Transcript of The Last Time This Happened Was 2018...
FX Evolution - Trading Academy
0:0016 days in a row. Wall Street doesn't do0:03this very often, but when it does, you0:05need to be paying attention. With a 9%0:07decline peaked to trough so far in the0:09Russell 2000, why is it that the markets0:12are holding up so well? And could this0:14chart be holding the key to whether we0:16actually see a tipping point when it0:18comes to bonds and risks in these0:20markets? With Jim Kramer and many others0:23coming out with all sorts of ideas over0:25the last 24 hours, where are we in the0:27cycle and what do we need to be paying0:29attention to, including a potential here0:32of acceleration in yields across the0:34board? And of course, the movement in0:37bonds. One of our favorite reads is now0:39starting to say, "Yeah, there's some0:41cracks starting to show." Is now the0:43time that markets really bust or are0:46they just going to hit new all-time0:47highs? Join us as we go through stocks,0:49commodities, and cryptos, breaking down0:51what you need to know right now. We'll0:53see you soon, guys. This will be a great0:55one.0:59Well, welcome back to one of the largest1:00daily shows on the planet. It's great to1:02have you here. And today, we're1:03discussing the latest in macro, Wall1:05Street flows, and of course, a couple of1:07sneaky transactions from the biggest1:09traders and investors themselves. We'll1:11start things off here though with1:13breaking down some of the behavioral1:14finance things that we've seen over the1:16last 24 hours and some stats that I1:18think might blow your mind. And first1:20up, we have of course one of our Google1:22trend searches that we do periodically,1:24which is the AI bubble search. And you1:26may have noticed that it looks to have1:28topped out just as we saw, of course,1:31the crash period in June and July for1:34hardware stocks and semiconductors. Now,1:36why is this important? Well, during a1:38hardware phase cycle where basically1:40markets are coming into a new1:42technology, they tend to rally and they1:44rally big and we've already seen this1:46and witnessed it in history so far. At1:48the same point though, when people think1:51that there's a bubble, then usually1:53markets aren't able to actually top out.1:56That is that markets often go on to make1:58new all-time highs. And we saw this2:00happen in 2025 when we talked about it2:03and we saw the resurgence of, of course,2:05hardware stocks. Now, at this point,2:07you've got to remember even though2:09hardware AI bubble searches are coming2:11off, we've also got many tech stocks2:14still hitting all-time highs. AMD,2:16Magnificent 7, it's just become more2:18concentrated into just a few names. So,2:21what's giving right now? How is this2:22market staying up while everything seems2:25to be in the news saying everything's2:26weak? Well, Blue Kurdic Market Insights2:28over on X has gone through and really2:30broken down something I think is2:32important, which is the last 162:34consecutive days. Now the Russell 20002:37has been actually closing below. So that2:40basically means it's opening and then2:42it's turning negative below its open.2:44Now this is pretty unusual. The last2:46time we saw this was actually back in2:482018 and it just so happened to be near2:51the bottom of a market. You're going to2:52hear this a bit today because there are2:54so many breadth reads that are starting2:56to get to extreme lows that they're2:58synonymous generally with a 7 to even3:0110% pullback in the S&P. Now, you've got3:04to remember at the time of this3:05recording, we're like 1 2% away from3:07all-time peaks. So, it's a very3:09different market, very strange in some3:11ways and has people showing similarities3:13to, of course, GFC, 1970s, all these3:17types of periods. But this is a streak3:19that yeah, it's pretty unusual and it's3:21now trending of course all over the3:23internet. Now, why is it important?3:24Well, of course, if the Russell is3:26failing, then it's suggesting that we've3:28got a weakness in debt. So that is3:31basically that as yields go up companies3:34in KRE of which there is a large dark3:36pool today. So we'll talk about that.3:38That's regional banks, banks in general3:40and really biotechs and pretty much any3:43zombie businesses as well. They struggle3:45to recapitalize their debts which3:47they're having to do here in 2026 into3:5027. And this has got many people3:52worried. And of course, people are3:53jumping on the bandwagon of getting cash3:56flows into money market cash-like ETFs.3:58According to macrocharts.com and at4:01macrocharts over onx basically shows4:04that we've recently seen a resurfacing4:06of people moving into cashlike assets.4:09And when this happens, there's always a4:11counterintuitive