2025 Starts In June

DANO WEIR: And just like that, it's as if six months didn't even happen in the market. Welcome to On The Markets. My name is Dano Weir. I'm the marketing director for Sonoma Wealth Advisors. We're a financial advisor in Sonoma. You may be one of our clients. You may be thinking about becoming a client. You might have just found this on YouTube.

DANO WEIR: We talk about the market in straightforward English, bringing it down to anyone who wants to learn about what's going on of the market and That's what today's show is all about. And we are talking about how, once again, shockingly, we are tapping on all-time highs for the S&P 500, despite all of the drama to start the year.

DANO WEIR: We'll also be looking at why having an emergency fund changes your financial well-being. We're going to put gold's meteoric 12-month run in context and talk about why the... By separating your portfolio from the headlines could benefit you because that's exactly what happened with the S&P as of today. But first this.

DANO WEIR: Thankfully i do not host the show alone the real stars of the show they are the managing principals of cinema wealth advisors Daren Blonski CFP AIF and Chris Sipes CFP AIF Chris, we have to give Daren his flowers. We have to let him take this victory lap because, Daren, you saw this coming.

DAREN BLONSKI CFP®: I didn't see it coming. I said the probabilities were high, Dan, that it was coming.

DANO WEIR: I mean, Chris, did we not say as the tariff, we did a special live broadcast as all the tariff panic was happening, and you said, if you've got the guts. To really stay in right now, there's a huge opportunity. And as of today, the S&P is back at all time highs.

CHRIS SIPES CFP®: Yeah. And again, you'd never could have known that outcome was going to happen the way it did so quickly. Although that's happened many times here in the last five years, the market doesn't always recover this quickly. I mean, that was only what, three months, April, May, and here we are at the end of June and we're back, right? So.

DAREN BLONSKI CFP®: Don't always like last week only we were going to have nuclear fallout because, or was that, yeah.

CHRIS SIPES CFP®: I guess potential nuclear war is good for the stock market. I mean, I don't know. I don't know, but nobody else does either. Right. And you can't invest based on that.

CHRIS SIPES CFP®: You know, so, so the important thing is that you kind of understand roughly how your portfolio has performed in the past. We always talk about it as an analogy to the weather and longtime clients are probably tired of hearing this, but if you move to a certain area where the weather is generally within a certain range, that's probably what you're going to expect from the portfolio most of the time.

CHRIS SIPES CFP®: Now, occasionally does it get way hotter or way colder or severe weather that can affect that area? Yes. And that happens with portfolios too. So it's not always the best.

CHRIS SIPES CFP®: Best it'll do or the worst it'll do, but in general, kind of knowing that range and knowing what, if that range is okay with you. And so we've said it several times here now that the markets have basically recovered. But if you were someone who was having panic, you know, back in April and you were thinking, well, this is too much for me.

CHRIS SIPES CFP®: You might reassess now while, while you're, you're able to do so with a calmer head. Less emotions involved. You want to make moves in your portfolio when you're not feeling stress of fear or fear of missing out.

DANO WEIR: Before we get into the rest of the slides for this week's show, I pulled this and I have to play this because when I saw that the all-time high was getting close, I needed to pull this clip from June 6th. June 6th, today's the 26th on our June sixth show titled How to Lose a Guy in 10 Months. Daren said this.

DAREN BLONSKI CFP®: And so people might be wondering at this point, hey. This. Let's just go back to the beginning of 2025. In February, we kind of ramped up to this all-time high.

CHRIS SIPES CFP®: Which is right here.

DAREN BLONSKI CFP®: And then we saw the tariff freak out. Then we've recovered pretty much all of that at this point. And so people might be wondering at this point, hey, are we going on to all-time new highs? And I'm going to suggest that the probabilities are in favor that we take at least another look, a strong look at the all-time highs, and here's why.

DANO WEIR: And you went on to explain things as you typically do, Daren. But we have it on record. There it is.

CHRIS SIPES CFP®: Wow. Holy cow. There it is. Dano is laying it on thick today, guys.

DANO WEIR: There you go. I was pretty blown away by that one.

CHRIS SIPES CFP®: He's laying it on thick. Now, if you're looking at this bull market and going, you know what? Investing is easy. I can pick the winners. It's so simple. Just look at the good companies. Put all my money there. Well... Think again, because the history of the markets is one of brutal competition.

CHRIS SIPES CFP®: This from Peter Malouk, and he shows the largest company by market cap, which means the value put on that company by the stock market from 1960 to 2025. Our logo is blocking what the biggest company is today, but that's Microsoft. Oh, there. Wow. Nice, Dan. So.

CHRIS SIPES CFP®: Microsoft is the largest company now, but look back to 2010 and then listen to what Peter Malouk says here. He says, in 2010, Exxon was the largest position in the S&P 500. Today, it's not even in the top 15. No matter how strong a company appears, technology, innovation, and competition will eventually come to its doorstep every single time.

