Latest / Felix Nikolas Prehn's Podcast / This chart predicts the worst week in 19 years + Stock Market News 24 June 2024

Transcript

This chart predicts the worst week in 19 years + Stock Market News 24 June 2024 · Felix Nikolas Prehn's Podcast

• 0:05
  Speaker 1: Again, the live stream isn't available at the moment.
• 0:08
  Speaker 1: Wonderful stuff, youtube.
• 0:10
  Speaker 1: How do we get back into this?
• 0:13
  Speaker 1: How do we get back into this?
• 0:15
  Speaker 1: Okay, I have a suspicion that we might be live, although YouTube isn't saying it, but I think we probably are, so welcome to this pre-morning market live stream.
• 0:27
  Speaker 1: This week is proving to be an interesting one, for both historical and very, very newsworthy reasons.
• 0:35
  Speaker 1: I'm going to walk you through the data points you need to know to make this week a success.
• 0:39
  Speaker 1: But just generally also learn and become a better investor.
• 0:42
  Speaker 1: That's always my ambition here.
• 0:44
  Speaker 1: Sort of ex-banker tries to do something positive with his life, so let's get straight into it.
• 0:53
  Speaker 1: Good morning to you all.
• 0:56
  Speaker 1: Destroy the like button.
• 0:58
  Speaker 1: I appreciate that and I'm going to share my screen with you.
• 1:01
  Speaker 1: We are doing what we did and if you saw my video on that yesterday, we've done a $7,300 profit so far this month on a $30,000 portfolio.
• 1:13
  Speaker 1: So we're doing quite nicely and I literally broke down every single trade of that in a video yesterday and I appreciate that might be a little bit complex for people who are new to this.
• 1:22
  Speaker 1: And for people who are new to this, I'm running a live trading training where I won't be teaching you every single trade.
• 1:28
  Speaker 1: I've just done here.
• 1:29
  Speaker 1: Instead, I'll just give you the system, the framework and the rules and the automation, so you can do this in two or three hours a week, rather than listen to my weird thoughts on every trade.
• 1:40
  Speaker 1: I've done here.
• 1:40
  Speaker 1: So if you want to join up, if you want to learn, come and join me tomorrow evening.
• 1:44
  Speaker 1: I've done here.
• 1:45
  Speaker 1: So if you want to join up, if you want to learn, come and join me tomorrow evening, 8pm Eastern time.
• 1:54
  Speaker 1: Felixfrenzorg slash training Link is down below.
• 1:56
  Speaker 1: Now, this is the slightly gloomy thumbnail that I used and I'm going to open with that, because I'm not a human gloomer.
• 1:58
  Speaker 1: I want to get this out of the way, but there are some real important implications from this.
• 2:03
  Speaker 1: To stick around, and we are literally here.
• 2:07
  Speaker 1: All right, that's where we are actually there.
• 2:09
  Speaker 1: That's where we are.
• 2:11
  Speaker 1: Um, that's what I was going to say.
• 2:13
  Speaker 1: We us right and, um, slightly worried.
• 2:18
  Speaker 1: Us, uh, with a good head of hair and large ears.
• 2:21
  Speaker 1: Um, what does that mean?
• 2:24
  Speaker 1: The seasonality of the market for literally the last 19 years is this chart here, and the coming two weeks are the worst weeks of the year for the last 19 years on average.
• 2:39
  Speaker 1: Now, does that mean that's going to happen this year?
• 2:42
  Speaker 1: Well, you know what?
• 2:43
  Speaker 1: There is actually fairly high likelihood of that and I'll break down why that has happening now with today's news in just a moment here.
• 2:51
  Speaker 1: So just bear that in mind.
• 2:53
  Speaker 1: Like seasonally, this is not a particularly good patch in the market.
• 2:58
  Speaker 1: But what the week is before we get back to that story, which we will just in a second, let's look at what the week is really about.
• 3:04
  Speaker 1: If you go through the economic calendar of all the weird and wonderful things being reported this week a bunch of stuff that's sort of not particularly important all week.
• 3:14
  Speaker 1: Gdp rate, durable goods orders on Thursday yeah, that's kind of interesting.
• 3:18
  Speaker 1: Jobless claims are kind of interesting.
• 3:20
  Speaker 1: But really the kicker is going to be Friday.
• 3:23
  Speaker 1: Core PCE that's the Fed's favorite inflation metric.
• 3:27
  Speaker 1: It's expected to fall from 0.2 to 0.1 because it's been falling pretty nicely and pretty consistently for quite a long period here.
• 3:40
  Speaker 1: At least since January we've gone really nicely down right.
