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Back in January, I attempted to answer the question “Is Dollar’s Dominance Over?”, as the dollar index (DX) had experienced significant losses.
However, we received two conflicting signals from the technical chart, which provided a bearish alert, and the interest rate differentials chart, which indicated support for the dollar.
In both polls, the majority of readers voted that the dollar’s dominance was over and that it had already peaked for the dollar index.
Since then, the DX has made a bounce close to $106 with the support of a hawkish Fed, however these gains proved to be unsustainable, and the price dropped back down to hit the valley established in January, reaching a new low of $100.

Is the dollar headed right into the abyss?
Let’s take a look at some updated charts, starting with the interest rate differentials.
Source: TradingView
This time, I will be using a monthly time frame to provide a closer look at what could potentially cause the dollar to decline.
The majority of real interest rate differentials remain bullish for the dollar, with the orange line representing the gap between the US and UK establishing a new top of 6.15%, and the red line representing the US-Japan gap breaking into positive territory at 3.4% and catching up with the US-EU differential.
However, the US-EU differential represented by the blue line is spoiling the positive outlook for the dollar as it has been falling since its peak of 5% in September 2022. It’s important to note that the euro is the largest component of the dollar index, and this downtrend in the interest rate differential is putting downward pressure on the DX.
The pace of the dollar’s descent may be somewhat exaggerated, as it appears to be based more on an emotional outlook than on current fundamentals as the curve of the blue line is not that steep and the Fed is not yet running out of ammo.

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The next chart follows to show the technical outlook.
Source: TradingView
The dollar index futures have now hit a crucial support level, with the orange dashed line on the chart indicating the 2015 high of $101 positioned just above the psychologically significant level of $100.
Additionally, the RSI indicator has reached the critical support level of 50. Indeed, the dollar is on the edge now.
At this crossroads, the dollar faces three potential paths.

The first path, illustrated by the blue arrow, represents a non-stop rise of the dollar towards the upside of the black uptrend line at around $117. This path could be supported by a more aggressive tightening from the Fed, a “flight to safety” scenario similar to the Great Recession of 2008, or a major geopolitical event.
The green path suggests that the upward movement seen in 2021-2022 was only the initial part, and we may witness a second upward movement after a period of consolidation around the current equilibrium. This view is more technical in nature, as it follows the concept that the 2001 peak at $121 should be retested before any major reversal occurs for the DX on a global scale.
The red path indicates that the dollar index futures may continue to weaken due to the growing trend of countries looking to trade without the use of the US dollar. This is reflected in the increasing number of countries expressing their desire to move away from the dollar as the world’s reserve currency.
The initial support level would be at the downside of the uptrend around $94, while the growth point of $89 in the valley of 2021 would be the subsequent crucial support.

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Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.
Click Here to learn more about Reitmeister Total Return

Six months ago, stocks made fresh lows of 3,491. Since then, we have seen a hefty bounce to our current `perch at 4,137.
So are we in still in a bear market…or has the new bull emerged?
That vital discussion, along with our trading plan with top picks, will be at the heart today’s commentary.
Market Commentary
Technically speaking we are still in a bear market. That is because the definition of a new bull market is when the S&P 500 (SPY) rises 20% from the lows. Here is that math:
3,491 October Lows x 20% = 4,189
However, some will say that was only an intraday low and more appropriate to measure based upon the closing low of 3,577 set on October 12. That would mean stocks would need to break above 4,292 to be considered in bullish territory.
The point is that we are getting closer to a bullish breakout. Yet where we stand at this precise moment is a state of limbo which is what creates a trading range.
One could say it’s as wide as the recent lows of 3,855 up to 4,200. But I think most of the near future will be spent in a tighter range of 4,000 to 4,200.

