Latest / Felix Nikolas Prehn's Podcast / Banks Just told Big Clients to SELL... + Stock Market News 12 February 2024

Transcript

Banks Just told Big Clients to SELL... + Stock Market News 12 February 2024 · Felix Nikolas Prehn's Podcast

• 0:01
  Speaker 1: Good morning to you.
• 0:01
  Speaker 1: We are live.
• 0:02
  Speaker 1: Goldman Sachs have today warned their clients not quite of the impending doom, but to get out of the trade that everybody is in.
• 0:14
  Speaker 1: Get out of the positions that everybody is in and I'm in those positions, you're probably in those positions, so I think it's important that we walk through it.
• 0:21
  Speaker 1: It's not a freak out video.
• 0:23
  Speaker 1: It's not a doom and gloom video.
• 0:27
  Speaker 1: Let's go through the data.
• 0:28
  Speaker 1: I'll show you the charts.
• 0:29
  Speaker 1: I'll explain it to the best of my old banker knowledge.
• 0:34
  Speaker 1: Our minds are like five year olds, so maybe I can manage that and then you can come to your own conclusion.
• 0:39
  Speaker 1: You can ask me questions in the live chat and everywhere else.
• 0:42
  Speaker 1: What happened actually to the live chat?
• 0:45
  Speaker 1: The live chat got eaten.
• 0:47
  Speaker 1: That's very, very bizarre.
• 0:49
  Speaker 1: Can't see the live chat for love or money?
• 0:51
  Speaker 1: All right, we'll have to open the video or something.
• 0:54
  Speaker 1: Focus on your live stream.
• 0:56
  Speaker 1: Seriously, the chat's gone.
• 0:58
  Speaker 1: All messages.
• 1:01
  Speaker 1: Oh, here it is, here, it is All right, it's back.
• 1:03
  Speaker 1: Good evening everybody.
• 1:05
  Speaker 1: Brilliant, all right, yeah.
• 1:07
  Speaker 1: So let me share my screen with you, walk you through a few of the data points that Goldman have given us and you can come to your glorious conclusion.
• 1:18
  Speaker 1: This is Goldman Sachs's momentum trade success over years.
• 1:23
  Speaker 1: Every color is a year and we're going to run you through all of them, except to say that the black one at the top is 2024, and it's been the best momentum trade ever.
• 1:35
  Speaker 1: Now, what is a momentum trade?
• 1:38
  Speaker 1: Basically, you go with the flow, and that's very much what I do, also as a trader.
• 1:43
  Speaker 1: I look at the chart and I go where is everyone heading, let's follow, and that works very well for like a week or two.
• 1:50
  Speaker 1: Beyond that it's kind of like you don't really know I might lead you down a cliff.
• 1:55
  Speaker 1: So for the longer term, very, very bad idea.
• 1:58
  Speaker 1: In the long term, you actually want to be a contrarian, but it's the best year ever.
• 2:02
  Speaker 1: And what does that mean?
• 2:02
  Speaker 1: It means the crowd's all heading in one direction and it's a dangerous thing to be in.
• 2:07
  Speaker 1: Well, a little bit.
• 2:08
  Speaker 1: If you look at the S&P at the top here and then the bottom, you've got it's probably the most commonly used indicator out there.
• 2:18
  Speaker 1: It's something called RSI and it's a resistance indicator, and what happens is that when you go over this wide line here, you break above it.
• 2:33
  Speaker 1: Then you are meant to be overboard and therefore it shouldn't last.
• 2:39
  Speaker 1: And if you look back in sort of history.
• 2:42
  Speaker 1: Well, 2018 was that.
• 2:44
  Speaker 1: We kind of went a bit too far there, didn't we?
• 2:47
  Speaker 1: 2020, we went a little bit too far and right now, well, we're not quite at those sort of insane levels yet.
• 2:55
  Speaker 1: Let me just draw a little line where we are at.
• 2:58
  Speaker 1: Right now, we're at 75 points on a small screen, and in 2020, just before everything collapsed we were at about 78 points.
