Transcript of Something Strange Is Happening To Markets...
FX Evolution - Trading Academy
0:00Something strange is going on on Wall0:02Street and not enough people are talking0:04about it. So, what is it and why should0:06you be paying attention? Whether you're0:08a trader or an investor right now as0:10diesel prices go through the roof,0:12yields and bonds start to get a little0:14bit shaky and even US property starts to0:17show significant decline. It's all about0:20debts and it's all about market flows.0:22And as you guys are probably already0:24aware, the next two months, at least if0:27history has anything to go by, could be0:29extremely volatile. Join us today as we0:31break down everything that you need to0:33know about markets. See you soon.0:39Well, what a wild 24 hours. That was one0:41of the biggest trades we've ever seen0:43for a major index coming through over0:46the last 24 hours in the triple Q's and0:48leading into a bit of a decline. Could0:51that be telling us something that Wall0:52Street is doing and not saying? Hi, my0:55name is Thomas. I've been in markets for0:56over 17 years. And here on the channel,0:58we like to do things a little bit0:59differently. Talking about behavioral1:01finance and how Wall Street likes to1:03trap us as retail traders, investors,1:05and the macro news, and of course, data1:08surrounding everything that's moving1:10these markets right now. Let's start off1:12with some of the big stories, then we'll1:14break down some things that we're1:15looking at from the stocks, cryptos, and1:18commodities side. And the first story1:20here comes from Dyson and also GoPro,1:23who are debuting new AI powered1:26machines. The $500 toothbrush, guys,1:28with built-in camera and oral hygiene1:31reads. Stuff that you may not think, why1:34do we know? Why do we even need this?1:35Possibly we don't. Would you be a buyer1:37of the toothbrush? Let us know in the1:39comments down below. At 500 bucks.1:41Either way, it's going to be a pretty1:42wild world we live in, I think, over the1:44next 10 to 20 years as we see more and1:47more products introducing these health1:49benefits and tracking codes and all1:51sorts of things going on. But let's1:53start with what's really happening1:54underneath the hood. This excellent1:55chart here from David Keller over on X1:58basically shows us that every one of the2:00major markets is in decline. That is,2:02there are less stocks going up and more2:05stocks going down over the last couple2:07of sessions. And what you might notice2:09is that the S&P has remained quite2:12rangebound with yes some declines coming2:15in but still in a very tight range. All2:18large caps, midcaps, small caps are kind2:20of showing the same thing. And at the2:21moment advanced decline line is actually2:23below the 50-day moving average which2:26can show us that there is a weakness2:27underneath the hood and we're seeing2:29less sectors actually find new highs.2:32Now if you've been viewing the channel2:33for a little while, you would know that2:34there have been a couple of really good2:36sectors recently. We had the size of2:38healthcare, biotech,2:41of course, oil and energy, and even2:43gold, although that's pulled back in2:44recent days, were all doing really well.2:46Well, some of those are actually not2:49doing as well as they were. And this is2:51now joining in with what technology has2:53already shown us to be, which is weak2:55over the last two months, particularly2:57semiconductors, obviously not software.3:00Let's take a look here at the free fear3:01and greed index. Usually, you would see3:03fear coming in when markets fall off a3:05lot. Well, actually, retail traders and3:07investors seem to be more fearful than3:09usual as markets remain in this3:12rangebound kangaroo market. And as3:14you'll see later on today's video, it's3:15pretty normal actually leading into of3:18course midterm election years and this3:20period of time to see a very kangarooey3:23market up down and all around. Now, Fed3:25Chair Walsh, he's seems to be the3:27controller of the markets at this stage,3:29particularly the bonds market. And over3:32the last couple of sessions, something3:33has changed. All of a sudden, the3:35markets have been paying attention to3:37what we already bought up months ago,3:39which was diesel price. Diesel price was3:42going wild. We saw, of course, markets3:45already showing huge discrepancies3:47between what the price was at the bowser3:50and what we saw in paper contracts.3:52Well, this is leading into inflation3:53concerns. And Fed Chair Walsh is now3:56expected to potentially hike rates at a3:5960% chance according to Kolshi and many4:02other kind of aggregators here. And this4:04is going to be a big point because if we4:06do see a rate hike, of course, that'll4:08put pressure under regional banks,4:10potentially pressure under biotechs and4:13many other businesses, particularly