Transcript of We Haven’t Seen This For 40 Years…
FX Evolution - Trading Academy
0:00Today's number might shock you because0:02it's been over 40 years since we've seen0:04inventories this low. And to make0:06matters worse, debt questions are0:08starting to be asked about the AI trade.0:11Yes, again, credit default swaps,0:13arguably one of the most important0:15things in 2026, are coming into focus.0:18And whether you're a trader or an0:19investor right now, we need to be paying0:20attention to the options market, the big0:23movement in flows, and the absolutely0:25historical runs that we've seen just0:27over the last week in Bitcoin, gold, and0:30other things. Could it be the markets0:32are finally starting to wake up in 2026?0:35Join us as we go through everything that0:37you need to know today. There's a lot to0:38get into, guys. I'll see you very soon.0:45Well, welcome back to one of the largest0:46daily shows on the planet. It's great to0:48have you here. My name's Thomas, and0:50I've been in markets for over 17 years.0:52On the channel, we do things a little0:54bit differently. We look at the0:55institutional insights, including data,0:58price action flows, and of course, what1:00Wall Street is doing, not what they're1:02saying. One of the biggest observations1:04I've made over history has been that1:06markets tend to prey on us, human1:09psychology. So, we need to be thinking1:11about markets totally differently to1:13what most people do. If that's something1:15that interests you, remember to1:15subscribe and smash that like button.1:17But without further ado, let's get into1:19the big stories that were moving the1:21markets over the last 24 hours and what1:23they could mean for us. First off, guys,1:26let's talk about this number that's1:27pretty shocking. This one here from at1:29bar chart, BofA, of course, uh global1:32investments as well, and Bloomberg. And1:35what it's showing us is that we are1:36seeing crude inventories falling off a1:39cliff. Now, they are the lowest that1:41they've been in 40 to 50 years. So,1:44really since the last crisis of the1:461970s1:48was the last time we really saw levels1:50quite like this when it comes to oil.1:52And this is leading into, of course,1:54some of the problems that we've already1:55seen. Diesel prices, remember we've1:58looked at those for the last 3 weeks.2:00The discrepancy between diesel price and2:03WTI crude, which is what most retail2:06traders look at, that discrepancy has2:09led into of course opportunity in2:10abundance, but at the same time most2:12people aren't looking at it and what2:14it's tending to lead into is inflation2:16in certain areas. And this is putting2:19pressure on of course treasuries. It's2:21also putting pressure on what we've seen2:24so far, which is the financial stability2:27of the system. And about 2 weeks ago, we2:29started maybe 3 weeks ago, we started to2:31see gold really come through strongly.2:34Basically, we've been looking at a2:35demand zone on the charts that we'll2:37take a look at later.2:39And then all of a sudden we started to2:40see improvement. Now, as you'll see, it2:42wasn't just one thing put together, but2:44it brings us to charts such as this,2:46gold stocks versus gold on the weekly.2:49Now, you might be familiar with gold2:51stocks being super underpriced back in2:532025 in comparison to gold, at least2:55based on ratios. Now, they're back at2:58where they've been over the last 103:00years. But guess what? It seems to be3:03that they're accelerating at this point.3:04Could it keep up? Certainly a very key3:07level for us to be watching and we3:08posted this one over on our X account if3:11you want to follow in the links in the3:12description down below. But it's a very3:14critical level because it's been over 103:16years since gold stocks have really3:18performed at all, you know, in in any3:21way better really than gold itself. Now,3:24speaking of gold, Duality Research over3:26on X puts together some great charts and3:28this one here is tracking one of our3:29favorite things to do, which is of3:31course the flows. Why? We need to know3:34where the big guys are actually3:35transacting. Over the last 5 weeks,3:37according to the latest data, $7 billion3:40was added into gold funds. So, that3:42probably tells you somebody at least is3:45adding into these funds. We've seen3:46central banks also do it. We've seen3:48Poland buying a lot as well. There's a3:50whole bunch of different places kind of3:53getting into the gold move. And it3:55always goes like this. There's a3:56narrative and of course people play it3:58out. Now, why is this important?4:01Well, of course, when you get flows like4:02this, then you need to be starting to4:04say, are we getting closer to things4:06such as blow-off tops? That is moves4:09that are unsustainable. We're about4:10halfway to the level or even less than4:13halfway to what we saw during that huge4:16run from September to January, but it's4:19good sign because of course there's some4:21form of improvement here when it comes4:24to gold. Let's now take a look at the4:26good, the bad, and the ugly when it4:27comes to dark pools though, because