• 3:11
  Speaker 1: In 2018, we really really went for it.
• 3:16
  Speaker 1: We went to like 92 points, so 70, anywhere above that, it's overboard.
• 3:21
  Speaker 1: Right now we're at 75, and therefore it's not meant to last.
• 3:25
  Speaker 1: It can last a while, but it's not meant to last all that long.
• 3:28
  Speaker 1: So that's one thing that Goldman's is pointing out, and they're right on that.
• 3:32
  Speaker 1: I can totally see it.
• 3:34
  Speaker 1: And then they're saying everyone's in the same trade, and they're right.
• 3:40
  Speaker 1: They're right that basically, in the US, the entire trading crowd whether you're a hedge fund, a momentum trader, somebody who buys big tech, like 67% of all traders are basically in the same trade Buy big mega caps, buy your Microsofts and your NVIDIAs and your Apple, and so on.
• 4:02
  Speaker 1: Everyone's doing the same thing.
• 4:04
  Speaker 1: So what could horribly possibly go wrong?
• 4:05
  Speaker 1: Well, a, there are less people left to buy the trade late.
• 4:10
  Speaker 1: B, there are very few people who fit the like button, which makes me very sad.
• 4:15
  Speaker 1: And C, it means that People might come out of it right.
• 4:22
  Speaker 1: People might start taking profits a little bit.
• 4:24
  Speaker 1: There might be a percentage of those people who might do that.
• 4:27
  Speaker 1: But is that everything they're giving us?
• 4:29
  Speaker 1: No, then you might be thinking but Felix, everything is looking so good.
• 4:35
  Speaker 1: Why the doom and gloom?
• 4:36
  Speaker 1: It's all wonderful, come on, relax, relax.
• 4:39
  Speaker 1: I agree with you on that somewhat.
• 4:42
  Speaker 1: If I look at the SMP and you give you another data point here, this is a screenshot from optionswatchio, which is a website that we built to give you access to Wall Street level data without having to pay tens of thousands of dollars for it.
• 4:59
  Speaker 1: Right now, what I can see is there is a little green line here at 5050.
• 5:10
  Speaker 1: The resistance has moved up from 5000, which is a positive, and it's actually starting to move towards 5100.
• 5:22
  Speaker 1: I think it probably will today.
• 5:23
  Speaker 1: What does that mean?
• 5:25
  Speaker 1: Well, we could go up 75 more points and we can enjoy it.
• 5:28
  Speaker 1: I think it's fairly likely to happen.
• 5:30
  Speaker 1: So I'm actually for today, for this week I'm kind of a bull.
• 5:35
  Speaker 1: So why the scary headline?
• 5:39
  Speaker 1: Because it's very important to realize that somebody like Goldman Sachs will try to be slightly ahead of the market.
• 5:48
  Speaker 1: No one with any experience tries to exit at the top and buy back in at the bottom, because you know that isn't actually possible.
• 5:59
  Speaker 1: No one ever gets that right.
• 6:00
  Speaker 1: So you pick a point where you feel like, okay, the reward to risk ratio is now no longer in my favor, I'm going to exit and sit on my hands because I've made a boatload of money Goldman Sachs undoubtedly has and when you are up as much as we are right now, where we have an RSI of 79 on the momentum trades, which just means we just insanely overboard, it is fairly usual to get a 30% drawdown.
• 6:37
  Speaker 1: And that's basically what Goldman's are saying to their clients.
• 6:39
  Speaker 1: Guys, just be aware, if you look at 2020, there was a 43% drawdown.
• 6:44
  Speaker 1: Actually, there was a second one that was 30%.
• 6:46
  Speaker 1: There was an even bigger one that was 41%.
• 6:49
  Speaker 1: In 2022, we had a 25% drawdown.
• 6:52
  Speaker 1: In 2023, we had a 30% drawdown.
• 6:55
  Speaker 1: These are common occurrences.
• 6:57
  Speaker 1: You are gonna get that kind of drawdown probably every year if you're in a market like this.