CHRIS SIPES CFP®: And I think if you rewind back to 2010, 10. That was right after the global financial crisis. Oil had been north of $130 or $140 a barrel, so super expensive. Now we're, I think, in the 70s. So Exxon at that time, it was the no-brainer of its time, right?

CHRIS SIPES CFP®: And now it's not even within the top 15. So what is that thing that's right around the corner for Microsoft or NVIDIA? Apple, you know, Apple's really struggling this year as an example.

CHRIS SIPES CFP®: It's going to be something that none of us see coming. You know, it's only obvious in hindsight. So be careful with our overconfidence bias in the markets.

CHRIS SIPES CFP®: Speaking of confidence, what is one of the best payoffs that you can get in terms of your financial well-being and confidence? Well, according to Vanguard and emergency savings, having an emergency savings in place and look at the amount, the amount that they have is, is not unattainable for most people, $2,000.

CHRIS SIPES CFP®: You know, it's not an exorbitant amount, but for just by having that much of a cushion it, and I don't know how they measured this, but it increased the person's, financial wellbeing by 21%, which if you look is higher than even those that... Had assets of a million dollars or more.

CHRIS SIPES CFP®: So getting yourself out of debt, consumer debt, and having an emergency fund, it's not exciting. Nobody talks about that at the barbecue. And if you do, you won't be invited next time. But getting out of debt and having an emergency fund is one of the, if not the best thing you can do for yourself financially to give yourself well-being.

CHRIS SIPES CFP®: To reduce your financial stress, to probably help your relationship if you're managing money with somebody else like a spouse or partner. Doing those two things are worth so much in the financial world. And I don't think we talk about it enough. So it was nice that Vanguard covered this here recently.

DANO WEIR: People often get itchy though, because they feel like that's cash that could be going to work. So what are some vehicles? A lot of people know this, but some don't. What are some vehicles as a financial advisor you recommend putting a emergency fund in, Chris?

CHRIS SIPES CFP®: Well, you want it to be in something that's going to be extremely low risk or even no risk. So while I can relate to the FOMO that comes from not earning as much as you possibly could, especially if you're going to bet it on that stock that you just know is a winner, right?

CHRIS SIPES CFP®: But in general, you want to put it in a place where the principal is not going to be at risk. So that could be a savings account as an example. And, and you want to look less at what it's earning. And more at, at the fact that it can't, can't lose principle. You need it to be there when, when you, when you need it.

CHRIS SIPES CFP®: Now there's other options, you know, money market is a common, a common option, although those are not, those, those do have a risk to them technically, you know? So, but in general, those are, those are considered a good option for, for, emergency fund money as well, but you want it to be. Easy to get to, liquid, and safe.

CHRIS SIPES CFP®: We call it the sleep at night number, right? So that number is different for each person. In general, you want three to six months of your emergency expenses. Think if you lost your job. If you had to go into emergency mode, you're probably not going out to eat five times a week, right? So you don't need to necessarily cover those types of expenses.

CHRIS SIPES CFP®: You need to make sure that you've got your basics covered. Three to six months is a good place to start. So this week, we're talking a lot about narratives, right? And what are the narratives that we get in our head? What's the confirmation bias that all of us have where we look for things that confirm what we already assume to be true?

CHRIS SIPES CFP®: This one, I... Did not expect the headline from the White House this week was the Trump administration has no imminent plans to refill the nation's strategic petroleum reserve. The SPR remains at its lowest level since the 1980s. And you can see what that level has been at over time, which was, we started tapping into it pretty aggressively during the Biden administration.

CHRIS SIPES CFP®: Coming out of COVID and when the Ukrainian, Russia-Ukrainian War started. So it's going to be interesting to see what happens there. Although I'm hearing a lot less about it now that Biden's not in office anymore. You were hearing quite a bit about how much it was being used and now that's not so much the case.

CHRIS SIPES CFP®: And it doesn't look like, you know, you would think like when When the prices of oil are low, that's when we would want to go ahead and fill that back up as a nation. And so maybe we'll get lower prices on oil to go ahead and fill that up. I don't know. But nonetheless, we're at a low point in the petroleum reserve.

CHRIS SIPES CFP®: And this may be a reason why. According to Apollo, this was also a narrative buster for me. I feel like I follow the... The markets pretty closely. And I would not have guessed that the US is the largest producer.

CHRIS SIPES CFP®: I knew we were up there, but I did not guess we were the largest producer of oil in the world. The top 10 largest oil producers by percentage. And you see there, my guess would have been Saudi Arabia, but it is the US thanks to the shale revolution.

CHRIS SIPES CFP®: If you remember back to the great financial crisis, there was talk of peak oil, meaning that we had produced you know, the most oil that we could produce per day back then. But then they came out with the shale oil technology revolution, I think around 2012 or 13, somewhere in there.

