this time is different. And the other side of the house would say, no, it's never different. And isn't that always the question, right?

DAREN BLONSKI CFP®: When the market sells off. This time is always different, but it's generally not. And I guess it will be the end day event when the asteroid does hit the word earth and it will be different this time. But at this point I'm willing to bet it's not that different. And this isn't it.

DANO WEIR: We can only hope.

DANO WEIR: So with, with Chris, with Chris out this week, we are going all candlesticks, which are all. Technical charts for Darren, his favorite thing to show. We'll let Chris come back next week with his insights on the economy. But Darren, take it away. We did get a lot of green this week, which is good. So tell me what we're looking at and how we did this week.

DAREN BLONSKI CFP®: You know, Chris, Dan, just because I didn't want it to be all candlesticks, I am going to start with the FinViz chart. And everyone who watches this show on a regular basis knows how much I love this chart. And what this is showing us is a visual representation of the S&P 500. The S&P 500 is the largest 500 U. S. -based stocks.

DAREN BLONSKI CFP®: Why is this so important right now, this moment in history? The reason is because we have a moment in history, and Chris and I say this over and over, where the concentration of the... Companies inside the S&P 500 is way out of whack. In particular, Microsoft, NVIDIA, Apple, Amazon, Tesla, Google, and Meta for recent past have sucked up all the oxygen out of the room.

DAREN BLONSKI CFP®: They've done incredibly well compared to the other asset investments or companies inside the S&P 500. And that's made a problematic market, a market that should concern people. And what I sense we're seeing is the rebalancing of that. So regardless of the political moment and what's going on with tariffs, what you're seeing is this rebalancing effect happen in the market.

DAREN BLONSKI CFP®: And there's this shift between these magnificent seven stocks and we're starting to see other stocks kind of step in. What you saw this week, though, was very much the look of risk on. And you can see that because there's 11 different sectors in the S&P 500.

DAREN BLONSKI CFP®: And these green technology type stocks tend to be the risk on stocks. And then you have utilities over here, which is the risk off stocks. And those did not do well this week. So which tells you this week risk went on. And that's true. This is the one week performance of Microsoft, NVIDIA, Apple, Amazon, Google, Meta, and Tesla. So really nice bounce this week.

DAREN BLONSKI CFP®: But that doesn't mean it's over.

DAREN BLONSKI CFP®: Let me talk about that. So this is the S&P 500 looking at the candlesticks. And what do the candlesticks represent, you might ask? What they represent is a period of time in the market. So up here in the left hand, you can see one hour, four hours, eight hours, daily, weekly, monthly, 12 months. And what they represent is the price movement during that period of time.

DAREN BLONSKI CFP®: So if I want to look at the one hour chart, I'm going to see a lot more smaller candlesticks. When I want to look at, say, the monthly, you see less candlesticks, but they move differently. So when we look at the monthly chart, today is... April 25th. And I'm looking at the monthly candlestick right here on the S&P 500. And that's what we call a doji candle.

DAREN BLONSKI CFP®: There's a hammer there, a hammer candle. This is showing me that if you pulled your money out sometime this month, you're probably going to regret it. And this is why. Because. The market traded way down, found support in this area here around 483 on the SPY and traded all the way back up to 550.

DAREN BLONSKI CFP®: A lot of volatility this month, but that's a good correction. That's a sizable correction. Notice this trend line that I have right here, this red line. Let me just increase this so it's a little more blunt. For the viewer, you can see this trend line, and this has been the S&P 500 since 2020.

DAREN BLONSKI CFP®: Probably just that right there. And the S&P 500 since 2020 has been moving up along this trend line. And you can see this huge trade down and this trade back up this month, which tells me on its face that we found support there. The odds are to the upside at the moment. That doesn't mean we won't continue going down, but the odds are to the upside at the moment.

DAREN BLONSKI CFP®: And that's the look of that candle. Now, this becomes particularly problematic because when you have moments like we had this month, we had these big sell-offs here. Those big sell-offs shake people out of the market. And when you get shooken out of the market, what that does is... It makes it even more difficult to go back in the market.

