A note to the Cassandras who are now out in full force...

Led by "Rich Dad, Poor Dad" Robert Kiyosaki's warning of "Be careful, it's the biggest crash in world history," the bears have come out of their winter caves. "We can't make it past 2025" warns Patrick Bet-David. Wells Fargo (WFC) is saying it's recession time. Mark Spitznagel, who serves as chief investment officer of Universal Investments, is predicting "Biggest market crash since 1929."

Shame on them, they have hurt lots of investors. Fast-talking Jim Rickards and Peter Schiff (both with horrible track records but large followings) tell us things such as "Everyone will be wiped it... what's coming is bigger than a recession... and... all this is going to collapse."

Really?

We have seen worse times than now. Have you forgotten the marches on Washington by the armies of Kelly and Coxey in the late 1890s?

With the release of the recent unemployment numbers showing a muted increase in jobs, these Perma-Bears are telling us the recession has begun. Maybe, maybe not. I prefer reality, and to look at employment data vs stocks to see what, if any, relationship can be found.

Taking this into account, the next few charts show the Dow Jones in black vs. Employment as a percent of population. We will go all the way back to 1948 in search of how these two data sets dance with each other.

The first 12 years of the past give us the impression the Dow and Employment hold hands on the dance floor, both dancing to the same tune. The lows leading to increases come at the same times.

The relationship was stable for the next 12 years as well. The bears tell us that when Employment declines, a recession is near, which means a stock market slide is expected. Their point is employment, or lack of it, is one of the best predictors of bear markets; a reason for their recent growling.

As we study the next 12 years again, we see that when the red line (percent employed) dips, stocks decline. Conversely, when it increases, stocks rally.

Oh my gosh! From 1981 to 1994 stocks and employment continued to hold hands on Wall Street's dance floor. It appears an increase in people working led to stock market rallies.

Don't rush to judgment here, because, in a moment there will be a twist O. Henry would appreciate.

From 1993 to 2006, we see the same pattern. It looks like the 2000 bear market was clearly called by the drop in employment. Hold on, though — the twist is coming.

Well, would you look at that! Employment dropped just before the 2008 crash and, when it picked back up, stocks soared.

Now comes the twist to the last 76 years' relationship between jobs and stock prices.

Look closely here and you will see I have shifted the Dow — pushed it forward —46 weeks. That means the charts you have been looking at show the Dow is a great predictor of employment. Stocks decline, then employment slackens. When stocks get strong, people get jobs.

The suggestion here is that soon, the employment numbers will rally in phase with stocks. More people will get jobs. Stocks are the driving force of employment. This is regardless of what the bears, Trumpsters, Anti-Trumpsters, or TV talking heads say. There is a force at work; expect more jobs.

Finally, for the bears that still think bad times are coming, Chart 8 is an overlay of my cycle projection for employment.

Employment numbers show a strong 9+ year cycle. It looks like we are on a similar path and should expect employment to pick back up.

Doubting Thomases

If you are still in doubt about your future, look at the following "Smoothed US Recession Probabilities" index.

Of all the easy to access predictors of recessions, this one is the best. As you will note, it is not even close to the area that kicks off recessions.

Bears, go back to your cave.

Wealth Is Not Health

How long will you live?

I don't want to live forever, just until I run out of money, energy, and friends.

On the surface, it seems people are living longer now than before. Organic food faddists should think about that. People are bigger now and may live longer (maybe) than "back then". Back then, there were no additives to food. It was all grown organically.

While our food supply chain has changed dramatically, we are told life expectancy in the US has generally been increasing. For instance:

• In 1900, it was 47 years.
• By 1950, it had risen to 68 years.
• In 2019, it reached nearly 79 years.

However, there has been a recent reversal:

• In 2020, life expectancy dropped to 77 years; thanks COVID.

Gee, looks like a real change in longevity. To me, though, something does not add up.

Step back in time to the lives of our founding fathers to see how long they lived. Ben Franklin lived to 84, Thomas Jefferson to 83, President Washington to 67, John Adams to 90, Aaron Burr to 80, James Madison to 85, Alexander Hamilton to 49 (he was killed in a duel), and Lafayette to 76.

