Are Markets Heading For A Meltdown?

things are starting to change in markets around the world but what does it mean when we take a look at the history of 2023 so far well we know that retail Traders and investors out there like you and I have been buying the dip in fact we've been doing it faster than almost ever before but is this a helpful thing well according to JP Morgan inflows into the markets are at all time highs for retail Traders at the same time largest outflow of tech in 10 weeks has just been seen by the biggest Traders so what does this mean as the Federal Reserve Cuts back on their overall asset purchasing in the big taper that's going on still in the back of the markets and we have a close on the lows today we uncover the secrets of the market so far let's get into it together well welcome back everyone to The Daily Show where we talk about markets around the world including stocks Commodities and cryptos we'll be covering the macro leading indicators and of course the hottest charts but let's begin with the last 24 hours what's been happening in markets it was a clear sell-off throughout technology and we just saw new lows with a close on the low as we often talk about here on the channel the close is the key but what are some of the big stats coming out as we mentioned at the start of this video inflows and outflows are always important to watch from the biggest Traders we just saw record inflows then we saw a massive sell-off from those inflows so is that profit taking from some of the large funds well according to our smart money dumb money indicators it would say yes I mean basically we've got a huge discrepancy here between these two now what smart money and dumb money implos really tell you is basically when you get huge discrepancies between them similar to other periods in time such as what happened in February and we can price up other things it often tells us that we're in a swing Trend change and as of the last 24 hours potentially we've seen a technical signal that tells us that there is more selling to come over the next couple of weeks now what about some of the other things we've been sharing well over here on Twitter you can see we've shared some interesting information recently we know that one of the big things was that JP Morgan reported that over 4.4 billion inequities was purchased in the previous week that's a remarkable two standard deviations from the 12-month average and over that period of time Goldman Sachs actually told us that they were seeing net selling from the big funds again that came through Goldman's Prime book which I posted over here on Twitter and if we go back over I've got a new post here that's from The Wall Street Journal which basically is telling us that by the dip reflexes are pretty strong 57 of all the options trades throughout the last 24 hours were goals and this has been consistent now for basically around three to four weeks if you went back a month ago it would have been 57 puts and every single time the market went down puts would be purchased not calls we've flipped the switch on that one for sure so what usually happens over these periods well we've taken a look at the data and as we know we may go into a little bit of weakness here this week but in general we actually usually get what we call a summer rally and over at the next three weeks we've got to be careful of that when we get sell-offs we may still rally back through because the odds are of course in the favor of the bull that's just data alone though so let's take a look at the macro together and then look at the technicals the first macro I want to use is realistically this particular indicator coming out of JPMorgan it's what they call the squeeze sentiment indicator we saw a January squeeze we've just reached it again we had this during the GameStop Saga of 2021 and of course also the pandemic and we know that we're now in the 99th percentile in terms of their squeeze indicator what does that tell us everyone's too bullish too much fomo and we're probably overly extended we also know that Erp will become an important component of the Q3 earnings which move forward through of course August and September and that's going to be something that we will be looking at traditionally one of the weakest periods of the Year even in pre-election years and it usually brings the pullback that most people are trying to look for here what we call mean reversion stick around if you're interested in knowing what that is we'll check it out later on now we know that calls are being purchased in their billions and at the moment we just saw a new all-time record only about two weeks ago of the most amount of calls ever purchased we know also that put call ratios are starting to rise and this was taken as a two-week Old Chart so basically we'd be trading at one of the highest points ever if you want to pause the video here and go back and have a look at what markets do around this period of time I think you'll be surprised at how the S P 500 ends up in folding let's talk about Investors as we go through here is it cheap to buy the market I always like to look at Ford PE and a bunch of other figures when we're looking at this it's about 18.6 at the time of this recording is it cheap no is it super expensive well nowhere near the prices of 2021 so if you're a let's call it any kind of partial value investor then you're probably looking for a 16.8 or better I like to get those 15 and a halves that's one of my favorite levels when we talk about sentiment in the markets we know that every single retail Trader flipped completely bullish about three weeks ago so far so