Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Something Terrifying is Happening to Tech Stocks + Stock Market News 30 July 2024

Transcript

Felix Prehn - Something Terrifying is Happening to Tech Stocks + Stock Market News 30 July 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: this live stream.
• 0:01
  Speaker 1: Apologies for being two minutes late today.
• 0:03
  Speaker 1: Terrible for a German, isn't it?
• 0:04
  Speaker 1: Youtube seems to be taking longer and longer to connect the live streams right now.
• 0:08
  Speaker 1: Today is a day that's kind of a bit funky.
• 0:11
  Speaker 1: Yes, there is some great, beautiful, shiny, wonderful news that makes you want to kiss Anthony Noto.
• 0:16
  Speaker 1: You know, as some of you are writing in the chat here, paypal and SoFi have got some great numbers, but there is a bigger problem brewing here and I want to walk you through that, not to make this into a doom and gloom video, but it's important you understand what's actually going on there and why are big tech stocks still going down and video selling off again, down again pre-market, and what's the silver lining and how do we make money out of it.
• 0:41
  Speaker 1: That's the premise here of today.
• 0:44
  Speaker 1: So if you want to give this old banker here a few minutes of your time, stick around, ask questions and I'll do my utmost to confuse you.
• 0:52
  Speaker 1: Now this is the NVIDIA stock chart taken from Trade Vision, and it doesn't look good, does it?
• 1:02
  Speaker 1: I mean, we've dropped pretty significantly and there are two levels here that are must-holds and we're kind of crossing them.
• 1:11
  Speaker 1: One is this $110, which is the support really for the week, although when I read the reports on Goldman Sachs and the investment banks, they're now looking at $104, 104 and 100 as the real support and I can see the 100 here from a positioning point of view.
• 1:32
  Speaker 1: That red line that I'm underlining here is basically your support.
• 1:36
  Speaker 1: That's what the put option said.
• 1:37
  Speaker 1: That's supportive.
• 1:38
  Speaker 1: We dipped below that support three days ago.
• 1:41
  Speaker 1: We closed slightly above it Pre-market.
• 1:43
  Speaker 1: Again.
• 1:43
  Speaker 1: We're down a little bit and then if you zoom out, you've got this longer term trend here, this one here, which is kicking in.
• 1:53
  Speaker 1: So if you break below that, bad things happen to good stocks.
• 1:58
  Speaker 1: So it's one to watch the Nasdaq moves, basically just like Nvidia right now, because Nvidia is so big and we have a support zone here here.
• 2:11
  Speaker 1: Basically, 460 to 465 is your support.
• 2:16
  Speaker 1: How do I know that?
• 2:17
  Speaker 1: These red lines here from tradevisionio links in the description.
• 2:20
  Speaker 1: Get yourself a one month trial from tradevisionio Links in the description.
• 2:22
  Speaker 1: Get yourself a one-month trial.
• 2:24
  Speaker 1: And you can also see that and we're trading in that zone, which isn't really brilliant because it means the first support isn't really giving us much help here.
• 2:37
  Speaker 1: And to understand why, you need to understand the following couple of points I'm going to run through here.
• 2:43
  Speaker 1: Um to understand the following couple of points I'm going to run through here.
• 2:54
  Speaker 1: That says you've taken more of my time than my wife and kids lately.
• 2:57
  Speaker 1: You mean you watch me more than you talk to them.
• 2:58
  Speaker 1: Time well spent?
• 2:59
  Speaker 1: Undoubtedly, say hello to your wife and children.
• 3:01
  Speaker 1: I'm well spent.
• 3:02
  Speaker 1: Undoubtedly Say hello to your wife and children.
• 3:04
  Speaker 1: Okay, this is half the story.
• 3:06
  Speaker 1: The other half is to follow CTAs.
• 3:12
  Speaker 1: What are CTAs?
• 3:13
  Speaker 1: Ctas are algo funds Algo funds that are basically computers.
• 3:21
  Speaker 1: So computers trade on certain signals.
• 3:24
  Speaker 1: No matter what happens, they will buy and sell if certain things happen in the market Over the next one week.
• 3:30
  Speaker 1: If the market is flat, they will sell $23 billion of stock.
• 3:36
  Speaker 1: If the market goes up, they're still selling $11 billion of stock.
• 3:40
  Speaker 1: If the market goes down, they're selling a heck of a lot of stock $51 billion.