CHRIS SIPES CFP®: And from there, the US took off as the number one producer. And I think that has a lot to do with our stock market's performance over that time as well, given that we've had abundant low cost energy.

CHRIS SIPES CFP®: We talked a few weeks ago about how a gallon of gas is basically the same price as it was back in 2007. So, you know, you're talking close to 20 years now where the price of gas has not changed per gallon. And that's pretty amazing. That's due to this technology in the U. S. Becoming this production powerhouse.

DANO WEIR: This is shocking.

DANO WEIR: Yeah. I that that today I learned today years old that that is not that that we're ahead but we're ahead by a large margin over.

CHRIS SIPES CFP®: Saudi Arabia that is not what I expected yeah so sentiment indicator this came out today you know we're shooting on a Thursday we normally shoot on Friday but this does come out on Thursdays We're still kind of hovering in that more normal range, still a little bit elevated on bearishness at 40% because usually we're about a third in each area, but overall I'd say... Pretty calm waters now.

CHRIS SIPES CFP®: And then you look at the CNN fear and greed index, that's at 62 greed, which is up a little bit from 55 neutral last week. Bitcoin at 74 greed, up from 57 greed last week. So all indicators looking like people are feeling a little bit better about the markets sentiment-wise. It looked like a lot of the spending numbers that came out today reflect that.

CHRIS SIPES CFP®: Even though the tariff pause ends in just a few days on July 9th. And so we'll see, although I'm seeing headlines, I don't know if this is true or not, but Lutonik saying that they've signed a deal with China two days ago. So it seems interesting that that wouldn't have been blasted all over the headlines, but maybe that's why the market has rallied so hard over the last few days here.

DANO WEIR: I would be stunned if something positive did not make. The top headlines. I can't, I can't, but again, today years old, I couldn't, couldn't believe that they would report the negative story at the start and then fail to report the conclusion. I just, who knows? Who knows?

CHRIS SIPES CFP®: Yeah. So we, we cover the housing market a lot because housing drives so much of our economy and markets in the U S and a lot of that's because one, it's one of the largest things that people borrow money for. And And credit creation is one of the biggest things that drives growth in the markets, right?

CHRIS SIPES CFP®: You've got money, which is checking and savings, but then you've got credit, which is many multitudes of the checking and savings. Because if you're going to go, say, buy a house, you got to get a mortgage and that credit is created, that money goes into the market, you're paying someone else, that money is going to get spent.

CHRIS SIPES CFP®: And then any homeowner knows you get in there and gosh, you got to put in furniture. And then there's these things that break and on and on and on. There's always something that a house is forcing you to spend money on.

CHRIS SIPES CFP®: Well, we've gone through this very, very strange market over the last few years since COVID really where interest rates hit all time lows in 2021. People locked in sub 3% mortgage rates. People, I think it's one in three in the US that own homes, own them with no mortgage at all, which is just mind blowing.

CHRIS SIPES CFP®: And then we've got the largest or one of the fastest upticks in interest rates in history to the point where now we've got this market that home prices are still high, which is covering up the fact that the home, you know, the residential real estate market really has gone through an unbelievable recession.

CHRIS SIPES CFP®: Like if you're somebody that's a realtor or a mortgage broker, et cetera, that this, this is probably worse than the great financial crisis for you based on the way that the market's just kind of locked up. So we've got low inventory, you know, or we've had low inventory for many years where we just don't have enough housing stock.

CHRIS SIPES CFP®: You've got an unaffordability of houses. It's leading to all these distortions in the market. I can't help but wonder if it's because, in part, the Fed getting involved in the mortgage market during COVID, pausing mortgage payments, backing the mortgage market, et cetera, et cetera, that all these distortions are coming through now.

CHRIS SIPES CFP®: But the number of unsold completed homes, and this is by Resi Club, by way of Lance Lambert. He says the number of unsold, completed, new single-family homes has once again set another post-2009 high. There's increased slack in the new construction chart.

CHRIS SIPES CFP®: Now, they break down the market between new construction, so think brand-new homes being built, and existing homes. So we'll look at that difference here on the next slide, where you look at month's supply. Anything under four is considered a very tight market. So you can see we're just coming out of that tight market in existing homes.

CHRIS SIPES CFP®: When there's tight market, you're usually going to see price increases over the coming 12 months because there's just not enough inventory, not enough supply to meet demand. And then you get between four and around eight or nine, that is considered. Kind of like more normal, right?

CHRIS SIPES CFP®: So your prices are probably going to stay about the same. You get above nine and now you've got slack in that market. The purple line here is the new single-family homes versus existing family homes in orange. And one thing to note is the difference in the two. That's new, at least for this data set.

CHRIS SIPES CFP®: And two is that they're both trending up, but there's still a huge gap between the two. And so if you kind of average those out, we're probably at kind of an average market, meaning that prices nationwide should stay roughly about... About even over the next 12 months.

