Latest / Felix Nikolas Prehn's Podcast / Kiss of Death Signal Just TRIGGERED for Markets... What Happens Now? + Stock Market News 16 April 2024

Transcript

Kiss of Death Signal Just TRIGGERED for Markets... What Happens Now? + Stock Market News 16 April 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Felix here and welcome to this pre-market live stream from a hotel suite in Manila, philippines, so forgive any technical challenges that we may face.
• 0:10
  Speaker 1: Today We've got a lot to talk about.
• 0:12
  Speaker 1: Markets are below their 50-day moving average both the Nasdaq as well as the S&P.
• 0:20
  Speaker 1: That's bad news.
• 0:21
  Speaker 1: Israel is apparently imminently about to hit Iran with further strikes.
• 0:27
  Speaker 1: We don't know how big or small they will be, and if they whatever they do they're going to trigger a reaction by Iran, and this tit for tat could, of course, get a lot worse.
• 0:38
  Speaker 1: Futures are looking slightly better now than they were about an hour ago, so there's a little bit of dip buying going on here, but I want to walk you through the things you need to know to be the best informed investor out there.
• 0:50
  Speaker 1: That's always our very, very simple mission here, and for that I'm going to shrink myself and you can see the back end of what this looks like when you're on only one screen.
• 1:01
  Speaker 1: One exciting thing happening also in about 11 hours, I'll be doing a live trading training from here in the Philippines, where I've had a very tough day of having massaged and sitting by the pool, and I'm going to go for a late night swim after this live stream and we'll see how tough life really is for us.
• 1:20
  Speaker 1: You know people who invest in trade, but if you want to learn exactly how I made these returns the last two years over 100% on capital employed in each year then I'll give you that system in literally 11 hours.
• 1:35
  Speaker 1: I'll give it to you Just a purely educational 90 minutes or so with me.
• 1:41
  Speaker 1: So come and join me at felixfrenzorg slash webinar.
• 1:44
  Speaker 1: That'll take you to this page here and you can just sign up and it'll show it in your time zone and you can grab yourself a seat and be on time when we join Free market.
• 1:55
  Speaker 1: Looking a little mixed Tesla is still down two and a half percentage points, metagoogle slightly red, but Nvidia has bounced back.
• 2:03
  Speaker 1: Everything else is pretty much flat and sort of sitting on the edge of your seat as the QQQ.
• 2:09
  Speaker 1: Let me show you this.
• 2:10
  Speaker 1: Let me go into a little bit more fundamental knowledge here.
• 2:14
  Speaker 1: This was the dark area from here to there.
• 2:20
  Speaker 1: Yesterday.
• 2:21
  Speaker 1: That was yesterday, right, that was a pretty horrible day, and then we have after hours, nothing happened, and then pre-market things got worse and now they seem to be improving somewhat.
• 2:35
  Speaker 1: One interesting thing I always like to look at is what happened just before the close.
• 2:41
  Speaker 1: And why do I do that?
• 2:42
  Speaker 1: Because that's where the ETFs, the funds, buy.
• 2:48
  Speaker 1: They buy in the last 30 minutes of the day, and the last 15 minutes of the day looked actually slightly green and then the last, really truly last 15 minutes of the day we were only down 0.7%.
• 3:02
  Speaker 1: So there was quite a lot of volume here.
• 3:05
  Speaker 1: I don't know how well you can see that.
• 3:07
  Speaker 1: Let me show you.
• 3:07
  Speaker 1: See that big green bar there in the background, massive volume and yeah, we bought and then we sold off but it wasn't terrible.
• 3:17
  Speaker 1: So it sort of means institutional dip buying is a little bit there.
• 3:21
  Speaker 1: But if I go over into OptionsWatch, where I can see the actual trades in terms of options of the big boys, pretty much everything on the big guys, the s&p, you know, 200 million dollars here in in bearish trades and there's a lot of like put buying, which is essentially insurance buying, on tesla, for example, here a lot of, a lot of buying of puts there.
• 3:41
  Speaker 1: So overall the flow yesterday was pretty bearish, pretty negative, significant bias or like 20 million, 19 million, 90 million, and so that's institutions and that sort of says to me markets got a little spooked.
