MAGGIE LAKE: Hi everyone, welcome to the Real Vision Daily Briefing. It's Tuesday, March 31st, 2022. I'm Maggie Lake. And here with me today is Tony Greer, editor of The Morning Navigator newsletter. Hi there, Tony.

TONY GREER: Maggie, how are you doing? I'm just going to fast forward you, it's May 31st. That's how fast time flies.

MAGGIE LAKE: What did I say? I knew I was good. Anytime we come up a long weekend, forget it. I'm still there. And I'm struggling. It's like Monday, Tuesday. It's the 30th, 31st. Listen, we're done with May, Tony, that's the most important thing.

TONY GREER: I'm not the only one that gets months confused. Let's proceed.

MAGGIE LAKE: That's right. Well, it's been a tough month. It's been a volatile month. And at least, it's in the books, but I'm not sure it's going to get any better from here. And I want to start with energy. Because we have a lot of news coming out on that coming off a holiday weekend here. Markets were closed, a lot of people out, coming back in to find out late Monday, EU leaders agreed to ban most Russian imports. We've been waiting for that oil imports.

And then today, word that some OPEC members are exploring the idea of maybe suspending Russia's participation in an oil production deal, just figuring they can't get enough production out to be participating in that. That's just a report, not happened yet, but you've got these headlines swirling. What are you watching in terms of price action? You were here last week with me. You talked about that rally coming, oil back, moving higher again, what do you see happening here?

TONY GREER: Well, like you said astutely, Maggie, the market had to absorb a bullish headline as it rallied toward its recent highs into a holiday market, holiday shortened market that's often a much thinner market. And then today, we had to absorb and unravel all the headlines in WTI. It obviously got quite a bit ahead of itself, it tapped a big psychological number up at 120 and fell back 3% or 4% and remained pretty much flat on the day.

It gave a lot of it's early in over the weekend gains back, you can easily see how those gains were printed up as short covers came into a very thin market and drove the price higher than it probably otherwise would have opened this morning. You see things falling back with the direction of crude oil the way it traded in the New York time zone today, which was from the top left to the bottom right corner of your short-term screens there.

That was, to me, nothing unusual. None of the technical moves really broke trend. If there's one move that stood out to me today, it would be in oil services, where there was an outside reversal day at a particularly obvious resistance level where it struggled before and now, we've got this outside reversal day down in one of the sectors of energy. And that could weigh on the tape for a couple of days, I don't really know.

My sense is that I can still remain positive though the physical commodity itself, WTI crude oil, Brent crude oil, I've been beating the same drum that the backwardation is intact, the calendar spreads are still at the wides or trading near the wides that they've been in. And we do not have any demand destruction. We have to say today that consumer confidence coming out, the data that we saw today up at 10-- what was it there?

MAGGIE LAKE: I think it was 103 if I'm not mistaken.

TONY GREER: Yeah, it's a little bit better than expected. Either way, my opinion of that number was there's no stag in the economy to go along with the inflation of the stagflation scenario. If consumer confidence is still booming during $5 gasoline episodes and your grocery bill being up 25% from the last couple of quarters, that's a decent sign for general demand.

I have to say that I've gained confidence that this is not going to be a weaker driving season this summer because gas is $5 a gallon. I don't think that anybody's canceling any plans to fly anywhere because airline prices may have adjusted to the price of oil. I don't believe that there's real demand destruction yet. I feel like we're going to continue to see high volatility and these fits and starts on headlines in the energy market.

The bull trend is intact, and all systems are a go for me. I just don't see the demand destruction, and more importantly, I don't see the supply side problem being solved anytime soon.

MAGGIE LAKE: Yeah, I'm going to correct myself. It was 106, the forecast was for 103. You're right, it's really a little declined from the previous reading but holding up and I think we all just have a look around for those who are out and about on the holiday weekend to see that things were heaving. People are sucking it up because there's so much pent-up desire to go places to gather to do all that stuff that people haven't been doing.

For at least the short term, hard to see, to your point, that demand destruction. I think the further out we get, maybe that becomes an issue. I'm wondering, do you think that-- are we in a trading range here? Is it a higher range than it was before?

TONY GREER: Well, I still think that we're in a bit of retracement mode, Maggie. I remain bearish technology with my broader great rotation thesis that we're going to have a lot of money coming into commodities, and a lot of money coming out of big tech first and other sectors of technology next, as I believe in that rotation, and I look at the chart against that idea what looks to me like FANG stocks were off 40% at their lows from the peak, a 40% drawdown which is massive.

The S&P was down over 25%. We're now down about 22% I believe in the NASDAQ. And still in a bear market there. I think that that's going to continue. And I think that we'll see other periods where the natural resources side of the S&P, or the basic materials side of the S&P tries to keep the broader market afloat. But we saw evidence of that rotation that I've been looking for in the month of May here as we close the month. FANG was off 1%, while the S&P was up a couple of basis points.

