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JC Parets, Founder and Chief Strategist of All Star Charts, joins Jared Blikre of Yahoo Finance to discuss the latest market outlook for global stocks and commodities, including crude oil.
Video transcript
– Let’s call on Jared Blikre for the breakdown of today’s market action. He is accompanied by a special guest, Jared.
JARED BLIKRE: It is true. We have JC Parets here from All Stars Charts. And I want to bring you in, JC. Let’s start with the market as a whole. You know, I’m monitoring your Twitter feed. And I have to say, why are you so bearish? Oh wait, wait – it’s the opposite. Why are you so optimistic here?
JC WALLS: Well, when stocks hit new all-time highs, that probably isn’t proof that they’re in a downtrend, is it? And, you know, the truth is, people are afraid of their own shadows. I don’t know why everyone is so angry. You know the stock market has broken all-time highs, last week the volatility index was pushing 40 with the S&P 500 3 and 1/2% off all-time highs, we’ve never seen that before. So basically the point is, people are scared more for every reason in the history of the stock market. I can’t think of a more bullish combination, angry people and stocks in bullish trends, I mean.
JARED BLIKRE: Yeah, and you’re also looking at the commodity market. I mean, we have crude oil at an all time high for a year. I don’t think a lot of people thought we would hold more than $ 50 here. Let me turn to the crude oil picture. What do you see on the market right now?
JC WALLS: I think people have forgotten the basics. You know, in the old days when you and I started working in this industry, commodities were booming. Are you kidding me? Oil went up to 150. Natural gas was breaking down. You know those Peabody Energy and all these energy and world growth names were monsters. Emerging markets used to outperform. Like, it was a whole different world. And then 10 years ago, everything changed. And it’s been a disaster ever since.
So these millennials have never seen an environment in which commodities are doing well. They don’t know any of this. I think they’re starting to find out. And us old people, it’s true – it’s funny even to say that. But those who have gone through several cycles like us, we remember the good old days. We know that when goods disappear, they disappear. So I think the commodity super cycle, this one, has started. I think the trading of below zero crude oil is what originally triggered this. I mean, I can’t think of a better start to a commodities super cycle than crude oil traded below zero, right?
JARED BLIKRE: Yes, you must be thinking that was the market clearing event of 2020. But I know you are watching financials as well. Recently, XLF has reached new heights. What do you see in the financial space here?
JC WALLS: I mean, you can argue that this is the world’s largest stock market index. I mean, we don’t have bull markets without financials. Financial services are still stuck below their 2007 highs. They are pretty much there. And the way I learned it, the more the level was tested, the greater the likelihood of it breaking. And if financial data breaks out on a 14 year basis, it is very difficult for me to be bearish. It makes me want to buy the XLF.
Look at Berkshire Hathaway. It is in fact the largest component of XLF, which accounts for about 15% of the industry. If we’re above 235 in Berkshire, you have to buy with Warren Buffett. Uncle Warren is going to make us some money.
JARED BLIKRE: I hear that. And he also has a big stack of money. JC, thank you for joining us here. And I’ll send it back to Zack.
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