Transcript of Are Wall Street Panicking?
FX Evolution - Trading Academy
0:00Wow. Could Wall Street be starting to0:02cave to the idea of a 90% chance of rate0:06hikes this week from the Federal0:08Reserve? And with tanker prices going0:10out of control, you can kind of see why.0:13Maybe the biggest stories though aren't0:15even just there. Software,0:17semiconductors, and massive0:19transactions. Today, we take a look at0:21the Leopold level and what's going on in0:23stocks, commodities, and cryptos around0:26the world. So much to get into, guys.0:28This one is not to be missed.0:33Well, welcome back to one of the largest0:34daily shows on the planet. Thanks to you0:36guys out there. The last 24 hours, well,0:39it was pretty scary. We saw0:41semiconductors down and software up, but0:44really nothing much happening underneath0:45the hood, unless you were looking. Maybe0:48the biggest story though was in the0:49puts, in the option side. Hi, my name is0:52Thomas. I've been in markets for over 170:54years. And on this channel, we do things0:56a little bit differently. If it's your0:57first time here, remember to subscribe0:59and smash that like button as we go1:00through the price action, the data, and1:03the flows daily, breaking down all of1:05the markets and how they're connected1:06together, and also how Wall Street tends1:08to manipulate them to really take1:10advantage of our human psychology. Where1:12are the traps? Where are the tricks?1:14We'll go through them right now. First1:16up, let's talk about one of the1:18behaviors that we haven't seen in a1:20while. And this one here is from Zero1:21Hedge. basically showing that nobody is1:24really considering much downside risk at1:27the moment. According to the latest data1:28here, the normalized put call skew1:31basically is showing that most people1:33aren't buying downside protection. Could1:35that be the point where they do the1:37rugpull? Well, the next couple of1:38months, at least historically, have been1:41more volatile. So, it's really1:42interesting to see this read here. At1:44the same time as that's been happening,1:46we have had of course an increase in1:49credit default swaps. Basically the1:51spreads right now on anything to do with1:53AI and borrowing are starting to rise up1:56and this is showing some pain in the1:58bonds market. We often say bonds bonds2:00bonds earnings earnings earnings and2:03IPOs IPOs IPOs as these are the three2:06pillars of what is really driving the2:08markets this year. Now the same point2:10that we see this we don't have much fear2:12in the general market and this chart's a2:14great one here from Topown Charts and2:16Ryan Dietrich over on X. So, let's take2:18a look at some of the other stories that2:20are making their rounds. We always want2:21to look at what's happening in the2:23world. First up here from All Girl2:25Infiniti. Great one over on X basically2:27to give a follow, guys. Basically shows2:29here that China's outstanding loan2:31growth continues to dwindle. And a lot2:33of people in the comment section have2:34said everything's going pretty well in2:36China. Yeah, but not the loan growth.2:38And this often means overall strength.2:40So we have seen a little bit of central2:42bank intervention over there2:43particularly to plug some holes which2:46they're starting to show. But it really2:48is a story of across the world things2:50have started to get a little bit more2:53sour. That is people are starting to2:55pick well maybe we need alternative2:57assets. Maybe we need to think about the2:59diesel price and how it's going to3:00affect food. And maybe more importantly3:02than all of this is this chart here from3:03Duality Research which shows that since3:06late May, remember exactly the point3:09where we saw semiconductors top out at3:11least recently, we've had actually a3:14flow decline. According to Duality's3:16research here, which is excellent given3:18following X guys, it shows that asset3:20managers and institutional investors3:22have actually been positioning downward3:24as the S&P 500 has remained in a3:28kangaroo market. that is going up, down,3:30and all around. And although this is not3:32unusual to see, positioning like this3:35does start to bring up the question of3:37is there something sinister happening3:39over the next couple of months? And why3:41are they declining in what has been a3:43pretty strong market for most of 20253:46into 2026. You can see here the previous3:48positioning has really been in line with3:50price action and they didn't really3:52start to drop the market that much3:55during the period here of 2025 into 26.3:59So it just goes to show that something4:01weird is happening when it comes to4:02positioning. Now why could that be?4:04Well, it could be debt strain and we're4:06starting to see this in auto4:07delinquencies, credit cards. And yes, if4:09you've been watching those for years,4:11you'll know that they are not lead4:12indicators, but they are, you know,4:14something we look at. We'll check out4:16Carvana a little bit later on to see how4:17it's