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Felix Prehn - STOCK MARKET REACHES ALL TIME HIGH | DO THIS NOW + Stock Market News 01 July 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Hey guys, welcome to this Monday morning live stream slightly new software, hence the slight tardiness here for the kickoff.
• 0:08
  Speaker 1: But today is important.
• 0:10
  Speaker 1: Why Look?
• 0:11
  Speaker 1: We're at all time highs and I think the big question everybody is asking themselves is why is Felix staring into the distance when we are live?
• 0:18
  Speaker 1: No, but seriously, like what do we do with this?
• 0:20
  Speaker 1: And I want to walk you through that.
• 0:21
  Speaker 1: I also want to give you the market setup for the week, some really important numbers that you have to have in your diary and you have to have written down if you're buying or selling or trading or doing anything this week.
• 0:32
  Speaker 1: So let's get started with that.
• 0:35
  Speaker 1: You will also see on the screen here that it is our last live webinar, tuesday, 8 pm Eastern Time, and you can just head over to felixfriendsorg slash webinar or you can scan that little QR code you can see on the screen and I hope that works well.
• 0:50
  Speaker 1: Let me know if it doesn't and you can learn.
• 0:53
  Speaker 1: Here's the premise Imagine if you knew what stock to buy and when, and if you could fully automate profit-taking and risk management.
• 1:05
  Speaker 1: Imagine how good life would be.
• 1:06
  Speaker 1: That's what I'm going to teach you on Tuesday, 8 pm Eastern time.
• 1:09
  Speaker 1: So come to phoenixfrontsorg slash webinar and learn, and let's hope this works Yay, it does.
• 1:17
  Speaker 1: So we are at the moment trading at what sort of 5,460,.
• 1:24
  Speaker 1: Something like that on the S&P, which is well, well, well above what Wall Street thinks we should be doing, goes to show what they think they thought that we would end the year between 4,200, that's doom and gloom.
• 1:40
  Speaker 1: Jp Morgan and Oppenheimer's up here at 5,200.
• 1:44
  Speaker 1: So we're right now significantly above where the market thinks we should be.
• 1:48
  Speaker 1: Does that mean we have to come down?
• 1:50
  Speaker 1: No, it doesn't necessarily.
• 1:52
  Speaker 1: There are, however, a few things we need to understand.
• 1:55
  Speaker 1: One is small caps.
• 1:58
  Speaker 1: So small stocks are underperforming the big stocks by the biggest margin, the biggest amount since 2001.
• 2:08
  Speaker 1: And 2001 was a bit of a shaky year in the stock market, if you recall.
• 2:13
  Speaker 1: And the Nasdaq is also beating the S&P by the largest amount in 30 years, more than in the dot-com bubble.
• 2:28
  Speaker 1: So you might be thinking, ok, we've got some frothiness here.
• 2:32
  Speaker 1: Maybe this is a little bit too much, right, but?
• 2:35
  Speaker 1: But?
• 2:36
  Speaker 1: But you've got people like this chap here, thomas Tom Lee, not the drummer, he's got a good sense of humor.
• 2:44
  Speaker 1: He just predicted that the S&P would go to 15,000.
• 2:50
  Speaker 1: Not this year, but by 2030, which would be a 15% per year compounding, which would make this one of the greatest decades of investing ever.
• 3:03
  Speaker 1: Right, which is pretty good Almost as good as hitting the like button.
• 3:08
  Speaker 1: You know how good you feel when you hit the like button.
• 3:10
  Speaker 1: And this is basically his premise and I just want to show that to you because a lot of people will not explain this and I think it's important.
• 3:16
  Speaker 1: He's basically saying the number of adults in prime leverage age, so basically where you load yourself up with debt 30 to 48.
• 3:30
  Speaker 1: Whenever that number goes up, so when there's more of you Americans who are ready to load yourself up with debt, the market tends to move up.
• 3:40
  Speaker 1: And you can see that we had.
• 3:43
  Speaker 1: We went up here in the amount of adults, and then we did it here and then we sort of went up again here.
• 3:51
  Speaker 1: The boomers market rallied and apparently where we are right now is there.
• 3:59
  Speaker 1: That's now.
• 4:00
  Speaker 1: So he's saying the same thing is happening and therefore the market is going to continue to rally for some time.
• 4:07
  Speaker 1: That's basically the premise.
• 4:10
  Speaker 1: So possible, I think.
• 4:13
  Speaker 1: But there is some good news, and there is some good news and there is some very, very good news when you hit all time highs, all-time highs at the midpoint of the year.
• 4:22
  Speaker 1: What does the end of the year look like?
• 4:25
  Speaker 1: Well, in 80% of years this goes back to the 1950s.
• 4:32
  Speaker 1: In 80% of years you have had a positive return in the next six months and in 100% of years you ended in the green.
