Transcription
What did we just see happen on markets? Nine days up in a row on the Nasdaq, a gap that reversed instantaneously on the S&P and squeezed higher, and of course, Wall Street all behind it into earning season. It looks like there could be a massive level of complacency in these markets. But as we often say, it's better to follow the flows. So, what did we just see over the last couple of sessions? Why is this chart one of the most important to watch? And of course, what's happening with stocks, commodities, and cryptos? That and more in today's show. See you guys soon. 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 markets. Thanks to you guys. Today we're discussing the latest in macro, what Wall Street's been up to, and of course the options flow and earning season kickoff. Realistically, the banks are in focus, followed by some very important tech companies this week. And I think that's probably going to define whether we can continue to move higher or not. Remember, earnings, earnings, earnings. Something we've been talking about here is that it doesn't look like the market's over until we see peak earnings. And that may not have happened based on Goldman Sachs latest report. And we've got more on that soon.
Let's kick things off here though with 9 days positive. The S&P has been up big. The Nasdaq has been up even bigger. 9% plus gains. And you can see here Blue Kurdic over on X has actually tracked all of this and found that when we have strength, we do tend to see even more strength. And that may come as a surprise, but remember guys, follow semiconductors. And although we're seeing some extreme unusual activity there, which we'll look at in a moment, that doesn't mean it has to instantaneously sell. What often happens is Wall Street starts to take profit. Markets continue to push higher to squeeze out, go to those extreme levels, and then they pull back down to allow that second chance offer. We'll kind of go through what that could look like on the S&P just a little bit later on.
Now, is this unusual in midterm election years? At the start of the year, we talked about in our kind of thoughts on this year that we probably get two dips, that is one in the first quarter and one potentially after the middle of the year into the overall midterm elections. And often you'll actually see bottoming effects that happen before that. Now this chart here is from these sources down below guys and Polycarp has obviously put it together and you can see it covers all of the major indices in the US. And what it shows is that we often do get relief rallies through that March into April period, but often then markets pull back into the middle of the year, continue to fall off, often with a worse sell-off into the midterm election years themselves, and they bottom just before the midterm election years, which is always an interesting statistic that we've found over time.
Now, why is this? Well, markets love to climb the wall of worry. And although my personal opinion is that we're too complacent right now when it comes to everything that's going on, I mean food is going to go up a lot guys, fuel, at least in my opinion, is going to stay high. And a lot of you guys have also thought it's going to stay high. I'm interested to survey you all on this one. And of course, you know, there is so much other things that are not taken into consideration in terms of how long this may go on for, but Wall Street themselves, hey, they've just been basically climbing the wall of worry for a long time now. You can actually see here, according to the latest Main Street University of Michigan report, it's now the lowest we've seen in over a decade, even worse than during the GFC. And this one here is sourced from Zero Hedge and show shared on Kobasta letter over on X.
Now, why is it important? Well, firstly, it's been disconnected for ages. I see a lot of people talking about this like it's some kind of precursor. It isn't really cuz it hasn't been working for a very, very long time. But what it does go to show is that there's been an overdrive of people of course feeling some extreme fear in markets and often we say earnings earnings earnings. One of the reasons that we're focusing on earnings and continuation of them is it doesn't look like we've seen the peak earnings yet, but semiconductors will be the most important because remember the backbone of this market, everything that's kind of making this thing go round is really the hopes and dreams of AI working out, the IPOs that are coming and more importantly these ideas of being able to make tons of profit off them. And remember, we've got right now software down, AI up. We'll talk more about that later on as we look at a couple of cross codes which we love to do here on the channel and I know you guys love it in the comments section down below as well.
12 month goods inflation. This one here source from the commerce department. Uh Tavy Costa sharing it just kind of shows already that food excluding food and NG items has already been seeing inflation go back up through 205 into 26. And this just basically goes to show imagine where it could be at right now. And that's of course going to hurt the middle class. And we've got to ask ourselves in this K economy um that we've got right now, which is basically we've got a disconnection of different sectors and we've also got a disconnection of the middle class and the lower class and of course the upper class spending all the money. What exactly may happen if we start to see one of those sectors go even worse.
