Episode 306: Fake v. Real

 In this week's episode, David and Ian discuss the continued chop fest, how the Magnificent Seven is a red flag, although at the same time Financials and Transportation stocks look good, which aids the bullish thesis that this consolidation resolves in the direction of the primary trend. They also discuss if the mega cap tech and Magnificent Seven era is over, what is going on with Consumer Staples, Utilities, and is it interest rate or inflation driven. Other topics discussed are tangible assets, the U.S. Dollar, the SpaceX IPO, and the next generation of market technicians. 

Transcript

David 0:50

Welcome back to the Weekly Trend podcast. Today is Friday, July 24th, 2026. S&P 500 currently sitting at 74.58. I'm David Zarling. I'm here with Ian McMillan. Almost another week in the books. Everybody is kung fu fighting. Chop fest out there

Ian McMillan 1:07

I

David 1:08

Yeah

Ian McMillan 1:09

If you couldn't tell by the last three podcasts

David 1:11

Yeah. Consolidations

Ian McMillan 1:14

Still chopping. Still chopping. I thought we might be done with the chop. We were just gonna get the breakdown, which at this point I mean, it's a direction, right? At least it's a direction. But, no bueno. Bounced, everything's kind of bouncing where it has to, needs to

David 1:33

Yeah, and I still go back, you know, I think it's appropriate if you have semiconductors moving 85% to the upside since March of 2026 that,

Ian McMillan 1:48

It

David 1:48

that we consolidate. You know, it's important to keep that context. We like making money for clients, and so when consolidations happen, they're perfectly normal. That doesn't mean that we're not allowed to be grouchy about consolidations And here we have a consolidation if we're using the S&P 500 in, what is this? Four percent range Yeah, 4% range since May. May, June, July. Almost the end of July. Can you believe it? Almost the end of July

Ian McMillan 2:20

Over

David 2:20

Oof

Ian McMillan 2:20

done with the year

David 2:22

And so, I mean, it's a quality consolidation really. If we move higher, you know, the-- as a technician, the study of technical analysis, the study of supply and demand, consolidations should break in the direction of the primary trend. If they do not, then we have something else on our hands. When I say should, I don't mean like they have to, it's a law or anything like that. I just mean as a trend follower, consolidations, the confirmation of the uptrend is consolidations break towards the direction of the uptrend. What is that level, do you think? Not what you think, basically, when you look at the data price-wise using the S&P 500 EAN, confirming an uptrend, where do we have to get to

Ian McMillan 3:11

SR

David 3:11

Yeah. Still some work to do But, you know, I think that's the difference between when you're in a consolidation, the question is, is this digesting the prior move and we move higher, or is this distribution? So if we're gonna operate under those two ins- assumptions, I think the red flag or orange flag... No, I'm gonna call it red flag for me is MAGS, The Magnificent Seven Yeah

Ian McMillan 3:37

They carry a lot of weight. I mean, they are definitely a, either a tailwind or a headwind at this point They've carried a lot of, they've carried a lot of breathless

David 3:47

Yes

Ian McMillan 3:49

And definitely a Headwind I mean, mega caps across... I mean, you see the c- s- I think tech gets the most, the most chatter when you talk about... But you see it in consumer discretionary

David 4:05

Ooh.

Ian McMillan 4:06

Pretty weak

David 4:07

You talking about consumer discretionary? Brutal.

Ian McMillan 4:10

it's pretty

David 4:11

Brutal

Ian McMillan 4:12

if you look at it from a cap-weighted perspective, but not that bad under the surface. Same for tech cap tech broader tech versus cap-weighted tech Can maybe say the same for communication services. They've definitely gotten hit. Google kind of helping there, though

David 4:32

To the downside

Ian McMillan 4:34

Netflix. Netflix not too

David 4:35

You're saying Google not helping in the fact... You're, you're saying Google's helping to the downside, not helpful from a capital

Ian McMillan 4:43

Yeah. Well, yeah, so Google, Google had been kind of the last thing helping it hold up Was, it wasn't even holding up, but it was Google had been the last one. Now they'll ask Google

David 4:56

On the Magnificent Seven, below a 200-day moving average, which is flattening out. So I think the best way to communicate that is a flat 200-day moving average means hot mess territory. So if you have your largest seven stocks in a hot mess, really that's gonna impact your cap weighted sectors and indices across the board. So tech, mega caps, S&P 500, probably a hot mess unti-

Ian McMillan 5:29

Nasdaq I agree another thing, I mean, other things act fine, I guess. I mean, there's definitely stocks making all-time highs.

David 5:39

what are we talking about? What do you got?

Ian McMillan 5:41

Transports I mean, not like broad

David 5:43

Well,

Ian McMillan 5:44

but

David 5:44

what about Broad Transport minus Uber?

Ian McMillan 5:47

Oh, I gue- I mean, I guess IYT looks pretty good. Pretty good relative chart. Oh my gosh. Am I buying trans? I mean, could be. Maybe second half of the year is very

David 5:56

I mean, Uber is 13% of transports, and if you take it out of IYT, transports look pretty good on a relative basis How bearish on the market are we getting? I think, I think two things can be true at once. Chop is not fun for a trend follower. The information we have on hand about, for example, transportation stocks minus Uber doing very, very well. Financials doing just fine on an absolute basis

Ian McMillan 6:25

Yeah, financials look, I mean, they're They're

David 6:28

Like, are we gonna get super bearish on this market?

Ian McMillan 6:31

Bank of America, 62 bucks today

David 6:34

Like, are we gonna get super bearish on this market if transportation stocks are doing fine on an absolute basis, industrials are doing fine on an absolute basis, financials are doing fine on an absolute basis? I guess, I guess the The caveat to that would be if, how, how bad would the mags... How bad would a magnificent correc- magnificent seven correction impact things? That could be a thing. There could be, you know, is this

Ian McMillan 7:00

Yeah, it probably eventually

David 7:01

You know, is this a scenario where equal weight S&P, which many investors don't realize that there's multiple ways to cut a cake. There's cap-weighted S&P and then there's equal weight S&P. Is this one of those scenarios where equal weight S&P outperforms? Cap weighted just because of what we're seeing out of ma- mega caps and Mag Seven? Could be

Ian McMillan 7:25

Used to have a reverse weighted S&P

David 7:27

Yeah, YPS

Ian McMillan 7:29

But that's, that's not, not ah, it's a tough product. That was just the

David 7:34

Wrong environment. And then like isn't... I'm sure the individuals or individual behind that really smart, really like love it, love the idea, but isn't it anti-momentum? Like if you say reverse weight S&P 500, aren't you saying bet against momentum?

