Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - DON’T SAY YOU DIDN’T KNOW + Stock Market News 13 January 2024

Transcript

Felix Prehn - DON’T SAY YOU DIDN’T KNOW + Stock Market News 13 January 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to this pre-market misery.
• 0:04
  Speaker 1: It is one of those days that you probably wish we didn't have and, as you can tell, I'm traveling, hence the slightly unusual backdrop and shabby attire.
• 0:16
  Speaker 1: So I want to walk you through what's happening here, why it's happening happening here, why it's happening, whether you should be freaking out or not, and give you some ideas of how we can make some money out of this.
• 0:31
  Speaker 1: Should we do that?
• 0:32
  Speaker 1: Should we do that together?
• 0:33
  Speaker 1: I think we should probably do that together.
• 0:34
  Speaker 1: So I've got your.
• 0:36
  Speaker 1: I've got.
• 0:36
  Speaker 1: Actually I travel with the screen.
• 0:38
  Speaker 1: Seriously, I kid you not, there is actually a hang on.
• 0:41
  Speaker 1: There's actually an extra monitor here.
• 0:43
  Speaker 1: So that's how I travel very light Laptop and an extra monitor always has to fit in the suitcase.
• 0:48
  Speaker 1: I asked you what I wish I had, and my options were more confidence and investments, rules on selling and buying or a time machine, and 57% of you wanted a time machine.
• 0:58
  Speaker 1: I like your pragmatism.
• 1:00
  Speaker 1: I like your optimism.
• 1:01
  Speaker 1: I think I can help you with the time machine, but I think I can help you with the confidence and the rules.
• 1:08
  Speaker 1: So let me you might want to avert your eyes here for a moment, just close your eyes very briefly.
• 1:13
  Speaker 1: And then, oh, look at that, and I'm covering some of it up with my enormous head, but it doesn't get much better than what I'm covering up here either.
• 1:26
  Speaker 1: So there I am.
• 1:26
  Speaker 1: I can shrink myself a bit here.
• 1:29
  Speaker 1: So this is the pre-market Not exactly a pretty picture, and what the heck's going on here?
• 1:35
  Speaker 1: Well, there's a bunch of stuff that we need to understand.
• 1:37
  Speaker 1: But Nvidia down 3.6 percent, tesla down 3 percent they are the big losers.
• 1:42
  Speaker 1: Big tech is down about a percentage point, which I actually think is a positive silver lining.
• 1:47
  Speaker 1: But camera lagging.
• 1:55
  Speaker 1: Yes, it's possible that I might be a little bit small still.
• 1:57
  Speaker 1: Can you hear me all right, because that's kind of the main thing, that you can hear me, okay?
• 2:01
  Speaker 1: Would you let me know that in the chat?
• 2:02
  Speaker 1: Put a one in the chat, if you can hear me, ok, and I will walk you through what.
• 2:08
  Speaker 1: So you're probably not surprised that the market is tanking, because I showed you this last week, remember this?
• 2:17
  Speaker 1: Do you remember this?
• 2:17
  Speaker 1: Are you paying attention or are you dozing off again?
• 2:20
  Speaker 1: This is the VIX, this is the volatility.
• 2:22
  Speaker 1: This is the VIX.
• 2:22
  Speaker 1: This is the volatility, this is the fear.
• 2:23
  Speaker 1: And seasonally, in January, we're very little fear, and then fear has a party season, sort of into spring break.
• 2:32
  Speaker 1: Okay, great Thanks for all the ones.
• 2:35
  Speaker 1: I'm glad you can hear me, that's the main thing If I'm a bit fuzzy or moving a little bit slowly.
• 2:39
  Speaker 1: I think we can deal with that.
• 2:40
  Speaker 1: Deal with that.
• 2:50
  Speaker 1: Maybe I can do something also about yeah, I can save a little bit of bandwidth here by, yeah, by doing that.
• 2:54
  Speaker 1: Okay, brilliant, the compromise.
• 2:56
  Speaker 1: So, yes, so this is a thing.
• 2:57
  Speaker 1: It tends to be, that you know sort of the theory Jan to March, go away, you know, don't bother with it, and then enjoy the summer and the last quarter of the year when you tend to make most of your money.
• 3:08
  Speaker 1: That's sort of the old school there.
• 3:11
  Speaker 1: But what is driving this?
• 3:13
  Speaker 1: Now?