Now Goldman Sachs has got the latest report out. This one here from earnings whisper. Always good to get these reports by the way every week guys over on X or through their website. And you can see that we have more banks coming in the next 24 hours that will probably show pretty good results based on what we're seeing from Goldman Sachs. And then of course TSM and Netflix. The big one here being TSM. What is going on in semiconductors? Are we seeing record demand? I'd say yes. Of course, we already know that RAM prices and hardware prices are still insane. But have we seen peak yet? Is this peak earnings? Is this the first quarter going to be the peak earnings of this particular cycle? Well, we don't know just yet, but we do know it's going to be fairly volatile. And you can see here TSM according to earnings watcher and the options market is expected to move around 6 to 7% and Wells Fargo could be moving as much as 5 1/2 plus. So just remember these earning seasons are very volatile here in 2026 and that means that each one is going to get those big snap decision huge moves and if we end up getting an underperformance especially in this environment of any particular stock they may get beaten down pretty heavily. So just be warned.
Now the latest Goldman Sachs performance was pretty good. Earnings report was very strong. We posted this over on X. So follow us in the links in the description down below and also sign up while you're there to our free newsletter. I've got a great one coming on later this week. It's totally free. One institutional like insight each week and of course we're covering it here uh during 2026 as this is the pivotal year into 27 that we all have to pay a lot of attention to whether you're an investor or trader. Key net earnings pretty good 14% up yearon year. Net earnings were of course really really good. EPS was a beat. But I really think the real story here is the breakdown of fees. 48% increase. Now, this is huge. Corporate deal making is back, guys. And what we're seeing here is that this mirrors the 2021 environment when ultraactive markets drove historic advisory pipelines. And this is the same thing that we saw, remember back in Jan into kind of like the middle of 21, what did we see? We saw the rise of ARK. We saw the rise of, of course, Kathy Wood. We saw the rise of everyone going into companies that didn't make any money. And it was a pretty wild time. Now, that's not the same as right now, but what is happening is we're getting a massive frenzy here in M&A. And this basically is something that can preede markets topping out. Do remember we've got the big IPOs coming as well later on this year, including OpenAI, including Anthropic and uh even SpaceX. Now, if they do end up getting accelerated into the World Cup, let's say one of them, maybe SpaceX does, then this is going to be super pivotal and it's something we want to continue to follow this year because you've got to follow the money. And in this case, the IPOs often have preceded sometimes peaking in markets. So, that suggests that maybe we'll be able to hold on here to even upwards of the end of the year even if we do dip.
Now, why is this? Well, one of the things that's happening is yearly EPS estimates are continuing to go up. The economists on Wall Street, they're bullish, guys. I mean, look at them go. They love life. They're thinking everything's looking fantastic. And they've basically just been upgrading, upgrading, upgrading for each quarter this year. This is a great chart here from Duality Research. Um, check them out over on X. And you can kind of see that it's really predicting that this earning season is going to be good. Now, are they right? Well, time will tell, but of course, they are feeling pretty bullish. And that's part of the reason that I think this chart here from Duality as well has been really good. We talk a lot about the backbone of the market, the most important stock market sector, semiconductors from the bull end. What's it been doing? It's been making a series of higher highs and higher lows when it comes to comparisons to the S&P. What's that mean? We're not in a bare market and we're not seeing the strongest market leader failing at this stage. In fact, we got a breadth thrust from this one which led onto a very strong of course movement in historical terms. Now, why is that important? Well, it's one of these things that of course we end up seeing a market that tends to be more resilient around these times. And so far, this has actually been cuz remember this was taken over a week ago. This has actually been very strong not only from the semiconductors but also from the market themselves rebounding. And boy oh boy, I got to say these markets are just like this in terms of how fast they are rebalancing nowadays.