DAREN BLONSKI CFP®: And usually the market will move before you feel comfortable getting back in the market. And that's often why we don't recommend that people do get out of the market to begin with. So now when we look at the four-hour chart, actually this is the daily chart. Actually, we're going to weekly. So we look at the monthly and we can see this huge doji candle, huge trade down, trade back up. Then we look at the week.

DANO WEIR: Why is it a doji candle? Is that like, I mean.

DAREN BLONSKI CFP®: You're saying- It's just in- It has nothing to do with Doge and Elon Musk. Doge is a Japanese. So Japanese are the ones who originated candlesticks in the markets in a way of, there's lots of different ways to look at the market. You can see, so there's candles mean red, green. So if it goes up during that trading period, it's green. It goes down, it's red. There's hollow candles.

DAREN BLONSKI CFP®: There's just lots of different ways to visualize it. You can look at the market as a line, which is the purple line. You can look at the market in one of many hundred different ways. This one's kind of an interesting way. This shows you trend, right? And all it does is it characterizes price movement a little bit different. And so you look for these trend shifts.

DAREN BLONSKI CFP®: So the idea is that you'd be out of the market here, back in the market here. This would have pushed you out of the market. You would wait for your first green can to go back in the market. So if you're going to be in and out of the market, you have to have some kind of tech. Technical indicator. So clients will ask me, hey, should I get out of the market right now?

DAREN BLONSKI CFP®: I say, not unless you have some technical indicator that you're going to abide by 100% of the time, because otherwise you're not going to emotionally feel good about the market until it's long moved on from where you're at. So this is one very popular way for people who are looking to time the market or playing with timing the market. They use these type of candles.

DAREN BLONSKI CFP®: And so this would have told you to exit the position at this candle. So you would have gotten out. Missed this month, you still don't have a green candle to say, get back in. So you'd wait to see how it goes next month. That would be the argument right now. Yeah, we traded high up above this trend line and we closed and we held the trend line, which is support.

DAREN BLONSKI CFP®: So I would argue that we're still headed up at this point. I would want to see a candlestick trade and close on the monthly below this to say, hey, we're into some long-term downtrend kind of moment. So you can look at the charts, you know, a lot of different ways, different analysts like to look at it differently. And I just, Bars is actually. Pretty popular for a long time.

DAREN BLONSKI CFP®: I like just candles. I think it's the simplest thing.

DANO WEIR: Sure. If you're saying Doge, Doge, if it's close to Doge, we got to clarify what you're talking about there because some people are going to get triggered by that phrase. So it's kind of defined here.

DAREN BLONSKI CFP®: Yeah. It has nothing to do with Elon or Trump or any of that long before those guys ever came around. So the SPY, what we had this huge trade down, still technically a red candle. We haven't printed a green candle. But the fact that it looks like we're going to close this month above this trend line actually makes me feel still a little bullish on the market.

DAREN BLONSKI CFP®: If we had closed right around here on the month, then I would be feeling very different about the market. And actually, the correction we have is a pretty normal correction in the way of corrections. It doesn't mean it's over yet, right? Because you can see historically, Let's look at the daily and let's go back to 2022 as an example.

DAREN BLONSKI CFP®: So this was the 2022 turndown, right? And we turned down and then bounced way up. And if we look at how much that retracement was, you can see we recovered almost 75% of that down and then still went down further. So just because you bounce up really strong doesn't mean... You're not going to actually roll back over. I'm of the feeling that that's the case.

DAREN BLONSKI CFP®: So talking out of both sides of my mouth here, like, hey, this is a nice bounce. It's more likely to roll over than not. But the fact that we're closing above that is pretty positive. There's also a zone right here.

DAREN BLONSKI CFP®: You can see how important this zone is. And we traded right into that zone today and held it. I want to see what it does above my... Guess is somewhere around 569 is where it will roll back over again. There's just a lot of resistance there.

