The April Producer Price Index (PPI) came in hotter than expected, with wholesale prices rising 6% year-over-year — the largest annual increase since December 2022. The Consumer Price Index (CPI) also surprised to the upside, climbing 3.8% year-over-year in April, up from 3.3% in March and above the consensus estimate of 3.7%.

Following these inflation reports, bond yields rose sharply. Since December, the Fed has expanded its balance sheet by roughly $200 billion, and combined with elevated oil prices, inflationary pressures are proving more persistent than markets anticipated.

The 30-year Treasury yield climbed to 5.12%, a level last seen on October 19, 2023. Rising yields may limit new Fed Chairman Kevin Warsh’s ability to lower interest rates — something the market had largely been expecting.

Notably, 30-year Treasury yields are now above the S&P 500’s dividend yield, which could prompt capital rotation from equities into bonds as investors seek safer income opportunities. At the same time, the U.S. dollar continues to strengthen as foreign capital flows into the U.S. to capture higher yields.

Energy markets are also contributing to concerns about inflation. Oil tankers are reportedly lining up along the Gulf Coast to transport oil to China and Japan as the Iranian supply remains largely offline.

A stronger dollar typically creates headwinds for gold due to its historical inverse relationship. For that reason, I exited my gold position. While gold may eventually serve as a strong inflation hedge, current macro conditions present several near-term challenges.

Meanwhile, junk bonds have begun to weaken, suggesting investor appetite for risk is fading. I still favor the long-term AI trade, but the sector appears increasingly extended, and I may reduce exposure if market conditions continue to deteriorate.

The blessing of the LORD makes one rich, and He adds no sorrow with it. Proverbs 10:22

We are in the early stages of what many describe as the Fourth Industrial Revolution (4IR), or the “Intelligence Age,” where advances in artificial intelligence (AI), gene editing, and robotics are reshaping industries and driving productivity gains. AI development is accelerating rapidly, and businesses that adapt effectively may be positioned to benefit from significant long-term opportunities.

Recent tax policy changes have strengthened incentives for large corporations to accelerate capital investment in data centers, manufacturing infrastructure, and research initiatives by allowing more favorable near-term expensing treatment for certain investments. These incentives encourage companies to deploy capital sooner rather than later, which may further support innovation, productivity growth, and economic expansion.

This wave of AI-related spending could help sustain earnings growth and market leadership among select technology companies for several years. While some AI-related stocks appear extended in the short term and may be vulnerable to periodic corrections, strong institutional demand has continued to support pullbacks. Although speculative excesses could eventually lead to a more significant correction, current market conditions do not yet suggest a broad-based peak.

Valuations within parts of the AI ecosystem remain elevated by historical standards, but forward earnings expectations have helped moderate price-to-earnings ratios relative to prior periods of technological enthusiasm. We continue to view selective pullbacks as potential opportunities while remaining disciplined about position sizing and risk management.

Monetary policy and liquidity conditions remain important market drivers. The Federal Reserve’s balance sheet policies and broader liquidity trends can influence financial conditions, borrowing costs, and investor sentiment. Lower interest rates generally support higher asset valuations by reducing financing costs and increasing the relative attractiveness of growth-oriented investments. Since December, the Fed has steadily expanded its balance sheet to raise bond prices and lower rates.

Emerging stablecoin legislation could also reshape financial markets over time. If regulatory frameworks encourage broader adoption of Treasury-backed digital payment systems, demand for U.S. Treasury securities could increase, potentially influencing yields and liquidity across the financial system. While the long-term implications remain uncertain, these developments could materially affect banking, payments, and capital markets.

For now, the combination of technological innovation, supportive investment incentives, and relatively accommodative liquidity conditions continues to provide a constructive backdrop for risk assets. We remain optimistic but vigilant, recognizing that periods of strong innovation-driven growth can eventually give way to excess speculation and increased volatility. We have been buying on dips and expect the market to continue higher.

Here is a list of stocks we like: ALAB, ARM, ASML, AVGO, BE, BKR, BLSH, CRCL, CRDO, FIVE, FN, GLW, HAL, JBL, LRCX, MPWR, MRVL, NVDA, MU, PLTR, PSMT, RBC, RIG, SIMO, TER, TRGP, TSEM, TSLA, TSM, WAB, WDC, WFRD.