good but we've now unpacked around a week of that move from two weeks ago and you can see here the sentiment is still incredibly bullish in this bull bear spread it's the bullet most bullish it's been for a very very long time here's an example of that bullishness and you can see here 40 plus reads are bullish usually when we saw a read like this around one to two weeks later we would see a cell we ended up going two weeks which was last week and we started to see the cells so will it continue that's usually a fairly good indicator that we're in a significant turn towards mean reversion if you're talking about recession which I'm sure people will start to discuss again just remember that when it comes to yield inversion you usually don't see a recession until yield inversion goes back above the zero line just something to keep in mind if you're interested in following that now why do I think this sale could be more than we're just looking at and we could be looking for this main reversion one of the reasons is because some leveraged funds got smashed about a week ago so when we look at the data which came through from the Opex week so that was now yeah literally about 10 days ago what ended up happening was some leverage funds got leveraged out so effectively they were forced to cover their positions and that's I think a pretty big deal it means someone lost big and that means also probably a bunch of short sellers were forced to give up their positions the market pushed them too far it scared them and then they had to pull it out it's usually the way it seems to go and we're seeing that on actually a massive scale in terms of net shorts actually reduced fear and greed index still sitting around the greed no surprises there as Warren Buffett would say technically you want to be buying when others are fearful at this point it's pretty greedy so some people may be looking at of course trimming up their positions let's go over to the wild world of options so over the last 24 hours I wouldn't say there was much options activity that was out of the ordinary we did see some puts starting to appear on a weekend video so far so good I guess for those they pushed through and you can see here in the 90-day unusual activity we had Nvidia getting a little bit of action over last 24 hours and then of course we had some of the other main shows here what I did find though was Snowflake and zoom and PayPal are still getting relatively big trades across the board in comparison to where they were only a month or two ago now if we scroll down here you'll see 57 calls 43 puts that's Again The Reflex now every single time we used to see a market drop off it was all about the puts this time it's all about the calls everything's a by the dip because we've been conditioned to believe so and that's something that's very very important and of course if you are an optimist in the markets there's nothing wrong with that it could be that we're going on to a very good time but when you're buying short date calls timing is everything and having the right areas is everything as well when we look at the zero DTE options coming through for the Spy you can see the top three were puts and they were mostly puts across the board anything unusual here not really we're generally looking for those longer date puts and as we saw we had a couple of them on the weekend for the main industry specifically the spy and that might be coming to fruition at this point if you remember rightly a lot of those spies were triggering points at around 4 15 so 415 410 was one of those big strikes that's now starting to come up what about single stocks well we saw Tesla trading pretty large calls and puts across the board whether they were covered or sold puts and calls I'm not too sure we'll have to have a look at that soon when we get the new software that we're going to be testing here on the channel so you guys can see it and you can see also a bunch of Nvidia AMD Apple everything else anything unusual here I wouldn't say so it was all pretty much just fairly stock standard on the day let's move over to rotation what's going on there well we did have a little bit of rotation going through and it was into some of the more hated sectors we saw energy actually increase and we saw of course some of the defensive utilities hold up Staples was barely down on the session and unfortunately poor Healthcare which has been doing pretty well recently was down was it a full defensive rotation I would say no but it did have some of the most popular indices or popular sectors of the market semiconductors technology consumer discretionary they were all down the most on the session when we take a look at a five day you can see the big difference here on how the Market's been sneakily kind of holding up Healthcare and Staples and utilities is making a little bit of a comeback clean energy solar semis and of course technology they're the worst why they're the ones that have the most extended charts outside of their Bollinger Bands and quite a few things speaking of technicals let's jump on over here to one of the big technicals that we've been looking at recently which is a combo of basically magma although it's been put together wrong here Microsoft Apple meta Google and Amazon now if we take a look at where that's at you can see the 20 moving average which is what we call mean reversion we're still quite far away from that over the last 24 hours did we get a shift in this market to say the swing is live well not really because we didn't actually see a new breach of demand however when we look at the S P 500 when we look at the queues very very soon