DANO WEIR: So you're saying at 560, so right now you're just saying an uptrend, 569, you're saying perhaps rolling back over, meaning the downtrend could begin again. And what I want to ask you, we mentioned this briefly before the show, I think it really applies right here. From someone following the narrative, Trump announces the tariffs. Everything's going down. It's doomsday. It's the worst ever.

DANO WEIR: We panic selling. And then he announced the pause and we see an immediate bounce. And then that has led to a sustained bounce in the S&P at least. Are we just waiting on that 90 day to elapse in July and we're going to see the whole thing again? Have we just protracted out the inevitable and will that rollover probably happen about right about 569? What do you think about that?

DAREN BLONSKI CFP®: I don't think we're the inevitable. I think there's a lot of things in the market to suggest that we're already in a decline, regardless of Trump's tariffs or not. I think Trump's chaotic tariffs are really just perpetuating what was already at play.

DAREN BLONSKI CFP®: And the reason I say that is because you look at oil, and historically oil, when oil turns down, and I've been talking about oil for months, when oil turns down, it does it a little bit before the S&P 500. And I think the S&P 500 is just following that. I also think the market was priced to perfection. It was over-concentrated in these big stocks, these Meg 7S. And now it's just recalibrating all of that.

DAREN BLONSKI CFP®: So to me, the tariffs are just the convenient news, if that makes sense. So that's kind of the difference between a fundamental analyst and a technical analyst. A fundamental analyst is going to say, well, Because of the tariffs this or because of that this, a technical analyst is going to say, look, what happens is price does what price does.

DAREN BLONSKI CFP®: And there's millions of factors that set price and influence price. And then what happens is we as humans try to go out and extrapolate what exactly it was in the market that created the price the way it is. And that's what you see happen to financial media, right?

DAREN BLONSKI CFP®: So you turn on whatever, pick your financial news source and the market's down and like, oh, it's down because of this or, oh, it's down because of that. And we never really know for sure, right? The market's a very complex instrument, but what it does, the market does is absorbs all information and facts out there.

DAREN BLONSKI CFP®: And so you can see like the SPY, if we traded down and I was like, I was down here and I use that as my like I got to get out things are getting scary Just based upon what the news is telling you right now. You probably don't feel if this scared you out of the market, you're probably not feeling any different. And look, you've almost already recovered 50% of that move.

DAREN BLONSKI CFP®: And that's the problem with it is that by the time we emotionally feel good, we're not getting back in the market. And we've already missed the move. And that's why it's often best just to pick an allocation that works for your potential volatility comfort level and just roll with it. So what I think to your question in answering that, Dan, is I think that...

DAREN BLONSKI CFP®: Right around here, right around 567 and change, somewhere in this range, I think we're going to find, and you can hold me to this, right? So let me go on record saying this. Right in this range here, magically, some convenient truth, some convenient fact, some convenience will do this. The market will.

DAREN BLONSKI CFP®: Do this all of a sudden, you'll see this kind of trade up into this range and then roll over. I think that's what's baked in the cards right now. But it will be some convenient yet to be known fact that will be the impetus or the catalyst, which then the financial news will then report and say, oh, the market's down because of this.

DAREN BLONSKI CFP®: When in reality, when you look at the technicals from it, and I love Fibonacci lines, and I'll show you this in a minute too on Gold. Because it was classic rollover on Gold. But notice I just told you that the market should roll over somewhere in this range.

DAREN BLONSKI CFP®: And the reason I'm saying that is because it hits the 61.8 fib line, Fibonacci, which is a mathematical kind of calculus. It hits that line. And when it hits that line, the market naturally finds resistance. It goes into distribution. If it goes through there, then we're into something different.

DAREN BLONSKI CFP®: It's still possible it could do that, but I don't think the odds are in favor of that happening for a lot of reasons. Another technical reason is the S&P 500 100-day simple moving average and the 50-day simple moving average just crossed, and that's called a death cross. And that's usually a sign that we're going lower right here.

