Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - Markets About to Flip + Stock Market News 04 October 2024

Transcript

Felix Prehn - Markets About to Flip + Stock Market News 04 October 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix, markets are trying to decide between the good news of the port strike seems to be over, at least for now, and the bad news the escalating conflict in the Middle East, and then lots of economic data in between.
• 0:14
  Speaker 1: We're going to walk you through all of that to make sure you are the best informed investor out there so you can potentially make boatloads of money.
• 0:21
  Speaker 1: Isn't that what this is all about?
• 0:22
  Speaker 1: I thought it was, anyway, so let's share my screen with you.
• 0:25
  Speaker 1: Futures are looking all right flattish Oil prices still creeping up, but not at a scary pace.
• 0:32
  Speaker 1: Vix pretty much flat from where it was yesterday, which is the fear index.
• 0:36
  Speaker 1: This is the first piece, really Israel's just massive Beirut strikes targeting Hezbollah leaders, and they basically fired here some whatever it was trying to take out the alleged next leader of Hezbollah in some bunker somewhere.
• 0:56
  Speaker 1: We don't know whether he's dead or not, hard to tell, I guess, with all that rubble.
• 0:59
  Speaker 1: So it's an escalation because it's Beirut, right.
• 1:02
  Speaker 1: And then we had the strikes from Iran.
• 1:04
  Speaker 1: They're going to respond to that.
• 1:06
  Speaker 1: Rumors are they're going to target oil infrastructure in Iran, which would likely cause another tit for tat, and then Israel would have to strike back.
• 1:14
  Speaker 1: And then what do they hit then Nuclear installations.
• 1:17
  Speaker 1: That's ultimately what this comes down to, isn't it?
• 1:19
  Speaker 1: Because if you were Israel and you knew that missiles get through, as they did this week, and you knew that the other side is trying to build nuclear missiles, well, if one gets through, you're toast right.
• 1:33
  Speaker 1: The country's that small, so I think you kind of know, see, where this is actually going.
• 1:37
  Speaker 1: So that's an escalation.
• 1:38
  Speaker 1: We definitely need to watch as the market Now, in the long run, wars don't actually harm the stock market.
• 1:45
  Speaker 1: Obviously harm people.
• 1:47
  Speaker 1: But let's talk about the port workers strike and we'll watch what happens in the Middle East in the meantime.
• 1:51
  Speaker 1: So the port workers have agreed to a 62% wage increase and I'm the first to criticize unions, especially when they're as aggressive as the chap who seems to run this one.
• 2:06
  Speaker 1: But that is actually 62% over six years, so it's not quite as generous as it sounds.
• 2:13
  Speaker 1: It's still pretty generous, but not as generous as it sounds.
• 2:16
  Speaker 1: And in the meantime, until I think, 15th of January, they're going to debate restrictions on automations, and that is just madness.
• 2:26
  Speaker 1: And that's actually why I have a problem with most unions is that they try to go against advancements, new technology, and if you're against it, you know what happens.
• 2:36
  Speaker 1: People are just not going to ship to US ports.
• 2:38
  Speaker 1: They're going to find a port I don't know in Mexico to ship to and truck it up because it'll be cheaper, or Canada, or wherever people allow it, or business will simply move their business to another country where ports are not run by terrorists.
• 2:52
  Speaker 1: Sorry, unionists, I meant you get the idea.
• 2:56
  Speaker 1: Terrorists is perhaps not quite the right word, given that we started talking about Hezbollah.
• 3:00
  Speaker 1: They're not as bad as Hezbollah.
• 3:02
  Speaker 1: I just want to make that clear.
• 3:03
  Speaker 1: But yeah, it's short-sighted.
• 3:05
  Speaker 1: I understand the fears behind it.
• 3:07
  Speaker 1: Nobody wants to lose their job, but robots, automation, ai, it's coming, whether you like it or not.
