Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - THIS WEEK Will Be The Biggest of the Year + Stock Market News 30 September 2024

Transcript

Felix Prehn - THIS WEEK Will Be The Biggest of the Year + Stock Market News 30 September 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: Welcome to this glorious Monday morning.
• 0:02
  Speaker 1: There is so much going on in the market today it's actually kind of hard to get it all in in the next 10 minutes or so, which is my intention here.
• 0:09
  Speaker 1: So what have we got?
• 0:10
  Speaker 1: We've got a massive China rally.
• 0:12
  Speaker 1: We've got US stocks limping along.
• 0:14
  Speaker 1: We've got so much data coming out in the next couple of days it's hard to wrap your head around it, and we've got something pretty big happening today Massive, in fact, huge and nobody really understands it.
• 0:28
  Speaker 1: So my intention here is to explain all of that to you so you are the best informed investor trader whatever you may be aspiring investor trader out there so you can make better, smarter decisions and hopefully make some more money for yourself.
• 0:41
  Speaker 1: That's always our intention here, so I'm going to share my screen with you.
• 0:45
  Speaker 1: There we are and actually show you the one thing that I'm incredibly excited about.
• 0:48
  Speaker 1: For the last 18 months, we've worked on this Trends AI, and I spent the previous 10 years working on what is underlying that, and it's an indicator that actually, well, it's basically the basis of how I make money and just to give you a little bit of a glimpse here and this is in Trade Vision, so you can check that out if you want.
• 1:09
  Speaker 1: Down below, there it is and basically it shows you for quite a lot of stocks how buy and hold sucks right.
• 1:19
  Speaker 1: So this is from January 2022 to September today.
• 1:23
  Speaker 1: And say, you're in meta, you're up 49%.
• 1:25
  Speaker 1: Well, if you'd used our indicator, you'd be up 175%.
• 1:30
  Speaker 1: Tesla, you'd be minus 44, we'd be up 81% and you get the idea right.
• 1:34
  Speaker 1: So it works pretty well.
• 1:36
  Speaker 1: It is an indicator.
• 1:37
  Speaker 1: Of course, it's not financial advice.
• 1:39
  Speaker 1: Use it cautiously, carefully.
• 1:41
  Speaker 1: You still need risk management and all that kind of stuff, but do play with it.
• 1:44
  Speaker 1: It's very, very cool.
• 1:46
  Speaker 1: I'm really enjoying it.
• 1:47
  Speaker 1: We're having some really great success with it.
• 1:48
  Speaker 1: It looks like this Basically, we have our holds, our buys, our exits, and you can just kind of click through the charts and you can see.
• 1:57
  Speaker 1: You know what are we doing here.
• 1:58
  Speaker 1: When it turns green, well, you get the idea.
• 2:00
  Speaker 1: When it turns red, I think you get the idea and very, very useful.
• 2:04
  Speaker 1: So you'll be seeing me use this more often on YouTube here.
• 2:08
  Speaker 1: But do check it out.
• 2:08
  Speaker 1: There is a seven-day trial.
• 2:10
  Speaker 1: It's risk-free.
• 2:11
  Speaker 1: Just test it.
• 2:12
  Speaker 1: If you like it, you like it.
• 2:14
  Speaker 1: If you don't, you walk away.
• 2:15
  Speaker 1: So, yeah, check it out.
• 2:15
  Speaker 1: Tradevisionio, very, very excited by that.
• 2:18
  Speaker 1: We've worked so, wouldn't believe.
• 2:28
  Speaker 1: So what's going on today?
• 2:28
  Speaker 1: Well, you'd think, with the Chinese stock market going absolutely ballistic, the world would be going ballistic too, but it's not, because look at the heat map.
• 2:35
  Speaker 1: This is pre-market Shudder, right, quite a lot of red.
• 2:39
  Speaker 1: Apple is looking a bit good, but that's pretty much it.
• 2:44
  Speaker 1: Right, that's pretty much it.
• 2:45
  Speaker 1: Everything else is pretty red Nvidia down 2.6% here.
• 2:49
  Speaker 1: Amazon JP Morgan red.
• 2:50
  Speaker 1: Big tech stocks flat.
• 2:52
  Speaker 1: Crm flat.
• 2:53
  Speaker 1: Tesla down 0.8%.
• 2:55
  Speaker 1: So we're not looking at party central and there are a bunch of reasons for that we will walk through here in the next few minutes.
• 3:00
  Speaker 1: Chair Powell is speaking today the anointed one, and we should have.
• 3:08
  Speaker 1: Well, we have jobs, data coming out, we've got earnings coming out this week a lot of stuff going on here as well.
• 3:14
  Speaker 1: How do you get that chart, aruna?
• 3:15
  Speaker 1: You go to you literally just go to trade vision.
• 3:17
  Speaker 1: It'll open up on that page once you're logged in.
• 3:20
  Speaker 1: Otherwise, on the top right here it says trends AI.
• 3:23
  Speaker 1: Do you see that?