in4:15this Russell 2000 and ones that are more4:18more kind of like debtridden in general,4:20what we call often sometimes zombie4:22businesses. But also bring up the credit4:24default swaps question again. At the4:26start of the year, one of the things we4:28talked about together was credit default4:30swaps. Why? Well, when we see those4:33starting to blow out, you know that the4:35market is saying, you know what, we're a4:36little bit concerned about debts in4:38general. And we saw this first in the4:40private equity markets. They've come4:41back a little bit recently, but now4:44we've got 100red-year bonds. We've got4:46totally different capex spends on AI and4:49obviously a very different risk profile4:51leading into this next two months of4:53potential volatility. Speaking of V,4:55often when you get a new Fed chair, you4:57do get volatility. This chart here from4:59Blue Kurdic kind of showing us we're on5:01the kangaroo side at the moment, not the5:04initial shock side that tends to come5:06with certain Fed chairs when they make5:08big changes. If you're interested in5:10finding out a little bit more about this5:11type of information, the stuff we share5:13here on the show and of course in5:15general just around markets. If you want5:16to get some of this a little bit earlier5:17than the video, make sure to give us a5:19follow on the X account links in the5:21description down below because today we5:22posted a whole bunch of these stories5:24and others. But I think the big thing5:26that I posted there was really around5:29the idea that the SEC is about to5:31potentially fundamentally change who5:34gets access to private markets. Now, for5:36a long time, private equity has been5:38kind of the place where the IPOs are.5:40When you get big enough, then you IPO.5:43All those smaller businesses that used5:44to go on the market, they haven't been5:46recently. Well, that could be about to5:48change. And remember this is now5:50potentially going to give access to5:52retail at a $28 trillion worth of assets5:55and companies. But here's the problem.5:58It's also a liquid. So I think this is5:59going to be a big story line. Remember6:01one of the things about later cycle6:03style markets is you often expect6:05deregulation. You often expect uh more6:08people getting access to maybe things6:11that they shouldn't even be able to get6:12access to and this causing concerns.6:15We've just seen that as well in the rise6:18of ETFs with leverage in them. Look at6:20what happened in South Korea, Hong Kong,6:22and even the US markets. Now, how will6:25September act? Well, Blue Codics6:26actually gone through and said, if we6:28had a pretty decent kind of August, and6:32we didn't actually keep dropping through6:33that point. We often have the average6:36price path of all these points being up,6:38down, and all around. And this kind of6:40goes back to what we've been discussing6:41for a while. If you've been putting in6:43the work in the markets, which I know6:44you have, if you've been thinking about6:46these markets as a collective hole,6:48there's a lot of abundance. There's6:49always a sector, there's always a6:51rotation, there's always a market out6:52there for somebody. And do remember that6:55this is the beautiful thing about what6:56you're doing. You're understanding that6:58there's more than just tech or7:00semiconductors or what most retail7:02traders and investors do. And always ask7:04yourself the question, when you started,7:07which was the market you first got into.7:09Let us know in the comments down below.7:10I'm always I love these responses from7:12you guys. It's always awesome. JP2-year7:15bond yields. All these bond yields are7:17breaking up and this is putting pressure7:19on, of course, central banks around the7:20world to potentially hold if not hike7:23rates. So, the JP2Y bonds, this has got7:26a question mark now for the treasuries.7:28We've seen the 10-year bonds as well7:30breaking to new highs. And really, I did7:32a quick cross check. Great Britain, uh,7:35Germany, any of these places, Australia,7:38all the bonds across the board are going7:40up. And this is going to put a lot of7:41pressure on, of course, also the7:43property market, which we already know7:44is declining in certain areas in the7:46world. Canada, New Zealand already7:48dropping. Now, we're seeing certain7:50parts of the US dropping, some parts7:52doing okay. Uh, and then, of course,7:54we've got Australia as well falling7:55through. We've also got places like the7:58UK in decline in certain areas. This is8:01a very interesting point in history. And8:03remember, it's not just one thing that8:05takes down a market. It has to be a lot8:07of things together. So, it's good to8:09note, but until the bonds market wakes8:11up and starts to freak out, I always8:13say, why should you be doing so? Let's8:15have a look at the NAIM8:17Exposure Index, this