CHRIS SIPES CFP®: But you also notice in those gray lines, those are all previous recessions that preceding previous recessions, you do tend to see an uptick in the month's supply in the housing market with, of course, the great financial crisis being one of the largest upticks back in 2008.

CHRIS SIPES CFP®: Now, market's totally different now. Most people have a ton of equity in their property. Lending is not as crazy as it was during 2008. So it's not likely we see a situation that's, you know, a credit driven crisis in, in the housing market.

CHRIS SIPES CFP®: But it's more, more being driven from the, the, you know, unaffordability of houses at this point, in terms of the slowdown in the, in the prices.

CHRIS SIPES CFP®: Now, where is most of that happening? Well, it, This is again from Lance Lambert. He says, while the U. S. Census Bureau doesn't give us a greater market-by-market breakdown on these unsold new builds, we have a good idea where they are based on total active inventory homes for sale, including existing. So pockets of the Sunbelt.

CHRIS SIPES CFP®: So if you think, you know, Southeast, South, Southeast, and then of course, there's a few spots there in Colorado as well, where you see, you know, active listings really ticking up. Now, the Midwest and the Northeast, you're not really seeing that at all yet. And so, you know, real estate is local, as they say.

CHRIS SIPES CFP®: We're more looking at it on a national level. But that's where those pockets are happening. In Florida, I'm really seeing the most stress in their housing market.

CHRIS SIPES CFP®: Now, this is from Jeff Weniger at Wisdom Tree. And Going back to what is driving the stress in the housing market, well, it's unaffordability. And that's driven by the combination of home prices being so high and the interest rates on mortgages being so high. So he says, there used to be an old rule of thumb, don't spend more than 28% of your income on housing costs for the median household. 28% of their income is $2,019.

CHRIS SIPES CFP®: But on the median house right now, the combined cost of mortgage, HOA, tax, and insurance is $2,860. And you can see where that is relative to that 28% rule. And this is probably, I would guess, maybe the most unaffordable time in the U. S. Housing market to buy a house based on these numbers. Even more so than the housing bubble, which again was driven by other factors, different factors than what we're seeing today.

CHRIS SIPES CFP®: Switching gears now to interest rates. And you're hearing a lot about where interest rates should be right now. There's been a lot of back and forth with Powell. Powell spoke to, he's the head of the central bank, the chairman of the central bank in the US and he spoke. To Congress this week.

CHRIS SIPES CFP®: Now, this is from Mike Zaccardi, and he's showing the Taylor Rule. The Taylor Rule is a monetary policy guideline that was developed in 1993 by John Taylor, and they use some different things to come up with where should interest rates be, right? And it's been mentioned many times in the Fed's policy. Now, what does Mike say?

CHRIS SIPES CFP®: Mike says the Taylor rule asserts the Fed should cut, but the gap was also larger in Q2 through Q3 of 2024, meaning that, hey, it may not be as much of a political thing as what's being painted in the news right now. Now look at the gap between the Taylor role.

CHRIS SIPES CFP®: You know, coming out of COVID, that's when people were quoting it a lot, like, Hey, you know, interest rates should be a lot higher, right? That's when, that's when the, inflation was taking off and people were saying, Hey, why isn't the Fed following the Taylor rule and really jacking up interest rates to try to keep up with this inflation?

CHRIS SIPES CFP®: And then they started to raise them. They got too tight. They started to lower them. And now that that spread is closer. So, huge distortions in the market from COVID and the reaction to COVID.

CHRIS SIPES CFP®: And what does the rates market say? The two-year yield, the two-year Treasury rate yield is widely considered what the market's collective outlook on short-term interest rates is. And so if you compare that to the orange line, which is the Fed funds rate, you'll notice that... Roughly that Fed funds rate has followed that two-year rate over time.

CHRIS SIPES CFP®: And there are times where that two-year rate says the Fed is too loose. So if the purple line is above the orange line, that's the market saying the Fed is too loose. And then if the orange line is above the purple line, that is the market saying the Fed is too tight. Now you'll notice we're about 75 basis points spread right now are three quarters of a percent, 0.75.

CHRIS SIPES CFP®: Which is a little bit wide. And so the market is expecting the Fed to cut in the fall, which would bring that spread closer. So we are starting to see that gap widen to the point where you would expect to see the Fed start to drop the rates, although I wouldn't say it's quite egregious yet. The second thing to look at is that typically, be careful what we wish for.

CHRIS SIPES CFP®: Because usually when the Fed is dropping rates and dropping rates quickly, it's in response to a recession. Those gray lines are the recessions. And you can see that in times past, the Fed tightens rates going into a recession. They're trying to slow down inflation, etc. And then we get some sort of crisis, whatever that crisis would be. And then the interest rates drop and they tend to drop. Aggressively.