• 7:03
  Speaker 1: So what they're saying is why don't you take some of your profits off the stove and maybe do something a little bit less risky with it and then wait, see if this correction comes and do something else, and I'm super happy to take your questions on how we could possibly do that.
• 7:20
  Speaker 1: There might be a smarter way of playing that and I know I'm giving you a lot of data and I maybe sometimes overdo it a little bit.
• 7:29
  Speaker 1: But what have we got?
• 7:30
  Speaker 1: We've got in blue, essentially stock prices, okay.
• 7:33
  Speaker 1: In red, we've got a line that gives us the March or the rate cut expectations essentially fed rate cut expectations and they have come down and the market has continued to go to the moon not typical.
• 7:53
  Speaker 1: Typically, these two lines move in tandem.
• 7:56
  Speaker 1: The market is very, very heavily influenced by the Fed and at the moment we're kind of going fed, we don't care, we don't care and I checked for you just before.
• 8:07
  Speaker 1: Our institutions actually listening to this.
• 8:09
  Speaker 1: Are they actually selling off?
• 8:10
  Speaker 1: And the way to look that up is to look at.
• 8:13
  Speaker 1: Well, one of the ways to look that up is to look at the dark pool indicator, and the dark pool indicator right now is at 47.6%.
• 8:26
  Speaker 1: That means they're selling.
• 8:27
  Speaker 1: So anywhere below 50, which will be somewhere around here anywhere below that, there are net sellers, and anywhere above.
• 8:35
  Speaker 1: It means that there are buyers Now does change day to day, so it's not like, oh my God, I can't believe how much they're selling.
• 8:44
  Speaker 1: It's just a little bit.
• 8:45
  Speaker 1: But there are definitely some institutions who are starting to sell Could change tomorrow.
• 8:49
  Speaker 1: So it's not the be all, end all.
• 8:51
  Speaker 1: Look at the zigzaggedy line.
• 8:52
  Speaker 1: It goes up and down like mad.
• 8:54
  Speaker 1: But right now they're basically saying all right, let's chill out a little bit, see what happens.
• 8:59
  Speaker 1: And if you look at fundamentally what's going on, the expectations of interest rate cuts in December were basically seven.
• 9:10
  Speaker 1: Right, we were thinking seven rate cuts is what we're gonna get this year.
• 9:14
  Speaker 1: And right now what we're pricing in and expecting is about 4.5 rate cuts and that should have a somewhat depressing impact on the stock market.
• 9:25
  Speaker 1: But it isn't, which is weird.
• 9:27
  Speaker 1: So it may in the future and therefore you may or may not wanna be a little bit more cautious.
• 9:32
  Speaker 1: That's essentially what Goldman Sachs is saying.
• 9:35
  Speaker 1: And you know we can make money.
• 9:36
  Speaker 1: I just show you like our little portfolio that we run.
• 9:39
  Speaker 1: I run for the coaching community.
• 9:41
  Speaker 1: Live, you can see.
• 9:42
  Speaker 1: You know we've done nicely this year.
• 9:44
  Speaker 1: We're up like 12% so far.
• 9:46
  Speaker 1: That only is only realized profit.
• 9:47
  Speaker 1: So we cleared out the accounts today, we'd probably be 20% up, which we won't do, but I will be live trading actually for you guys in the coaching community straight after this, in literally 20 minutes.
• 9:59
  Speaker 1: I'm sure you've seen the notification already here.
• 10:02
  Speaker 1: It is live trading with Felix.
• 10:04
  Speaker 1: We run coaching calls every single day pretty much and we're actually live right now and I tend to also live trade.
• 10:11
  Speaker 1: So you can see that if you wanna know how to get to that, well, ask how.
• 10:15
  Speaker 1: Or just come join me on Tuesday for the live trading training.
• 10:20
  Speaker 1: That's probably the easier way in because you get to know my structure, my system, how simple it is, how we trade in any environment with a rules-based approach, and just go to FelixFriendsorg slash webinar, grab yourself a seat and I'll walk you through it for about an hour hour and a half.
