Markets Rally Through Headwinds

DANO WEIR: Happy Friday, April 10th, 2026. It's time to go on the Markets with Fermata Advisors, Sonoma Wealth, the Fermata family of brands. My name is Dan O'Weir. I'm the marketing director, joined shortly by our managing principals, Chris and Darren. Market movements can often feel priced in, right? We say that all the time on this show.

DANO WEIR: It's already been priced in weeks or months in advance. Well, this week's news cycle clearly had impacts on asset performance. Pretty obvious narrative here. So we're going to look at this week, Darren explaining why the TACO truck has returned to the market. And we'll tell you what that means.

DANO WEIR: The mag seven pretty much held up the market after a rough start to the year. Where do we go from here? You're probably thinking about this. You might have a flurry of emails and documents you're trying to collect. It's tax time. California feels like the most taxed state in the union. Is that true?

DANO WEIR: Layoffs and college grad unemployment also making headlines. How many young people are still living with their parents? Consumer sentiment is at a 70-year low, but we'll examine what Darren's seeing in the market, what signals he's seeing. They're showing we might have a bullish breakout right around the corner. Let's go.

SPEAKER 2: The stock market, the economy, your money. What's the latest and what could be next? Find out now with Fermata on the Markets. Straightforward financial market updates. For the brands of Fermata Advisors, Sonoma Wealth Advisors, Fermata 401k and Fermata Tax. On the Markets starts now.

DANO WEIR: Markets had a spring break last week. They're back and ready to roll. Chris Sipes, Darren Blonsky. Guys, you got to shout out. Where'd you go? Did you stay at home? Did you go somewhere? What was your spring break, Chris?

CHRIS SIPES CFP®: We visited Nashville, which I've never been to before and Thoroughly enjoyed that. And the kids seemed to like it as well. So that was great. Made a little pit stop at Mammoth Cave in Kentucky, which have you guys ever been there before?

DANO WEIR: No, but I've heard of it.

CHRIS SIPES CFP®: Okay, well, it's a system of caves underground that I believe are over 200 miles long. Now, obviously you don't see the whole 200 miles, but pretty wild.

CHRIS SIPES CFP®: Humans used to explore that with just sticks and fire.

CHRIS SIPES CFP®: Never catch me down there.

DANO WEIR: Yeah, probably not. What about you, Darren?

SPEAKER 4: You know, I had the blessing of going to Disney World. I loved it. And I know, Dan, you're a big fan of Disney.

SPEAKER 4: And I brought back with me a nice little cold. Pretty exciting. It was good. It's good to go.

CHRIS SIPES CFP®: You should count yourself lucky that cold was all you got, Darren. Yes. You're not surrounded. Yeah.

DANO WEIR: Didn't get bit by an alligator, okay? You're coming out ahead if you get out of Florida with no alligator.

SPEAKER 4: You know what I learned, man, is in Florida that there's a law against doing anything around alligators. And they call it molestation of animals if you get busted for it. And I actually had a friend who was there who was fishing. And he was fishing for bass. And while fishing for bass, a three-foot-long alligator took his lure.

SPEAKER 4: And so he reeled the thing in and had to unhook it. He sends us a video that morning of him unhooking this alligator from his stuff and his arms shaking with adrenaline. And it was something else. But yeah, so yeah, you can't touch alligators in Florida. Sometimes they bite your lures and you have to get rid of them all somehow because you don't want to leave them hooked up.

DANO WEIR: So keep all this in mind.

CHRIS SIPES CFP®: Your friend's sanity. I don't know. Unless it's a really nice fishing lure. Is that lure really worth it?

SPEAKER 4: That was the joke where it's just like, for real, dude, just cut your line, man.

SPEAKER 4: He's like, no, I always wanted to catch an alligator. So that was my chance because you can't catch them legally. Because the thing bit his lure. He's just like, I'm going for it. And I'm like, dude, you're, you're crazy, bro.

DANO WEIR: So, so when we look at state income tax on slide four, just remember everybody, this is what you're paying for in California. Okay. No alligators. Let's, let's get into the deck here, Chris. We're looking at a cartoon. We've got, I mean, what am I looking at here? What is this?

CHRIS SIPES CFP®: Well, you know that I love history, Dan, and I came across this. This is an anti electricity propaganda from 1889 so this is right when electricity was, was coming out. And, of course, as with any new technology, as we're seeing all the scare, scare, scary headlines around AI, I just thought it was really apropos to see something like this around electricity and boy, it looks, it looks rough, right? Yeah. Pretty scary.

DANO WEIR: Yeah. We've got a network of wires. We've got a bulb up top. Someone is dead in the wires. There's a horse that's... On the ground behind it. Yeah, that's interesting. There's a lot of parallels there.

CHRIS SIPES CFP®: Yeah. So we got tax time right around the corner.

SPEAKER 4: Just like you wanting to punch us in the face because we live in California. Like, why put it in our face?

CHRIS SIPES CFP®: Well, it's tax time. We got April 15th right around the corner as a reminder for those of you. And I think. The, the family at Sonoma Wealth would appreciate me saying, please don't wait till the last day to make your contributions.