DAREN BLONSKI CFP®: So that doesn't mean we're going to immediately go lower, but it does mean that... We're probably going to bounce around for a while. We'll have some good news. Trump will get all excited and say, I made all these deals with so-and-so and so-and-buddy. And then right around this area, magically it'll roll back over.

DAREN BLONSKI CFP®: There'll be some will bomb Iran with Israel or, you know, I don't know, all of a sudden India and Pakistan are dropping nukes on each other. It'll be something. I think that's what's baked into the market right now. I think that's what the market's signaling to us.

DAREN BLONSKI CFP®: That's the more probable outcome again we're dealing with probabilities right there's no like for sure in any of this but probable wise i think we see it turned down does that make sense Dan it does and let me just give a really layperson explanation of the fib lines Fibonacci was an Italian mathematician who.

DANO WEIR: Looked at a lot of designs in nature and so he was able to using geometry measure things like a nautilus shell, the spin of a nautilus shell or a galaxy. And he was able to develop what he calls this golden ratio, which is found many, many times over and over in nature.

DANO WEIR: And it was also applied now to the market. And so the general, general, general thought is that it's baked into existence, this ratio in these lines. And it's sort of, for the market's perspective, used to help predict. Human behavior, correct?

DAREN BLONSKI CFP®: That's right. That's exactly right. And it's pretty fascinating. I love the outdoors. I'm an outdoors guy. So when I'm not working or chasing kids at basketball games or whatever, I'm mountain biking, I'm working in the yard and the orchard and the greenhouse, all that kind of stuff. And it's amazing to me how often if you really study like plant life, for example.

DAREN BLONSKI CFP®: How geometrically formed they are. And so what Fibonacci was basically observing that, and it turns out in the markets, they tend to perform very similar. And we see that happen in the markets over and over. So naturally, you have to say, well, I think it's 61.8, which just happens to coincide geometrically with all these other resistant areas in this chart.

DAREN BLONSKI CFP®: That's the next area we got to work through. And the fact that we have a death cross right here, I've got a lot of resistance there. I think the odds are we lose that spot versus gain that spot. But what I always just find so fascinating is, is it chicken and the egg, right?

DAREN BLONSKI CFP®: Was it the news that turned the market down or was the market always going to turn down there because of the geometry of the market? And I tend to lean more towards the geometry of the market and a fundamentalist analysis type person is going to lead more towards, oh, it's because the news said this or because this earnings report. And I just say price does what price does.

DAREN BLONSKI CFP®: And it has all these other these data points that the human mind cannot even begin to comprehend all of it and we saw this with Gold happen right because and here's a perfect example Gold this week graded right up into 3500 an ounce so if you're listening to the media Gold's going the moon buy Gold everybody's buying Gold gotta buy some Gold need more Gold and everyone's freaking out getting their Gold.

DAREN BLONSKI CFP®: But if you do. Technically that and had a pretty strong sense of things that Gold was going to trade into 3500 because why because in the technical world the market loves 3500 or it loves 3400 or it loves 3300 it loves big fat round numbers it just has this magnetic psychological attraction to these big fat round numbers well sure enough Gold traded right into 3500 and got dumped.

DAREN BLONSKI CFP®: What's that mean? It means they traded into 3,500 and all those people who were buying just rug pulled all the retail people running out there to buy their Gold. Now, let me show you what else is happening with Gold. So now if you're saying, well, okay, well, is Gold going higher or lower? Well, check this out.

DAREN BLONSKI CFP®: So if we look at Gold here, you have something called a triple top right or a head and shoulders which is even more deathly in a chart and you can see this look here is like a triple top and that could be a topping pattern to Gold you've got to watch that really closely the fact that we didn't lose it right here i think is hopeful for it but the last four hours of trading it bounced up and hit this area at 3300 not looking good for Gold though if if we Thank you.