if4:29you're unfamiliar with it, dark pools4:30tend to matter. What a dark pool is is4:33basically it's a trade between two4:34institutions or one institution4:36potentially with many, and it's done off4:38market then reported at the end of the4:40day. Why do you want to be looking at4:42these? Well, probably self-explanatory.4:44It's big transactions happening4:46potentially critical levels. And we saw4:49some of these occurring previously in4:52gold around those lows when it was4:54forming a potential base. Well, we've4:56got two that just came in and as you can4:58see the 7th and the 13th, so certainly5:00not small, and the market initially sold5:03off, but then rallied back to this5:04level. Super critical point here for5:06gold and silver. We'll take a look at it5:08on the charts later on today's video,5:10but certainly something I'm watching.5:12What else are we looking at? Well, Blue5:13Curdic putting together this chart is5:15always good to look at. Weekly5:17percentage change thrust. How fast are5:20these movements going? Well, Bitcoin5:22went ballistic last week in part thanks5:26to I think the Treasury situation, and5:28of course in part thanks to the White5:30House and the meeting they all had. Now,5:33why is this so important? Well, 24.4%5:36it puts it in a rare breed of time. We5:38often see thrust happen at the beginning5:40of changes of trend or even closer to5:43the end. That is when markets go5:44euphoric or of course super pessimistic5:48and capitulate. So, it's a pretty5:50critical level and it does seem like the5:52data right now is showing some massive5:54flows. According to something we wrote5:56over on X and we do put out like kind of5:58like the top stories of the day. Follow6:01us in the links in the description down6:02below, guys, on X if you want to get6:04access to them before these videos go6:06out. We saw five consecutive days of6:09positive inflow at around almost $26:11billion.6:13On top of that, we saw record contract6:15contracts coming in as well when it6:17comes to some of the markets out there,6:19including at the latest data, I think,6:21from Goldman Sachs, which was showing6:23that the skew, that is the inflows into6:26Bitcoin, was actually improving and6:27increasing at a really fast rate. Why is6:30this all important? Well, it leads on to6:32at least somebody believes something's6:35occurring. And this brings us back to,6:36of course, the price action. What did it6:38do? The market went from being in what6:40we call a pit,6:41which is a pullback in time, very6:43important concept to understand, by the6:45way. If you're not familiar with it,6:46check out our courses over at6:47fxevolution.com. We talk about this6:49stuff all the time. You must understand6:51the structure of how Wall Street puts6:53together price action. Nobody talks like6:56that way. It is the structure of how6:59Wall Street puts together price action7:01that becomes the most important thing7:03that will change your behavior in7:05markets and let you understand what7:07they're doing. Now, let's take a look7:09here at what happened. We basically got7:11a closure up and the markets very7:13quickly priced themselves to the next7:16volume node. Now, why is that important?7:18Well, it shows, again, inflows were7:20excited. It also kind of points towards7:22when you have a market doing nothing for7:24ages, it tends to get very excited when7:27it comes out of that nothing. And I7:28think it's always a lesson that you can7:30learn and apply in your charts. Go back7:32through. I encourage you. Have a look at7:34levels where markets have been trapped7:36for a long time. See how they react.7:38Replay those levels. Do it thousands of7:41times. Do it tens of thousands of times7:43even and then you'll start to build that7:45wealth of knowledge that really helps7:47you. Let's now go through bond funds7:49because7:50>> [laughter]7:50>> there was a big movement here in7:52treasuries and of course this caused or7:55was one of the reasons that we saw7:56Besant come out last week and say guys7:59two to four billion dollars we're buying8:01the long end bonds. It's all good. We're8:02all here and we've actually [snorts] got8:04reports now coming in they're8:06considering putting big money against8:09protecting8:10Could they be going down the way of the8:11Bank of Japan? All of these things are8:14speculation of course what we're8:15interested in and from this chart here8:17from Bloomberg and Morningstar and8:19Hedgeye Markets over on X is basically8:22that government treasuries are less8:24allocated or becoming less allocated as8:26people are going towards corporate bonds8:29particularly AI bonds.8:32Now credit default swaps have been8:34blowing out on these bonds recently and8:36this one here again from Hedgeye Markets8:38and Bloomberg is basically showing that8:41credit default swaps are continuing to8:43rise. Just take a look at this chart and8:45have a look at these spread blowouts.8:48We've got huge moves here. AVGO look at8:51this credit default swap. Look at this8:53it's it's accelerating guys. Basically8:55Broadcom's going for a hundred billion8:57dollars in off balance