CHRIS SIPES CFP®: We w we would love to see those ahead of time to, to save, to save the family there at Sonoma Wealth, but, contribution deadlines for a lot of folks are April 15th. So coming up next week, along with, with, you know, taxes due, or maybe you're getting some money back.

CHRIS SIPES CFP®: But this is income tax by state. And you can see California there, 13.3 is the highest marginal rate. You've got some of the states with gray that have no income tax, but they make up for it in other places like property tax, from my understanding.

CHRIS SIPES CFP®: So just interesting, I guess, a good thing to know, looking at the states where you're going to be paying a little extra. Dan, you shared an interesting little tidbit with me before the show started that artists and athletes also pay tax according to where they're playing, essentially.

CHRIS SIPES CFP®: If they're playing a concert or they're playing a pro football game or a basketball game or whatever, it might be that they're going to pay tax on the money that they earned in that state, which I didn't know. So that's pretty interesting.

DANO WEIR: So if you're... If you're a Kansas City Chiefs player and you come out to California to kick the Niners butt, you're going to pay California state tax on that day's game check, which is crazy. So and then same thing for artists.

DANO WEIR: When you're, you know, Jason Aldean touring around, you play 50 states, you're going to have 50 different tax returns, state tax returns, which is very interesting. So California is an interesting one because, you know, there's a lot of people here. There's a lot of affluence here. And yet when you come out here, you know, they definitely know how to charge for it. So.

SPEAKER 4: I believe, didn't the 49Ers just lose a key recruit because of that?

DANO WEIR: Yeah, I don't have his name. It wasn't a massive loss. And they did get a really great player named Mike Evans. So it's not the only thing. But there are definitely mid-tier guys who pass on coming to the Niners or the Rams.

DANO WEIR: Because if you're going to play in Arizona... And you're going to play in California and there's a 9% state income tax difference, that contract better be more than 9% bigger, you know, because it's definitely a factor.

SPEAKER 4: Yeah, that's interesting.

CHRIS SIPES CFP®: So this is a demographics, I guess, trend that we've been following for a while. And when I saw this from Visual Capitalists, I was surprised. And this is the living with their parents, the percentage of young adults. Living with their parents. So this is people that are 18 to 34.

CHRIS SIPES CFP®: And if you look at that bottom right there, it says in the US overall, 33% of people in that age range are living with their parents. And if you wonder how that compares to the 1960s, well, they have that stat down below there where it says only 22%.

CHRIS SIPES CFP®: So call it roughly one in five versus one in three now are living with their parents and this is a trend that It's probably largely associated with the housing market, but also the employment market. We're going to talk today about consumer sentiment, just leading to the overall sentiment in the K-shaped economy where some people are doing very, very well and others are not. And that's contributing to a lot of the angst.

CHRIS SIPES CFP®: And issues. One of the, one of the main issues that are going on in the, in the U S one of the many, that we're dealing with. But, you know, I, I hope that this doesn't continue to climb. It seems like that would be bad for societal peace and, and, and, and living together, you know, beyond. When we get up to 40 or 50%, it might start to get ugly.

DANO WEIR: And think about how this affects the birth rate, Chris, because you have extended lifespans, right? So because you have extended lifespans, you've sort of got this longer adolescence. And when, you know, the 60s or the 70s or the 80s, you know, I think my parents had my sister when they were like 21, you know, and instead, I'm not saying you can't have a child if you're living with your parents, but...

DANO WEIR: Maybe the implication would be that you haven't launched yet. That's probably not something that's going to happen. So it gets to something you talk about all the time, Darren, which is this cliff that's coming up with the birth rate. Not enough people to replace the others.

CHRIS SIPES CFP®: All right. So we'll take a look at sentiment in the Markets. We had a little bit of an uptick from last week, 33.6 up to 35.7. A little downtick in the bearishness from 51.4 down to 43. I guess we can all celebrate that no civilizations were eliminated this week, which is a positive thing, and it's reflected in the investment Markets.

CHRIS SIPES CFP®: Now, if we look at the CNN fear and greed index, we are at 39 fear, which is up fairly substantially from last week, which was 23 extreme fear. Now, we've seen that number get, you know, much lower than 23.

CHRIS SIPES CFP®: It's kind of surprising with all the rhetoric that was flying around this week that it wasn't worse than that, you know. But Bitcoin at 16 extreme fear, which is up from nine extreme fear last week. So a little uptick in the sentiment in the Markets this week, which is positive.

CHRIS SIPES CFP®: We got the CPI this week. The consumer price index, which you can see has ticked up 3.3, which was in line with expectations. But you can see this is a 10-year chart along with the shaded area being the recession areas.

CHRIS SIPES CFP®: And you can see that we went through a massive spike in inflation in 21 and 22 that came down. We kind of were sideways for a while. I would say we're still within that range. But with a noticeable uptick here this month. Hopefully that's not the beginning of a trend, but CPI jumping year over year this month.

CHRIS SIPES CFP®: And that was expected because the ISM prices paid, among other indicators, had also ticked up. This from Ed Yardeni at Yardeni Research. And he put out this chart on April 6th. So this was prior to the CPI coming out. He says PMI prices, paid indices are flashing a warning. CPI inflation may be higher, headed higher in the coming months.

