Nothing Good Happens Here…

Today's number is possibly one of the most important on Wall Street. And the words of Paul Tudtor Jones, nothing good happens underneath the 200 day moving average. So, now that we've broken it, are we heading for a massive correction or possibly even recession?

Well, we break down everything that you need to know in this special weekend edition of the Daily Show. From volumes to what's going on with yields to potentially 1970 style action and the structure that tends to happen after geopolitical conflicts such as we're in in 2026. Also, many people have been asking us why is gold continuing to sell? And we'll explain it in this video.

But maybe more worrying than all of this is realistically what's going on when it comes to food costs and potentially all consumers around the world. Because it's starting to look a little bit bleak. Let's break down stocks, commodities, and cryptos with everything that you need to know whether you're a trader or investor into the next coming weeks. Guys, don't go anywhere. There's a lot to talk about. See you soon.

Well, welcome back everybody to the special weekend edition of the Daily Show. Today we're discussing everything from the latest macro to what Wall Street's been up to in terms of flows to of course some massive darkpool activity that looks like a potential WOFF distribution. Yes, there's a lot going on and it's great to have you here. And if you love markets like we do, remember to subscribe and smash that bell icon. Also, a few of you hyped the video last time. Thank you so much for that. If you can click the hype down below if you appreciate our work and you want it to be seen by more people.

All right, let's now break down the big story lines. We'll start off with the data, then we'll go through some of the options flows, and of course, we'll end up with some of the key levels that we're watching from the technical side. But we'll start here with this blue Kurdic chart because this is possibly one of the biggest problems right now. And it is that CPI or inflation could be spiking similar to other periods of time with geopolitical conflicts. And we're starting to see structure that is showing a very similar thing to what we've seen before.

Now, why is this important? Well, it actually has to do with us, the American consumers, the worldwide consumers, and everybody else. Basically, the normal person, the moms and dads, you guys out there that are at home struggling, and more importantly, you know, just making ends meet on normal wages, not the 1%. This really affects everybody else.

Now, why is this important? Well, you can see here that inflation during major oil supplies tends to spike up. We saw it back in 2021 to 22 and of course we've seen it plenty of times before including the 1970s. And it brings up a chart that we showed last year and this one here I've retweeted over on our ex account. Links in the description down below from Carl Quintanilla. I'm going to mispronounce his name, but basically it is here the year-on-year change of the 1970s and what happened with inflation. Basically, we thought we beat it back in the 1970s. Then we didn't. Then it sat for a while and guess what guys? It's spiking up once again.

And I found some interesting stats. One of those was actually from the Reserve Bank of Australia, which is that when hiking cycles start, which we just started a new one over here, cuz I am Australian, of course, and we just had two rate hikes over the last couple of months, that generally there were eight plus or eightish uh in terms of each hiking cycle. Now, if that was to happen, it will put a lot of pressure of course on our economy here in Australia, but at the same time, imagine if that's happening from many central banks around the world. This is an interesting chart and weirdly enough at around the right time that you would expect it to actually start to spike up again. It is. Is it a coincidence? It's only one data point, but certainly it is starting to happen.

Now, we've been looking at structure. On this channel, we talk about flows. We talk about the idea that large big players actually show their hand. Woff bought us this idea back many many decades ago when he was discussing the idea of the invisible hand in many ways. Now, why is this important? Well, because we look at structure and we look to history a little bit to figure out whether it rhymes a little bit with the current day and age. And we can see here that S&P 500 performance during major global oil disruptions often doesn't bottom until 60 to 100 days after we've seen these things. Now, we only have a couple of dates here, but you can see that that is kind of more towards the normal side of having potential dips. And in each case, actually what happened was even if the markets rallied, they still stayed fairly sideways for that first kind of 60 to 100 days. And I think that kind of gives us as investors and traders some insights into what's happening. We probably don't expect a massive runaway market. And we also expect a lot of volatility. As you can see there, some of those f falls were upwards of 15%.

