Transcript of This Hasn't Happened In 16 Years...
FX Evolution - Trading Academy
0:00The last time we saw this was 16 years0:02ago, eight straight days down from0:04semiconductors. And the strongest sector0:06in the markets, once considered0:08untouchable, has now been bought into0:11question. With Core Weave seeing massive0:13volumes and the bonds market starting to0:15shake, what's happening when it comes to0:18everything to do with hardware,0:19including the South Korean market,0:22falling to levels that we only saw0:23during the crash of July? Well, one0:26thing's for sure, there are several0:27problems in this market, including0:30tanker shipping going absolutely0:31parabolic. But on a weirder note, we0:34just saw a flying car. And yes, I am0:37talking about Tesla. 0 to 60 mph, less0:41than 1 second. And yes, I did say0:43flying. Let's get into it today, guys.0:46So much to go through in the wonderful0:48world of stocks, commodities, and0:50cryptos. See you soon.0:54Well, welcome back. It's great to have0:56you here and we have a lot to discuss.0:57The latest in macro, Wall Street flows,1:00a new number one transaction from volume1:02leaders and of course what is happening1:04when it comes to semiconductors. But1:06let's begin the story of today with a1:08little video. And I thought if you1:09haven't seen it by now, it is kind of1:11one of those days that you remember1:13because Tesla just unveiled their1:15Roadster. And I'll let you guys watch1:17this in the background. I thought it was1:18AI when I first saw it. That's just 20261:20for you. But take a look at this. Yeah,1:23that is actually some form of flying car1:25that does less than 1 second to 0 to 1001:29or 0 to 60 in America. Pretty wild1:32stuff, guys. If you want to check it1:33out, I guess you can. But we'll see how1:35that ends up being. It did send stocks1:37up 3% in after hours trade though. Tesla1:40now trading 3% above where it closed and1:43SpaceX coming with it. Now there are big1:46questions getting asked by the bonds1:47market and of course there's some1:48serious concerns here when it comes to1:51certain bonds debts particularly1:53coreweave and we saw actually Jensen1:55because of course Nvidia do invest in1:57corewave come out and saying that he1:59thinks financing costs are improving and2:02Nvidia doesn't need a bailout. Now, I2:04wrote this in our five things that2:05caught our attention today over on X on2:09FX Evolution if you want to give us a2:10follow. Links in the description down2:11below, guys. But this is the big crux of2:13it. We're seeing the bonds trading at 792:17now for these stock. And that means that2:19yields are now yielding over 15%. So,2:23the credit markets are not necessarily2:24agreeing with Jensen and they're saying2:26there are real concerns here of2:28potential defaults in the future for2:30companies such as Cororeweave. Now, will2:33it happen? Well, we'll find out soon.2:35But one of the big problems here is, of2:36course, inflation, which continues to2:38hammer all of us around the world.2:41September's producer inflation actually2:44came in at 1.3%, which I think was more2:46than double the expectations. This is a2:49huge deal, obviously led by fuel costs2:51in general, and we saw prices rising 21%2:55in September alone. Now, the problem2:57with this is they haven't been passed on2:59yet to us. So what happens when they end3:01up in the supply chains? There are3:03potentially big problems coming into the3:05end of the year. Another story that I3:07think we have to mention here is3:08Anthropic's latest numbers. We saw huge3:11numbers. I mean it looks like they're3:12growing at a extreme rate up 46% from3:16the previous quarter. The problem is3:18though this actually is still a little3:21bit slower. So the previous quarter was3:24actually even faster in terms of3:25acceleration. And now with the investor3:28IPO days and everything else coming3:29soon, we're going to really see whether3:32the market is actually still eyeing3:34those high valuations. What do you guys3:35think in the comments down below? Have3:37we seen kind of a peak here in AI as3:39semiconductors come under pressure or3:42are we still all about IPOs, IPOs, IPOs3:44into 2027?3:47Well, let's try to answer that a little3:48bit here by having a look at TSM's3:50overall income statement. Now this was3:52the first of the big tech companies and3:54on the surface it looks pretty sweet.3:5641% revenue up in terms of overall year4:00that is a beat. We also saw