• 3:23
  Speaker 1: You just click on that and then you get to this chart and then you can scroll through.
• 3:28
  Speaker 1: You can also just search for stuff up here.
• 3:30
  Speaker 1: We've done this for about 2000 tickers and in the top right we tell you how well we've done.
• 3:35
  Speaker 1: So we're always transparent with that.
• 3:37
  Speaker 1: And there are some stocks that doesn't really work very well for If they're insanely volatile, it's quite hard to do.
• 3:42
  Speaker 1: Or if they've gone up in a straight line, very hard to beat a straight line.
• 3:46
  Speaker 1: So there are some examples where we just struggle to do better.
• 3:50
  Speaker 1: But you can always see that.
• 3:51
  Speaker 1: So obviously use your judgment.
• 3:54
  Speaker 1: So yeah, china stocks are up massively.
• 3:59
  Speaker 1: The Chinese stock index is up something like 8.5%.
• 4:00
  Speaker 1: I think they actually stopped trading because they were up too much.
• 4:02
  Speaker 1: At least on the futures.
• 4:02
  Speaker 1: Biggest rally since 2008,.
• 4:05
  Speaker 1: Lots of stimulus, basically there.
• 4:07
  Speaker 1: Some commodities are rallying on the back of that because China is a massive commodity importer.
• 4:12
  Speaker 1: There.
• 4:12
  Speaker 1: They are heading into a holiday season I don't know if that's tomorrow or the day after for National Day.
• 4:18
  Speaker 1: So it'll be kind of interesting to see what happens after that.
• 4:21
  Speaker 1: But why are they rallying so much?
• 4:23
  Speaker 1: It isn't just the stimulus, it's just.
• 4:26
  Speaker 1: This is a Goldman's chart, I think.
• 4:28
  Speaker 1: I think the lovely lovies at Goldman put this out and they asked people on the beginning of September hey, what's the most crowded trade out there?
• 4:38
  Speaker 1: What's everyone in?
• 4:39
  Speaker 1: And yes, everybody is long.
• 4:41
  Speaker 1: The Magnificent Seven, the big tech stocks, true, but everybody was also short Chinese stocks.
• 4:50
  Speaker 1: So those shorts have been caught with their trousers down literally in the town square starkers, and they're struggling.
• 4:57
  Speaker 1: So they have to buy the stocks to cover their positions and that fuels more rally, right?
• 5:02
  Speaker 1: So that's how a short squeeze works.
• 5:04
  Speaker 1: Basically, say, you shorted I don't know a million dollars of stock.
• 5:11
  Speaker 1: Now suddenly the stocks jump up 15%.
• 5:16
  Speaker 1: What happens is your million dollars is no longer a million dollars, it's just become it's just become $850,000.
• 5:25
  Speaker 1: So you lost $150,000.
• 5:28
  Speaker 1: And that might be enough for you to say I'm out.
• 5:31
  Speaker 1: If you're a professional trader, maybe you're going to lose a bit more and then you're out.
• 5:35
  Speaker 1: So what do you do?
• 5:36
  Speaker 1: Well, now you're out.
• 5:37
  Speaker 1: So you're going to take this $850,000 and you're going to buy the very stocks that are hurting you with it to get back to a zero position, which means the stock is now no longer going up 15%, it's now going up 20%.
• 5:52
  Speaker 1: And therefore the next investor who's also short, he's now down 20% and he's going to buy back.
• 5:59
  Speaker 1: And it's just sort of a self-fulfilling rally there, which is why short squeezes are so powerful and potentially also very dangerous.
• 6:07
  Speaker 1: But if you look beyond Asia, the German government's putting out some pretty negative numbers.
• 6:13
  Speaker 1: They're basically saying the economy isn't going to grow at all this year, which generally means it's shrinking.
• 6:18
  Speaker 1: Right, governments tend to lie, at least European ones.
• 6:20
  Speaker 1: So yeah, not particularly good outlook there for Europe, which isn't particularly glorious.
• 6:27
  Speaker 1: That's also part of the reason stocks are down today.
• 6:29
  Speaker 1: And then look at this here have you been wondering why oil isn't up?
• 6:33
  Speaker 1: Maybe you don't think about that.
• 6:35
  Speaker 1: That's completely okay, that makes you normal.
• 6:37
  Speaker 1: But I've been kind of thinking well, you've got all that war in the Middle East going on.
• 6:42
  Speaker 1: Right, you've got loads of stuff going on.
• 6:47
  Speaker 1: The US has basically reduced its strategic oil reserve to very little.
• 6:52
  Speaker 1: You'd be thinking, with the economy booming, as the Biden government claims, we should be seeing oil going through the roof.
• 6:58
  Speaker 1: But actually no.
• 7:01
  Speaker 1: They're saying it could maybe go to $60.
• 7:04
  Speaker 1: Maybe it could go to $55.
• 7:07
  Speaker 1: Some even saying it could go to $30 next year.
• 7:09
  Speaker 1: What does that mean?
