The Last Time We Saw This Was 1997...

Today's number is 1997 because the last time we saw something like this happened was quite a while ago. But could there be similarities with that period that we are missing right now, as both traders and investors?

Well, in today's video, we take a look at what's just happened after the Fed rate cut and why this is so important to the next couple of months of structure in these markets. Also, could we be heading for another euphoric moment? Well, one thing's for sure, IPOs are back on the march, and it means that there's a bit of liquidity going around. Join us today as we talk stocks, commodities, and cryptos to unbreak and unravel some of the biggest stories that are happening right now and how they're going to impact all of us. See you soon.

Well, welcome back everybody to the special weekend edition of the Daily Show. My name is Thomas Atinson, and in today's video, we have a lot to talk about, as always, from the macro to the data to the key flows and the options activity. And boy, oh boy, were there a lot of options movements on the Friday. That was the quad witching event. And although it wasn't maybe as volatile as some people expected it to be, it certainly did have huge volume. And that, of course, can have a lot of ramifications now that we're post options week. So, what does the data suggest? We'll get into that soon, but let's start off with what Wall Street's doing and, of course, the euphoria that is trickling back into this market once again.

Well, as we expected, guys, it is all about Wall Street upgrading. And we knew they'd do this because, of course, the AI earnings this particular season were pretty good. So, they're setting 12-month targets above the current market range. 7200 is the new level, up from 6800 to 6900 only a few months ago. And it means that pretty much everyone on the street is obviously upgrading across the board. And it has people saying, "Are we heading back into a super bubble?" Now, a lot of people already say, "Oh, but Tom, we're already in a bubble. Look at semiconductors. Look at what's going on." But remember, when people say the word bubble, and we've already been tracking this a lot when it comes to Google searches, it's usually not the time that it's all over. That doesn't mean there can't be a lot of volatility. And this is probably the chart that most people are trying to track, which is, of course, Netscape and its introduction, which changed the internet, and of course, now ChatGPT and its introduction, which is changing the world that we now live in.

Now, I think this chart is not necessarily the best one to look at, but of course, a lot of people have been pointing to this sell-off here and if you may notice this upcoming potential sell-off that was around the same period of time. Now, why this is all important is because I want you to focus a little bit on the right-hand side over here. When a bubble goes ballistic, that's when you know everyone's all in. And it usually looks something like this: an absolute vertical run. Now, we may not get one of those this time around, but we are looking for, of course, the signs. And one of those signs is record winning streaks for our favorite stocks. So, if you ask any retailer out there, it's starting to become pretty clear that if you went into an elevator, let's say, or maybe even an escalator at work, you might be starting to hear people talking about the stock market once again. I'd be really interested to see your comments down below. Give us some stories. I'd love to bring them up in our next video that you've heard over hearing other people talking about potentially crypto or stock markets recently. There's always that theory that I have that if everyone's talking about it, then you're starting to get either a temporary high or the end of a bull run.

But take a look here at this record-winning streak. The last time we saw this was actually heading into 2021. And you may remember that was the rise of the ARK funds. And of course, hypergrowth went ballistic, rallied into Feb, and then got absolutely slaughtered from that period to all pretty much about 2024. Now, there was another period as well where we actually saw a very good gain in retail stocks, and that was the bottoms of 2022, where we got that very strong initial thrust. So, there's clear that there could be some euphoria back in these markets. And what does euphoria bring? Well, it generally brings the IPO market. And the last time we saw good IPOs was, of course, 2020, and before that, yeah, the 1990s period. So, you can kind of see why we're starting to think about heading back to that euphoria back all those years ago.