It's not enough just data to go off by itself. But what else can we look at, guys? Well, one of the things that we can look at here is what has happened when it comes to surges of energy prices. And I've shared this one here from the Bulgette over on X. And I've again retweeted this if you want to give him a follow. But basically, this is an old chart and it was bought up back in 2022 to really demonstrate that likely the US and the rest of the world was going to recession. Now the reason is because each time energy prices had surged the probability of a recession was really really high. In fact we were either already in one or we were about to go into one. And this has happened again if you thought about it kind of looks like this at this stage here in 2026. And you might say well didn't work last time. Why would it happen this time? I think one of the reasons is us or the American consumer, the Australian consumer, the worldwide consumer. We're starting to struggle. the money that was in our pockets back in 2022 in many ways that has now dried up. Jobs market is of course worse than it was and costs are out of control.

You know, one of the things here is the problem of what's about to happen. I was actually talking to a few people on the weekend that own small businesses and they've said they're going to have to jack prices up. Yeah, I'm sure you're already aware of this. Let me know in the comments down below. Have you already seen this at your local bakery, at your local food place? Are you already seeing prices getting jacked up because of the energy cost? Because here in Australia, I can tell you prices just spiked big time and they're already talking about potentially rationing fuel. Yeah, you wouldn't think that was a story on the bingo card in 2026.

Now, why is this important? Well, Tavy Costa here from Zura Capital, give Tavi a follow. Really good stuff out there. shows here that we could see UN food and agricultural world food price index usually spikes of course with the input which is energy in this case. Now, if that happens and we think about the wealth distribution in 2026 being that pretty much the top 1% own more than everybody else, that is the bottom 80% plus that we've got some struggles here because people are going to just flat out run out of money and it's going to cause big concerns in the American consumer and the worldwide consumer from a spend point. Now, why and how do we track that? We'll look at it a little bit later on, but it is something on the macro spy scale that we have to consider because things are eerily similar to some of the other times.

Now, let's talk about sentiment because although everything looks terrible and everything is breaking down, it's important to know that markets don't just go like this. They tend to eb and flow. And that's why we look at technical analysis and movements because you often get rallies, then you get sells, and you hit critical levels of support. And we in many ways have just hit one of these critical levels. Now, at the same time, the market stats here over on X has also shown that the daily sentiment index has broken back down to a very low level. And when you've been down in these kind of zones before, they've often kind of lined up with potential buy the dip situations.

Now, it's important to note that this data only goes back to 2023. If you keep pulling it back, it's not it doesn't have as good a strike record. But you can see here that US CNN fear and greed index, this one being tracked by macro micro, as you can see here over um on the uh internet. You can go view their website and check out this chart. You'll notice here that we actually get down to levels that you know again are significantly oversold in terms of sentiment and these can be bottoming style markets. This was one of the favored things to use over the last kind of 4 or 5 years and it kind of broke a little bit in 2024 to 25. So it's important to note that no indicator is infallible. This is just the same thing. You have to stack the evidence in your favor. So do we have sentiment, you know, really really bad? Yeah, it's really really bad. Are we hitting some correlation levels? Yes, we'll talk about them soon.

But maybe more disturbing than all of this is the massive distribution patterns that we're potentially seeing here on the uh S&P and NASDAQ. And I kind of almost laugh because this is just ridiculous how many there are. And uh I will show you here from volume leaders uh the share from Bruce is a massive one. You can see here that there are so many massive amounts of transactions that have gone through in recent times. And it has a lot of people including you guys out there. You guys are smart. You all been saying Tom is this a dist distribution? Well the problem is it does have those types of categories. So you can see here these are all large trades all in top 100 trades and these are all massive of course ETFs. This is IVV and you can see here massive clusters all over the place and they've been coming through really heavily at the tops with some of the biggest ones number five up here for VO number three and then of course we're breaking towards the downside. So you can see what's at stake here because this is happening as we're also seeing the iShares core growth which has been a little bit disturbingly good when it comes to darkps also printing some monsters including the number one trade ever when it comes to this particular ETF uh at the peak here as we're now dropping down and it has a lot of people saying well is this the end for markets I often say we have to look at earnings generally earnings will tell us if it's the end uh but markets remain relatively resilient even through these things. Is this a concerning market? Absolutely. Are bonds starting to fall? Yeah, we'll talk about that soon. And more importantly, financials are the worst sector of the year, followed closely by consumer discretionary. Yes, that 1% kind of concept we're talking about before. The American consumer, the worldwide consumer, you know, we're struggling out there, guys.