• 3:54
  Speaker 1: Yes, they understandably.
• 3:55
  Speaker 1: So now let me just check.
• 3:56
  Speaker 1: You are getting this from the comments.
• 3:58
  Speaker 1: Uh, brilliant, it seems so.
• 4:01
  Speaker 1: Um, stephanie, you read the newsletter yesterday.
• 4:08
  Speaker 1: Brilliant, I like that.
• 4:09
  Speaker 1: Now it works.
• 4:13
  Speaker 1: Okay, brilliant, we were over the slight time lag.
• 4:15
  Speaker 1: Hopefully the Peninsula Hotel Wi-Fi will not be overwhelmed by us today.
• 4:22
  Speaker 1: Okay, a couple of things.
• 4:23
  Speaker 1: We need to go through A bit of data points here, because data is ultimately how you make money as an investor and as a trader.
• 4:31
  Speaker 1: Dow yesterday down for the sixth straight day in a row.
• 4:34
  Speaker 1: That's down 2,000 points.
• 4:36
  Speaker 1: That's pretty significant.
• 4:37
  Speaker 1: The S&P below its 50-day moving average line that's a big kind of trading kicker.
• 4:44
  Speaker 1: Where we go bearish, where we start to sell, we make money on the move down.
• 4:48
  Speaker 1: And that's the first time since November and it was the longest continuous upstreak since 1950.
• 4:57
  Speaker 1: It's like 74 years, right, almost as old as me.
• 5:01
  Speaker 1: This is where you politely disagree in the comments, but you don't have to Now.
• 5:07
  Speaker 1: We're not down a great deal 3.7% Typically every year we get a drawdown of about 13% at one point during the year and people don't realize that.
• 5:19
  Speaker 1: I think everything always goes up sort of swimmingly.
• 5:21
  Speaker 1: No, no, there is always this kind of thing happening.
• 5:24
  Speaker 1: Small caps is what's getting particularly hammered still this morning.
• 5:28
  Speaker 1: Why?
• 5:34
  Speaker 1: Because they're particularly rate sensitive.
• 5:34
  Speaker 1: Interest rates affect smaller companies much more than the bigger companies.
• 5:36
  Speaker 1: The dollar is also very strong, which affects the mega caps.
• 5:37
  Speaker 1: We get into that in a moment.
• 5:38
  Speaker 1: The volatility index, the fear index, is up 50% and that's basically.
• 5:44
  Speaker 1: How does that get triggered?
• 5:46
  Speaker 1: That gets triggered because people buy insurance, and that's basically how does that get triggered.
• 5:48
  Speaker 1: That gets triggered because people buy insurance and you buy insurance because you're smart and you don't want to lose all your money.
• 5:54
  Speaker 1: So we've gone from being super, super, super low here it's sort of 14 and way, way, way, way, way low up.
• 6:05
  Speaker 1: We go on a day chart here.
• 6:06
  Speaker 1: Vix is honestly like the one thing I would look at if you are looking at getting into investing and trading.
• 6:11
  Speaker 1: Look at VIX and you instantly know what the market's feeling.
• 6:13
  Speaker 1: So we were at like 11.
• 6:14
  Speaker 1: Now we're at 19, coming down a little bit, which is good, because yesterday's move was massive and somewhat scary.
• 6:22
  Speaker 1: Just keep checking that.
• 6:23
  Speaker 1: You guys can see and hear me.
• 6:25
  Speaker 1: Winston, yes, you're really quite young.
• 6:27
  Speaker 1: Oh, you are very kind, matt, I agree.
• 6:31
  Speaker 1: And no, I've closed my IWM trade.
• 6:32
  Speaker 1: Yesterday I was feeling a little bit iffy on IWM from that move there and we probably lost $200, $300 or something, and that's cool.
• 6:40
  Speaker 1: Like, as a trader, you have to get used to losing small amounts of money.
• 6:43
  Speaker 1: That's how you make large amounts of money.
• 6:45
  Speaker 1: That's a thing.
• 6:46
  Speaker 1: And again, we'll go through that today in 11 hours.