• 3:44
  Speaker 1: So, no matter what happens, the computers are selling.
• 3:48
  Speaker 1: You can't change their mind, they're just going to sell.
• 3:51
  Speaker 1: That's obviously not good.
• 3:52
  Speaker 1: That's going to give us some, you know, volatility would be the polite way of saying it.
• 3:56
  Speaker 1: But Chris says trade visually.
• 4:01
  Speaker 1: Tesla says an uptrend visualizer shows red.
• 4:02
  Speaker 1: Chris says trade visually as a Tesla.
• 4:03
  Speaker 1: This is an uptrend visualizer shows red.
• 4:04
  Speaker 1: Interesting Chris, I'll take a screenshot of that.
• 4:08
  Speaker 1: I'll have a chat with our developers on that.
• 4:10
  Speaker 1: I think the uptrend is definitely there.
• 4:15
  Speaker 1: The question is, why is the background still red?
• 4:17
  Speaker 1: I think that's probably the question.
• 4:19
  Speaker 1: Right, we'll get to it, we'll get there.
• 4:21
  Speaker 1: Now you might be thinking, okay, that's only a week.
• 4:23
  Speaker 1: Well, what about the month Flat market market?
• 4:27
  Speaker 1: They sell 25 billion Down tape.
• 4:29
  Speaker 1: So if the market goes down, they're selling $225 billion of stock.
• 4:35
  Speaker 1: That's a lot of stock.
• 4:37
  Speaker 1: And if the market goes up, they're going to buy a bit.
• 4:42
  Speaker 1: But they're basically only buying French and English stocks, with only 3 billion in the S&P.
• 4:48
  Speaker 1: And I mentioned that English FTSE trade yesterday.
• 4:51
  Speaker 1: Was it yesterday?
• 4:52
  Speaker 1: Was it the day before?
• 4:53
  Speaker 1: On Friday?
• 4:53
  Speaker 1: I can't remember.
• 4:53
  Speaker 1: You know I said that's what some people are saying.
• 4:56
  Speaker 1: A FTSE trade might be something we might want to look at.
• 5:01
  Speaker 1: I'm actually going to add that to my list.
• 5:02
  Speaker 1: I forgot about that, that A FTSE trade might be something we might want to look at.
• 5:05
  Speaker 1: I'm actually going to add that to my list.
• 5:06
  Speaker 1: I forgot about that.
• 5:07
  Speaker 1: That might be something to look at.
• 5:08
  Speaker 1: Ads are back.
• 5:08
  Speaker 1: Brilliant Love that so annoying.
• 5:10
  Speaker 1: I don't know why it does that Special from YouTube.
• 5:13
  Speaker 1: I guess it's their way of forcing you to buy their subscription.
• 5:17
  Speaker 1: Now the other thing we're running today literally today, tuesday is showing you how we make money in all market situations.
• 5:24
  Speaker 1: We didn't start the year with $30,000.
• 5:28
  Speaker 1: And so far we are.
• 5:29
  Speaker 1: At what are we at?
• 5:31
  Speaker 1: $54,000.
• 5:33
  Speaker 1: So we've turned $30,000 into $54,000 so far this year because we picked the right direction.
• 5:41
  Speaker 1: No, we just understand a little bit more about trading rules and risk management and how to set things up and automate them.
• 5:48
  Speaker 1: And if you want to learn that as a beginner you don't need to know anything at all and see how I do these trades and see how little I do.
• 5:55
  Speaker 1: I do like six trades in a week, 11 trades, seven trades, two trades.
• 6:00
  Speaker 1: I'm very, very lazy, I spend very little time on this and yet we made $10,000 this month.
• 6:05
  Speaker 1: I'm not promising you the returns, I'm promising to show you how I do it and why I do it.
• 6:10
  Speaker 1: And if you like, if you come and join me at phoenixrentalogcom today, I'll also throw in the five kind of investments more than trades that I'm going to make later today.
• 6:22
  Speaker 1: So if you want to come and join that, then check it out.
• 6:26
  Speaker 1: Lily says is it all from put spreads?
• 6:27
  Speaker 1: No, not all of it, some of it, a fair bit of it, but we also did a few other trades so far.
• 6:33
  Speaker 1: Clap my dogs.
• 6:36
  Speaker 1: Winston's my second favorite golden retriever.
• 6:38
  Speaker 1: Okay, winston will be happy about that.
