Transcript of The Bond Market is Having a Historical Meltdown
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0:00US treasuries are experiencing one of0:02the worst bare markets in history. The0:0430-year Treasury is now above 5.6% for0:07the first time since 2002. The White0:10House has urged the European Union to0:12draw down its emergency diesel reserves0:15to lower global prices, and Iran's0:18currency fell to a new record low. Rate0:20expectations swung sharply today after0:22Fed President Williams said there's no0:25need for urgency after September's0:27increase, pushing the probability of an0:29October rate hike from 70% all the way0:32down to 49%.0:34Today we cover why stocks are falling,0:37what to know, and what to look out for0:39tomorrow.0:44Stocks continue to fall and Treasury0:46yields continue to surge. The 10-year0:49Treasury hit 5.29% today, while the0:5230-year rose to 5.61%,0:55its highest level since June 2002, and a0:58new 24-year high. A big reason for this1:01is because interest rate expectations1:03are flying. The bond market is now1:05pricing in four more 25 basis point Fed1:08hikes by June 2027. And 9 months ago,1:11markets expected at least 100 basis1:13points of rate cuts by then. And that1:16rise in expectations comes off today's1:18jobs data where job openings fell by1:20256,000 to 7.07 million below1:24expectations. Excluding the pandemic1:27era, hiring and quit rates are also1:29nearing 10-year lows. Markets reversed1:32though late in the afternoon today as1:34New York Fed President John Williams1:36said one more interest rate hike this1:38year may be appropriate to help contain1:40inflation. But he also said with the1:43policy action we took at our September1:45meeting, there is no need for urgency1:47and we have time to gather more1:49information. Chances of a rate hike in1:51October flew from 70% this morning all1:55the way down to now 49.3%1:57after the speech with a pause now being2:00priced in at the October meeting.2:02Zooming out, this has become one of the2:05worst Treasury bare markets in history.2:07The 30-year Treasury price return index2:10has fallen 60% since 2020, wiping out2:13nearly 20 years of gains. The previous2:16largest draw down over the past 40 years2:18was roughly 35% during the 20082:21financial crisis. The Iran war is2:24lighting a fire on inflation, causing2:26the selloff in the Treasury market,2:28which is in turn causing the selloff in2:30the stock market. Trump is denying2:32reports from Axios and CNN that he2:35offered Iran sanctions relief and access2:37to frozen funds in exchange for progress2:40on nuclear talks. On Truth Social2:42yesterday, he posted saying, "I offered2:44them nothing." Calling the story a hoax.2:47At the same time, Trump also said the2:49war could end quote very, very soon.2:52Iran's foreign minister met with Qatari2:54mediators in New York today to discuss2:57Iran's recent 7-day peace proposal,3:00saying he expects a final response from3:02the US soon. And the Iranian realal just3:05hit a new record low as$1 US dollar is3:09now worth more than 2.5 million realals,3:12which heavily reduces the purchasing3:13power of people inside Iran and shows3:16that the US economic warfare is having3:18an impact. US forces are also set to3:21leave their final bases in Iraq3:23tomorrow, ending a military presence3:25that lasted more than 23 years. The3:28withdrawal plan was agreed upon in 20243:31under the Biden administration, and some3:33Iraqi security experts are warning that3:35the withdrawal could leave an opening3:37for Iran. The White House is now urging3:40the European Union to release its3:41emergency diesel reserves in an effort3:44to bring global fuel prices down. This3:46comes after the US energy department is3:48also now offering to loan 40 million3:51barrels from the strategic petroleum3:52reserve in an effort to lower rising3:55prices. And we already know how low that3:57petroleum reserve has become. And there3:59is some good news related to the rising4:01prices. Though Saudi Arabia has4:04completely resumed oil loadings from its4:06Red Sea port of Yanbu after attacks took4:09down the East West pipeline earlier this4:11month. And by some measures, the stock4:13market is weaker now than it was during4:16COVID and all the other crashes since4:18the do-com bubble. This measures how far4:21the S&P 500 index is from its 52- week4:24high relative to the median stock. S&P4:27500 breath has fallen to nearly -5% well4:31below its long-term average around minus4:336%. Only about 25% of S&P 500 stocks are4:38now above their 50-day moving average,4:40while fewer than half remain above their4:43200-day moving average. And for the S&P4:45500 itself, it also just surpassed the4:48level it peaked at during the dot bubble4:51relative to its M2 money supply. Every4:55single day, we post brand new videos4:56just like this