Ian McMillan 7:53

Yeah, I don't think it's a probably not a buy and hold strategy

David 7:56

Okay

Ian McMillan 7:58

But I mean, in an environment like this, could

David 8:02

Yeah, there might be some alpha there.

Ian McMillan 8:04

make a

David 8:04

Yeah, yeah, absolutely. For sure. And I, I just, I think it's fascinating as technicians you study if you use ETF RSP versus SPY. Might be an argument here for a return to equate S&P, which matches what we're s-

Ian McMillan 8:20

Yeah. You know, though, you know this, every time people get like this, then we, you know, Micron's up 25% and we're all back into... Every time people start wondering if the Russell's gonna do it, could the Dow do it, could the value stocks, could the JP Morgans of the world do it? And they let us down

David 8:45

Well, and part of this could be

Ian McMillan 8:47

I wouldn't say they let us down. It's more like the tech just...

David 8:51

I think, I think it's a-- you're highlighting an important aspect. Like, if we just look at, let's, let's take J.P. Morgan versus semiconductors. Relative strength, ratio analysis I mean, this, this move, aren't we just saying this is a reversion to the mean? We talked about this before hopping on here. Like reversion, we're not seeing like this is a new trend. We're not saying, "Oh, for the next 10 years, JPMorgan's gonna outpace semiconductors." It could. I mean, I-- That's, but that's a lower likely probability. We're just saying, "Oh, we're reverting towards the 200-day history of that re-"

Ian McMillan 9:30

Okay, but what if you... Okay, so what if you If you go backwards, if you work it backwards, like, okay, so JPMorgan outperforming like a Microsoft. Like that would be like a first crack for me

David 9:45

Okay

Ian McMillan 9:46

Like if it started outperforming some of the mags like... Well, JP Morgan versus Microsoft looks pretty good. JP Morgan versus Apple, and that's an easy, like that's an easy tar- I, I'm kinda cherry-picking I could say JPM versus Apple or,

David 10:01

I like this though. You're saying

Ian McMillan 10:03

and it doesn't look any better. I mean, JPM versus Amazon, I think. I mean, right, like yesterday helps. versus Google I mean, yeah, intermediate term I could definitely make an argument there. So if these dominoes start falling, then it makes you wonder, like, okay, well, will it just start outperforming the Nasdaq? And then if it starts outperforming, I don't know, I think that there's some growing I think there's some growing evidence, thank you, that we could actually be doing it. Like, we could actually be getting out of The tech mega cap era, I wouldn't say completely unscathed, Yeah, we'll see. Or was 2022 the... I mean, was it 2022? Because if you go back and look at App- like Apple since the 2022 bear market I mean, not a, a very... I mean, it's outperformed a little bit

David 11:09

So Ian, I, I think what you're bringing up here is fascinating. When you pull up a chart of J.P. Morgan versus Magnificent Seven, so JPM versus Mags, I think, I think you got a case here

Ian McMillan 11:23

I think you can do it

David 11:24

And that doesn't mean the end of a bull market. That just means are we over the megas? And I guess there's two ways that, you know, I, I shouldn't say there's only two ways, but the two ways that stick out to me that this could play out is when you think about the '08, '09 correction, heading into the '08, '09 top, or I should say '07, '08 top, it was financials, industrials, energy leading. It was value over growth. But during the correction, but during the correction, it was growth and tech that held up the best So do we see another

Ian McMillan 12:04

Yeah, maybe people are positioning themselves

David 12:06

I don't know. Like I, I don't, I'm not ready for that yet just 'cause we have advanced decline lines, new highs, we got bullish percent indexes, Now, and,

Ian McMillan 12:17

Why don't you...

David 12:18

and I, and I was, and I would add that like small caps leading throughout the year means they likely lead throughout the rest of the year. I'm not ready to call mega cap growth or tech dead. I just think there's alpha in other places But I would say the Magnificent Seven struggling on a relative basis versus S&P 500 is a shot across the bow What were you gonna say?

Ian McMillan 12:49

It's interest- It's, yeah, it's definitely It's not a new thing. This has been going on I mean, I guess I'd rather have multiple years of distribution that kind of gets swallowed up versus a dot-com bubble 2.0. I was gonna ask, why do you think So many staples stink. not just on a relative basis, but like the Walmarts, the Costcos. Think that's a debt thing? Like a, like an interest rates thing? Not to get all

David 13:24

No, let's do it

Ian McMillan 13:25

Although utilities look okay, and they always get the argument that I don't know enough about the corporate debt world. Utilities are holding up fine. Could probably also segue this into the fact that 30-year Treasury yields Back up above five. I mean, they've been above five for a couple weeks now, but we are back up at year-to-date highs we saw back in May

David 13:51

Yeah. So you got, you got me a,

Ian McMillan 13:53

5.14

David 13:53

you got me a couple pieces here. You talked about Utilities, staples, like why do they look so bad? Rates So from a technician, technician standpoint, intermarket analysis, you like to see things outpace staples. So staples okay on an absolute basis, underperforming on a relative. We like to see that, and you're just saying, well, they're also really struggling on a absolute basis. If I'm-

Ian McMillan 14:26

Yeah, and then you look like Walmarts and

David 14:27

Yeah. Is it because there's some elasticity in absorbing inflationary pressures? So like I mean, s- in the last six years, I think groceries are up 40%. Like if you-- your grocery bill is up 40% over the last six years Costco is probably absorbing some of that And trying to adjust pricing up

Ian McMillan 14:53

Is McDon- McDonald's is considered

David 14:55

Oof.

Ian McMillan 14:56

right?