Now, do we need to be worried about a couple of things? Well, as we mentioned in the last video, we're starting to see some massive transactions. Now, they have predominantly been around turn points the last couple. The number one largest led to a bit of a sell after some time. The number 12 obviously led to a buy the dip. We saw that on MU as well. ABGO, some other semiconductors, all got big trades. And now we're starting to see cluster trades of semiconductors. Now, the market did move up after this. It's like kind of looking like that on a candle right now. But just remember, these guys don't really deal in stop losses or any of those types of things. They buy based on positionals and they also buy based on grids and sell based on grids. So, in this case, we've got a market that's basically up at these highs. We're seeing a lot of activity and frenzy and we've got big gaps that are left behind. And you know what they say about gaps, they often do eventually get filled and Wall Street does tend to like giving a second chance offer.
Now where I think markets look very shady has got to be the Cosby. Now this is the South Korean market and I just think that is a huge amount of monstrous trades after what has been an absolute rocket ship. Now for now we're still seeing squeezes on these markets. SanDisk over the last 24 hours as well just the hardware thing we follow that's been absolutely wild. But this does show volatility and when volatility enters into the market then you've got to say well maybe it's over from uh the the run in terms of the biggest gains or most of the gains of the party of the trend are basically over.
Now let's have a look here at IGV. Uh this has been software just want to show again the cluster. Now at the time of this recording what happened was the market went to a lower low. Now we've got here what we call a 123. And I often like 123s cuz they can form woff accumulation bases. Bit of a strong regain over the last 24 hours from software. Certainly something we're watching and of course that is that patience react don't predict kind of concept. Like the level looks good on demand. Uh a lot of good technicals there but it kind of reminds me a little bit of Bitcoin takes a long time to form a base. Also looks like Intel if you ever want to do your analysis and check it out.
Now let's have a look here at why all of this stuff rallied so hard. I think macro charts probably puts it the best here. Also Subu Trade and Stock Market stats and a few other guys. Why? Well, of course, we had a huge amount of puts in the system. Everyone was super bearish that tends to lead to these extreme rallies cuz they they go into squeezes and there was a bunch of cash on the sidelines. Cash is always worthwhile following as it does sometimes denote extreme fear and you can see here macro charts really showed that before it uh picked up and we did of course share that here.
Energy leads, food follows. Tavi Costa, good chart here from Zura Capital. Basically, I think this is what's going to happen. I'm not sure how it's going to show up. The stock market is obviously different to the economy, but there's no way that food is not going up, guys. I think in Australia, we're already bracing for around 20 to 30% hikes in several food, uh, fresh fruit, vegetables, all these types of things. And I just think it's going to, you know, the damage is done here that's been done, and it can only get really a little bit worse. So what does that mean? Are we going to see central banks get involved? I think this time they can't because of the nature of the inflation. It's very different to the inflation that we created back in 21 into 22. But you've got to be aware that this is a macro side story. It takes a while to flow through. And remember, markets love optimism. So for now, they're betting on everybody just kind of canceling everything that's going on with the blockades. and they're just basically betting on a few days or maybe even like even a couple of hours and then everything will be unlocked. Now, if that doesn't happen, remember markets will start to pull back on those fears. But for now, it's like every day it's like going up. All the market, all the news has to say is fear, fear, fear, fear, fear. And the markets keep squeezing higher on that optimism. They're betting that everyone's going to reverse their decisions of what's just happened.
Now, let's have a look here at large speculators net positions. This is of course more on the Bitcoin side. Super trade putting one good in here. We've obviously talked about this. Actually, Bitcoin had a exceptionally good 24 hours along with Ethereum. Some big pickups there from those markets. So, just goes to show that it does take a while, but when you start to see huge activity, large speculation, sometimes coming in with a sideways style market, it can lead into a bit of accumulation. And Bitcoin actually looked a bit more encouraging, I would say, over the last 24 hours.