one here from8:19stockcharts.com.8:21And you'll notice here that we're at8:22that 102 read. Now, I took this just a8:24few sessions ago. And what it basically8:26is telling us, if you don't follow the8:28NAIM, is that it tracks US equity8:31exposure reported by active investment8:34managers each week. So unlike just a8:36sentiment survey, this is actually what8:37they're doing. This is the positioning.8:39This is the opinions of what they're8:41really doing. Now, they've just recently8:43upticked to a point where often that8:45means that they're kind of allin. And8:48we've seen that also in the cash8:49holdings of a lot of these investment8:51funds. They've kind of been in for a8:52while. And this is why it gets8:54interesting when we saw that number one8:56transaction on the cues. The biggest8:58trade ever to go through the cues8:59according to volumeleaders.com happened9:02just 24 hours ago. And since then we9:04rallied and then dropped through on9:06these markets. Now I think that's pretty9:08interesting when you start to think9:09about all of the transactions we've seen9:12recently. We've also seen PSQ here which9:14is like short cues. Some people have9:17been placing transactions. Could that9:19tell us that Wall Street's getting a9:20little bit negative? Sure, it could be.9:23But I always say whenever you're looking9:25at these types of things, just remember9:27that it's only one piece of information.9:30We also saw a darkpool sweep coming in9:32on SSO as well uh over the last session.9:35So, some big trades starting to come9:37into the markets while they remain9:39sideways and we've got a little bit of a9:41weakening in terms of formation going9:44on. Have a look here at the discrepancy9:46between the sectors over the last couple9:48of sessions. last 24 hours, software9:51gave up. Gold, which of course were the9:53two or two of the best performing9:55sectors, they've both come down.9:57Consumer discretionary also down as9:59well. Semiconductors down again. They're10:01still struggling as we suspected. All10:03sorts of kangaroo after that big crash10:06just the other sessions or about a month10:08or two ago. And still energy coming10:11through across the board. We also see in10:13agriculture and you might notice what10:16was defensive healthcare, utilities,10:20staples, all of these markets remained10:22pretty much stock standard throughout10:25the session. And that's the first day of10:28potentially a defensive move from the10:30market. I like to look for three of10:32those in a row to really tell us the10:34markets are actually moving properly10:35defensive. One maybe an outlier, a10:38couple in a row that could be more than10:40a coincidence. Let's now take a look10:41here at the 5 days again. Energy,10:44energy, energy. That's been what's been10:47picking up. And you can see the beatd10:49down on gold. Now, why the beat down on10:51gold, you might ask? Well, gold doesn't10:53tend to like inflation. Also, if you're10:56following seasonality, such as this10:57chart here from Polycarp, actually shows10:59a rally followed by a drop that often11:02happens around this kind of period here11:04into the start of September. Now, if it11:06follows a standard path, it could still11:08continue to weaken for a little bit and11:10then maybe pick up into the month of11:12October. So, interesting times for gold.11:15It's so far been relatively seasonal.11:18For Bitcoin, it's been a little bit11:19different. It's been actually sitting.11:20And Bitcoin, according to the latest11:22data we got, uh, was actually showing11:24inflows, particularly into IBIT on the11:2731st of August. So funnily enough,11:29although I think there's probably some11:31negatives last 24 hours, it still11:33remains all over the place in terms of11:35neutrality. We've got markets going up,11:36we've got markets going down, and all11:38around. Earnings release this week,11:40we've got earnings watcher coming out11:42with quite a few uh big points here. We11:45can see Wednesday, Thursday,11:48these are pretty important periods. And11:51really, it's just more of the consumer11:53discretionary stocks, more of the small11:55cap stocks. How have they been11:56performing? What I really take away from11:58this chart is that the options market is12:01expecting a lot of volatility moves for12:03these stocks. So if you're not aware,12:05don't know what the options are pricing12:07in plus - 10 plus - 20% per session.12:12That's some pretty crazy stuff. And12:14yeah, you've got to be aware of that. So12:16make sure to follow those things. Guys,12:18if you're interested in finding out a12:19little bit more about some of the12:20stories that I've got over the last 1712:23years, also some of the learning lessons12:24that I've made and more importantly some12:26of the mistakes that I've made, you12:27know, some of the things that the good,12:28the bad, and the ugly. Uh then of