CHRIS SIPES CFP®: Is the rebound transitory or is the start of something more persistent? Is this the start of something more persistent? Now, I didn't see this call myself, so I'll be anxious to catch up on that this weekend. But I also heard that Yardenny... Said the market bottomed, I want to say sometime last week. I don't know if you guys caught that or not. Did you hear that at all?

SPEAKER 4: I didn't hear what Yardeni said, but the bottom was clearly the 30th. Okay. The charts, which I'll show you, it was actually that candle on Monday the 30th we talked about that could have been that formation of the bottom. And then we came right up into that 200-day moving average, which we talked about as well. And then three days ago, just busted through that like gangbusters and just ripped right up.

CHRIS SIPES CFP®: Okay. I believe that was the day he said that the market had bottomed. Now, nobody knows anything. And anybody that watches this or listens to this show understands that you can never put too much credence into anyone. Nobody knows anything. The market makes a fool out of all of us.

CHRIS SIPES CFP®: But having said that, Yardeni has been very accurate in his calls, especially since the COVID era has started. So I pay a lot of attention to what he says. A few months ago, he had made a bearish call on the tech stocks, which turned out to be true. And so people that are right more often than they're wrong and people that are not always bears or not always bulls.

CHRIS SIPES CFP®: Those are the folks that you tend to want to listen to, the ones that can change their mind depending on the conditions in the market, and they're not always one way or the other. They tend to get more credence in my books. So we'll see if Yardeny was right.

CHRIS SIPES CFP®: But that was his call for last week.

DANO WEIR: Chris, what am I looking at here? I'm not familiar with ISM. I'm familiar with CPI.

CHRIS SIPES CFP®: So the ISM prices paid is what the manufacturers and non-manufacturers are paying for. Think of it as the goods that are going into the system. So they all report what they're paying to manufacture whatever it is that they're manufacturing or if they're non-manufacturers. You know, what their wholesale goods are essentially.

DANO WEIR: And so this is the wholesale price versus what the consumers are paying?

CHRIS SIPES CFP®: Correct. Yes.

DANO WEIR: And so then the indication is that the wholesale price is going up, then CPI is going to go up.

CHRIS SIPES CFP®: It tends to lead it. Yes. Which is what you can see in this chart. And so the red line tends to lead the blue line and the blue line is, is headline CPI, the consumer price index. And so that tends to follow what's happening in the prices paid.

CHRIS SIPES CFP®: World, you know, not, not one-to-one of course, but there is some correlation there. And so, that, that's a number that comes out all the time and, and, a lot of people look at it as a precursor to what is going to happen with CPI.

CHRIS SIPES CFP®: Now, consumer sentiment. Now, when you first look at this, this is what you would mention in the beginning of the show, Dan, The consumer sentiment from the University Of Michigan hit its lowest reading ever. This goes back to 1952 is what I saw from Jim Bianco.

CHRIS SIPES CFP®: I believe that's the longest that it goes back, so 73 years, and we just got the lowest reading ever. Now, you might look at that and go, wow, that's bearish for the market, right? Wrong. If you typically look at these other times where the sentiment has been this low, those in a contrarian type of way tended to be buying opportunities.

CHRIS SIPES CFP®: So usually they are in the midst of a recession. So it's a little abnormal that we're not in a recession. We're not in sky high inflation when some of the other low readings have been where if you look at this chart, all those gray bars are recessions. So typically when you hit the... Bottom in consumer sentiment is towards the end of a recession.

CHRIS SIPES CFP®: And we're not in a recession. Now, if you also look at 2022, the last time we had high inflation, sentiment was also very low, and we never called a recession. I think they probably could have in 22, but they never did. And so it's interesting that we're back to those lows in sentiment now.

CHRIS SIPES CFP®: Only time will tell what's going to happen. But a big part of this is people's expectations of future inflation have jumped.

CHRIS SIPES CFP®: And so we all know, based on our experience in 22, that people in general really hate inflation, like really hate it. So it tends to lead into their sentiment. And so far, at least we haven't seen much change in spending. But that's kind of what you would typically worry about if sentiment turns south, that people stop spending, which leads to further slowdowns in the economy.

CHRIS SIPES CFP®: All right, now goods inflation. This is from Nick Timoros at the Wall Street Journal. He says core PCE was firm in February because of goods. Goods inflation was plus 0.84, a huge month-over-month increase. If you annualize that number, it would be up by 10.6%. And the largest since January of 22, core goods prices rose 2.3% over the last 12 months.

CHRIS SIPES CFP®: If you exclude the time period between 21 and 23, it's the highest run rate since 1991. So obviously this is hopefully a transitory thing and not a, you know... Going to persist. There's definitely been a lot more volatility in inflation.

CHRIS SIPES CFP®: One of the things that strikes me when you look at the inflation rate back in like the 70s when we had really high inflation was how much more volatile it was. It was way up and then way down and way up and way down versus where we're at and have been over the last couple of decades has been much more, you know, less volatile, more smooth, kind of more.

CHRIS SIPES CFP®: You can kind of anticipate what's coming a little easier when you get less volatility in that, in that, in the, in the inflation rate. So we'll see if this persists, but so far that goods rate is heading. Getting higher quickly.

