Transcription
Today's number, guys, is 10 because we're witnessing something on the VIX that doesn't happen very often. And in previous times, it's led to a double-digit loss in markets around the world. But could that be happening? And is Wall Street planning it? Today, we share the data surrounding it, Tesla's positive gamma move that we've been tracking for some time, and of course, where the Bitcoin is going to fall to its overall production cost and find buyers.
Once again, there's a lot going on in markets around the world and of course some extra good opportunities. And one of those is of course in metals. Join us as we cover stocks, commodities, and cryptos in what is going to be a jam-packed show. See you in a moment, guys. Don't go anywhere.
Well, welcome back everyone to the Daily Show. My name is Thomas Atinson and in today's video we'll be taking a look at what Wall Street's been up to the macro and of course what the data is telling us. But let's kick things off here with some of the big stories in terms of structure. And one of those is are we at the calm before the storm? The VIX term structure has gone underneath .8. And you might think, well, what's the big deal? That means that there's volatility potentially in the future and not right now. Well, that's exactly the point. when we go to this kind of ratio that is the short term is pretty calm but the long term shows a bit of vol on the horizon we sometimes go underneath this ratio and according to Subu trade if we've done this in the past it has been a very good point to start to say well there might be a little bit more gains upwards of even 5% in markets but in all similar situations since the 2022 rally we've actually dropped over 10% in similar times after this particular particular read.
And of course, we do like term structure on this channel. If it's the first time you've ever heard of this, make sure to subscribe because this will become incredibly important when it comes to 2026 and what we expect to be a very high volatility year. We've got our thoughts on that coming up in a special show very soon. So, make sure to sub for that as well.
Now, let's talk about the good, the bad, and the ugly. We'll start off here with a couple of good things, then go some bad, then go some good again, and of course, we'll summarize it together. First up, $5.5 billion per day is going into the market. Now, this is pretty normal. It's the end of the year kind of rally that tends to happen around Christmas. It brings this calm in the VIX and it's because most of the time you get what you call the Christmas rally and people window dress to get those lobster rolls. Basically, Wall Street needs to get paid and that usually means they start taking profit and they start basically trying to lever in. And that's kind of what we felt like we saw during the month of November. A pretty big rally off the bottoms there, including things like RSP and new sectors and a bit of obviously rotation going on. But we did just see a cluster of dark pulls come in from the RSP, which is the equal weighted market. Could this be a take-profit target? Is somebody getting out before maybe a bit of V coming in? It's certainly a possibility and I thought I had to mention it because it's pretty rare to see that many massive trades all come through at the same price and it does mean that someone at least doesn't believe that price is probably worth it or they're getting ready for a really big rally. I think it's personally a bit of take profiting though after what has been a pretty good run.
Now let's take a look at some of the worrying signs. First up, the Federal Reserve has been doing all sorts of repo action, especially in the banking system. And we can see here that we just saw the sixth largest liquidity injection since 2020 into the markets. And of course, one of the biggest here since the dotcom bubble. Now, why is this so important? Well, it's the activity that's starting to rise up. Basically, we are starting to see signs of the repo markets in distress. And this means that liquidity could be drying up and of course, it's a big problem for 2026 when you also include the amount of bonds that are going to need to be reissued, especially from the Treasury.
Now, all of this stuff is coming in at the same time and is something we'll continue to track, but it's not a point just yet to be absolutely freaking out. You'll hear that story. You'll see these billions of dollars and you'll say, "Wow, it must be all cooked." Well, as we often say here on the channel, patience, react, don't predict. In this key market, it's all about price action and flow. And for now, as you'll see later on today's video, we still have quite a lot of good structure and not that much freak out from most of the bonds market.
Now, a lot of people have been carrying around a chart like this, which obviously shows that fourth quarter free cash is starting to decline in the biggest tech stocks. And that's because they are currently spending. What are they spending all their money on? Well, of course, it's AI data centers. And you guys know because they're going up everywhere right now that this is the new gold rush. Basically, everyone has to build a data center and everybody is burning their cash to get into it.