David 14:57

Yeah, yeah

Ian McMillan 14:58

No. It's an

David 15:00

Yeah, it's discretionary. I mean, I don't...

Ian McMillan 15:02

Is it?

David 15:03

Ian, Ian, I don't have to go to McDonald's

Ian McMillan 15:06

Well, I was just saying they got a really bad chart too. know that they're starting to lower prices Probably gonna get like Beyond Meat or something, some

David 15:15

ugh

Ian McMillan 15:16

meat, but I, I like, I like McDonald's, so

David 15:19

I just

Ian McMillan 15:21

I know that's not healthy,

David 15:22

Hey, you're allowed to like what you like. It's America. But I think to your point, XLY on an absolute basis, there's some weakness there If I'm allowed to do the fundamentals soapbox, it's just there's some absorption or elasticity to how do we handle the price pressure, inflationary price pressure on goods that we're selling. There's probably some impact there. I w- I, I don't sit here and say that there's not. And then I feel like you had two tag-on questions, and I miss-- I'm missing one of them. You talked about staples, and then we got to rates, but there was something in between I felt that was important But I think rates is an important one to touch on. What are you seeing out of there?

Ian McMillan 16:06

Tough tough if you were the part of the rates lower crowd. Rates are going lower, which we were not. We were not. It's probably been our- I don't know. I wouldn't say our... Yeah, I don't know. We've been pretty loud and consistent about that over the last

David 16:21

we're in a new 35, 40-year rising rate cycle?

Ian McMillan 16:25

40. I bet we've been saying that for three or four

David 16:27

Oh yeah.

Ian McMillan 16:27

podcast

David 16:28

Yeah, go ahead and check us on that. You're listening to this, go back.

Ian McMillan 16:32

Yeah.

David 16:32

You can look.

Ian McMillan 16:34

You can go

David 16:34

Yes

Ian McMillan 16:35

on that, that like, all right, well, yeah, we're getting a new, we're getting a

David 16:38

And this, this next branch or leg probably is higher. And it, it is interesting the, the Fed funds rate futures indicate eighty-two percent likelihood of higher rates. Not shocking based on the charts that we're looking at, whether you're looking at 10-year rates or 20-plus year rates. I mean, we could be sitting six percent rates in a couple months. Would that be surprising? Not at all Which has lots of real world and portfolio ramifications, right? We've been talking for th- at least three years about 60/40 portfolios are dead. Like, how are you handling your bond allocation? Really need to look into that. And then obviously your, your debt maintenance pro- you know, process. You know, you're talking about mortgages. Really interesting to think about real estate So we, okay, we get a breakout in 10-year rates, 20-plus year rates, and then you look at what real estate is doing as a sector.

Ian McMillan 17:46

Yeah, real

David 17:47

Yeah, so interest- isn't that interesting? You get

Ian McMillan 17:50

And there's a lot of REITs, REITs specialty, like there's some good

David 17:54

Mm-hmm.

Ian McMillan 17:55

estate, good

David 17:56

Mm-hmm

Ian McMillan 17:56

charts

David 17:57

In this interest rate environment, I think three years ago many people would be like, "You gotta be joking that real estate would look like this with rates looking like this." Who are we? I think the market knows more than we do. Maybe, yeah.

Ian McMillan 18:14

looked fine.

David 18:14

May- maybe there's

Ian McMillan 18:17

I don't know. I wouldn't say like they're my top thing to go buy today, but

David 18:21

Yeah, they're not alpha generators, but they're... It's okay But maybe there's something to be said for real versus fake. Like real estate's about as real as you can get

Ian McMillan 18:32

Real versus fake. Well, I don't know, maybe that should be our title

David 18:36

could do that

Ian McMillan 18:38

Real versus fake. Are we, are, are, is society just done with technology and fakeness? Now we wanna go buy tangible things

David 18:47

I mean, a house is pretty tangible.

Ian McMillan 18:49

Like

David 18:50

is about as tangible as you get

Ian McMillan 18:52

A house, bars of gold and silver

David 18:55

Yeah. What are you seeing out of that? I mean, that, that was the, that was the darling made our...

Ian McMillan 19:00

Shipping

David 19:00

Wait

Ian McMillan 19:01

good. If you l- look at BOAT, B-O-A-T

David 19:04

BOAT shipping. Oh. Oh

Ian McMillan 19:06

Does

David 19:06

my. Physical

Ian McMillan 19:08

tangible? That's actually real. I'm glad I came... We'll have to notch that down

David 19:12

Yep

Ian McMillan 19:12

call

David 19:13

And I think

Ian McMillan 19:15

And you think, you th... Okay, I got a

David 19:16

Ready

Ian McMillan 19:17

you. And so

David 19:20

Yeah

Ian McMillan 19:21

So dollar staying above 100. Markets haven't totally Craft a bed

David 19:29

Yeah, you're, you're just saying dollar's above 100. We got S&P sitting in a 4% range You got S&P outperforming VEU, which is international stocks minus US stocks since the beginning of March, and DXY has been rising since the beginning of March. What's the deal? Can I put words in your mouth? Is that a fair It is interesting

Ian McMillan 19:57

I think we'll s- I guess, right? I mean, we're in a strong dollar environment. I was s- I guess we see who the the outperformers are. Last time we kinda had this would've been October 2024 I can't really... I mean, Q4 2024 Little rocky? No,

David 20:17

Yeah,

Ian McMillan 20:17

fine

David 20:18

it was great You're talking about like for US equities? Yeah, US equities, US equities Q4 plus 10% with the dollar rising. It's possible.