CHRIS SIPES CFP®: And then the Fed does what they can to keep up with the market. So if we continue to see that purple line drop, and especially if you see the purple line drop quickly and dramatically, that would be a red flag definitely for recession incoming. And at the time, it'll be obvious because there's going to be some headline tied to it as to why these interest rates are dropping like they are.

CHRIS SIPES CFP®: I think another narrative that's been missed is the money supply change, right? We talked about how the money supply was tightening, tightening, tightening, especially in 2022. This is the M2 money supply, or it's just one measurement of the supply of money. And you look at the one-year percentage change here from Charlie Bielo, and he says the U. S.

CHRIS SIPES CFP®: Money supply grew 4.5%. Over the last year, which is the biggest year over year increase since July of 2022. After a brief hiatus, money printing is back. Now, what happened in 2022 when that increase happened was, of course, that was when we saw the short-term bottom in the markets in the fall of 2022 and the market started to take off from there.

CHRIS SIPES CFP®: So a lot of the markets are driven by what What's the water level doing, right? Think of them two money supply as the water level. It lifts all boats. And that is definitely increasing. Liquidity is increasing, which is probably why you're seeing gold do so well, Bitcoin, stocks, et cetera, and why the dollar is down 10% year to date.

DANO WEIR: So you're telling me that the money supply is up 4.5% and magically year to date, the S&P is up 4.6%. Percent shock based yes it can't be just that simple right no it can't it can't it can't be total coincidence yeah.

CHRIS SIPES CFP®: Another narrative and i i definitely fell for this one which was that the foreigners are selling all of our treasuries right This is from Ryan Dietrich, and he's showing, at least from the Treasury Department, that foreign Treasury holdings remain near a record high. Now, did we get a little bit of a sell-off earlier this year? Yeah, but that's all been erased, and we're back to, you know.

CHRIS SIPES CFP®: An upward trajectory and in the Treasury holdings of, of foreigners. Now there's all different kinds of reasons for that. One, one reason being that our interest rates are higher, right? So people globally have the option to put money wherever it's going to be treated best.

CHRIS SIPES CFP®: And the United States currently is, if you can get, you know, four and a half percent or so on a long-term Treasury. Hey, that's pretty good relative to other countries. Or short-term Treasury is the same thing because our yield curve is fairly flat.

CHRIS SIPES CFP®: And so if you can get north of 4% in a Treasury, globally, that still looks pretty good, even despite the credit downgrades and the turmoil and the seizing of treasuries a few years ago. So far, at least, foreigners are still putting their money into these holdings. And they're really doing so at the same rate they have been previously.

CHRIS SIPES CFP®: Where else are they putting it? Gold.

CHRIS SIPES CFP®: In flows to gold were a record so far in 2025.

CHRIS SIPES CFP®: I think that most, starting to get some questions from clients, definitely back in April when stock market was tanking and and gold was doing so well we're getting more questions about gold but you know it's going to be interesting to see how that that plays out as we kind of go into this multi we've been in a multi-year bull market for gold it's kind of sleepily been trouncing most other assets and not a lot of people are paying attention to that And I think that's because it's one of those assets that people feel very strongly about.

CHRIS SIPES CFP®: They're either all in and all their money is in gold or they're just like, nope, I will not touch it. It's an idiotic investment. There's no yield on it. It's basically against my investing religion to go into gold.

DANO WEIR: Oh, I thought you were talking about Bitcoin there for a second. You were talking about gold.

CHRIS SIPES CFP®: Yeah. Yeah. Bitcoin is like the the volatile.

DAREN BLONSKI CFP®: Bitcoin is so easy to pick on.

DANO WEIR: I mean, I'm just saying everything that you were saying could also things I've heard about Bitcoin as well. And I'm against it from a religious standpoint. The philosophy is like, oh, that's just funny. That was similar.

CHRIS SIPES CFP®: Well, they're both kind of measured on something called a stock to flow, you know, which is where they tend to get a lot of their value from. But it's just Bitcoin is a lot more volatile, or at least it has been so far than gold. Gold is definitely volatile.

CHRIS SIPES CFP®: It's, it's up there with the stock market in terms of volatility. Now it's not necessarily correlated with the stock market. So it makes a very good diversifier because of that non-correlation, you know, it just happens to be going up with the stock market, right now.

CHRIS SIPES CFP®: And I think 2024 was the first time I think maybe ever where they've both been up over, I think it was over 25% in one year. Together. So that's really odd. That doesn't happen very often. Usually they move separately, which is why they're usually a good, why gold tends to be a good diversifier.

DANO WEIR: So I saw an incredible article this week, speaking of gold, Chris, that within the ocean itself, like within the water are just very trace amounts of gold. And they estimate that there's $771 trillion dollars worth of gold that's just like locked within the waters of the oceans of the world, but it would take even more money than that to actually get it out of there.

DANO WEIR: But if they were actually able to extract the gold that lives within the water of the ocean, the entire gold market would be completely reset and crash. So it's just kind of an interesting that, you know, the price of what you're paying for gold is for what's available. It's not actually for the total amount that's actually out there.