Now, let's have a look here at XLF up, but the S&P was down. Now, we talked about how Wells Fargo, Goldman Sachs, some of the others were all sitting on technical supports. And this is why it's great to look at technical supports because the thing is that they both bounced or at least held themselves while the rest of the market dropped off. And that's why you often see these correlation periods form even though they form over a period. Everything kind of eventually hits those equilibrium levels. Now, when this has happened in the past, we've either been kind of close to the top uh similar to what we saw back before the liberation day, similar to now, and then of course we could also be at the bottom. Now, there's not too many data stats here, but I thought was interesting to see that financials were actually up, but the S&P was down. And one of the reasons is that I think it might be happening is it's because it's in the press. It could be partially in the price for now. We just saw in the last video that Goldman Sachs and JP Morgan now are offering to hedge funds to allow you to get access to the private credit market and potentially short it. Now, that's pretty wild. deregulation continues in the US allowing to short an area that's already been got many question marks and redemption issues and all sorts of things going on. You know, this all spells, I think, a uh very very big story line in 2627. And I encourage you guys make sure to sub to the channel because there is going to be some content here that we're bringing this year that I think is going to blow your mind and it's going to be pretty wild. I'd say midterm election years, you need to be on top of it in these markets. We knew this coming in. We know this now. And there tends to be usually even upwards of two dips. So we tend to get a dip followed by sometimes a rally followed by a secondary dip as we head in. So it's going to be pretty wild.

This one here from Grand Hawkidge over on X the daily number. You can see it just shows exactly more of what we've been talking about. Basically we've got this huge amount of bonds kind of waking up from doing nothing. And when we ever we see bonds start to accelerate in terms of risk that is effectively they start dropping off it's not that great for returns for the S&P for that time and you can see here from blue kurie extrapolating on that data looking at some high yield spreads similar kind of read. So basically as bonds start to spike up that is a problem for the markets and we often need to therefore be pumping the brakes a little bit and looking for market structure.

Sector trend positioning. Pretty much everything's been down except for utilities and energy recently. This one here from Grand Hawkage as well. And you guys know that what's been up recently has actually just been really fertilizer stocks, energy, and those types of things. And fertilizer stocks is something we have to come back to when we look at the charts. Ford PE ratios, technology stocks are actually now the cheapest they've been in a very long time. This chart here from Duality Research, give them a follow, is a really excellent one. Shows us all the different sectors. And you can see here that energy is up a lot. Of course, consumer staples is coming back down. A lot of these things are actually coming back to averages. So, it's not like the market is as expensive as it once was. It is actually coming back to more of a mean reversion.

In meantime, things like Bitcoin here, this one here from Duality Research has actually shown inflows that have been looking a little bit better. And again, as we say on this channel, there's an abundance mindset. There's always different positions, always different things going on. And you can see here the COP report from Bitcoin non-commercial net positioning has already started to spike back up. And this has often been a bottoming effect for Bitcoin. So there's actually some signs that structure is starting to form on one of the most hated asset classes of 2026 so far. And then the rest of the market is obviously dropping off at the same time. And that's pretty normal in these markets.

All right, let's now have a look at the big stuff. The 50 weekly moving average, something we thought we'd hit while we closed exactly on it. And um I want to always say to you guys, well done. And I say well done because a lot of you guys were smart out there and you knew that this was kind of what you were looking at. And although the market may not hold this level, it just goes to show that sometimes going back to basics does pay, especially when VIX comes through. Now, why are we saying that? Well, we broke below the 20. We had a suspicion we would spike back up and then we had a suspicion we would hit this level. Now, this level matters a lot because it's not just this level. We talked about the 200 and Paul Tudtor Jones before and Paul Tudtor Jones the 200 is actually sitting at around 6,600 and we've closed below that now. So although we're at a technical support or or kind of demand zone, what happens here is going to be super important because you don't want to stay underneath the 200 for too long. You can see here when you break the 200, the 200 can act as dynamic resistance. So therefore we have to mark out the 200 on this week which is going to be about 6620. It's going to be very important level to watch guys. If we break above, good times. If we if we go back down, bad. That's bad. So, we do not want to be doing that. But you can see here that often you don't want to be sitting under the 200 for too long. It has broken, but often it'll break up quickly. If it does that, it's kind of a relief rally or even a deadcat bounce. But once it breaks underneath, and if it stays underneath for too long, then you get that kind of 2021 2022 kind of period. You can see here, go back through, do your history. We'll do some more analysis on this a little bit later on.