or counter kind of play4:13to it, which is that you want to look at4:15whether institutions are cashed up or4:17they're in the markets. Now, here's4:19where the flip side happens. they're4:20actually still invested and they're4:22invested pretty hard. So, it's a really4:24weird kind of case here in 2026 where4:27people are running for cash cuz there's4:28a lot of cash out there anyway. People4:30are also really invested in markets and4:33at the same time we've got a weakness in4:35a huge amount of the S&P 500 stocks.4:37Less than 50% of stocks are trading4:40above their 200 day moving average. And4:42of course, Paul Paul Tudtor Jones has4:44that famous quote, nothing good happens4:46below the 200 day moving average. So,4:48it's basically saying half of the4:49market's really weak. A whole bunch of4:51the market is actually pretty weak. But4:53of course, AI and 41% of the market are4:58AI tech stocks are still pretty strong.5:00Why capex spend? It's all about data5:02centers. And really, at the moment, you5:04kind of almost need inflation to stay up5:07and you need a boom to stay up because5:09if the GDP kind of starts to weaken,5:11then we could begin for the dreaded5:13stagflation. But at the moment, we're5:15squarely here. So, it's kind of like5:17this point where energy markets might5:19still need to go up and we're also5:21getting AI stocks going up at the same5:23time. If one of those weakens out, it5:25actually could be a sign that things are5:27worse than you think. So, you almost5:29want both of them to keep going up at5:30the same time or at least to stagnate5:32then rally then stagnate then rally. It5:35is a strange time in 2026. If you enjoy5:37this type of stuff, remember to5:38subscribe as well and smash that bell5:40icon. We do this every day together.5:41Let's have a look at this chart here5:43from bar chart at bar chart over on X5:45guys if you want to give them a follow5:46and check this one out. And basically5:48it's just the S&P versus M2. Now we've5:51shown this chart before but I thought5:52I'd give credit here to the guys that5:54have uh put it out recently. And the5:56reason they're putting it out is of5:57course look where we are. We're at5:59points that we haven't seen since of6:01course the 2000s.com bubble. Now this6:03one's going to I'm sure get become6:05trending and everyone's going to talk6:06about it. This is not necessarily, at6:08least in my opinion, the chart that6:10really tops out of market, but it's6:12still interesting to see here that if6:14you take a look at asset class, you look6:16at the overall valuation to the money in6:19the system, then you're getting towards,6:21of course, yes, a tipping point period.6:23And it all just stacks upon itself. But6:25it's not the first time you'll see6:27charts like this. It's also not the last6:28time. And the reason I say some of these6:30things is because look at this chart6:32here from Carson and at Ryan Dietrich.6:34And he puts it together very well.6:35Ryan's excellent. And he basically says6:37here, equity supply is surging as net6:40issuance turns positive. And you can see6:43here also, by the way, there's some6:44credit to this handle down here. So go6:46go check them out as well. Uh but6:48basically, it looks like there's a huge6:50amount of issuance. Now, I always track6:51debt. You track debt. We know why we6:53track debt. It's a huge component to6:55growth in the economy. And last time we6:58saw issuance like this, remember these6:59CEOs, these guys, they know what they're7:02doing. They know when to go raise the7:03capital. Well, when they're doing it,7:05you need to be paying attention. Now, it7:07turns out that this issuance comes from7:08basically two businesses, SpaceX and7:10Google. We talked about in the previous7:12one, I think 88% of the overall issuance7:15here is from those two companies. But it7:17does just go to show still, I think, an7:19important factor, which is that people7:21saw an opportunity. They know probably7:24more than we do. They probably have more7:25information and they just a few7:28basically a quarter ago went in and7:30said, "You know what? I'm pretty excited7:32about getting some de giant bonds.7:34Remember, they were getting hundred-year7:35bonds as well, some of those guys. And7:37we saw similar things in the government7:40side, that is the Treasury side and the7:42central bank side just before really7:44bonds topped out. They went on for7:46months, I think about a year after this,7:48but we had 100red-year bonds in the7:50Swiss central bank and everything else.7:52So, when this happens, you got to be7:53paying attention. They don't they're not7:54stupid. They're going for debt at the7:56same time. So yes, it's all basically7:58two businesses and a few others, but8:00remember we've also