As you guys know, when the VC market, that is, they try to actually raise capital, they do it all well, that's fine, and everything's dandy. But when they bring it back into the IPOs, that is into the stock market, it generally means they're trying to cash out, and it usually means there's a bunch of leverage around, and there's a bunch of liquidity. And I think this chart here really shows the problems in the existing market right now. Now, you may say, well, everyone's in leverage, and you may not be wrong. Have a look at this chart. I mean, it blew my mind when I looked at it. We've already been talking about for a while, but this is the amount of single-stock levered funds out there that now exist in the form of exchange-traded funds. And as you guys know, when you first get into trading and investing, the word exchange-traded fund supposedly is safe. But as you guys know, it actually you better check those fact sheets. You better have a look underneath the hood, 'cause not all of them are safe, and some of them actually can be quite dangerous. But have a look at this. Look at the overall market capitalization size of some of these single-stock ETFs.

Now, you may say, "Oh, this isn't a problem." But this is growing exponentially right now as people start to really treat the markets more so like they did in 2021 as gambling opportunities to make tons and tons of money. And what that is really doing is it's leading into this narrative of, of course, markets can never go down, the Fed will always support it, and all of these other things. So, don't get me wrong, the Fed always has come through for a while now, and of course, markets are generally bullish towards the way up, but you've got two sides of the coin now. On one side, you've got everyone saying, "Everybody's bullish, it's all fantastic." And then you've got the contrarian, which is trying to short this market at every single time they can. And this is causing the same phenomenon that we've seen so many times, which is everybody tries to get into puts. Take a look at this chart here. Generally speaking, when you see this many puts in the market, you're either at the bottom of a pullback or you're kind of on the way down. Well, that time is not right now. We're actually pushing up. We're squeezing at this point in this market. And more people added puts over the last week than they have in a while.

And I believe this is a two-factor thing. One, a lot of people are trying to go against, of course, the Fed and what just happened with the interest rate cuts, saying that the jobs numbers mean that the economy sucks and everything sucks. In some ways, yes, it does, but remember, the stock market and the economy are different things. And at the same time, many people are aware of the two weeks of September being so weak. So, I think a lot of people are putting on puts, and the issue is is that the market's kind of loving itself because not only is there money to be made if everyone's buying puts and they can all expire worthless, but at the same time, we're also getting an improvement in AI stocks, that is, the actual growth of AI stocks continues to come through.

Now, why is this all important to the current structure? Well, at the moment, what's happened here is the S&P 500 has, of course, had uh three or had a had a cut at the all-time high or near the all-time high. Now, this is kind of unusual. As you guys know, when we've seen this in the past, it's generally led into a little bit of a shaky one to three months, but overall a very aggressive next 12 months with a 100% read over those periods. So, when the Fed cut at all-time highs, that's not necessarily bearish straight away. Remember, the bearish component here is actually going to be which stocks go up. If the small caps do better, if the midcaps do better, that is actually a no-no. Maybe not in the next six months, maybe not in the next nine months, but sometime over that next 12 to 18 months or even two years, it usually does point towards a recession coming. And that's something we'll be tracking very closely here on the channel together, which you guys know is going to be really important for us to look at. It's the same thing we did in 2024 together. And it made us think, okay, no recession is most likely coming because we didn't see the market structure. Remember, do what they're doing, not what they're saying, guys. Every single expert out there comes out, and every year they all say the market is going to collapse. This is going to be 1929. This is going to be the end of the world. And don't get me wrong, I think there are problems here that are substantial in these markets and eventually will create a massive crash. But at the same time, timing will be everything. So, we've got to understand when is it coming? What's it going to be caused by? Those types of things.

Now, a lot of people are going on about steepening of certain spreads. Well, uh, Bu Curtic, Blue Curtic here, Market Insights, actually went through and had a look at that and found that, uh, yeah, the odds might not be that great for the next couple of months, but actually it was relatively good when you looked at all factors. Although, there are two outliers, which you may notice here. One of them being the 1980s, and then, of course, this other one here in 1987, which uh was a little nasty. So, there are a couple of big sellers there as well, but overall, again, the general rules are bullish.

