Following are my personal comments on specific markets and issues. I chart markets for a hobby and my comments are the result. They are not recommendations to buy or sell anything and should not be thought of as such. They are for entertainment purposes only so enjoy.
Please remember, the following is pure speculation based only on my experience and chart patterns. "Every sunken ship has a room full of charts."
David Bruce Edwards
June 6, 2026
Note - I got a new, wider screen monitor and when I look at this web site with the screen size in full, the site spacing does not come out properly. By making the window less wide all of the text and graphics slide into place. Perhaps you are having the same experience. DBE.
As usual, I will show pictures and graphs found on Zerohedge.com, Sentimentrader.com, which include the Seasonality charts and charts made on Barchart.com. I will also mention "cycle low timing bands" suggested by another market website to which I subscribe, Cyclesman.com.
The war drags on with claims that we are close to a deal and the Strait opened followed by denials and delays. Our markets decided to skip the ugly details and look beyond the current problems. Google's parent, AlphaBet (GOOGL) announced an 80 billion Dollar stock offering to fund future data centers. Apollo and Blackstone are are raising 36 billion Dollars in the private credit market that will go to Anthropic to buy Nvidia chips. SpaceX is selling 75 billion Dollars worth of stock on June 12th. There is no need to let wars and inflation get in the way of raising money. During my last plane ride I read - Technological Revolutions and Financial Capital, The Dynamics of Bubbles and the Golden Ages by Carlota Perez. On page 50 she writes, "Frenzy is the later phase of the installation period. It is a time of new millionaires at one end and growing exclusion at the other, as in the 1880s to 1890s, the 1920s and the 1990s. In this phase, financial capital takes over; its immediate interests overrule the operation of the whole system. The paper economy decouples from the real economy, finance decouples from production while there is a growing rift between the forces in the economy and the regulatory framework, turned impotent. A small but growing portion at the top is rich and getting richer while there is a deterioration and growing outright poverty at the bottom." When she wrote about finance decoupling from production what she meant is that the prices people are paying for shares of companies at the center of the technological revolution and money that they are happy to lend, are divorced from the potential real profits from the technology. In the case of AI, surveys done by Bain and others find that companies don't yet see a meaningful increase in profitability that justifies the millions they are spending on AI tokens. See - "The Value Didn't Arrive": Bain Finds Cost-Savings From AI Are Falling Far Short Of Projections | ZeroHedge
There were some statistics released over the last two weeks that had more to do with the real world but no one cared - - until Friday's jobs number.
The Personal Consumption Expenditures Index, a measure of how consumers are experiencing inflation, rose at an annual rate of 3.766%, far above the 2% Fed target (left side, blue line). The Core reading that subtracts food and energy was up 3.289% with services costs leading the way. We still spent money (right side, red line) but incomes didn't rise last month (right side, green line).
With incomes not keeping up with spending, the savings rate (left) fell to post COVID levels. Borrowers are running into trouble and the percent of past due loan payments is headed higher (right).
New home sales for April (left) fell. Spring is supposed to be the strongest time of the year for buying homes. Higher interest rates caused by war related inflation killed the market this year. Median prices for new homes rose despite the lack of activity (right). I subscribe to Reventure Consulting videos on YouTube. You can download their free app that shows you the number of listings in your zip code along with an indication of the supply and demand in your area. Towns in Florida, Tennessee and Texas that saw big inflows of buyers during and after COVID are having fire sales with huge increases in listings. It goes against what you hear in the popular media.
Surveys of manufacturing Purchasing Managers from both S&P and ISM show gains (blue and green lines, left) but very recent hard economic data turned down (red line). The right side chart shows details of the ISM survey results. New Orders (red) were up a bit as was employment (green). The biggest recent change has been in the prices paid for inputs (brown). Companies say that most of the new business is from clients building inventory as opposed to final sales. They believe that things will only get more expensive in the future so they are stocking up now. This pulls demand forward which will cause a future slowdown.
The latest JOLTS data is for April and it showed a big increase in job openings (left). Despite reports of thousands being laid off in the tech world due to AI, the overall demand for workers is holding up. The number of actual hires and people quitting for new jobs fell. This paints a more conservative picture of the jobs market, echoing the "no hire, no fire" theme.
The most sensitive measure of the jobs market is the weekly data on New Claims for Unemployment. It rose to 225,000 last week which is above its recent range but in the middle of the Claims data for the last few years. Continuing Claims (right, red line) fell slightly. Analyst pay a lot of attention to the four week moving average of initial claims which is the green line on the right side graph. If it gets to the upper end of it range, you will hear more about problems in the labor market.
On Friday morning, the Bureau of Labor Statistics announced that the economy added 172,000 jobs in May (left). The consensus was for only 88,000. March and April were both revised higher (right), adding another 93,000 workers.