Ian McMillan 20:31

Okay

David 20:32

And I think that's one of those things in, in textbooks, right? You go to, you go to these post-high school edu- you know, institutions and they tell you, "Oh,

Ian McMillan 20:42

Most high school

David 20:43

Yeah, I think that's where we're going with, cause I'm not convinced that they're all that they're cracked up to be. But you get a rising dollar, oh, that should be a headwind, and it can be. It can be at times a headwind for equities But man, you, if you actually look at the data, there's times where the US dollar on a trade-weighted basis is rising, equities are rising. So I don't think the dollar above 100 on a trade-weighted basis using DXY is like a death knell for equities

Ian McMillan 21:13

I think the market's just telling you, I mean, it's good for some,

David 21:16

Yeah

Ian McMillan 21:17

That's like anything else. Small caps are still hanging in there Green today

David 21:23

On the, uh

Ian McMillan 21:25

I mean, mm

David 21:27

The micro caps versus mega caps trend is still alive since the beginning of last year So pretty healthy Style box or mega versus small rotation pretty good

Ian McMillan 21:42

You say megas over

David 21:43

No, micros over megas

Ian McMillan 21:45

Micros over megas

David 21:47

Right. Outperformance

Ian McMillan 21:49

I mean, that's actually a

David 21:50

since

Ian McMillan 21:51

mean, longer term Yeah, back below the COVID highs. Had a big run-up into COVID, right? Yeah, 'cause everyone went into mega caps during COVID I don't even know if we called them mega caps then

David 22:05

Good.

Ian McMillan 22:05

When did that start?

David 22:07

Like Magnificent Seven Megas thing?

Ian McMillan 22:09

Yeah, it was like 2022-ish.

David 22:12

like that was

Ian McMillan 22:13

Whenever the first one got to a billion do- or a trillion dollar market cap. Apple maybe Cause there was a thing, wasn't it Apple and Microsoft in a race to be the first to a trillion

David 22:28

Feel like, feel like you're onto something there

Ian McMillan 22:31

But yeah, rates higher. Hasn't cracked the market yet. that's

David 22:36

Well, and, and don't you think though that rate, rates, rates higher doesn't have to be Doesn't have to break the market, it just is rate of change. So the rate of change of... Cause this is all about cash management for these companies. You know, you're talking about what is the cost of debt So a consolidated rate environment that we've seen now for quite a few months to years I mean, in, in some sense, corporate America has handled it better than Public America, you know, the government. And so maybe they're ready for the next leg in rates Now to get

Ian McMillan 23:17

This is why you don't do, this is why you don't do

David 23:19

That's right.

Ian McMillan 23:20

This is why you don't do

David 23:21

Nope

Ian McMillan 23:21

people. You don't wanna play that game

David 23:25

So to answer your question, Apple was the first Mag Seven company to reach $1 trillion 2018, Amazon was second

Ian McMillan 23:33

Oh,

David 23:33

Amazon, A- Apple going out to new all-time highs Today

Ian McMillan 23:39

It's the lone one holding on Tesla looks terrible. That's also not great for

David 23:44

Yeah, Tesla down 18 per- 18% on the week

Ian McMillan 23:48

SpaceX, I mean, oh, why did... I don't think they had any... They don't have any inverse funds yet, do they? Of course. Oh, yeah, they do. S- but when did this one come out? Did come out just in time. Good for them. Yeah, the SpaceX was a pretty clean

David 24:05

trading at 112, all below its IPO level. But I mean, how many times, like when I say that, and there's probably listeners on here that are young, young enough who are like, "Oh, that's so crazy." No, it's not crazy. This is what we see out of IPOs from time to time

Ian McMillan 24:23

Meta did the exact same thing. Facebook... Well, it was Facebook, but back then.

David 24:28

But what do you think about the... So there's something in IPOs Where a certain amount of shares become tradable. So you trade SPCX, SpaceX, and they've got a, a staggered lockup schedule. So right now, 5% of SpaceX shares are trading. 5%, that's it Now, when you think of like Fund makeups or index makeups, how much selling had to happen in order to buy SpaceX. 'Cause I mean, SpaceX is now one, two, three, like in the top 10 cap-wise. I mean, it's pretty close. Top 15, top 15. And then you threw...

Ian McMillan 25:18

I have a...

David 25:18

Well, I, I was just gonna say, don't lose your thought, please. The next ma- the next major date is August 6th, where

Ian McMillan 25:24

I won't

David 25:25

we get the next tranche of eligibly traded shares of SpaceX

Ian McMillan 25:31

And that's like a 90-day lockup from... 'Cause some, don't some people have like, obviously there's a standard

David 25:37

Yes. Yes

Ian McMillan 25:38

I think Elon's is like even

David 25:40

Yep. As the, as the founder and owner, yep, that's longer. But August 6th, 20% of the eligible, eligible group becomes available. That's 7%. So right now we're at 5% of SpaceX is able to be traded. August 6th, 7% added onto that, so 12% of shares

Ian McMillan 26:02

What I wonder is, I have a

David 26:04

I like it. Let's hear it

Ian McMillan 26:06

because, well, the, the era we're in, right? And these people, they're probably educated, more sophisticated, I think that they could be I think a lot of them could be synthetically, you know, whatever they wanna use, you can hire a firm to do it for you. But they could be shorting SpaceX themselves. And I wonder if this break, I wonder If, right, they were doing it, this, I mean, this is what a normal, I feel like pretty normal person to do. If you knew you had, if you were gonna make $50 million at X date, the potential to

David 26:47

Yeah, why don't you just lock it in?

Ian McMillan 26:49

Yeah. Wouldn't you hedge that out and be like, "All right, like, if we get below the IPO price of $150, we need to be like one for one

David 27:02

Well,

Ian McMillan 27:02

shorting

David 27:03

I don't, I don't even know one for one shorting, but all I'm gonna tell you is that if I'm a SpaceX, SpaceX holder of shares of significance, so I'm an employee, I'm a higher-up, whatever. I'll also add the caveat, if I got a wife, if I got kids And you're sitting on-

Ian McMillan 27:22

I

David 27:22

Yeah.

Ian McMillan 27:22

your ticket,

David 27:23

This is-

Ian McMillan 27:23

This is

David 27:24

Yes, this is how I provide for my family. I'm sorry. We're selling. Yeah?

Ian McMillan 27:30

Yeah, we're selling. And yeah, I'm not gonna sit here and lose 20 million during my lockup period. Like, there's nothing I could... Like, this is not 1952. all have tools, all these people. And I know they were hiring wealth management firms. I mean, which is smart. Like, they would, you know, groups of employees would get together and, like, vet wealth management firms, which, I mean, fine, if I was I mean, you're literally gonna have, like, lower tier employees that will be worth $20 million overnight, and that's great. That's the Amer- that's ca- I mean, that's awesome to me.

