Latest / Felix Nikolas Prehn's Podcast / FED's U-Turn Warning! | Stock Market News Dec. 19, 2023

Transcript

FED's U-Turn Warning! | Stock Market News Dec. 19, 2023 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and I'm at the airport.
• 0:02
  Speaker 1: I apologize for the sound quality here, but it's a couple of important things I want you to know.
• 0:06
  Speaker 1: First, what the Fed is up to.
• 0:08
  Speaker 1: But the short squeeze warning is because major Wall Street banks are warning we are at the end of this cycle here.
• 0:16
  Speaker 1: So what actually happened?
• 0:18
  Speaker 1: Well, we've had a massive, massive squeeze up.
• 0:20
  Speaker 1: Last week, hedge funds actually bought stocks for the first time in weeks and now was to cover their painful, bleeding short positions.
• 0:30
  Speaker 1: And at the same time, of course, it is all caused by the Fed.
• 0:34
  Speaker 1: Now the Fed's cutting, or threatening to cut, interest rates has literally created a two trillion dollar spike in the last three days of stocks and bonds going up, which is absolutely insane.
• 0:53
  Speaker 1: And the Fed came out at the end of last week feeling a little frightened by what they triggered off.
• 1:01
  Speaker 1: They're like oh, this is a little bit more than we had in mind and therefore they got out the big guns.
• 1:07
  Speaker 1: And the big guns where I'm gonna light a little bit here the big guns are Williams, bostick and Goldsby.
• 1:14
  Speaker 1: They unleashed them and they were basically saying hey, maybe we weren't cut rates in March, maybe we haven't even thought about it yet.
• 1:23
  Speaker 1: Trying to get some doubt into your mind, into your head, so that you wouldn't be freaking out or you'd be freaking out a little bit less into the, into this meltup that we've been in, and I don't think it's gonna be successful because I think the momentum is too strong here.
• 1:42
  Speaker 1: But at the same time, I think we have learned don't fight the Fed.
• 1:49
  Speaker 1: So, on the coaching course we've had over the weekend with my mentees and stuff, we were looking at look where is the resistance, where are the, the peaks and or something like IWM, the Russell, we are at the peak.
• 2:03
  Speaker 1: So we got some pretty strong resistance here.
• 2:04
  Speaker 1: Now the S&P I think 4800 is possible, but I would still be very cautious doing it.
• 2:12
  Speaker 1: I would not be chucking all my money at chasing everything.
• 2:15
  Speaker 1: Now, the one thing that I think might be worth chasing and again, this is not financial advice is NIO, because you know, put out our all separate video on this today.
• 2:25
  Speaker 1: The battery test that they've just done is insane.
• 2:29
  Speaker 1: The Abu Dhabi money just coming into them.
• 2:32
  Speaker 1: I think it's great.
• 2:34
  Speaker 1: Yeah, it might be dilutive, but still like it's just.
• 2:36
  Speaker 1: You know, it's the money and therefore, if you look at laggards, I think that's a laggard of laggards.
• 2:46
  Speaker 1: I mean they really haven't gone anywhere all year.
• 2:48
  Speaker 1: Stocks just gone sideways around $7 $7.50.
• 2:52
  Speaker 1: How would I do that?
• 2:53
  Speaker 1: What's the video that I put out a little bit later?
• 2:55
  Speaker 1: I actually walk you through a real, real trade there.
• 2:57
  Speaker 1: But yeah, I just want to look a little bit more generally at the market here, as I can't do a life today, guys, because I'm actually flying.
• 3:06
  Speaker 1: But yeah, the the dash for trash is something that worries me.
• 3:10
  Speaker 1: If you read our newsletter, trading floor whispers and I encourage you to go to Felix friends at org slash sub, felix friends at org slash sub, and we literally talk about the bonk coin.
• 3:23
  Speaker 1: That's a real thing.
• 3:24
  Speaker 1: It's up 18,000% and those kind of things say to me maybe we've ever done it a little bit, maybe people are getting a little bit.
• 3:37
  Speaker 1: You know they're screaming diamond hands and to the moon again, and when that happens doesn't mean the market's gonna tank the next day or the next week.
• 3:44
  Speaker 1: But I just think you can bear it in mind with your positioning that you're probably somewhere near a peak and that peak can last for a while.
• 3:54
  Speaker 1: And there are many reasons for trash and non profitable stocks and crummy tech stocks to rally because rates are gonna come down and for every percentage point.
• 4:04
  Speaker 1: They should go up 10%, not 18,000%, though.
• 4:08
  Speaker 1: So the bonk coin is not one that I'm gonna put all my money into, at least not at this price point.
• 4:14
  Speaker 1: So watch the Treasury yields.
• 4:18
  Speaker 1: The bond market is a little bit more sober.
• 4:20
  Speaker 1: They snort less cocaine and therefore they're a good indicator.
• 4:26
  Speaker 1: When yields go down, the market, the stock market goes up.
• 4:30
  Speaker 1: When yields go up, sooner or later the stock market comes down.
• 4:34
  Speaker 1: So the second thing that's gonna come out is the reverse repo facility of the Fed.
• 4:42
  Speaker 1: We drained about a hundred fifty billion dollars over out of that the second half of last week, which means it's the biggest drawdown since the Silicon Valley banking collapse.