• 4:43
  Speaker 1: And in 100% of years you ended in the green overall on the year.
• 4:47
  Speaker 1: I'm just going to pour some hot water into my protein shake here, which might look a little disgusting, but I think it'll be good.
• 4:59
  Speaker 1: It's pretty good.
• 5:01
  Speaker 1: So it's going to be a good year.
• 5:04
  Speaker 1: That seems basically guaranteed, even if not a lot happens here.
• 5:08
  Speaker 1: But it seems very likely that we'll continue to go up for the rest of the year and this is the reason.
• 5:17
  Speaker 1: The likelihood of rate cuts coming down this year as priced in by the market.
• 5:24
  Speaker 1: This data is from CME, which are sort of funky futures traders type people.
• 5:28
  Speaker 1: This data is from CME, which are sort of funky futures traders type people.
• 5:29
  Speaker 1: That likelihood is now literally 94%.
• 5:34
  Speaker 1: So everybody and their dog, except for a tiny percentage 6% expect a rate cut this year.
• 5:43
  Speaker 1: A rate cut this year will be good, especially for certain parts of the market, and I think it's important that you understand which part of the market.
• 5:55
  Speaker 1: Travis says that you enjoy the 50s Travis, I should beat you over the head if I could grab hold of you.
• 6:03
  Speaker 1: I was born like 30 years later.
• 6:05
  Speaker 1: Apparently, I don't look it or act it.
• 6:09
  Speaker 1: But you know what?
• 6:10
  Speaker 1: Even in the off chance, the freakish off chance, that the Fed does not cut interest rates this year, well, guess what?
• 6:18
  Speaker 1: The Canadians will cut.
• 6:20
  Speaker 1: The Europeans will cut, the Brits will cut.
• 6:23
  Speaker 1: The Scandinavians will cut.
• 6:26
  Speaker 1: India will cut.
• 6:27
  Speaker 1: South Africa will cut.
• 6:28
  Speaker 1: Australia will cut.
• 6:29
  Speaker 1: The Scandinavians will cut.
• 6:29
  Speaker 1: India will cut, south Africa will cut.
• 6:30
  Speaker 1: Australia will cut.
• 6:31
  Speaker 1: What is that?
• 6:32
  Speaker 1: Malaysia will cut, china will cut, south Korea will cut.
• 6:37
  Speaker 1: Pretty much everybody, except for Japan, is going to cut interest rates this year.
• 6:42
  Speaker 1: Mexico will cut and therefore the US will have to follow suit.
• 6:47
  Speaker 1: They will.
• 6:47
  Speaker 1: But even if they don't, what does it mean when the whole world cuts interest rates?
• 6:52
  Speaker 1: Lots more money, lots more money gushing about.
• 6:56
  Speaker 1: Basically, because it isn't stuck in government bonds or fixed income instruments.
• 7:01
  Speaker 1: It's now seeking a return and the stock market becomes more attractive.
• 7:05
  Speaker 1: It's as simple as that.
• 7:07
  Speaker 1: Already, mike, you're quite right.
• 7:10
  Speaker 1: Canada already did cut.
• 7:11
  Speaker 1: They will cut again.
• 7:12
  Speaker 1: They have no choice.
• 7:14
  Speaker 1: So this is the expectation, according to Bloomberg that by the end of 2024, global interest rates will have come down by about 1.5 percentage points, and that means more money gushing into stock markets.
• 7:36
  Speaker 1: It's very, very simple.
• 7:37
  Speaker 1: It's just follow the liquidity, follow where the money is and you basically know what to do.
• 7:43
  Speaker 1: But for those of you who are trading this week and I think there are quite a few of you out there this is the chart of all charts.
• 7:53
  Speaker 1: And what the heck is this?
• 7:55
  Speaker 1: It's called Gamma.
• 7:56
  Speaker 1: Gamma is a funny concept that comes out of the options world.
• 8:01
  Speaker 1: But in a nutshell, to make it easy, right now the S&P is here, that is now.
• 8:12
  Speaker 1: If the S&P goes up by 1%, then we would get to 5,500 roughly.
• 8:20
  Speaker 1: There would be a massive amount of stock selling happening, and you might think that's a bad thing.
• 8:29
  Speaker 1: It's not a bad thing.
• 8:30
  Speaker 1: Up to 15 billion, that's a lot.
• 8:35
  Speaker 1: But what happens if the market drops a percent?
• 8:38
  Speaker 1: So they would sell.
• 8:40
  Speaker 1: Right, they would sell.
• 8:42
  Speaker 1: These are the market makers.
• 8:43
  Speaker 1: What if we drop a percent down?
• 8:46
  Speaker 1: Well, they would buy a little bit less, but still they will buy something like 5 billion.
• 8:53
  Speaker 1: So what it means is that we are in this stable zone where the market isn't going to move a lot.