Another one was this which is of course to look at fertilizer stocks and to understand that when fertilizer stocks are spiking up that is a concern for markets. Basically we've seen fertilizer stocks spike up in 2021 that led on to of course a correction that almost turned into a bare market. We've seen fertilizer stocks spike in 2015 16 that actually led onto many markets including the Australian market falling a lot actually during that time. the US market remained relatively resilient but didn't do anything because it had the tech stocks in it. And then of course the famous one which is 20067 a massive spike up in fertilizer costs really hurting the general um you know the general consumer because of course what does this do? Well, it causes us to have significant problems when it comes to the overall uh cost of food and then people just can't afford stuff. it goes and affects jobs and it has that kind of like stuttering or domino effect. So, this is something we're watching.

Let's now go to the US 500 futures. Here are the updated options high low levels. You guys can see here that we continue to make a series of lower lows and lower highs. Until that really changes, you can't really say that there's a bid in this market. So, there is no bid at this stage. And at 6,500, we've hit what I would usually think is going to be a bit of a put wall. So, 66 to 65, that seemed pretty likely once we broke below it. this trend line here. A lot of people aren't really showing this one. This is a pretty important trend line on the downside. And you guys can see here that while we broke to the lows, we're still just underneath this. What this level does is it liquidates a lot of positions. So, I think there's a possibility that we see some spike up around this area.

Now, let's have a look here at the NASDAQ. You guys can see again the NASDAQ is showing again the same level. Now, I want to bring this one into the main discussion because of course we know that 24,000 is such an important level. And although you might say, "Well, Tom, we've broken below it." I wouldn't count that. That's that's that's right on that is right on that zone. So, this is a very very important level. And generally, you would expect the street to try to pick it up around here. The reaction here, remember, patience is key. The reaction around here is going to tell us a lot of what Wall Street really wants to do because if we fall lower, Yeah. is that's a double top that could push us down to 22,000 which is what a lot of you guys have in the comment section. I saw that when I was reading them over the weekend.

Let's now have a look at the big levels that matter. So 6,500 is the most struck zone now for the S&P moving forward. You can see here that's where the put wall is. So again underneath this massive negative gamma possibilities, waterfall possibilities, pretty nasty stuff. The S&P also shows 6,400 is the level after 65. So you can see here a lot of puts starting to strike on this zone. Again reaction is going to be very important and the cues is something similar. We ended up closing underneath 600 and you can see here that this 590, 580 and 570 all look quite well strike in terms of puts. Here are the cues for the Monday session. You guys can see here that 585, 580 seems to be where most of them are, which is exactly pretty much where we closed at. Other markets not as important at the moment. Nvidia still holds above 170. So that's again very very key. And for Bitcoin, it's amazingly resilient considering, but that's because the structure as as we've been talking about. So it's just holding above 39, which seems to be the most struck area. And then you're looking at like a 42 to really get positive gamma back into that one.

All right, let's have a look now at some of the worrying signs for this market. First up, we started to see bonds crack last week. High yield junk, corporate bonds, spreads, all of them started to work towards the negative side. And you can see here high yield junk actually dropped off quite a lot off the top here and it started to accelerate towards the downside. You generally don't want to see this. Uh you don't want to see bonds markets and spreads widening too much. And this usually shows a sign of you know pump the brakes, look for structure, look for the street to actually show that they're interested in finding a bid. Otherwise, it can turn into a freef fall party pretty fast.

You can see here the magnificent 7 has also fallen down. Series of lower highs all the way down through here. that uh daily 20 I think is very important for us to track in the future as well. But the Magnus 77's hard for the index to go up when you've got the biggest stocks in the world falling off a cliff. The other thing is VIX is above 25 still. So we could be getting that secondary kind of peaking but we are at what we call crossorrelation.