David 28:04

America, baby

Ian McMillan 28:05

but like I said, I mean, these are sophisticated people. and there's just the ability to do it so I d- I wonder how... So this gets back to my point, is I wonder how much of this pretty... I mean, it's been a pretty... I mean, have we had any green days since it broke 150? Maybe one.

David 28:25

You're talking about SpaceX?

Ian McMillan 28:27

On SpaceX, one green

David 28:29

So June, June 16th is the highest SpaceX has ever been. Your point is since June 16th, what does life look like for the overall market? Pretty choppy

Ian McMillan 28:43

Pretty choppy. And then, yes, so Ju- July 10th SpaceX closes at 145. Okay, it's had two green days. I take that back. Two green days in the last two weeks, give or take Yeah, 14 days. And I just wonder, right? Because I ju- I wonder how much of this and, is like a I wanna call it like a death cycle, but like, uh Like are they, are these employees to do this to themselves, will do this to the stock, but it doesn't matter because they're net neutral anyways

David 29:26

Yeah, I th... What I, what I think is important to keep in mind is these lockup schedules So if we look at it from a 30,000-foot view, we have this, the ma- the biggest IPO we've ever seen, largest ever in, in nominal terms

Ian McMillan 29:44

Yeah

David 29:45

How does the market absorb that? And so far we've moved arguably sideways since that Not too bad. Not too shabby. Now, for the employee of SpaceX who is now exercising those options, which is great, you should, like, if this is generational for you, do it It'll be interesting in the weeks and months to come absorbing the supply available in the next few months from people exercising their shares, what does this look like? And I think it's important to keep that in mind. I'm, I'm not saying that's a negative for the market, I'm not saying that's a negative s- for SpaceX, but this is a generational wealth-producing IPO for employees, potentially for stock market participants. But I think we have to go in eyes wide open on what does that mean, supply and demand when we say 5% of sh- shares are available, now we're at 20% shares available. And then you have, you have all these nuances. You've got indexes, you've got funds that have certain mandates about what they're gonna hold, and all of a sudden now we gotta sell out of MAGS to allocate to SpaceX. That's a factor. And

Ian McMillan 31:11

And SpaceX is SpaceX and it's in the NASDAQ already Is that the only one?

David 31:17

Think spooz held on

Ian McMillan 31:18

I mean, I guess it'll obviously it'll be in the Russell indices because that's just straight up market cap

David 31:24

Yeah, S&P backed off. It was gonna, it was gonna do it, backed off Nasdaq 100 In it. I mean, Nasdaq 100, it's top 10 right off the bat. But S&P 500 held off, was gonna do it, backed off But I mean, it's, it's generational. This is a huge thing. And then in the backdrop, you've got this AI piece, the OpenAI, the Anthropic. What does that all look like? Because all of these are-- The way I would describe them is like disturbances in the, in the surface of the water, like where liquidity's gonna go, right? 'Cause if I'm running a tech fund and I've got a mandate that I've gotta be allocated to tech or I've gotta be allocated to aerospace, invariably I have to sell some things in order to allocate towards SpaceX. That's just the mandate That has impact on things. And so while this unveiling is happening, SpaceX, OpenAI, Anthropic, I'm probably missing something in there There, there's gonna be some variability on what's going on with makeup of funds and indices, and that's the hard part. Is this marking a top? Is this just marking volatility in the near term, near term being a six to 12-month period? I don't know But we're, from a broad perspective, we're still, still sitting in a 4% range on the S&P. On the flip side

Ian McMillan 32:53

I know NASDAQ is

David 32:54

Yeah

Ian McMillan 32:54

the weakest Golly, this thing, man To bam

David 32:59

So it's, it's a, it's a unique time, I mean, for investors. I don't think we get to sit here and say, "Okay." We don't get to ignore what's going on with rates, right? We're r-right on the cusp of twenty-plus year rates potentially breaking to the upside. We have... You brought up earlier discretionary stocks, a lot driven by Tesla and, you know, obviously tied to SpaceX in some sense with Elon gapping down. You've got CCC credit spreads, which haven't cooled off since fall of last year. Junk bonds haven't really moved higher. Dollar's above 100. So it's a really unique time, and the beauty of unique in markets is there's no really no such thing as unique. That's what the market does, is consistently be unique. That's the hard part. Which brings me up, brings me to an interesting thing I wanna talk to you about, Ian. You are

Ian McMillan 34:02

Okay

David 34:03

A thought leader in the CMT, charter market technician, technical analysis community. And I l- I think so. Yeah. No, I think, I think you are. And you come in contact with a a lot of young individuals looking to get into the space or grow into the space And I find it very interesting one of the comments you made out on socials about So I'm gonna ask you to comment on this without without too much adjectives on what you're seeing out of young up-and-comers in our technical analysis community, right? 'Cause there's a big delineation between being sell side, so selling research, and buy side, which means actually making decisions and investing money on behalf of yourself and others. What are you seeing in that? Can I, can I put you on the spot for that?

Ian McMillan 35:03

Yeah, I didn't know if you were gonna, like, read a tweet off or not. I mean, right, and, like, I think it's different. Sometimes you're on Twitter and you, and you are ranting about whatever. But yeah, I think, I guess I know, I think I know what you're referring

David 35:23

Okay, I'm, I, I will read it. I will read it I've talked to

Ian McMillan 35:27

think that, that would

David 35:29

Yeah. So

Ian McMillan 35:30

context

David 35:30

this is back Nine days ago. I've talked to a few young and aspiring technicians lately. None of them have interest in the buy side, not a single one. They just want to, they just want to do research and create content. That's it. Just make graphics to post on social media. I literally had a kid tell me he'd rather make less money if it meant he just got to do content. Zero desire to actually put their necks out there