so the NASDAQ you'll see it's a little bit different but just remember these are the markets that have gone the most ballistic so they have probably the most fall to get back to main reversion from the top to the low here was about 15 percent and there's still a lot more to go should we actually see that volatility come in speaking of volatility while the vix was up six percent look at the volatility of the volatility the vvx this has been the better chart to look at over the last couple of months and it has shown us often times when we're about to see some extreme volatility if we'd go back over and you can see here the volatility of the 8th of March and how we spiked through and also our lead in as you can see here the volatility the volatility leading into that 15th of Feb sell that's the type of thing we're looking for a spike up it is going up at the moment as the markets are starting to sell off that's a good sign and of course it means that there could be a little bit more volatility to come the skewers also helped us with scores saw the skew Crush then we had the data that said that the market should be weak after the Opex or the trillions of dollars of options are expiration that happened only a few weeks ago if you're not aware of that you've got to subscribe you need to make sure you take pay attention to the options Market at this stage and we saw the skew Crush so that really just gave us the tick of approval to say if we start to see Trend changes or anything like that on the small time frames it may be worth day trades Etc put call ratio also gave us the tick of approval a few weeks ago it said that there was a one to two week kind of lead pre-lead to a sell so far we've seen a little bit of a sell and of course that's what you usually expect when it goes under these 0.7.8 areas you've got to be paying attention too many calls not enough puts now what was most surprising was really Central Bank liquidity at the start of this video we talked about that Fred result which of course is the tapering of the central Bankers out there and really removing a bunch of liquidity from the markets but when you look at it underneath the hood such as this particular indicator that we use here what we found is that the FED actually have been doing a lot of backdoor action so while they've been tapering off they've also been injecting a little bit in sneaky ways now as we know we have a market that's very extended away from basically what I would call the buyer of Last Resort which is we know is the Fed so when we're this red this deep in terms of massive massive movement away it usually means that we will mean revert at some point and we've seen this a few times over the last couple of years and this is the worst I've seen it in realistically three years I've never seen it so extended away if this green line continues to go down which of course subscribe and watch this channel for that stuff then what we'll be looking at is a market that could go even lower and we'll be watching this one in particular following the FED is very important at this stage as we know demand destruction well we don't see much stimulation from China at this point and that's a problem in the markets and copper hates it it's hitting the supply we pretty much saw the turn further selling off at this stage there's no real Copper support until we get into the 370s and as many of you would know this is called Dr copper to us and the reason why is it shows us that metals and potentially energy in the future and everything like that is starting to look unhealthy it shows us weakness in the economy and usually the copper Market is one of the ones to spot it first when we go over to treasuries they've been holding up okay so the bonds Market yeah it's been okay if we go over here to the high yield chunks they weren't down in the last session they were basically flat so it wasn't much follow through from the high yield chunks generally speaking if you've seen the stock market sell off you want to see junks go down as well and of course that was not really happening over the last 24 hours what about the US dollar it's hovering around I'd like to see the US dollar come back to around 102 and then find buyers so around this area here is probably my interest level for the dollar at this stage and it's kind of hovering in what I would call nowhere land at this point it did have a nice strong move last week which we suspected may happen around our interesting bull Zone but in general it's uh hovering at a point where I don't know if you're long cool feel good about it I guess but I'd like to see it come back a little bit more to those areas we discussed gold has been very weak and it makes sense each rally has been consistently met by cell demand we talked about this in the previous video so we won't go into it too much but basically down here we've got gold potential buyers we still have that huge gap in efficiency down here as well and the trend at least for the swing at the moment is down so until we're proven otherwise we still have to be kind of bearish gold until we break through some of the key zones to the woods the upside though it is in demand at this point if you're a scalper or day trader I've been looking at oil but I do think oil is trapped within a zone so natural gas has been the clear better play in terms of the energy side these particular Market's been doing really really well in recent weeks we discussed how we thought this was bottoming just a while ago we talked about the pullbacks to here and here is where we expected it to go it hasn't swung the low it's got a nice base on it and no one cares