Why Are We in Limbo?
The threat of recession still looms large. This was reinforced Wednesday because the FOMC minutes discussed their fear of recession later in 2023 because of residual damage from banking issues.
On the other hand, we have heard about the threat of recession since early 2022…and it keeps NOT happening.
This has led many traders to not hit the sell button too hard on any whispers of recession. They have been faked out too many times on that in the past only for the market to bounce back ferociously as no recession unfolded.
This is creating an upward bias in the market the last 6 months. Yet will be hard to see too much more upside until the bears are thoroughly convinced that no recession will be in the offing.
Meaning the clear new bull market breakout will not happen until more bears are convinced of an improving forecast. When more of them turn tail and start buying in earnest is when the new bull market will begin.
BUT WHAT IF A RECESSION DOES FORM?
Indeed, those recessionary storm clouds still linger especially as the Fed’s primary goal is to stamp out inflation by “lowering demand”. Lowering demand is just a fancy way of saying they want to slow down the economy.
In a perfect world that is a soft landing near 0% GDP before the economic growth engines restart. In that scenario we have already seen the stock market lows and the next bull market would emerge.
However, just as likely is that all the steps to “lower demand” actually spark a recession with negative growth, job loss and yes, much lower stock prices (below the October lows).
Recent shocking declines in ISM Manufacturing, Service and Friday’s Retail Sales report do paint the picture of an economy potentially tipping over into negative territory. And again, remember that the FOMC minutes did point to their increased concerns that the recent banking issues will be harmful to the economy likely leading to a recession by end of the year.
As long as these serious threats linger, then there will be enough people rightfully bearish to prevent the overall market from heading much higher.
The sum total of this stand off between bulls and bear is a trading range environment likely with serious resistance at 4,200 as was found in February. I don’t even believe the May 3rd Fed announcement has the muscle to change that outcome.
Thus, I could see this trading range scenario in place for a good part of the summer until investors can better determine the true likelihood of recession.
One of the classic investor sayings is that we do not have a stock market as much as we have a market of stocks. Meaning that each individual stock has the potential to rise no matter the overall market environment.
It is much easier to appreciate the virtue of this saying when you understand that over 2,000 stocks were in positive territory in 2022 even as the bear market got its claws into most others. And amazingly over 1,000 of those stock rose 50% or more.
This begs us to always be on the lookout for the very best stocks and funds to outperform. And in my 43 years of investing experience nothing does a better job of that than the POWR Ratings scan of 118 different factors that point to a stock’s likelihood of future success.
So even though I fully appreciate the potential for recession and deeper bear market, I still want to be pinpointing the very best stocks and funds to hold in our portfolio.
What To Do Next?
Discover my balanced portfolio approach for uncertain times. The same approach that has risen well above the pack so far in April.
This strategy was constructed based upon over 40 years of investing experience to appreciate the unique nature of the current market environment.
Right now, it is neither bullish or bearish. Rather it is confused…volatile…uncertain.
Yet, even in this unattractive setting we can still chart a course to outperformance. Just click the link below to start getting on the right side of the action:
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & Editor, Reitmeister Total Return

About the Author
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

For the past two years, investors in the precious metals complex have watched nearly every commodity race higher, with oil, coffee, orange juice and copper up significantly from their 2021 lows.
Unfortunately, gold (GLD) and silver (SLV) were both left in the dust after topping in August 2020 and February 2021, respectively.
And for investors looking for leverage to the metals, the corrections were even more painful in the mining stocks, with the GDX sliding over 50% from its highs above $45.00 per share set in August 2020.
Fortunately, we’ve since seen a reversal to this trend. Not only is gold knocking on the door of a new all-time high, but silver is outperforming over the past month, up over 35% from its lows after making a new year-to-date high above $25.00/oz.
This has lit a fire under several silver miners, with their margins set to improve by over 50% based on AISC margins of ~$6.00/oz in FY2022, and the potential to enjoy margins closer to $9.00/oz if the silver price averages $25.00/oz this year.

