Transcription
Are we heading for another .com style crash? The most popular chart going around the internet right now is a similarity between 1999 and, of course, 2026. But is this something we've already talked about on this show? And is it really going to end up like this?
Well, in today's video, we'll take a look at stocks, commodities, and cryptos to better understand what's happening, why the markets were up so much on Friday, some of the macro behind this, and more importantly, how things are looking coming into this week now that we know the strait is closed once again. It seems to be an up, down, and all-around year. And to make matters even more crazy, we're now in some big earnings. So, join us as we go through the markets and everything that we need to know as investors and traders this week. See you soon, guys. This one is not to be missed.
Well, welcome back everybody to one of the largest daily shows on the planet when it comes to everything that we need to know about markets out there. It was a great week for one of the big things that we've been seeing recently, which was software. Semiconductors came through and defensives were down across the board. But could that really only be painting part of the picture as we saw weekend news once again now start to form gaps?
According to the latest market data, based on the weekend futures, we're only down about 0.5% on the S&P. But if things continue to stay closed in terms of the strait, could we be looking at extreme volatility coming up? While this is the first chart that we want to talk about before we go through earnings and expectations and then everything else in today's video, which is, of course, something we've already talked about once before, the .com boom and the similarities of 2026.
Over here, we had, of course, the internet, the wwws, and everybody was going wild. Over here, we have 2026 on the left, which is AI data centers, and guess what? Everyone going wild. So, are there similarities? Of course, in many ways, there are. But like everything, there's going to be nuance and differences. Where the big thing is, though, is this particular overlay. If you actually put the chart on top of each other, which we've done before, then you'll end up seeing that this rally looks very similar to what happened before an extreme amount of volatility near the end of the dot-com rally.
And this is kind of what we expect, actually, for the rest of the year. In many ways, it was part of our prediction at the start of this year where we talked about this, and the main reason was that we thought there would be two dips because of midterm election years and the nature of what tends to happen. A first-quarter dip into a rally, which you'll see in a moment, that then gets into a very hectic time leading into the midterms themselves.
Now, Tom Lee also came out this week and mentioned that he believes the market can get to 7,300 and then may suffer a 15 to 20% falloff. Now, that's a pretty big call, but of course, he did get the April rally right. And as some of you said in the comments down below, maybe he was due one because some of you were going at some of the things that he said late last year. Well, as always, these predictions are one of those things that's very difficult to necessarily completely map out. But the good thing is is that we can follow the flows and we can follow the dark pools. And today, we've got a couple of big dark pools coming in from Wall Street into this earning season.
Now, to kick earning season off here, we've just had the banks, and of course, we've had a pretty good result coming in from semiconductors. TSM in particular showed that demand is sky-high. The markets are absolutely crazy for it, and of course, they've been pricing it in. But could it be time now to be looking at other sectors such as software?
Well, this week, we're going to be all eyes on, of course, Tesla and many other companies. And this chart here from earnings whisper. Definitely give them a follow over on X if you haven't already. They've been providing these for forever when I think about it in terms of being in the markets, but a long, long time. Um, and obviously, they always show you all the companies. Another one that gives a good follow is earnings watcher, who gives us the options implied volatility move.
Now, you'll notice that Tesla's already come out, and according to at least the economist expectations and the big banks, they're going to do okay, and that's led to the markets rallying up. Now, we actually saw this in flows already because we do know that electric vehicles are becoming extremely popular due to, of course, rising fuel prices. And here in Australia, where I'm based, anyway, if you go into any normal car dealership, there's probably going to be crickets versus, of course, anyone that sells an EV vehicle or hybrid, you're probably going to see a massive amount of people around. And the main reason is people are desperate to get off diesel here in Australia because of the expense running through.
Now, is that a knee-jerk reaction? Well, in trading and investing, you know, it's always important to actually look at the time horizon versus just going and making crazy decisions to buy anything. But in this case, it is probably going to help Tesla's sales. And this is, of course, all eyes on the chart. And more importantly, the daily 20 moving average was also broken through this week, which we'll look at later on.
So, a lot of implied V. Do remember next week is actually the big, big earnings as we kick off real massive tech, but we've still got some big ones coming here with IBM, Tesla, and many others. So, has earnings been living up to expectations? Well, the answer is quite simply yes. And as we often say here on the channel, peak earnings is something we're looking for here in 2026 if we're to think we're actually in the top of a late-cycle market.
