Transcription
The stock market has just broken down after hitting a very important level. And it makes us start to wonder what exactly is going on when it comes to Wall Street and big movements and flows. Maybe more importantly than all of this though is to do with the 20 moving average. Something we discussed in our previous video and we suspected would cause some concerns. With oil starting to spike up and financials now almost breaking down, what exactly is going on? Join us as we cover stocks, commodities, and cryptos to unpack some of the biggest flow movements over the last couple of sessions and what it could mean for all of us as traders and investors.
Well, welcome back everybody to the daily show. My name is Thomas Atinson and I'm glad to be here and obviously sharing the data with you today on what's going on in these markets. It will be a little bit shorter and tomorrow the show will resume as per normal. But I did want to kind of get this video out just to make sure that you guys are aware of some of the big things that have been going on.
Now, we're going to jump straight into the charts because we need to talk about one of the most important moving averages that you can put on a chart, which is of course the 20-weekly moving average, and it's what Wall Street often considers the mean reversion. Often being either a dynamic resistance or support when it comes to markets. And when you see it broken, it can become a very good dynamic resistance, at least the first time. Now, really the way we want to break this down is by understanding the options highs and lows and also by thinking about the technicals. So, I thought we'd jump in on this today and rather than do the macro like we usually do, just get into the charts and the options flows.
Now, first up, the big thing here is of course we have a downward trend line. Now, this has appeared over the last couple of sessions and it also just so happened to coincide with the most traded zone throughout the previous range and it's exactly where you would expect a bear to step in in terms of markets when you're thinking from a technical level. More importantly than this though, we've also seen a breakdown of 6760, which was one of the key levels of support that we talked about in the previous video as well because of course we suspected that if that was broken, it may start to trigger off some sells. But is it all bad? Well, not really. I mean, the good thing is for bulls is that we can look at this key alert zone up here as a very critical break into the future as it will break not only a downward trend line but take out a higher high at the same point. And of course, if we do continue to see selling, we expose certain levels. Now, some of those include key zones such as 6654 and exactly where we find ourselves pretty much right now, which is 6700. So, let's dive into the options and get a better understanding why this could be going on.
6775 is exactly where we ended up closing on the markets. And you can see that's exactly where a put wall is over the next session. So, it may act as some form of holding support unless we drop it. And then, of course, as you guys know, it creates a negative gamma event. Next up, as we thought on the charts, 6700 comes in. Big round number and one of the key levels that you always want to be looking at. And then when it comes to the next kind of zone, we want to be thinking about the cues as well and whether that lines up. 600 again starting to appear as a major put support when it comes to what bears seem to be doing in the market, which is targeting these round levels.
So what does this mean all for all of us? Well, basically we need to be on alert when it comes to these markets and over the next session particularly, we'll be going through some of the big data flows that have uh happened and more importantly what they could mean in terms of the financial markets potentially starting to crack here. But Nvidia, in particular, you can see has been doing okay. Holding around the 185, which is important as semiconductors or what we consider the backbone of the markets, is a very important factor when it comes to what's going on and maybe more importantly, whether this market is still healthy enough to actually continue to remain up.
Now, I asked you guys in previous videos whether you were bullish or bearish right now, and a lot of you responded that you were pretty bearish on markets. And I think one of the main reasons was, of course, the geopolitical tensions and that you were starting to worry about liquidity in the private equity markets. Well, of course, that has become uh one of the most important factors over the last couple of sessions as well, where we're seeing a lot of news starting to appear about that. So, of course, we need to keep on top of that as much as we can.
With Tesla, you guys can see 420, 410, big critical level at 410. We did see it kind of break up and then come back down over the last 24 hours. And actually, Tesla's chart is starting to get a little bit better. So let's dive into some of the charts and talk about the first one, which is something we've been tracking recently, software. Now, one of the reasons we're tracking it is, of course, dark pool activity and large trades. And we've seen here the key support zone really starting to hold up when it comes to these markets. Big key support, bit of a buy. Obviously, the markets have rallied up and then it's usually natural for them to fall back down a little bit. But software has been oversold and as we often say in the videos, one of the big things here is when software is oversold, or anything's oversold, and you see a market starting to get unusually volatile, often these particular stocks actually hold better. And that's because, you know, they've already been sold, the risk-off kind of event occurs, and money goes into these types of markets.
We've also seen the same type of thing happen with Ethereum and the same type of thing happen with Bitcoin, where they've held that massive demand range from previous points. And it just so happens that we went through in our previous video, but it looks like software and Bitcoin or crypto seem to be kind of going hand in hand when you put them on the charts. You can do it by literally just loading up IGV on your TradingView platform. And you can see here that they're pretty similar in terms of movements. And interestingly enough, they both ended up creating a higher high at very similar points as well, suggesting that again, that type of thing may be starting to play out in terms of an improved price.
Now, we have started to see some weakness in the banks. And it's not new. It's of course been going on since January of this year. And we've seen a 12% drop off, which is pretty considerable when you think about a sector, new lows being formed. And it's kind of like a very important point for banks because sometimes these can be false breaks and then of course we break back up to the upside. So that's going to be a really important kind of factor. Another one is going to be of course what's going on here with things like JP Morgan, the most important bank pretty much arguably in the world in terms of financials. And then of course XLF versus SPY. Are we seeing the financials hold up versus the stock market? And they're clearly starting to underperform and they've actually broken to a new multi-year low when you're looking at this particular sector rotation. So, this is actually pretty important because it does suggest that we need to now pay a lot of attention to things such as the bonds market, which dropped here in corporate bonds, and we also saw some dropping as well in high yield junk. Two things we'll have to be looking at.
One of the reasons yields are going up. We obviously got the inflation report and we'll talk deeper about that in the next video, but realistically, we all know that there's likely some inflation coming based on some prices and this spiked the 2-year yields, which tends to spook the markets as well. Now, this is a pretty big break up. So, it does suggest that potentially on the charts, four and 3.8% are both possibilities here when it comes to these markets.
When it goes to crude oil futures, you can see that the futures into the actual future. This is a crude oil December contract is still holding quite high at 73. So similar risk on the long tail and of course the shorter tail has come down, but it has started to change towards the upside with an up higher high uh that kind of came through when it comes to the markets and you can see here pretty clearly that we got that higher high and the markets have of course broken up a little bit.
When it comes to the backbone of the market though, semiconductors are still holding and that's a very important factor. While they've broken down on semiconductors versus SPY, if we actually take a look at semiconductors themselves, they're still holding okay as in they've rallied up and they're kind of making a big decision point. Watch this space. We'll be covering semis quite a lot in the next videos.
So, to really summarize for now, cuz it must be a bit of a quick video today, guys. I'm just trying to get it out. Obviously, the audio will improve tomorrow as well. What we're starting to see is a market that's hitting some of these kind of first touch points where bears come in, often the 20 moving average on several different things including here the Chinese markets, and then we're seeing a little bit of a rejection. At the time of this recording, we are seeing a little bit of a sell-off across the board. Uh but generally speaking, anything that's been kind of sold previously, that is sold heavier in the f in the kind of previous months, actually held up. And that again suggests that Wall Street is kind of bunkering a little bit here and moving out of what they would consider higher risk. We do need to remember, of course, Wall Street usually are invested at all times. So they tend to move through pairs.
For the next 24 hours though, I think the big thing to watch is going to be the S&P 500. And of course, we'll come back at you tomorrow with a fully normal show with all of the details. But I did want to get this out for you because I do appreciate you guys. And of course, I'll see you in the next one. Bye for now, guys. Catch him.