got private equity.8:01We've also got a whole bunch of other8:03areas around that have been raising now8:05especially hard in the last 6 months to8:08one year. Something to watch. Next 108:10months returns from the end of September8:12in midterms. Now you might think October8:14is going to be horrible. It could be.8:15It's a bit of a weird one because of8:17course it's a second cycle, presidential8:20cycle here. So what tends to happen is8:22these kind of things. Now if you have a8:24look there can be a bit of kangaroo8:26coming into the overall election itself8:29and then often markets actually8:30stabilize and rally and there will be8:32some stats that you'll see going around8:34this one here from blue kurdic and many8:36others that are actually going to be8:37pretty positive post election. I do8:39think that's worthwhile considering8:41these things. Obviously, you have got to8:43take it a little bit with a grain of8:44salt because 2026 is a little bit8:46different, especially since I think8:48June, July when we saw semiconductors8:50kind of top out for now. And unless8:53they're making new all-time highs, it's8:54going to be very difficult for the8:55markets to really rally hard. Remember,8:58tech, tech, tech such an important9:00component of the US markets. Have a look9:02here at the data stats surrounding9:04advanced decline lines. A lot of people9:05worried about breadth. Obviously, the9:07stats there aren't really necessarily9:09saying it's horrendous. I always see9:11breadth as a potential opportunity9:13depending on where you are in the cycle.9:15And with this many stocks down, I mean,9:17as I said, usually you'd be down 7 to9:1810%. So yeah, I mean, it's a it's a9:21strange one, but we always look at the9:24price action. At the moment, we're in9:25what we call a pit. This one here from9:26Polycarp Research, I retweeted it over9:28on X if you want to check it out.9:30Basically shows here the financial9:32cracks. Now, we've been talking about9:33this for a while. I wrote a newsletter9:35on about a month and a bit ago. We saw9:37it ages ago and that was that financials9:40and KRE looked horrible and so far9:43they've been kind of tipping over. Now a9:45lot of people see this and synonymize9:47will kind of set it up for it's the9:49beginning of the end. We saw it happen9:51before the GFC. We saw it happen before9:532022 and of course we even saw it happen9:56before tariffs. Now it's something to9:58keep in the back of your pocket. Keep it10:00in the back of your mind. If financials10:02keep going bad then that can be a pretty10:04big sign. But we did get a monster10:06transaction coming in according to10:08volumeleaders.com10:09and on X that we just saw the seventh10:12largest transaction ever recorded on10:14KRE. Now is this a big deal? Well, it's10:16happening at what we would usually call10:18level of demand. Of course, the market10:19has dropped off at the side of a cliff10:22and the last big transaction we ended up10:24getting further sells. So, this is a10:26critical point here for banks and I10:28think most people, most retail traders,10:30investors, people like you and I, we're10:32not looking at it enough. We're not10:34paying enough attention to this10:35subsection because really if they're not10:37lending then we've got problems. Debt is10:39a huge creator. The Q's meanwhile tons10:41of cluster trades coming in. Obviously10:44no extreme weakness in the Q's yet. This10:46is the market to watch over the next10:49coming months. If we lose the Q's well10:5141% of the market is basically tech. So10:54everything else is pretty bad other than10:55maybe energy and couple of healthcare10:57biotech areas. So yeah it's going to be11:00super important. Let's have a look at11:02the last kind of session. We saw gold11:04and utilities pick back up off basically11:06falling through a massive floor. And if11:09we actually look at the month to date,11:10as we've been talking about for the last11:11two weeks, semiconductors, tech,11:14communications, healthcare, bio really11:18the only good sectors. And look, health11:20energy has been pretty good. It's only11:22down 3%. Obviously, it's been running11:24super hard in June, July, August. So11:27yeah, it really just has been a tale of11:29a couple of sectors in markets. And it11:31comes back to what we talk about all the11:32time, which is it's stock selection and11:35sector selection in later cycle periods.11:37Now, speaking of later cycle, have a11:39look at this chart here from Duality11:41Research over on X. Basically, it's just11:43going through the standardized cycle.11:45Now, if you know your your stats on kind11:47of market runs, generally speaking,11:49around 100 to 115%ish, which is where we11:52are right now, is kind of the average of11:55a good bull run in