Now, we mentioned this during the drops. We've mentioned this, of course, all of last year, and we always talk about earnings, earnings, earnings, because it does tend to be incredibly important ultimately to whether a rally can continue or whether a drop will be bought. Now, in this case, the analysts are going wild. Now, this was actually taken before the markets have already given expectations, but duality research over on X, give and follow, great chart here, really shows that each quarter this year, everyone on Wall Street is feeling extremely bullish, and of course, that's totally against what's in the press, which is everybody feeling extremely bearish.
Now, if we have a look at Ford PE ratio, what you're going to notice is that the markets themselves have made new all-time highs, but the actual expectations of the street are that it's still kind of cheap. Now, expectations of cheap are, of course, different things to different people. Are we really cheap? Not really, but we're certainly not quite back to the peak here. And duality research again shows that we're around 10% away from the expect of the overall valuation that we were during the peak of October '28.
Now, is this important? Well, it's always worth keeping things, you know, relative to each other. And although I do think that the markets have stayed too high for too long, and we will see earnings compression at some point this year, at the moment, the street seems to be very happy with how Q1 is shaping up so far. The Nasdaq therefore led into one of the best returns ever. In fact, 12 consecutive days up is pretty much a face-ripper rally.
Now, you don't see these every day. And you can see here the market stats over on X. Shout out to you, market stats. Basically shows that when these types of rallies happen, there does tend to be usually further rallies behind them, which I guess does support the idea that maybe markets can go a little bit higher. The thing about this stat, though, is you've got to ask yourself, why are we up? What is the market really pricing in that maybe a lot of people aren't seeing?
Well, there's actually quite a few things that could lead us higher. And although I don't agree with them over the long term, which I think is, you know, the important factor here, the short term, it does kind of make sense in some ways. Government stimulus, defense spending, obviously we've got here, of course, deregulation, trader rules changing in the US, by the way, guys, it looks like, and constant deregulation across the board, just to name a few, are some of the reasons that the market is ultra optimistic. That on top of AI capex spend, as pretty much every business seems to have extreme fear over not getting on board, plus also IPOs in 2026 are what is kind of supporting this market. And as we've often thought about, it's usually when the big IPOs come through that you've got to be most worried.
What I have noticed, though, is something I'm going to talk about in this week's free news weekly newsletter. Links in the description down below, by the way, guys, to sign up. You'll enjoy this one, I think, which is to do with a new exchange-traded fund that just came through. Now, some of you might be able to guess what it is, but let's just say I'll be writing that one up in the newsletter, and it is a bit of a problem because when they tend to come through, it can mark a bit of a peaking of that particular sector.
Now, let's have a look here at the S&P 500. 12% plus gain over a 13-day stretch here from Blue Kurdic. Does kind of show that sometimes we get a bunch of volatility after this period. In fact, you'll notice here that over the next 5 days, less than a coin flip of the time, markets are up, at least based on history. But if you look at a 12-month change, very, very positive, except for one.
Now, I'm going to say that these stats, while all very good in terms of thrust, because of the late-stage cycle of the market that at least we believe we're in, based on, of course, big small caps actually doing big small caps, small caps in general doing better than the large caps over the last 6 months. Remember, this is something we've been tracking for quite some time, guys. We have to bring this one up soon as well, which is from when the Federal Reserve did, of course, the rate cut last year and started the rate-cutting cycle that we are in, probably what we call late-stage cycling.
Now, latest stage cycling can take anywhere upwards of 6 to 2 years, and it does take a while to really play out, but that's why we're looking for peak earnings, and we'll also be looking for what the new Fed chair is going to do, which is the expectation of cutting into potential inflation, which frankly could be diabolical. Now, short-term can be good, long-term very bad, and could weaken currency significantly if not handled correctly and if the right things don't go out. So, we'll have to see how this plays in during 2026 as well.
S&P 500 three plus all-time highs. Very interesting read here from Blue Kurdic. Interesting quant. Basically, the S&P 500 price paths in years where April has three all-time highs does tend to bring with it more positive movements. Now, I think the thing here is that obviously there are some that could be bad, but generally speaking, there are a couple that have that kind of weakness later on in the year. And while I'm not going to use one data point to say anything, if you're on the bull side, you may like this particular quant. We always on this channel try to provide both sides as much as possible so you can see the good, the bad, and the ugly.