• 3:15
  Speaker 1: We had some economic data out last week that alluded that we had a stronger jobs market.
• 3:20
  Speaker 1: If you watched my video on Sunday, I told you why that's bollocks.
• 3:23
  Speaker 1: Because actually the US lost full time jobs.
• 3:25
  Speaker 1: It gained some part time jobs, but that's all they gained, and a lot of those were government jobs, like 40,000.
• 3:33
  Speaker 1: So it's just the usual government nonsense.
• 3:36
  Speaker 1: So actually the economy hasn't gotten stronger and therefore the Fed should cut rates.
• 3:41
  Speaker 1: But you know, the market is a little bit stupid in the short term.
• 3:47
  Speaker 1: So what are we getting out this week?
• 3:48
  Speaker 1: Tomorrow we're getting PPI, which is producer price index, and that's a leading indication for inflation.
• 3:58
  Speaker 1: So if that comes in a little higher than 0.4%, pack your hard hat.
• 4:03
  Speaker 1: Pasadena is nothing.
• 4:05
  Speaker 1: I do feel genuinely very sorry, honestly, for the guys in LA.
• 4:09
  Speaker 1: They're terrible, really terrible story, and I can't believe this is happening.
• 4:14
  Speaker 1: I just can't believe it.
• 4:15
  Speaker 1: So on Wednesday we're getting out consumer price inflation and on Thursday, jobless claims again.
• 4:28
  Speaker 1: This is kind of the key week here, but I think I'm going to have to answer the door.
• 4:32
  Speaker 1: Hang on Room service or something.
• 4:34
  Speaker 1: One second, sorry.
• 4:47
  Speaker 1: Please come back a little later.
• 4:47
  Speaker 1: You could probably hear that right, because I'm wearing a wireless mic.
• 5:01
  Speaker 1: So, yes, turndown service essential.
• 5:04
  Speaker 1: We're here to make some money.
• 5:06
  Speaker 1: So how do we make some money today?
• 5:07
  Speaker 1: Well, first of all, we have to look at is this really terrible?
• 5:11
  Speaker 1: Is this really a collapse?
• 5:12
  Speaker 1: Is this something we should be worried about?
• 5:14
  Speaker 1: Is this a little bit of a you know, sell everything.
• 5:16
  Speaker 1: What's that?
• 5:17
  Speaker 1: Underwear?
• 5:17
  Speaker 1: No, no, no, no.
• 5:18
  Speaker 1: Shorts, shorts, my friend, I am on holiday.
• 5:22
  Speaker 1: I am wearing blue shorts.
• 5:24
  Speaker 1: The rumors on that are definitely not true.
• 5:29
  Speaker 1: Is it this that's coming up this week, because this is quite important.
• 5:33
  Speaker 1: We've got the banks reporting on Wednesday this week JP Morgan Chase, blackrock Some people are blaming the California fires on BlackRock.
• 5:45
  Speaker 1: I would not say such a thing, of course, you know, I also wouldn't deny it.
• 5:49
  Speaker 1: And then on Thursday we've got TSMC.
• 5:52
  Speaker 1: That's a big one for the AI market and that's sort of it.
• 5:55
  Speaker 1: But then next week is the party week, which is proper earnings season, which is Netflix and what else is big out here.
• 6:09
  Speaker 1: Netflix, pretty much, that's kind of the key one.
• 6:12
  Speaker 1: I mean, you know Amex and Texas Instruments and so on.
• 6:14
  Speaker 1: They're all kind of important.
• 6:15
  Speaker 1: And then the week after that the real big boys report.
• 6:18
  Speaker 1: So we look forward to a lot of.
• 6:20
  Speaker 1: This is also by volatility spikes up again.
• 6:23
  Speaker 1: So the market does a bit, gives a bit nuts.
• 6:25
  Speaker 1: Here.
• 6:25
  Speaker 1: Felix is shorting.
• 6:26
  Speaker 1: Today Felix has been visited by three ghosts, something like that.
• 6:31
  Speaker 1: The phone is ringing, the door is knocking, all to help us focus on what's going on here.
• 6:38
  Speaker 1: So how do we focus on this?
• 6:39
  Speaker 1: Okay, so we do this rationally, right?
• 6:41
  Speaker 1: So we go into trade vision.
• 6:43
  Speaker 1: If you haven't got a trade vision already, there's a link down below and then the first thing we do is we click on the S&P.
• 6:50
  Speaker 1: Why?