• 6:40
  Speaker 1: Very kind, you don't need to be polite to me, you just need to be polite to Winston Now, okay.
• 6:46
  Speaker 1: So, okay, we know there is some selling pressure, right, but aren't people going to buy the freaking dip?
• 6:52
  Speaker 1: Haven't people been buying the AI dip for like a year?
• 6:55
  Speaker 1: Well, no, sorry to say.
• 7:00
  Speaker 1: This little complicated chart here shows you in blue and blue again.
• 7:07
  Speaker 1: Master chartsman thought I've got three lines.
• 7:10
  Speaker 1: I know I'll make two of them blue.
• 7:12
  Speaker 1: It'll make it harder to differentiate which is which.
• 7:14
  Speaker 1: Anyway, one of them is retail options volume, so that's you and me, and the other one is non-retail, which is basically hedge funds and they're not buying.
• 7:27
  Speaker 1: We've got the lowest level of dip buying sentiment here since basically January, you know, just before the thing took off.
• 7:37
  Speaker 1: So no, the dip buying isn't happening, it's just not there.
• 7:41
  Speaker 1: Institutions aren't buying the dip and I think retail is running out of money.
• 7:48
  Speaker 1: The Google conspiracy continues.
• 7:49
  Speaker 1: There are no ads.
• 7:51
  Speaker 1: Ads are off.
• 7:52
  Speaker 1: Ads automator is off.
• 7:54
  Speaker 1: It's super irritating.
• 7:55
  Speaker 1: Let me show you that here.
• 7:56
  Speaker 1: It says it here Ads automator is off, we're not showing any, let YouTube insert ads for you.
• 8:03
  Speaker 1: And it's saying turn it on.
• 8:04
  Speaker 1: And I said, no, no, I'm ignoring it, still showing you ads.
• 8:08
  Speaker 1: Youtube, the bastards buy some more Google stock.
• 8:11
  Speaker 1: It's a great stock.
• 8:12
  Speaker 1: Okay.
• 8:14
  Speaker 1: Now let's get onto something a bit more silver linery to this.
• 8:17
  Speaker 1: There is something positive happening at the same time, and that is buybacks.
• 8:22
  Speaker 1: So buybacks is this second force, in fact, it's kind of the only thing that's actually moving markets.
• 8:28
  Speaker 1: Like nobody's been buying stocks over the last 10 years other than companies buying their own stocks.
• 8:34
  Speaker 1: And buybacks go into what we call blackout periods, where they paint their face black, to be you know ESG for the month.
• 8:50
  Speaker 1: No, I'm kidding, I know, I know.
• 8:53
  Speaker 1: I think we should be allowed to joke about everything, and I'm German, I mean we have no sense of humor, right?
• 8:57
  Speaker 1: About half of the S&P is getting back to buybacks.
• 9:06
  Speaker 1: So by next week it'll be pretty much all the stocks back to buybacks and that means money is going to flow back into the market.
• 9:15
  Speaker 1: And before you ask which stocks stick around.
• 9:19
  Speaker 1: So this is a little bit.
• 9:21
  Speaker 1: This is from, I think this is from Goldman Sachs.
• 9:23
  Speaker 1: It's saying, with all this bearish sentiment and all the selling momentum from the CTAs, the algo funds, is there any chance of a bullish reversal?
• 9:32
  Speaker 1: Yes, and it comes from the biggest buyer of stocks in the past decade companies themselves which is a little bit like the US government buying its own debt, doesn't it?
• 9:42
  Speaker 1: The buyback blackout window closed about a month ago and it's reopened last Friday and, as Goldman says, we have officially started the open window period.
• 9:52
  Speaker 1: As companies start to report earnings, you will see corporates enter the open period where they can place buyback orders and ramp up purchasing if they see fit.
• 10:02
  Speaker 1: And right now they're saying about 50% of companies are back to buying.
• 10:07
  Speaker 1: 66% will be back to buying their own shares by the end of the week.
• 10:11
  Speaker 1: So that's supportive and that's going to offset the selling by the CTAs.
• 10:16
  Speaker 1: So what are we expecting?
• 10:22
  Speaker 1: Have a look at this chart.
• 10:23
  Speaker 1: I'm going to take a screenshot of this if you can Wow.
• 10:26
  Speaker 1: What happened here.
• 10:27
  Speaker 1: What happened here?
• 10:28
  Speaker 1: Microsoft says don't show it to people, it's too important.