Ian McMillan 36:02

Yeah, I mean, it's just, it's a, I guess a I don't know if it's like a dying generation or whatever. Just I think I-- what I find wild is this is by far, so like let's use Eli's, your oldest son's generation, for example. These like young 20, and he's definitely in like the younger 20s, youngest 20s. but still in the like, so out of undergrad is aware of the stock market. Like his generation is by far the most, and I would put Pradi in this category too, our intern we had. Like, you know, 16, 17, 18, fig-- like I'm not saying that they're necessarily making consistent money in the stock market, but like the generation with the most access, the generation that, you know, ta- has talked about it the most, is trying to educate themselves. we've talked about it a lot on here about this being the golden age. We talked, you know, the, with access to, I mean, you can go buy an ETF and I mean, you can, you can buy anything now compared to just five years ago 10 years ago, oh my gosh, what is available at your fingertips with pretty good liquidity is awesome. we've had this generation of all, like these kids where, I mean, they ha- like they've learned about it and the outcome of it ha-- I don't feel like it's been this rush to be like, "Yeah, like that's what I wanna do for a living. Like I wanna be the next David Tepper. I wanna be the next Paul Tudor Jones," or not even that. Like, "Oh, I would wanna own like a a..." Like it just has kind of culminated in, Oh yeah, like I think it'd be cool if I got paid post pictures on social media of stocks and stuff." And I don't know. I just find that disappointing that so many of them, it, it ends with them just wanting to do content. And I think a lot from, is it there's a lot of people that I mean, you never know how much people are making, right? As far as like if you wanna make a living off of social media or you wanna start research company, really, right, re- at this technical analysis research is here's a chart, here's my thoughts on it. So pretty Twitter-ish. and that's fine. I mean, that's what probably TA research should be. You show me the charts, and I guess you know why. But yeah, you just never, ever hear the, the young kids say like, "Oh, I wanna be an analyst and go work for someone and provide ideas." That's how I was right with... I mean, you have the goal of being a portfolio manager, but yeah, I just was always like, "I'm gonna go to the buy side. I'm gonna like do my time, you know learn," and then, you know, whatever. Someone eventually gives you a shot to be a portfolio manager. But you just never... And yeah, the money thing which-- and that's I guess the, it doesn't matter. It d- it doesn't matter. You know, that's the correct thing to say publicly. If it, if it was my child, we'd be having... I'll tell you that. If it was my child and he came to me at 22 and was like, "Well, money doesn't really matter, I just wanna do what I think is cool," sorry, bud, it's not 1982. I don't know. Yeah, I'm, I'm just, I'm disappointed by it because these kids are educated, they are aware. I'm not saying that, I mean, they have good technical analysis, but for it to end with, like, "I think that this would be really cool if I could get paid to post this on Twitter" instead of, "I think it would be really cool if like a director of research just paid me a salary because I had really good ideas that made clients money."

David 40:29

Yeah, and I, I... No,

Ian McMillan 40:31

long-winded,

David 40:32

not apologize 'cause I think it's spot on. I think it's addressing a certain thought process or ethos in our current era, which is, are you in this for you or are you in this for others? Cause, you know, you, you can post charts and, and I'm not saying posting charts or content is inherently self-focused at all, because part of that could just be... I mean, part of the reason why you and I got connected, Ian, is...

Ian McMillan 41:05

Exactly. I mean, I have

David 41:07

Correct.

Ian McMillan 41:07

of

David 41:08

So,

Ian McMillan 41:09

That

David 41:09

right.

Ian McMillan 41:10

though

David 41:11

you were just, "This is my thoughts," and that's how we, how we got connected. Now, now you're using those tools to impact, and think about this, I mean, 600, 700 families who have portfolios with us, and now you're impacting their livelihood. To me, that has a lot more holistic meaning to your life, my life, their lives, than just being famous on Twitter

Ian McMillan 41:42

And you don't have to, like, go pick stocks. Take a David Yoka- you know, David Yocum went into credit. I just did a CMT sponsorship for a kid in St. Louis who works in risk management for Schwab TD and is using his CMT skills. Like, this isn't like, "Oh, let's go pick stonks and, like, try to be up 100% on every year." Like, there's other technical analysis out there. yeah, it ending at, with like, "Wow, I have this skill set, and I'm just gonna like... I think it'd be really cool to Be on social media and see if it gets me followers, and like that's just where

David 42:27

Where's the, where's the

Ian McMillan 42:28

And, you know, maybe like I'll get a, I'll just get like a job at Kohl's, and then in my free time

David 42:34

But what's the

Ian McMillan 42:35

charts. I'm not hating on Kohl's. I probably shouldn't even use... No offense to Wisconsinites especially. No offense. Are they headquartered in Wisconsin or M- Minnesota? Okay, yeah, I thought so. I thought so. I'm just... I don't know. Maybe it's an ambition thing. Maybe to your point, it's there is no, like... And this gets into like a whole... I mean, this, we could go for eight hours on. Like it goes back to like they're doing it for themselves because there is no one out, like there is no spouse or future partner where they're like, "Yeah, I probably should be trying to make like an extra 20, 30 grand a year. That probably would be better for me and my spouse," and they're like, "Oh, if we wanna have kids." So maybe there is like where this generation is just like, "Ah, don't really care about money. Like, it's just me, and it's probably just gonna be me so black pilled on the future."

David 43:32

and, and for some, if for some in the gig economy, the social economy, the clicks economy. Is it, is fame have more currency than actual currency?

Ian McMillan 43:49

I mean, I definitely think at the high school level it does. And you read we t- even when Prati was interning for us, and I f- and we found Prati. I mean, truth be told, this is probably gonna go against my argument. I mean, Prati was posting stuff on Twitter at, like, 17,

David 44:05

Yeah

Ian McMillan 44:06

And I didn't know, but he-- Now he used it as a platform to be able to say, look what I've been doing. Would you give me an internship?" and it was a, I mean, it was a paid internship.