Jesus Christ is the same yesterday and today and forever. Hebrews 13:8

A “Power Trend” is a high-conviction technical uptrend identified by former IBD strategist Mike Webster when major indexes such as the Nasdaq and S&P 500 display exceptional strength, often lasting 3–10 weeks and historically supporting meaningful market gains. It requires a specific alignment of moving averages that signals sustained institutional buying: the 21-day EMA must remain above the 50-day SMA for at least five consecutive trading days.

We are currently in a confirmed Power Trend, which gives me the conviction to remain fully invested. That said, the market is becoming extended in the near term and appears vulnerable to normal profit-taking or consolidation before advancing further.

The Fed steadily reduced its balance sheet from April 14, 2022, through December 4, 2025, shrinking it by approximately $2.5 trillion. Since bottoming on December 4, 2025, however, the balance sheet has expanded by more than $164 billion. While this renewed liquidity expansion supports asset prices, it also has the potential to rekindle inflation expectations.

Historically, expanding liquidity tends to place upward pressure on long-term interest rates and supports hard assets such as gold. Rising inflation expectations can push bond yields higher as investors demand greater compensation for future purchasing-power erosion. Gold often benefits as both an inflation hedge and a store of value during periods of monetary expansion and uncertainty.

Our largest portfolio weightings remain concentrated in AI-related companies, emerging-market bonds, and select hedged mutual funds. Several long/short and hedged strategies are performing particularly well in the current environment, helping provide balance and downside mitigation across client accounts.

The memory-related AI stocks have become extended, but strong demand dynamics could drive them even higher. Unlike fiat liquidity, semiconductor memory supply cannot be created instantly. Capacity constraints, combined with accelerating demand for AI infrastructure, continue to support elevated pricing and strong fundamentals for leading memory producers.

Overall, I remain comfortable with our positioning as we participate in this powerful uptrend while maintaining prudent diversification through hedged exposure.

Everyone who calls on the name of the Lord will be saved. Romans 10:13

Melting Higher!

The major indexes are pushing to all-time highs, with markets increasingly pricing in a more stable geopolitical backdrop following tensions in Iran. Risk appetite has returned, and leadership remains concentrated in AI-driven market segments.

We continue to emphasize the AI theme as the dominant fundamental force driving earnings growth and investor demand. Companies tied to semiconductors, data infrastructure, and automation are leading this cycle, supported by strong capital spending and long-term secular tailwinds.

Liquidity conditions have also improved modestly. While the Federal Reserve has been in a quantitative tightening cycle since 2022, recent balance sheet movements suggest a slower pace of contraction, which can act as a tailwind for risk assets at the margin. The Fed’s balance sheet has increased by over $150 billion since Last December, which gives me the conviction to step on the gas and rest, knowing the Fed has our back.

That said, markets are becoming extended in the near term. The semiconductor index has rallied sharply in a short period, reflecting aggressive dip-buying behavior and momentum-driven flows. While this strength is constructive, it is unlikely to persist without periodic pullbacks.

This type of “melt-up” environment—where buyers chase strength and quickly step in on dips—can persist longer than expected, underscoring the importance of disciplined risk management. Sharp rotations or corrections can occur with little warning.

The S&P 500 is up approximately 5% year-to-date, and the broader trend remains positive. Client portfolios are participating in this strength, and we remain positioned to benefit from continued upside while staying attentive to risk.

Bottom line: The trend is higher, AI remains the primary driver, but conditions are increasingly extended. Managing risk—not chasing momentum—remains the priority.

Give thanks to the Lord, for he is good; his love endures forever. Psalm 118:29

The NASDAQ has now advanced for 13 consecutive sessions, reaching new all-time highs following a sharp V-bottom recovery that began on March 30. This type of rapid extension has pushed the market into overbought territory, making a near-term pullback normal—and likely healthy. I would view any such weakness as a potential opportunity to add exposure.

Investor sentiment appears to be pricing in a resolution to geopolitical tensions, while continued strength in artificial intelligence remains a dominant driver of earnings growth. Companies are increasingly leveraging automation and AI to improve efficiency and margins, and this structural shift could prove as transformative as past industrial revolutions.