markets. That is that11:58markets rally. They rally for a couple11:59of years. Usually, you get to around 312:02and 1/2 years and blur, they kind of go12:04bad. Now, this one's gone past that.12:06We're now on the fourth year, and we12:09roughly last usually 5.5 years. We've12:12shared this several times over over a12:15decent period. It comes from Ryan Detri,12:17comes from us. We've also looked at it.12:19Duality here, of course. It's it's well12:21known through I guess people that have12:23studied these structural cycles. And we12:25love structure. You know, structure is a12:27super key. Understanding averages. I I12:29feel very comfortable with averages. I12:31love a good average. I'm sure you guys12:32do, too. But we don't have too many data12:35points. Actually, a lot of them really12:36do weaken out about 3 three and a half12:38years in. So, we've only got a couple,12:40but on average around five and a half12:41years. So, if that's going to happen,12:43then we have a potentially another one12:45and a half years left in this market12:47before it really hits the fan. Again,12:49take it with a grain of salt, but12:50interesting stats. Now, every time12:53Bitcoin goes up, guys, what does12:54everyone do? They jump into altcoins.12:57You will have seen quite a bit of alt12:59froth recently. Now, Glass Node's gone13:01through and kind of found that this is13:03periods where often Bitcoin will will13:05stabilize and everyone will jump into13:07alts. Some alts have been doing well.13:09Actually, some great technical charts13:11there uh in terms of overall cryptos at13:14the moment. But yeah, interesting times.13:16Now, open interest versus BTC price.13:19Here we have a chart and you can see13:21that actually according to glass node,13:23not many people seem to be kind of13:25opening with leverage. So, it's actually13:28a less levered version of the markets13:30rallying at this stage. So, of course,13:32if leverage comes back in, well, then13:34things could get pretty crazy pretty13:36fast. And I think that's because when13:37you turn a market, often people don't13:40feel comfortable. Remember, leverage in13:42both the good and the bad way is often a13:44sign of people getting confident. And13:47that's why we follow leverage so much in13:49the stock market every month because13:51guys, we've got record leverage. So that13:53means people are pretty confident in13:54stocks and crypto turns out not as13:57confident. Bitcoin ETF flows very13:59positive I think over the last kind of14:02week, week and a half. And again, this14:04solidifies that at least there was real14:05money behind this movement. And that's14:07really important. Remember, we talk14:08about price action, we talk about data,14:10we talk about flows. Well, this shows us14:12that flows were there. They were14:14positive. And at least for now, it seems14:17like plenty of people have been involved14:18in this rally. So, that's a good sign to14:20hopefully keep it up. Now, just14:22reminder, if you haven't already signed14:23up to our newsletter, if you're new14:25here, make sure to do so. Had over 1714:27years plus experience in markets. I14:30share both the institutional side and14:31the retail side in these newsletters.14:33One chart, one story, one market lesson14:36links in the description and pin comment14:38down below, guys. Be great to see you14:39there. All right, let's now jump into14:41some of the charts that are looking14:42good, some that are looking not so good.14:44First up, S&P versus kind of the lowvol.14:48Now, in general, if you're seeing this14:49chart going up, not a bad sign uh14:52generally for markets. So, if we have a14:54look here and we overlay the cues for a14:55second, you might notice that yeah, it's14:59not a bad sign that it's made new high.15:01And these kind of track pretty well15:03together. So, at the moment, this is15:05actually making new high and the cues15:07haven't quite done so. So, it's kind of15:08showing us that in general, there seems15:11to be a slight risk on in markets.15:13Again, it's only in the tech stocks. The15:15tech stocks, the tech stocks. If they15:17weren't there, the market itself would15:19look pretty bad. You know this because15:21New York Stock Exchange, look at the15:23advanced decline line. It continues to15:25go down. It's actually worse breadth on15:27the daily pretty much all the time. And15:29the percentage of S&P 500 stocks is15:31still under 30. So we've got a really15:34weakened market. Now this chart here15:36from Heisenberg and a few others over on15:37X uh was pretty interesting. It was15:39basically showing us I think something15:41that we talked about in the last video15:43and if you missed it, just wanted to15:44kind of reiterate it. This is the US15:4510ear. This is McDonald's. looks