Transcript of Wall Street Is Starting To Make Secret Moves...
FX Evolution - Trading Academy
0:00Is Wall Street waking up to risks in0:02this market? As certain bonds indicators0:05start to go up, treasuries just hit0:07multi-deade lows. And at the same time0:10that this occurs, we're seeing a real0:11weakness in breadth underneath the hood.0:14That is, more stocks are actually going0:15down right now than up. So, how is it0:18then that markets are holding so well?0:20And can they continue to do so into the0:22month of October? Some people call it0:24October, but in midterm years, it can0:27get a little wild. Today we break down0:30the good, the bad, and the ugly as we0:33really look at stocks, commodities, and0:34cryptos around the world. This one's not0:36to be missed, guys. We'll see you very0:38soon.0:42Well, welcome back to one of the largest0:43daily shows on the planet when it comes0:45to everything that you love about0:46markets. Today, we're discussing the0:47latest in macro, Wall Street flows, and0:50of course, a couple of big darkpool0:52trades that are a little bit sneaky from0:54the street itself. But I thought we'd0:56start today's story by discussing some0:58worrying figures when it comes to the1:00latest Atlanta Fed GDP now estimates.1:03Now, it's important to note that of1:04course these are estimate reads, but1:06just a week ago we were getting reads1:08over 5% for the GDP. And you might say,1:11how is that possible? Well, really the1:14word is of course AI and data centers.1:16But this one here coming from Liz Anne1:18Sunders over on X guys basically shows1:20the Atlanta Fed has now revised their1:23overall GDP estimate to 3.7%. Now is1:27that still positive? Yes, of course it1:29is. But as we know if this continues to1:31go down and the reality of capex spend1:34doesn't come to fruition that is we1:36don't continuously see debt going on1:38debt on going on debt or this uh overall1:40circular kind of finance thing then1:42there could be problems starting to show1:44up underneath the hood. And remember,1:46the market is only holding up right now1:48because the likes of technology stocks1:50are near or even sometimes at all-time1:53highs. On top of that, we've seen1:55reports recently from a few publications1:57stating that they believed that less1:59than 40% of all data centers were ever2:02actually going to go towards completion.2:05So, in the light of all these new2:06announcements, Chat GPT literally making2:09a new announcement on agents just over2:11the last 24 hours, are these going to be2:13enough things to keep the hype going?2:15Well, let's take a look at where the2:16weakness is in these markets first. And2:18of course, it comes back to this chart2:20here we shared yesterday from Blue2:21Kurdic Market Insights over on X, which2:24basically says that we had 162:26consecutive days closing negative or2:28below the open. Now, this is for the2:30Russell 2000. And if you know anything2:32about the Russell, it's filled with2:34regional banks, it's filled with2:35biotechs, and it's filled with zombie2:37businesses. So why are we saying zombie2:39businesses? Well, there's quite a few2:41that are going to struggle to get2:43financing. And of course, that's the2:45concern in a high interest rate2:47environment kind of market. And2:49basically at the moment, what's happened2:51is we're starting to see a bit of2:53volatility coming back into these2:54markets that is causing some real2:56concerns. And it's all got to do with2:58just more stocks going down. Basically,3:01less than 50% of stocks are currently3:03trading above their 200 day moving3:05average. At one point, less than 20%3:08were trading above their 20-day moving3:10average. And these are usually things3:11that you see with a much bigger3:13pullback. The last time we saw this3:15though, where we had kind of markets3:17close to all-time highs and over 5% down3:21in some of the other market weights in3:24terms of the equal weights, markets3:25didn't necessarily fall over straight3:27away. Can it be near points of3:29consolidation? Yes, we've discussed this3:312020 period quite a lot. In fact, we3:33started talking about that back in July3:35where we started to think sectors and3:37stock selection were really important.3:39Remember, abundance is a big thing here3:40on the channel and that's what kind of3:42happened. But at the same time, in3:44previous reads such as this, markets3:46actually either stabilized or even3:49actually managed to go up. Now, could3:51they stay sideways for a while? Well, of3:53course, the longer we stay sideways, the3:56longer that usually means a coiling or3:58pit market, a pull back in time. And if4:00we get a break up or down from that4:02point, they can be quite explosive. That4:04is, there's a lot of money on the side,4:06it creates a huge squeeze effect and4:08things can get kind of bad. Now, this4:10chart here from at odd stats kind of4:12goes to show that if you have a good Q2,4:15you have a good Q3, which we just did,4:18then could we actually have a decent Q4?4:21Now, of course, Q3 was a lot worse than4:23people maybe expected. Some people4:25expected a lot worse because September4:26is often one of the worst months of the4:28year, but it still held up. And this4:31thing usually means that Q4 could be4:34positive. Now, these