• 6:49
  Speaker 1: For rules, just come to felixfrenzorg slash webinar links down below and I'll teach you the whole thing.
• 7:00
  Speaker 1: The 10-year yield is moving up, struggling slightly with my mouse here, maybe have a pen, please, microsoft.
• 7:03
  Speaker 1: And Microsoft says no, like a French waiter anywhere in the world.
• 7:06
  Speaker 1: And, yeah, the yields are up.
• 7:08
  Speaker 1: That's not good, because when the yields are up, money pours into yields because they pay you more right and stocks seem therefore more risky.
• 7:17
  Speaker 1: Halloween.
• 7:18
  Speaker 1: Well, yeah, we're down significantly, essentially.
• 7:23
  Speaker 1: That's basically what that's saying.
• 7:24
  Speaker 1: Now the drawdown I hope you can see that.
• 7:27
  Speaker 1: Well, the drawdown is pretty significant here.
• 7:29
  Speaker 1: That's the last time we saw that was last October.
• 7:33
  Speaker 1: Look on the chart of what the market did last October.
• 7:35
  Speaker 1: That was pretty unpleasant.
• 7:37
  Speaker 1: Now the computers are basically up to the eyeballs full of stocks.
• 7:44
  Speaker 1: They've been buying, buying, buying, buying, buying.
• 7:46
  Speaker 1: Full of stocks.
• 7:47
  Speaker 1: They've been buying, buying, buying, buying, buying.
• 7:48
  Speaker 1: And well, we're assuming this is from Goldman Sachs that they sold about $10 billion worth of stocks yesterday and that can be stop losses.
• 8:05
  Speaker 1: So when their trades start to lose money, they exit.
• 8:06
  Speaker 1: Or when the market moves below the 50-day moving average, like it has just done, that's also when they sell.
• 8:09
  Speaker 1: So if you look at, say, qqq here, can you see the yellow line there?
• 8:15
  Speaker 1: That's the 50-day moving average line.
• 8:16
  Speaker 1: We flirted with it, we fondled it a little bit and then yesterday breakthrough, and not in a good way, and that's a sell signal, typically for computers as well as good traders.
• 8:29
  Speaker 1: So that's an issue.
• 8:30
  Speaker 1: There's a lot of positioning there that we could unwind if things go further south, and a lot of that will depend on what Israel is going to do today, if they do anything today.
• 8:39
  Speaker 1: Now, my hope is that they'll do a cyber attack and they'll break something, and that won't really be like.
• 8:44
  Speaker 1: You know, that's kind of what would be the best scenario.
• 8:48
  Speaker 1: Worst case scenario they strike the nuclear cells, in which case Iran's going to have to come out, like you know, like a silverback on heat.
• 8:56
  Speaker 1: I'm sure that didn't offend anybody in Iran.
• 9:00
  Speaker 1: Oh dear, you shouldn't really joke with those guys.
• 9:04
  Speaker 1: Not much of a sense of humor apparently.
• 9:06
  Speaker 1: Now, not all Iranians.
• 9:09
  Speaker 1: Obviously.
• 9:09
  Speaker 1: They're lovely Iranians.
• 9:10
  Speaker 1: They're mostly in London and the south of France where I tend to see them.
• 9:13
  Speaker 1: But you know the lot of the anybody who says that they are the um, um supreme leader, generally not great for conversation and humor.
• 9:24
  Speaker 1: Um, right, sentiment stretched, it hit the upper part of the channel and so on.
• 9:33
  Speaker 1: So we're not really seeing panic yet.
• 9:37
  Speaker 1: That's what Goldman's is saying, or JP Morgan, rather, saying.
• 9:40
  Speaker 1: Here they're saying it's muted, no, you know, no, get me out of here.
• 9:47
  Speaker 1: Calls, and that's normally what they would get.
• 9:49
  Speaker 1: Right, literally on the trading floor, someone would be like panic, get me out.
• 9:52
  Speaker 1: And we haven't really seen that yet.
• 9:53
  Speaker 1: So that's quite good.
• 9:54
  Speaker 1: Now insiders have been selling like mad and I did a video on that two months ago or something.