We saw a big pullback in breakevens in the bond market, and yields backed off a little bit, but we saw a rally in fossil fuels and natural gas and oil rallied sharply. The signs of this rotation are still everywhere. We saw XLE, XOP, all of these sectors and energy are up over 5%, 6% this month, still putting in leadership type of qualities. And the story remains the same for me, Maggie, as long as this is just a retracement, I'm going to be looking to sell rallies in technology and buy dips in natural resources.

MAGGIE LAKE: I have a question from Ross on the exchange that I think makes a lot of sense to bring in now. And he's asking, how do you assess the risk profile of trading commodity futures versus trading commodity equities? And what are the environments you prefer one over the other? This has come up before.

TONY GREER: Yeah, put it this way. It's a tricky question. Trading commodity futures is a lot more complicated and, I don't know, I guess labor intensive than trading ETFs or other equity sectors. There's usually a little bump up in volatility adjustment that you have to deal with when you step into the commodity arena versus trading the slower moving equity sector. That's not the easiest thing for the average Joe sixpack, or retail customer.

I try to keep my trading ideas to ETFs in as much as I can, because this way, everybody gets the idea of what I'm trading. And if you have the means to trade the actual commodity, which I find probably 15% to 20% or 25% of my audience actually does, then you can go ahead and manage that risk that way, because that's a little bit more complicated, you have to roll out the calendar, you're in front month, so you're subject to more volatility. There's a lot to consider when you're trading the commodity.

You have to obviously adjust your risk accordingly. You have to be smaller in size and try to have a longer timeframe if you're trading the physical commodity. And I feel like stocks are a little bit more forgiving. In general, you're trading within the context of a bullish stock market. And this is a sector that's in a bull run right now, so it makes a lot of sense to me to be trading it that way.

MAGGIE LAKE: Yeah, great answer, Tony. I think it's a great clarification for people because I think are trying to think about this. I also just want to circle back to what you said about when you see it move, it sounds like you have to be really nimble, though, because you're going to take the opportunity. You're expecting to see more step-like action it sounds like, where you're going to get periods of retracement because we've been in an extraordinary period where we've seen these really rapid one way moves. Does it feel like maybe it's going to get a little bit more where you've got to pick your moments and you've got to stay a little bit nimble here?

TONY GREER: Yeah, nimble is a relative term. In terms of this commodity trade, the way it's we're working out, you are still being rewarded for standing in and buying dips and believing in the rally and believing that there are structural deficits across commodities. You're still being rewarded for if you were sharp enough to get out of the way and get out of your technology names, your portfolio is doing a lot better in May than it would have been in January if you didn't touch them. There's a lot to consider there within portfolio construction and portfolio management at some level. We can go whichever way you want about that.

MAGGIE LAKE: Yeah, and everyone's different, too. These are broad questions. When you're not actually looking at the person's portfolio, hard to know when they're asking questions. Want to ask you about nat gas. I know that's something you're watching as well. And I want to bring up a point that Jesse tweeted us earlier today, saying that the theme there is going to be people and pipe shortages on both, perhaps impacting the price action there.

That echoes an article that was out of Bloomberg as well around nat gas. How much are you watching the pipeline issue here? And are you expecting that to maybe put a cap on where prices can go?

TONY GREER: No, it's been something that we've just, I guess, started to consider where the supply chain is going to slow down the expansion of E&P production, inflation is likely to slow it down even further. There are definitely issues with natural gas production that are going to stand in the way of the rally sometimes, but there are other things that should really keep natural gas really well bid.

Not everybody, most nations are undersupplied and would rather have a lot more under storage right now than they currently do. I think that lends a bid to it. And the other side of the story, like the pipe story, I can't really speak to that well. I'm trying to just keep my eye on the ball in terms of the calendar spreads, staying backward dated, and the demand being steady and things like that.

I just feel like the more chances that we slide towards intermittent power, the more of a chance that there is a real scare in natural gas where the price could double from last sale or something crazy like that.

MAGGIE LAKE: Yeah. And amid all the volatility, I think people are bracing for these big moves still. In this period, as we've talked and this comes up every time, people always asking about diversification, but specifically wondering whether gold is a good investment, we always get someone who's asking you about gold. I want to talk about it on the other side, but Mike Green had a chance to sit down with Keith Weiner, the founder and CEO of Monetary Metals, and asked why he continues to believe in gold. Let's have a listen to a clip from that conversation.

MIKE GREEN: One of the things that I want to highlight there is you use this phrase about gold saying it's nobody else's liability. It's the financial asset that is nobody else's liability. What does that mean to you?