are only a couple4:35of reads. It's important to note that's4:37only one data stat, but still there is4:40some good stuff in the air if you're a4:41bull right now, which is that the4:43markets have remained very resilient in4:45the face of several crisis periods,4:48including diesel price, of course,4:50that's been moving up over the last4:52couple of months in particular. Now,4:54who's been financing or who's been4:56actually going out and getting debt?4:58Well, we saw Q2 issuance here. And I5:00keep bringing this chart up here from5:01Carson Research, Ryan Detric over on X,5:03guys. Give him a search and and a5:05follow.5:05>> [snorts]5:06>> Basically, this shows that equity5:08issuance was really high in Q2,5:11synonymous with sometimes peaking5:13periods of market hype and really kind5:16of like I guess CEOs realizing it's a5:18great time to go and get some money.5:20Now, it turns out that most of this5:22money went from two businesses. And I5:23know if you've watched this video5:24already or previous videos, you would5:26have seen this, but 88% of this issuance5:29came from SpaceX or Google. And of5:32course, Google was famous in the news5:34just a few weeks ago or months ago going5:36for those 100year bonds. So they5:38basically were thinking, "Wow, this is5:40the best time we're going to get in a5:42while to potentially finance money at a5:44cheap rate." So far that's been correct5:46cuz of course inflation is around and5:49that's causing interest rates to go up.5:51So what did they know we didn't? Well,5:53of course, they were probably looking at5:54metals prices into the future, but at5:56the same time, when everyone goes and5:57gets financed, when that starts to slow5:59down, it can also be a topping point in6:02markets. We've got to consider this debt6:04acceleration or deceleration moving6:06forward. We will be tracking that and of6:08course sharing it together. Now, let's6:09have a look at S&P 500. What happens6:11when we have an okay September and we're6:14in a midterm election year? Well, you6:17might think, well, it's going to be6:18terrible. But traditionally here from6:20Blue Kic again actually the next 106:23months is historically pretty good and6:26there can be quite a lot of volatility6:27into the election after the election but6:30once you start to get a little bit more6:32certainty on what's happening then6:34markets tend to like it and I think this6:36year is going to be one of those ones6:37that it may be a patience play. So even6:40though the stats look good it could6:41still get quite volatile just like that6:44could be bonds could be inflation could6:46be anything. You don't know until you6:47know. So keep an eye out on anything6:50that's going on specifically from the6:52bonds market. Now I did want to mention6:54this because it seems like the froth of6:56the search of AI bubble has now uh kind7:00of gone to its peak. Now a lot of people7:02thought of course it was last year. We7:04talked about how markets tend to7:06struggle to top it around that point.7:08And funnily enough, even though we got7:10AI bubble peaking just a few months ago7:12before semiconductors crashed, most of7:15well, if you took at least the weighted7:17tech and of course the Magnificent 7,7:19they're now at all-time highs, if not7:21even above some of these. So, at the7:23same time, what's happened? We've just7:24hit a new low in terms of AI bubble7:27searches. So, is this the highest we'll7:29ever witness the kind of the peak FOMO7:32period of AI bubble? If it is and then7:35markets keep going up, well, when no one7:37thinks something is, often that's when7:38you need to be most concerned. Of7:40course, it's all got to do with7:42perception, guys. And although AI we7:44believe it's the future, you know, it's7:46the future. And it's like anything else,7:48electricity, the internet, rail, any of7:51these things, of course, timing will be7:53everything. You know, at some point,7:55certain stocks do become overpriced. And7:57I actually wrote a newsletter article7:59about this just a few weeks ago. So, if8:00you're interested in finding out more8:01about that, links in the description and8:03pin comment down below. Make sure to8:05sign up to the newsletter. One free uh8:07market lesson each week and that comes8:10from my 17 plus years of experience in8:12these markets and I think you guys will8:13enjoy it. But there were some certain8:15lessons I think there that were pretty8:16important because it seems like we keep8:18repeating stuff even in an AI world.8:21Let's have a look here at KRE. So, we8:23did get the seventh largest transaction8:25just the other day according to volume8:27leaders. Since then, it's kind of been8:28sitting around this zone and that's8:30important because of course in technical8:32world this could be seen as a potential8:34demand zone or support area. Now, this8:36is a critical point in markets and of8:38course we'll be paying a lot of8:39attention to this level moving forward8:41to see what happens next. S&P time, is8:45this far enough? Is this bull run gone8:48long enough? Well, if you know your8:49averages, generally around 3 and 1/28:51years is a pretty standard bull run.8:53that is from a 20% crash such as 22 into8:57a nice rally. But once you go past a8:59certain stage, the stats start