• 3:43
  Speaker 1: So if it goes to 0.1, the market will be relieved.
• 3:46
  Speaker 1: But it also means until then, everyone's a little bit like you know.
• 3:51
  Speaker 1: Should I do something today?
• 3:52
  Speaker 1: Should I buy something?
• 3:53
  Speaker 1: Should I maybe just wait?
• 3:54
  Speaker 1: Should I maybe just wait.
• 3:54
  Speaker 1: I think I'll just wait.
• 3:55
  Speaker 1: I think I'll wait, let's wait, and I think that's probably a good thing to do.
• 3:58
  Speaker 1: And I was literally thinking the same thing today.
• 4:00
  Speaker 1: Should I trade today?
• 4:00
  Speaker 1: Should I trade today?
• 4:01
  Speaker 1: Should I not?
• 4:01
  Speaker 1: Should I trade today and close all the trades on Thursday?
• 4:03
  Speaker 1: Should I?
• 4:04
  Speaker 1: You know that kind of thinking.
• 4:06
  Speaker 1: So the market will be a little bit calm, and then we have Nvidia down 2 point something percent again this morning.
• 4:14
  Speaker 1: And it's the tough thing with Nvidia right now is nobody can really figure out what it's worth.
• 4:21
  Speaker 1: And the reason is that we got to look at forward sales like what are they going to do next year?
• 4:27
  Speaker 1: What are they going to do next year?
• 4:28
  Speaker 1: And I'll show you in a second how much they've grown by and how hard it is to therefore predict how much they are going to grow by in the future.
• 4:34
  Speaker 1: But anyway, it's trading at a 21x next year sales, multiple.
• 4:41
  Speaker 1: Microsoft's trading at 11.
• 4:43
  Speaker 1: Apple's trading at 8.
• 4:45
  Speaker 1: So a lot of people are just going well, why don't I just buy Microsoft At least?
• 4:50
  Speaker 1: I know what's happening with Island Bill and its company, you know so.
• 4:54
  Speaker 1: But there is good news.
• 4:58
  Speaker 1: Okay, so this isn't all over.
• 5:00
  Speaker 1: It isn't the end of the world.
• 5:02
  Speaker 1: The crash isn't near and that kind of thing.
• 5:04
  Speaker 1: Buybacks are accelerating, buybacks are picking up speed and they're the highest level since 2020 right now, and at the highest level over this year ever.
• 5:16
  Speaker 1: This will be the biggest buyback year ever.
• 5:18
  Speaker 1: What does a buyback really mean?
• 5:20
  Speaker 1: A buyback is a very simple thing.
• 5:23
  Speaker 1: It's a buyback is a very simple thing.
• 5:27
  Speaker 1: It's stock shredding.
• 5:35
  Speaker 1: So less shares will be around and say you have a company, so you have a beautiful, bushy eyed company.
• 5:38
  Speaker 1: Looks more like a house, doesn't it?
• 5:39
  Speaker 1: Let's make it into a, into a factory or into a printer, and and say this company is worth $100 million.
• 5:47
  Speaker 1: Okay, this is the company code.
• 5:50
  Speaker 1: And then you have shareholders.
• 5:51
  Speaker 1: Say you have five shareholders, so each shareholder's share is worth $20 million, right, good, 20, 20, 20, 20.
• 6:03
  Speaker 1: So what happens if I destroy one of the shares?
• 6:09
  Speaker 1: Still have five shareholders.
• 6:12
  Speaker 1: Still have 100 million company.
• 6:14
  Speaker 1: You only have four shares now.
• 6:16
  Speaker 1: So what happens?
• 6:18
  Speaker 1: Your shares are now worth $25, $25, $25, right, so it's a good thing to happen.
• 6:27
  Speaker 1: That's basically what buybacks are.
• 6:28
  Speaker 1: So buybacks are a wonderful thing to happen and we've got tons of them because companies are sitting a lot of money.
• 6:32
  Speaker 1: But it also means the bigger and bigger buybacks get, the more important the on and off period of buybacks are.
• 6:40
  Speaker 1: And why do they go on and off?
• 6:42
  Speaker 1: We've got something called a blackout period, so during earnings, in a certain number of days before earnings, companies don't buy back their own shares.
• 6:52
  Speaker 1: So every time you go into the earnings season, which we're about to again, the company stopped buying.
• 6:58
  Speaker 1: So we're here somewhere today.
• 7:01
  Speaker 1: Right, that's us here, you know, worried about what's going on in the market today.
• 7:07
  Speaker 1: And if you fast forward a week, you're up here, which means you know 80 percent of companies are not buying, not buying their own shares.