CHRIS SIPES CFP®: But if you look at the Markets, you would not be worried. So, Tuesday, I think it was, was when the ultimatum was. And, you know, if you were just looking at the headlines, it seemed pretty hairy and like, there might be some, you know.

DANO WEIR: Can you clarify for people who aren't following that closely, maybe don't want to follow that closely? What do you mean the ultimatum?

CHRIS SIPES CFP®: Well, the president said that a whole civilization was going to be wiped off the map. I believe that don't quote me. He didn't say it exactly that way, but it was pretty close. And so, but the reason I didn't worry about that was I was looking at the market and the market was completely placid, you know, just smooth as silk.

CHRIS SIPES CFP®: And actually the market ended up just slightly on Tuesday. So to me, being a market person, I said, oh, they're going to announce a ceasefire. There's going to be a de-escalation, right? And who knows if it was the market knowing that that was coming or if it was the old adage of like, if the world's going to end, you might as well buy it anyway because there's not going to be anybody to pay out.

CHRIS SIPES CFP®: Like if you're short the Markets in the end of the world scenario, there's not going to and it actually happens. There's not going to be anybody to pay out anyway. So maybe it was the market just saying, well, if this is the end, then so be it. Yikes.

SPEAKER 4: Yikes.

CHRIS SIPES CFP®: Thankfully not. You know, the market just did not react. And in general, it didn't react to this whole war the way that it did with the tariffs. And maybe that's because the impact is going to be less. Maybe that's because the market completely expects Trump to change direction quickly. Maybe it's some combination of the two.

CHRIS SIPES CFP®: But if you just were looking at the Markets right now and had no idea what was going on in the world, you would say there's nothing that serious happening. And that is illustrated here with the spread on junk debt. And again, the gray bars are recessions. Those are other prior crisis times.

CHRIS SIPES CFP®: The most recent one being COVID in 2020. You see that spike in the spreads hit. Almost 8% during COVID. It was north of 12% in the great financial crisis. And you look now and we're flat. The spread is, there's nothing happening at all.

CHRIS SIPES CFP®: And so this is the spread between what you would charge a low credit quality company for a loan, if you were going to lend your money to a low credit quality company versus a treasury, which has a higher credit quality. You're expected to get your money back based on credit quality. And so the spreads are, it's not saying there's any stress or any anticipated stress at the moment in the fixed income market.

CHRIS SIPES CFP®: Then you look at the S&P 500, the US stock market, largely one of the gauges that most people look at for the US stock market, the largest 500 companies, and we're barely off the highs. 2.25% when this chart was created. And you can see, again, prior drops in the market with COVID being the most recent one.

CHRIS SIPES CFP®: And even the one that we saw during the tariff tantrum last year at this time, the pullback that we're currently seeing is essentially nothing. And so to me, the market is seeing around this for whatever reason. And whenever you're looking at news and you're like, how does this square with the market?

CHRIS SIPES CFP®: This just isn't making sense. Either good or bad, the market's doing better than you expected or it's doing worse than you expected. My inclination now as a more experienced investor is to agree with the market because the market is usually right.

CHRIS SIPES CFP®: And don't trust your own guts on that and what's happening. So now if you look at, One of the reasons why the stock market has done so well is because the other areas that have been struggling over the past few years have started to show some areas of strength.

CHRIS SIPES CFP®: So this from Bank Of America, they're showing on a quarterly basis stock correlations. So meaning how much do they move together or not are at their lowest level since 2017, meaning that stocks are not really moving together.

CHRIS SIPES CFP®: Like they had been previously.

CHRIS SIPES CFP®: So that means that, you know, depending on what stocks you're invested in, some of them are actually doing well in this market and actually going up and not down too much. Now, some of the software stocks have been hit really hard.

CHRIS SIPES CFP®: So it really depends on where you're at. And you can see that blue, that light blue line is where they delineate, okay, below this light blue line is a stock picker's market, quote unquote, you're better off to be in certain stocks. And then above it is a macro market where it's more that most of the stocks are moving together.

CHRIS SIPES CFP®: You, you know, you pick an index and you go for it. Now, on the right hand side chart, this is also showing that there's a large dispersion, meaning that the outcomes are, there's a wide range of outcomes for those, for those stocks. So while performance dispersion as that is also at the highest level since the great financial crisis. So...

CHRIS SIPES CFP®: So there's wider outcomes, which is leading to the strength in the stock market. So we have, until this week, really seen a lot of weakness in the mags, which were leading for so many years in the U.S. Stock market. Those kind of peeled off and haven't been doing well. But the rest of the market has been doing so well that it's really been holding that S&P 500 index up much better than you might think.

CHRIS SIPES CFP®: The other area that's doing well is value. Value has struggled for quite a while versus growth. You can see that here. So if the bar is high above the line, that is the growth index doing better, measured by the Russell 1000 growth versus the Russell 1000 value index.

CHRIS SIPES CFP®: There's a lot of different ways you can measure growth versus value, but they're just using these two kind of simple indices for that. And so far this year, the Russell 1000 value index is outperforming by 12 points. Now, if you'll notice here that value tends to outperform, it outperformed in 2022 as well. So another stressful time. It outperformed in 2016. But those are really the only examples recently that we remember.