the FY264:04outlook outlook basically remain4:06unchanged. So they were kind of not4:08upgrading but there's basically saying4:10yes everything's looking pretty good.4:11Now this is from App Economy Insights4:13over on X guys and their website here if4:16you're interested in following them. And4:17you can see net profit was very very4:20strong indeed. So the thing about TSM is4:22it's kind of seen as the most important4:24or one of the most important4:26semiconductor stocks. If it's doing4:28okay, then it could stabilize the4:30market. And just as it stabilized, what4:32happened? Semiconductors hit a support.4:34We'll look at actually hit the put wall4:36as well, the options levels. And we also4:39saw the South Korean market slam4:41straight into the lows that we last4:43reached during July. So why is this all4:46important? Well, it all comes back to4:48streaks. Now, we've not really seen4:50markets this bad for 16 years. Blue4:53Kurdic actually went through and broke4:54down that stat I mentioned in today's4:57title, and that is that we've had eight4:59consecutive trading days down for5:01arguably one of the most important5:03sectors, if not the most important5:04sector in the markets. And this means5:06that it's the worst in 16 years. Now,5:08from this point, what tended to happen?5:11Well, the big change was here. 5 days5:13later, only 33.3% of the time, markets5:17were actually up. And I think that's5:18kind of to the point where when you see5:20big dips, often you'll see rallies,5:23which you can see here do happen. 100%5:25of the time, 2 days later, it was5:26actually bullish in those couple of5:28limited data stats. But markets often5:31take time to structure up. And that's5:34the key here. Remember, a lot of people5:36try to buy the dip. We often talk about5:38buying the V, that is buying the5:40recovery rather than that point. But5:42it's also here in the Cosby. The Cosby5:44plunged over 20% in just last trading5:47seven trading days. And the last time5:49it's done this, the rate of change has5:51been close to the lows. Now, we note5:54here that we got a deadcap bounce back5:57over in this period here in the pre2000s5:59and then of course it fell down creating6:01lows later on. But yeah, interesting6:04point here. A pretty sold market.6:06Obviously extremely sold based on data6:08statistics and we've only got one, two,6:11three other data points. And in those we6:14were very close to the ultimate bottom6:16for that period of time. Will that6:18happen again though? Well, again it's6:19just a limited data set. But it is6:21important to keep in the back of your6:22mind. Or infinity also has here an6:25interesting one. Remember we saw that6:27overall that magazine cover last week6:29that said will bonds crash? Now I think6:31each day post that magazine color cover6:34coming out we've actually seen6:36treasuries go up. And you can kind of6:39see in some ways why when you look at6:41the CTA positioning, take a look at this6:43at the 10-year super sold. So, of6:46course, often people think this is going6:48back to mean reversion. And whenever6:50you're on an extreme, you've got to6:52start to say, well, what does that6:53exactly mean? But yeah, US 10-year6:55Treasury Zore, you can see here, super6:57sold there. Terms of overall transaction7:00volume, we do the price action, we look7:02at the data, and we look at the flows.7:04Still some massive transactions coming7:06through SPY and Q. And the thing about7:08this is the bulls are going to say this7:10is a pit. So that is the markets have7:12come up to kind of a peak. Now they're7:14seeing some volatility near the highs7:17and that's going to move into further7:18strength. Now on the bare side, what7:20people are thinking is that markets are7:22kind of doing this and this all could be7:24part of distribution. And I think as it7:26becomes more clear, what we're going to7:28be noticing here is we're seeing a lot7:30of transactions coming through this even7:32with limited volumes. And this is kind7:35of telling us that there's at least7:37quite a lot of activity. And when we7:39bring up a Q list on the weekend, make7:41sure you subscribe for this guys. We'll7:43be looking at the NASDAQ in a bit of a7:45deep dive because the NASDAQ could be7:47the key here to what's really going to7:49happen with markets moving forward over7:51the next coming weeks and months.7:53Speaking of weeks and months, we're7:55coming into, of course, the midterm7:56elections. Now, there are many