Transcription
Today's number is one. Why? Well, it all has to do with darkpool transactions from Wall Street and one of our favorite investment assets of the last couple of years, gold. So, what exactly is going on as tons of different transactions transpired over the last 24 hours? Well, one thing's for sure, it could all be positioning ahead of the biggest earnings this season. And that comes back to Nvidia, trapped between a high and a low. We're about to see a big move, and it's going to be hundreds of billions of dollars.
In today's video, we take a look at what the options market believes will happen next. And of course, we talk about rotation because it does look like we've hit some targets that we've been looking for for a little while. Guys, what happens if the Fed cuts in September and small caps start to rise? Yeah, the results may surprise you.
Well, welcome back, everybody, to the daily show. My name is Thomas Atinson, and it's good to have you here. Today, we'll be talking about the latest macro data, but of course, we need to do a bit of a special on Nvidia because the earnings is coming in less than 24 hours, and it's going to be one of those ones that moves markets hundreds of billions of dollars. On top of that, we've got darkpool activity. So, let's get kicking things off here straight away with what happens if the Federal Reserve does cut in September and what should we be looking for.
Now, apologies that this chart's a little bit blurry, but it was a really good one that I wanted to bring in for today's video. And that is whether we focus on a non-recessionary path or a recessionary path when it comes to a pause of the Fed rate cuts for a while and then a new regime. Now, of course, it's speculated that Jerome Powell last Friday mentioned that pretty much we're going to see a rate cut in September. So, this kicks things off again to looking at the next 1 to 3 months. And if it's your first time here on the channel, make sure to subscribe because this will matter a lot to how we perceive the next 12 months for markets, and it could be one of the most important structural charts that you will be looking at.
Now, it turns out, according to Bank of America, we have a two-rule kind of thing. If large caps do well, then it tends to mean that the market is probably not going into recession. If small caps tend to do better and perform better than mids and large caps, however, over the next 6 months in particular, then that could be a massive cause for concern. And you guys know that we've been looking at small caps over the last 2 weeks and noticing a significant improvement in rotation from the street. So, what could this tell us? Well, of course, as we mentioned, it's all about the post-rate cut experience, and it really has to do with the way that the market reacts itself, but we will be tracking it very heavily. And this is, of course, a very good read on the next type of move.
If we take a look at the dual data surrounding rate cuts, you guys might not be surprised to note, and we've already said this many times, that JP Morgan have found here that generally the first month is a little bit shaky. Then really a market starts to make a decision. You can see here the bad ones and what happens, and you can see the good ones and how fast markets tend to shrug off the rate cut and say, you know what, we're going to start a what we call dull bull market run. And of course, that's what we've been in now for quite some time. Although it doesn't seem that dull when it's been moving at the speed here from Carson Research, Ryan Detrick. You can also see that the next month is about a 50/50, followed by the next 3 and 6 months being at a much higher percentage across the board, and it is something that, of course, we will be tracking very heavily.
Now let's go over to Nvidia, though, because it's the talk of the next 24 hours and rightfully so. It is now a massive stock. I just want to read some reads out here. Going to Jeff Weniger here. You can see that it is approaching, Nvidia is approaching potentially the entire market size of the Nikkei. Now, this is huge, but it already is bigger as one stock than Canada's entire stock market. And if you take a look at the UK, it's bigger than the UK's entire stock market. So, it is a superpower-style stock. And of course, that makes this earnings always a blockbuster.