about it anymore so that usually is a good sign that it's probably coming in with that recovery there was a stat we shared a while ago that was super bullish on natural gas over a six to 12 month period from that point so we finally started to see the turn there well percentages are good but remember they call it the Widowmaker there are many risks in that particular style of trade not just including the roll contract sizes let's move over to Tesla now this actually changed Trend over the last 24 hours we saw a new low being formed and markets came out they hit the demand they rallied forward filling the Gap here which you can see was there and then they just sold sold sold sold sold and they ended up down six percent so is it finally over is this the end of the rally for Tesla well it's been doing really well we moved underneath here and you can see it's now closed but this is a long leg doji on the weekly so obviously that's an indecision candle it got the Gap fill I thought 300 might be possible as we kept just rallying and rallying and rallying but at this stage you can see here the turn has happened you have to expect that in this point basically rallies will be met by cell demand as long as the S P 500 can continue down so Tesla's kind of done a turn on the smallest time frames is that you know the the best way of doing things well if you're going to pick when you're looking at shorts rallies now into the shorts are technically more live than they were at any other point through the last especially 50 60 once we went past 195 oh it wasn't good where will the Bulls most likely be well I still think around 195 will be an interesting zone now and it could be a bit of a brutal sell-off if we continue to see selling from the S P 500 let's talk about semiconductors these are weakening as we mentioned we got into our supply Zone there was a fair trade if you wanted to play everything on average but we have not moved below 143 so technically we are not on swing trades yet we're not even close to our 130 kind of areas here from the bear Target or a bull kind of area that you'd want to be looking at so sami's certainly looking weak on the charts we go over to Apple Apple's still holding so well absolutely no turn on this stock though it did take a new all-time high over the last 24 hours then sold off we're looking for reactions around these levels down here as you can see that's the last low to really change Trends generally that's what you're looking for but also some smaller time frame Traders will be looking for a little low underneath this area here which sits around 185 on the charts yeah Apple's been a tough one to trade I usually don't like to short such strength here but it is one now in notables there were so much more selling and things like Google I mean Google looks terrible we've got that head and shoulders style pattern it's been one of the weaker of the big tech stocks it still looks really weak and if we go and put it on a chart it also had a 61a retracement from the high all the way down to the low so really if you're going to see swing turn changes this is it make of it what you will but you can see here the way it's set up and the same thing was going on from meta and a few other stocks let's move over to defensives did they find buyers as we mentioned we saw buying and utilities Staples not so much Healthcare the last 24 hours again nice little bullish Hammer if the markets still suffer or even if they go up up and we see Staples start to outperform again it's a good sign that that rally will be faded so we're really looking at the rotation at the moment in the markets if they keep buying defensives on a rally more so than they're buying some of the other stocks we need to pay attention to what's underneath the hood let's go over to the markets now we'll talk about indices around the world first up is the Eurozone the Dax here wow it is so strong I don't want to short the Dax at all even though it's on an all-time high just no change of trend look if you're going to do a trade like up here you're obviously getting a very tight stop loss you're going to lose it a lot of the time probably only win 30 of the time so you need to make it pay off pretty large is it a point where you could do it it's an all-time high I guess you could make your own decisions there let's move over to the XJR I've been very weak on this Market this is the Australian market and what happens here is you get a lot of demand destruction plays we have energy we have financials and we basically have medals and that's a breakdown of the Australian Market in one now now there are obviously other stocks outside of that but that's predominantly what makes up the top 200 and you can see here the weakness I'm looking for the exterior to continue its weakness down into the 6950 kind of area so that's something we're looking for here us 2000 was weak over the last 24 hours it rallied then it sold again the rally wasn't I would say very strong it's kind of done a little change of trend I could see buyers maybe trying to recommit here over the next 24 hours not a strong play though I usually like to Target these kind of areas and I would call it in the middle of limbo land at the moment but certainly has been weakening and I'd like to see it back in those levels the queues sold off to the close look at that right on the low now generally speaking and it didn't happen last time when you sell into the close you usually get follow-throughs and of course there's been a few times now that that hasn't necessarily happened it's a statistical fact that you generally do see that especially when you break a key