• 10:36
  Speaker 1: You can ask me a million questions and we go a lot more in depth into the trading side than I can on YouTube, just because I don't wanna bore you guys to death, right?
• 10:44
  Speaker 1: That's kind of the intention well, not the intention here.
• 10:47
  Speaker 1: So appreciate it.
• 10:48
  Speaker 1: Smash the.
• 10:48
  Speaker 1: You know what 145 of you have, which means 145 of you are allowed to ask me questions.
• 10:53
  Speaker 1: Anybody can.
• 10:54
  Speaker 1: I don't know who clicks it, but I'd appreciate it.
• 10:57
  Speaker 1: Let me have a look at your question, sir, and I will be glad to answer those.
• 11:09
  Speaker 1: Danza says am I gonna shave my head for the 100K subspecial?
• 11:12
  Speaker 1: I might get a haircut.
• 11:15
  Speaker 1: How about that?
• 11:15
  Speaker 1: Now, I don't think you're gonna get me to shave my hair head.
• 11:18
  Speaker 1: I don't think that's sort of green hair or red hair or something you have to go to certain other channels for that.
• 11:25
  Speaker 1: Not really the flavor of the month around here.
• 11:28
  Speaker 1: When big banks tell you should be selling, you should actually be buying.
• 11:38
  Speaker 1: That is a contrarian approach to take.
• 11:41
  Speaker 1: I'm not saying you're right or wrong, but it is an interesting approach.
• 11:45
  Speaker 1: A pre-market we're actually looking all right.
• 11:46
  Speaker 1: We're pretty flat-ish.
• 11:47
  Speaker 1: Nvidia keeps going up.
• 11:49
  Speaker 1: Everything else is sort of dancing sideways.
• 11:52
  Speaker 1: Mostly no major moves pre-market other than Nvidia up 0.7%, microsoft, google, apple basically flat.
• 12:01
  Speaker 1: Amazon flat, tesla down 0.7%.
• 12:04
  Speaker 1: I like it.
• 12:05
  Speaker 1: The more it comes down, actually, the more I like it.
• 12:08
  Speaker 1: I must say Do you ever trade Pepsi?
• 12:10
  Speaker 1: It's not really liquid enough, which is why I don't really trade it.
• 12:14
  Speaker 1: So probably not.
• 12:16
  Speaker 1: No, I own Pepsi stock but I don't trade it.
• 12:18
  Speaker 1: Typically, if you write your comments in caps, they are going to get deleted by the bot.
• 12:27
  Speaker 1: So that's exactly what happens.
• 12:32
  Speaker 1: So don't write in capital's chaps.
• 12:36
  Speaker 1: Ken says I have Palantir holds.
• 12:38
  Speaker 1: Let me have a look at Palantir Pre-market down 2.1%.
• 12:43
  Speaker 1: I'm on a month's chart.
• 12:44
  Speaker 1: So we really went for it here, didn't we?
• 12:47
  Speaker 1: With the annotations, I mean it's holding pretty nicely right so far.
• 12:57
  Speaker 1: There's this insane rally up.
• 12:58
  Speaker 1: If you look at history, it tends to do that and it tends to come down, not always, but most of the time.
• 13:07
  Speaker 1: It's a zig-zaggedy stock and we are very, very, very overboard.
• 13:11
  Speaker 1: So I would be cautious buying at these levels.
• 13:14
  Speaker 1: Honestly.
• 13:14
  Speaker 1: I just would just chill a bit, see what happens.
• 13:28
  Speaker 1: Jonathan retracted his message, Was it?
• 13:31
  Speaker 1: You said something juicy I treasure is the way to go.
• 13:34
  Speaker 1: Well, the bond market is pricing in now or is accepting that the Feds won.
• 13:41
  Speaker 1: So yields are coming down a little bit here Again, just a little, which is which is positive.
• 13:51
  Speaker 1: So if I look at the 10 year yield as well, basically the lower yields are the better for the market.