CHRIS SIPES CFP®: But if you go back to the 2000s when the dot-com crisis happened, value outperformed and it grouped up more. So it's, it's more usual that you will see one type, you know, whether it's value or growth will outperform for years at a time that that's more usual. It's not, it's, it's unusual that it shifts back and forth every year.

CHRIS SIPES CFP®: So we'll see if this time is different, of course. But so far this year value is doing very well. You know Mostly probably the energy stocks are impacting that. But the other reason why stocks have done well and probably the reason why inflation is up, among other things, wars tend to be inflationary. Tariffs are inflationary, or at least some people say they are.

CHRIS SIPES CFP®: Some people say they're ultimately deflationary. But you look at the M2 money supply and I think it was Milton Friedman had the famous quote of, inflation is always and everywhere a monetary phenomenon, meaning that it's pretty simple. The more money you have in the system, the more inflation is going to go up.

CHRIS SIPES CFP®: So who knows if it's that simple, but it seems to make sense, right? And if you look at the M2 money supply, this is over the last 10 years. Of course, we got the huge bump in COVID in 2020. We had a little bit of a tailing off. Of the money supply in 22 and 23.

CHRIS SIPES CFP®: But really since the beginning of 24, it's been resuming its upward March. And from Jeremy Schwartz at Wisdom Tree, he says, while all-time highs in the amount gets the headline, the annualized growth rate is this latest monthly money supply report important to watch. It's over 10%. This makes the Fed rate cuts harder to see.

CHRIS SIPES CFP®: Now, I would go further and say that, look, if you don't have protection against inflation in your portfolio, and if you're someone that thinks that there's always safety in cash, be really careful because if inflation comes back, and it's been a long, long time since we've had to deal with inflation on a sustained basis, cash is really a tough place to be to keep your purchasing power up and if the war and the empty money supply and the massive deficits the U.S.

CHRIS SIPES CFP®: Is running, et cetera, et cetera. To a more inflation on a sustained basis, you're really going to have to change the way that you approach your investments and change the way you approach your thoughts about safety around cash because inflation will eat away at those returns over time if you don't have assets that perform well during times of inflation.

CHRIS SIPES CFP®: That's all for this week. So hopefully, Darren, you've got enough voice to take us into the candles.

SPEAKER 4: Yeah, that's hopefully the best.

DANO WEIR: He lost his voice on Big Thunder Mountain, and then he blew it out on Space Mountain, and now he's forced to try to stretch through some charts. I hope you're okay, buddy.

SPEAKER 4: I was actually completely healthy until I got home the next day, so I think the old plane got me.

SPEAKER 4: You know, flying around and hanging out with millions of sick little kids.

DANO WEIR: The cabin cough, the 747 cabin cough.

SPEAKER 4: That's right. That is right. So I will be resting up this weekend, but nonetheless, let's talk about SMP and I'm going to rest with even more perhaps ease than I would have. Otherwise, have we not had the TACO trade, TACO truck trade?

SPEAKER 4: So for those who don't know, Trump is being referred to often as the TACO trade because he'll say one thing and then he changes his mind and does it. And also the market just rips up. And that certainly played out in this fee once again.

DANO WEIR: And TACO standing for Trump always chickens out. He drops his, quote, grenade in the room of something he's going to do and then backs off.

SPEAKER 4: Yeah, exactly. It doesn't mean anything else. It doesn't imply anything else. But Trump always chickens out. So I think it's a negotiation tactic, right? Like you say, hey, I think the words he used on like Monday were something like, we're going to obliterate the Iranian civilization, something to that tune, which then of course, all the Democrat politicians were like, ah, that's a war crime.

SPEAKER 4: You can't say that. Okay, whatever. And then ninth hour comes and Trump says, oh, yep, ceasefire, peace deal. Kind of interesting, though, if you're watching it closely, unless there was some backtalk channels happening, like they didn't really give him anything. It was like he was going to, we're going to blow you up at the last minute.

SPEAKER 4: We'll just accept whatever you send us and call it a ceasefire, end of the day. Apparently, the vice president and some others are hanging out in Pakistan. I don't know if you guys caught this, but the Pakistan... Air Force had to go pick up the Iranian negotiation contingency and then protect it flying into Pakistan because there's No Air Force left for the Iranians.

SPEAKER 4: So Pakistan went and got them and protected them to get there. Certainly because Israel's killing every one of them. Apparently, the ceasefire really made Israel pretty mad. So there's a lot of people saying Trump is not going to hold through on the ceasefire because... Israel wasn't done yet. And, you know, there's a lot too hard. Israel has an outsized influence on U.S. Politics.

SPEAKER 4: But I might have to take some awkward pauses throughout today just because my voice just goes away. And I have to drink some honey water. But so this is the S&P 500, the largest 500 U.S.

SPEAKER 4: Based stocks and so what we saw this week on the charts and we talked about this a few weeks ago i mentioned earlier on the cast that we thought this candle might be the beginning and then we certainly saw the building and then we came right into that blue line which is a 200 day simple moving average and then boom busted above that on Wednesday i mean just massive move because the ceasefire was on and we're continuing to go higher this is the all-time high right here So if we look at it from how far are we from all-time high, which is right here, all-time trading high, to where we closed up today, we're 2.45% below.