DAREN BLONSKI CFP®: Reverse back down over the weekend or something like that, then we could see a pretty sizable sell in Gold. And what happens if you have a triple top, it's this distance right here. So this is the head. And then you've got the neckline. And you take that and you move it down.

DAREN BLONSKI CFP®: I know for most people, this is like French class, but it moves down. So this tells me that there's a lot of down pressure selling. It's going to bring Gold right into, I would call it 31.50. I'll call 38, 31.50 is that. There's also some support down at 3,200, some right in there.

DAREN BLONSKI CFP®: But when you know the patterns and you can look at the patterns and you understand how price moves in the charts, that helps you to make better decisions. If I'm listening to the financial media all week long saying, Gold, Gold's going to the moon, Gold is so amazing, Gold is so awesome. Gold, Gold, Gold, and China's buying all the Gold in the world.

DAREN BLONSKI CFP®: Everyone needs Gold because it's the end of the world. And blah, blah, blah. You fill in the blank. You've all heard it on whatever news channel you listen to. And you look at Gold and you go out and buy Gold. Well, if you knew that $3,500 was probably going to be a major resistance point, especially with how fast that chart moved, that the odds were in that favor, you wouldn't have bought Gold at $3,500.

DAREN BLONSKI CFP®: You would have bought Gold at $3,200 or even maybe lower if you think it's headed lower. So the chart can inform our behavior in a way that helps us be less emotional about the market, more thoughtful about why the market does what the market does, and help us find better entry and exit points. And that's why we use technical data to tell us what's up next.

DAREN BLONSKI CFP®: And so with Gold, I think it's actually the probabilities are to the downside at this point, which tells you also that the probabilities are that magically, Mark my words, Dan, magically, people are going to start getting along and figuring things out. And these tariffs won't be that big of a deal. That's what Gold chart's telling you right now.

DANO WEIR: Why? Tell me again. Why is Gold chart telling me that? Where?

DAREN BLONSKI CFP®: Because it's selling off. Because it's risk off. So when risk is on, Gold goes up. When risk is off, Gold goes down. Right? There's a lot of other factors, but that's a simplistic way of thinking about it. Right? So what the Gold chart's telling you is that people don't feel as scared. It's saying, hey, guess what?

DAREN BLONSKI CFP®: Things are calming down geopolitically, perhaps. But actually, if you look at that, that's true because you've seen in the last two days, you've seen China giving some concessions to Trump and Trump giving some concessions to China. And they're walking back from the edge of nuclear death for us all.

DAREN BLONSKI CFP®: And that's what Gold's telling you. Because look, it went up to $3,500, which is risk on, all the way up. And now it's saying, oh, we're not feeling like the risk is all in there. We're going to pull back. But you could also argue that forget all what China and U. S. Are doing.

DAREN BLONSKI CFP®: Technically, we have a triple top here, which is a topping pattern. Topping formation in Gold risk is to the... To the downside now. And you have, if you're a Gold buyer, you would look at this for support and this for support in that area. So you'd probably pick up some along the way at 3,200, probably pick up some at 3,100.

DAREN BLONSKI CFP®: So the point being is just that it's always this discussion about, is it the chicken or the egg? Does the Gold tell the story? Is what's happening out there politically in the charts are just a reflection of what's happening out there? Well, yeah, that's true, but there is also a lot of geometry to it.

DAREN BLONSKI CFP®: Let's take a look at ag because ag is really important. This is the bond market. And this has been a particular frustrating period of time for people who are diversified and own bond portfolios. You can see this is, this was 2022. Actually, you just go back. This is 2022 here. And the, huge sell-offs.

DAREN BLONSKI CFP®: It's been the worst three years in the bond market in history. So anyone who's diversified that's not owning all stocks has been not having fun. What you're seeing now, though, is this, I would call it a bull flag right here, which is price comes up into an area, consolidates in, and then breaks out and goes higher.

DAREN BLONSKI CFP®: So that's telling you that right now, I'd say this chart's telling you that we're probably headed... Higher in bonds, which would mean that the 10-year is probably headed lower. And so the 10-year is opposite to the bond portfolio. You can see the 10-year sitting right on that daily average, that orange one, that 100-day moving average.