Now, according to the latest Goldman Sachs report, and I'm going to read a couple of things here, they are still positive on Nvidia, but it's becoming less so. And I'll read why. To be clear, we remain very bullish on Nvidia's prospects for driving outside growth in 2026 based on positive hyperscale capex. So, basically, they're spending more money to, of course, make more money in the future, and that's always a good sign. However, based on our analysis of historical trading patterns, we believe it may be difficult for the stock to outperform in the next few months. In the absence of numerical data points, this is supportive of further upward revisions. But we think uncertainty of the direction of travel in 2027. Remembering, guys, that stocks trade well into their futures. This is why they're talking about these numbers could weigh on the stock, similar to the historical trading patterns of 2024, which would be, of course, August, September period, and late 2023. So, basically, what they're saying is they think that the stock could start to do more of this, and of course, we know this of it being a pit or a pullback in time. It's had a good run. Maybe it's starting to slow down. My personal opinion is that if we do go into positive gamma, which we'll look at later on today's show, we may be able to reach upwards of that $200 target that a lot of people have set. But realistically, the key here is that we are starting to see a bit of a rotation in the street, and we're losing momentum of some of the most important stocks out there. So, it looks like, of course, at least based on the latest data here from Goldman Sachs, that's what they believe.
Now, a lot of you guys will say, "Well, I don't believe what Goldman has to say." I think it's a relatively interesting point, and of course, you should always look at flows, dark pools more than what they say. You should see what they're doing. Now, speaking of what they're doing, let's have a look what the options market is implying. Now, this is thanks to earnings watcher, and you can see the current implied volatility move coming into Nvidia day is 6.7% plus or minus. So, that basically means that the stock could either move down or up 6.7%. Now, according to the data from the last couple of earnings, you can see here that actual versus implied move, how often does the actual move beat the implied move? So, the implied move might be this. If it is a massive beat, then generally the move is larger by on average 6.3%, and when it's not a beat, it's only about 2.9% larger. So, what often happens is we do end up getting quite large moves based on the earnings result themselves. So, here are the implied moves from all the previous periods, and here are, of course, how much the stock moved, and you can see sometimes the stock has moved even more. So, do remember they do tend to be relatively accurate for Nvidia. So, expect a volatile day with hundreds of billions of dollars moving, and of course, potentially expect a breakout of momentum in either direction. 170 on the support side, about 185 on the resistance side. You'll see that with the gamma walls that we've got later on today's show.
Now, let's take talk a little bit about this week and how markets generally react. We've already talked about how we generally see a positive side spin to pre-Labor Day. This goes for most US holidays. And of course, the week before often does tend to be more positive. Post-Labor has had some shockers in it in particular years, but just remember these are just data statistics. As the Almanac Trader says, Wednesday does tend to be the better day with, of course, the more positive reactions across the board, and then Thursday and Friday can be a bit coin-flippy in terms of how they work, at least this week.
In broader news, we've got bullish oil bets falling to 17-year lows, which we've mentioned a few times now on the channel. The reason we're bringing this up is when everyone goes completely against something, you know, I start sniffing, and a few of you guys start looking around. This is most famous for some of the moves that we've made, of course, in gold a few years ago, something we did in silver recently, Bitcoin last year, all sorts of things. When everyone hates something, China as well, when people hate stuff and the price action starts to improve, I always pay attention. I'm sure a lot of you guys do as well. S&P seasonal composites post-election year, it makes sense potentially, based on what Goldman Sachs is also saying, to see some form of sideways in some of the momentum stocks. By the way, darkpool activity in many momentum stocks over the last 24 hours. Could we be going into all sorts of volatility and sideways action? So far, that's kind of been what's happened. We've slowed down a little bit. And this would also make sense when you think about zig-zag breadth thrusts and how much they tend to bring up over the first 126 days.
Now, you'll notice that we're already at the point now in terms of average gain of a zig-zag breadth thrust, one of the best breadth indicators ever, by the way. This one from the daily number by Grant Hawkridge. I like Grant very much. So, it's awesome to see his work here. And of course, you can see we have a beautiful pit. So, we have one of these points where you can see there is a pullback in time. The market doesn't do anything. Now, you might think, well, that means that it's just, you know, nothing's going on. Actually, this is where rotation often occurs. So, this is where the streak goes from the biggest large caps into the mids, into the smaller ones, into the other areas. And that's what we started to see about 2-3 weeks ago. So, it actually makes sense when you look at the Zwag breadth thrust, which is why I bought it up.