SPEAKER 4: So think about this, guys.

SPEAKER 4: Not that you watched the Markets at all, and you weren't paying attention to what the candlesticks were doing, and you were just watching the news.

SPEAKER 4: Do you think the market would be off just 2.5%? At all-time highs.

DANO WEIR: Definitely not. And it feels like the worst of times, you know, based on that he's the president is certainly not assisting that because he's got some pretty the most inflammatory communications I've ever seen. So yeah, it does not feel like it's off 2%. And same thing that what we showed with the consumer sentiment. It feels like rough times.

SPEAKER 4: Yeah, for sure. And the market certainly don't think that this is the Trump always chickens out trade. I feel like I have to call it the Trump always chicken out trade because it just could insinuate other things. Call it the TACO trade.

SPEAKER 4: So the Trump always chickens out trade certainly is in play. And this is why you don't freak out when things are down. You don't know what's going to happen. Now, why is this a little bit different than, say, are we going to go back down further? Well, you can see in this.

SPEAKER 4: Scenario what i was watching really closely this is the tariff panic and you could see it went down it went below the 200-day moving average straight it up and then got rejected and went back down further right so that's why i was watching really closely we went down below that 200-day moving average back up into it was resistance but the fact that it kept hanging out up there and then broke above that tells you that you know i think that gap there is saying something pretty strong about the current market conditions.

SPEAKER 4: I do expect this gap here on the start to get closed. So I don't know if it happens tomorrow or next week, but I would suspect that we would see the market trade down in and then bounce up if it was going to keep going higher, kind of clean that up.

SPEAKER 4: The fact that it moves so high so fast, usually you'd get some type of recorrection where the market makes sure the buyers are still there to be expected. So it would shock me next week to see it trade down and move up. When we look at it from a.

SPEAKER 4: Technical perspective the Markets move really fast really far and like i always say on this show when it moves really fast really far in any one direction what happens to the rubber band boys it snaps back and that's what we tell it wouldn't shock me to have a step back on this but overall you can see here's another example when it came up into the 200 day moving average it gapped up this is back in may of 2025 traded down in found support and moved on up So it always pays to pay attention to the technicals because this is a perfect example where just watch the technicals, you broke out, that was your signal, look at our business.

SPEAKER 4: When we look at the RSP, so this is the S&P cap weighted index. It's represented by these heat maps here. You can see what really drove this higher fast was these big magnificent seven stocks, NVIDIA putting up big numbers. A lot of the stocks underneath, like Chris was saying earlier, these value stocks are not doing that. But the big stocks are doing better.

SPEAKER 4: When we look at it, it's one-day performances. Look at it on a one-week performance, and you can see just how strong that move was this week on those mega cap stocks. Smaller cap stocks still struggling, right? These defensive stocks, more struggle there. Interesting, the old financials really crushing it and doing pretty well.

SPEAKER 4: That's, I think, an interesting signal to watch.

DANO WEIR: Why do you think it's an interesting signal to watch and why do you think they're performing?

SPEAKER 4: Well, they haven't been performing very well. And usually financials are first to go, one of the first to go when it comes to Markets selling off. And the fact that they're doing well, they're rebounding somewhat suggests that. And the reason I...

SPEAKER 4: See the financial selling offers when we're likely to get a recession or something like that is because that's a market saying, oh, the interest rates are going to go down and banks can't make money because banks make money on spreads, right? So if interest rates go down really far, then it's harder for them to make money.

SPEAKER 4: And that's telling you that interest rates are probably going up or staying up or staying elevated. Chris's point, they're going to see inflation or R. You just can't shut down the straight hormones. Not have some inflation in the system.

CHRIS SIPES CFP®: You know what, though, before we go off the stock market, I saw somebody comment this week something to the effect of like, look, life is a lot easier once you realize that the market tends to go up even when bad things are happening. And while that sounds really simple, it struck me for some reason.

CHRIS SIPES CFP®: It's like, yeah, you know. Like if you, if you go from the assumption that, that kind of the default is that you're, it's up into the right, you know, over time, at least it has been in the, in the past. And I'm talking not just the stock market, but just financial Markets in general.

CHRIS SIPES CFP®: By taking on risk and investing your money and trying to do something productive with it, the default is that it has done better over time despite all kinds of bad things happening in the world, which will happen in the future too. And so when you kind of shift your perspective from kind of always expecting the worst to just more expecting...

CHRIS SIPES CFP®: Expecting that things are going to go well and then sometimes the market does pull back right i mean that that does happen and it will happen in the future but in general the default is up you know well i don't know maybe it wasn't that profound to you guys i i struck me well.

DAREN BLONSKI CFP®: Being is like i mean we all we joke on the show a lot Chris like you're a more like there's generally Leave. Kind of different investors, right? I tend to lean into risk a little bit more and you tend to lean back from risk, right? Like it's your bias. It's my bias, right? And that's what makes a nice balance between us because I'm leaning into the risk, you're leaning back from the risk.