• 13:58
  Speaker 1: We have had this sort of massive fall in decline and then we've bobbed sideways, which hasn't really been that great for the stock market.
• 14:06
  Speaker 1: So if yields come down a bit more, that would actually be good for the market.
• 14:10
  Speaker 1: But we'll see Bob's asking how do they measure the momentum chart?
• 14:18
  Speaker 1: That's a very good question, bob.
• 14:19
  Speaker 1: You're going to have to ask the nice folks at Goldman Sachs that, because they have their own indicator and they don't tell us what it is.
• 14:34
  Speaker 1: Otherwise everybody would have it and they want people to pay for it and their advice and their services.
• 14:38
  Speaker 1: So I can't really tell you on exactly what basis they do that.
• 14:45
  Speaker 1: But there are a bunch of them and momentum is going to be a combination of a bunch of indicators that are momentum based whether it's RSI or MACD or there's a variation of those, and you lump them together in some sort of way with a weighting and then you basically get your momentum indicator.
• 15:03
  Speaker 1: Danza wants me to grow a moustache.
• 15:12
  Speaker 1: Any live trading, mauricio.
• 15:14
  Speaker 1: At the moment what we're doing is for the coaching community.
• 15:19
  Speaker 1: Appreciate the question Is it time to sell the S&P, says Catarina.
• 15:24
  Speaker 1: Well, I think it really depends on your outlook and obviously it's not financial advice.
• 15:29
  Speaker 1: But if you look at what's your outlook, it's just like 10 years, 20 years, why sell?
• 15:34
  Speaker 1: Why not just keep buying every week or every month?
• 15:37
  Speaker 1: If your outlook is a little bit shorter, then it starts to make a bit more sense.
• 15:43
  Speaker 1: We trade the S&P a lot but I don't actually trade the stock.
• 15:48
  Speaker 1: I do it with options.
• 15:51
  Speaker 1: But you can look at historically when is a good time to get in, when is a good time to get out.
• 15:57
  Speaker 1: One way what we're looking at just now is the RSI because Goldman Sachs brought it up.
• 16:02
  Speaker 1: If I make that a little bit bigger, get rid of all those squiggly lines up there and I just say look, whenever the RSI is overboard like here and here and there and there actually maybe, why don't we use a red line for that?
• 16:16
  Speaker 1: So here, when it's overboard, what happens to the stock?
• 16:20
  Speaker 1: That was here, this was there.
• 16:23
  Speaker 1: This was here.
• 16:25
  Speaker 1: This was here for the alarm.
• 16:28
  Speaker 1: This was pretty good call.
• 16:31
  Speaker 1: This here was too early.
• 16:34
  Speaker 1: Now we're obviously back up here.
• 16:38
  Speaker 1: Would there have been terrible places to sell?
• 16:40
  Speaker 1: Probably not.
• 16:41
  Speaker 1: Then, on the buy front, if you were buying every major dip in the RSI, where would you be buying?
• 16:48
  Speaker 1: You would have bought back in here.
• 16:52
  Speaker 1: You would have sold up there.
• 16:54
  Speaker 1: Bought back in here.
• 16:54
  Speaker 1: You would have bought down here.
• 16:56
  Speaker 1: Sold again up there, bought again down here.
• 16:58
  Speaker 1: You get the idea right.
• 17:00
  Speaker 1: You would have sold up there.
• 17:03
  Speaker 1: You would have bought some here, you would have bought some down there.
• 17:05
  Speaker 1: You would have enjoyed it gotten out already up there and now you'd be sitting on your hands with some nice profit.
• 17:11
  Speaker 1: So I'm not saying that's the best strategy in the world.
• 17:13
  Speaker 1: I think you could probably do better than that.
• 17:15
  Speaker 1: If you want to know what I mean by that, literally come and join me live Tuesday and I'll break it down for you.
• 17:20
  Speaker 1: I'll literally trade the S&P, but it depends on your horizon.
• 17:25
  Speaker 1: It's like what kind of investor are you?
• 17:28
  Speaker 1: Does it make sense for you?