DAREN BLONSKI CFP®: What I see on this chart is we're probably going to go lower here. This is going to be a crucial support area, 4% on the 10-year. And we've heard that from Secretary Besson and from Trump saying, we got to get the 10-year lower, we got to get the 10-year lower, we got to get the 10-year lower.

DAREN BLONSKI CFP®: Well, it looks like that's starting to play out a little bit. We've still got to break through some areas here to get some follow through.

DANO WEIR: The 10-year affects interest rates, but is not the Fed cutting interest rates? They're different?

DAREN BLONSKI CFP®: Yeah, so the Fed manages the rate closer to... The maturity. So when you look at it, the, it's called the Fed funds rate. So the Fed funds rate right here. So they set the rates at 4.33 and then the market will then set off of that.

DANO WEIR: Okay.

DAREN BLONSKI CFP®: So what, this is the Fed funds, right? So this was the federal reserve. This is what Trump and, chair Palabon all yapping at each other and yelling at each other. And Trump's like, he's the worst ever. He's always late to the party. And the truth is on this one, actually, and please don't take this offensive the wrong way if you're not into it or into it, but Trump's actually right on this one.

DAREN BLONSKI CFP®: The Fed is always late. It has nothing to do with Chair Powell because the Fed is fundamentally a reactionary group, right? They look at the data, then they move. But historically, if you look back to every other time where rates plateaued and then these critical moving averages I have here. Crossed over one another and it went down. We ended up dropping rates really fast. So I'd say the risk is to the downside.

DAREN BLONSKI CFP®: The risk is to the recession. I expect lower rates in the next few months based upon that data there, based upon the interest, the yield curve. And we've talked about this in previous episodes where the yield curve is reinverting, where it was negative for a very, very long time. And now it's reinverting. And that happens when the Fed starts dropping rates. Why do they drop rates?

DAREN BLONSKI CFP®: Because the recession's potentially there. Things are slowing down. That impacts mortgage rates, 30-year fixed mortgage. You can see they shot back up over the last few weeks. But I think that's in question now. I think we should see lower rates here coming in the near future. There's some that are arguing that rates are going to just skyrocket up to 8% and go higher. I don't see that.

DANO WEIR: Is it possible for the 10-year, for all of the other things that are happening that could influence the 10-year, is it possible for those things to lower the 10-year without Powell and the Fed doing anything? Or is the 10-year only connected to cuts in the Fed fund rate?

DAREN BLONSKI CFP®: No, it's possible the 10-year could go lower from a whole host of things.

DAREN BLONSKI CFP®: And that's what Trump and Powell were yelling at each other about. Well, Powell wasn't really yelling back at Trump, but Trump was yelling at Powell. Shocker. Yeah, it wasn't, in fairness. I actually think Powell's a pretty level-headed guy.

DAREN BLONSKI CFP®: He's like yelling at your grandpa and you're just kind of like, and your grandpa's like.

DANO WEIR: It's not appropriate. It's not.

DAREN BLONSKI CFP®: Are you okay with yourself?

DANO WEIR: You know, not appropriate to comment.

DAREN BLONSKI CFP®: That's not right here, folks.

DAREN BLONSKI CFP®: And, so the 10 year is, can absolutely, right.

DAREN BLONSKI CFP®: Because part of what was happening a few weeks ago, when Trump was just running these tariffs up on everybody, what, people were arguing is that some of the federal some of the other countries like Japan and China were having to sell their treasuries that they own and that was pushing the price of the 10-year treasury up so you it absolutely has nothing to do with the Fed and everything to do with the Fed on the 10-year it just depends there's so many different factors and that's part of the challenge with the engineering that Besson and Trump are trying to do is they're trying to effectively engineer economy that slows down, pulls inflation out, kind of slows down a little bit and then pop it up nine months after the election, right before the next election, right?