• 10:03
  Speaker 1: I keep talking about that on Instagram as well that executives like your, bezos and those big guys they've been selling stock at the fastest pace in over 10 years and that is significant.
• 10:16
  Speaker 1: So when those guys start to sell off at levels bigger than usual, well it sort of says to you that they think we might have hit kind of optimal sentiment and that's a good thing.
• 10:28
  Speaker 1: But these kind of corrections, let me just show you here this is like going back to 1960.
• 10:37
  Speaker 1: And the little yellow dots down here are the drawdowns we've had in those years, and the blue bars is how the market did over the whole year.
• 10:44
  Speaker 1: And you can see, even in pretty nice green years where we are up like 25%, like here, we had a drawdown of what?
• 10:53
  Speaker 1: 19%, and it's quite normal.
• 10:55
  Speaker 1: It's quite normal.
• 10:57
  Speaker 1: So far this year we've seen a 3.7% drawdown, which really isn't very much.
• 11:02
  Speaker 1: So I wouldn't completely panic and just put everything into ammunition and sardines quite yet, because this is actually at this point a relatively normal thing.
• 11:15
  Speaker 1: But raking below that 50-day moving line, which is a really important line.
• 11:19
  Speaker 1: And if you join me on the live trading training, in just 11 hours live, we'll talk about that and I'll explain to you how we use that to actually set up trades and make money.
• 11:28
  Speaker 1: So come and join me for that.
• 11:31
  Speaker 1: It's the first time in 110 trading days that we've closed below that 50-day level and that's significant.
• 11:38
  Speaker 1: That's significant.
• 11:38
  Speaker 1: That's a significant shift in what we're seeing here.
• 11:40
  Speaker 1: And we've seen sell-offs in Japan, hong Kong, europe didn't look particularly good and the more that happens, the more you get into this kind of momentum cycle, the bigger the snowball gets potentially as it comes down.
• 11:56
  Speaker 1: But I still think that the big story for today and probably tomorrow will be Israel-Iran.
• 12:03
  Speaker 1: We'll come back to that.
• 12:04
  Speaker 1: I mean, let me look at earnings in a second as well, because that's obviously super, super important to what Bank of America just said.
• 12:10
  Speaker 1: Now Mary Daly, president of the San Francisco Fed, has said that there is no urgency to cut rates, but there is tremendous urgency to let in the illegal immigrants and the homeless apparently Just kidding, and UBS are saying hiking rates is a real risk.
• 12:32
  Speaker 1: But then UBS also came out and said that gold should go to $5,000.
• 12:36
  Speaker 1: And imagine, ubs has quite a lot of gold they want to offload.
• 12:39
  Speaker 1: So I'm not sure that those guys are entirely independent at this point.
• 12:43
  Speaker 1: Middle East this is the big thing.
• 12:45
  Speaker 1: So the oil sort of look, us oil is currently trading at $85.
• 12:52
  Speaker 1: It's not terrible.
• 12:53
  Speaker 1: It's way above 90.
• 12:55
  Speaker 1: I think it would get painful.
• 12:57
  Speaker 1: But yeah, that's one thing and yeah, economic data in China looking sort of mixed.
• 13:05
  Speaker 1: Really, I think that's probably the best way to describe that.
• 13:08
  Speaker 1: And we have Bank of America just reported.
• 13:10
  Speaker 1: And actually for me, the most interesting thing from Bank of America's data today isn't how good their earnings were or any of that.
• 13:20
  Speaker 1: It's really ultimately all about commercial real estate and they made a massive write-off, which is almost entirely commercial real estate.
• 13:28
  Speaker 1: So the real crisis that no one's freaking talking about is it's not US housing, it's not even the debt crisis really.
• 13:37
  Speaker 1: It's not even really the Middle East.
• 13:38
  Speaker 1: It's actually commercial real estate, which is connected to the banking crisis that's still there and looming, and my view continues to be that that is the gift for us stock investors and stock traders, because it will force the Fed to cut rates.
• 13:56
  Speaker 1: The only way to calm down the disaster that is commercial real estate in the US office buildings being sold for $0, is cutting rates.
• 14:09
  Speaker 1: So I think it's coming, but we don't know quite when.
• 14:12
  Speaker 1: Obviously,