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Transcript

Felix Prehn - The $20 Trillion BUY Warning! + Stock Market News 06 August 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Welcome to the day after the catastrophe.
• 0:03
  Speaker 1: What's happening today?
• 0:04
  Speaker 1: Are we rallying?
• 0:06
  Speaker 1: Is this going to get worse?
• 0:07
  Speaker 1: How far is this Japanese trade, the carry trade, unwound, and where are our support and resistance lines?
• 0:16
  Speaker 1: What are the bargains we can snap up today and should we?
• 0:20
  Speaker 1: That's sort of what we're going to go through here today.
• 0:23
  Speaker 1: Felix, here you're a former YouTube investment banker and our mission is always to make you the best informed investor and trader out there and also make you calm, collected and happy.
• 0:34
  Speaker 1: Quite a few things we're trying to achieve here today.
• 0:37
  Speaker 1: Let me walk you through a little bit of the setup and then we'll get a bit more specific on what's going on today, and then, of course, I'll take all your questions, provided more than 30 of you hit the like button, which is just an abhorrent indicator of what the market's doing.
• 0:52
  Speaker 1: The more likes, the more the market's going to go up by.
• 0:53
  Speaker 1: It's very simple.
• 0:53
  Speaker 1: It's clear maths.
• 0:54
  Speaker 1: The studies all support the theory.
• 0:56
  Speaker 1: So what's going on here today?
• 0:58
  Speaker 1: Well, we just witnessed the largest two-day decline in the Japanese Nikkei index ever.
• 1:06
  Speaker 1: We also saw the largest move in VIX, which is the fear indicator ever, and the third largest ultimate level ever.
• 1:19
  Speaker 1: So it moved the most ever, but it's the third highest.
• 1:22
  Speaker 1: 2008 was higher, COVID was higher, but we're right here.
• 1:26
  Speaker 1: So this was a pretty significant event.
• 1:28
  Speaker 1: So in many ways I'm actually surprised it didn't turn out worse than it did.
• 1:34
  Speaker 1: So what does it mean?
• 1:35
  Speaker 1: Well, NASDAQ sold off 990 points at the worst point of yesterday.
• 1:41
  Speaker 1: That is again the largest point sell-off for the Nasdaq ever.
• 1:46
  Speaker 1: Lots and lots of superlatives today.
• 1:50
  Speaker 1: Is that the word the Russell, if we could spell Russell, dropped 3% for three consecutive days.
• 1:55
  Speaker 1: That's the small caps, the IWMs, and that's again a first since 1987, which was you know it was a Black Monday or whatever 1987.
• 2:05
  Speaker 1: Since 1987, which was you know it was a Black Monday or whatever 1987.
• 2:10
  Speaker 1: Japan also declined the most ever and the yen surged 12.5%, and it's this drop here of the dollar against the yen that's actually causing this.
• 2:19
  Speaker 1: So if you want one indicator of what's going to happen here for the rest of the week, watch the US dollar yen rate, and you want that to reverse, because the worse it gets, the stronger the yen gets, the more the market unwinds the Japan carry trade, which I'm super happy to explain to you again, and that's what's causing this.
• 2:40
  Speaker 1: So I'll tell you what the big banks are saying about that, how far we're into that sales signal there.
• 2:48
  Speaker 1: So we are the best and fortuitous people out there.
• 2:50
  Speaker 1: I'm also running today, literally in less than an hour, a live trading training and if you're curious to see how we made $24,000 so far this year and that's twenty four thousand dollars on a thirty thousand dollar portfolio, so that's about eighty percent you want to learn the rules, the strategies, and I'll share that with you today, live for free, in about an hour.
• 3:16
  Speaker 1: Just come and join me.
• 3:17
  Speaker 1: Felix friends at org slash webinar link is down below in the description as well, so grab yourself a seat.
• 3:23
  Speaker 1: That's probably offensive, isn't it, to our hispan viewers.
• 3:26
  Speaker 1: I just like the Spanish language.
• 3:28
  Speaker 1: I think it's nice, it's fun, it sounds dramatic.
• 3:31
  Speaker 1: This is our trade set up for July.
• 3:34
  Speaker 1: So far.
• 3:34
  Speaker 1: We did 10k in July, which is not bad, and we even made money on Monday yesterday.
• 3:41
  Speaker 1: Now, let's get a bit more into this.
• 3:44
  Speaker 1: Then, Monday yesterday.
• 3:47
  Speaker 1: Now, let's get a bit more into this.
• 3:48
  Speaker 1: Then Clap my dogs, as please to the like button 127 likes so far.
• 3:50
  Speaker 1: There's still 600 of you on the fence going.
• 3:51
  Speaker 1: Who is this strange chap yabbering on in that weird accent?