range and when we took out that 360 on the Queue that was a fairly significant level let's have a look at it on the NASDAQ here and we'll scroll into a two hour just to show the key Zone that we broke through so here it is here and you can see that there's that nice level of support and then all of a sudden the market went straight through it and at this stage you know rallies are going to be you would think met by cell demand unless you get through these key levels such as 15 200 look at that right into the low point it points towards certain issues such as this over here being filled over the next couple of days what do you think in the comments down below do you think this is the NASDAQ and the s p gearing up for a bit of mean reversion back to the 20 moving average let me know let's have a look at the s SPX another close on its low we talked about the Bollinger do not discount the Bollinger during these periods we've seen some where they've got an extra week but then they usually fall over it is no joke we usually go sideways sideways to down up obviously breakouts are super massive here on the Bollinger and it happened so now what we tend to see after this point is the market usually stagnates and often goes towards mean reversion now that would be the weekly 20 you'd be looking at so it sits around 41.50 at this point back in that structure is it possible I guess it is let's have a look at es volume a bunch of volume indicators in general quite weak here again showing that this sell-off is uh I would say not necessarily seeing the usual volume you would get and that's because I think it's you know summer obviously in the US and we do tend to see a Slowdown in volume but we've got the cell here at this stage let's have a look at it on the Futures Market here it did get underneath that 43.37 so yeah broke underneath yes it closed yes it hit the daily 20 moving average pretty much which is right in the middle of the Bollinger here so are we going to see buyers I wouldn't be surprised at all to see a little bit of a knee-jerk reaction up but at this point that is still a break below so for Bulls you want that thing above 4370 and uh on all circumstances for Bears you want to see everything get faded before that point and keep pushing down into our next structural zones 40 300 4260 key on our charts here to find whether there's bulls or not at those levels and then of course past that point we're looking at around a 4150 the most traded zone for a very very long time so the s p actually put in a fairly interesting low here rallies all sorts of things we've got some great key levels now for markets and yeah as we mentioned this is a fairly significant change we've got a daily close underneath those lows that usually means that rallies will be met by cell demand over some period of time let's take a look now at Bitcoin what's going on in the Bitcoin World well it closed right on our 30 500 which kind of sucks because that basically means that we don't necessarily have a super bull pattern for it Bitcoin has been very strong you can see here it's been consolidating around these highs for Bears you want to see it underneath that Wick there so let's have a look at that on the two hour and we'll check it out here you can see You'd want to see it underneath 29 500 if you're a bear and then you're probably looking for rallies to be about my cell demand that's pretty likely if that did happen and for Bulls you just need new High I mean basically it's going to be explosive at the moment you'd have to be leaning towards the bull side than the bare side that Weekly still did close around the right levels and we also know that Bitcoin versus things like the NASDAQ Bitcoin versus Earth even the timing of the market it's very behind where it should be at these points think back to 2020 we had 2020 then we had March we had a bit of a rally then by December of that year we were going ballistic if we consider October the bay case well you can do the math on it I'll do it in the next video so definitely check that out for the news for the week ahead let's have a look here what we've got going on it's not too much obviously we have some US news we do have fed share power speaking on Wednesday at 9 30 a.m which is going to be important final GDP numbers yeah it usually doesn't move the market and then if we scroll down we've got one important thing that the FED likes to look at which is core PC price index which is Friday at 8 30 a.m do remember the week after is going to be non-farms as well if you enjoyed today's video and you're interested in some of the other things that we offer we do have a free competition at the moment for June links in the description and pin message down below so definitely check that out and make sure you enter it what do you got to lose you literally get free stuff if you win and you can maybe even be talking to me in July's 2023 group mentoring thanks so much everybody for watching the video If you enjoyed subscribe smash the like button we'll see in the next one bye for now

Channel: FX Evolution

Views: 36,182

Keywords: Stock market, Technical analysis, S&P 500, Trading, Investing, Day trading, Stock market analysis, Stock market news, S&P 500 technical analysis, NASDAQ, Stock market for beginners, Swing trading, S&P 500 today, Bitcoin, fxevolution, Investing for beginners, Forex trading, Market analysis, Trading strategies, Candlestick charting, Technical indicators, Trend analysis, Moving averages, MACD, Volume analysis, Support and resistance, Trend lines, Fibonacci retracements

Id: tQHquJ7eqv4

Length: 26min 35sec (1595 seconds)

Published: Tue Jun 27 2023