Liquidity conditions are also playing a key role. The Federal Reserve’s balance sheet peaked near $9 trillion in April 2022 and declined significantly into late 2024. However, since bottoming out at around $6.5 trillion in December, it has begun to expand modestly again. While not a full-scale easing cycle, even incremental liquidity support can help fuel equity market strength—particularly in momentum-driven environments like the current one.

Historically, V-shaped recoveries have often coincided with improving liquidity conditions, though it’s important not to over-attribute market moves solely to Federal Reserve actions. Policy decisions are typically driven by broader economic objectives rather than political outcomes, and markets respond to a complex mix of growth expectations, earnings, interest rates, and risk sentiment.

Looking ahead, fiscal dynamics remain an important backdrop. Elevated government debt levels and potential future issuance could influence both interest rates and monetary policy. Over longer periods, sustained increases in the money supply can contribute to inflationary pressures, which in turn may support real assets like gold. Gold remains in a longer-term uptrend, and a continuation of that trend would not be surprising in an environment of persistent deficits and accommodative policy bias.

Meanwhile, a significant amount of capital—roughly $8 trillion—remains parked in money market funds. This sidelined liquidity could provide additional fuel for equities if confidence continues to improve and investors rotate back into risk assets.

On the regulatory and structural front, proposals like the “Clarity Act” and the growth of stablecoins are worth monitoring. While innovation in digital payments could create new competitive dynamics for traditional banks, the scale and speed of any disruption will depend heavily on regulatory outcomes and consumer adoption.

Positioning

Portfolios are performing well year-to-date. We will remain disciplined—gradually deploying capital on pullbacks while continuing to manage risk and avoid chasing extended markets.

The LORD will continually guide you always. Isaiah 58:11

The market has stabilized over the past seven sessions, finishing mostly flat to higher following the March 30 shakeout low and a confirmed Follow-Through Day (FTD) on Wednesday. This action suggests the potential start of a new uptrend, supported by improving sentiment after the announced two-week ceasefire. Investors increasingly believe the worst may be behind us.

As defined by William J. O’Neil, a Follow-Through Day occurs at least four days after a market low when a major index advances 1% or more on higher volume—often signaling institutional accumulation and the early stages of a new bull phase.

In the near term, the market appears due for a modest pullback toward the 50-day moving average. I plan to use that pullback to begin selectively adding exposure to leading stocks, ETFs, and mutual funds. For the uptrend to be sustainable, institutional investors should provide support near those levels.

There remains approximately $8.2 trillion sitting in money market funds—significant sidelined capital that could help fuel further upside as confidence builds.

Notably, the market rallied despite a hotter-than-expected CPI report. That type of price action often signals underlying strength and reinforces the case for continued upside momentum.

We are also seeing an unusual divergence: interest rates are rising while the U.S. dollar is weakening. Typically, higher yields attract foreign capital and support the dollar, so this disconnect suggests a larger macro force may be developing beneath the surface (stagflation).

Financials are benefiting in the current environment, as higher rates tend to expand net interest margins. However, if rates remain elevated for too long, they could eventually slow economic activity by reducing borrowing and investment.

Gold is setting up constructively. With the dollar weakening, I am monitoring for a potential breakout and may begin adding exposure.

Emerging market stocks and bonds could also benefit from a weaker dollar. One possible driver is the expectation of a widening U.S. budget deficit tied to increased spending. If the Federal Reserve is forced into debt monetization—effectively printing money to absorb new Treasury issuance—it could put upward pressure on rates while weakening the dollar.

If the Clarity Act passes ahead of the November elections, stablecoins could re-emerge as a meaningful force in the financial system. I am watching Circle Internet Group (CRCL) as a proxy for where I believe bitcoin and stablecoins may be headed. While I have not historically invested in cryptocurrency, stablecoins could play a role in how the U.S. manages its growing $39 trillion debt burden.

For 36 years, my approach has remained consistent: risk management comes first. While markets have historically recovered from crises—often supported by Federal Reserve policy—there is no guarantee they will recover on any specific timeline that aligns with investor needs.