course12:31check out our free newsletter. Links in12:34the description down below. One chart,12:35one story, one market lesson. Always12:37great to have new people experiencing12:39some of the things. And you know, one of12:41the best things about sharing stuff here12:43on YouTube and sharing stuff with the12:44community is we've all put in hundreds12:47of hours, but sometimes it's great to12:49learn from people that have also put in12:51tens of thousands of hours. And the12:53great thing about meeting so many of you12:55over time, as well as I've even learned12:56from you guys and from everybody else,12:58you know, what people have done well,13:00what people have done badly, and how we13:02can possibly improve together. Let's now13:04take a look here at the Vanguard S&P13:06midcaps. Now notice this is getting down13:09to, you guessed it, a support line. So13:12why is this important? Well, take a look13:13at the advanced decline line in general.13:15It's dropping. We've got weakness kind13:18of, you know, slowly sapping away at the13:21markets here. And it goes back to13:22David's post where we have a whole bunch13:24of stocks underneath their 50 in terms13:27of the advanced decline. Soon we're13:29going to take a look at overall relative13:31strength. We'll do that in the next13:32video and I think it'll be a really good13:34one. open a lot of insights into what13:37Wall Street often does. Take a look here13:39at copper. Another rejection coming in13:42on the markets. Basically, a whole bunch13:44of up down up down up down. We've got a13:47longlegged dogee fest. Now, if you're13:49familiar with longleg dogeis, you would13:50know I believe they're a bit of13:52equilibrium. So, that is that basically13:54the market is not really super bullish,13:56nor is it super bearish. It's trying to13:58figure out what the next move is. I've14:00been looking for a while now for a 68014:02plus close. hasn't happened yet for14:04copper, but it's not necessarily dire14:06yet for that stock or that particular14:08metal. Let's have a look here at US14:1010ear. Yeah, 10 years have broken up and14:13this is not probably a coincidence. It14:15all comes around the same line of when14:17we've got oil also rallying and it14:19doesn't seem to matter which bond yields14:22you're looking at. If we have a look14:23here at a Great Bit Britain kind of like14:2620 year or something, you'll notice14:28they're all at new highs. And this is14:31the fear of the unknown that we've been14:32discussing. It's bonds actually starting14:35to move and it's the first time for14:38ages. Take a look here at high yield14:40junk over the last session. Look at14:42this. This is high yield junk. It14:43dropped 1%. You might say that means14:45nothing, but they're all starting to14:47drop because yields are going up. Look14:49here at LQD corporate bonds. You would14:51think corporate bonds would be doing14:53better. They're not. They're actually14:54falling off. And this is a direct14:56reflection in my opinion of AI15:00debt and markets saying, "Well, we15:02better get the money back because15:04they're starting to get a little bit15:05jittery about some of these IPOs and15:08even announcements such as the one we15:10saw from ChatGpt OpenAI ahead of these15:13IPOs and announcements. They they're15:15making certain uh I guess you would say15:18calls that make you think, well, is it15:20all okay or is there something going15:21on?" It's not a question of whether AI15:23is gamechanging. It is in almost every15:26way for so many of us. But at the same15:28time, uh it has to also pay off15:31trillions of dollars in terms of growth15:32fairly quickly for the street TLT. Look15:35at this again. Treasuries dropping off,15:38coming back down. We suspect that or we15:40talked about this that maybe the market15:43at least in my opinion would want to15:44pressure that pain point that area where15:47we saw Bessant come out and say, "Oh, 215:49to 4 billion long curve blah blah blah."15:52All of this type of stuff. It always15:54makes you wonder, the street likes to15:56punish these levels. So, I think that's15:57another reason why we've got these bonds15:59coming through. Just have a look here as16:01well at airline companies. Look at what16:03the diesel price is doing to them. It's16:05dropping it through support. It's16:07putting real pressure on the American16:09consumer. And you'll note here that we16:11continue to track the American consumer16:13very closely. It's not dire yet. It's16:15not through key supports yet, but these16:17are the kinds of levels that we16:18obviously want to track. Let's have a16:20look here at healthcare. You'll note16:22here we've got a series of higher highs16:23and higher lows. So again, defensive16:26still holding up in these markets when16:28compared to others. And if we have a16:30look at semiconductors, you can see it16:32came down to that put support