• 3:55
  Speaker 1: Well, what have we done?
• 3:58
  Speaker 1: We've lost $6.4 trillion seriously, $6.4 trillion just gone up into smoke.
• 4:06
  Speaker 1: And the good news is that Japan is up more than 9% today.
• 4:14
  Speaker 1: So Japan is sort of rallied up Now.
• 4:16
  Speaker 1: It did tumble 12% the day before and simple maths they will tell you.
• 4:20
  Speaker 1: Therefore, Japan is still down.
• 4:21
  Speaker 1: Ss love you too.
• 4:23
  Speaker 1: Appreciate that.
• 4:24
  Speaker 1: And therefore, what's happening today with our market?
• 4:29
  Speaker 1: Well, if you listen to Goldman Sachs, they're saying that any S&P dip of 5% has typically been profitable in the last 40 years, and I thought are they right on that?
• 4:44
  Speaker 1: Let me find the chart of charts that proves it.
• 4:47
  Speaker 1: So when we've had a 5% pullback in the S&P in the last 39 times, that happened in the month following we were up 3%.
• 5:01
  Speaker 1: In the three months following we were up about 5%.
• 5:05
  Speaker 1: Six months following we were up 7% and a year later we were up about 11% on average.
• 5:12
  Speaker 1: So, generally speaking, dip buying is a fairly good hobby.
• 5:15
  Speaker 1: I did buy the dip this morning sneakily through a Swiss-listed NASDAQ ETF which trades earlier in the day Sneaky, I know.
• 5:26
  Speaker 1: Plus, it gets around US withholding tax and US dividend tax, which I'm not prepared to pay as a non-US tax person.
• 5:34
  Speaker 1: It's a scandal, right?
• 5:35
  Speaker 1: If you were a non-US taxpayer.
• 5:37
  Speaker 1: You live, not in the US, and you buy the QQQ, you're going to get withheld dividend tax on the dividends it pays out, Just like why I'm not a taxpayer.
• 5:48
  Speaker 1: You can get around it by using ETFs that are listed elsewhere.
• 5:52
  Speaker 1: So I'm not saying, therefore, you should buy the dip.
• 5:55
  Speaker 1: But I did this morning.
• 5:57
  Speaker 1: But that's within horizon of 10 or 20 years, I'm not touching that.
• 6:03
  Speaker 1: And if Microsoft is down 15% on the month, then I'd rather buy it 15% lower than 15% higher.
• 6:08
  Speaker 1: That's sort of the theory with that but, but, but.
• 6:11
  Speaker 1: But let me show you pre-market.
• 6:13
  Speaker 1: Okay, Pre-market looks greenish, greenish, right.
• 6:17
  Speaker 1: Nvidia up a little bit, Everything's up a little bit, but only a little bit right.
• 6:20
  Speaker 1: Notice, no, plus 5% anywhere, like, just sort of like, can't be as bad as yesterday.
• 6:30
  Speaker 1: But we're still feeling a little bit itchy about it.
• 6:31
  Speaker 1: And this is actually why JP Morgan says that the carry trade unwinding is only about half complete.
• 6:37
  Speaker 1: And this is the co-head of FX, which is foreign exchange traders.
• 6:44
  Speaker 1: And I went to school with a chap who became a foreign exchange trader at a large bank I shan't name which Very, very smart guy, the smartest guy I know.
• 6:52
  Speaker 1: He only got 100% on every exam and he became an FX trader, because you need to be quite smart to become an FX trader, and so it's definitely something to bear in mind.
• 7:03
  Speaker 1: Quite often you get the dip after the crash and then you get more dips.
• 7:08
  Speaker 1: Why do you get more dips?
• 7:09
  Speaker 1: Because the sort of foundation of trust in the market has been shaken, not stirred.
• 7:17
  Speaker 1: So what we often see is we get a little bit of a recovery and then something bad happens and it gets worse.
• 7:25
  Speaker 1: So our fundamental, undying, unswerving religious faith in AI has been a little bit shaken up because earnings went amazing.
• 7:35
  Speaker 1: We had Buffett sell Apple and Bank of America.
• 7:38
  Speaker 1: That makes us feel a little bit queasy inside the US economy.
• 7:42
  Speaker 1: We're not quite sure which way it's heading.
• 7:44
  Speaker 1: You know, we're not quite sure who you're going to elect, and all these kind of uncertainties add together to just a feeling of I'm not sure we're going to make another all-time high anywhere.
• 7:54
  Speaker 1: Soon.
• 7:54
  Speaker 1: We might get a little bit of a recovery, but just bear that in mind, OK.
• 7:57
  Speaker 1: So don't think today everything is over.
• 7:59
  Speaker 1: Just think, be a little bit cautious and conservative, right?