studies7:58around this. A lot of studies post8:00midterm elections show that the S&P8:02tends to do well. But what about coming8:04into the midterm elections and then8:07actually the day trading afterwards?8:09Well, it's been pretty strong. In fact,8:12since the 1950s, 18 of 19 midterm years8:17actually found positive action over that8:19period of time. Now, will it be that the8:22same? Again, like anything, take it with8:24a grain of salt. You've got to consider8:26price action data flows. But if you're8:28seeing the right things for your system,8:30plus this, this, this, this, this. It's8:32about bringing all the pieces of the8:34puzzle together. Another piece of the8:36puzzle that we've seen over the last 248:37hours has been a new number one. This8:39time happening in SPYV, which is of8:42course value stocks. Now, it is a new8:45number one. And we'll just go back8:46through here, the previous one. So8:48here's the previous number one and that8:50was happening at resistance. It led into8:52a massive buy. We had a fifth largest8:55transaction which soon after kind of8:57repriced down and then of course the8:59third largest ended up being pretty9:01bullish. Now we've had a sixth largest9:03and first largest all near the highs9:06though. And I'll just kind of zoom in9:07here a little bit so you can see. Look9:10at that. Kind of almost the exact same9:12transaction area. So something's going9:14on here from Wall Street in value and9:18again is just part of the puzzle that's9:20happening right now when it comes to9:21these flows. Another thing has been that9:24tech has reached its same ratio that we9:26saw during the 2000's peak. That is when9:29you compare it to defensives which have9:31been stronger in the last 5 to 109:34sessions and you compare them to tech,9:36we're kind of witnessing a bit of a9:38peaking period. Now will it be the same9:40as the.com boom? Again, it's just an9:42interesting point here. Tech has become9:44such a huge part of the market. And you9:46saw recently JP Morgan came out and said9:48that they believe that AI related9:50businesses now make up 49%9:54of the S&P. That's pretty big. Titanic9:57warning, Hinderberg omen, all these9:59types of things. We did get another10:00Titanic overall warning and these can be10:03kind of topping points in markets. So,10:05there's a lot of bull and a lot of bare10:08kind of reads going on. And I got the10:10latest sentiment report, guys, for you.10:12And I know it's not quite on the screen,10:14but it actually showed that bears tipped10:16up 2% this week in overall reports. So,10:19we'll have that in the weekend video.10:20We'll discuss it more. But in general,10:23there is actually a pretty equal amount10:25of bulls and bears in this market.10:27There's almost an equal amount of good10:29reads and really bad reads. And of10:30course, what we always say is it's10:32earnings, earnings, earnings, bonds,10:34bonds, bonds, IPOs, IPOs, IPOs. We still10:37haven't seen Anthropic come through.10:39We've now got a flying car from Tesla. I10:42I still thought that was AI, guys. I'm10:44sure you did. Anyone else think that?10:46Put it in the comments down below. When10:47you first saw that video, I thought it10:48was uh certainly that, but it turned out10:51it was real. And you can see that all of10:53these things are coming through into the10:55end of the year. Earnings so far. What10:57grade would I give it? I'm going to give10:59it a seven out of 10 so far. Now, I11:03always grade the market as their11:04expectations are about usually an eight11:07out of 10. They want to see damn good11:09numbers. So, I think they're getting11:11slightly under what they want to see.11:13And that's because there's no new11:15upgrades. If you noticed, most of these11:17AI businesses, tech businesses, everyone11:19else, they're just like, "Yeah, we11:21continue to tell you the same thing11:22about our future earnings." But, uh,11:25they're not going, "Oh, we love that.11:27Everything's fantastic." And I think11:28that's why the next couple of weeks11:30we'll need to be watching quite closely.11:32Do remember also to have charts such as11:34this one which is from earnings watcher11:36that shows you the options expected11:38volatility and TSM ended up recovering11:41over the session and I think it ended up11:43slightly positive by the end of the day11:45from the stock market. Let's move to11:48quickly have a look here at crypto. this11:50one here from glass node and glass node11:53on X basically shows