So now let's jump on over to dark pools. And boy, oh boy, were there a lot of dark pools over the last 24 hours. Notably, of course, semiconductors. First up, Nvidia, 15th largest transaction ever in the dark pool side. And you can see here that it's at those all-time high areas. Now, why would this happen? It could be someone just saying, I don't want to take the risk into earnings. I'm going to get out. It also could be a huge amount of transactions needed to cover some of the massive options flows that were happening over the last 24 hours. It always, I guess, it doesn't surprise me, but a lot of people love speculating on earnings season. The key to me has always been the credit side, but you need to know, of course, you're doing. But yeah, a lot of people opening up calls. There are some notable ones that happened over the last 24 hours. So, I would say quite a lot of people are betting on the positive side here for Nvidia, but we'll see that soon in the gamma walls. TSM also adding to the semiconductor trades. Number seven recorded near the all-time highs. So, of course, some big transactions going on there from TSM. And another one of the top 10 stocks that took us all the way to the gains so far of this V-shaped recovery, Oracle, getting the third largest transaction. Not a dark pool, but a big one coming in just near these highs. Again, is that a take profit? Is it an additional ad? I don't know yet, but I would say that it all seems to be in keeping. Now, this is because we also saw a huge rebalance event in the MSCI. So, just remember that some of these transactions are probably because of that, but they are all coming through on top of each other.
Another one that's surprising is SoFi, number one, number 98, and number 30. These are big transactions. So, they're all coming in near the peak. And of course, it shows you that maybe the SoFi run has come to an end for now. It's actually near its all-time high back over here, I think, in the list or around that level. And the main thing here, a few people of our private community have been on top of this one, running it up, is that we started to see a lot of volatility recently, and so far good earnings, of course, but yeah, some big transactions coming through nonetheless. Then we got one on Tencent Music. You can see here the fifth largest transaction, and then we get to the number one. Ooh, it's happening in something I like, guys. Gold, old GLD, getting a monster coming through here. And you know, you've got to ask yourself, is this a top position? Is this a dark pool off the current accumulation potential here of the symmetrical triangle or pennants, if you're a technical trader? We don't know yet. But what I will say is that we have got number one. I I've actually been seeing improvements in the gold markets recently. So maybe it's some big player saying, "You know what? I like what I'm seeing on the charts more than anything else," and they're getting in. Now, a lot of you guys are going to say, "Tom, you're biased. Gold bullish. You usually say these are sells." Yeah, that could be true. But at least the good thing is the technical chart is actually showing around the right type of things. So, I expect a large move on gold soon based on these types of things. We also have FU. Always sounds like I'm swearing when I say that one. And that had a number one largest transaction on it at the peaks. And of course, number well, what was the one on it down here? So, they've led into fairly large trades each way. So, Ethereum kind of stuck for now after all of that massive movement to those all-time high levels.
All right, let's now have a look at what's going on with the implied moves for the stock earnings this week. You can see Nvidia is the big discussion point, but we've already gone over that. And then there's some other ones. Barber also notable on Friday. So, couple of Chinese stocks coming out with earnings. That should be interesting.
All right, now let's jump into the charts. S&P 500 time. Do we see the advance-decline line still looking good? Answer is yes. That's of course a bullish checklist kind of read. You know, percentage of stocks above 50 moving average and 20 still remains good. So, it is still in a bull trend, and it is relatively dull at the moment. The real story has been underneath the hood, and while we still expect Q3 to be all sorts of volatility, for now, it's grinding higher each day, it looks like.
Let's have a look at the futures market. You can see here in futures, we have the options high and low levels for the day. And we're getting close to that all-time high for S&P. But maybe more interesting is actually what's happening on the NASDAQ and the Russell, which we'll look at in a moment.