DAREN BLONSKI CFP®: That's on face what I think is happening. They're just trying to slow inflation down. And the way to do that is to manufacture a slower economy, but they're also trying to completely re-engineer the trade policy of the United States, which is not a fast process.

DAREN BLONSKI CFP®: So there's a lot of factors that drive what the 10-year does. The Fed certainly influences and impacts it, but the 10-year can also be controlled by the markets, the markets controlling it at the end of the day. But what the Fed does can impact it.

DANO WEIR: I just want to clarify that because I think it's that's very technical. It's very detailed and all you can get again, the news media who we just love to rag on. I do think they try. I'm not saying they don't try.

DANO WEIR: Sometimes with some of these articles I read, they're doing their best. But I think the average person just kind of thinks that there's this guy, Powell, who has the Fed and he just sets the mortgage rate. And that's not the case. So there's a lot of factors.

DAREN BLONSKI CFP®: Yeah there's a ton of factors and it's complex right like If there's any criticism I have for the current administration, just from a technical standpoint, is they don't, they're seemingly very ignorant of all the complexity here and of all the moving parts, right? Like if you do this, then this happens.

DAREN BLONSKI CFP®: If you do that, then that happens. And that impacts everything and what they do with tariffs, how they make China happy or not happy or Japan happy or not happy.

DAREN BLONSKI CFP®: Like at all it's a very complex global economy and it's not we don't live in a world anymore where one country controls everything and it's run it's and we saw it through 08 and i think Covid was an example of that too where this is a global economy this is a global market we're all globally dependent upon each other and because of that we have to be very thoughtful about what we do and how we impact things.

DAREN BLONSKI CFP®: So let's look at the dollar. So this has been something that's been kind of newsworthy this week. The dollar's been going down, which is interesting because it's one of the first times in at least recent history that I can remember where uncertainty and risk goes up in the world through tariffs, through wars, through rumors of wars.

DAREN BLONSKI CFP®: And the value of the dollar went down. Typically, when people are scared, they flood to the dollar. But we didn't see that recently. Actually, the value of the dollar has gone down, and you saw Gold go up. So that tells you that more countries have less confidence that holding their wealth in the dollar is what they should be doing.

DAREN BLONSKI CFP®: That's also what part of the argument is why Bitcoin is starting to go parabolic again. Because some of the argument is in these governments are that we're going to start buying Bitcoin as a preservation of value as we'll be buying Gold as a preservation of value.

DAREN BLONSKI CFP®: And because we're seeing the dollar weakness, that tells you that there's countries, family offices, political players that are saying, look, we don't have the same trust in the U. S. Dollar that we used to have.

DAREN BLONSKI CFP®: So that, I think, is an interesting outcome of this most recent tariff battle and something to watch closely.

DAREN BLONSKI CFP®: It's without fail. The gardener comes when I'm recording, it seems on a Friday.

DANO WEIR: What does he want?

DAREN BLONSKI CFP®: No, he, can you hear the lawnmower?

DANO WEIR: Not really. No.

DAREN BLONSKI CFP®: Like he's like right outside my window blowing.

DAREN BLONSKI CFP®: Thanks. Sweet. Awesome.

DAREN BLONSKI CFP®: So, the, let's see. So all in all, let me just kind of wrap it together. SMP had a great week. We look at it like a bounce. Do we think the correction's necessarily over? No, we don't think it's necessarily over. We do think that the odds are to the downside still. But you do see some positive coming through. I do think, though, where we'll see some magically rolling over. We're not far off, I think, in this kind of range.

DAREN BLONSKI CFP®: Give it another week or so, and there'll be magically something in the news that freaks out the market again, and then you see a roll back over. I think that's the more probable outcome in the near future.

DAREN BLONSKI CFP®: I think that going to an all time high, I think is less probable. So all in all though, I think a great week and we'll take that for the win. And we'll hope it continues, knowing that it might not the, and I think that'll wrap it for the week for.