Unlike some previous reports, the Household Survey confirmed the strength in the labor market, coming in at 149,000 (left). The only sign of weakness was in the composition of the gains. Full time jobs were down by 79,000 while part time jobs rose by 266,000. The unemployment rate was unchanged at 4.3%. Leisure and hospitality saw the most gains at 70,000 workers which is understandable with summer vacation season a few weeks away. Health care saw 35,000 new jobs with a lot it for in-home care workers. State and Local governments added 55,000 workers, something that surprised most analysts. Insurance and commercial banking saw losses, something predicted by those watching the adoption of AI in white collar industries.
Interest rates rose across the curve in response (left) and bets on the Fed increasing overnight lending rates soared (right). Every asset that depends on borrowing hit the skids. Semiconductor and AI stocks started falling on Wednesday, after the Zerohedge article referenced above circulated. They were absolutely hammered on Friday.
Charts of the week -
If you were trading during the first decade of the century you might remember that a driving theme was China's huge build-out of infrastructure that included high speed rail, new airports, highways and entire cities where few people lived. In the United States the way to play this theme was to own copper. On the left is a weekly bar chart of copper from this era. Copper peaked out in May of 2007. It rose again in 2008 during a surge in all commodities then sold off again. On the right is a weekly graph of SMH, the semiconductor ETF which is the most popular way to capture the build-out of data centers. There is a spooky similarity between the two charts. Copper fell from $4 a pound to $2.50. In April of 2007 no one believed that copper would ever see $2.50 again. It is a reminder that there is a limit to any cycle.
As of Saturday morning there is no "deal" to open the Strait. Overnight, we exchanged fire with Iran. Oil fell below $90 but the overall pattern still has the potential to thrust to new highs. Wall St. focused on SpaceX and the jobs report. News about the war and oil took a back seat by week's end but it remains the most important factor in the world.
Analysts say that prices are not as high as expected because demand from China is much lower than anticipated. It could also be that traders are buying from other suppliers that were previously more expensive than Persian Gulf locations due to the longer transit from loading to destination. Directly to the left is a graph showing the surge in exports of crude and refined products from the U.S. Other producers are seeing the same thing.
The upper right graph is from a survey of Logistics Managers. Prices for all kinds of freight movements are rising and capacity is constrained making it more difficult to meet current demand. Last week, I sat beside a gentleman who won awards on TV cooking shows in France. He is opening a commercial bakery for French style pastry in Columbus Ohio. He asked me what I thought about just-in-time inventory. I told him that it sounds great in theory and works well in a world where everyone is happy with each other but this is not the case right now. Better to put some money into supplies than be caught having to pay outrageous prices to get what you need or even worse, to have to shut down production because a key ingredient is unavailable.
Interest rates rose the most on short and intermediate duration paper as highlighted by the yellow rectangle on the Yield Curve graph. The blue line shows current yields. The red line marks the level of rates the week that President Trump took over. At the time, analysts were concerned that his policies would be inflationary and they proved to be correct. Rates on the long end are rising but not as much as the short end which means that the yield curve is flattening. The chart on the right shows the rate history of Ten Year Notes, 30 Year Bonds and in green, the spread between them. Bond wonks refer to this as "term premia." It implies that investors do not think that inflation will remain high for long. Most business and consumer borrowing is done on the shorter end of the curve. The market is signaling that the increase in these rates will be enough to slow demand and inflation. Analysts who track liquidity, that is, the amount of money sloshing around in the system available for borrowing, say that more and more of the available borrowable funds are going into real world projects such as Data Centers and targeted investments having to do with defense projects and critical minerals. Governments around the world are also soaking up available funds to roll existing debt and issue additional debt. Our Treasury rolls over 600 billion Dollars worth of bills and notes each week and will borrow an additional 2 trillion Dollars this year. All of this demand leaves less in the system for Wall St. speculation. We could go through a cycle where corporate America is doing well but stocks trade sideways or decline because the liquidity that fuels asset purchases is less available.
The green line on the left side graph markets the level of interest rates on 10 and 30 year paper at the stock market low of 2022 when Wall St. thought rates were high enough to trigger a recession. Rates moved higher and so did the stock market. What was it about Friday's news that frightened investors? One of my favorite analysts, Martin Armstrong always says that investors will borrow at 5% if they are sure they can make 20%. With SpaceX coming, GoogL borrowing 80 billion, private credit raising 36 billion and a rumor that Meta will sell tens of billions of shares to build data centers, it could be that investors sense that there isn't another 20% left in this market so paying high carrying costs is not worth it anymore. Bulls will reassure you by saying that the stock market got ahead of itself by rising so rapidly over the last two months. It is still trading well above its 50, 100 and 200 day moving averages. Everyone will be watching these lines to see if they act as support on a selloff. Earlier in the year, I included the a,b,c,d,e markings that labeled the sideways move as an expanding triangle that would lead to a final enthusiastic burst followed by a reversal. One bad day at the track does not mean I was right. Watch the moving averages over the next couple of weeks.