• 6:51
  Speaker 1: Because that's the boring beast that's the market overall and we look up what's going on here.
• 6:57
  Speaker 1: So how do we look that up?
• 6:58
  Speaker 1: A couple of things we look up.
• 7:00
  Speaker 1: First of all you can double click, by the way, if you wanted to zoom in, turn on the support line here, click on current and what's going on?
• 7:11
  Speaker 1: Well, the support now sits at 5,800.
• 7:13
  Speaker 1: We're slightly above that 27 points, so below 5,800,.
• 7:19
  Speaker 1: Bad things happen to good people.
• 7:21
  Speaker 1: Now, if you turn on the history here of this, you will see that last week here of this, you will see that last week that little green line there, this one, was at 5,900.
• 7:31
  Speaker 1: So we've dropped.
• 7:39
  Speaker 1: So that means the actual, real market positions of the whole freaking market have moved down 100 points.
• 7:41
  Speaker 1: Is that a good thing?
• 7:41
  Speaker 1: Is that a bad thing?
• 7:42
  Speaker 1: What do you think?
• 7:42
  Speaker 1: You think it's a good thing when the market drops and you know, I don't know put a crazy smiley in the chat.
• 7:47
  Speaker 1: If you think it's a bad thing, then put a number two in the chat and I'll understand whether you are following me on this one.
• 7:54
  Speaker 1: So that's where we are right now.
• 7:55
  Speaker 1: 5,800 is the new support.
• 7:57
  Speaker 1: You can also see that we are below the 50-day moving average line, which is up here at 5,950.
• 8:07
  Speaker 1: Scott says bad.
• 8:08
  Speaker 1: Yes, scott, you're, of course, interesting, thanks for sharing your thought there.
• 8:12
  Speaker 1: And most of you seem to think it's bad, unless you know how to short.
• 8:18
  Speaker 1: Yes, well, I like shorting, but I would only do it if I really think this is a proper sell-off, we really turn into a bear market.
• 8:29
  Speaker 1: Then we make the same amount of money we would in a bull market just by shorting.
• 8:32
  Speaker 1: But are we there yet?
• 8:34
  Speaker 1: If you look at this market here, look at where my trend line is here, which is not particularly scientific, but we're slightly below that, but we're still at a pretty good rally level here.
• 8:48
  Speaker 1: I mean, we've gone up a lot.
• 8:49
  Speaker 1: So isn't this just one of these wobbles like what we've had here in September or in October?
• 8:56
  Speaker 1: Even so, to me this isn't so bad.
• 8:58
  Speaker 1: It's just it gets more volatile below that 5,900, which is what I said last week.
• 9:03
  Speaker 1: The next thing I would look at do the same thing for the Qs, the QQQs, the Nasdaq, and let me just check that everything here is functioning as it should.
• 9:14
  Speaker 1: Yes, absolutely, except for the likes.
• 9:17
  Speaker 1: I think people are feeling a bit gloomy this morning, which is understandable.
• 9:21
  Speaker 1: So let me turn off indicators and so on here.
• 9:24
  Speaker 1: So what do we see on the QQQ?
• 9:28
  Speaker 1: Let's again look at the history.
• 9:29
  Speaker 1: Where was the support line?
• 9:31
  Speaker 1: Last week it was at 510.
• 9:34
  Speaker 1: And that's real market positions.
• 9:37
  Speaker 1: That's where the market makers are meant to be buying.
• 9:40
  Speaker 1: Well, what have they been doing?
• 9:41
  Speaker 1: Flunking they have been, because we've moved down to 500.
• 9:45
  Speaker 1: So again, it's a real shift down in the market.
• 9:47
  Speaker 1: We're trading one point above the support Not exactly brilliant and it looks like we might even be gapping down here this morning.
• 9:56
  Speaker 1: So this is definitely not a nice way to start the day.
• 10:00
  Speaker 1: So who's to blame?
• 10:01
  Speaker 1: I blame the Taiwanese.
• 10:04
  Speaker 1: Well, they're actually American, aren't they?
• 10:06
  Speaker 1: Nvidia blame the Taiwanese Well, they're actually American, aren't they?
• 10:11
  Speaker 1: Nvidia Allegedly no-transcript December 20th Was that a long time ago, was it Not really?
• 10:22
  Speaker 1: And we know we've been in that kind of sort of zone.