• 7:10
  Speaker 1: Well, the only reason that would happen is pretty much a recession type environment, at least big parts of the world, and therefore we have an oversupply of oil.
• 7:22
  Speaker 1: So it makes me feel a little bit itchy around just the whole economic thing.
• 7:30
  Speaker 1: And then here is no, no, I'm not gloomy today, I'm just you've got to understand the downsides so you can make money out of the upside.
• 7:38
  Speaker 1: I think that's always really, really important here, yeah, so what's this?
• 7:46
  Speaker 1: This is again from our loveys at goldman and it's basically how much is the market positioned?
• 7:53
  Speaker 1: How stretched is positioning right?
• 7:55
  Speaker 1: So if you're down here, it's sort of very low.
• 7:57
  Speaker 1: Hardly anybody owns anything.
• 7:59
  Speaker 1: When you are up here, that little blue line, there you are basically stretched.
• 8:05
  Speaker 1: And then you get these crazy moments where you get really, really stretched.
• 8:08
  Speaker 1: But right now we're at 0.7.
• 8:10
  Speaker 1: So we are not low as minus two, stretched as plus one.
• 8:16
  Speaker 1: So we are much closer to stretch than to low.
• 8:20
  Speaker 1: And that's something to look at, unless you think there is a real reason for some cataclysmic, revolutionary bull market.
• 8:27
  Speaker 1: It might make you think maybe a little bit closer to the top than we are to the bottom.
• 8:34
  Speaker 1: So maybe it makes sense to just start taking a little bit of profits, get a little bit more cautious, put our stop losses in and all that kind of stuff right.
• 8:42
  Speaker 1: So that's something definitely to look at and that's exactly what we do and that's why you know this is our trading portfolio for the year our teaching portfolio.
• 8:51
  Speaker 1: We are up 93% so far this year.
• 8:54
  Speaker 1: We started with $30,000.
• 8:56
  Speaker 1: We are right now at about $58,000 of realized gains.
• 9:00
  Speaker 1: So if you're wondering how we do that maybe you're dubious about how we do that then come and join me on Wednesday and Thursday for an hour each day, at 8 am New York time or 1 pm London time, and I'll show you.
• 9:11
  Speaker 1: I'll show you how we do it.
• 9:12
  Speaker 1: I'll show you the rules, I'll teach you the rules, we'll walk through some actual trades together and everything else.
• 9:16
  Speaker 1: Felixfriendsorg slash challenge is the link to sign up for that.
• 9:20
  Speaker 1: So check that out and I'd be super happy to see you there.
• 9:24
  Speaker 1: You can, you can pamel me, but here is something that hardly anybody explains massive options expiration today.
• 9:31
  Speaker 1: What does that mean?
• 9:32
  Speaker 1: Well, it's the last day of the month and it's also the last day of the quarter, and that's important.
• 9:39
  Speaker 1: So last day of quarter and then the last day of the quarter, a little organization that's called JP Morgan has a monster trade open every single quarter.
• 9:52
  Speaker 1: It's called the JP Morgan trade or the, you know, jp Morgan collar or whatever you might call it, and sort of obscure financial press talks about it sometimes and you can see it.
• 10:04
  Speaker 1: If you go into trade vision here and you open the Hang on, yeah, show you, let me show you.
• 10:21
  Speaker 1: Here we go.
• 10:21
  Speaker 1: You open the SPX, which is the S&P 500, and you see there at 5,750, I'll zoom in for you this massive candle that's JP Morgan, and you see it down here as well, that's also JP Morgan.
• 10:37
  Speaker 1: So it's a massive, massive colossus of options.
• 10:41
  Speaker 1: And what does it do?
• 10:43
  Speaker 1: Well, it does quite a lot of things, tends to make JP Morgan a lot of money, but essentially it pins the market down.
• 10:50
  Speaker 1: Because it's that big, it actually stops the market from moving.
• 10:54
  Speaker 1: Now you might think it's good for the market to move, but it's what's been underpinning the stability we've had.
• 11:01
  Speaker 1: So what has been happening is, as we go up, the market's been selling, the market makers.
• 11:05
  Speaker 1: As we've been going down, the market makers have been buying and that creates sort of a stable, fluffy kind of environment.
• 11:12
  Speaker 1: It's just that safety net that's there that goes away by the end of today.
• 11:16
  Speaker 1: So what will we expect for the rest of the week and maybe going into October?
• 11:20
  Speaker 1: More madness, basically More volatility, as they politely call it, in the market.
• 11:27
  Speaker 1: So be a little careful If you've got something that's like on the edge and you're watching it.
• 11:32
  Speaker 1: You're thinking should I stay in it, should I not?
• 11:34
  Speaker 1: You should probably not stay in it.
• 11:36
  Speaker 1: Obviously, I don't know your traits, I can't give you advice on it, but you hear what I'm saying.
• 11:40
  Speaker 1: Right, the market is likely to get a lot more crazy after today, so bear that in mind.
• 11:47
  Speaker 1: I hope that's useful.