• 3:13
  Speaker 1: If you don't accept it as a country, as an economy, the economic growth is simply going to go elsewhere.
• 3:20
  Speaker 1: It's as simple as that.
• 3:21
  Speaker 1: You haven't got a choice in the bloody thing.
• 3:23
  Speaker 1: You just got to figure out how to deal with it.
• 3:25
  Speaker 1: Now, why did we get a resolution to this quite this quickly?
• 3:28
  Speaker 1: Well, about 30% of all US imports and exports go through these ports that were on strike, and you can imagine that the White House would have been breathing down the phone, begging, pleading, threatening you know whatever, and said come on, guys, just agree to this please till after the election and we'll give you lots of sweetness then lots of sweets and goodies after the election if I'm still there.
• 3:54
  Speaker 1: So I think that's kind of what happened here.
• 3:56
  Speaker 1: That's what you would do, wouldn't it, if you were running the country.
• 3:58
  Speaker 1: Probably, people just think about themselves mostly, and then we've got some slightly more well, less big headline news.
• 4:07
  Speaker 1: You're not going to find this in mainstream media, but it's equally as important.
• 4:14
  Speaker 1: This shows you how much asset managers and fund managers are exposed to the market, like how heavily invested are they?
• 4:20
  Speaker 1: It starts in 2012.
• 4:21
  Speaker 1: We are here right now, so we are at peak levels of investment in the market, and that means it's more likely that they take money out of the market than they add to the market.
• 4:35
  Speaker 1: So this is a little bit of a downside risk.
• 4:38
  Speaker 1: This is our portfolio and people always say oh, felix, it never bloody moves.
• 4:43
  Speaker 1: It never bloody moves.
• 4:43
  Speaker 1: It actually just did.
• 4:44
  Speaker 1: If you can see a little bit here, that was today.
• 4:46
  Speaker 1: We closed some trades yesterday.
• 4:48
  Speaker 1: Actually, we closed the VIX trade.
• 4:50
  Speaker 1: It did it by itself.
• 4:51
  Speaker 1: Of course, it's always automated.
• 4:52
  Speaker 1: So we are now up $28,000, I think $250 on a $30,000 teaching portfolio we started the year with.
• 5:02
  Speaker 1: And how much is that?
• 5:03
  Speaker 1: 28 over 30.
• 5:05
  Speaker 1: Well, it's basically 94% or something like that, isn't it Something like that?
• 5:10
  Speaker 1: 94%, I think we're up by so far this year.
• 5:12
  Speaker 1: And if you're trying to figure out how we do that, well, don't try to figure it out.
• 5:16
  Speaker 1: Just come and join me on Wednesday this coming week at 9 pm Eastern time, 9 pm New York time, at felixrensorg slash training and I'll spend about an hour and a half with you breaking it down.
• 5:30
  Speaker 1: Maybe we'll run a little bit longer and I'll literally give you the three rules I use.
• 5:35
  Speaker 1: We run through some real trades.
• 5:36
  Speaker 1: Ask me all the questions you always wanted to ask me and I explain to you how the heck we win 75% of our trades, because that's ultimately a big part of our secret here.
• 5:47
  Speaker 1: And it's not rocket science.
• 5:48
  Speaker 1: Anybody can learn it.
• 5:49
  Speaker 1: It's for beginners.
• 5:50
  Speaker 1: So come and join me, felixfrenzorg slash training.
• 5:54
  Speaker 1: Now are stocks going to collapse?
• 5:57
  Speaker 1: Isn't that the real question?
• 6:00
  Speaker 1: Well, after you get a rate cut, cut you either get a recession and everything is terrible, or you don't get a recession and everything is so wonderful.
• 6:10
  Speaker 1: You want to kiss your neighbor and hug everybody, you see, and what you've got on this little chart is that it shows you the pe multiple of stocks.