Now again, why is everybody feeling like this market is overbought? This market is absolutely ballistic. Because it is. It's incredibly rare. In fact, Bespoke actually found that we've only experienced a phenomenon like this on 0.04% of all trading days. So, as we recently reported, this means that the NASDAQ has really almost never been this overbought for this long. And this is leading people to lose their minds when it comes to when is this market going to sell? When are we going to get the pullback? Well, the problem is is you have to follow the price action. And for now, the markets have consistently been squeezing. And although they've shown signs of significant overboughtness just recently, which means that volatility will be around the corner. The key will be when is it actually going to strike and more importantly, how low will it go when that does happen.

Well, Wayne Whley came out with his study now post, of course, the OPEX, post that quad witching event that we just saw, guys. And what it shows us is that we actually have got a usually statistically pretty bad time ahead of us. But as you'll find out, while this week might be a little bit worse than some people expect, 8 to 22. So only eight bulls, 22 bears. The big thing here is it also could lead into, I think, maybe more gains before we see maybe a little bit of a pullback actually in the month of October. Now, this is why everyone's trying to sell the market right now. It's the classic time of the year for it to sell. You can see here what happens. This is exactly where we are pretty much at the time of recording on this video. And generally, there is a small pullback followed by epic ramp if you're following what we call S&P 500 seasonality. Now, that one is kind of well-known.

So then we've got to go back over to some of the things that are happening more unique to now. When the Fed cuts at the 1% all-time high, as you can see here, when that happens, sometimes there is a volatile event afterwards. You can see that kind of shown here in these bubbles. But at the same time, it tends to lead more into the bullish end. In fact, it always has. So, what that generally will be telling us is that if we do get at least an initial sell-off, let's say it's 8 to 10%. Do you guys think the bulls are going to be there? Now, there are a couple of reasons why if it does fall off, I'll be a little concerned if it is those reasons. But in general, it does look like any dip at this point is going to be bought by the street because they have to allocate money to it because they're behind where they should be for this year to get their bonuses. We also do know that when we're following these markets as well and we're looking at the most sensitive, the most consistent markets to this, that we keep going back to those 1990s. So remember we mentioned before 1997, well that's the one that's Netscape versus ChatGPT. But if we actually take a look at what are the most uh logical structured zones, we end up finding that 1998 is the most closely kind of kept one to the current pullback that we've seen since liberation day. And if that is going to happen, while gains may not be extra amazing over the next kind of six months, we will generally be bullish. And of course, there are a couple of pullbacks that could potentially occur during that time. But it also kind of shows us that we should be looking for maybe late cycle stuff as well, which means that maybe the stock market overall systems will change. They'll go from being just large caps to mid to maybe even small caps. And this is where that change will be very important post a rate cut. How does the market react? It's not just the way it moves, it's what moves with it. So, of course, most people are not talking about this. We are. We do believe that this is one of the most important factors that we have to look at specifically over the next one to probably six months. So, make sure if you haven't already joined the channel, subscribe, smash that like button. It's going to be awesome to have you on board because this is a lot of stuff that we need to go through here as we kind of unravel this story that seems almost unbelievable to many out there.

So, why is it unbelievable? Well, it's actually not too bad when you look at the overall earnings of some of these AI companies. Now, why do I say that? It's not so much the multiplier, it's more are they actually growing? And the street is of course saying yes, they are. And that is not usually what happens when we go into a recession soon afterwards. So, do remember the current chance that we're going into a recession very quickly is less. And you might say why? Well, the proof is in the pudding. And if we have companies that are continuing to grow, it doesn't generally show that there is significant weakness. What I would call this market right now is a dull bull market. And you might say, why are dull bull markets decent to be in? Well, generally speaking, they require support. And where does that support come from? Yeah, you guessed it. Fed. And generally, we're looking for liquidity. And generally, we're looking for interest rate cuts.