• 8:06
  Speaker 1: So why did I buy stocks today?
• 8:07
  Speaker 1: Because I buy stocks every Monday and I delayed it from Monday to Tuesday.
• 8:09
  Speaker 1: That was really the only thing, and it's very, very rare I stop that.
• 8:12
  Speaker 1: So for me also, if one week's bias goes down a bit, it doesn't really matter, I'll do the same thing again next week and the next week and the next week, and I'll do it, for you know, till the end of eternity, hopefully.
• 8:24
  Speaker 1: So, and Captain Tockey there, if you're just doing your weeklies then yeah, I think you know, if your time horizon is long enough, it doesn't bloody matter usually.
• 8:32
  Speaker 1: Now, where is our support then?
• 8:34
  Speaker 1: So we've got on the S&P at 5,100, we've got some support, and that's slightly below.
• 8:43
  Speaker 1: It's basically this low here.
• 8:44
  Speaker 1: It's also slightly below the 200-day moving average line there, which is that blue line there.
• 8:50
  Speaker 1: But we are noticed below the 50-day moving average line and, from a trading point of view, that's typically where you turn bearish and a lot of people trade right.
• 9:01
  Speaker 1: They don't care whether the market is upside down, they want to make money in every direction, which is me and I'll show you that later on today if you join me live at felixrentsorg slash webinar and that's one of the reasons we make money, because we trade both directions right.
• 9:10
  Speaker 1: We don't just trade it when it goes up, we trade it when it goes down, and the NASDAQ has got support in that 17,700 to 18,000 range, which is exactly where we kind of are right now.
• 9:21
  Speaker 1: Caution, there, we go much lower.
• 9:27
  Speaker 1: It doesn't look very good Now.
• 9:32
  Speaker 1: Morgan Stanley, which is what MS stands for, investment banks like to think they're really smart, so they like to abbreviate things to keep out the riffraff.
• 9:41
  Speaker 1: So MS Morgan Stanley sales desk says much of the selling thus far.
• 9:46
  Speaker 1: Thus he's very smart, well-educated and all of that driven by systematic strategies and HFs, hedge funds.
• 9:54
  Speaker 1: We're closer to the end of the selling than to the beginning, given the positioning for those strategies has become much lighter.
• 10:06
  Speaker 1: Long-own lease, which is LOs, which is funds that only buy they're never short have held steady through their net exposures to equities at the high end of the range.
• 10:18
  Speaker 1: So Morgan Stanley is basically saying I think the worst is behind us.
• 10:21
  Speaker 1: There'll be a bit more selling, but not that much more.
• 10:24
  Speaker 1: But a bit of caution here.
• 10:26
  Speaker 1: And there's a lot of data here today, which means only 240 of you hit the like button.
• 10:31
  Speaker 1: I think I do need to dumb this down more, don't I?
• 10:33
  Speaker 1: Apparently to earn more likes.
• 10:35
  Speaker 1: Anyway, I think you can handle the data.
• 10:38
  Speaker 1: I think you can handle the real, raw facts the way, if you were sitting in a morning meeting in a bank, they'd give you the hard facts like this.
• 10:44
  Speaker 1: They wouldn't sort of explain it like your five, they just sort of explained it like your five.
• 10:47
  Speaker 1: They just give you the data.
• 10:48
  Speaker 1: But if you don't understand it, please ask.
• 10:50
  Speaker 1: I gladly explain it.
• 10:51
  Speaker 1: So we're going to see CTAs, which is algo money, right, so just computers.
• 11:03
  Speaker 1: Basically they're going to sell 15 to 20 billion today and, as long as the market stays kind of flattish, another 40 to 50 billion over the next four days.
• 11:08
  Speaker 1: Again, that's Morgan Stanley's quant desk.
• 11:11
  Speaker 1: So there is selling pressure there.
• 11:14
  Speaker 1: But bear in mind we also have buybacks coming back and if you're at a buyback program as a large company, wouldn't you be buying now?
• 11:25
  Speaker 1: I think that would be the smart thing to do.
• 11:28
  Speaker 1: But you never know.
• 11:29
  Speaker 1: But there is more selling than just the algo funds.
• 11:33
  Speaker 1: Nvidia's CEOs are selling quite a lot, as you can see by that chart.
• 11:39
  Speaker 1: Now, in fairness, he has a lot of stock left and he keeps getting awarded stock, so you can kind of see why he's selling.
• 11:45
  Speaker 1: But it's still not brilliant, is it?
• 11:47
  Speaker 1: You've got him selling.
• 11:48
  Speaker 1: You've got Buffett selling, Bill Gates selling, Bezos selling You're a billionaire, apparently you're selling, so that again doesn't really create a lot of confidence in the market, right.