KEITH WEINER: Well, if you have a dollar bill, as you just said, it's only good so long as the Fed is solvent. And the Fed is solvent only so long as the US government is-- because the government can't pay its debts. We're way, way, way past that. 30 years ago, you could debate whether the government can somehow amortize it. But at least the government services its debts by selling new bonds every time an old one matures.

As long as that holds true, the Fed is solvent, the assets that the Fed holds, which is Treasurys, liabilities, are money good, then the Feds liability, which is the dollar is good. Your dollar is good only so long as that condition is true. But if that condition, or when that condition fails to be true any longer, then that dollar in your hand, or in your bank account suddenly becomes just like the Zimbabwe dollar, just like the Venezuelan Bolivar, just like Weimar. They all go eventually when their shelf life is up.

MAGGIE LAKE: That full interview is available to Essential Plus and Pro members on our website. Tony, there are people who hold that view and that long macro view, but in the past we've talked, you've been frustrated with the gold trade, how are you feeling about it now?

TONY GREER: Still frustrated, I haven't gotten my money back. This is one of the trades that the old Tony would still be pounding the table on and not giving up on and saying eventually it's going to work, et cetera, et cetera. But as long as the performance indicates that it is in fact, not working, I have no interest in trading it from the long side so I'll continue to maybe stack coins on dips and things like that to be fiscally conservative, but I don't see like--

I go back, I keep blaming on the same argument with the energy markets and the ag markets, and everything correlated to them all trading with such volatility and such powerful trend that there are 1000 other trades I could think of rather than try to sit here and wait for that moment when gold is going to decide to go. Because as you can see, all we had today was a slight bump higher in yields and gold is spilling right down to the lows of the move for the day, carving a new low as we speak at 1835. And that's the number that it's been trading for the last two years or three years.

As a trade, as a trend follower and performance hawk, I could not be less interested in gold other than the stuff that I have in my safe, which is still a good insurance policy.

MAGGIE LAKE: I'm not sure if you're following this one closely. It's very specific. Feel free to punt if it's not something that's on your radar, but David on the RV site saying, any update on Southwestern Energy company?

TONY GREER: Sure, the short looks great. I don't know. Still, it's easy to be bullish Natural Gas Producers. There's been a really powerful advance off of technical support in Southwestern Energy. It closed today, the second highest close of the year at $9.12. I don't know if it looks like a bull market, trades like a bull market, smells like a bull market, acts like a bull market, does everything bull markets do. You're going to have to decide on your own. I don't have any advice for things like that.

MAGGIE LAKE: Right. I think we reiterated this before. But no One Knows Thyself from YouTube asking, is the reversal we saw in XLE, XOP, and UNG a sign that the oil and natural gas trades may be exhausted? We touched on that, but if you join late, do they feel?

TONY GREER: No, I want to keep slamming the microphone on my head as long as the energy market is literally bid the highs and I have traders on Twitter, on television, on Real Vision now saying, this talk to me about this pullback that we've seen here in energy, it seems that oil just traded the bid. That must be the end. That must be the end, because oil just traded a bid.

Now, if you would have said that at any point in the last two years, you would have been spun upside down and spit out by the backside of the oil market in a very short period of time. Nothing has changed. Nothing has changed about the oil dynamic other than we are creeping closer on the calendar to elections that could potentially reverse the political side of the oil trade.

But right now, it's amazing to me that oil still bid the absolute high of the move and there are people still talking about, what about this crazy reversal that's going on? It's like I don't know, it looks like the last 15 reversals that happened 20% ago so I'm going to stick with my guns and say that this move isn't over because nothing about the fundamentals or the price action has even changed.

MAGGIE LAKE: And on the flip side, even though we've seen so many people caught up in bear bounces in tech, everyone's calling the bottom in tech and saying that this is it, now's the time to step in and buy.

TONY GREER: Same exact story except upside down, Maggie. They want to buy technology, they can't stand it that their Facebook and Amazon have been hurting them for the last couple of statements. They're frustrated that they're not in the energy sector that's up 35%, 45%, 55% on the year and this is going to continue until they all rotate into those sectors and understand that with these fundamental dynamics, that they are not going to back off anytime soon.

MAGGIE LAKE: And have you seen signs-- we certainly know people have been paying attention and some people have been increasing their exposure but how lopsided is it still? Do we still have a lot of people who are not participating and don't have energy in their portfolios or haven't rotated out or gain some exposure?

TONY GREER: In the commodity, it doesn't seem like the spec long has been showing up at all. Open interest isn't elevated, the spec long in Commitment of Traders isn't really historically huge given where price is. I think there are people that are still willing to hang on to this stagflation dream and maybe short crude oil here or sell some here and see what happens. I just don't see any signs that stagflation is biting anywhere in the markets other than literally talking points on TV and on interviews and with Cathie Wood and things like that.

If I start seeing real evidence, then I'll start worrying about