sheet. They're8:59being asked now by the markets hey guys9:01yeah you will give you the money but you9:03got to pay up and this means that in a9:06high interest rate environment these9:07guys are having to pay more than ever9:09before. It's not as cheap as it was just9:11a few years ago to go and get this9:14financing and you'll notice here Oracle9:16which of course began all of this9:18discussion back last year. It seems like9:20it was years ago we were talking about9:21Oracle but it was really it hit that9:24massive peak last year. What was it he9:26became the most rich person Larry became9:28the richest person in the world and then9:30it just like two days later it started9:32crashing and has continued since then.9:34But basically Oracle has been going up9:36and up and up and it's reached levels9:38that we haven't seen since the GFC.9:40That is debt is widening and it's9:42continuing. Look at this. Look at what's9:44happening here in the month of August so9:46far. We're seeing Oracle hit new highs9:49in terms of risk on debt and I think the9:51thing is that you have to be watching9:53this because if you're not watching the9:54debt markets, you're probably starting9:55to do things a little bit wrong. Why?9:58Guess what? Most things are financed by10:00debt, guys. It's one of the biggest10:01drivers to economic growth. But uh yeah,10:04numbers to be watched. Therefore sure. I10:05hope you guys enjoy that. Give it a like10:07if you enjoy that type of stuff, guys.10:08It does help out. Let's take a look at10:10Ford PE ratios. Oh, wow. Good one here10:14from Duality Research. Look at that.10:16Some things look cheap. Some things look10:18expensive. Uh realistically, you10:21probably can't see this and no, you're10:22not going blind. It's because it's quite10:24small. But basically, healthcare's being10:26valued at, you know, higher PE ratios10:28because it's not been the most10:30profitable sector recently and other10:32things are getting cheaper. And you10:33might say, "Well, does this mean overall10:35the markets are actually better priced10:37than they were?"10:38Theoretically, yes. But remember what's10:40happened is Wall Street's expectations10:42for the future went up huge. So of10:45course, there's a huge discrepancy here10:48between each and every earnings earnings10:50earnings season. This week's, of course,10:52Wednesday and Thursday are important. We10:54got Micron Thursday, Nvidia Wednesday.10:56More on that soon. And it could be10:59fireworks. Jackson Hole as well on11:01Friday with the new Fed chair.11:04That tends to be actually more bullish11:05or positive according to Mr. Derivatives11:07over on X the next 3 days, often being a11:10little bit more positive. But this is11:12where we find ourselves at. Close to11:14midterm elections. If you're looking at11:16the closest correlation structure at the11:18moment, 1978. I think also 2007. Ooh.11:23That's a scary one.11:24I uh I have seen that one correlated11:26over the top. But imagine if we are11:29going into this volatility. I've asked11:31you guys many times before. Some of you11:33believe it's going to happen, some of11:34you think this year will be different.11:36But midterm elections, they do tend to11:38bring a lot of news stories, which of11:40course can create a lot of rotation. And11:42that's actually what we've seen in the11:44S&P. It's been a rotation market. Great11:46if you've been watching this channel11:47from the perspective of you understand11:49what's going on. Maybe you observe it a11:51little bit better, but bad if you've11:52just been looking at semiconductors and11:54that's it. Let's take a look at the11:55dollar index. The dollar index has kind11:58of gone to levels that we haven't seen12:00in a while in terms of extreme12:02positioning. Another one here from12:03Duality Research. Well worth follow,12:05guys. Look at all this great work he's12:06doing. And the dollar has actually12:09fallen since this read came out, which12:11is interesting here. You can see a12:12little bit of weakness on that chart.12:14But let's now move over to where the12:16money was flowing the last 24 hours.12:18Well, it seems like it was financials,12:19utilities, staples,12:21insurances, that type of stuff, even12:23health care a little bit, and out of12:25semiconductors. The thing about12:27semiconductors, this chart here from12:29Koyfin, basically they're doing this.12:31Why? Because they had a huge ramp up and12:33a huge dump down, and people are12:36confused. People are very confused about12:39what's happening next, and that's12:40because of course they're wondering12:43whether the expectations are too high.12:46Nvidia's earnings after the close on12:47Wednesday, this one here from Earnings12:49Whispers, could tell us a lot, and of12:51course Earnings Watcher as well shows us12:54that the options market is expecting a12:56plus minus 6.2% move on Nvidia13:00potentially on that session. So, the13:02options market, they kind of knows. Look13:03at Okta, 13.5.13:05And these moves, you know, they're13:07significant. They're going to push13:08around billions of dollars, if not, you13:11know, across the whole market cap, maybe13:12even