Let's now jump on over to the option spreads. You can see here, guys, that we have the S&P 500 with a decent put wall at around 6450 still. That held the market up over the last 24 hours. We already mentioned that a few times. And then, of course, we get huge amounts of calls all over the 6,500 zone. So, this is going to be the zone where if it breaks through, you know, a lot of people are going to say, well, let's get to 6,600 then, and the market will start to push higher. So, that's going to be the next two big levels.
Tesla hit 350 plus. So, that's of course a positive sign. Congrats if you've been on the Tesla wave up. It's actually been a pretty good technical trade, which we've talked about. And again, leave my opinions, your opinions at the side. I might not believe it's worth that much money. Maybe you don't, maybe you do out there. But the point is, it doesn't matter, guys. The options flow often, and that price action flow is what makes a lot of these stocks move. Now, the good news is you're at 350. The bad news is you've got to break 350 now to get to the next big levels. And those, of course, have historically been 380, 400. So, you'll notice that these big strikes, look at the next big strike zone. It's coming in at 400. So, yeah, something to watch there for Tesla if it keeps rallying against the wall of worry.
And Nvidia, it's all about 185, at least in terms of the current data. And then 200 is going to be the next major wall you would have to think from that. So, as you'll see in a moment, 170, 185, trapped between coiling, break up, possibly positive gamma push higher, break down. I would just say, you know, maybe a bit more decline, but in general, more of a sideways for now.
Let's now jump into the lead indicators. As you guys know, we've been using the top 10 stocks that have taken us to this all-time high rally, third fastest rally ever recorded. And you notice here, we have done nothing the last couple of days, which is good because that's what it should be doing. Very slow movement in the tech side, which is totally fine. Equal weight has done better, which is good because that means it's rotation as we expect, and the Russell 2000 has held much better versus the Spy, actually going over or getting towards that 365 argument that we've had for a little while. And this, of course, is important because that's the first good sign in the Russell in a very long time, probably the last time it even looked okay was November. So, the last time it actually looked okay was November, and then before that, probably over here in December, November. Funnily enough, similar periods. Yeah. So, you always get a lot more run often in the Russell into the end of the year, where it tends to do well. But this time, coming into a cut, do we really want to see it do very well? Because remember, if the Russell leads by too much, hey, that actually might be a bad sign for the economy, if you can believe, because that's what's happened in at least the past. RPT equal weight, no changes there. So, that's absolutely fine. And US dollar is doing nothing, which is again exactly what we would expect it to be doing because even tinging upside, which is because it's the most crowded trade or was, and it's got to de-leverage itself.
Now let's talk about number one largest. Now, of course, that was on GLD, which is just an ETF for gold spot, but or gold bullion, but you can see here we have the pretty much symmetrical triangle here. We're getting close to where you'd expect a coil breakout. We have seen some improvements, of course, 3375 broken through, that's a bit more bullish. 3450 remains the main level to see really bulls take control. And if the bears are going to bust this one down, then it's probably going to need to go underneath this level down here, probably somewhere around 3250 breach below that, and then that could actually start a bit of a sell circus on gold. But for now, I, you know, the the weekly, the monthly, the daily, the wow, not so much the daily, but the weekly, the monthly, they're both bullish. So, you've got to kind of be on more the bullish end. And silver is also showing the same things. New high over here. Obviously, now we're looking more towards that bull run.
When you go over to energy and oil, oil dropped a little bit, back into the same levels. Energy stocks still looking for an 8940. I'm starting to see improvement in energy. Like to see oil, though, hold around here and find buyers. So, I've gone between both oil contracts. So, here's Brent, and you can see Brent's at around the support. So, like to see bid there. Early days. We'll see how that one plays.