• 7:22
  Speaker 1: So it takes away a lot of demand in the market and it makes it therefore much easier for markets to tumble, because some squibbly bit of bad news and suddenly the market drops because there are no buyers.
• 7:36
  Speaker 1: So that's what happens.
• 7:38
  Speaker 1: The other thing that happens in the summer is that a lot of people are on holiday.
• 7:42
  Speaker 1: It's a serious thing.
• 7:44
  Speaker 1: Wall Street is just on holiday.
• 7:45
  Speaker 1: They're on a yacht in Côte d'Azur, in France or in Cayman Islands or somewhere, stashing their cash into an illicit box somewhere, and therefore they're not there.
• 7:56
  Speaker 1: They're not there to buy, they're not there to buy the dip.
• 7:59
  Speaker 1: So that matters.
• 8:00
  Speaker 1: So you've got all of this kind of coming together, and then people are looking at NVIDIA.
• 8:04
  Speaker 1: And what is this?
• 8:05
  Speaker 1: This is insider sales, insider how do I spell insider?
• 8:11
  Speaker 1: Insider sales of stocks and biggest sell ever in terms of value from nvidia shareholders.
• 8:26
  Speaker 1: The chart, though, is a little bit criminal.
• 8:30
  Speaker 1: Whoever made it made it sentiment trader.
• 8:33
  Speaker 1: I think he should be convicted of chart crimes, because what's happened in the same period?
• 8:39
  Speaker 1: The value of shares have gone up a lot.
• 8:42
  Speaker 1: So if you schedule to sell a million shares here and your share price had now gone up by double or triple, well, the value of that share sale is now suddenly, in dollar terms, displayed as this crazy amount.
• 9:00
  Speaker 1: So I'm not that concerned about NVIDIA people selling their own shares.
• 9:04
  Speaker 1: If Jensen came out and sold all of his shares, I would be concerned, but founders, ceos, sell shares for all sorts of reasons taxes, expensive mistresses, yachts, all sorts of stuff, diversification, in that order and it isn't necessarily a bad thing.
• 9:24
  Speaker 1: Nvidia is also doing some buybacks, so if they don't sell, they end up owning a bigger and bigger and bigger piece of the company.
• 9:32
  Speaker 1: So it isn't necessarily a bad thing.
• 9:33
  Speaker 1: The one thing with insider trades is when they buy.
• 9:36
  Speaker 1: That's useful, because you only buy something because you like it.
• 9:40
  Speaker 1: You want to own it, but you do sell for a lot of different reasons.
• 9:43
  Speaker 1: So I wouldn't put too much focus on this, but at the moment the market's like we're worried about this.
• 9:49
  Speaker 1: Right Now, let's have a look at the live pre-market here, and I would encourage you also to come and join up for tomorrow's live trading session how I will teach you so you're a complete beginner.
• 10:05
  Speaker 1: If you know nothing at all, then you are exactly in the right place.
• 10:08
  Speaker 1: If you know something, you're also going to get some benefit from that.
• 10:11
  Speaker 1: See how we made $7,300 so far this month out of a 30K portfolio.
• 10:15
  Speaker 1: I'll teach you the system, the structure and the rules that I use.
• 10:18
  Speaker 1: So I'm not promising you the outcome.
• 10:19
  Speaker 1: I'm not promising you the outcome.
• 10:20
  Speaker 1: I'm not promising you the returns.
• 10:21
  Speaker 1: I'm promising to teach you how I do it.
• 10:24
  Speaker 1: What are the rules?
• 10:25
  Speaker 1: That's what I'm promising you, and then you can do with it as you wish.
• 10:35
  Speaker 1: But let's have a look at pre-market here.
• 10:36
  Speaker 1: Eatmap and I also want to look at what's trending, might come up with some trade ideas and so on.
• 10:44
  Speaker 1: Okay, let's look at pre-market here.
• 10:44
  Speaker 1: If you have any questions, of course, put them in the chat here, rick, losing patience on PayPal.
• 10:53
  Speaker 1: Don't expect anything from PayPal in 2024.
• 10:56
  Speaker 1: That's what I said at the end of 2023, and I'm sticking with that.
• 11:01
  Speaker 1: I don't expect anything from them this year at all.
• 11:03
  Speaker 1: Nothing, absolutely nothing at all.
• 11:05
  Speaker 1: If you have no expectations, you don't get disappointed.
• 11:08
  Speaker 1: This isn't loading.
• 11:10
  Speaker 1: This is a little painful, isn't it?
• 11:12
  Speaker 1: Well, let's have a look at the life market another way.
• 11:14
  Speaker 1: We can do it this way.