DANO WEIR: For the average investor. You're saying you know that it's going to, well, you don't, you're guessing, you're thinking that it'll roll over at a certain point. Why would we not just wait for that point and then get all out of the market, right?

DANO WEIR: You talked about this earlier, but I want to hit it again because, you know, there is this idea that we should be guessing and knowing and then we're going to get in and get out. So what would be, why would you not do that? Why would the average retiree not do that?

DAREN BLONSKI CFP®: Because the way we're wired emotionally to get it wrong. Okay, so what do I mean by that?

DAREN BLONSKI CFP®: The market will move long before you change how you feel about the market.

DAREN BLONSKI CFP®: And for example, we have now recovered 50% of the sell-off from the all-time new high.

DAREN BLONSKI CFP®: Show me one news outlet that's legitimate that has actually reported that. They sure as heck aren't placing that on the front. Page of the Wall Street Journal, New York Times, Business Week Daily.

DAREN BLONSKI CFP®: They're not telling you that, hey, this market's already bounced 50% back for all you that sold at the bottom. Sorry, but it's already bounced. They're not telling you that. So you're not going to feel better about the market until it's already all recovered.

DAREN BLONSKI CFP®: So trying to get out and get back in is a fool's errand unless you have a technical indicator that steps you away from your emotional sense. Because your emotions will absolutely get it wrong 100% of the time.

DAREN BLONSKI CFP®: And unless you got a technical indicator that's going to say, get out, get in, regardless of how you feel emotional, you're not going to get it right.

DAREN BLONSKI CFP®: So that's the answer to that question. You can actually usually time getting out pretty right. Getting back in is tough. Because tell me, like, actually this Monday or on the Monday, the 7th.

DAREN BLONSKI CFP®: Like I remember that day and that was the bottom, but at that day, most people were freaking out about the markets, but that actually ended up being the bottom. So it's just a fool's errand. And the reality too, is the markets now move so fast and they're so electronic and so driven by computers and high frequency traders.

DAREN BLONSKI CFP®: The human stands zero chance. And so you're better off just to pick an allocation that you're comfortable with, expected volatility or the movement in that portfolio and write it and not go in and out.

DANO WEIR: And the benefits of the financial plan. This is why you have the financial plan in the first place. So that, you know, the allocation that you're talking about, there's expected volatility, there's expected up and down in reasonable times or predictable times based on what we think is going to happen can never know.

DANO WEIR: But if you've got the plan in place, even if it is down, being down is part of the plan in the first place, which is part of what we do.

DAREN BLONSKI CFP®: Yeah. And it's, it's much easier to like, in any reason. Financial plan, you're going to have a range of expected outcomes, right? No financial plan says, hey, we must get this return or else. That's not a financial plan because it's just not reality, right? So you're going to have a range of expected outcomes. And as long as the return is within the range of expected outcomes, you're going to be fine on your plan. And that's what financial planning is all about, right? And if you're jumping in and out of the market, you make it much more difficult to make sure your returns are falling within the range of expected outcomes.

DANO WEIR: I just bring that up to the end of the episode because sometimes I do think we get through some of the technicals and it's like, yes, so what? You know? And so that is one of the reasons why we hit that home often is that, you know, it's good to kind of stick through things. You need to be thinking about year, years long timelines for some of your portfolios and some of your investments and not just day to day.

DANO WEIR: Because if you're on the day to day, it can crush you emotionally. So we'll leave it there. We are Sonoma Wealth Advisors. You can learn more about us at SonomaWealth. Com. If you are not a client, you can take our free wealth analysis, learn more about what we do, our four core services.

DANO WEIR: And if you are a client, thank you so much for checking out the show. Make sure to subscribe wherever you're finding this show. So if you're on Apple Podcasts, you can follow us there, subscribe there. Spotify, you can follow us, subscribe there. YouTube. And we love to hear from you. So thank you so much for checking out the show. And we will see you next week. Thanks, Darren.

DAREN BLONSKI CFP®: Awesome. Take care, everybody.

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