Tesla, nice downward or nice trend line break. Nice break from that to the 350. Now the 380, 400 becomes open. So, it's actually pretty bullish. I mean, the way that it's doing it's playing catch-up. Remember Tesla, Apple, Google have been behind, and if you actually look, they've been doing better in recent sessions. So, you can see here Apple showing a little bit of bullishness. Not that bullish Apple, but it is what it is. And Google, you know, one of the most, well, I think it's the most underpriced fundamentally when it comes to the MAG stocks, and that's been holding that daily 20 all the way up. So, that's sitting at around a resistance level.
Now Nvidia, we've got the high levels of about 185. We've got the supports of around 170. And we're trapped within a coiling level in here. We don't know which way it's going to break yet. Of course, you'd usually go with the trend being bullish. So, therefore, you'd be slightly bullish tinged. If you're looking at previous history, you'll notice pretty much all the earnings except for a couple have been bullish. So, for now, it's going to be, is it a buy the rumor, sell the fact, or is it just a continuation? But the good news is if you take this distance, you may have already calculated this. It's got what we call proofing in it, which takes us to around that 200 target. So, that's going to be a pretty cool level.
In terms of China, still good, guys. Look at them go. Oh, it's a wild market that one there. When it gets when it rips, it rips. And if you don't believe me, have a look at this. Zoom out. Oh my goodness. Look at this. Look at these rips that they've had in the past. So, yeah, China well known to get a bit of the liquidity in it, and then everyone suddenly piles in. So, certainly is happening out there, and we've been talking about that.
The Russell 2000 did play a bit of catch-up. I'm still looking at most drops to be bought up towards 2440 in terms of technicals at this stage, and you can use things like fibs as well to work out some extensions if you want to do that. But realistically, I think the two main extensions that people are going to be going for is this one here, which is the pullback that we saw giving you a negative one at around those first targets. And of course, it makes sense also why we're sitting on these levels. So, yeah, some extensions there for the Russell.
NASDAQ, again, some people are saying this is a head and shoulders. Notice the significant underperformance of the NASDAQ since we started talking about it. That is exactly what you'd want to generally see. And if the market does go underneath 22,800 in the future, then that's going to, of course, open up this distance, which is going to prove pretty well into this demand structure down the bottom. So, that may signal, let's say, a further pullback is in order.
Ethereum is doing its thing. It's holding better than Bitcoin after everything that's going on. A lot of trades going on in here. Of course, big buy, big sell, middling ground at this stage. If alts hold better, the big alts hold better while Bitcoin gets flogged, that's similar to previous cycles. And as we've mentioned, if an alt cycle does come through, it's more likely to happen in October, November, or December because that's what's done in the past. And it doesn't last long, 30, 40 days. So, remember, it's not too long.
Bitcoin still holding underneath 112. You can see it did make a recovery, guys, and then it fell through. And if we take a look at the Oh, I actually had it up, but I didn't anymore. If we take a look at the levels, you'll notice in the last video I did this as well. 98K is about 21% down, which would make sense to previous times. And between 104 and 106 is that heavy traded zone through here. So, I'm thinking at this stage, this is a possibility. This is a possibility. They're kind of the two that I favor. But you're always willing to to change in trading. You've got to evolve. Get a new high above here. That will be super significant as well. That would basically say, okay, that was the pullback. Now, let's hopefully move on up.
If you enjoyed today's video, guys, please remember to subscribe and smash that like button. Obviously, we have a bunch of other areas you can go check us out. We've got Twitter. I post on LinkedIn pretty much daily at the moment. And you can also check out our courses over at fxevolution.com. We've got some showing you how we pick gold, silver, and all of these other things, our advanced masterclass. We've got options credit style setups, including our advanced options strategies, which have a new course that we just released. And of course, we have our day trading masterclass as well, which takes into account day trading, scalping, all the way into swing and position base. And I do love a good bit of position base. The key to the future, guys, follow the flow, not what they say. And also think about your strategies as well to combat AI. I've been doing that for years, and I'm sure that all of you guys are already implementing new strats to make sure that you will be able to stay ahead of the game. Thank you so much for watching. Subscribe. We'll see you in the next one. Bye for now.