• 4:56
  Speaker 1: So that matters, because they're going to run out of money there and at some point they're going to have to come up with the next bailout, and they will.
• 5:05
  Speaker 1: They will bail out banks again, and that could be an interesting one.
• 5:09
  Speaker 1: So at the moment we probably have a couple of months left, or that could, in theory, run out in January, but I would really really focus back on quality.
• 5:21
  Speaker 1: I would say this is a stock picker's market.
• 5:24
  Speaker 1: I think there are good tech stocks out there that actually have a good business, that have enough cash and have improving margins and have revenue growth.
• 5:32
  Speaker 1: That's really the important thing and are going to do well in 2024.
• 5:37
  Speaker 1: But then there is also all the junk, the plugs and those kind of things, which are just shitty businesses and they're just rallying more because they've been beaten up so much.
• 5:47
  Speaker 1: But that's probably just hedge funds and Reddit degenerates doing that.
• 5:51
  Speaker 1: So you have to pick your corner and if you're just looking for the long-term gains, go for quality, make gross margins, improving gross margins.
• 6:00
  Speaker 1: If it's a growth stock, the revenue growth better be there.
• 6:03
  Speaker 1: Otherwise, what I'll be looking at here and look at the balance sheet.
• 6:06
  Speaker 1: How much cash have they got on there?
• 6:08
  Speaker 1: How much cash are they burning?
• 6:09
  Speaker 1: And I think if you do that consistently, you can actually find some really, really great names.
• 6:13
  Speaker 1: Like, we put out an IWM benchmark about a week ago or so and a lot of you guys have made a lot of money out of that, which is absolutely brilliant.
• 6:21
  Speaker 1: And then the second thing is do the short-term stuff and join me.
• 6:24
  Speaker 1: Tomorrow I will teach our three-step simple trading protocol at phoenixfrensorg.
• 6:31
  Speaker 1: I'll do it for my hotel room, because I really, really enjoy doing this and I think it just shifts your entire framework into what actually bankers do, what hedge funds do, and it's not complicated.
• 6:43
  Speaker 1: It's really very, very, very simple.
• 6:45
  Speaker 1: So I would do that and I'm gonna go and grab myself another snack here, as I'm in the tea house of this glorious lounge.
• 6:56
  Speaker 1: This is what airport lounges should look like.
• 6:59
  Speaker 1: Let me just show you.
• 7:00
  Speaker 1: See that behind me there, so the end of the tunnel is all lounge.
• 7:04
  Speaker 1: I will run you through it.
• 7:06
  Speaker 1: This is why I love the Hong Kong.
• 7:09
  Speaker 1: Back there is some bathrooms.
• 7:11
  Speaker 1: You can have showers on there, and here is the bar when you can actually no, no, this is the coffee room where you can get for desserts and snacks, and here are more showers back there.
• 7:26
  Speaker 1: This is the noodle bar, which is my favorite room, because you can get dim sum and freshly cooked noodles from.
• 7:35
  Speaker 1: Look at that lovely chef back there.
• 7:38
  Speaker 1: It's really, really fresh.
• 7:39
  Speaker 1: It's fantastic.
• 7:40
  Speaker 1: Airfields to the other side, and then you can also have Western feud, of course, which is what you have.
• 7:49
  Speaker 1: This is the bar.
• 7:50
  Speaker 1: Actually, this is where the alcoholics reside, which is why it isn't my spot, but yeah, you can get proper cocktails in here.
• 7:59
  Speaker 1: And then, one step further, let's show you that as well.
• 8:03
  Speaker 1: It's just so nice.
• 8:04
  Speaker 1: Traveling like this is just such a pleasure.
• 8:07
  Speaker 1: Christmas music is on and here you can get Western food, pizza and all that stuff and a lovely Christmas tree here at the end.
• 8:17
  Speaker 1: So, yeah, honestly, guys, if you haven't yet traveled through Asia's first class cities, highly, highly recommended.
• 8:26
  Speaker 1: And you know, I was reading something about a chap the other day, actually yesterday, and he was saying he wanted to go to Myanmar, burma, and he was saying he was going to do it on his 50th birthday and then he basically can't go.
• 8:39
  Speaker 1: Now.
• 8:39
  Speaker 1: I just sort of pretty much a closed off country at the moment and he's really feeling quite irritated with himself that he can't go.
• 8:47
  Speaker 1: And I think the lesson really is don't put stuff off, don't put living off, don't put the glorious things off until some magical date.
• 8:54
  Speaker 1: Like, you want to do it now.
• 8:55
  Speaker 1: Obviously you've got to get into a financial place to be able to do that and therefore you also got to really just jump up and down all over that, because not everything is available Like when you're ready.
• 9:06
  Speaker 1: So you just got to be ready.
• 9:08
  Speaker 1: You got to be ready now and I'm super happy.
• 9:11
  Speaker 1: I traveled through Burma eight years ago, nine years ago or something.
• 9:16
  Speaker 1: Beautiful country, amazing people and, yeah, it's just a shame what they're going through.
• 9:21
  Speaker 1: Don't wait.
• 9:23
  Speaker 1: Whatever you want in life, get it.
• 9:25
  Speaker 1: Get it right now.