Now, speaking of, I guess, the good and the bad, do we expect rallies generally to top during April and May? Well, I guess if you're looking here at Polycarp FX's research, obviously taken from these sources down here, guys, then you'll notice that during normal midterm election years, we tend to rally into April and May. We tend to fall into the middle of the year. Things can get much worse, which is where, of course, these negative 15 to 20% kind of reads come from, and then we actually bottom often before the election itself.
Now, the stat around the election, you have to wait for that one later on this year, guys. But that particular stat is actually an incredibly interesting one. But as I say, earnings, earnings, earnings, you know, it's going to be very important.
Now, why did we rip up so much? Well, this chart here from the MAC at macro charts over on X, and of course, it looks like to be a Goldman Sachs report that's been shared here, basically shows what Goldman said last week, which was that we got a massive rally coming through. And this rally was driven by global CTA positioning. Now, they did say that, of course, the tape was super under invested. We did talk about this in our shows, but look at it now. It is actually rallied all the way back up. And there are a couple of dates here if you're interested in checking them out: November '23, August '24, and September 2019.
Now, in a lot of these cases, you might be interested to have a look at the markets and how they reacted afterwards. But, um, yeah, couple of massive reads, and this is an it's a huge change in CTA positioning. So, everyone basically went back in. That was $70 billion of buying, and it happened just like that. Now, that, of course, we have the news of the global of the strait being closed once again. I guess it's going to be, you know, probably a red market open on Monday, and we'll have to see how this ends up.
But the problem with this in 2026 is that it's up, down, and all around in terms of the news that we're being told. You know, one minute open, one minute closed, 20% of the oil is basically at risk here for the world. And the longer it goes on, which unfortunately, we kind of still expect it to be going on for quite some time, even if it comes off, I have a feeling it may go back. We'll see, guys. But who knows? That's not what we look at here at the show. Uh, this type of stuff will eventually take a massive toll.
Now, a few of you guys in the comment section said that it's already increasing food around you. You've also said that you've canceled your travel plans. All of this takes a toll, and it's a domino effect that hits onto markets, which could be an explanation for why we're starting to see some hated market sectors such as software here becoming some of the best sectors over the last 5 days. Software, which is the kind of anti-trade to semiconductors. Semiconductors up, software has been down over the last 6 months. Particular have had the best 5 days. So, they've actually picked up quite a lot, and this comes off the back of this huge dark pool cluster at low steel, and something that we wrote about in our free weekly institutional insight newsletter. Again, link in the description if you're interested in having a look at that in the future.
So, why is it important? Well, it just goes to show that sometimes when you see traps, potential traps, anyway, and the markets do start to find these basing patterns, that there's always another opportunity. And remember, it only really started about 5 days ago, which is after semiconductors went crazy, after things such as this, which is hard drives and data-style stocks went crazy.
Speaking of which, we are very closely watching something that I don't think many people are looking at the retail world, which is not so much that people aren't looking at hardware, hardware companies, because of course, everyone is. They're tracking them, but at the same time, is this the actual sign of the end of a semiconductor run? So, SanDisk here is ballistic, and it just saw the number one largest trade go through next to the number 12. And you might say, what is the big deal? Well, last time we saw clusters of trades come through, we actually got some weakness for a period there. So, it does suggest this is a possibility right now in these markets. And of course, it's something that I think we have to consider as we move forward through 2026.
Some other things that need to be considered. Stocks such as this one here, which is, of course, Car or Avis. We're seeing squeezes similar to 2021. We're seeing rallies similar to 2021. We're seeing IPO private equity markets similar to 2021. It all suggests that a lot of activity is going on. And JP Morgan, Goldman Sachs, and many other banks, what were they all doing, guys, this week? They were all saying, "Hey, our trading desk is awesome. Fantastic." And what about the retail side? Ah, you know, don't worry about that one, guys. Fantastic on the trading desk. It's great, guys. So, you know, it is a two-connected market, and it does show that there's some weakness here, at least in our opinion, in the American consumer, and probably the world consumer, especially post what's been happening over the last month and a half.