Now, on one hand, the liquidity's actually been good since 2022, since pretty much around when the market started to turn, '23 in particular. The interest rate cuts. We expect quite a few on the on the board now, maybe even upwards of six over the next kind of 12 months, which is pretty obscene, but you know, may happen. Now, will that bring back inflation? Do I think inflation's coming back? Yeah, I'd say so. Uh, but at the same time, it's really going to be the liquidity that we want to be looking at. And of course, we'll be tracking that one as well on the channel, which will be important.

So, where do we get the pullback? Well, there is a chance we get it over the next couple of weeks. Of course, that's statistical. You can see here even with similar setups through summer, we do only have a 14 up, 10 down kind of read from Wayne, which is pretty pretty bearish in some ways considering where it's at. But it is October that we're actually looking at here. Six to 18. And a lot of you guys are going to be saying, well, I want the pullback. I want to get into semiconductors. I want to get into this or that or whatever else it might be. And that could be good, but I think it's most important that we have a plan. And more importantly, is there another opportunity if this doesn't happen? And the answer is yes. Remember guys, we always practice this idea of abundance on this channel. And the reason why is because the abundance mindset, what it does is it allows us to look outside the box. Remember, we've been one of the earliest ones to the gold bull run years ago, silver this year and the bull run there, and then of course, China last year and the bull run that continues on to this day. And you might say, well, yeah, okay, that's some, you know, cool moves. But what these are is they're not in the normal box or the normal toolkit of most retail traders. Remember, most retail traders, they come in and they say, "I'm going to buy Apple stock or I'm going to buy Microsoft." Were you one of these guys? We all are. We always buy what we know and then we move into other things. So, remember, there are always other opportunities coming.

Now, it would be remiss of me not to add this stat in, 'cause I think it's an interesting one from Subu. And basically, what it shows you is if we've been super bought in terms of the market for this long, we go into a rare market condition. And the last time we saw this was pretty much 2024, 23. And in both of those cases, remember, 0% of the time in these reads, and this is just a specific stat, so you can't, you know, take it with a little bit of a grain of salt, we were actually never up and we were down 2.17, which is actually a pretty interesting statistic in itself. Uh, fairly rare to see something like this. So, we are coming into arguably the worst two weeks of the year, which is the post OPEX time, and then of course, we go into October, which is expected to be volatile. But then you ask yourself the question, is the market actually looking bearish? And the answer is not really. It's still up, guys. It's still up. Did the market close near its highs? The answer is yes. Did it manage to continue to squeeze higher? Yes. Has it hit a call wall again yet? Uh, no. Which you'll see in a moment. And the real teller at the moment is actually this chart here, which is the advanced decline. Now, usually we see this going up as we're making new all-time highs. It didn't do so last week. We actually saw a lot of stocks selling off as the markets rallied higher. So, this is going to be an important one to look at.

But generally speaking, when you go to the options market and you take a look also at the futures, you can see here that the reactions towards buying the dip have been quite aggressive. We didn't quite get the big dip that we wanted last week, well, at least any dip really to 6520, but if we had got that, that would have been pretty good, sweet reload zone. It was a fairly quick one post the Fed rate cut in the press conference, and it led on to a new high. And what I tend to see happen when this happens is that the market can squeeze for a couple of sessions. Now, I don't think it's not overbought. Remember, we were talking about, you know, the fact that we were super overbought on metrics that generally either sideways the market or actually create a bit of a pullback. Now, when we go past that, we do tend to lead in for a few more days. So, again, it could be a little bit more to go, but this does not necessarily bode super well for October. It actually shows you there could be some weakness there.

So, let's have a look now at the options market. Where is the gravity? Well, the gravity seems to be pushing towards kind of that 6700 zone, which of course we've talked about now that we've broke through 6600. And we've been pushing higher, pushing higher, and of course, you're already starting to see these puts appear, 6600 and 6500. So, both 6600 and 6500 are going to be support. You would think when it comes to uh this week and where we might be going if the if there is some downside selling for Tesla, 450 remains the call wall that most people are targeting. Of course, lot of calls going in on that stock. Remember, don't be a sheep when you follow the overall run. If you were in early, which a lot of you guys were, congrats to you because of course we saw positive gamma rise. Well, that was cool to 400, 430, you know, it's getting near that first target, but everyone jumped in too late. You know, if you're jumping in the last $10, it's not really coming from an abundance mindset. You're just kind of yoloing and hope it works. That's cool, but try replicating that for 10 years, it's probably not going to work out. So, just remember that when you look at it.