Now there are some other markets that I'm a bit more concerned about. The German market is probably one of the first for that and I want to break this down the next vid but basically is this some kind of woff distribution basically you have a buying climax of some kind some UTS a couple of traps up and look you can't really say that hasn't broken below that is actually closed below the major support now, the the German market doesn't rule the world in terms of usually what happens in financials but this is a really big concerning point we've seen something like this happen before if you remember back in the past guys. And um yeah, it was 2022. So, it's almost the same pattern. Um well, it is pretty much the same pattern. We've also seen it back in 23 as well. So, the German market we often use as a bit of a gauge. This is something we do a little unique here. It's not really great. So, breaking below certainly does expose the potential length of that WOFF, which is, you know, quite a few hundred points there or even more.

Now, let's have a look here at the US dollar. No breakout of the major hedge. So nothing changing there on the dollar and oil futures continue to spike up into the future. That is the February ones. If these stay higher for longer, it's going to put a lot of pressure. And of course, we're seeing boots on the ground, all sorts of things going on. Not a geopolitical expert, but the issue is is that the market is seeing it as longer. And I can tell you here in Australia, fuel prices just shot up over the week. and uh they're now looking at I think it's like a 100% increase in fuel cost uh on some fuels here in Australia. So, it's getting pretty wild out there. It's going to put a lot of pressure on everything in the system and I think we need to remember that everything in the system is going to be, you know, spiking up quite a lot.

So, semiconductors, they're still holding the backbone at 377 is important. Gold has fallen low. Now, a lot of people can't understand why this might be happening. One of the reasons gold can fall down is because it isn't actually a hedge in the way that a lot of people think of it as. It is going to get affected by high interest rates. You've got to think about it as a currency and the dollar becomes a little bit more desired while interest rate spike expectations go up. So we went from lots of cuts or a few cuts to less cuts to now no cuts to maybe even spikes up. So that's part of the reason why gold is doing this. Also, as you guys know, when the volatility enters, we often expect a relief rally. Then we expect not much for a while. Remember that Nautilus chart we shared for silver and gold structure? Yeah, unfortunately, it's kind of coming true. It's not that I'm super negative on gold. I think it's a excellent metal and I like it a lot, but unfortunately these types of movements, you know, we need to get back into these demand zones here. Uh, and we we're now there. We need to see a bid. There's no bid here, guys. I've looked at the two zones so far. There's just been no bid. That's why we say patience, react, and predict. Look for the bid. That's the most important thing.

Nvidia's holding 170. Chinese markets have broken down again. We'll have to see what how these all react. You can see here the pressure on these world markets on everything on support. And probably the only thing that's doing okay right now is probably software and uh and Ethereum and Bitcoin. And that's just because money is going into them to try to, you know, control a safe haven to a degree so that they don't lose on the other stuff. Now you can see here Ethereum still holding that anchored VWAP off the last move and Bitcoin is doing something similar. And for now these markets are still looking like they could be finding bidders. The flows are coming in but ultimately it's not about Bitcoin. It's not about Ethereum. It's not about gold. It's going to be about the S&P. So for the most important chart of this week guys, it is the S&P.

Let's have a look at the news coming out. Uh this one here from forexfactory.com. If you want the calendar here, it's free to access so you can check it out. Um, but basically, uh, you can see here that we've got PMI, CPI for Australia. That'll be interesting and probably won't be good. And then we've got just a bunch of different bits of news. We also have daylight savings time shifts coming for many places in the world, which is pretty good if you trade the US markets. But I would say in summary here, we have dropped down to key levels. There's no doubt that 6,500 is an incredibly important zone for the S&P. There are a lot of options at stake here still over the next couple of weeks. And generally speaking, the S&P is one of the biggest hold patterns that you want to be looking at. Will we actually change trend directly towards the downside? As Paul Tudtor Jones says, nothing good happens below the 200 day. So, we want to be retaking that relatively quickly and we could be looking at that as also dynamic resistance. So, some massive levels to watch out for. We're bringing you the content this week. Make sure to sub, guys. That was a big video. Thank you so much for watching and thank you for so hyping the video, subbing, putting the comments down below. Really appreciate you guys. Thank you so much. We'll catch you for now.