David 44:20

Yep

Ian McMillan 44:20

Correct. Yeah. So I mean, he did g- I mean, he was even doing, like he, the kid did it in college. He was on every market call for three years in college, which is insane. Yeah, so and well, I would, I would say even when you see, like you'd see these surveys, you'd see these surveys where it's like, oh, we interviewed Gen Z-ers and a third, like 33%. I would see this 33 to 34% number. You'd ask them what they wanted to do when they grow up, and they'd say they wanted to be a social media influencer, and that was so wild to me. That was so wild to me. But now being like down the line and having more interaction with them, I mean, other than like the two interns we had, your kids, don't, I don't really know of or hear about too many Gen Z-ers or hadn't at the time. Yeah, being three, four years further down man, that, those interviews might have been

David 45:16

Yeah

Ian McMillan 45:17

cause I guess that's what they want to hear. Is it social currency? I don't... I think it's really cool to them in high school, which sucks. I mean, there wasn't that, like social media followers when I was in high school or college or anything. I don't know. But yeah, I'm just disappointed. Like, to me, the buy side is, like, the ultimate I don't know. It's like getting to play the sport. Like, would you rather shoot hoops, be out there with a team shooting hoops trying to score, or would you rather just be the guy that gets on the radio station and judges how the team played and talks about what the team should have done to win or whatever, you know?

David 45:55

Which I think is lame. I'd rather be in the game than commenting on the game

Ian McMillan 46:00

Yeah.

David 46:01

I mean, respect to those who comment on the game, but

Ian McMillan 46:04

I guess we need people who

David 46:05

Do we?

Ian McMillan 46:06

I guess

David 46:07

Do we though?

Ian McMillan 46:08

I mean, Southplex. Yeah, I mean I don't know. But yeah, just definitely, and I don't wanna say that that's all that I've come across. Like I s- I mean, I've definitely come across my fair share of guys that have gone into the... I mean, take, yeah, like I said, Prati. Prati's, um you know, an analyst and he's in the buy side. And I think of who's at Potomac, and yeah, a lot of younger guys. But I guess I say, my message would be for younger people out there, who wanna do it, I just don't think that your end goal should be, "I want to, like, I wanna make charts on Twitter and see if I can be chart of the day on the chart report and see if I can get to 10,000 followers and

David 47:03

I think, I think, I think that's of like anybody listening, if you're listening because you wanna be content king, let's get into the real stuff. Like, I get it. It's easy to post a chart. It's inter- it, it's interesting to post a comment. But in the end, are you in the blood, sweat, and tears? Like, are you in the gritty? Like, are you actually having to deal with the emotions that come with investing your own money, investing other people's money in a market like the current one that we've seen, seen since the end of April, which is just chop? Like, are-- Like, do you have that gumption? And I'm gonna read a q- quote by one of my favorite guys, Teddy Roosevelt. It's not the critic who counts, not the man who points out how the strong man stumbles, or whether the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs, who comes up short again and again because there is no effort without error or shortcoming, but who does actually strive to do the deeds, who knows great enthusiasms, the great devotions, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement, and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat." And to me, Ian, if you just wanna be content king, you're not really sitting there trying to figure out what victory or defeat is, in my opinion.

Ian McMillan 48:48

Well, yeah, and a lot of it that I hear, it's more of like even the da- like, oh, but it gets, you know, 700 clicks. And it's... I, I don't, I mean

David 49:00

Dude, I can, I can moon the camera and get 700 clicks. Is that talent? Is that value add?

Ian McMillan 49:08

I think they see other people doing it, right? And we're so big into the data, like so big into the slicing up of the like, it's a midterm year, the leading s- the top weighted sector is down year to date. But like, you know, the way like we add all these little data points to find like a You know, the last seven times this has happened, here are the three, six, 12 f- month forward returns. And that stuff gets a lot of clicks. And it's cool, and it looks nice, and it's got like the little, you know, research logo on it, and people talk about it, lots of comments on it. But I mean Like I just don't think at the end of the d- like I'm not convinced that people are paying for that. Like, I wouldn't pay for that. I click like on Twitter, but I'm not paying

David 49:58

Yeah, get my, get my heart for free

Ian McMillan 50:00

Yeah, but I'm not-- Like, I don't care. I, I'm not putting $5 million in a trade because of your, Well, the last time this happened, the six-month on bank stocks were really good." Okay

David 50:16

Good, great, Grant Yeah, I

Ian McMillan 50:19

I, I understand that got a lot of Like, that got 300 clicks and Ryan Dietrich retweeted it, and there was a lot of buzz about it. And again, this is not, I'm not, I'm not like trying to call out Ryan D- I mean, that's

David 50:31

Yeah,

Ian McMillan 50:32

of a positive to him, right? Because

David 50:33

100%. Totally agree

Ian McMillan 50:35

Yeah, And like, wow, look at that. And it's the the rush, the dopamine hit from I don't know, man. I guess those surveys were right. I guess that's what I go back to. Those surveys were right. These kids that I don't know. I don't know. But a long rant

David 50:50

No, I, I actually really appreciate it because when I look at the generation below me, which is you and Kevin, supreme talent, just incredible talent

Ian McMillan 51:02

And Kevin wants to do, Kevin wants to manage and, like, make decisions.

David 51:07

Yes, 100%. And what we're talking about is the generation below you guys. Like,

Ian McMillan 51:14

Yeah

David 51:14

supreme talent. Don't, don't settle for social media validation. Like, don't bow to the god of social

Ian McMillan 51:23

I don't think, I don't think

David 51:25

No. Well, he might have. I d- and I don't, I don't care 'cause he's one of our best teammates we've ever had. The guy drives innovation forward,

Ian McMillan 51:34

it's

David 51:34

does great things for our fixed income stuff. I mean, my point is, you, the guys who are listening to this, and gals, who are the up-and-comers, do not bow to the god of social approval Like that is not the end-all be-all, is social approval. The hearts, the likes, the shares, the whatever. Get in the trenches, make the decisions for people. 'Cause Ian, one of the, one of the most fulfilling things that we do on our team is manage money for the secretary of the cheese company who saved up a million dollars but has no idea about markets, and they just wanna retire. That's your responsibility. It's not about getting likes, clicks, shares, all that crap. It is about can you make decisions for people who work their butts off in actual industries for their li- their livelihood and their lifetime, can you manage their money? And so that's a call-out to the CMT association as well. Are we gonna be buy side or sell side? Are we gonna sell research, or are we gonna actually make impactful decisions for people who work in meaningful, tangible vocations to support everyday Americans with... and then have their retirement, are we gonna make decisions for them? Let's get beyond the fake, let's get into the real