Goldman Sachs is the lead underwriter in the SpaceX deal and will make a killing off of the IPO. Investors drove the stock higher for the last two weeks until Friday. Goldman is the heaviest weighted stock in the Dow Jones Industrials which is why the Dow rallied on Wednesday and Thursday while other market measurements turned down. On Barchart.com, which I used to make this graph, you choose a base item such as the Dow Jones Industrials, then use the Compare tab to add another item such as Goldman Sachs. When you pull up the next chart and put in a new base item such as the NASDAQ 100, the item you added in the Comparison tab is still there until you delete it. When I entered the NASDAQ 100, the Goldman, green line was still there. I was surprised to see the snug correlation between the two even though Goldman Sachs is not included in the index. This tells me that there is a group of hot stocks around the tech binge that are being bought together as a package and Goldman is one of them.
On the left is QQQ, the most popular ETF for tracking NASDAQ 100 stocks and SMH, the concentrated way to play the Semiconductor shortage. What helps when the tide is rising, hurts when the tide recedes. On the right is the NYSE Composite. It rallied in April and May but is not focused on AI and the build-out of data centers. Bulls said that the rally would broaden out and it did to a degree but the focus was always AI and its financial enablers.
I am a big fan of the work of Cyclesman.com. He proposes a 39 trading day low to low cycle in the stock market. Thirty nine is the average periodicity with some cycle lows on the early side and some late. Seventy percent fall within five trading days of 39. Within the 39 day time span, stocks often make a low around the 19th day of the cycle. June 16th will mark the 19th day. If stocks continue to trend lower, that could be an initial time target. If we take out the last cycle low from May 20th, it will be evidence of a larger correction in the making. On the right are weekly bars of the index. Stocks have weekly cycles that average around 22 weeks. The next low is ideally due the week of August 21st. As with daily cycles, some run short or long so a strong low in the window of the next 39 day cycle low in the later half of July could also be the inflection point for the weekly cycle low. If the next weekly cycle takes out the March 30th low, it will suggest that any rally will be a temporary rebound.
The left side graph shows daily bars of the U.S. Dollar Index. It sold off amid predictions of a total Dollar collapse then traded sideways in a slightly expanding pattern. Lately, analysts have become more bullish on the Dollar. It could be making a major bottom, however, the sideways move also fits as an expanding triangle. It is almost textbook with each inflection point hitting trend lines and each leg being wider and taking more time to complete. If reality follows art it will rally to point "e" and break above the trend line briefly in one final burst of enthusiasm before a strong sell off. This could have implications for gold and the other precious metals. On the right is a graph of the daily closing price of spot gold in NY and the Dollar Index inverted so that when the red line goes down, the Dollar is getting stronger against other currencies. I inverted it so that the correlation is easier to spot. A move to the "e" point on the Dollar graph could be the next tradeable low for gold, silver, platinum and palladium.
Gold looks like it made its last 21 trading day cycle low on May 27th. If so, we have a failed cycle with the next lows projected for the third week of June. The alternative is that the current cycle is running long and will hit this week. On the right is a graph of the closing price of spot gold in NY and a simple RSI oscillator in red. The best buys are when the oscillator falls to the .20 level or below and pundits are telling you to not waste your money on metals. If gold continues lower and the RSI oscillator gets below .20 as the Dollar Index punches above the trend line at point "e", I won't bet the farm on gold but I might mortgage one of my kid's houses to do so.
The left side graph shows the weekly closing price of spot gold in NY and a simple RSI momentum oscillator. If you are a patient, long term investor you wait for an oscillator reading near .20. We finished last week at .28. The vertical dashed lines show the price of gold at previous low oscillator readings. Often, gold trended slightly lower over the next month but not by much and traders who used the oscillator certainly avoided buying a high. The right hand chart has weekly bars of spot gold in NY with Cyclesman.com's suggested 18 week cycle lows. The next one is due in mid-July, however some run short and others long so a nasty sell-off into the later half of June could also be the 18 week cycle low!
Last time I presented a silver chart that had an initial decline, labeled "A" followed by a sideways contracting formation that would lead to another sell off. A bullish interpretation would be that Friday's slamming was the "d" to be followed by an up move into "e." This might be wishful thinking and silver could continue its sell off immediately into the same time frame I outlined above for gold. On the right is a graph of the daily closing price of spot silver in NY with a simple RSI momentum oscillator in red. As with gold, it is not quite oversold enough to give you the best odds of making money on a buy. Better to wait for more extreme over-sold conditions.