• 6:21
  Speaker 1: When we got the first rate cut, so in in 64, 87, 89, 96, 98 in green, we had PE multiples below 18 and we didn't get a recession and the world was wonderful and everyone was making out in the corridors.
• 6:36
  Speaker 1: Whereas 2000, it was 21X, 2017 was 15X, 17x, now it's 22x.
• 6:44
  Speaker 1: So the question is is there some correlation between very overvalued markets and recessions coming up?
• 6:48
  Speaker 1: It's a thought, isn't it?
• 6:53
  Speaker 1: But it also says to you that, out of the last eight times, only three times we got a recession.
• 7:00
  Speaker 1: Five times we didn't.
• 7:01
  Speaker 1: So maybe that's the glass half full approach to it.
• 7:08
  Speaker 1: So, honestly, I don't think we're going to get a recession, for one reason and one reason only the US economy is amazing.
• 7:15
  Speaker 1: It's not actually that.
• 7:15
  Speaker 1: No, it's not actually that.
• 7:17
  Speaker 1: No, it's US government spending.
• 7:22
  Speaker 1: The US government is likely to go to bail you out, either through tax cuts or through insane levels of spending, which is both about the same thing.
• 7:26
  Speaker 1: Well, not quite, but almost.
• 7:27
  Speaker 1: I prefer the tax cuts over the massive spending, but that's just my hat.
• 7:30
  Speaker 1: So, yeah, I don't think we're going to get a recession, but there's a risk to it.
• 7:36
  Speaker 1: Now, right now.
• 7:37
  Speaker 1: Where's the S&P trading SPX.
• 7:39
  Speaker 1: Does anybody know SPX stock?
• 7:42
  Speaker 1: About 5,700 is what I thought.
• 7:45
  Speaker 1: So if we drop below 5,700 on the S&P, the bastards also known as market makers sell, and they are actually lovely people.
• 8:07
  Speaker 1: I have three of them on my team.
• 8:08
  Speaker 1: Market makers you get the idea.
• 8:13
  Speaker 1: I can't spell.
• 8:14
  Speaker 1: They don't take directional positions, they just hedge and by hedging they influence the market massively because they're on the other side of a lot of trades without you realizing it.
• 8:26
  Speaker 1: So they sell below 5,700.
• 8:29
  Speaker 1: So something to bear in mind.
• 8:30
  Speaker 1: That's a little bit of a risk thing.
• 8:32
  Speaker 1: And then, as I mentioned yesterday, the biggest buyer in town has gone on the holiday.
• 8:38
  Speaker 1: The biggest buyer in town, of course, is buybacks, corporate buybacks.
• 8:43
  Speaker 1: And if I just erase my previous scribbles on here so you can see it better, we're here.
• 8:52
  Speaker 1: So until the middle of November.
• 8:55
  Speaker 1: So until mid-November there'll be very, very little to no buybacks, and then they shoot back up magically because the guys are all allowed to buy again.
• 9:06
  Speaker 1: So until mid-November, caution, right, Caution, big caution.
• 9:12
  Speaker 1: And then I also showed you this yesterday the computers are selling just a little bit if the market's flat or the market goes up, but if the market drops, they're going to sell like $40 billion worth of stock.
• 9:23
  Speaker 1: And that's just computers.
• 9:25
  Speaker 1: You can't do anything about it, you can't pull the plug.
• 9:27
  Speaker 1: No, no, no, they're in the cloud now, you see.
• 9:29
  Speaker 1: So it doesn't work anymore.
• 9:30
  Speaker 1: So that's also a bit of a downside risk here.
• 9:32
  Speaker 1: And then you've got to look beyond October a bit of a downside risk here.
• 9:34
  Speaker 1: And then you've got to look beyond October, because beyond October, from basically the beginning of November onwards, we tend to get historically this beautiful rally from sort of November 1st and then November 15th the buybacks kick back in, come back in.