looking. But generally, the surplus4:19of sellers as well in the property4:21market is just continuing to accelerate.4:24And it's accelerated again here4:26according to the Kobassi letter over on4:28X. And again, this is from Redfin data4:31and MLS data. Why is this important?4:33Well, we've just had a new high being4:35reached in terms of 30-year mortgages.4:38And it's not so much that there's strain4:39as much strain underneath the hood as4:42you in America. Well, for anyone that4:43doesn't know, they most people have like4:4530-year loans that are fixed rates, but4:47it's anybody trying to get into the4:49market. You know, it's 7.1 to 7.2%.4:53You know, these are really high rates4:55for a lot of people to pay down. We do4:57have many people in the industry. Guys,4:59if you are in the industry, let us know5:00in the comments down below. What are you5:02seeing on the ground? Is it that the sun5:04belt struggling? Chicago might be doing5:06okay. Are we seeing more and more states5:08starting to struggle to do transactions5:10and more of course houses online?5:13Because could it be that this new5:16interest rate hike that is now at 92.5%5:20according to this post here from at Mr.5:22Derivatives and of course the5:23probabilities out there. Could it be5:25that this is the straw that breaks the5:27camel's back or starts a totally5:29different market dynamic? At this point5:32it's pretty much priced in. In fact, I5:33noticed that Heisenberg asked Grock and5:36he said um during periods of 90% plus in5:39terms of probabilities, has it ever been5:41wrong? And according to this, it says5:43here that the accuracy being this high5:45generally means there will be a rate5:47hike and the market is usually wrong5:50when it's more like kind of like a 70305:52or 6040 kind of split. So just like5:55that, we went from 50/50 to 65, you5:59know, and and of course 35 and then we6:01went to now almost 90% plus and and6:05really almost no chance of there not6:07being a rate hike. Now, I would have6:08thought there wouldn't have been one,6:09but hey, this is the good thing about6:11when you're checking out markets, you6:13don't necessarily have to be correct on6:15those real calls. You just follow the6:16price action, the data, and the flows.6:18And as I've mentioned, you know, people6:20have opinions. The best thing to do is6:22to follow the actual money. What's the6:24money doing? What are the smart guys6:26doing? Where is the actual flows?6:28Speaking of which, we've discussed this6:29for months. Copper, metals, oil, all of6:34these have been moving up and yields6:36have been relatively stable, only just6:38breaking through in the last couple of6:39weeks. This one here from Tavy Costa,6:41you know, Tabby totally agrees here.6:43Zura Capital, basically he overlays here6:46the commodities prices against, of6:48course, the market's expectations for6:50inflation. So, who's right, who's wrong?6:52I generally say the flows are more6:54correct and so far they're being proven6:56correct because of course we're looking6:58at a rate hike in just 48 hours. Now7:01let's go to where it gets really7:02interesting. The large transactions,7:04this one here from volume leaders7:06basically shows that semiconductor7:08transactions came through on one of the7:10largest ETFs over the last 24 hours. And7:13this is effectively that Leopold level.7:15So we're getting down to the zone where7:18effectively Leopold was forced to7:20liquidate. Of course, markets freaked7:22out on that and then rallied up. And so7:24far, we've been in the structure that we7:26would expect, a kangaroo style7:28semiconductor market. It really goes to7:30show that these levels do tend to7:32matter. And why? Well, there's been a7:34lot of transactions in the past. So,7:36we're watching this zone closely. And7:38you'll notice even S, which is the7:41semiconductor bare spread, that just had7:43three clusters over the last 24 hours.7:45Will it be a sell or is it actually7:47someone saying, you know what, going to7:49take a little bit of profit here and7:51wait for the next move, maybe even7:53reverse and start to see semiconductors7:55improve. Clearly, a couple of7:57transactions, including a sweep, a7:59darkpool, and a normal large one. So,8:01something's happening here on semis. I8:03think the next 24 to 48 hours might show8:05us the way. Let's now take a look at8:07CQ's. This is the Chinese market. Big8:10dark pool just came in. We have had a8:12couple of big ones in recent times.8:14China's been struggling a lot and you8:16can see here CQ all the way back down8:18the lows but this is the second largest8:20trade through that ETF since history or8:22inception and it is a sweep so happening8:25at a demand zone will it find a bid or8:28is it finally find more further selling8:30time will tell bigger stories coming8:33through so much stuff going on last 248:35hours really defined by really software8:38software picked up and as we wrote about8:40on X during our kind of things that8:42caught our attention today by the way if8:44you want that you can get it before8:45these