All Star Charts founder and chief strategist, JC Parets, joins Jared Blikre of Yahoo Finance to discuss the latest market outlook for global stocks and commodities, including crude oil.
Video transcription
– Let’s bring Jared Blikre into detail on the current market action. He joined a special guest, Jared.
JARED BLIKRE: Is this right. We have JC Parets here from All Stars Charts. And I want to bring you inside, JC. Let’s start with the market in general. You know, I monitor your Twitter feed. And I have to say, why are you so pessimistic? Oh, wait, wait – it’s the opposite. Why are you so optimistic here?
JC PARETS: Well, when stocks are hitting new all-time highs, there is probably no evidence that they are in a bearish trend, right? And, you know, the truth is that people are afraid of their own shadows. I don’t know why everyone is so angry. You know, the stock market breaking historic highs, last week, the volatility index was pushing 40 with the S&P 500 3 and 1/2% off historic highs, we’ve never seen that before. So, basically, the fact is that people are most scared for the fewest reasons in the history of the stock market. I can’t think of a more optimistic combination, angry people and bullish stocks, I mean.
JARED BLIKRE: Yes, and you are looking at the commodities market as well. I mean, we have crude oil for a maximum of one year. I don’t think many people thought we would have more than $ 50 here. Let me see the crude oil chart. What are you seeing on the market right now?
JC PARETS: I think people forgot about commodities. You know, in the old days, when you and I started in this business, commodities were growing. Are you kidding me? Oil went to 150. Natural gas was tearing. You know, that Peabody energy and all those names of energy and global growth were monsters. Emerging markets used to outperform. Like, it was a totally different world. And then, 10 years ago, everything changed. And it has been a disaster ever since.
So, these millennials have never seen an environment in which commodities are doing very well. They don’t know anything about these things. I think they’re starting to find out. And we veterans, right – it’s funny to even say that. But those who have gone through several cycles like us, remember the good old days. We know that when goods go, they go. So I think the commodity super cycle has already started. I think the sub-zero crude oil trade was what originally generated this. I mean, I can’t think of a better start for a commodity super cycle than the sub-zero crude oil trade, right?
JARED BLIKRE: Yes, you have to think, that was the 2020 market clearing event. But I know that you are also looking at finances. We had the XLF reaching new highs recently. What are you seeing in the financial space here?
JC PARETS: I mean, you can argue that this is the most important sector index of the stock market in the world. I mean, we don’t have bull markets without finance. The financial sector is still stuck below its 2007 highs. They are practically there. And the way I learned it, the more often the level is tested, the more likely it is to break. And if finances are bursting on a 14 year old basis, it becomes very difficult for me to be a bass player. It makes me want to buy XLF.
See Berkshire Hathaway. In fact, it is the largest component of XLF, representing about 15% of the sector. If we are over 235 in Berkshire, you should buy with Warren Buffett. Uncle Warren is going to give us some money.
JARED BLIKRE: I heard this. And he also has a big pile of money. JC, thanks for joining us here. And I will play it back to Zack.