Now, is it expected that we continue to see volatility? Yeah, it's a midterm year. uh do not expect this year to be just up and all good. It's probably going to be up, down, and all around. And we've shown that several times with tons of different charts. Speaking of charts, let's jump in. The first one here, the dollar index. Now, the dollar index is about to make a new low. And of course, it does look at the moment bearish. So, what that means is it's got that accumulation potential base. We're obviously looking at 130, but you can't deny that this is currently downward trend line in or downward move and downward break of a trend line when it comes to the smaller time frames. Now, am I super bearish on the dollar? I'm probably very neutral on it here to even slightly bullish even though it's down here because I don't mind the accumulation base and the volume is huge, but I don't see price action to show any bullish sign at this stage. It went to a lower low. So, you've got to say who's in control at this stage. It's the bears on those charts.
S&P 500 squeezed big. Now, I thought this could be an island reversal. If you watched our last video, I thought gap up, possible gap down. We open with a gap down. That confirms an island reversal. We move towards 6600. You'll see why that's a good zone. And you know, that makes a lot of sense. And of course, the markets then maybe bounce off that level. Now, that's not what happened. It just kept squeezing. And I think a lot of this is because everyone was so negative. And also, markets just love to do this. They love to take the offside position and push it. Now, what's happened is we've ended up trading right into the top end range. We're only a few percentage points above or below the all-time highs. And you can see here, we actually dialed straight into where I thought the topping of this box was. So, yeah, by the time the market actually opened the real market, we got no gap. That's why you've got to wa watch for the open. That is the US open is the most important liquidity, guys. And then we've moved up to here. things like the anchored VWAP continue to sit on 6,600 that continues to be probably the most interesting zone should markets come back down probably the decision point and I generally find that cooler heads in terms of market participants generally do prevail you know these mass rally kind of markets although they do come with statistics that show further rallies I think generally speaking you do get a bit of a pullback at some point or consolidation and yeah there's usually something that happens along those lines So, if you go back through history, you'll see most of them do have second chance offers. Why? Well, it all has to do with Wall Street wanting to get their positions in. So, at the moment, we're right at that kind of resistancy line. We're a little bit higher than I would have thought we'd get to, but you can see just underneath 6900. Now, why has that become important? Well, we're in positive gamma and there are so many calls now. Look at the sizes of them. Huge calls all over 69 to 7K. Everyone's jumping on the call wagon now. Look at this 69. Everything's positive gamma. And what a switch we made just a few days ago when we pushed through that downward trend line of the series of lower lows and lower highs. As soon as that happened, we went positive gamma and markets just repric themselves. 6,800 and now of course 6900. But we are at some pretty critical call walls. And you can even see when you go out further, there's people now going crazy thinking that we could be going by December into the 8,000s. Look at all the calls. They're all starting to float up there in the 8,000s. Q's are kind of similar. 620, 620, 616. If we look at the QES, they closed at 617. So again, positive gamma, 620, 625. Pretty strong there. But maybe the more interesting charts actually IBIT and this is a Bitcoin ETF. And you can see here that we've got 42 is the most traded overall expiration. And we are now placing just below the 42. So, if we get above 42, that's going to enter into positive gamma. It can often lead into squeezes. And could it be that Bitcoin's about to break out of its range? Well, maybe we'll know over the next 24 to 48 hours.
Let's now take a look at some of the cross pairs. So, we already know the bonds market doesn't seem to care about everything that's going on right now. Who knows why, but anyway, that's what the bonds market's doing. Unless it flinches, we don't probably need to think about too much. We also know that software has been getting smashed by semiconductors for a very long time. And we can see here the volumes are massive. Now, this is still making a series of lower lows and lower highs. So, there's no reason to say that semiconductors are weakening towards the overall software companies and of course they're hurting them in many ways. But what I think you need to be tracking this year is semiconductors versus spy. We've been following this one for a while. We already noted just a few weeks ago we hadn't dropped semiconductors in terms of relative strength. If we do drop these, then we'll have to be paying attention. Remember, they haven't really weakened since April of 25. And the last time we actually saw them weaken heavily was back in August of 24, which ended up leading into further selling uh that came through through liberation day. If we lose the backbone, that's going to be a big problem. So, watch that one.