All portfolios are up nicely year-to-date. We will remain disciplined—gradually deploying capital as conditions improve while continuing to manage risk carefully.

May the God of hope fill you with joy and peace as you trust in him, so that you may overflow with hope by the power of the Holy Spirit. Romans 15:13

All client accounts are up nicely for the year and sitting on the sidelines until we get an FTD. A Follow Through Day (FTD) occurs at least four days after a market bottom when the index closes at least 1% higher on greater volume. According to William O’Neil, an FTD has preceded every bull market, but not every FTD has led to one. O’Neil was a self-made billionaire who studied markets for decades and wrote several books on his findings. His system is one of the best I have found because it follows the common-sense logic of human emotions driven by fear and greed. I am not willing to bet my life savings on the idea that because the market has always recovered from every crisis, it will do so again exactly when I need my money. O’Neil’s system gives me the edge I need to succeed; otherwise, the house wins in the end.

The Iran war will likely cost more than anticipated, and it may eventually force the Fed to monetize the debt issued by the Treasury through Congress. The 10-year Treasury yield has risen toward the 4.4% threshold and could move higher from here. Recent reports show the 10-year yield trading between roughly 4.31% and 4.39%, with many analysts viewing 4.4% as an important level for stocks and gold.

Higher yields could attract foreign capital, strengthen the dollar, and pressure gold prices in the short term. I am short-term bearish on gold but long-term bullish because I believe the Fed will eventually print more money, which could fuel inflation and support higher gold prices over time. Gold has recently come under pressure as the dollar and Treasury yields moved higher.

The longer the Strait of Hormuz stays closed, the longer oil prices are likely to remain elevated, and the more global economies could struggle. Roughly 20% of the world’s oil supply flows through the Strait of Hormuz, and some analysts believe oil could rise to $150–$200 per barrel if the disruption continues.

I believe Trump will do everything in his power to bring oil prices lower before the November elections. I am watching the dollar, oil, gold, and yields closely because they will likely determine where the stock market heads next.

Happy Easter!

The curse of Yahweh is on the house of the wicked, but God blesses the house of the righteous. Psalms 3:33

The NASDAQ 100 is now in correction territory (down more than 10%), and the S&P 500 has fallen by more than 9% from its recent high. All major indexes—including junk bonds—are trading below their 50- and 200-day moving averages. Simply put, the market is not rewarding risk.

There is a time to invest, and there is a time to protect capital. We are currently on defense. Nothing good tends to happen below the 200-day moving average—or after midnight.

I am waiting for a Follow-Through Day (FTD)—a signal that the market may be putting in a bottom, marked by a strong rally (at least 1%) on above-average volume. After that, I will look for leadership: stocks breaking out with strong volume, accelerating earnings and sales, and double-digit forward estimates—the fastest horses out of the gate.

The market will likely turn higher before the war ends, as it begins to price in that outcome.

War is expensive, and markets are already reflecting those costs through rising interest rates. Sustained higher oil prices will ripple through the economy, pushing producer prices higher and ultimately feeding consumer inflation.

To fund war-related spending, Congress will likely increase fiscal outlays, while the Federal Reserve may be forced to monetize debt—effectively printing money to absorb Treasury issuance. More money creation risks fueling further inflation.

While the Fed can influence short-term rates, the market controls long-term yields—and it is demanding higher rates amid rising inflation expectations.

Higher rates pressure housing and economic growth. When slower growth meets rising inflation, the result is stagflation.

A recession could eventually break inflation—but that comes with its own challenges. In that environment, traditional long-only strategies struggle. However, downside strategies—such as shorting—can be effective in bear markets, just as long exposure works in bull markets.

Until a clear uptrend emerges, cash remains a position.

Remember: a 20% loss requires a 33% gain to break even.

Cash is King.

In him our hearts rejoice, for we trust in his holy name. Psalms 33:21

I recently exited my gold and emerging market bond positions after they broke below my defined “line in the sand.” Successful portfolio management ultimately comes down to risk management—and the discipline to act when sell signals are triggered.

As a rule-based trend follower managing IRA accounts since 1990, I don’t force investments when trends lack clarity. When conviction is low, I’m comfortable holding cash and waiting for the next high-probability opportunity—whether the trend is up or down.