Pretty interesting ... people back then, if they survived the early years, led long lives, about the same as now. Speaking of which, here are recent presidents age at death; FD Roosevelt at 63, Harry Truman at 88, Eisenhower at 78, Nixon at 81, LBJ at 64, Reagan at 93.

I am not so certain people that live past puberty are really living longer now than then.

The leading causes of death in older North Americans include:

• heart failure (20.0 percent)
• dementia (13.6 percent)
• chronic lower respiratory disease (12.4 percent)
• pneumonia (5.3 percent)
• cancer (5.6 percent)

(J Am Geriatr Soc, 2012 Aug; 60(8): 1448–1456)

Women, on average, live 6 years longer than men. Knowing the above, we know what we need to protect ourselves from: heart, dementia issues, and respiratory disease which account for 45% of deaths.

My personal focus has been on how to fight those three leading causes. I think it boils down to these 5 elements.

1. Nutrition and lifestyle - discussed this month
2. Physical activities - discussed last month
3. Boost immune system/inflammation - coming soon
4. Rejuvenate cells - more on that later this year
5. Clear out old cells, see my bit on Senescent cleanse - discussed a few months ago

Nutrition has been the buzzword of the last few years. Does it matter? Looking at the deaths shown above makes me wonder.

Dr. Roy Walford, a UCLA professor, doubled the life span of mice by cutting their caloric intake in half. He became the leading advocate of eating less, claiming cutting back on calories was the way to live longer. Dr. Walford died at a very young 79.

I know Seventh-Day Adventists (vegetarians) live 10 years longer than others in the USA with a 30% lower risk of cancer. Those are just staggering numbers.

Why is this? Is it the fact they do not eat meat? I once thought so; that led to about 10 years of being one of those strange people. I eventually gave it up... it was just too boring, plus my marathon career was beginning, and I thought I needed more protein.

Recent research makes me wonder about all these diet claims. A studyin 2015 of more than 60,000 people in the United Kingdom (part of the European Prospective Investigation into Cancer and Nutrition –EPIC-Oxfordsurvey) found that vegetarianism provided no overall reduction in risk of early death, though it found that some low-meat diets reduced the risk of death fromspecific ailments.

A 2017 paperthat analyzed similar health metrics for over 240,000 Australians, part of the "45 and UpStudy", found no increased longevity from avoiding meat."We have shown in a large population-based Australian cohort that there is no difference in mortality between vegetarians and non-vegetarians. The results of our study seem consistent with other studies and meta-analyses which have shown that in non-selected populations a vegetarian diet is not associated with reduced mortality."

Why is this?

My thinking is that most vegetarians — in particular, Seventh Day Adventists — do not smoke or consume alcohol. Mormons (meat-eaters) also live longer; again, a group of non-smokers and non-drinkers. My uneducated guess is these two factors are what's at work here, more than a meatless diet.

I have never been a smoker, never consumed diet drinks, and always drank alcohol, until recent years where I have cut way back with just an occasional glass of wine (which I really enjoy) or a beer. That's a lifestyle change more than nutrition/diet. I am careful about what I eat, avoid deep fried foods, processed stuff, have not gone to a fast-food place for years, work at eating less to keep my weight down. Sweets are my nemesis... I am working on that.

Diet clearly influences heart health. What can we do there?

There is a myriad of paths to healthier hearts. Some take statins with their side effects. Others use aspirin, which also comes with side effects, as does the GLP-1 agonist.

In 1988, a study reported an impressive 44 percent reduction in heart attacks in North American male physicians, aged 40-84, who took aspirin (N Engl J Med, January 28, 1988;318(4):245-246). As a result, by 2017, many people took aspirin with the belief that they were helping to prevent heart attacks.

The view now is patients should take low-dose aspirin ONLY IF they have evidence of clotting problems such as having had a heart attack, a clotting stroke, known heart or blood vessel disease, or any episode of an irregular heartbeat (atrial fibrillation); also, if they have had a stent inserted into an artery or vein, or anything else that causes a high risk for forming clots. Most people who are at increased risk for bleeding should not be taking aspirin regularly.

