J.D. DURKIN: Good morning, subscribers! Carley Garner joins me now for a look at commodities and what they could tell us about some of the biggest holdings in the portfolio. Thank you for being here. Good morning.


J.D. DURKIN: Really appreciate your time here. Before we get there, what stood out to you in the last week of trading? What are you following that maybe members should follow as well?

CARLEY GARNER: The most interesting thing that I saw this week was action in the US dollar and US treasuries. Both of those asset classes are going to guide what happens in stocks and commodities going forward so it's really important to see what happens with interest rates. It's kind of an unpopular opinion and against the grain, but I think that interest rates have a pretty good chance at topping out, meaning treasuries bottom and rally. The chart's a little bit messy but we're still holding major trend lines.

And in addition to that, on the future side of things, there's more people net short the 10-year note now than have ever been in the history of 10-year note futures. Now it might take a little bit of something to surprise the market to get them to start covering and taking profits and eventually trigger a short squeeze, but when markets get this overloaded into one direction, generally that's exactly what happens. So I expect interest rates to start topping out.

And the US dollar is in a bit of a corrective rally but I think that dollar index is probably going to find resistance around 103, 104. If that happens, and it rolls back over and breaks below 99, which is the price that it traded below before Russia invaded Ukraine, then it would kind of wipe out the entire dollar rally. I think that's bullish for most commodities, especially the grains and gold.

J.D. DURKIN: Were you surprised by the move on the 10-year yield-- er, yes, the yields the last few days that we saw?

CARLEY GARNER: I was but I think we're in a bit of a capitulation situation. Seasonally, the market tends to go up in treasuries right around now. And like I said, we're holding support levels. And I think the Bill Ackman piling onto Treasury shorts news yesterday triggered a little bit of that. But I think most of this is washing out, running sell stops. And I think we find our footing next week.

J.D. DURKIN: So for people who missed it, what was the Bill Ackman piling on component, if you don't mind me asking?

CARLEY GARNER: Apparently he's going short the 30-year Treasury in a big manner so we'll see how that goes.

INTERVIEWER: OK, I appreciate the context. Seasonality is something that Chris Versace, of course, follows and tracks very closely. What kind of signs do you look for here, Carley, when determining if markets will follow traditional seasonal patterns? Keep in mind, of course, we're not really in a traditional economy right now but--


J.D. DURKIN: --your thoughts on that.

CARLEY GARNER: Markets have been really strange for the last couple of years but seasonality works more than it doesn't. So I'm a fan of paying attention to it and I'm a fan of using it as part of my analysis. That said, the hard part about seasonality is, on the years that it doesn't work, it just completely melts down.

So if a market's supposed to be going higher at a certain time of year and it does the opposite, it doesn't just trickle lower. It literally ruins people's lives. So you want to be really careful with that. Unfortunately we don't know that it's not going to work. We don't know this year is the exception until after the fact. So--

J.D. DURKIN: Ah yeah, of course.

CARLEY GARNER: It's tricky.

J.D. DURKIN: Yeah, it absolutely is. You discussed the war in Ukraine earlier. We follow, of course, the volatility-- the movement in food prices. What will you be tracking as we head into the fall and that lane of things?

CARLEY GARNER: So the last year-- 2022 in wheat was historically volatile and unfortunately it was human-induced, not weather-induced. Usually in commodities it's weather that triggers that kind of volatility. This time it was politicians. Politicians aren't predictable, just like the weather so I have no idea what the next six months to a year brings.

But what I can say is, wheat's probably-- it's actually quite a bit lower. We're trading about $6 in wheat, which is half of what it was last year when all the hoopla was going on. I think we probably go a little lower. I think there's going to be a really good base around $5.50, and I think if anybody is bullish wheat or bullish stocks that are involved in wheat, that's probably the place to consider.

J.D. DURKIN: Yeah, and I'm also curious, any other kind of commodities in the space? You know, I've tracked some of the numbers like soybean production out of Brazil and how that's impacted. Of course, we're upcoming on the El Nino season of things. What else do you follow in that lane?

CARLEY GARNER: So the interesting thing about grains is, in the US up until recently, we've been used to it being a US market-- like most of the production is occurring here. But Brazil is taking over in soybeans and I think Brazil is going to start sneaking in in corn as well. So we want to be aware of that. So hopefully if you're a corn farmer in the US, you're listening to-- this is a time to make sure that you're minding your risk and sticking with the game because Brazil is right behind us on that.

J.D. DURKIN: The club does have a position in the SPDR Gold Trust. Talk to me about your outlook on gold.

CARLEY GARNER: So I tend to-- gold has been basically trading sideways for three years. We had a really big rally a couple of years ago and we've just been kind of hovering around but it hasn't given up much of the gains. We're only 1%, 2% off the all time highs. And we've spent the last three years knocking up against 2100 and I think fourth time might be the charm if we try that again.

We will need interest rates to settle down and start moving lower. We will need the dollar to continue to roll over in the overall scheme of things. But if those two things happen, I think we break above $2,100. And I'm going to throw a big number out there-- I think we're going to $2,500.

J.D. DURKIN: OK, you heard it here first, folks. Breaking news. Finally, let's conclude with a bit of talk on oil. Obviously it's also kind of a seasonality thing, right? We've been out on the road, we're using fuel in different ways. Now we'll start to use it in ways to heat our homes during the cold months to come. We'll see how cold they are, but your thoughts on oil.

CARLEY GARNER: Well, oil is trading in the low $80s. It's taken kind of a perfect storm to get here. We've had OPEC throwing everything along with the kitchen sink at it. We've had us producers shutting down some rigs and lowering their production.

And seasonally we tend to struggle this time of year. Like, most of the gains in oil occur in the front half of the year and then we kind of trade sideways. And so I'm a little skeptical about oil getting much above $83, $84 on this trip. I think we have another sell-off in oil.

J.D. DURKIN: Carley Garner, I'm very grateful for your time to join us--


J.D. DURKIN: --here on the floor of the New York Stock Exchange and do this. We usually do this remote, so it's great to be able to do this in person.

CARLEY GARNER: Yeah, awesome, it's awesome.

J.D. DURKIN: Very grateful you made the trip. And folks, Chris Versace and I will be back on Monday for a look at the week ahead. Have a great weekend. We'll see you then.