If we are entering a period of stagflation—marked by slowing growth and persistent inflation—I expect downside opportunities to emerge. In that environment, inverse ETFs, which rise as markets fall, may provide a way to generate returns. Near-term direction, however, will likely depend on how quickly geopolitical conflicts resolve.

Treasury yields are rising as markets anticipate increased government spending and debt issuance. With a federal budget exceeding $7 trillion against roughly $4 trillion in tax revenue, deficits continue to expand, adding to an already elevated debt load. Historically, this has led to monetary expansion—but further money creation risks fueling inflation, tightening financial conditions, and slowing growth even more.

If stagflation persists, history suggests the eventual outcome is often recession—sometimes prolonged—to bring inflation back under control. While the Federal Reserve has intervened in past crises, there is no guarantee the same playbook will work without unintended consequences this time.

I’m also closely watching developments in stablecoins—digital assets typically designed to maintain a 1:1 value with reserves such as Treasury securities. A government-backed stablecoin could lower borrowing costs and increase demand for U.S. debt. Stablecoins are an evolving space with long-term implications, and I’m monitoring opportunities like Circle Internet Group (CRCL).

From a technical perspective, both the S&P 500 and Nasdaq-100 remain below their 200-day moving averages—a level I consider a “no-go zone.” Historically, sustained weakness below this trend line signals elevated risk. Junk bonds are trading below their 50-DMA, a sign that investors have lost their risk appetite. Cash is a position!

The U.S. dollar continues to strengthen against other currencies, reinforcing its role in global trade—particularly in oil, which is priced in dollars. Gold typically moves inversely to the dollar, so as the dollar rises, gold tends to weaken. In this environment, countries may sell gold to buy dollars to facilitate energy purchases. Additionally, easing sanctions on Iranian oil could increase supply and help moderate global oil prices.

For now, I’m comfortable holding cash equivalents, such as the PIMCO Enhanced Short Maturity Active ETF (MINT), while waiting for clearer signals. Durable market bottoms are typically marked by capitulation—high-volume selling that exhausts weak hands—followed by a strong, confirmed rally.

Until then, I’m not assuming the Fed will once again rescue markets simply because it has in the past. Protecting capital remains the priority. We will come out and play, so let’s wait for the rain to stop and the sun to shine.

God gives wisdom to the wise and knowledge to those who have understanding. Daniel 2:21

Gold is attempting to hold its current support line as the dollar shoots higher toward a resistance line. Gold and the dollar typically have an inverse relationship, meaning when the dollar rises, gold often falls—and vice versa.

The dollar is rising as more oil is traded in dollars amid the Iran war. Once the market believes the war is nearing an end, the dollar will likely fall, and gold should resume its uptrend.

Congress will likely be forced to pass additional spending bills to finance and replenish our weapons of war. As more money is spent, the Fed may monetize the debt by creating money and buying Treasuries to finance excess government spending. As more money is created out of thin air, inflation can rise, and the cost of goods can increase. Rising prices do not cause inflation—rather, inflation causes prices to rise.

If oil demand exceeds oil supply, oil prices will rise, and we will all feel the impact because oil is embedded in nearly everything we consume.

Emerging markets had been performing well, but they broke their trend lines two weeks ago, so I sold those positions and reduced our gold exposure. We now hold a small position in gold and a larger position in the high-yielding money-market like ETF, PIMCO Enhanced Short Maturity Active ETF (MINT).

Treasury yields are rising as bond prices fall, signaling that the market may be anticipating higher inflation ahead. The S&P 500 Index and the NASDAQ‑100 Index are down about 3–5% year to date, while our portfolios are up by similar amounts.

We could be entering a stagflationary environment where economic growth slows while inflation rises. Historically, the only way out of stagflation has been a prolonged recession.

President Donald Trump will likely do everything possible to avoid a weak economy and stock market ahead of the November elections. Still, the market is far bigger than any single politician.

Price ultimately trumps everything, which is why I follow price trends. When I do not have an edge—when there is no clear trend—I wait patiently in cash until a tradable opportunity appears.

Remember: the trend is your friend… until it bends in the wind.

The LORD’s blessing brings wealth, and he adds no trouble to it. Proverbs 10:22