Now, Nvidia, what's it doing? Well, 180 is going to be a bit of a thresh line here because, of course, that's where we've got that positive gamma switch. So, a level to watch. And IBIT. We can see here on the overall options contracts here for the biggest Bitcoin kind of movements, we're moving at. Can we get through 67? If we do, then we're probably going to push towards 70. And we've talked about 70 a lot of times, which is basically all-time highs for, of course, Bitcoin. Now, you'll also notice there are a lot of puts that came out of nowhere here for the next session, which is around 66. So, it kind of points towards likely the market is still bullish here in the crypto world. But if it does drop, we expect kind of around that 110, 111k for Bitcoin potentially find some buying pressure.

Now let's have a look here at gold. What's gold doing? It's still struggling with 3700 an ounce. And that lines up very well with, of course, 340-ish uh on GLD. So, of course, we've talked about this, and this is the good thing when we bring in these options, when we bring these walls, it's going to make a lot more sense to what you're seeing in the price action as well, which is a great technique that you can use in markets.

So, let's now have a look at the lead indicators. What do we got going on there? Then we'll jump into some of the key levels for charts. First up, 2-year. Nothing much going on the 2-year. Of course, most people are going to be trying to short yields, expecting six rate cuts. A lot of that is priced into the market. So, what the market's done is it's done its typical little thing and pushed higher. And this, of course, has also led into a little bit of gains for the dollar as well, which we'll look at in a moment. But in general, the American consumer, or at least the way that the stock market tracks it, they seem to be pretty happy with that because XLY, consumer discretionary versus staples, continues up. And at least at this point, that usually means risk on. And you can see risk on is also being shown here in innovation ETFs such as ARK, and a lot of these stocks. New highs, multi-year highs here for this fund as it broke out ahead of the FOMC statement and everything else. So, just remember the market often pre-we pre-weaponizes kind of price, and you can actually start to see that and therefore not worry too much about the news, 'cause remember, if it's in the press, it's often in the price, guys. And instead, focus on the ratios, focus on the movements here.

Speaking of ratios, the small caps did a little bit worse on Friday versus the NASDAQ as we saw options expiration, and treasuries came down once again. So, this trade I think too many retail traders were getting in on, and I still think it's going to go long overall. Uh, but at the same time, it's not a trade. It is just something that traps so many people's money. It has done for so for years, and that's why we don't talk about it too much here on the channel. But of course, recently it became more interesting because it broke through this 8850. I still think 93 and 100 are interesting targets to look at. Although I wouldn't trade it, I think I think it's great.

Now, let's move over here uh for the dollar. So, the dollar has gone back up, and of course, it was really facing off on potentially collapsing there. The general sentiment is, of course, dollar is trash. That's what people think. Uh, that's not necessarily true. Of course, it takes a long time for the US dollar, the major, to be weakened. But at the same time, you can see here it's facing off with the most important supply. If it does breach this level, which is around 9740, then you're kind of looking more towards temporary strength, and that actually could lead into a very interesting trade, but I don't think it's activated just yet. So, the market is still down the dollar until these types of levels break.

Now, gold's done pretty well. It's managed to hit 3700, sell off kind of like we expected, find the first support at around 3630, find buyers, and move on back up. Now, I do expect gold to be way more volatile on this in the future. Our aims are still 44, 200, so we'd like to see that. But for now, I'd probably still be like, you know, maybe day trading a little bit, holding, and and looking for new opportunities.