that we saw some11:56bids off the node which no surprises12:00really there 80 to 81 and a bit we've12:03witnessed quite a few times Bitcoin has12:06come back down to that level it's so far12:09been able to hold it and we'll look at12:10the charts later on but that's a slight12:13improvement and of course if we're12:14looking at the h havinging results we're12:16basically at that point where in12:18previous h havinging times we've getting12:20close to the bottom. So, um, is the12:23Bitcoin doing okay? It's doing okay12:25right now. Terms of ETF flows, I haven't12:27updated these yet, but I do notice that12:29we've got negatives coming in on the12:32last session. So, effectively flows were12:34still negative. We'll update on the12:36weekend for that. Just before we jump12:38into the charts, do remember we do offer12:39a bunch of free resources as well, so12:41you guys can find out a little bit more12:43about what we do and also get a couple12:44of tips and tricks. And we have one12:47coming up 20-minute live session in just12:49over 9 days and it's completely free to12:52sign up to. Links in the description12:54down below. Make sure to check it out12:55and we'll see you guys there. All right,12:57let's go into the good, the bad, and the12:58ugly. We'll start with the ugly first.13:00Let's look at bonds. And there's no13:02doubt the bonds have woken up. The13:03canary is kind of coming out. Look at13:05the bow for high yields. I've circled13:07the previous point. And traditionally,13:10when you've seen this going higher,13:12usually the markets have been slumping.13:14So these markets are actually extremely13:17resilient considering everything going13:19on. And do remember it's not just this.13:21We've also had of course the general13:23bonds market being more volatile. You13:25can see here the move index still13:26remains more elevated. The triple CRA13:29junk bonds. We'll look at those on the13:31weekend. Certainly some stuff to look13:32into there. We're seeing spreads on13:34coreweave and specific companies,13:36Oracle, etc. They're all coming under13:39pressure on the bonds market side. And13:42of course in general yields as well have13:45started to drop off. So take a look here13:47the 10-year, the 3year, the 5year, they13:49all kind of spiked up and dropped during13:51the CPI and PPI kind of held them. And13:54the reason why this is so important is13:56because it's suggesting that there's a13:58real weakness actually appearing in the14:00economy. It's different to what you14:02would expect. Some other problems why14:05that could be happening. Have a look14:06here at this tanker shipping ETF. I mean14:08you look at this. I'm going to show you14:09a three-month chart. Let me load up a14:113-month chart. And this thing's just14:12parabolic. I mean, that is insanely14:14parabolic. It was down here at $20. Now,14:17it's trading at 900. Kind of looks like14:19semiconductors and hardware stocks and14:21stuff from just about 6 months ago, but14:23it's a very parabolic chart. And that's14:26leading into, of course, higher prices14:29for us at the bowser. So, it's pretty14:31wild times out there. TSM, I thought I'd14:34bring it up. Pretty big volume. You can14:35see here it ended up down 1.8, eight,14:38but a lot of semiconductors, as you'll14:40see in today's show, all hit around14:42technical support. So TSM, one of the14:44more important ones, came down, slapped14:47into that support. So maybe find a14:50little bit of relief. Treasuries had a14:51good session on them, 1.37 up. So again,14:55we're seeing recovery there. And if you14:58note, we're getting really, really,15:00really close to kind of getting towards15:03that 20w weekly. So that's that mean15:05reversion. This happens after we go15:07through the Ballinger, after that bad15:08magazine cover, all sorts of things. So,15:11makes sense like when sentiment's so15:13bad, maybe we'll get a bit of a relief15:15rally. Will it be longer than that,15:17though? That' be something we look at.15:19Q's versus SPY, the NASDAQ is coming15:21under pressure. The S&P is looking okay.15:24The way we can tell that is if we take15:26out information, tech, and communication15:27services. Take a look at that market.15:30Totally different market. And it's like15:33what we've been seeing recently. The15:35market's not dumb. It's pressuring15:37financials like, okay, they're a little15:40bit better here in the main financials,15:41but take a look here at the KRE. The15:44regional banks still quite