DAREN BLONSKI CFP®: If anyone thinks... Price of gold is going to drive up the ability of people to get the gold out of the land, the water, whatever.

DAREN BLONSKI CFP®: I invite them to come gold painting with me for a weekend.

CHRIS SIPES CFP®: Yeah, seriously. If Costco can't figure a way to get it out of the ocean.

DANO WEIR: It's probably not going to happen. That's right. Well. We now transition in the show, second half of the show. We've looked at some of the fundamentals, some of the economic indicators that is Chris's specialty.

DANO WEIR: And now Darren, Darren hops in with the technical approach. What's actually happening with the lines on the charts? Let's look at that S&P 500 and see it retrace and recover from that April low. Darren, you want to take it away?

DAREN BLONSKI CFP®: Yeah, we can do that and talk all about why the market's doing what it's doing. Let me first go here. We'll share this. So this is the CME Group's probability index, where they're looking at target probabilities of a change in the Fed funds rate. People might say, why?

DAREN BLONSKI CFP®: Why is the S&P at all time highs? Well, guess what? The chances of a... Rate change are getting higher and higher on the probabilities, right? And that's driving the mags, which are those stocks that do particularly well when interest rates go down.

DAREN BLONSKI CFP®: Although they did particularly well in the past, I do wonder though if interest rates really start going down for all the reasons that Chris just talked about where we might be looking at recession, certainly in the real estate market, things are plummeting, i. e.

DAREN BLONSKI CFP®: Secretary Pulte came out yesterday and said, oh, and you can now use your crypto as collateral to buy houses. To me, it was just a sign of desperation. Now, anyone who listens to this, I'm a fan of Bitcoin, but I think that was them trying to release a lot of assets that are out there to help prop up the real estate market.

CHRIS SIPES CFP®: Yeah, I'm not a huge fan of that. I think that just given the volatility, right? And, and I could be wrong, but they didn't specify like which crypto assets, right? They're not saying like Bitcoin. They're saying like any crypto assets, right?

DAREN BLONSKI CFP®: Yeah, Chris, that's correct. You could technically post your fart coin for buying a new home.

CHRIS SIPES CFP®: Oh my God. Wow.

DAREN BLONSKI CFP®: Chris, I really wish that I was just kidding with you, but I'm absolutely not.

CHRIS SIPES CFP®: You know. Dan, you can go ahead and save this audio clip to refer back to, right? Where I'm going to go ahead and say that posting a fart coin as collateral for your house is probably going to be a bad idea down the road. We're going to look back and go, you know what? Not our smartest moment.

DANO WEIR: You know what I'm going to do is I'm going to pull this out as a real, and I'm actually going to send it back in time to you guys 10 years ago. And you're not going to believe that what you're saying is reality or that fart coins up.

CHRIS SIPES CFP®: Up two million percent in the last two years well and people that just think we're being crass and call it like we're not a real i really say real i know it's it's unbelievable and it's awful but it's true there is there is an asset out there well i use that term don't call it that yes okay let's move on where are we yes next next next out of here Abort.

DANO WEIR: Abort.

DAREN BLONSKI CFP®: All right. So let's talk about the S&P 500. So the S&P 500 is the largest 500 US-based stocks. We did close at an all-time high. This is like an SPY. This is New York trade hours. And you can see we closed at 611 today, folks. 611. Check that out and change. Our all-time high was back here. And that was in the early part of the year, I should say.

DAREN BLONSKI CFP®: And since February, it's been rather tragic in the markets and now we're looking at all time new highs. I mean, I don't know. I felt in the last five years, I have felt a lot of whiplash when it comes to managing money in the markets, with all of the things going on. But for real, like last week we were talking about nuclear fallout.

DAREN BLONSKI CFP®: Like that was one of the biggest topics out there driving all of the discussion. And the market takes an all-time new high, which is pretty impressive and just speaks to the concentration in the Magnificent Seven, right? And so when these Mag Seven, they broke out here and now they're moving up and they have not hit their all-time high.

DAREN BLONSKI CFP®: So these are these big seven stocks that are driving the market. Their correction phase is in the books and apparently we're on to the records now. So given the trajectory of breaking above this, I think the odds are higher. The mags are going to reach an all-time high, which is going to drive the S&P 500 much higher because of that.

DAREN BLONSKI CFP®: So risk on. And there's lots of reasons why I talked a while back about why I thought we would be going on to all-time highs. And frankly, regardless of everything going on, it was in the charts because you can see that bull flag right there. And then we broke out.

DAREN BLONSKI CFP®: Now, what I'm looking for to feel like, hey, this is sustainable, because there are instances in history where you had an all-time high, a breakout to an all-time high, and then a crash.

DAREN BLONSKI CFP®: It is possible to see something like that. But what I'm really looking for is this breakout above that 600 on the SPY and that retest and that resumption upward. I want to see that there's buyers willing to buy here.