like a15:48K because it kind of represents the K15:50shape. I've never seen a representation15:51of a chart that looks right down to the15:54theory. It's literally the theory15:56written in a chart. So, what's it15:58telling us? People are struggling, guys.16:00It's pretty brutal out there. I'm sure16:02you're witnessing this. Maybe some of16:04you are feeling it as well. It's um16:06yeah, it's pretty rough. So, something16:08eventually will break, but at the16:10moment, you're looking for those signs.16:12And of course, one of the ways that we16:14look at this is often looking at bonds.16:16Now, there's no doubt that one of my16:18favorite reads, the old BO for high16:19yield spread, that's broken up. The move16:22index has broken up as well. Now, when16:24this has happened, it's been synonymous16:25usually with a pullback occurring and16:28losing structure on the cues. But16:30remember, the number one principle,16:31price action. Have the Q's lost their16:35levels yet? We'll take a look at it in a16:37moment. But another chart that I thought16:39was really interesting here when we're16:40talking about breadth is the equal16:42weighted market versus the S&P. We're16:44back at levels. And I'll just quickly16:46load up the S&P here so you can see you16:48can get a bit of a point that usually16:50are synonymous more with either topping16:52parts of the market or possibly uh16:56consolidation periods. So you know look16:58at this the RSP again we ground higher17:02had a big pullback we ground had a17:05little pullback and now we're back at17:06this level and we're still grinding. So17:08really the markets are kind of17:09signaling, yeah, we're just rotating17:11underneath the hood, but when you're at17:13RSP levels like this, it it's it's17:17really strange because when it actually17:19is bounced up, what's actually been17:21happening is the market itself has often17:24been declining or going sideways. So the17:27rotation is going to be key here. And17:28again, watching tech is super super17:30important. The overall defensiveness of17:33the markets doesn't seem to be there at17:35this stage. Utilities staples not going17:37up. You can make arguments why that is.17:39The bonds market again starting to show17:41some signs of risk. The other market17:44that everyone looks at at these points17:45is of course move and the move is17:48rallying. So this basically is showing17:49us that there is volatility inside of17:51bonds. If you've ever looked at triple C17:54bonds, they're pretty nasty ones. Hard17:55to chart actually um without proper17:58different software. But basically,18:00they're kind of showing real signs of18:02concern and stress, which is why we're18:04seeing some IWM stocks not doing so18:07well. But at the same time, the biggest18:09guys, they're not freaking out just yet.18:12It's just the beginning. But yeah, look,18:13if you're a bonds watcher, this is the18:15most risk we've seen literally since a18:17pullback that was 7 to 10% back in18:20March. So, coming into this midterm18:22election year, yeah, bonds are moving.18:24They're actually moving. We we've said18:25consistently now for weeks and weeks and18:27weeks, nothing's happening. Nothing's18:28happening. Nothing's happening. Well, if18:30you're a believer in the bonds market18:32being a predictor, something is18:34happening. Just price hasn't really done18:36anything in the stocks yet. That's not18:37unusual for happens, but yeah, something18:39is happening. Treasuries, of course,18:41falling off as yields go up. No real18:43surprise there. But here are some of the18:45things in the tech world that haven't18:47happened. Korean markets, they haven't18:49made new highs. Semiconductors,18:51meanwhile, they have a little bit, but18:53still struggling. And it's become a18:55techspecific market. So, have a look18:57here. XLK still series of higher highs18:59and higher lows. That's a good sign for19:01the bulls. Magnificent 7 still holding19:04above all-time highs. Again, that's an19:06okay sign for the bulls. The bulls are19:08going to like those types of reads19:10because the tech sector is so important.19:12You can see here the semis, even with19:14the recent little bit of selloff this19:15week. They rallied straight back up,19:17made new high. So, specific19:20semiconductors, specific tech stocks,19:23they've been moving and they've been19:24moving pretty hard. So, of course, the19:26ones that have been in the news, the19:28likes of the AMDs and stuff, they19:30rallied. They're now consolidating19:32because, of course, everyone already19:33went ballistic on them. But generally19:35speaking, it's been a stock selection19:37market inside of tech. Copper,19:39meanwhile, let's take a look at the19:40metals here. It's still holding up. It19:42still had the all-time high weekly close19:44on it. So, it's still an okay market for19:47now. And that's a good sign. And we saw19:49here the movement in GLD actually held19:52those put support levels. So you can19:54kind of witness here that so far gold is19:57holding the puts, but there's not much19:59technicality there. It's really just a20:02kind of maybe relief rally after falling20:04this week. Speaking of gold, you can see20:05the slight relief. Certain levels such20:08as this 20 on the 4hour could cause some20:11resistance. For gold to really recover,20:13guys, it's going to need to take out20:14these levels. 