• 10:33
  Speaker 1: Okay, this is the Goldman Sachs trading desk flow.
• 10:37
  Speaker 1: And how do you get that data?
• 10:39
  Speaker 1: Goldman Sachs?
• 10:41
  Speaker 1: Very simple Ring them up and say excuse me, would you mind passing over your corporate desk trading flow?
• 10:48
  Speaker 1: So what do you see In blue?
• 10:50
  Speaker 1: You see the number of trades that Goldman Sachs have placed.
• 10:54
  Speaker 1: And this isn't Goldman Sachs money, it's their client money.
• 10:57
  Speaker 1: So if you are Apple and you want to buy back 5 billion of your own stock, you call Goldman Sachs and say, hey, do you want to take me out for something great and invite me to something special?
• 11:08
  Speaker 1: And I'll give you my 5 billion order.
• 11:10
  Speaker 1: That's pretty much how it works.
• 11:11
  Speaker 1: But what do you see?
• 11:12
  Speaker 1: Well, when you have these spikes, the market tends to recover.
• 11:19
  Speaker 1: Look at that here right, bottom of the spike, lots of buybacks.
• 11:23
  Speaker 1: And then we see this spike here and we go up.
• 11:27
  Speaker 1: And even on the smaller spikes here, they tend to correlate with rallies afterwards.
• 11:32
  Speaker 1: Why?
• 11:32
  Speaker 1: Because they're the biggest buyer of stocks out there.
• 11:35
  Speaker 1: And right now we're down here and Goldman Sachs is basically saying we're expecting spikes, maybe at the end of the week, maybe next week, but we're expecting spikes and we like spikes, don't we?
• 11:45
  Speaker 1: Spikes can make us money, so expect unexplained melt-ups in the coming days and expect the guys on CNBC to go.
• 11:56
  Speaker 1: We have no idea what is happening, but we're going to give you some random ass explanation, because we don't understand this.
• 12:01
  Speaker 1: It's going to be buybacks.
• 12:02
  Speaker 1: Okay, marks and Spencer.
• 12:13
  Speaker 1: Oh God, you're still with your Marks and Spencer trade.
• 12:15
  Speaker 1: I hope it's worked out for you.
• 12:16
  Speaker 1: I might do a FTSE trade today, okay.
• 12:18
  Speaker 1: So you're going to want to know who's launching the largest buybacks, right?
• 12:22
  Speaker 1: This is last week's Friday's kickoff from Goldman Sachs and the largest buyback that they're seeing here is on the 24th of July.
• 12:31
  Speaker 1: What's the date today?
• 12:33
  Speaker 1: 30th, so it's about a week old.
• 12:36
  Speaker 1: That's Bank of America.
• 12:38
  Speaker 1: That was quite a big one.
• 12:39
  Speaker 1: The most recent ones on this list here 25th, first, citizens Bank, outfit Bank.
• 12:44
  Speaker 1: They're reasonably large and then they get a little bit smaller, so these are a lot less interesting.
• 12:53
  Speaker 1: If I get the list of the stuff that gets kicked off this week, I will also be sharing that with you here, because it's fun.
• 12:56
  Speaker 1: I'll be too late to the Bank of America trade.
• 12:58
  Speaker 1: Let's have a look.
• 12:59
  Speaker 1: Where is Bank of America?
• 13:02
  Speaker 1: Here?
• 13:02
  Speaker 1: It is Whoops.
• 13:04
  Speaker 1: So they started buying on the 24th, okay, okay, you can let me hide this trend.
• 13:15
  Speaker 1: Can you make out these little volume bars?
• 13:19
  Speaker 1: 24th is here.
• 13:21
  Speaker 1: 25th, 26th you see the spike.
• 13:23
  Speaker 1: That's institutional buy volumes.
• 13:25
  Speaker 1: So I think the buying has already happened.
• 13:27
  Speaker 1: That's the way I would look at that.
• 13:29
  Speaker 1: The volume's already happened.
• 13:30
  Speaker 1: Stock's still down, dropping to the bottom of its trend.
• 13:33
  Speaker 1: So it might still be an interesting buy, especially if we get closer to 40, because typically we don't break the trend, there's no massive reason for that.
• 13:47
  Speaker 1: Sell-off Earnings were actually pretty decent, I thought.
• 13:50
  Speaker 1: At least I think the sell-off might be a little overdone there.
• 13:52
  Speaker 1: Yeah,