DAREN BLONSKI CFP®: Because if you thought things were overvalued down... Here, you think they're still overvalued here. And oh, they're still overvalued here. And they continue to be overvalued. So this is where the technical guy goes, well, it doesn't really matter what the fundamental guy says about overvalue because the market don't care.

DAREN BLONSKI CFP®: And when you look at what's happening with the likelihood of interest rates getting pushed down lower. You look at what's happening with money printer. Well, that has to go somewhere and it's coming out in the markets.

DAREN BLONSKI CFP®: Now, what's interesting about this particular move, and we talked about this a little bit before we came in, the 10-year, actually, it went down. And when the 10-year goes down, that's really a nice market for the bonds. And, whoa, look at that, Chris. We got a breakout in the bonds, folks.

DAREN BLONSKI CFP®: So all you diversified investors out there can take part in some of the victory lap of this.

DAREN BLONSKI CFP®: Break out because bonds broke out interestingly enough though that's a pretty significant four-day breakout on the bonds we're we're not in a we didn't close out the only thing i don't we'll see tomorrow because the holiday coming up and we've got people headed on vacation etc we're filming today on Thursday but we'll see how the closeout goes tomorrow and see where that goes but the fact that we're like looking at this high here That's pretty interesting.

DAREN BLONSKI CFP®: I'm really curious to see how high this goes tomorrow, which would suggest that the 10-year is going to continue to go down, although you can see support right in this range here on the 10-year, and we're coming right into there. So my guess is we're going to come right down into 4.2. We're going to either stall out or we're bouncing from there.

DANO WEIR: Darren, can we look at that S&P again? Will you give us a second? Because you talked about it being an important psychological point on the graph, And I think that... We've mentioned this a couple of times before, but it's still something that I've realized in doing this show and that a lot of people don't, which is that the market is the market is a lot of things.

DANO WEIR: But it's thought to be a combination of fundamentals, meaning like if you're investing in Coca-Cola, their earnings come out. That's just a random stock. I pick their earnings, come out. The stock does a particular movement. And then you say, well, it went did that movement because the earnings came out.

DANO WEIR: That would be the fundamentals. But the technicals would be that. For whatever reason, the stock price is at 100 and people just like the number 100 or that they like that particular price. And you're saying right now you believe that what's going on with the S&P is more about the technicals. That's why you think perhaps that it hit that point.

DANO WEIR: Yes.

DAREN BLONSKI CFP®: Yeah, exactly. It's just, it's all about what the technicals are saying, right?

CHRIS SIPES CFP®: So, now- There's also a lot of talk right now about, you know, the rise of the passive investing and index investing and the flows that come through regularly through things like people's 401ks. Right.

CHRIS SIPES CFP®: And a lot of people just look at their, their, you know, investment options, look at what's done the best recently and put all their money in that. And that's kind of where that's the extent of their analysis. Right. And, but that has a lot of power on the market when you've got those massive flows going into the market regularly.

CHRIS SIPES CFP®: You know, and so a lot, you know, there's a lot of market analysts looking at that going, geez, how much do fundamentals matter anymore when you've got flows like that?

CHRIS SIPES CFP®: And of course those flows going up can also change based on a narrative shift as well. Right.

DANO WEIR: So, well, right. Then I, then, then what happened with the tariff crisis then would kind of be an example of fundamentals. Because you've got this absolute bottom in April, and it's very clear that that had a lot to do with panic because of the tariffs. That wasn't because of the line. That was because people were freaked out about what could be happening with tariffs. So that would be an argument in the opposite.

CHRIS SIPES CFP®: Yeah.

DAREN BLONSKI CFP®: Well, I think that's the chicken and the egg argument, right? And that's the challenge with it. It is amazing how often at perfectly. Plausible technical areas, some piece of data comes out. And I think for the most part, what happens is the market does what the market does. And we construct a narrative for why it did what it did.

DAREN BLONSKI CFP®: And I think that's even more true in the world today, as Chris was saying, because so many people are literally every paycheck putting money in the S&P 500 and forgetting if it goes up or down in their 401k. And that's become such a dominant part of the flows of the market that it takes a lot of fear and a lot of behavior that is coordinated. To push the markets down because the buying is just consistent.

DAREN BLONSKI CFP®: And wow, thanks for bringing up Bitcoin, Darren. And so that's exactly what's happening with Bitcoin. So people say, how on earth is Bitcoin continuing to go up? Well, the reality is there's enough people through the network effect that continue to buy it and buy it every day or every week or every month or whatever that frequency is that with a limited supply, the demand just keeps driving higher.

DAREN BLONSKI CFP®: And that's what's happening with Bitcoin and why the price is about ready to drive higher. And you can see now, if you didn't believe me here in the S&P a few weeks ago when I told you there was a bear flag or bull flag right here. And, oh, the probabilities are going higher. Here's your second chance to believe me.