• 11:16
  Speaker 1: But let's have a look at NVDA here, which is the thing that matters, and we're down 2.6% here this morning down there, which is not terrible, but it's also not glorious.
• 11:28
  Speaker 1: Let me just see where is.
• 11:29
  Speaker 1: I'll pop it in.
• 11:31
  Speaker 1: And there she is.
• 11:34
  Speaker 1: So we're dropping down here to $123.
• 11:53
  Speaker 1: Let me just see where is the 50 days.
• 11:54
  Speaker 1: 50 days down there.
• 11:55
  Speaker 1: We got a lot of room.
• 11:56
  Speaker 1: 20-day moving average is at 120.
• 11:59
  Speaker 1: Support should kick in at 120 here.
• 12:03
  Speaker 1: Can you see that little bar there?
• 12:05
  Speaker 1: That's the 120 support on puts.
• 12:08
  Speaker 1: That is 35,000 put options for today.
• 12:12
  Speaker 1: So that's kind of what I would expect us to hit a break, but we'll see.
• 12:20
  Speaker 1: You have a call option expiring on the 28th.
• 12:22
  Speaker 1: Noah, noah, noah, my friend, never hold options until expiry.
• 12:26
  Speaker 1: It's a really dangerous thing to do.
• 12:29
  Speaker 1: You want to get out of them at least 21 days before they expire.
• 12:33
  Speaker 1: That's what I would generally do.
• 12:35
  Speaker 1: So you are right now in risk management mode.
• 12:40
  Speaker 1: So you've got to do whatever risk you're willing to take.
• 12:41
  Speaker 1: You've got to write that down.
• 12:42
  Speaker 1: And you've got to draw a risk you're willing to take.
• 12:43
  Speaker 1: You've got to write that down and you've got to draw a line in the sand wherever that risk number is.
• 12:50
  Speaker 1: Grumpy Sailor, I watched your video yesterday where you tried to sell your options in blocks Same time, but in your system you were 10, 15, 25%.
• 12:57
  Speaker 1: Why the difference?
• 12:58
  Speaker 1: Oh, you mean, well, not every trade has necessarily a multiple of four stocks.
• 13:03
  Speaker 1: Also, I've been doing this for a long time.
• 13:10
  Speaker 1: If you want to fully automate it and do it in the least amount of time spent, and particularly if you want to start out and you want to just have consistency, then yeah, I would definitely do the blocks.
• 13:21
  Speaker 1: Once you've done that for a while and you are consistent and comfortable and confident and you want to do more, then you can come up with a slightly different set of rules.
• 13:31
  Speaker 1: So I have very, very strict risk rules, but I deviate sometimes because sometimes I know something is happening in the market.
• 13:40
  Speaker 1: So I sometimes have a knowledge or an information edge and then I trade on that.
• 13:45
  Speaker 1: But if you don't have that and you don't want to have that because you don't care and you don't want to spend the time in, then I would definitely trade BSMP, which is what made me 70% of the profits that I showed you here in that video yesterday, and I'd very much stick to the rules.
• 13:58
  Speaker 1: But a lot of those trades are very short, right, like same day, same hour, that kind of thing.
• 14:03
  Speaker 1: Will reallocation be substantial this quarter?
• 14:08
  Speaker 1: Not for NVIDIA, if that's what you're asking.
• 14:11
  Speaker 1: No Dream of stuff.
• 14:14
  Speaker 1: 21 days.
• 14:14
  Speaker 1: I do two weeks.
• 14:15
  Speaker 1: I set up 45-day trades and I exit them typically in the first 14 days.
• 14:21
  Speaker 1: The closer you get to expiration, the madder the scenario becomes.
• 14:25
  Speaker 1: So if you want consistency, my friend, you need to throw the greed out of the window and just accept smaller profits but higher consistency.
• 14:35
  Speaker 1: Let's have a bit of a look, then, at like what's actually so.
• 14:38
  Speaker 1: This is brand new in Trade Vision.
• 14:40
  Speaker 1: Links down below.
• 14:41
  Speaker 1: We've now got the uptrends in the screen up.
• 14:43
  Speaker 1: It's a premium feature.
• 14:45
  Speaker 1: If you sign up for it right now, you still get it free of charge as part of the premium subscription it's a whole month of it for free anyway and you can see what's actually trading up, and then you can filter by volatility or by volume or whatever else you want to filter by, and that way you don't need to scroll through stuff anymore.
• 15:01
  Speaker 1: So this is out of two and a half thousand stocks.
• 15:03
  Speaker 1: These are the ones that we calling as bullish right now, and Google, for example, is one of those.