DAREN BLONSKI CFP®: It calibrates someone who leans into the risk and it calibrates someone that maybe is not taking enough risk. And, you know, someone who leans into risk more from an investment standpoint, it does show. And all I would do is the further you look, look back on the chart, like right here, it pays to bet that the market will go up.

DAREN BLONSKI CFP®: Now, there are periods of time where, let's take 2001 to 2008, 2023 here, where it took time for the market. But generally speaking, the longer you stay in the market, it pays to bet that it goes up into the right. And that fundamental thesis is the app is is the market, right? Like that's how you do well in the market is believing that bet.

DAREN BLONSKI CFP®: Now, there might come a time in history where that changes and that's not true, right? And we no longer have Markets that go up and to the right. We have long periods of time when the Markets are flat. I mean, you take, we go look at a weekly chart, you can look at like this is 2007, there was not much going on for you.

DAREN BLONSKI CFP®: But if you thought that was going to be forever more of the market, you really suffer miserably going from 2012 to 2006. So generally, it pays to be more leaning into risk. But that means you need to be comfortable with periods of time when your portfolio goes down. Your portfolio gets cut in half even if you're leaning into risk.

DAREN BLONSKI CFP®: But if you think about how the whole capital market structures are, if the market doesn't go up and to the right, then none of it works. All the wheels come off the bus. We're in a world of hurt, right? So it's like we have, as economic actors, we all collude with one another to push the Markets up and to the right. That's why no one complains really too loud when our politicians just keep printing money over and over.

DAREN BLONSKI CFP®: Because the reality is we're all in it with our politicians. We're colluding with them so that our house values go up, right? That's why no one's writing their politician and saying, stop printing money. I'm pissed off that my house's value is going up and my portfolio is going up. We're in a collusion economy.

CHRIS SIPES CFP®: And you have to- It's also productivity too. And as long as humanity wants their life to get better, We want to do things faster, more efficiently, nicer, et cetera, et cetera, which will always be there. That greed within all of us will always be there. We want a better life for our kids than what we had.

CHRIS SIPES CFP®: They'll want a better life for their kids, et cetera. And as long as that human drive to have more is there, like you say, Darren, as long as the rich want to get richer, and I would say we're all rich when you look at how you how life compares now to life would have compared in 1889 when that electricity, you know, scare propaganda was put up.

CHRIS SIPES CFP®: I think we can all assume we're, we're very rich compared to that. And as long as, as people want to get, want things to get better, Markets tend to go up over time, despite the, the, the things that happen in the short term to take it down.

DAREN BLONSKI CFP®: Well, that's what I mean about the collusion. Like we're all colluding for a better future.

DAREN BLONSKI CFP®: Right as society as a community and as we argue about our values and what's important and what we want in our schools and not in our schools and what we argue about economically what's important and not important and all those things are very much on the geopolitical front stage at this moment in history and i guess they always happen but they shift and they change and but at the end of the day everyone.

DANO WEIR: Has to collude for this to go higher and i've given it can i give an analogy to make this a full-blown rabbit hole yeah just to completely sidetrack the show you Chris, just you, when you're describing, you know, up into the right and you're describing, you have to take on risk if you want to see that, appreciation, you know, I think when I've, as I've been learning about the Markets with you guys, I think a lot about thermodynamics and that energy is.

DAREN BLONSKI CFP®: When they think about Markets, it's thermodynamics, right?

DANO WEIR: That's right. Of course. But if you remember this from school, you know, energy is neither, created or destroyed. It's just transferred. And so, you know, if I put two bowls on a table and one bowl was a bowl of water and one bowl was a bowl of lighter fluid, when I take a match to one, it's going to do nothing.

DANO WEIR: But when I take a match to the lighter fluid, it's got that potential energy and always had the potential to explode, right? That's your portfolio if you're taking on risk. So if you're not taking on any risk, when the event comes, it's just going to sit there.

DANO WEIR: I think that's how I tend to think about it. I don't know if that lands with you guys or not.

CHRIS SIPES CFP®: You're saying explode in a hopefully positive way, though, right?

DANO WEIR: In a good way, I guess. But, I mean, you could take it as a bad way as well. You know, I mean, that's what risk is. So it just depends on whether you wanted the fire or not. But, I mean, you know, if you have a portfolio with no juice in it, you know, do not expect, you know, to have great appreciation for no reason. You know, because you're sitting in cash. Your cash is never just going to go up on its own.

CHRIS SIPES CFP®: Yeah, potential energy has to be there. All right. Back to the oil charts.

DAREN BLONSKI CFP®: And that's the whole point of this, right? Like going to your point about thermodynamics and like you can't kill energy, it just comes somewhere. Like you can't do this and it not show up somewhere, right? So where's it going to go? Well, we know when the government prints money, it doesn't get broadly dispersed to those who don't have money.

DAREN BLONSKI CFP®: When the government prints money, it's broadly dispersed to people who already have the money. When people who get the money that's being printed already have the money, a Reagan-esque theory is the trickle-down economy, and there's lots of debate whether or not that works or doesn't work.

DAREN BLONSKI CFP®: But the bottom line is people with money get the money, and people who get the money, then they've already provided for their families. They've got the house. They've got the food on their table. Then what? And that's how they find themselves back into capital Markets. So that's one.