videos over on X links in the8:48description. Give us a follow there,8:49guys. It's really a good read. We do it8:51pretty much daily. And what this is8:53showing us is that yes, okay, we had a8:55move from semiconductors into software8:58based on this AI model slowdown and9:00everything that was said on the weekend9:02from the three big guys, but also that9:04we saw Oracle just put in a massive sack9:07report. They're doing 13%9:0913% of their entire workforce, 21,0009:12people. You know, if this is continuing9:14and this is what we're seeing as these9:16guys spend more and more more money on9:18capex spend, then are we going to really9:21start to see unemployment tick up?9:23Remember, unemployment is a lagged9:25indicator, but still ultimately it9:27always shows a recession before well9:29when it's happening or as it's9:30happening. So, it's a big big kind of9:32important. We also wrote a little bit9:34here about the housing market and a few9:36other things. But guys, the real story9:38is still underneath the hood. It's these9:40crack prices. Basically, diesel is just9:43continuously going up. Oil is9:45continuously going up. We're continuing9:47to see geopolitical tensions. And if9:49this goes on much longer, I've seen Wall9:51Street Journal reports. I've seen big9:53reports out there in the news that are9:54saying, you know what, there's really a9:56threat here of a bit of a contagion9:59effect. And where are we going to really10:01show that? It's going to come into10:02bonds. So, of course, bonds and severe10:05weakness underneath the hood. The first10:07signs we saw bit about a week ago when10:10we were taking a look at RSP. The equal10:12weighted market of course drop through10:14as you can see here on the chart. We saw10:16the New York Stock Exchange also weaken10:18and we saw several sectors underneath10:20just start to struggle. Basically if it10:22wasn't energy or maybe you know a couple10:26of other very particular markets,10:27everything's actually been slowly going10:29down. And this leads us into, of course,10:32looking at a couple of key reads and10:34recognizing that unless they improve,10:36it's going to be hard to say that the10:37market wants to take new highs over the10:40next coming months. So, the good news10:42for bulls is it's not that bad just yet10:44cuz the bonds market hasn't freaked out.10:46The bad news is is that of course if we10:49don't get these new highs, then it's10:51going to be very, very tough to say the10:53market is actually super resilient and10:55ready to move towards an 8100, 8200 or10:58some of those other levels people have.10:59I've seen people calling 10,000 on the11:01S&P. What is your end target? By the11:03way, guys, for the end of the year, it's11:05time to uh put in that next quarterly.11:07Remember, this week as well has a lot of11:09options expirations in it. So, quite a11:11lot at stake. Before we jump into the11:13rest of the charts, I put out a cool11:15newsletter on the weekend. I hope you11:16guys enjoyed it. Really looked at the11:19electricity and of course whether people11:21were bullish enough on electricity at11:23the time, but whether that even still11:25made bad investors. And of course, we11:27also looked at the story of Lucen. And11:30it was really, really cool to do some11:31research on that and just to I guess go11:34back over what I've already learned11:36before and and really recognize the11:38similarities and also the differences11:40between 2026 and them. If you're11:41interested in that one chart, one story,11:43one market lesson for over 17 plus years11:46of experience, plus really meeting with11:48some amazing minds out there as well.11:51and just like picking up little things I11:53like to share with you weekly there. If11:55we can guys make sure to sign up totally11:57free comments down below. Let's now have11:59a look at the markets. What's been12:01moving them? Okay, where are we seeing12:04the movement? Well, Magnificent 7 has12:06been sneakily improving now since June.12:09So, it was not hot for a long time. It's12:12been improving. Mags versus S&P a slight12:16improvement here. If we actually look at12:17the Magnificent 7 itself, right at that12:20resistance heading into an interest rate12:23I guess hike question mark still but I12:26guess hike based on the stats and we12:29could see breakout here and that happens12:31of course the MAG7 where it goes the12:33index tends to try to follow. Carvana12:36time are we seeing price action flows? I12:39really want to make sure we continue to12:41look at these levels. You may note this12:43as a possibility of a head and12:44shoulders. If it closes below, could12:46that be telling us that we've got some12:48delinquency issues and debts starting to12:50come through? Remember, the price action12:52is the real opinion, not what you see in12:55the news, not what you read somewhere,12:56not what you kind of think, oh, that12:59makes logical sense. How many times has13:01your logical brain been wrong about13:04markets? I know it's hard, but13:06unfortunately, markets are the