Friday Recap (5/2/2025)
GSD Friday Recap
AU: $3239 ($3303- Last Week Spot)
AG: $31.96 (33.05)
HUI: 376 (389)
DXY: 99 (99)
S&P: 5686 (5524)
10-Yr: 4.3% (4.23%)
Oil: $58 (63)
We are near the end of a dead cat bounce. The S&P 500 has been up 9 days in a row and has been trending upward after hitting 4835 on April 7th. Unless Trump does a 180 U-turn on tariffs, I see no chance the market goes much higher. My expectation is for the S&P to head lower at some point in May. I don't expect to see 5000 hold. GDP came in negative for Q1, and I think it will be even weaker in Q2.
I've never witnessed an economy this weak where we didn't get a recession, and I don't expect this to be an exception. Where are the green shoots? Name a sector that is healthy. Now, name a sector that is either in recession or feels like it is (that's a long list!). The port of Long Beach is empty. How is that healthy? 74% of families report financial stress. It now takes 6 months to replace a job. Existing home sales are at historic lows. Real estate agents and auto salespeople can't sleep. Should I go on?
The incoming recession is glaringly obvious. The train is heading down the tracks, but a big gap is up ahead. To quote Jeremy Irons in Margin Call: This is it! Easy Street is coming to an end. We have a few more months, and that is it. As Parker Schnabel would say, we're out of pay. Close down the plant.
The HUI crossed 400, but it didn't hold. Now we are heading back to retest the breakout at 365. I don't think it will hold. We are likely going back into the channel from hell one more time. Keep some dry powder handy for this final dip. I expect to see the HUI bottom out between 300 and 330 (10% to 20% from here). Gold should hold $3000, but could go a bit lower. The good news is that gold is the new MAG7. Gold is the bull market. This little correction from $3500 back to $3229 (today) was healthy. Now we rip higher after it finds a cycle low. A 10% correction would be $3150. I think we will go a bit lower than that, but it could hold.
We are very close for both the HUI and silver to break out. When the HUI gets back above 400, I expect silver to finally rip above $35. That's when we win, and we are close. It will either be weeks or months, and not very many. Get your champagne out. It's almost time to pop the cork.