DAREN BLONSKI CFP®: Take it or leave it. Not advice. But this, my friends, is a very large bull flag.

DAREN BLONSKI CFP®: Happening and this thing is likely to go higher and much higher when it goes Chris we've created a monster pattern is a pattern is a pattern so not use the royal we with me so this this extension and then this consolidation period is a classic bull flag and so when it breaks above 107 you're likely going to see one of these lowercase god candles that you see right here i think that's what you're looking at with Bitcoin right now so you can tell me thank you later all right let's see let's take a look at oil that was the big one right because a few weeks ago oil was going to just blow out and go sky high and pushed us into a recession.

DAREN BLONSKI CFP®: And we'll talk about whiplash, man.

DAREN BLONSKI CFP®: We were up here, we had a breakout and then went back down. So this is a good example of why we want to be careful with the S&P breaking out like it is right now.

DAREN BLONSKI CFP®: Because you can still have these breakouts happen and then all of a sudden the trade just goes down. So when all of a sudden the ceasefire happened, the price of oil went down. And what's interesting about the ceasefire, which I don't know if you guys caught much, but what's happened, the whole politics of the Middle East is getting reshaped right now, which I think is both particularly well for the price of oil.

DANO WEIR: Well, I heard that they don't know what they're doing. That's what I heard. There's something like that. Someone said that perhaps they don't know what they're doing. Maybe it was slightly different than that.

DAREN BLONSKI CFP®: Yeah, I think you could argue whether or not they know what they're doing or not. I mean, the amount of media coverage, just to talk about, we don't know what we're doing. I have heard about six holes in the ground over the nuclear reactor that the U. S. Dropped these bunker buster bombs on.

DAREN BLONSKI CFP®: And the amount of time and energy and effort and media that has been staring at these six holes in the ground and trying to assess whether or not... We actually really blew up the nuclear rate. I don't know if the reactors is not the right word, nuclear or whatever.

DAREN BLONSKI CFP®: The nuclear tools they have underground in Iran. But I mean, quite sad, really, that that is the state of where we're at in humanity, that we're going to sit there and argue about six holes in the ground with all the other things we could be solving in this world. But nonetheless, it sounds like we have peace.

DAREN BLONSKI CFP®: In the Middle East, at least for now, and the charts scream that. And right now they're saying, hey, it looks like it might hold. The only thing I will say of caution is you've got this area here, which is going to be support for the buyers, meaning a lot of buyers will step in right there and buy oil, and we're hovering above that.

DAREN BLONSKI CFP®: But you could argue that this is a bear flag. In the formation. So it looks like we're going to be consolidating in here for a little bit, and then we'll see if we go up or down, if that turns into a bottom or it becomes the next leg down.

DAREN BLONSKI CFP®: So anyway, that's good news for oil and good news for us Californians. I don't think we're out of it. There's some really significant issues coming in California with this summer with a bunch of taxes kicking in on our gas prices. So in about a month and a half, we should be hearing lots of people very unhappy with the amount of gas they're having to pay for gas. Fyi.

DAREN BLONSKI CFP®: So we'll see how that little journey goes. All right, let's take a look at gold and we'll wrap it up with gold. Gold, very similar chart to Bitcoin. Look at that. You got a nice little bull flag happening right there. So if I'm a veteran person, I'm telling you gold probably going to be higher.

DAREN BLONSKI CFP®: That, to me, looks like a chart ready to move higher. So that tells you that people will probably feel even more risk off coming in the near future. My guess is we'll probably see some peace through June, July, and August, and then we'll go ahead and see the fireworks in September.

DAREN BLONSKI CFP®: But that's pretty normal, seasonality speaking. That'll carry on until about mid-October. Then, magically, things will calm down, and we'll ramp into the end of the year for a good, solid year.

DAREN BLONSKI CFP®: Yeah, I guess our politicians can take their victory lap for now.

DAREN BLONSKI CFP®: All right, I think we'll leave it there.

DAREN BLONSKI CFP®: Dan, did we lose you?

DANO WEIR: It helps if I turn my mic on. Thank you so much for checking out the show. I'm going to give a high five to my co-hosts here. We're under an hour, boys. Okay?

DAREN BLONSKI CFP®: Right?

DANO WEIR: They said we couldn't do it. They said it couldn't be done.

DANO WEIR: We didn't take too many rabbit holes this week. And we really appreciate you checking out the show. We put a lot of time and energy into this because we think it's helpful. We love to give our perspective. And if you want to learn more about who we are, if you are a client, thank you for checking us out.

DANO WEIR: And if you want to become one, learn more at SonomaWealth. Com. You can take our free wealth analysis. Wherever you're listening or watching right now, make sure to subscribe so you don't miss future episodes of our show On The Markets and our other podcasts. Thanks so much for checking out On The Markets. We will see you in two weeks.

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