4,400, you know, at the20:17moment maybe 4310 or something like20:20that, but still pretty weak. Silver20:22similar just kind of floating around20:24this little level that it's reached in20:26the lows kind of in limbo land and US20:28oil has gone back down to test the lows20:31again. Could it be a double bottom?20:35Of course. Could it be further falling20:37into the election? You know, these these20:40types of things uh can happen. Who20:42knows? The main thing with oil is that20:44you're watching probably things like20:46energy stocks in particular and crack.20:49And that's because if energy stocks lose20:52some of their key levels, and you'll see20:53here that they lost it and then kind of20:56bounce back up after after the end of20:59the session, these zones here are21:01potential turning. You've got highs,21:02you've got lows, you've got higher21:04highs. It's been a very strong trend so21:06far. The daily 50 has been pretty good.21:09So again, energy critical point,21:11critical support. Lot of actual stuff at21:13work here. And you don't really want21:15energy. I know you want energy to drop.21:16of course we all do but at the same time21:19it kind of could also be telling us that21:21ultimately the capex spend is weakening21:24as well so the markets are smart they21:26think 18 months in the future so I21:27actually think energy and capex spend21:29have to kind of go almost hand in hand21:31at some point here and you could say21:32yeah but Tom the geopolitical stuff21:34that's where all the problems come yeah21:36but there's also copper and there's21:37there's all these things going on this21:39it's a powerful forces at work guys here21:41in the markets crack had the number one21:43transaction it's fallen a little bit21:45since then we'll watch structure And of21:47course, markets remain pinned by the21:49calls and the puts. The Q's are pinned21:51between two tight levels, basically21:53doing a little pullback in time at21:55resistance, not necessarily a negative21:56signal, and the S&P slamming into those21:59puts and holding for now. So, these22:02levels here, we're witnessing basically22:04the options market kind of holding it up22:07as the structure also holds at around22:10this uh this put level of 7660. Who22:14knows why it's that level, but it it22:15just seems to be finding it. IBIT,22:17meanwhile, Bitcoin holding really again22:20pinned by two really tight kind of put22:22and call positions, but it's holding up22:24really well. Flows are looking pretty22:26good. And we've got a little alert here22:28just above 85 because we've got a low,22:30we got a high, got a lower low. Do we22:32get a higher high? Are we hitting 81k22:35demand zone? You know, this is kind of22:37what the market's saying at the moment.22:38But if it bucks it and goes like this,22:41then all of a sudden we could be in for22:43a nice little rally. What an interesting22:45time in markets, guys, and a fascinating22:47time to be, of course, in everything in22:50terms of these global kind of issues and22:53markets in general. It is one of those22:55points where I think abundance comes22:56into it. We talk about on the channel22:57all the time, one chart, one story, one22:59market lesson. Got a new one coming this23:01week. So, make sure to sign up. Links in23:03the description down below for the23:04newsletter. But to summarize the market23:06itself, terrible breadth, usually 7 to23:0810% decline, certainly strange, but tech23:11is holding up. And because AI and capex23:13spend are such an important part of this23:15market, how can it fall when AI remains23:19higher highs, higher lows. If that23:20changes, well, we'll be the first one to23:22talk about it. But there's no doubt that23:24bonds have set a small alarm, not a23:26freakish alarm, but certainly a small23:28alarm into the markets. The bow for high23:30yield, the move index, synonymous23:32usually with a price action declining23:34market. Nothing's happened yet. Let's23:37see what happens next in one of the23:38greatest stories ever told. And that's23:40of course what we're looking at these23:41markets. Bye for now, guys.
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