• 9:51
  Speaker 1: So that helps with the year-end rally and everyone says Santa is coming and everyone gets very excited and giddy and is just generally high on Christmas sweets and therefore buy stocks.
• 10:00
  Speaker 1: So end of year I'm looking very positive at it, but I'm still worried about October.
• 10:04
  Speaker 1: So what are we going to do with our little trading portfolio here, up 94% so far?
• 10:08
  Speaker 1: Very little, I imagine, very, very little.
• 10:11
  Speaker 1: We've got a couple of trades open, but we'll do very little.
• 10:14
  Speaker 1: We'll nibble here and there, but we'll continue to do very little.
• 10:18
  Speaker 1: Because when you're up like almost 100% at the end of the year, why the heck are you?
• 10:24
  Speaker 1: It doesn't really matter how much you outbuy, just don't take risks you don't need to take.
• 10:27
  Speaker 1: So come along with us how we do that three easy rules, simple system.
• 10:31
  Speaker 1: It'll take about 90 minutes or so to explain FelixFriendsorg slash training is completely free of charge.
• 10:41
  Speaker 1: It's part of our mission to make a million people financially free, which is really what I want to achieve here.
• 10:42
  Speaker 1: So let's have a look at the markets here a little bit Now.
• 10:44
  Speaker 1: Pre-market might have changed somewhat from the moment I'm uploading this, but just to look at where we are at.
• 10:55
  Speaker 1: So this is tradevisionio and you're super welcome to play around with that.
• 10:59
  Speaker 1: There's a one-week free trial for that.
• 11:02
  Speaker 1: Just sign up.
• 11:03
  Speaker 1: If you don't like it, cancel it on day six or seven and you won't get charged, and I think it's $19 a month.
• 11:09
  Speaker 1: It's like a super affordable way to get access to like Wall Street quality data.
• 11:13
  Speaker 1: So if you look at the S&P here, over the last you know, almost two years it's gone up 19%.
• 11:20
  Speaker 1: Our little indicator is up 34%.
• 11:21
  Speaker 1: So if you just bought the greens and exited when it says red, you would, in theory, be up 34% and right now we're still in that green zone.
• 11:29
  Speaker 1: We haven't sold, we haven't caved in, we haven't bottled out.
• 11:32
  Speaker 1: So we're still seeing caved in.
• 11:35
  Speaker 1: We haven't bottled out, so we're still seeing.
• 11:36
  Speaker 1: We are in a reasonable upside here, which kind of makes sense.
• 11:37
  Speaker 1: The market didn't move a heck of a lot yesterday.
• 11:39
  Speaker 1: I would, of course, watch this, see when the indicator goes red and then I'd probably get out.
• 11:52
  Speaker 1: If we look at NVIDIA, which is the thing that really makes the market, you know, nvidia has gone up almost in a straight line.
• 11:55
  Speaker 1: We still managed to squeeze out a little 20% gain over NVIDIA versus buy and hold.
• 12:01
  Speaker 1: It's really hard to do when things go up that much to actually beat them.
• 12:04
  Speaker 1: But right now we're just not saying anything, we're just going.
• 12:06
  Speaker 1: Yeah, we're just neutral, and I'll show you why we're neutral.
• 12:10
  Speaker 1: There is a very simple reason for that.
• 12:13
  Speaker 1: If I whoops, may I?
• 12:16
  Speaker 1: So?
• 12:18
  Speaker 1: There's a little drawing tool I've got here so I can draw some lines.
• 12:24
  Speaker 1: So if we connect these highs here so that one, I could have extended it one over this one, that one third, one, fourth, one, fifth one, and now here, what you're seeing is that we have a moderate, very moderate downward trend, right, and we need to break that.
• 12:44
  Speaker 1: We need to break through that, and for that we probably need some good AI news.
• 12:47
  Speaker 1: That's really what's required here Now.
• 12:50
  Speaker 1: The valuations coming in for OpenAI and so on are far, far above NVIDIA's valuations, by the way.