SNDK, it's got to be squeezing at this stage. Now, I'm not a big fan of this trade cuz I think it still could be a big trap. Massive dark pull here, massive dark pull here, but it certainly put on the dial 11.8% over the last 24 hours. And to put it in perspective, this is insane when you think about it. $40 to $952. This is one of those ones that is starting to disconnect from reality. And we've got not only massive volume, but we've also got massive candles. These candles are the ones that look great when you're following them in the trend and we still got high highs and high lows, but when it goes bad, we're going to see a big crunch and it's going to look kind of similar to the Cosby. At least that's what I think. AVGO, MU, any of these other semiconductors. They're all kind of still rallying again. Large transactions coming through. A lot of activity here and the possibility is still something like this. So remember, if semiconductors are holding, that's okay. And for now, they are. And of course, that is strong.
When it comes to bonds, we're looking at things like high yield junk. We're looking at cross pairs against some of the bonds as well, but in general, high yield junk is holding. So again, the bonds market doesn't seem to care. And Magnificent 7 had another decent session in it, rallying up a little bit here. Now, a lot of people have asked me about Tesla in the comment section. We used to cover it every day. The only reason we kind of stopped is cuz it just was making a series of lower lows and lower highs. And it's really been the same thing that we've talked about. So, I said I'd bring it back just to just to discuss it. You can see here the daily 20 has been the best short. So, it's just been bang bang bang bang bang bang bang every time. If it breaks above the daily 20, that'll be the first sign that maybe we're getting some recovery. But, we're actually getting close now to a level that we looked at for a long time, which was 330. And I think what I'll do is if you guys like it in the comment section, I'll pop in some more technical longerterm uh possibility areas. So, at least you can pop them in your charts and see if you agree with your system. So, uh then you can you can have a look at those. But um that one's actually getting really close. And remember, we've had that sitting on the chart for a very long time.
Speaking of very long time, gold came down to the daily 200. It bounced. So far, it's doing kind of what we'd expect, which is tight range, slight change of trend on the smaller time frames, decent volumes, and basically just consolidation. This kind of goes for silver as well. Both of them are just consolidating in these areas. So there's not much really going on just yet from those markets, but we will of course track them in the future. Metals and materials, we're seeing the stocks rebound, but they're not breaking out just yet. Downward trend line, obviously breached, similar to the stock market. Uh, and what I wanted to say was that, you know, there's always an abundance mindset, guys. You know, I know semiconductors are flying. I know some techs flying. And some people sometimes go, "Oh, I've missed out on everything." But just remember back to 2025. No one liked energy, then it was good. No one liked silver, then it was good. No one likes a lot of things and then suddenly they become opportunities. So there's always something out there.
Speaking of opportunities, although very dangerous ones, emerging markets are of course gapping up. This actually is one of those classic island reversals. Gap down, consolidate on the weekly there, and then gap back up. Now, it hasn't really shot off huge, and these of course are risky markets because of the nature of what tends to go into them. But you can kind of see here um a pretty interesting you know level of gaps and the market itself obviously has regained itself after seeing the oil stabilize. When it comes to Chinese markets no breakout yet but some car companies in China are doing a bit better by etc. And German markets are just sitting hovering underneath their resistances. So they haven't performed as well as what the big companies have or big indices have done in the US. They've actually been rallying a lot more.