great13:08equalizer. Remember, if the smartest13:10people in the world with the highest IQs13:12and the most knowledge were going to be13:14the richest in markets, then why aren't13:15they the richest? The good news is you13:18don't have to be that smart. The bad13:19news is you also have to recognize that13:22sometimes markets do things that you13:24think at the start are counterintuitive.13:27Then as you find out more information13:28over time, yeah, it becomes reality. And13:31that's I think a harsh lesson that we13:33all learn and I'm sure most of you have13:35learned it. But keep reminding yourself13:36of that and you come back to abundance13:39as well. Something we love on the13:40channel and then you guys tell me it13:42helps you. Abundance is cool. Now let's13:44take a look at the New York Stock13:46Exchange. So you can see here dropped13:47below this trend line which has been13:49holding all year or at least since the13:51selloff and then it's rallied up and13:53then sold off this area. Now that's what13:54you would expect from bears. You would13:56expect them to pressure this area. You'd13:58expect them to also pressure RSP the14:01equal weight and so far that has been14:03what they're doing. So, really14:05interesting times for that as well. What14:08about the percentage of stocks above14:0950-day moving average? Well, here's14:11where things get even more interesting.14:13Only 40% of stock is sitting above the14:1650-day. So, it's continuing to drop, but14:19we're not quite at, you know, the14:21critical 20 or 80 zone. So, are we14:24really oversold yet? Not really. Are we14:26really overbought? Well, of course not14:28if we're dropping like this. So uh again14:30if interest rates come in the markets14:31start to drop levels we go into like a14:33waterfall effect then we could easily be14:36at one of those zones very very quickly.14:38Treasuries they're underneath the14:40Bessant level. This is where you know14:42Bessant basically freaked out and he14:44said guys we're you know we will we will14:46hold the line. I am the house. All of14:48these major comments these are the bits14:50of news that I don't tend to forget.14:52Remember I say if it's in the press it's14:54in the price. But at the same time there14:56are very few bits of information that14:57you remember. to me. I remember data14:59centers on the moon. I remember the15:02chances are that this is the Bessant15:04level. I don't think I'll forget that15:05because it's pretty important. And of15:07course, I'll also remember certain15:10things like the tariffs when they were15:11first implemented. These are the types15:13of news events that matter a lot. You15:15know, one CPI read, who cares? You15:17forget about it 3 weeks later. So, yeah,15:19important level. Treasury is currently15:21pressing down. Will we see some form of15:23capitulation? That is the Treasury will15:25come out and freak out totally. If they15:28do, that could change everything just15:29like this. So, you've got to be15:31remembering here that policy. The last,15:33you know, kind of decades have really15:35been driven by the Fed and the Treasury.15:37And that is all important. US dollars15:39picked up ahead of interest rate hike15:41expectations. Not much to note though.15:43It's not above 100. It's not below 98.15:46So, it's really just kind of still15:48sitting. And the overall bonds have15:50started to show signs of small distress,15:53but still extremely low. There's really15:56no major wow, this market's freaking out15:59kind of thing. If you look at high yield16:01junk, you'll get a different story.16:02We'll have a special on this tomorrow.16:04So, make sure to subscribe for this one.16:06I'm going to have a look into high yield16:08junk, triple C rated, these types of16:11things. I think that we could be at some16:12very interesting points relatively soon.16:15Semiconductors at the Leopold level.16:18Remember Leopold was in the news. Next16:20day it freaked out, hit demand. Cosby16:23hit a incredible level and then we saw16:25that rally. Since then, kangaroo, no16:28real surprises. The market itself, we16:31need to find out whether it's really16:32willing to go back up. Why would it be?16:35Who knows? Could be good stories about16:36anthropic and blah blah blah blah blah.16:38But in general, it is still struggling16:40in the kangaroo. So, couple of big16:42trades though that make us look at this16:44level. Nvidia, nothing much, but I16:47thought I'd report on it just because16:48Nvidia to SPY. And what you'll notice16:51here is if you look at this, it almost16:53broke through that.3 the other day, but16:56uh it's still still struggling at this16:58stage where we're in consolidation17:01pretty much for a year now for Nvidia to17:03S&P ratio. Chinese market, HSI still17:07sitting at the bottom ends, not really17:09finding any strength yet, but that CQ17:12again could start to show stuff. And17:14here's the chart that I think might be17:15all important. Dr. Copper, the struggle17:18takes a high goes in the news. We've17:21been talking about copper for