Be careful with Advil (Ibuprofen), as, despite what you read online, it can cause a huge increase in blood pressure readings. After taking a heavy dose due to some dental work, my BP skyrocketed to 187/109. That's in the life-threatening area! I had no idea what was happening. Fortunately, my doctor had seen this before, so we solved the problem by stopping the use of Advil.

There are lots of drugs and supplements to improve heart function. On the supplement side, Hawthorne, beets, or beet juice have credibility. Omega-3 helps lower cholesterol as does Niacin. I take Ubiquinol based on this study.

Bottom line was said best by my father, when I was on one of my many fad food programs, "Larry, you can eat most anything ... just do it in moderation." That has become my approach to diet.

Here is what seems the simplest...

Live Longer - Lower Your Death Rate By 15%

People who walked at least 8,000 steps per day just one or two days per week had a 15 percent lower death rate over the next 10 years, compared to people who walked less than that (JAMA Netw Open, Mar 29, 2023;6(3): e235184). People who had 3-7 days with 8,000 steps or more had an additional reduction in death rate. Exercise such as this also lowers depression levels.

There can be too much of a good thing. People who are doing the highest volume of vigorous exercise start losing longevity benefits. "If you're doing full-distance triathlons when you're in your 40s and 50s, your risk of atrial fibrillation increases by 500% to 800%", says Dr. James O'Keefe, a cardiologist with the Mid-America Heart Institute at St. Louis Hospital in Kansas City.

If you want to stay healthy... just keep moving.

Keep in mind I have no medical training. I just explain here what I am doing based on research and experience. This may or may not even work, so hard to ever know.

Now let's get back to the markets...

Big Surprise and Big Trade Coming Up

I am looking for an important top in gold. Here's why...

In Chart 10, you see the long-term cycle for gold. It has usually ebbed and flowed with about a 48-month cycle. That means major highs and lows have been about that far apart.

In Chart 11, we see the cycle update through 2024, with the suggestion that we are in the area of an important cycle peak.

Chart 12 is an "up close and personal" cycle view of Gold. I have marked off the general roadmap I expect it to navigate, as well as the percentage of times in the past it has rallied or declined. For almost 50 years, price has moved up or down in sync with these waves.

Okay, what I have shown so far are the general cyclical patterns of the metal. With that behind us, let's look at my specific forecast, where several cycles are melded into one for a projection into the future.

Well, there you have it. Chart 13 is a complete cyclical study of Gold and a guideline as to where it is going, as well as when to expect the bobs and weaves as the battle unfolds.

Now... The Real Reason I am Bearish on Gold

Cycles can be so helpful but, in my book, conditions are what drive these cyclical waves. Gold has a long, long history of being one of the markets most influenced by the Commitments of Traders Report. That's the government report released each week that shows actual positions of the public, the funds, as well as the users and producers (Commercials).

The public, as you might suspect, usually buys the tops in gold and sells the lows. As always, don't take my word for it... take my charts.

The green line in Chart 14 is a measure of how bullish or bearish the small speculators are based on their actual positions as reported by the Commodity Futures Trading Commission. When the index is high, they are heavily long and bullish. When low, they are short or not long. Notice they have not been buyers at any the major lows in the last 3 years.

When it comes to market tops in Gold, these smaller traders are buyers - exactly where they are now. This is not a timing tool — it is just a setup tool that is quite bearish at this time.

On the flipside of the small specs, we find the users and producers, known as the Commercials in this report. A quick glance shows they were buyers at or before every market low and sellers before declines. Their current position is bearish. As of the most recent report on May 21, they were long 25,490 contracts, down from 35,446 last week. They were short 57,460 contracts.

Opening Up StockCharts...

Opening up StockCharts... the first thing I see is the gold line in the bottom panel, my measure of valuation. When it is high, like now, we are in the area of market tops. Check it out for yourself and you will see this has been true at every major top in Gold.

The true seasonal pattern also turns down here for a bit. So I rest my case. Let's look for and take sell signals in GLD (the ETF for Gold) or the actual contract if you are futures trader.

Trades for June ... Trading Day of the Month (TDOM)

June has had a consistent pattern to the way it trades. We can see that using my True Seasonal indicator from StockCharts.com using the Dow Jones Industrial Averages.