one. So, if you haven't4:58subscribed already, consider5:00obliterating that subscribe button to5:02get our videos recommended to you more5:03often. It takes a long time to make5:05these videos for each trading day, and5:07if you subscribe, you'll see them more5:09often. Tom, looking at the market right5:11now, the S&P 500 is 1.95% off of its5:15all-time high. What are you seeing on5:17the charts? Looking at the SPY today, it5:20closed down 0.18%5:22and it did test a pretty big level of5:24support close to 762. But as we look at5:27the spy, it did have that nice end of5:29the day recovery here. Now looking at5:31the spy overall over the past few5:33trading days, price action has been a5:35lot more negative. And if we actually5:37draw out the downtrend here, you know, I5:39would not be surprised if coming into5:41tomorrow morning, the SPY continued this5:43positivity as the chances of rate hikes5:46got pushed lower for that October5:48meeting and really caused that end of5:50day reversal. So, I'm really watching5:52SPY up into some resistance zones like5:5476650 and even the high of pre-market5:57today around 768. I think that 768 level6:01will be critical for tomorrow and the6:03biggest level that I'll be watching for6:05if the spy does continue to rise past6:08there. Keep your eyes on 770 and 77250.6:11Now, if we continue just chopping around6:13down in this lower range, don't be6:15surprised if the spy comes down to test6:1876235,6:19which was essentially the low of day6:21from today. So, watch that as the main6:23zone of support. If that breaks, watch6:25for 762 and 760 just underneath.6:29>> Interesting. And another thing to keep6:30in mind, too, is that generally when6:32you're looking at market stats, the6:35market rises a lot more than it falls.6:38But there was this interesting stat6:39today that basically shows that the NYSC6:42technical index rate of change has6:45fallen below minus.96:48signaling a sharp deterioration in6:50market breath momentum. Historically6:53most similar signals occurred near6:56short-term highs. So keep this in mind.7:003 weeks later in six of the seven most7:03recent cases the S&P 500 ended up7:06falling. Yeah, and it had pretty7:08negative average returns as well with a7:11negative 3.8% average return there. And7:14even if you look at the two-week percent7:16change, you know, we see a negative 5.4%7:19average return, that is an extremely7:21negative statistic. And we are also now7:24only one day from the best buying point7:26during a midterm year, which is7:28September 30th. I know that we've been7:30counting down the days just in just7:32about every single video, and we're and7:34we're almost there. So, uh, we'll see if7:36this year ends up playing out this way.7:38Obviously, 2026 is an insane year and7:41there is a lot going on right now. And7:44speaking about a lot going on, the7:46economic schedule is jam-packed this7:48week. You know, we had Jolts job7:49openings come out today and that7:51impacted things quite a bit early on7:53this morning. But tomorrow, we had the7:55PCE price index, and the core PCE price7:58index is the Federal Reserve's preferred8:00gauge of inflation. So, be ready. That's8:03going to be a huge data release. The GDP8:05growth rate, personal income, and8:07personal spending data will also be8:09releasing 1 hour before open tomorrow.8:12And looking at Thursday, ISM8:14manufacturing PMI data will release. And8:16Friday, we'll also get the non-farm8:18payrolls and the unemployment rate. So,8:20it is a jam-packed week. We'll talk8:22about those a lot more as the week8:24progresses. And looking at the earnings8:26lineup, Micron, the biggest report of8:29the week, we'll report tomorrow and8:30after hours. This is a highly8:32influential tech stock. It's a memory8:34chip stock and it can end up impacting8:36the overall market. As we know,8:38semiconductors and AI stocks run the8:41show right now. But Mike, besides that,8:44I think it's time to get into the good8:45stuff, which are some setups and8:47predictions for tomorrow. A stock close8:50on the radar is SPXS.8:53This ticker uh tracks the S&P 500, but8:56in an inverse and leveraged way. So8:59basically, the more the S&P 500 falls,9:01the more this goes up. Uh, of course,9:04this falls a lot more than it rises9:06because the S&P 500 uh rises a lot more9:09than it falls. But when there are major9:12pullbacks, this ETF has the ability to9:15make some major moves to the upside. Uh,9:18we can see over some of the recent9:20crashes, uh, SPXS had some massive,9:24massive moves. Uh the market is still9:27really close to its all-time highs,9:29which is good, but we are seeing more9:31weakening come into play and yields9:33continue to surge, which I think will9:35continue to be a risk for the market. We9:37have a couple big data points coming up9:39like the PCE price index and the GDP uh9:42data and even