a trillion dollars. So, it's a big13:14day, and that is Wednesday after the13:16close. And of course we will have a13:18report on that as soon as we get those13:20earnings calls through. I'll be13:22recording a video. Make sure to sub for13:24it. Speaking of which, if you're13:25interested in finding out some more, I'm13:27go and have a great newsletter this13:28week. I'm feeling it. Why? Because I13:30think there'll be quite a lot to learn.13:32One chart, one story, and of course one13:35market lesson. If that's something that13:36interests you, it's completely free.13:38Links in the down description down13:39below. Join so many people getting it13:42right now. It's great to have you guys13:43on board and the feedback's been13:45awesome.13:46Let's now move over to the charts that13:47matter. First up, this one doesn't seem13:49to be doing anything, guys. KWEB's going13:51down and Bitcoin is stabilized at around13:55this resistance for now. Why is it13:57important? Sometimes markets that you13:59don't even think about do connect up.14:01And although this is seemingly what14:04happened here with KWEB, the interesting14:06observation is so far we're not seeing14:09an improvement in Chinese stocks, Baba,14:11etc. Looks like they're coming under14:14some pressure. Speaking of which, I14:15thought we'd bring in a stock here of14:17the day just to discuss. This is Nike14:19and Nike has been doing, frankly,14:22terribly. Have a look at this, an14:23absolute capitulation of stock price14:26over such a long period of time. And I14:29think it's just a learning lesson that14:31you can think, well, yeah, this14:32company's a fantastic, it's great, but14:34this is consumer discretionary. Just14:36like this, things can change even for14:38the biggest companies in the world. And14:40remember, companies like Nike as well,14:42or Nike as you guys call it, they14:45have had this type of problem before,14:46that they've come through these types of14:48cycles before. Either way, the market14:50has punished it in recent weeks and14:53we've seen all sorts of press surrounded14:55as well. Plus huge volume activity which14:58is elevated from the past. And Wyckoff15:00said often he looked for volume activity15:03to see somebody, you know, both in the15:05buy and the sell end. And I think it's15:07an interesting point. So, we might bring15:09this one back up and have a look at it15:10from an educational standpoint in the15:12future. Let's take a look at Nvidia now.15:14Nvidia, so coming into, of course, this15:16earning season for it, what's the key?15:19Well, the thing is it's it's slated, at15:21least according to the options market to15:22move around 6%. So on the sell end that15:25could push it into around the 200 and on15:28the buy end that could push it into you15:30guessed it the call resistance. So15:32basically it's sitting slammed in the15:33middle. Why? I think there's a lot of15:35confusion over what's going on right now15:38in this market and whether the15:39valuations make sense. Speaking of15:42confusion the Cospi it's continued to be15:44kangaroo guys and we first reported on15:47this when it got that huge storyline15:49remember the liquidation event Citadel15:52coming out oh we got it guys and then it15:54went up and it rallied rallied rallied15:56and a lot of people get caught into this15:57idea that there's this huge V and every15:59market goes up. When the market falls 3016:0140% you got to be paying attention and16:04that's kind of what we saw here on the16:06Cospi and I think it's just trying to16:08digest exactly what's happened and16:10that's because so many people got16:12levered out. Semiconductors still16:14struggling as well. They're not the16:15leaders they once were and I think16:17Anthropic's IPO moving forward if it16:20does come in that's going to be a huge16:22discussion point around semiconductors16:25and where really the markets go from16:27there. Look at these Japanese yields.16:29We're continuously seeing a series of16:31higher highs and higher lows coming16:33through when it comes to the Japanese16:35yield. They're pretty dull. They've16:37started to accelerate in recent times16:39and this is going to possibly force16:40another well probably force another16:43big interest rate hike and put further16:45pressure on of course the Treasuries16:47trade. So all of this becomes important16:49because when you go to the Treasuries16:51they're stuck within that level where16:53Besant came out trying to support them16:55and the little technical resistance we16:57have here. We continue to watch it each16:59day so we'll update that. Also looking17:01at of course the financials regional17:03banks came under some pressure recently.17:06JP Morgan as well well arguably one of17:08the best banks in the world that one has17:11started to decline a little bit last17:13week. Still early days still generally17:16in a bullish high highs, higher lows17:18stock price action. So, we're just17:20watching and observing it there. And of17:22course, you want to look at your long17:23yields, 10, 20, 30 year, etc. Check them17:26daily. So, let's now take a look at the17:28US dollar. One of