Now on to the elephant in the room though. Oil was up about 9 10% got crushed back down and is still sitting on the daily 20 1 2 3. Now if oil does break to the upside and goes through 105 that's probably going to create a squeeze effect on oil and we might get through 1151 120. But you also want to be looking at Brent as well at the moment. So you want to check both and you'll notice here that it's of course also up down all around. I think the market's probably getting a little bit of ahead of itself in terms of, you know, it's getting confident, but one of the reasons it's confident is it looks like, of course, in some ways, uh, that there there will be some form of resolution. I actually checked out the number of of oil tankers coming through though. And I got to say it's not like it hasn't been pretty for a long time in terms of those. There used to be about 140 ships. Now there's around 7 to 14 per day. So there's 800 ships approximately and these approximate numbers stranded in the Gulf and oil prices of course are quite high. So I'm not sure exactly how up to date some of those data stats are, but I did check on the most recent one. Some reports showed that Monday barely had any ships through. So I don't see how this doesn't impact oil. It just comes down to how long does all of this go on for. So remember, we're at supports on both UK oil, US oil in terms of futures contracts, and we'll see where that ends up lying.
Now, with the NASDAQ, I would have thought we probably would have seen a little bit of selling over the last couple of sessions. We talked about it here. We've seen no such thing. The markets are very resilient. They're all the way through the the the zone, and you can kind of see here that they're pushing a lot of people's um sentiment. So, a lot of people, you know, when you see these markets rallying like this, people can't handle it because it's so aggressive. And this is the nature of what we've been getting used to is in super V-shaped rallies. Have a look here at US 2K. Look at that thing. Absolutely flying almost at new all-time highs and it's gone through even the most traded zone. So, I just want to kind of show you guys like we did stop there for a little bit. Look, little bit of stoppage and then just bang squeezes higher. It' be interesting to see what happens. I mean, at the moment, series of higher highs and higher lows. So, you can't say it's necessarily going down. I always say it's harder to short these markets for sure than it is to buy them. Uh, but at the same time, generally speaking, I would not be surprised to see that or even a decline off this level. But these areas down here being very important in the future. We just haven't. Look at the look at this Russell though. It's just such a huge outperformance day. 3% up. So, is this a disconnection from reality or just super confidence into earnings? One thing that has been happening since last year, which again is a sign of late cycle, is that the Russell is beating the S&P and that's something we've discussed for a very long time. And it is still showing us late cycle, which means that u probably the overall index gains generally speaking year may be subdued to what we've been used to over the last couple of years.
Ethereum right at resistance. You can see here um absolutely hitting into those 2400 zones rejecting a little bit. Looks quite decent on the chart. 2050 cross here on the daily as well, which is encouraging. And almost a 2050 cross, which has been a while now for Bitcoin. And if you actually zoom this out, what you'll see is the last time we got it, we false crossed. That was actually a false break. That looked pretty decent back then. And we're getting close to another one now. I do think that uh this is decent. We've got a high here. We've gone into the resistance. we break to the next level which would be 79 and then of course from 79 there's really nothing stopping it until about almost 90,000. So could it be the time for Bitcoin? What do you guys think in the comments down below? Things are starting to do a little bit better there.
Now do remember it's earning season. We've got more banks coming. Then of course we've got TSM this week. Make sure to sign up for our free newsletter. Links in the pin comment down below guys. Um it's awesome to be sending those out and got some really good feedback on them. one institutional style insight to help you guys better understand the markets. Uh, and of course, if you follow us over on X as well, I post a bunch of stuff there. It's always great to interact with you there as well. Thanks so much for watching, guys. You have a fantastic day and remember to stay safe out there.
To summarize these markets, they're certainly pushing extreme levels. They're definitely in positive gamma in terms of the way that you're seeing these these options flows. And you can see that we're now driving into some significant volume call walls as we hit 697,000. Could this be the stopper for them? Are we going to see some form of deal or is this going to continue to just, you know, continue to blow out for days and days? And if that happens, then of course the markets will most likely, you know, fall a little bit on those uh, you know, kind of concerns about that stuff. Remember, whatever's in the news is not really kind of what's driving. What ends up happening is it's the flows and where the big money is. Thanks so much for watching. That's what we cover. We'll see you in the next one.