the non-farm payrolls data9:45on Friday. Of course, the US Iran war9:48doesn't appear to be deescalating, and9:52if anything, it's only escalating. And I9:54think all of this will continue to pose9:56a risk to the market. Um, S&Ps is on my10:00radar, especially if we continue to see10:03more selling come into play. If the S&P10:05500 isn't moving or if it's moving10:08higher, then I don't think a play like10:10this should be forced. But if we do see10:13weakness, I think um a ticker like SPXS10:17can be a good way to play the downside10:19in a shorter term sense. Yeah. And you10:22know, the market has been weak in the10:23short term. As we can see, the SPY has10:25been downtrending over the past couple10:27of weeks or so. It did have that nice10:30pop back on Monday, September 21st, but10:32it has been fading ever since. But one10:35stock that did start moving a bit more10:36today is Oracle, ticker symbol OCL.10:40Oracle popped up 3.9% at close, but it10:44had a massive intraday run. From its10:46opening price to the high of day, it10:48popped up around 8% plus. And looking at10:51it, they ended up having a good thing10:53where NetApp officially launched a10:55native integration of its ontap storage10:57platform directly into Oracle's cloud11:00infrastructure. Oracle obviously had a11:02great reaction from this and popped up11:04to around $144 per share. And I'll be11:08looking for a good retest of that 14411:10level coming tomorrow. And there was11:12even a big intraday level around 140.11:15And it acted as a little bit of11:16resistance into the afternoon. And if we11:19can see a good break past 140 tomorrow,11:22I think that we could start to play11:23Oracle up to that high of day from11:25today, if not even target a move further11:28than that. Although, I will say I think11:30it would be smart to start scaling out11:32at that high of day test. But overall,11:34Oracle moved very well off of that news.11:36And this is a stock that's been stuck in11:39in this overall lower range for quite a11:41while now. And we can see that whenever11:43it does have these recovery efforts, it11:46can move quite a bit over the course of11:48a few months, especially off of this11:49support range. So, keep Oracle on the11:51radar. It's uh running up with a lot of11:54good momentum today. Very nice. Another11:56ETF that's close on watch is XBI to the12:00upside. This tracks the biotechnology12:02industry, and this industry has been hot12:04this year. It's one of the few areas of12:06the market that has remained resilient12:09and I don't think it's as overhyped as12:11the AI industry, but it does have a lot12:13to gain from AI uh in general. This ETF12:17is still close to its recent highs, but12:19it is also pulled back a bit, which I12:21think might offer a good riskreward as12:24long as it can hold these lower support12:26levels around this $152.5012:29area. Looking at XBI, it has more so12:32just been consolidating over the past12:34few trading days than anything else. I12:36think if we can see it continue to hold12:38this level and continue to build on this12:42little bit of bullish momentum, it might12:44be a good shorter term trade setup. I12:47really like it in a broader term sense12:49as well as I think the biotechnology12:52industry has a lot to gain uh from AI12:55and and as uh technology itself12:58continues to improve and I really like13:00how XBI it goes through these periods of13:03consolidation and following those13:05periods it's been really following a13:07solid uptrend and it will break out past13:09these consolidation zones in some pretty13:11awesome ways and it has been13:13consolidating a lot recently so I'll be13:15watching it that is a good support level13:17there. But also, I'll be looking at SPCX13:21or Space X to the upside. TD Cowan13:23initiated SpaceX at a buy today with a13:26$200 price target, citing major13:29opportunities across the AI computing13:31and just the overall AI space in13:33general. The firm expects AI compute13:35leasing to become SpaceX's largest13:38business by Q1 of 2027, forecasting13:41revenue of 14 billion in 2026. And13:45looking at SpaceX right now, it has been13:48recovering quite a bit from its lows.13:50You know, at today's prices, it's up 41%13:52and at its recent highs, it was up13:54nearly 50% from that low that was posted13:57back at the beginning of August. So,13:59looking at SpaceX right now, it's up14:01quite a bit in the short term. But, as14:03we can see, the high post IPO was around14:06225. So, I'm going to really eye up14:08SpaceX. I think that it's a stock that14:10can start to move quite a bit in the14:12short term, especially if the overall14:14space sector starts to heat up a little14:16bit. And we can also see that there's14:18been a good downtrend in play over the14:20past few days with SpaceX. But at the14:23same time, there's a really good