DAREN BLONSKI CFP®: To As Americans, we've been conditioned every two weeks, money comes out of our paychecks, money goes into 401ks, and it creates this ever-building flow of money into the capital Markets, which then propagates the market up further. We've been taught to collude on the pyramid scheme of the economy, effectively, right? If we all participate, then it keeps working.

DAREN BLONSKI CFP®: And that's what you saw. And you can see this big, strong weekly candle boom right above that. 20-week moving average. Risk is on, folks. I hate to break it to you because the news isn't going to tell you that, but risk is on in the Markets. And this was a strong move off the bottom. It was a strong piercing through a lot of the important moving averages.

DAREN BLONSKI CFP®: Yes, it can sell off next week. Yes, it could be wrong and go back the other way because Trump always chickens out. Maybe he's going to chicken out now and not have a ceasefire. Who knows? As I read the market today and I read the faces of the market today, things are strong.

DAREN BLONSKI CFP®: You should turn off the news because it will lead you astray in your portfolio because it is not telling you that. When we look at oil Markets, you can see this massive weekly candlestick drop in the oil Markets. That's the price of oils. As soon as the ceasefire came in, it just fell through the floor. And that's all good for the economy. Oil comes down. We want to stabilize.

DAREN BLONSKI CFP®: Price of oil right why do we want to stabilize because then we can make economic assumptions then we can make decisions about what we will do as economic actors and what we won't do as economic actors when you have the price of oil going up really fast and down really fast that is problematic for everyone trying to project into the future of their business and their decisions they make in their business oil down that's what gold continues to stay strong and What's interesting is we have risk on, but we also have gold now proving itself and breaking above that 20-week moving average for a close on the week.

DAREN BLONSKI CFP®: That tells you that, hey, gold is bidding a trade again. As is silver, but silver got that rejection on the 20 period moving average. So I'd say that the trend for silver is still down. Gold is up. And Chris, your favorite assets.

DAREN BLONSKI CFP®: I know you were on the edge of your seat waiting to hear all about Bitcoin. And here we go right now. And what I'll show you is a weekly double bottom. You can see, look at that. Boom and boom and boom.

DAREN BLONSKI CFP®: Right there and we're right at neckline we break through that we're going to extend up into this 20-week moving average we break above that and we will probably see some god candles coming out of bitcoin and once again the honey badger will be a honey badger and it will keep on living regardless of what people thought it was going to do but looking like a double bottom on bitcoin not for sure again that's probabilities but looks to me like bitcoin is did in fact like we were talking about a few weeks ago.

DAREN BLONSKI CFP®: Was basing we had these moves down right here for two weeks and then we had two good strong great weeks and now we've got a double bottom which is statistically a pretty good sign that things might be bottoming you could actually even you know on the daily chart on the weekly it's a double bottom but on a daily chart look at that you got a triple bottom boom that's even stronger so i like i liked the triple bottom look there the thing to watch is going to be watching 74 75 000 a coin that's going to be your line in the sand we'll see what it does this weekend but that's going to be your major resistance right now then of course that winds up but over here with the major bottom we break above 75 and hold on here bands because we're about to get crazy in bitcoin again so it's looking good on the bitcoin side so all in all risk on folks risk on like that's you can't, you can't avoid that reality of the charts.

DAREN BLONSKI CFP®: It is what it is. Ignore the news. Let's look at 10 year. We want to see this guy go down. It looks like that was the top on the 10 year for now. The time being, we're still very much in trend. I'm not going to say anything's really happening until we break below that 419 on the 10 year, 420 on the 10 year.

DAREN BLONSKI CFP®: Volunteer got a shout out by president Trump.

DAREN BLONSKI CFP®: Which is interesting Trump shouted out on true social anger there today it looks like it caught a bit it was collapsing the price on Palantir he said something like Palantir has proved itself as a war fighting machine or something like that which is kind of weird but not really weird when you assume that peteel is the one who more or less stood up Palantir, and he also stood up the vice president, very involved in this administration.

DAREN BLONSKI CFP®: So interesting, nonetheless, from the president of the United States to shout out a stock. And there's NVIDIA. There's that breakup of them. It looks like NVIDIA is going to live to fight another day.

DAREN BLONSKI CFP®: It broke out, and that's what helped the market push higher. So I'm going to close it there. All in all, risk on, folks. The risk off world is not in the cards at the moment on the charts. And, hey, Trump always chickens out, it appears. Who knows what this weekend brings.

DANO WEIR: Well, there were all the reasons this week, the national headlines, international headlines, inflation, all the reasons and all the narratives in place to have a down week and the market found its way through headwinds. Thank you so much for checking out this episode of On the Markets from us. We're Sonoma Wealth Advisors, private wealth brand of Fermata Advisors.

DANO WEIR: If you've made it this far, thank you so much. Please subscribe on YouTube. Please subscribe on Apple Podcasts and Spotify. We have more shows, including a new episode this week on our Life and Finance podcast, It's All Money, sitting down with Saris Ranch right here in Sonoma. A great new episode that just dropped for Darren Blonsky and Chris Sipes. We will see you next week on The Markets.

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