Platinum and Palladium are following gold but on a slightly weaker basis, especially palladium. If stocks continue to sell off, industrial metals will also. Traders assume that a weak stock market means a slowing economy and that is never good for industrial metals. On the right is a graph of daily copper prices and the path of Goldman Sachs in green. If you thought that you were diversified by buying copper and that its fundamentals were so different from the stock market that you were reducing risk, think again. Computers run the world now and they chose a group of assets that would benefit in a particular scenario. All of them are trading together and become interchangeable. You can test this at home. If you have a charting program where you can watch multiple items trading in real time, watch a couple of the big stock index ETFs and put copper and T bonds on other screens. Using one minute bar charts, you will see them jump up and down simultaneously throughout the day. Humans used to have to hear news then react. The algorithms are programed to move when certain words or phrases are mentioned. Any time President Trump says a deal is close, they all move instantly. The computers own the tape for now so your copper futures are no safer than Goldman Sachs on Monday
Best Guesses:
Stocks - The market closed on most previous Friday's amid expectations of a peace deal over the weekend. By last Friday we hit "peace exhaustion." As of Saturday evening there is not a bit of good news on the war. We closed on the lows Friday. Wall Street wants a positive market for the big SpaceX IPO on Friday of next week so watch for lots of reassurance going into Monday. Short term, we are over sold enough for a bounce. If we open strong then run out of steam by 10:15 NY time, watch for another rough day. The article about Bain's survey and AI says out loud what everyone was quietly thinking . AI is a very cool technology but are its benefits so good that businesses are willing to pay its massive real costs?
Bonds - I think a test of last month's lows will be successful and bonds will put in a tradeable bottom.
Dollar - As long as oil is in tight supply the Dollar will do well. Watch for a rally to the "e" point on the graph above.
Gold and Silver - I am going to wait for a lower entry point later in the month.
Commodities - Grains sold off last week on some better weather conditions. If the war escalates, hoarding will resume. In a previous update I mentioned that coffee was coiling for a thrust down. We are in the middle of it now.
Oil - If the war persists, supplies will tighten. Sourcing from alternative locations will ease some of the crunch but it is likely that if a full scale conflict resumes, Iran will take out oil exporting facilities in neighboring countries and prices will go much higher. I want to see a break of $78 to feel better about oil.
Unneeded Commentary - Is there one good take away from the Russian Invasion of Ukraine and our bombardment of Iran?
These two wars are disasters for everyone involved and consumers who depend on exports that are no longer available. But, there is a positive side to these events. During many periods in the past there was a big difference between the military technology available to one side versus the other. In the Middle Ages, the invention of the horse stirrups along with improvements in saddles and selective breeding of horses gave mounted warriors a huge advantage over those on foot. The horses and equipment were extremely expensive and not available to the masses. Those that could afford them joined competing marauding bands, killing and plundering their way around Europe, leading to chaos then a new feudal order and the eventual glorification of "knights," the maruading warriors. The gunpowder revolution created a world of haves and have nots. Castles and towers which had been perfected as defensive fortifications in the previous centuries were useless. Before industrialization, the basis of wealth was land ownership. A mismatch in weapons technology increased the payoff from war and land was fought over continually. We saw this kind of technology mismatch in Desert Storm when our troops met with little resistance. When superior technology is available to a few, the temptation to use it in wars of choice increases.
In Ukraine and now in Iran, the world is learning that a much smaller country can counter the most powerful militaries in the world with less expensive, satellite guided weaponry. Russia could choose to flatten Kiev and still might decide to do it and likewise, the United States could destroy the civilian infrastructure of Iran and starve its 90 million people but other than those extreme steps, we are left in a world were defensive tactics have caught up to the most sophisticated offensive capabilities and the cost of aggression has risen. While this is bad for Russia, the United States, Israel and China, it could be good for the future of the world because it is showing other would be aggressors that the costs of invading a neighbor or a country half way around the world are much higher than hawkish or radical elements in their governments are predicting and it should put a stop to large scale movements of troops and attempted invasions.
As a response, what we are likely to move to is the weaponization of space, something prohibited by treaties. We are already seeing signal jamming that interferes with the satellite guidance systems used by some weapons. If a major war breaks out you are likely to look up into the night sky and see multiple explosions as each side takes out the other's satellites the learn that underwater fibre optic cables were cut which is why your internet doesn't work and you can't get money from your ATM. My guess is that the U.S. and other major powers are already working on alternative land and inner-space communications backups for military operations and high altitude reconnissance.
Best of luck,
DBE