• 8:58
  Speaker 1: That's quite nice.
• 8:59
  Speaker 1: We can make very nice money with that.
• 9:01
  Speaker 1: It's not going to go up a lot, it's not going to go down a lot, it's just going to sort of go sideways.
• 9:04
  Speaker 1: It's only if we went down like 4% or something like that, really, really collapsed.
• 9:10
  Speaker 1: That's when the market would go oh my God, panic.
• 9:14
  Speaker 1: You know jump.
• 9:15
  Speaker 1: But that seems fairly unlikely given that not a lot's happening.
• 9:20
  Speaker 1: So spinning the questions here.
• 9:29
  Speaker 1: So from a market setup point of view, I would be cautiously optimistic this week.
• 9:34
  Speaker 1: I just wouldn't really expect us to go above $5,500.
• 9:37
  Speaker 1: We can do some nice trades with that.
• 9:39
  Speaker 1: We can make some nice money.
• 9:40
  Speaker 1: But we also know we've got a little bit of time here going into the summer.
• 9:43
  Speaker 1: We can be calm and relaxed and we can pile up some good stocks into the summer.
• 9:49
  Speaker 1: We can be calm and relaxed and we can pile up some good stocks.
• 9:51
  Speaker 1: Now, from a seasonality point of view, of course you want to be buying Chewy because did you see this?
• 9:54
  Speaker 1: This is Keith Gill.
• 9:57
  Speaker 1: He filed that he now owns 9 million shares of Chewy and he added this please check the appropriate box to designate whether you're a cat.
• 10:07
  Speaker 1: He added this please check the appropriate box to designate whether you're a cat.
• 10:10
  Speaker 1: The man has a sense of humor and the SEC filed it, so you have to give him that.
• 10:14
  Speaker 1: So obviously, chewy is going to go through the moon.
• 10:29
  Speaker 1: But if you're not into that kind of a mad hatter trading, I would look at software.
• 10:33
  Speaker 1: I would look at barely profitable Tech because they're going to benefit the most from interest rate cuts.
• 10:39
  Speaker 1: You could also start to look again at cyclicals If you have a longer horizon cyclicals they didn't teach us bankers how to spell.
• 10:51
  Speaker 1: Everybody hates energy.
• 10:54
  Speaker 1: So there's a bunch of things.
• 10:56
  Speaker 1: This is for, like, the longer term, right, longer term.
• 10:58
  Speaker 1: If you're a little bit more shorter term, I would look at software and, as I say, barely profitable tech.
• 11:04
  Speaker 1: That would be my kind of focus on that and I'll put out some more videos over the next day or so on that.
• 11:09
  Speaker 1: So you guys have chewy shares.
• 11:20
  Speaker 1: Yeah, if you want to sign up for the live webinar, felixrunsorg slash webinar or you can scan that QR code in the top left corner if that works for you.
• 11:28
  Speaker 1: If it doesn't, also let me know FinTech yeah, fintech is generally barely profitable tech.
• 11:33
  Speaker 1: So FinTech definitely would be part of that because they would benefit again from rate cuts significantly.
• 11:41
  Speaker 1: So that's the way I'm looking at that.
• 11:42
  Speaker 1: Now, as I said, put out a few more videos on that.
• 11:46
  Speaker 1: Now let's have a look at stock heat map here, pre-market, and it's looking pretty good, isn't it?
• 11:57
  Speaker 1: Nvid, nvidia, is basically flat for purposes.
• 11:59
  Speaker 1: All the other big green giants are up a little bit.
• 12:03
  Speaker 1: Tesla up one and a half percentage point, which is nice for our Tesla trade, and other than that, not a lot of red to be discovered here, right?
• 12:11
  Speaker 1: So the market I would expect the market to continue to trade largely sideways and it'll be interesting to see what happens when the market opens.
• 12:20
  Speaker 1: But if I look at Friday's largest trades, let's see $900 million here.
• 12:33
  Speaker 1: Someone's selling a $1,000 call option.
• 12:35
  Speaker 1: Okay, that's a weird trade to do.
• 12:39
  Speaker 1: Look at these trades here 900 million Isn't that crazy?
• 12:42
  Speaker 1: 792 million and so on.
• 12:43
  Speaker 1: So, yeah, a lot of these are bearish.
• 12:45
  Speaker 1: And what is that?
• 12:45
  Speaker 1: That's people taking profits.
• 12:46
  Speaker 1: Right, they had call options at 4,000 and they're taking profits because it's now at 5,400 or something crazy.
• 12:53
  Speaker 1: So, a lot of profit taking and that's okay, that's normal, nothing wrong with that.
• 12:58
  Speaker 1: But really what we care about is the setup, obviously into this week, and for that it'll be interesting to see what the market comes up.