base of14:25support around 145 to 146. And if we14:28break out of this downtrend, I think14:30that we could see SpaceX over the next14:32day or so very easily come up and test14:35155, if not even go for a larger break.14:38So, I would really like to see the14:40confirmation above this trend line going14:42into tomorrow and the next couple of14:44days. I don't think we need to force it14:46if it continues downtrending off of14:48that.14:49>> Sounds good. And let's also jump right14:50into today's momentum plays. With the14:53first one, we have T1 Energy, ticker14:55symbol TE, to the upside. If TE can14:58break out above $3.80, we're at double15:01top today. Watch TE to the upside. With15:04the next one, we have Digital Turbine,15:06ticker symbol APS, also to the upside.15:10Digital Turbine moved up 3.7% today and15:13tested the high of day from last Friday15:15as well. If it breaks that high of day15:18from last Friday at 1175, watch it to15:20the upside.15:22>> And then the last one, we have15:23DraftKings, ticker symbol DKNG, to the15:26downside. Yeah, DraftKings had a huge15:29drop today and made new lows of 2026,15:32falling under $20 per share. If it15:35continues falling and breaks under15:36$19.50,15:38watch DraftKings to the downside. These15:41three stocks are on the radar for15:43potential continuations tomorrow if and15:46only if they break through the levels15:47listed. These stocks are volatile, so15:49always protect yourself, use stop-15:52losses, and focus on what matters, which15:54is making smart, disciplined trading15:56decisions. But let's also jump right15:58into today's $2.65 million big money16:02trade. Today, we are looking at ticker16:04symbol IOVA.16:07The trader here traded the 15 strike16:09call options that expire on December16:1218th of 2026. This company is a16:15biootherrapeutics company. Um, the stock16:18has crushed it so far this year. It's16:20actually insane. And the company uh had16:23some really good news today as well. The16:26stock is up over 30% on the day after16:28the company raised its 2026 revenue16:31guidance to $410 million to $420 million16:36from its prior outlook of $350 million16:39to $370 million. The company pointed to16:43strong US demand for its cancer16:45treatments as the main driver of16:46revenue. Uh the stock is booming. These16:49calls are roughly at the money and they16:52have a lot of time to them. Um the16:55company's hot. I can see how this trade16:57can continue to do very well. I think16:59the biggest risk is that it's already up17:02a lot and these calls are a bet that the17:05stock is just going to keep on ripping17:07which, you know, it's hard to bet17:09against companies like this. At the same17:11time though, um, you know, the stock is17:14up a lot, which might skew the17:16riskreward a little bit, but these17:18options do have a lot of time to them.17:20Very interesting trade setup, and I'm17:22excited to see how this one ends up17:23playing out. Yeah, IOVA is an extremely17:26interesting stock, and whenever you zoom17:28out on it over the past few years, it's17:31had some insane moves and sometimes17:33following major gap ups like this, it17:35has continued for a few days to a few17:37weeks at a time. So I think that IOVA17:40could still make a overall bigger move17:43from this point. I do think that there17:45is a risk that the big money trader here17:47is shorting these calls given today's17:50massive run. But during this overall17:52rally this year, this stock has, you17:54know, really continued to the upside17:56with very minimal pullbacks mixed in. So17:59uh very interesting trade setup. I think18:01that the risk is extremely high on this18:03one. So just make sure that you don't18:05overleverage whenever you enter into18:07this position. But it's a pretty high uh18:10a high amount on this big money trade,18:11too, being $2.65 million on such a risky18:15position.18:16>> Yeah, high risk, high reward, and that's18:18how a lot of the biotech stocks are. So,18:20we shall see. And let's keep it close on18:22the radar. But let's also give a giant18:24shout out to today's member of the day,18:27RSB, in the stock discord, who had a18:30great post today. He said, "Nice work on18:33BE and NDXP." And he made around $3,00018:38and he went right back to bed right in18:40like the first hour of trading. Huge18:41shout out to you. Keep up the great work18:43going forward and it's awesome to see18:45posts like this one. Thank you all so18:48much for watching. Tomorrow will be a18:50big day. Don't forget about the PCE18:51report and the GDP report. Both of those18:54will release 1 hour before the market18:57opens. And if you're new, don't forget18:58to subscribe to get our videos19:00recommended to you more often. Thanks19:02for watching and let's crush it in the19:04market tomorrow.
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