XLE Energy. Now, this was a very interesting one. We saw the largest dark pool sweep, which suggests that someone may have been trying to buy energy stocks. Well, based on the position and the demand, it does suggest that that could be the possibility. Then, of course, we got the announcement of the strait being opened, and it gapped down and then rallied back up, ending up pretty much right around the same trade area. Now, the question will be, will it bounce a little bit on Monday? I guess we'd have to expect it probably would at this stage. But was that some kind of low steel in this structure?
Well, this is, of course, the big discussion point, and we're looking for a series of changes on the market from structure side to actually show whether the momentum has switched towards the bullish side or not. It hadn't, as of last week. Obviously, it still fell off. Now, the question is, will it switch like this? And of course, if energy does tend to drive higher, which I guess would usually happen if you are leading into an inflation crisis and a crisis in general, often energy stocks do do that, then yeah, we're in some big trouble.
Because got the Mickey Mouse pattern on the Cosby, which is obviously pretty much hardware, and we're looking towards, you know, what happens here. So, hardware, hardware, hardware, and semiconductors, semiconductors, semiconductors. Why is this so important? And it's just the backbone of the current US market. It's what's really been taking us up.
Now, Duality Research also had this excellent chart here, which basically showed after 2 days of rallies off the bottom just a few weeks ago, that the markets were probably going to try to find recovery. Why? Because when semis find thrusts, it does tend to be more bullish cases than bearish cases. And what tends to happen is you get a lot of sideways to up markets. So, you know, little wonder why I guess we're up so much, but at the same time, um, yeah, it's driven by semis. Just remember.
All right. Well, let's have a look now at the dollar index. And it actually tapped into the area that we would have thought it should have to find some buying pressure. It just goes to show why we're going to set up a bunch of these levels in the future. So, you guys can see what we do in terms of loading up bigger, higher time frame zones, and how that kind of helps you. If you're ever interested, by the way, to find out more about these zones, how you can start to think about fishing for yourself, actually understanding the stuff in the markets, check out our courses, fxevolution.com. In 2026, I'd have to suggest, by the way, that you look at things like the advanced masterclass, day trading masterclass, ultimate masterclass, those kind of ones, so that you get a bit of an idea about the flows, uh, in particular, because not only is the advanced class about cycles and where we're at, but yeah, there's some problems that are coming up here in 2026 that we need to be paying attention to.
Now, the dollar index is not probably going to create instantaneous, you know, momentum flows, but it did hit that support. Where the interest comes in is, of course, what's going to happen here with the S&P. Let's just get some numbers together here. From the bottom to the top, we now have a 13% rally. Now, that's an extremely fast rally. Not unheard of, but pretty damn extreme. We do have a 20 and 50 cross sitting here. And if we actually put an anchored VWAP behind the low here on the main market, you can see a lot of things aligning with 6,800, which just goes to show that the markets often do line up with very important levels. Remember, this is also the most traded zone on the way down. Uh, so therefore, we thought it might find a little bit of resistance selling here. And you can see it did for like a fraction of a second until Trump made that announcement, and then boom, it led to a massive rally.
Now, the frustration here in markets is, of course, people are getting very concerned about integrity and what's actually moving here in markets in terms of the ups and the downs, because this is a very aggressive rally. I've chucked two anchored VWAPs behind so you can kind of see some potential key levels that may be hit. Uh, but 6,800 is now becoming a very interesting zone should we actually pull back for where you may see Wall Street start to dip back in. What the big story is, is probably going to be whether there's too many call options at the top, and of course, the news through this week, and then whether we get puts that are sitting at 6,800 should we actually pull back. For now, though, it's a series of higher highs and higher lows. There's no real sequence to say that these markets are weakening. It doesn't really matter which one of these markets you're looking at.