Silver, on the other hand, wow, wow, wow, wow, wow, wow, wow, wow, wow, wow, wow. I can't say I'm sad about this one. Silver, a big close. 43. Not only did it hit a target that we've looked for for a long time, and don't get me wrong, I'm very happy with silver 43, but now I'm getting greedy. Are you guys getting greedy? I'm feeling a little greedy, uh, because now I'm kind of thinking, well, all right, let's go 48. This is the trap that most people get into. But actually, my my opinion on silver is very bullish. You know, of course, I actually think it'll make all-time highs over the next 12, 18 months. You know, I think this thing is looking good. But silver breaks to 43, suggesting there could be more in the tank for this. And do remember, silver to gold ratio is not where we think is fair value yet. So, silver's still playing massive catch-up to that, and therefore it's finding that strength.

When we're looking at oil, it's around the 618 fib. So that's obviously an interesting level to be looking at. Uh, no bid yet. So I probably like to see a bid, maybe break back above 6360 and move back up. This is a geopolitical minefield. So you got to be very careful with oil. And I still prefer taking a stock position like an XLE or an OIH or something like that, uh, instead of the overall barrels because I think they're a bit safer at this stage.

Semiconductors still says risk on for now. Now, there is a chance that, of course, we could get a gap down and then all of a sudden you've got a little bit of an island reversal off a new high. But for now, what are you going to say? Trend's up, movement's up, flows are up. How can you be bearish? You can't be bearish on that at this stage. You might say, "But Tom, there's there's uh, you know, all sorts of divergence." There's always going to be divergence on a chart that looks like that.

Now, what about Nvidia? Well, it's still rallying up. So, again, no real weakness here yet. Uh, it managed to kind of buck that support down here and go back to 175. Again, a 185 plus is probably going to be a go sign for Nvidia, and I wouldn't be surprised to see a 185 plus get to 200 fairly quickly.

Tesla just keeps kind of slowly grinding higher after all of that movement. It's basically pitting at this point, which is a pullback in time. And yeah, it doesn't look weak. Uh, it just kind of looks bullish, I guess, at this stage.

And US 2K, new all-time high, then a bit of a sell. And that's not to be surprised. I mean, our first major target was here. So, it's going to be a bit of targeting around this area. It's really how does it react since this point? Again, what are you going to say? Well, you have to say the trend is still up when you're looking at these charts.

NASDAQ closes near its high. So again, it is still bullish. Very difficult to be bearish on a chart like this when it's doing this type of thing. And it's not traditionally the type of chart I would short, guys. So, it's still bullish at this stage until proven otherwise, which we're looking for. Of course, when we do see some selling reasons, then we will look at the uh key supports to be watching. So, stay tuned for that.

And Bitcoin is slowly grinding up here. It's having some problems with 118. Breaks 118, I think it's probably going to an all-time high. And of course, IBIT should show around a 70 at that point based on at least the uh options and the technicals. So, for now, the pullbacks, you know, some interesting levels. 110, 111. That'll be an interesting buy zone if if it does get back down there, or at least an area where I think bulls could be, and the trend is still up. So, really with the crypto market, it's following similar halving cycles. And we've got more on that coming up this week as I'm researching the topic even further. Not so much the halving stuff, we all know that, but other stuff to do with the options, do with the flows, to do with the uh movement of probably sneaky Wall Street into a whole bunch of different pairs.

If you enjoyed today's video, then make sure to subscribe, guys. This news week is not that big in terms of just the overall numbers here. Here we've got flash PMI, uh, Fed P Fed Fed P Fed share power is speaking here on Tuesday, and you can kind of see there's some policy and GDP numbers and stuff. The GDP might hit the news, but that the markets, the the algorithms, they can figure that out. They already know what that's going to be. We don't, but they know, and that means that it's just going to be an excuse. So, just remember guys, follow for the latest stuff. Check us out on X. Check us out on the videos here. We are coming to you, of course, every day with the closes. Thank you, guys. Bye for now.