to favor9:01the 5 1/2 year period. And we're about 49:04years in right now. So could we be9:06looking at another 1 and 1/2 years and a9:0710,000 S&P? [snorts] Well, that's of9:10course the bullcase scenario. But this9:11one here from Duality Research, I think9:13it's got a really nice visual here. So9:15good shout out to Duality if you want to9:16give him a follow. Now on to Bitcoin. It9:18seems like we've got a bit of a call9:20wall we'll look at in a moment. But in9:22general, Bitcoin flows have been pretty9:24good in recent days. And even though9:26markets have come down a little bit,9:28there are a couple of critical levels9:30where you're seeing some take-profit9:32targets being set from Bitcoin, but9:34really it's been quite resilient9:35compared to the rest of the market. All9:37right, let's jump into the charts that9:39matter right now. First up, let's have a9:40look at the S&P versus kind of the lower9:43V. And this is basically, you know, is9:46the S&P seeing a riskon environment at9:48the moment? Well, it kind of is. uh and9:51we're noticing that of course in9:52technology that we're also seeing but at9:55the same time certain things aren't9:56necessarily adding up and for people9:58that are a bit more bearish in markets I10:00can see why you're seeing breadth here10:02looks terrible we track of course the10:04New York Stock Exchange look at this10:06composite the advanced decline lines10:08falling off a cliff there's rotation10:10underneath the hood and if it wasn't for10:11tech bang we're down 5% because the10:15thing about this is the actual internals10:17that is every other sector outside of10:19maybe healthcare and a bit of bit of10:21energy. They really are down quite a10:23lot. So, it's not a broad market. And10:26this is synonymous with a readjustment10:28period. You've got here percentage of10:29stocks above the 20-day sitting at 22%.10:32Percentage of, you know, just general10:34kind of yield in general. They're all10:37moving up. Even with the PCE that we10:39just saw, by the way, they changed the10:41formula on that. Uh, yeah. Okay. It10:43looked like inflation was coming down.10:45The market didn't care anyway. Look at10:46the 10-year. It went up. And at the same10:48time, this thing that's kind of almost10:50synonymous with the Kwave, that is10:52McDonald's price down here and US 10ear10:54up here. 10-year was up, yields were up10:56across the board, oil managed to hold10:59itself last 24 hours, and McDonald's11:01continued to fall off a cliff. So, it's11:03kind of really showing us that physical11:05point here where are the markets11:07actually starting to see real pain. And11:09you can make a case for this because the11:11move index that is basically the11:13volatility maybe not of the stock market11:15but the volatility here of the bonds11:18market. Well, take a look at this. It's11:20on the move guys and it's about to make11:22highs which we usually see that are11:25synony this is very strange. These are11:26usually synonymous with actual riskoff11:30markets. So that is that markets are11:32actually usually saying whoa whoa whoa11:34we're concerned and you get broadbased11:36sell. And this is why we often say price11:38action is the key because are certain11:41bonds markets starting to say you know11:42wake up wake up wake up well this only11:44happened two weeks ago and it's actually11:48even less than 2 weeks ago but at the11:49same time the markets the indices are11:51holding up thanks to tech have a look11:53here both high yield option Justin11:55spread one of our favorite reads it's11:57broken out I don't think that's really a11:59question the thing is is it's gone to a12:01higher high now will it eventuate in12:03price so far that hasn't happened and12:06this Why we often say patience, you've12:08got to put your opinion at the door and12:10of course focus on what's in front of12:12you and what really is happening with12:14the flows and then of course if things12:16start to agree with your maybe risk on12:19or risk off environment once the price12:21starts doing it then you can say okay12:22well maybe it's time look at treasuries12:24here the monthly closer just happened12:26that was a horrible month for treasuries12:28absolute bedum here they're starting to12:30get outside of their Ballinger bands12:32we'll do a special on that we didn't12:33talk about Ballingers because utilities12:35and treasuries and all these sorts of12:37things uh that don't necessarily like12:40inflation and higher yields. They're12:41just getting blitzed and it's starting12:43to push some extreme sell-off levels.12:46Korean market not really recovering yet.12:48So that means generally hardware hasn't12:50recovered but it's all about12:52understanding some of the things in12:54markets because tech in the US look at12:56it it's pressing here. It's trying to12:58get to those highs and it's staying in a13:00very compressed range. So, if you're13:02looking inside of tech, there are stocks13:04that are actually still making higher13:05highs and higher lows there. It's always13:08something uh doing okay in markets. Now,13:10have a look here at Magnificent 7. It's13:12still holding up. There was a pretty13:14okay 24 hours for the MAG 7. Basically,13:17some stocks were doing really well13:18during the session and then they