Ian McMillan 53:03

Yeah, that's probably... I mean, there's a lot. Like the CMT, for better or worse, I mean, it is a lot of research

David 53:12

Like 80%, you CMT symposium, I'm calling you out. 80% of your your education is health spine

Ian McMillan 53:20

Well, and that's what, like, that's what a lot of social media is, right? These... Like, those are the people posting stuff. I mean, I post stuff, but, like, they're posting. Like, it is their business market themselves and get the, the, you know, chart out the quickest that it gets retweeted the mo- Like, and I get it. I'm not hating on that. But I think that's what a lot of people see of, I like technical analysis, and I mean, there's... It's just a lot, a lot, a lot of people posting charts with the end goal of selling subscriptions to, like you said, you know, you go to a CMT symposium. Hey, do you want to fly to Dubai?" And 18 of our 27 speakers have never managed a dime of money. I'm gonna be completely honest, like, I don't. That doesn't in- that doesn't intrigue me. is that a snooty thing to say?

David 54:27

I don't think it's, I don't, I don't think that's snooty. I think that's reality. I think it is why does technical analysis exist? Just to sell research? Or are we, are we in the business of studying supply and demand because we wanna do what's in the best interest of our client? Like, it is mind-boggling to me that you're more interested in selling subscriptions than it is in, I've got people that are relying on me daily to manage their funds that they work their asses off. Like, that is the mo- the big- one of the biggest privileges in life is to manage someone else's money Who is, doesn't have a clue about markets, and they're entrusting you to do that, and technical analysis is the method that you use to manage risk and reward. But people are more interested in subscriptions and likes and shares and content. Give me a break. We need to up our game when it comes to our society, the charter market technicians s- you know, group. Like, how are we spending 80% of our time on sell side? I'm sorry. Like, let's get into buy side, like real applicable, real world. This is how we're using it to manage risk and reward for our clients. And I, I know I am coming across a little bit emotional, but it's getting a little bit old that our focus is on research. Like this, this is real money, real people's money, and people... It could be $100,000. It could be $100 million. All of it matters. And if we're gonna sit there and say, "I'd rather have likes, shares and content," versus, "I'm taking care of Susie who worked at XYZ company who saved up her whole life And now we're supposed to take care of that? That's completely

Ian McMillan 56:24

Yeah, especially if you're young. If you got... I mean, if you're like 48 and your career is sell-side, I'm not gonna be like, "Oh yeah, go quit your job tomorrow and go be an analyst at a hedge fund." But if you've got the choice, if you are 22 with the world in front of you Yeah, just don't do the so-

David 56:47

Do the noble thing. Do the noble thing, which means it's not about you It's about other people, and there's a lot of other people that make this world go round than you. Like, I get super jazzed about what our clients do that make the world go round that I'm not capable of. But you know what I'm capable of because of technical analysis? Managing their money And so to me, if you're listening to this and you're an up-and-comer, do not fall into the fame content thing. How can I serve other people? That is the question. How can I serve other people? And if you've been exposed to technical analysis because of Ian, because of this podcast, because of others, that's awesome. Use that to serve other people, not yourself. That's my end diatribe soapbox thing, and I think you've communicated it well, Ian

Ian McMillan 57:47

Yeah.

David 57:48

Yeah,

Ian McMillan 57:48

thank you if you listened for that long and did not turn off the

David 57:52

we kind of got on a soapbox there

Ian McMillan 57:54

I mean, get out of the range and maybe I won't be so... I mean, that, yeah, that Yeah, it's just my, that's my two cents on where you're at. 'Cause I do talk to a lot of younger people. They ask, tell me what they're interested in. Oh, should I get this here? You know, I'm so interested in TA and here's what I wanna do. And like I said, not, not all of them, but more than there should be. I'll te- I will... I think that's a great way. I'll end with that. There's definitely way more young men out there that want to use their skillset for clicks instead of Going into the real world. And the real world has responsibility. Like, you're gonna lose people's money If you're good enough, you mean you'll make more than you lose. But I mean, there's gonna be... But of course, you know, se- sell side you can avoid that. You can avoid that. There's a comfort zone. That maybe a lot of young people would rather

David 58:58

Well, Ian, it's one of the, it's one of the reasons why I locked onto you early, is that you were willing To put your pride aside, use the tools and gifts that you had to benefit our clients And that's why you've been with us for seven years, and kudos to you for that

Ian McMillan 59:19

Seven years next week?

David 59:23

29th.

Ian McMillan 59:24

Yeah

David 59:25

And I just thank you for all the work that you've done for our clients. It is one thing to post content, it is another thing to manage other people's money, and you've done a fantastic job managing other people's money. And that is-- I don't know how to stress that enough. That is a different league. And I appreciate you, appreciate what you've done for our clients. I'm hoping that this is motivation to others listening to this, that if you are just in it for the clicks or the sharing, quite frankly, that's not enough. You gotta serve other people, and that is where the full reward will happen. And so, Ian, I thank you for the last seven years. Fantastic job. You know, we got next week yet, but seven years.

Ian McMillan 1:00:17

Yeah, we'll

David 1:00:17

Yeah, you've done a great job. And I know we've gone over time, and I gotta highlight the support of this podcast, the Adaptive Select ETF, listed on the New York Stock Exchange under ticker ADPV, helps investors access two of the most prevalent factors in markets, momentum and relative strength. Through proprietary identification methods, the Adaptive Select ETF attempts to own the strongest twenty-five large-cap stocks when the market is in an uptrend, and since not all market environments are the same. Adaptive Select seeks to prevent extended declines by moving its short-term Treasury bills and cash during long-term market downtrends. Investors can find out more, including how to invest in ADPV, by visiting adpvETF.com or calling one-eight three three-eight eight zero five two hundred. Investing involves risk, including possible loss of principal. ADPV is distributed by Quasar Distributors LLC. ian, thanks for being on here. Thanks to everybody listening. We'll do it again next week.

Ian McMillan 1:01:11

Have a great weekend everyone