low. So,15:46they've been pressuring the banks.15:48They've been pressuring certain sectors15:50such as home construction and others.15:53Yet, they've been rallying, of course,15:54the MAG stocks. Now, here's Tesla, and I15:57don't know if we can take too much away.15:59It's trading at 372 here after the16:01flying car, but we're not quite through,16:03you know, the psychology numbers of 40016:05and stuff. And we'll start tracking this16:07cuz I think that was maybe a catalyst16:09event to at least get more people16:11talking about the stock. It's been a16:12while since Tesla's really been in the16:15news from that aspect in terms of the16:17the stock getting a bit of anticipation16:19around it. So, it's always worth16:21bringing up the options at those points.16:22Now, uh with the Tesla kind of movement,16:26what about the mags? So let's have a16:27look here at the mags and they had a16:30slight recovery on them up43.16:32If we take a look just briefly here at16:36the overall kind of market movement in16:39things like you know even China look at16:41the Hong Kong market here. Slight16:44recoveries. Yeah, this is not16:46necessarily a a fullyfledged movement16:49just yet. SpaceX uh it's been dropping.16:52It's rallied again in after hours. So,16:54we're seeing this up after taking out16:56this low, but still around that midpoint16:58of where it all launched and where it17:00all gapped up. So, key points here to17:03watch 135. And I think that's probably17:07the main one there in terms of the puts.17:09And XLE had a bad session for the first17:12time in a while. This has been very17:13strong. Energy stocks moving up very,17:15very strongly. Let's look at CRK. Still17:18really high, which shows that we're17:20going to be paying more at the Bowser,17:21at the petrol Bowser. Diesel in17:24particular moving forward. Oil futures,17:26we need to look at the real oil futures,17:29not just what most people look at, which17:31is just US oil at the current spot17:33price. You'll notice they're still quite17:35high. Here is what's happening with US17:37oil. So, it actually had an up session17:40on it last 24 hours. And if we go to UK17:42oil, you're going to notice it rebounded17:45off the bottom. So it actually dropped17:47and then rebounded again. 1 2 3 Dogee.17:51So we have a bit of indecision just17:54underneath that previous peak. So again,17:56we push forward here after doing a bit17:58of a pit. We could be looking at a18:00higher diesel price at the pump very18:02very quickly indeed. So please be warned18:05that is still happening which doesn't18:07look like oil is necessarily weak just18:09yet. the charts are still strong from18:12the point of view of higher highs and18:13higher lows. Anyway, let's have a look18:16at gold. So, gold has stabilized after18:19yields dropped, which is pretty much18:21what you'd expect after you get the18:24biggest current or one of the oldest the18:26oldest currency of course holds okay18:28against yields going down. You can see18:30here is it a woff? Is it some form of18:32base? We haven't seen a breakout yet.18:34Silver also bounced off that really18:38massive fall into 5550. So it's holding18:41on for dear life there. At the same18:43time, the dollar spiked on CPI has18:45dropped and it's held the same area on18:48PPI. So again, will we get a lower low?18:51Uh we'll be watching very closely here18:52on the US dollar. Let's move over to18:55Cosby futures now. Now you might notice18:57that Cosby dropped this low and where18:59did it go? Straight into that most19:01traded zone. So, I'll actually get rid19:03of the Cosby futures for a second. And19:05this is where I think it pays to look at19:07the main index. And the reason why is19:09because if we pull a fixed range volume19:11profile through this area here, you're19:13going to note that this is Oh, actually,19:15we have to do that on the Cosby futures.19:17My bad. There we go. You're going to19:18note that this is the most traded area.19:21So, we get a lot of transaction between19:23this value area high and this PC. So,19:26because of that,19:28it makes sense why it would try to stop19:30here. Now, is this really going to stop?19:33Well, it's a bit of a freight train. We19:35often say patience. So, it's going to be19:36about structure, but it is a worrying19:39sign because semiconductors came off19:41that fib area. They've dropped down.19:43They've come into, of course, that bit19:45of put support. We saw it at the start19:48of today's video. Here