Here's the Russell 2000. It's also incredibly strong. Series of higher highs and higher lows suggesting that pullbacks will be met by bull demand regardless of what your opinion is, at least right now, on the macro. And I think that's very important. Like we mentioned a few weeks ago, the markets, as they broke through that downward trend line on the S&P, guys, it wasn't really that the macro is bad. It is. It's just that when does the market care? And at the moment, it's earnings, earnings, earnings. So, the market is just saying we're going to get stimulus. We're going to get Federal Reserve support. We're going to get deregulation. We're going to get government spending and defense spending and all this other stuff with re-industrialization. And this is just a huge amount of massive deficit that's going to be potentially put in markets that provides liquidity that gets us up. And that's really the main thing here. It's kind of like thinking, you know, what happened in COVID, and I don't think we're going to go that kind of stim. But obviously, that's what the market's betting on. Whether it's right this time or not, though, is the big question. You shouldn't really be stimming so hard into mass inflation. So, I think it's a tough one. But what do you guys think in the comments down below?
Let's have a look here at the S&P. You can see that 7100 now, or 7090, becomes the call wall. We're in positive gamma again, guys, which basically strengthens the upward case and the hedging case. And obviously, 7200 is now the most struck of all zones, which has been rising up for this week ahead. 7100, 7100, 7100. The mark itself was obviously just above that with that epic close. But you can see here the calls are sitting everywhere on those zones and then up to 7,200. So, that's kind of the main areas for the cues. We've got here. It looks like 650, which is right where we pretty much closed. So, again, 650, 650, 650. So, big call walls. We expect the market, I guess, to open down. If it opens up, then probably something's changed in the news from this recording. Maybe even now, you never know, guys. But it doesn't really change the overall thought process to the markets.
Tesla, what's going on there? 400, 400, 400. We ended up just on it, uh, as you can see here on the spot close, and that is the most struck zone. Now, interestingly, this week is, of course, the earnings result, and I think the market's starting to realize probably people are buying, you know, EVs around the world. That's probably leading into, you know, a decent, decent kind of forward guidance. And at the same time, obviously, Tesla is also releasing their Model Y six-seater around the world, which I expect will come to America soon. If you haven't seen it, you might as well check it out, guys. Um, and then general, I guess you would say, like, the main thing here is, you know, what else can they announce? Something with AI, FSD, etc., etc. It has been in the doldrums recently. So, remember, it's been a declining company for ages. It's been losing probably a bit of liquidity to SpaceX IPO thoughts and stuff like that, but 400 is a big breakout level for uh Tesla, at least in the gamma side.
Nvidia, 200, 200 again at resistance. There's a lot of massive calls walls here on the markets. And IBIT, well, it came up, but we do have, of course, Bitcoin open. It's dropped back down. So, it got through the all-important 42, 43. We ended up going to 44 for IBIT, and then we've sold off a little bit, but we're still above. And we'll look at the technicals in a moment.
All right, let's jump into the charts. First up, software, software, software. Really big improvements over the last week. We managed to get back above this previous low, which is a super deal. Obviously, we have here massive volume. We also have a change here in small time frame trend. And of course, now the markets may do battle with the big zone of 88 to 90 zone. So, this is going to be a pretty important level. But you can see here that software has been improving versus the spy. And while it hasn't come off, you know, a significant change, it has been improving. And we've seen this with Infoch as well, which we tracked this week.
Let's have a look at SNDK. I just wanted to bring this up to show you how crazy the rally really has been. And if you actually zoom it out, you're going to get a bit of an idea. If you bought that in August of last year, $42. Not an unknown company, by the way. Now $920. Wow. And you load that up next to Cosby, which is the South Korean market, remembers the whole index. Oh, look at that, guys. You go back to June, and then it's literally over a doubling of what's happened there. So, some pretty big stuff going on in the Cosby. Do I think it's probably got close to topping? My personal opinion is probably yes. I think it could still make a new high, but in general, this market actually scares me more than any other market out there. Again, it's my personal opinion, but it does certainly bring up some questions.
We saw quite a lot of breakouts over the last week. Uh, many people looking at things like uranium, uh, which broke through the downward trend line, broke through 52 kind of area. We also saw, of course, energy come down to that important demand zone. It also hit the weekly 20, which is considered weekly mean reversion. Uh, which it's been a while since it's done that, cuz it went on that epic rally. And then I think probably more interestingly, once it dropped through, which it didn't break through all this demand, by the way, but it did break a little bit lower, it ended up coming up and basically filling the gap between the low, the low here, and this area. Now, it hasn't filled the gap from the close. So, now we've got new zones to mark out this week, including this high here that was formed back last week. So, yeah, interesting to see how the number one trade, which remember, trades around 55, so almost the exact same price. Will Wall Street use this rally to dump out and get rid of the energy stocks, or is this some form of like low steel trap that will rally out? I think that one's worth watching this week, and we'll definitely check it out.