• 12:58
  Speaker 1: So in theory that should help propel the stock upwards.
• 13:01
  Speaker 1: But we'll see.
• 13:02
  Speaker 1: Yesterday, 3.3% up, it was a good start.
• 13:04
  Speaker 1: I think we need a little bit more to break out of this downward trend here.
• 13:08
  Speaker 1: If we look at QQQ, the NASDAQ, we are also in neutral land here.
• 13:15
  Speaker 1: By the way, we've beaten it's only up 16%, you know, since the beginning of 22% the Nasdaq pretty miserable, right.
• 13:21
  Speaker 1: If you traded it without a little indicator you'd be up 40%.
• 13:24
  Speaker 1: And obviously it's not saying that you know past returns or future returns, any of that.
• 13:28
  Speaker 1: But it's kind of interesting to see that buy and hold over a short period of time tends to suck, so over a long period of time it's a good strategy.
• 13:38
  Speaker 1: So what have we got here?
• 13:39
  Speaker 1: Well, you've got a high here, you've got a high there, and now we've got a high here, and this one's a little bit higher than that one, which is good, but it's still lower than that one.
• 13:52
  Speaker 1: So we need to do this and then kind of crank our way back up to break through that resistance line here.
• 13:58
  Speaker 1: Once we do that, I think the things will look a little bit more optimistic, but for the moment, we just need to break above the previous high again, reconquer that one here.
• 14:08
  Speaker 1: So I'm a little bit cautious right now on this.
• 14:12
  Speaker 1: And you could also argue that this is the beginning of a head and shoulder pattern.
• 14:16
  Speaker 1: Left shoulder very small head.
• 14:19
  Speaker 1: Right shoulder I'm not saying it's a good looking person, but it would be a right shoulder if this went down right.
• 14:26
  Speaker 1: So that would be the pattern.
• 14:27
  Speaker 1: And how do you measure when that's actually the case?
• 14:31
  Speaker 1: Connect the armpits Whoops, hang on, let me get a straight line.
• 14:38
  Speaker 1: You connect the armpits this one and that one and you keep drawing that line over and then basically, if I can get rid of this here if the stock were to drop below this line here that connects the two armpits, then you'd have a completed head and shoulder pattern, which would be insanely bearish.
• 15:01
  Speaker 1: But we're not there yet.
• 15:02
  Speaker 1: So we don't predict patterns that we haven't actually got yet, but it is one to keep an eye on.
• 15:07
  Speaker 1: If we look at Tesla here, it told us to get out yesterday and you might be thinking who is this indicator?
• 15:14
  Speaker 1: I hate it already.
• 15:15
  Speaker 1: Well, you know, since the beginning of 2022, the Tesla is down 44%.
• 15:22
  Speaker 1: Well, if you, over the same period, had traded every single one of our trades, you'd be up 81%, so maybe it's worth paying attention to.
• 15:30
  Speaker 1: Of course, I'm not telling you whether you should be selling, but yeah, it's basically going.
• 15:34
  Speaker 1: Yeah, we don't like it.
• 15:35
  Speaker 1: Now, if you're a long-term Tesla investor, it doesn't bloody matter whether it's up or down $5.
• 15:40
  Speaker 1: But if you're a short-term trader, you don't want to be a bag holder, right?
• 15:43
  Speaker 1: Of course, 10th of October is coming up Robotaxi event.
• 15:46
  Speaker 1: That could change everything.
• 15:48
  Speaker 1: There might be a title idea for a video.
• 15:50
  Speaker 1: What do you think?
• 15:51
  Speaker 1: Tesla just changed?
• 15:52
  Speaker 1: Everything, or something ridiculous like that.
• 15:54
  Speaker 1: With me staring at the screen in horror, I think we might have to do that one.
• 15:58
  Speaker 1: So it's come down quite a bit.