• 10:24
  Speaker 1: So from a zone point of view, we're basically still in the same old box that we've been in for some time.
• 10:34
  Speaker 1: But we're very much at the lower end of that, and that doesn't make us feel any better.
• 10:38
  Speaker 1: And our support is at 130 now and we're trading 41 cents above it.
• 10:45
  Speaker 1: So we'll hopefully get a little bit of support from the market makers, but it's not really like a comfort level, is it?
• 10:52
  Speaker 1: So the sell-off is quite extreme here.
• 10:55
  Speaker 1: So what's actually causing the sell-off?
• 10:57
  Speaker 1: It's this, these boring charts in the world and I love charts, but this one's really boring.
• 11:03
  Speaker 1: Why?
• 11:04
  Speaker 1: It's the US 10-year yield and it's going up.
• 11:07
  Speaker 1: So bond yields are going up.
• 11:10
  Speaker 1: You can get 4.7% now on a bond yield, which is really quite something.
• 11:14
  Speaker 1: Why is that surprising?
• 11:16
  Speaker 1: Well, let me show you something.
• 11:19
  Speaker 1: If you add to this the US interest rate Economy, here we go.
• 11:32
  Speaker 1: Us interest rates have gone from 5% to whatever.
• 11:40
  Speaker 1: They've gone to down over percentage point.
• 11:43
  Speaker 1: But the yield, the real interest rate in the market, has gone the other direction.
• 11:48
  Speaker 1: So the market is completely ignoring the Fed.
• 11:51
  Speaker 1: Can you see that?
• 11:52
  Speaker 1: So this is the Fed, and then this is the bond market.
• 11:59
  Speaker 1: So the bond market is basically saying we're worried about all that debt that the Donald is going to incur because he's going to cut taxes and he won't get through any of the spending cuts.
• 12:10
  Speaker 1: I think this is quite a lot of that.
• 12:12
  Speaker 1: So proof will, of course, be in the pudding, but until or as long as we're close to that 5%, it's pretty unpleasant.
• 12:25
  Speaker 1: It's pretty unpleasant.
• 12:25
  Speaker 1: And another way of looking at this is compare this to QQQ and see where were we last time, when the bond yield was at where we are right now and we were then trading at.
• 12:49
  Speaker 1: Okay, scale is a bit off there, isn't it?
• 12:55
  Speaker 1: 420 dollars on the air, 420 on the on the nasdaq.
• 12:58
  Speaker 1: So that's basically saying, potentially rationally, we should be 80 points lower, or something like that.
• 13:02
  Speaker 1: So, am I that doom and gloomer?
• 13:07
  Speaker 1: We should be trading at $420 on the Nasdaq Now?
• 13:11
  Speaker 1: Am I that doom and gloomer?
• 13:12
  Speaker 1: No, I'm not.
• 13:13
  Speaker 1: I'm actually very, very bullish on this, because I do believe that we're getting the most business friendly government the United States has had in like 100 years, and therefore we're going to get lower taxes, going to get less regulation, less banking regulation.
• 13:32
  Speaker 1: We're going to get an administration that likes big tech and is going to defend it against you know, the commissar in Europe, for example which costs Google and Microsoft and Apple tens of billions of dollars, and they also love Bitcoin, for example.
• 13:51
  Speaker 1: So I think we're going to see all of these individual rallies in banking and finance and crypto and then probably going to get some significant infrastructure spending and the world will be a wonderful place.
• 14:04
  Speaker 1: But until then, and until it's clear, until it's guaranteed, you're going to get this choppiness and that's.
• 14:09
  Speaker 1: You know, like Gabe here says, you invest on, my stomach hurts a little bit and that's kind of normal.
• 14:15
  Speaker 1: But what you have to ask yourself is we've dropped only 30 points on the Nasdaq rally.
• 14:21
  Speaker 1: That's gone, you know, straight up like this.
• 14:24
  Speaker 1: So when was the last time we had a drop like that?
• 14:27
  Speaker 1: Well, there, here, there, this is all 2024.
• 14:33
  Speaker 1: This was bigger.
• 14:34
  Speaker 1: That one was similar, this one was similar.
• 14:37
  Speaker 1: This one was worse, this was worse.
• 14:38
  Speaker 1: This was worse, this was worse, this was worse.
• 14:40
  Speaker 1: You see how this happens all the freaking time.
• 14:42
  Speaker 1: So, at the moment, what we're seeing, despite the rather dramatic heat map,