In this update, we’ll look at two silver miners that are still trading well off their 2020/2021 highs and look to be solid buy-the-dip candidates:
Pan American Silver (PAAS)
Pan American Silver (PAAS) is a $7.0 billion gold and silver producer with a production profile of approximately ~1.5 million gold-equivalent ounces [GEOs] after acquiring Yamana’s South American assets last year.
This makes it one of the largest producers sector-wide and the acquisition solidifies its spot as a top silver producer, with the company expected to produce ~28 million ounces of silver in 2024, and this excludes the massive Escobal Mine which has the potential to produce ~20 million ounces of silver if it is restarted.
The major benefits of the acquisition were that Pan American improved its diversification by adding new assets in Brazil (Jacobina), Argentina (Cerro Moro), plus two assets in Chile (El Penon, Minera Florida).
Notably, these assets are lower-cost than Pan American’s current production profile, and the company also added a majority stake in the MARA Project in Argentina, a massive copper-gold-molybdenum project that is capable of producing 530 million copper-equivalent pounds on a 100% basis. This is equivalent to $1.2 billion in annual revenue or ~600,000 gold-equivalent ounces.
Despite this significant upgrade to the investment thesis following the acquisition of most of Yamana’s assets, Pan American Silver continues to trade at a lower valuation than it did at its peak in August 2020, yet it’s added over $4.0 billion in net asset value. This is a significant disconnect and Pan American Silver continues to be one of the cheapest ways to get silver exposure, with the company trading at barely 3x sales assuming we see no further upside in metals prices.
Plus, there are multiple projects not accounted for in FY2023 sales and cash flow estimates, including Escobal, MARA, La Arena Sulphides, and La Colorada Skarn, with a combined value for these projects of more than $3.0 billion [US$8.00 per share].
Based on what I believe to be a fair multiple of 11.0x cash flow and FY2024 cash flow per share estimates of $2.48, I see a fair value for PAAS of $27.30, pointing to 43% upside from current levels.
In addition, investors are getting an attractive ~2.0% dividend yield at current levels, pushing the total return closer to 45%.
So, with over 40% upside to fair value to its 18-month target price, and this not accounting for an impressive development portfolio (and or assets in care & maintenance), I see PAAS as one of the sector’s best buy-the-dip candidates, and I would view pullbacks below US$17.10 as buying opportunities.
Wheaton Precious Metals (WPM)
Wheaton Precious Metals (WPM) is a $23.0 billion company in the precious metals space and is arguably the premier way to play the silver sector.
This is because it boasts scale, capital discipline, and diversification, with its President and CEO, Randy Smallwood, being involved in the founding of WPM as its EVP of Corporate Development.
Since it was founded in 2007, Wheaton Precious Metals has seen its revenue increase from $160 million to ~$1.1 billion, and the company should see a record year in 2024 with the potential to generate revenue of $1.35 billion and over $700 million in free cash flow.
Looking at the FY2024 free cash flow estimates (~$700 million) and its current market cap, many investors may quickly jump to the conclusion that WPM is very expensive, with it trading at more than 30x free cash flow.
However, this is a superior business model to producers with considerable leverage in a rising metals price environment, and the company is sitting on one of the strongest balance sheets sector-wide with nearly $1.0 billion in cash.
The reason for its superiority vs. producers is that Wheaton Precious metals does not actually produce metals, it instead makes an upfront payment in exchange for the right to purchase a portion of production over the life of mine of its partner’s assets.
For example, WPM has the right to buy 50% of silver produced at Cozamin for a payment of just 10% of the spot price ($2.50/oz at a $25.00/oz silver price).
The benefits to this business model is that Wheaton Precious Metals is insulated from inflation on operating costs as well as capex inflation, and it is much more diversified than the average producer with streams on over thirty assets globally.
Based on what I believe to be a fair multiple of 28.0x cash flow and FY2024 cash flow per share estimates of $2.10, I see a fair value for WPM of $58.80, translating to over 17% upside from current levels.

However, this fair value could rise to north of $65.00 per share if metals prices continue their upward trajectory, and these cash flow per share estimates do not include new projects set to come online in 2025 with WPM being one of the better growth stories in the royalty/streaming space.
So, with a diversified portfolio, an experienced team and upwards of $2.5 billion in liquidity to scoop up new streams, I see WPM as one of the safest ways to play the sector.
That said, I see the ideal buy zone being $42.00 or lower, meaning that the best way to play the stock is to wait for a correction.
Several precious metals stocks have rallied sharply over the past few months, but the key is separating the wheat from the chaff.
And while many might seem to have solid growth stories, the track records in the sector are dismal at best and there are only a few names that are truly investable.
So, for investors looking for silver exposure, I see PAAS and WPM as two of the best names to buy on dips.
That said, both stocks have seen strong runs, so while they belong at the top of one’s watchlist, I would be waiting for a sharp pullback to start a new position.
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.