pulled13:20back a little bit during the day. You13:21can see here there was a rejection that13:23happened after markets rallied. Markets13:26went up, then they started to to pull13:28back a little bit there. the likes of13:29AMD and these types of stocks, they're13:31still holding near those highs as well.13:33It doesn't mean they're great. Uh but if13:35they're holding, then at least they're13:38not selling off. And that means that in13:40general, tech is holding up. Now, let's13:42have a look at copper here. You can see13:43that copper again hasn't really fallen13:46to lower lows. We call it the doctor.13:48Why? Well, everyone uses copper to build13:51out infrastructure, particularly data13:52centers, anything to do with this stuff.13:54So at this stage, if copper's holding,13:56it generally means GDP is potentially13:59growing. And if that's happening, even14:01with inflation, you're often in what we14:03call an inflationary boom. And that can14:05help the new technology of the time. It14:07can also help energy and certain metals.14:10Now, let's have a look at certain14:12metals. Gold holding up barely. And what14:15it's holding up seems to be around those14:17puts. So, we've got a whole bunch of net14:20put expirations sitting around 380.14:22We've got a bunch of calls sitting14:24around this kind of what is this level14:26is about 383. So we're kind of trapped14:28within price at this point. So obviously14:30a very important point here for gold.14:33Gold itself on the spot metal price. Not14:36much to really state there. We broke14:39below this very important area which14:41starts the possibility of a neckline.14:42And at the moment the bears are in14:44control. And you can see they pushed14:46down under that 4hour 20 again. So yeah14:49important point here. Colt's going to14:51try to stabilize, but I think the bears14:53are in control of that one at this14:54stage. Silver's similar. Lower lows,14:57lower highs, middle of nowhere, really14:59in the pack for silver. Could it rally15:01here? Maybe just because of the options15:04market, but other than that, there's not15:05much to say really just yet. Energy15:07watch sitting on the daily 50. You'll15:09notice most energy trades are sitting15:12around daily 50. UK oil, US oil, they're15:15all making kind of lower lows. If they15:17rally, then all of a sudden we're in15:20potentially a bit of a squeeze. At the15:22moment, though, I'm watching also just15:24above 85 a barrel. I think that could be15:26an area that if market sell off to could15:28be where we start to see some structure.15:30The cues, what happened? Well, we got a15:33rejection. It looks a bit like a15:34shooting star. And of course, we have15:37here the highs uh with basically the15:39market kind of consolidating in the15:42middle of two options walls. So, these15:44are the updated options walls. You can15:45see the resistance. You can see the puts15:48730 seems to be a pretty important point15:50for the Q's. Also just so happens to be15:52the daily 20. Similar thing for the S&P.15:54It rallied and it sold showing that the15:56bears kind of were pushing it down. And15:58if it wasn't for tech, this market would16:01be a lot worse. So you're kind of16:02looking here at 76.50 in terms of puts.16:05Will it hold? If it doesn't, we could be16:07at 7500 pretty quickly. But um yeah, for16:10now the structure is kind of just barely16:12holding. And look here at the futures.16:14You can see this little support level.16:16How important that 7650 put zone has16:19become. So it's a uh touchandgo market16:22really just holding up basically from16:24tech. We'll look at some subsectors in16:26the next video to really look at this.16:28Now at the same time as that's16:30happening, Bitcoin and crypto have done16:32a lot better. Bitcoin really just still16:34holding around the same zone after it16:37had that beautiful technical level that16:39look at that island reversal here. Here16:41are the options levels again. very tight16:43range as the market stay stabilized. And16:45you can see here the 85k level. And I16:47want to bring this up because it looks16:48like there's a whole bunch of sellers16:51here. And you can see that they16:52instantly pressured that level right16:54back down. So if we get past 85, that16:57could expose potentially, you know, the16:5993s, the supplies of the 93s, those kind17:02of levels. But the bears, they tried17:04their hardest to stop this because they17:05wouldn't have wanted a higher high close17:08uh cuz that opens up buyers at this17:10stage. Just goes to show these walls of17:12huge sellers and buyers, they do tend to17:16be pretty important. On the bottom end,17:17you've got 81. On the resistance side,17:20you've got 85. What a critical zone,17:22though. Really looking forward to doing17:23some heat map analysis in the next video17:25on that. Guys, if you enjoyed today's17:27video, please remember to subscribe.17:28There's a whole bunch of stuff going on.17:30One chart, one story, one market lesson,17:32the newsletter, totally free description17:34down below. Little bit of a shorter one17:35here today, but we'll be coming back w17:37with some massive stuff tomorrow. So,17:39make sure to sub and we'll see you then.17:41Bye for now, guys.
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