• 16:02
  Speaker 1: If you connect the two tops here, you can see the right one is ever so slightly below the left one.
• 16:09
  Speaker 1: It's not brilliant.
• 16:10
  Speaker 1: We're hoping for a bit more of a breakout here, but in the long run, I'm very bullish on Tesla, but for the moment.
• 16:22
  Speaker 1: Short term, yeah, I can see that this rally is taking a pause.
• 16:24
  Speaker 1: We can look at small caps as well here, as we got IWM here and they're still in the trade.
• 16:34
  Speaker 1: But it's starting to look a little bit like this pattern over here, right, and this is also arguably a head and shoulder pattern, because if you look at this left shoulder head, right shoulder I know everyone's got midget heads here today but if you connect the armpits again the armpits of the world then if you got to sort of 213 or so down here somewhere, maybe even 214, then you would complete that head and shoulder and that would be a very, very bad thing.
• 17:07
  Speaker 1: So jobs data today, hopefully will come in neither too high neither too low, because that would be wonderful and that way we believe in the soft landing here.
• 17:16
  Speaker 1: We got an Apple buy signal yesterday, I believe, which is quite nice, and we have.
• 17:22
  Speaker 1: Apple has done 23% since the beginning of 2022.
• 17:26
  Speaker 1: We outperformed that by more than 2X, bringing in 49% here with our little algorithm.
• 17:32
  Speaker 1: So we've got a little buy signal there.
• 17:34
  Speaker 1: It's yeah, it's one for the early ones.
• 17:37
  Speaker 1: I would probably wait just a little till we exceed some of these previous highs here at 228.
• 17:45
  Speaker 1: But nice to see there is a bit of oomph left in Apple.
• 17:48
  Speaker 1: But again, you've got that triple top here, right, and we need to break through these triple tops.
• 17:57
  Speaker 1: So at least through that one here and then take out this one.
• 18:01
  Speaker 1: That's what I would say.
• 18:02
  Speaker 1: So I'd kind of be looking more at like a 235 entry price personally, but that's just me.
• 18:07
  Speaker 1: So head over to tradevisionio, play with it If you like.
• 18:11
  Speaker 1: Links down below.
• 18:11
  Speaker 1: As I said, there is a one-week trial which is completely risk-free literally the only risk-free thing you could probably do today.
• 18:18
  Speaker 1: Keep an eye on oil prices in the Middle East In the long run.
• 18:25
  Speaker 1: If you look at a stock chart of all the wars, they've always been good for the stock market, but in the long run pretty much everything goes up.
• 18:31
  Speaker 1: Defense contractors, of course, particularly.
• 18:34
  Speaker 1: So I'd say chill, I honestly mean it, relax before the election.
• 18:40
  Speaker 1: I wouldn't do all too much.
• 18:42
  Speaker 1: Yes, I'm still buying high quality stocks every week.
• 18:46
  Speaker 1: I very, very rarely ever stop that and obviously every dip is an opportunity and I just do that religiously every Monday.
• 18:53
  Speaker 1: But for my trading I'm doing very little and I appreciate some of my students at the moment are going Felix, why aren't you live trading?
• 18:59
  Speaker 1: I'm like, because I'm not trading, I'm not doing anything.
• 19:01
  Speaker 1: The little that I do, I share with you.
• 19:03
  Speaker 1: So we're going to go back into full throttle, I think in November and that'll be fun.
• 19:08
  Speaker 1: I look forward to it.
• 19:09
  Speaker 1: I don't really like not doing a lot, so I'm using this to build things, refine things, start some apps and build better scripts and better screeners and better research, and I will be sharing all of that with you to help you get onto this financial freedom journey with me, if you wish.
• 19:28
  Speaker 1: I love you for watching, I love you for tuning in.
• 19:30
  Speaker 1: Have a marvelous day, smash the you-know-what and I hope to see you on the next one.
• 19:34
  Speaker 1: All the best.