the things about the17:29US dollar has been that it's been stuck17:32for over 1 year. With what Bison said17:34last week, with obviously the movements17:36that we saw from duality in terms of a17:39lot of fund managers being maybe to the17:41overbought side here, the market remains17:43quite neutral and trapped at least at17:45this stage. But does bring up17:47interesting questions when we start to17:48look at oil and movements around that17:50market. UK oil little bit stronger than17:53which is Brent a little bit stronger17:54than WTI, but in general the market17:57really has been around diesel. So, do18:00remember things like crack, you want to18:02be watching this as it makes series of18:04higher highs and higher lows. It puts on18:07more pressure to the markets18:09particularly from the inflation side as18:11well as all of this will most likely end18:14up impacting food production costs in18:16general and everything else that kind of18:18goes into it. What about energy stocks?18:20They're still performing relatively well18:22in line with the spy at this stage. So,18:24of course it's another one of those key18:26observations that we'll be looking at18:27over the next coming weeks. And as we18:29mentioned before, gold stocks, they've18:31remained pretty strong in recent weeks18:34beating out realistically I guess you18:37would say gold itself which has also18:39been in the major discussion points18:43which we saw before which is basically18:45that it's reaching that level of around18:48the 4,700 zone. Now, why is that become18:51so important? Well, when we take a look18:53at the weeklies here, you'll see on the18:55left hand side we get quite a lot of18:58structural change around this area. And19:00now that we closed above 4530, this19:03becomes that next potential critical19:05level. We actually just reached into the19:07bottom of the box. So, we're drawing a19:09box like this over the last 24 hours.19:11So, critical level here and that happens19:13of course with cross correlation as we19:16see silver what did it do? Well, as you19:19guys may have known the other day we19:21talked about the idea of $70. So, these19:24are levels where at least for now we19:26might see what we call a pit or a19:28pullback in time where silver and gold19:31need to do a little bit of breathing19:33along with Bitcoin potentially at around19:35this stage. Now, why is that? Well,19:37let's take a look at the crypto's run19:39around the corner. We've got Ethereum19:41here making a slightly higher high.19:43That's a good sign at least initially19:44for crypto. We've got Solana. That's19:47actually now trying to go for a higher19:49high as well. So, take a look at this19:51level 100 for Solana big psychological19:53zone. It's actually trying to push19:55higher. So, these a little bit more19:57beaten down and then we've got Bitcoin19:59coming through and getting closer to20:01that 82,000 points. So, all of these20:04critical levels starting to be reached20:06at the same time. Bitcoin, Solana,20:09Ethereum maybe coming off lesser or more20:12bases than you would say something like20:14a gold which didn't fall anywhere near20:16as much.20:17So, critical levels and we'll be20:19watching flows a lot. My preference20:22would be to see this kind of sit around20:24like this or even to possibly go higher20:27then consolidate above the high and then20:29hopefully move higher after that. So,20:31would love to see a good pit that is a20:34pullback for a little while reset those20:36indicators then move from there. Take a20:38look at the Q's 705 700 seems to be20:41where most of the puts are. So,20:43basically this opens up the possibility20:45of an options kind of demand zone this20:48week into Nvidia earnings. Remember,20:50it's not long away now till we get the20:52data from that. And then of course we20:54have here the S&P as well which is20:58sitting at around 7,600 for the first21:00put level and 7,500 for the second. So,21:03markets right at anchor Vwap right now21:06holding on to their first level. If we21:08lose this, maybe we go 7,600, then maybe21:107,500. So, critical zones there this21:13week ahead. When it comes to the21:15futures, you can see here that also21:17lines up pretty well with some of the21:19more traded nodes. So, we get 7,500 very21:23heavily traded level for the S&P. Guys,21:25I hope you enjoyed today's video and you21:27found some value in it. If you did,21:28remember to subscribe, smash that like21:30button below, and also follow us on our21:32newsletter, totally free. Links in the21:34description and pinned comment as well.21:36Core PCE Price Index 8:30 a.m. on21:39Wednesday in terms of the market open,21:41and Jackson Hole kicks off, of course,21:43on Thursday with the big discussion21:46coming on Friday from the new Fed chair21:48Wash. It's going to be a big week, guys.21:50Nvidia, Micron, so much stuff going on.21:54More importantly, questions in the debt21:55markets, and of course, probably more21:58out of the Treasury, geopolitics, and22:00ultimately, maybe even out of the debt22:03markets. See you soon.22:05Catch you for now.
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