What we see is an early month rally, a decline, then a rally at month's end.

How can we take advantage of this pattern? The best way I know is to use my TDOM concept.

I did not show this last month. Afterwards, I was inundated with requests to bring back TDOMs. For newcomers, welcome aboard — what you see above is a tabulation of what profits or losses would have resulted "if you had bought on the X trading (not calendar) day of the month for June."

As an example, if you had bought on the opening of the first trading day of June, over the last 25 years (using a $2,800 stop or exiting on the first profitable opening after 2 days in the trade) you would have made a total of $18,200.

What we learn is that stocks have shown a distinct bullish bias for the first two and last four trading days of June. See the highlighted TDOMs. Do not automatically take these trades; they are a guideline to follow as these trading days draw near. I have used this TDOM concept since 1986; it is a very good tool, but use it as that — a tool.

Stock traders can apply this same concept to trading the SPY. The next tabulation is for that symbol using a 1.5% stop from the entry, and exiting the trade on the first profitable opening after being in the trade one day.

Here too, we see early and late month strength. This means short-term stock traders should focus on these times to be bullish. You don't have to try to beat the market every day of the week — just when the odds are in your favor.

Now to Individual Issues

Trading Tip

Let's talk a little about entry techniques first...

My thinking has always been to find a market ready to rally or decline, and then wait for a trend change in the anticipated direction to establish a position. There are many ways to establish trend change: moving averages, trend lines, hi/low channels, congestion breakouts, etc.

StockCharts has a great tool for this; Price Channels. These will show the channel for the highest high and lowest low, like other chart services. They go way beyond the others, though, in that you can instantly adjust the channel to see what best fits the current market.

Chart 19 is a daily chart of JNJ with a high/low and mid-point channel. When price touches the top bar, you go long; when touching the bottom bar, go short. You do catch some good trades, but it is way too "whippy" with back-and-forth signals.

Look to the upper left top of the chart under Price Channels with a blue dot that says Periods. This is a great tool. You can slide it back and forth to find what channels work best when you chose a stock.

In Chart 20, I have widened out the channel tool (again look at the upper left tool) to get the best fit for JNJ. This creates much better entries, because we are adapting the channel to current market and cycle conditions.

Individual Stocks

As Kenny Rogers sang, "You have to know when to hold ‘em, know when to fold ‘em". I do not think it is a time to fold the tents and walk away. It is a time to hold and await a better — more certain — buy point. Let's start with a look at the S&P 500 Index.

Just when is that "more certain" buy point? About the first of July, based on my cycle work. In Chart 21, the red line is the model's forecast for shorter-term swings, while the blue shows the long-term path stocks have been on for the last 100+ years. That path tells us we have a very strong buy point coming in this cycle. How strong? Well, in the last 23 occurrences of this cycle wave, the S&P 500 has rallied 81% of the time.

Until then, I think this is a much better time to just hold our stock positions with trailing stops.

We have been really lucky with a few of our selections while still waiting on a few to rally. First Solar, Nvidia, Marvell, Meta, and Boeing had held up. Our L selections, LULU and LOW, have not. Use tight stops there. I may still be wrong on COIN to decline, still sticking with that as a short. I expect further gains in TLT with a rally to start soon, lasting until the end of June.

Now let's revisit a potential short sale in Bank of America (BAC). If you like to sell short, Bank of America is still on my list. Here's why.

Here, using StockCharts, we see the seasonal pattern in blue that suggests we usually decline at this time of the year. Of more importance is my Money Flow Index, which shows professional money has been leaving BAC, usually a harbinger of a decline.

Clearly, BAC has a cyclical influence suggesting lower prices, perhaps lasting into September. I like this. We know cycles are best at telling us when to expect turns, but, when I see a longer-term trend (up or down), it tells me there should be real legs to the move. Time is on our side.

With that in mind, we can go to the daily chart using the channel method I just discussed as an entry. We can also wait for the formation of a lower short term high, as I have shown in red.

In Closing

That's it for this month. Kick back, relax, and get ready for a better buy point coming.

Good Luck and Good Trading,

Larry Williams

If you have questions for Larry that you'd like addressed in future postings, please email familygathering@stockcharts.com.