around 54016:35and it's trading there at the time of16:36this recording. The Cosby is also16:38dropping. That's down 4% which seems16:40like just a standard move for the Cosby.16:43But yeah, big moves here in the South16:45Korean market. And you'll note here as16:48well, Nvidia just kind of hovering16:50around after that exceptional earnings16:52result. So the semiconductors continue16:54to be kangaroo up down all around and16:56they're no longer leading this market.16:59If we have a look at gold now, gold has17:01fallen below the first level of demand.17:04You might think, well, that's shocking17:05and it certainly has come down pretty17:07aggressively. For now, the key is17:09probably to have the patience to see17:11market structure start to form. So, is17:14it a little bit lower than makes a lot17:15of people comfortable? Yes. Markets17:17often do like to trap into these zones.17:20Potentially 4240 is also an area of17:23interest. And because it's coming down17:25like a freight train, series of lower17:26lows and lower highs, we really want to17:28see market structure come back in17:30because you go to a weekly and you're17:32going to see a pretty big rejection. But17:34to be surprised of where it sold, I17:37don't think that's that surprising. to17:39see it sell there is pretty normal and17:42pretty much what it would usually do.17:43When you look at gold futures or17:45options, we're actually sitting right17:46around the put zone of GLD which is17:49about 396. So interesting point there17:51for it as well. Silver meanwhile holding17:54a little bit better holding on the17:55demand. So again I think a very17:58interesting next 24 48 hours coming into18:01non-farm payrolls week this week guys as18:03well. US oil new high and if we have a18:07look here you can see crack so that is18:10uh oil refineries still making a series18:13of higher highs and higher lows. So18:16we're still getting a real discrepancy18:18here not just on the barrel which is18:20going up but diesel which is18:22skyrocketing and that's leading into18:24certain agricultural stocks as well. I18:27noticed I got even set alerts for this18:29where the new highs came through. So,18:31we're actually getting a real food18:34problem starting to appear on the18:36street. I don't think many people are18:38seeing that on the charts. US 500,18:40again, small time frames, you could make18:42technical cases for it to be a bit weak.18:44Key levels in the future, maybe 7,500.18:47Reason probably the S&P puts that sit18:51around these levels. So, we've got both18:52zero DTE puts and the net expiration18:56puts sitting here. So, could we be18:57heading for 7,500 before we see any19:00reprieve? That's certainly a possibility19:02here on the charts. Let's take a look at19:04IBIT now for Bitcoin again. Why is it19:07finding trouble up here? You guessed it,19:09most likely call resistance. If we get19:11through this level, we could go into19:13what we call positive gamma. But for19:15now, Bitcoin remains in a very tight19:17range. Actually holding better than gold19:19and silver and what we would call at19:21this stage a pit. Is it time to have19:23patience? Often, yes. In these markets,19:25it is time to have patience. And what19:27we're looking for really is bigger19:29reactions. We got those huge moves. Once19:31you close above here, movements to here19:33seem logical from the technical spa19:35state. If you get nice pits and it19:37resets things and then closes up, then19:40often it goes on to potentially squeeze.19:42So, it's not necessarily a bad sign for19:44Bitcoin, even for gold, for silver at19:47this stage. These types of pullbacks19:49after big moves, they're to be expected.19:52It's always that two steps forward, one19:54step back that you've got to think19:55about. What is a beautiful technical19:56chart? That actually is a beautiful19:58technical chart. If you have two steps19:59forward and one step back, it's when it20:01gets a little uncomfortable that it gets20:03dangerous. Guys, do remember this week20:05non-farm payrolls, that is the jobs20:07numbers coming out for the US. Such an20:09important number, you know, not so much20:11that we believe it's real or fake or20:13whatever, but we do of course look at it20:15very closely and we need to be paying20:17attention to how the market reacts. If20:19you're liking this video, you like the20:21content here and you enjoyed it, you20:23found some value in it, well, I hope you20:25did, then remember, subscribe, smash20:27that like button, guys, and also check20:28out uh to follow us on some of the other20:31socials and other things down below.20:33Great to have you on board. You have a20:34fantastic day, and thank you very much20:36for staying up if you're in the US for20:38this video. Tomorrow's will be a bit20:40earlier. Thank you so much, guys. Bye20:41for now.
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