are uh the19:50current puts, but they were actually19:52here at five, what was it? 540. So, we19:54saw 540 puts. They've changed now19:57because of the sheer mountain of options20:00transactions going through, but that is20:02eight days down in a row, the worst in20:0516 years, and you guys saw the stats20:07before. So, it is it, you know, there's20:09a real concern here from the markets.20:11And again, it's picking up things like20:13Corewave and putting them under20:15pressure. I mean, they keep pressuring a20:16similar support line and the volume is20:19no joke. like we're seeing big20:21transactions through here and a lot of20:23interest from retail which is always20:25concerning uh whenever you get those20:27types of things. Magnificent 7 has still20:29held up really nicely. High higher low20:32higher high still higher low. So yeah20:35you might say oh well look small time20:37frames change. Sure but this is the20:39backbone at the moment. This is what's20:41holding the markets up. It really is the20:44main thing. So the mags are still doing20:46okay. We'll go over to the cues. I've20:48updated these for you guys. You'll20:49notice here the cues in pre-market hit20:51into that most traded area. They20:54rebounded off that. Little bit early to20:56tell here because you go to the S&P,20:59you're going to see kind of something21:01similar where the markets have come down21:03into that midpoint. They've hit that and21:05they've rallied off. And if we go to the21:07futures and we'll load the futures chart21:09up here, you'll note again a higher low.21:12So, in general, the S&P is holding. The21:15Q's lost some time frames, but held the21:18most traded area. And for now, we're21:21still seeing a market that remains21:23intact, even if it's got canaries, such21:25as the Bofa high yield moving up. And it21:28really brings out the bears that are21:29going to say distribution, rightfully21:31so. Again, we'll do a deep dive on the21:33weekend on this, guys. And then it's21:35going to bring out the bulls that are21:36just like much to do about nothing.21:38We've seen plenty of scares before.21:39We've got a flying car, guys. And we've21:42got higher highs and higher lows still21:44intact in the Magnificent 7. So as long21:47as you have, you know, your biggest tech21:49stocks coming up, higher highs and21:50higher lows, it drags the rest behind21:53it. At least that's what's happening for21:55now. I bit not much going on in Bitcoin21:58in terms of the option side. You can see22:00here Ethereum may have retail stolen. So22:03I'll mark a little alert above this22:05high. And if we go to Bitcoin, you're22:07going to see it at about 82K. It took22:10the low, came into the node again, and22:12we get to now mark out this level. And I22:14actually think the crypto charts look22:15really interesting moving forward. So,22:17I'm really keen to keep following these22:19and watch them over the coming weekend22:22and see how everything's transacting.22:24Guys, please be aware the markets are22:26starting to turn volatile into the back22:28end of October. Okay, we've got some22:31data reads that are good, some are bad,22:33but you know, semiconductors certainly22:35is not ideal. the worst in 16 years22:38doesn't exactly fill you with confidence22:40that [laughter] the market is loving22:42technology stocks and of course he was22:46remember the poster child of loss over22:49the last week so this is you know was22:52once the most traded ETF in Hong Kong a22:55two times levered version of this so why22:58is it stopping here well if anyone ever23:00says oh why technical this technical23:02that well you know this is the first23:04reprieve it's had the whole way down.23:06Why would it have that? Well, maybe23:08because people think it's support. Do I23:10think it's strong? That looks to me like23:12a freight train. So, yeah, be careful23:15out there, guys. Thanks so much for23:17watching. I hope you enjoyed today's23:18show. And if you're interested in23:19finding out a little bit more about what23:20we do, I'll be posting a new newsletter23:22as well over the probably over Monday23:26next week. So, make sure to sign up. One23:28chart or a couple of charts usually, one23:30market lesson, and of course, one story.23:33It's awesome to share those with you23:35guys. And the feedback's been amazing.23:37Thanks so much. Subscribe. Smash the23:38like button. I'll see you in the next23:40one. Bye for now.
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