months and17:23pretty much year plus year and a half17:26now of how it's been looking really17:27decent. Is this actually weakness? This17:29is a horrible looking chart. So, needs17:32to hold this weekly 20. It's pretty17:34important so far. Small bounce.17:36Hopefully, it can because of course it's17:38putting pressure on as well the gold and17:40silver market. So, take a look here at17:42silver. You know, some people are going17:44to be looking at this and saying it's17:45dead. I don't think it's dead yet. I17:47mean, you got demand here. It's got a17:49lower low. Can it get a higher high? You17:51know, levels I'm watching. I'm watching17:536540. I'm watching 6818.17:56You know, I want to see higher highs17:57being formed. If you're a bull on gold17:59or silver, it hasn't happened yet. Take18:02a look here at gold. It got down and18:05you'll see this gold chart here. Oh,18:07we'll just wipe that off. And it18:08actually went into this demand. So the18:10problem is everyone can see that as a18:12head and shoulders. Lower lows, lower18:14highs. Pretty nasty. What do we want to18:16see? A higher high. 4500 plus. Well,18:19that would be a little smiley face for a18:21bull. But for bears, they're going to18:23say, "Look at that head and shoulders."18:25It is pretty obvious though. And18:26sometimes the obvious technicals are18:28big. I also don't know if it broke the18:29neckline cuz a lot of books will say18:31yes. But to me, that's the demand. You18:34know, there's a demand here. Price-wise,18:36if it did happen, it would go back into,18:39you would think, 4,400, maybe 4,000,18:42maybe even a little bit lower. Let's18:43have a look at RSP again. It's18:45underneath advanced decline lines, what18:47I put on here. We're still seeing more18:49stocks going down than up. So, that's18:51the the taller there. And the S&P is18:53underneath the zero DTE puts, but it's18:56not at the put support of 7500, nor is18:58it at the core wall. So, still trapped19:01within the two ranges. The cues are the19:03same. It got close to 700, spiked up to19:06709ish at the end of the close, but 70019:09remains kind of like that that stronger19:11put zone. At the time of recording this,19:13we're seeing a little bit of selling in19:15the futures. Not much. Not much. Not19:16much. Bitcoin, meanwhile, didn't care.19:19Look at this. An old asset actually19:20holding pretty nice on iBit. Still a19:23below the call resistances. But you'll19:26notice here when you look at pretty much19:28any crypto, couple of things I note19:30straight away. First up, it's tried to19:32rally twice and failed. That's going to19:34put a lot of people trying to short it,19:36you would think, with stops above19:3782580,000.19:39So, if the market goes like this and19:41then tries to rally later, it could19:43create a short squeeze. At this stage,19:45though, you could make a case that in19:47this pit, that is a pullback in time,19:50the market is kind of neutral to down in19:52small small time frames. I like to watch19:54these places. I think the best thing is19:56patience. We've talked about how it's19:58probably going to be a pit for a while20:00and that's really helpful because even20:02if you're a day trader and you're20:04looking at ranges, well, you could be20:06more of a buy here, sell here kind of20:08person with risk parameters, of course,20:10and maybe even just go for the middle20:12point as well. All of these types of20:14things, you know, it's a beautiful thing20:16about market is you get the choice20:17sometimes to sit on your hands. And I20:19love pits for one reason. I love to be20:21patient. I love to see the market20:23actually show, hey, the flows are here,20:25guys. And if there's a trap, woo, even20:28better. If you want to learn about some20:30of the traps out there, check out the20:31day trading master class and advanced20:33class that we have over on our website.20:35So, what is the summary? It is the FOMC20:38probably the statement that will20:40ultimately be the mover. 2:30 p.m. New20:43York time, guys. I know the news. It20:46sucks each one. You say, "Oh, it's a big20:48one. It's a big one." But this20:49ultimately is the first big decision.20:51And the market might just say, "You know20:53what? I want to see that the Fed puts a20:55rate hike in. If they don't, could they20:57lose credibility? All these types of20:59discussions come into it and it's such21:01an important time in markets. If you21:03enjoyed today's video, then remember to21:05subscribe to the newsletter as well. One21:06chart, one story, one market lesson. I'd21:08love to have you there and it would be21:10awesome to share some of our knowledge21:13with you for free as well. Links in the21:14description, guys. Thanks so much. You21:16have a fantastic day and remember, the21:18markets have abundance in them. There's21:20always another opportunity and they're21:23all interconnected. So what you learn in21:25one you can bring into the others. It's21:27such a beautiful thing. Catch you guys.21:29Bye for now.
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