XME, we've seen a breakdown, uh, or break up, I guess, of the overall downward trend line. Things like copper and stuff have been going pretty wild, and that's leading to emerging funds. So, EM emerging companies and all emerging economies in the world doing very well, and also the Brazilian market doing pretty big, pretty big stuff as well.
Let's have a look here at, uh, Tesla. You can see series of lower highs and lower lows. Daily 20. Wow, it was so sally at those zones. Then suddenly, boom, massive report comes out. Earnings this week. We'll see how that plays. But we do have a break for the first time of a downward sequence. And it has been like, what, a long time? A long time, guys, over what, four or five months since we've seen anything good come out of Tesla in terms of positive price action. So, no wonder we're at the call wall. Also, the most traded zone, as you can see here. Makes sense that we would hit that. And then I guess now the decision will be made on the earnings this week. So, we'll see how that ends up. Will it continue to rally?
Gold, slowly, slowly, you know, 5,000's the next resistance. A series of higher highs and higher lows for it and silver. So, they're still doing the same thing. And copper's at resistance, doing a pit at this point. We'll look at that more this week.
Chinese markets, slow breakout, but still a breakup. So, uh, this is a close above the previous highs, which suggests that we could be moving towards 27 and 28,000, and obviously not looking negative on the weekly closures either, which you can see here on the charts. So, bit of a positive action. Love to see it break through 27 and continue up. That one's been doing okay.
NASDAQ has been ballistic. You can see here, massive move. Huge amount of days up in a row. All good things eventually do come down. The question is when. And just remember, it could get very volatile if we are really seeing a 2000-style overlay, which at least in my belief, is very similar types of markets. Uh, but again, I think every time is slightly different. So, don't just use one overlay to try to figure out what's exactly going on. When everyone starts talking about it, usually it'll provide a different chart as well. And that thing is trending at this stage. I think Beardo over on X was the most popular one, but it is something we've talked about for a long time. And I've actually brought this one up for well over five or six years as being something that we're tracking. Um, I think also Tim Fidelity, shout out to him. He's had some excellent overlays with the '60s and '90s runs for quite some time.
What about Ethereum? Well, you can see here that Ethereum has made a break high in terms of a closure, which is solid. We're still seeing a series of higher highs and higher lows, even with the news of the strait, uh, being closed once again. And of course, Bitcoin managed to get back to the weekly 20. Probably no surprise it rejected there. It was right around that 78K that we thought might struggle with a little bit, but we get through there. Not much on the left-hand side, and that could get us back into 89. So, is this encouraging for Bitcoin traders? Yes, I think the naysayers and the people that will uh hate on Bitcoin right now will have something like this drawn, and they'll be, you know, maybe they'll draw it through the body closes or something and be like, "Yeah, look at that. It's going to it's going to get caned." Well, hopefully not. Uh, but we don't know just yet. Series of higher highs and higher lows, large accumulation, obviously some good data stats with the COT reports and other things for Bitcoin. So, yeah, we'll see. It looks more promising than it has in quite some time for the week ahead.
In terms of news, this one here from forexfactory.com, guys, there's, of course, core retail sales. We've got also Fed Chair. Look at that. 10:00 a.m. Tuesday, April 21st. And then we scroll through, and that'll be a big thing, I'm sure. And then we go down here, and not that much other stuff. So, really, this week will be dominated by news, the Fed chair information, and basically, we'll just end up seeing it in the flows.
If you enjoyed today's charts and everything, make sure to subscribe, hit that bell, guys. Have a great weekend as well, and make sure to sign up for the free newsletter. It's totally free. Links in the description down below. One institutional insight each week. I think you'll enjoy this week's one as well, as we go through that ETF that we've been watching uh in recent weeks and why it could be important. Also, check us out next. It's been great to interact with you over there. And if you're interested in finding out more about some of the courses that we run and how to see charts in front of you, see key levels, actually start to set things so that you have plans rather than just, you know, mad reactions, uh, then we want to be, of course, uh, thinking about our courses, fxevolution.com, and links in the description as well. Thanks so much, guys. You have a fantastic weekend. Bye for now.