Now, it doesn't look as scary when you start to look at a chart such as this one here from the time investor, but you can see why Oracle is the standout when it comes to issues with their bonds. Remember, credit default swaps, which we'll show you in a moment, by the way, expanding again, which means, of course, even more fear, are starting to rise up. Why? They just don't have the free cash that some of these other businesses do. But notice here that some of them have been spending pretty heavily, including Meta, which is now dropping back down to where it's been back in 2021. So clearly not the same cash flow holdings that we used to have, but back then everyone complained about the big tech not spending their money. Now they're spending their money. Everyone complains about the fact they don't have any money. You get what I'm saying? It's always a different story.
So the question is, is there a problem? Well, one of the things that you've probably heard of before, we've brought it up plenty of times here on the channel has been that equity risk premiums are negative. Now, notoriously, when we go to negative, it sounds scary because what this tells you is that it's not a great time usually to own equities and there's something wrong in the markets. But I would warn people against just looking at a chart like this. And the reason I want you to think about it is because if you actually go back into the 1990s, there were years, in fact, I think it was like 5 to seven years where equity risk premium was well underneath and nothing happened to the markets. So, like anything, you can sometimes get data that looks scary, but really, is that the truth?
Well, let's have a look underneath the hood of the S&P because one of the things that's been happening recently is that Wall Street's been tracing different sectors which we've been tracking. Of course, we've been a huge bull on metals, particularly oil services been doing okay, and then of course gold and all of those other ones doing absolutely amazingly, but last week we actually saw 336 stocks outperform the index. And really, if it wasn't for big tech, we wouldn't have been down as much as you'd expect. And what's been happening is we've actually got here from duality research a pretty interesting market. A market where small caps have performed very well in relative performance versus cap weighted S&P and even versus equal weighted S&P. And funnily enough, utilities has actually been performing the worst, which does mark a very important point for 2026. It's actually something I talk about in my private community, which is a reason why we actually were bullish this year, which was of course that utilities was performing pretty well in 2024. Now, because it started to weaken, that actually brings up are we starting to turn into a late cycle market now? Are we starting to see healthcare outperform? These types of things will matter and of course more on that coming up soon. But basically, this is a market where smaller caps, riskon style stocks have been doing well.
Another article that's been going around is of course the Bank of Japan and everything going on there with all of their yields and issues. But funnily enough, the Bank of Japan just basically mentioned they're going to start selling some of their stock holdings. Now, this is interesting because of course they hold lots of stock and uh their ETF book holdings are insane. So, this will be an interesting story to follow as well over the next coming months and it does start pretty much immediately. So they own about $534 billion US worth of stock and they're going to start selling that into the market. How will the liquidity hold? What exactly is going to go on? This is a story of course that will continue to unfold. And I think with Japan, you've got to look at it as it is a worry. There are many issues there. We just saw Buffett actually mentioned he's buying yen, I believe, and getting rid of some US dollars. There's a lot of currency stuff going on, but we need to unpack that in a later video. Let's focus on what's important right now for the stock market.
And the big one here is the options levels. So we've actually just seen the Q's. So that is the NASDAQ hit some m pretty mega kind of calls here. And we basically saw huge call volumes. Now this is from the market stats over on X. And you'll notice that we got really really high levels of calls coming in. You might say, well this is kind of bad. Uh no, it's actually not too bad. It's pretty normal, especially when we get a huge amount of puts, to see potential kind of wall of worry style trades. So, you can see here the S&P 500 also saw some massive record put volumes, taking us back up to huge amounts of puts, which you'll see later in today's video, are sitting particularly at 6,800 and 6700, which I think could flaw this market. And that usually 3 days later after similar reads on this, we are pretty bullish. And what this could mean is we still have a Santa rally, but we have a really bad start first quarter of next year. And that's actually what we've been thinking about when it comes to the structure and when it comes to the current rally that we've had since the September rate cut.
Now, let's have a look here at the tech sector. A lot of people are making a big deal about, you know, how expensive the tech sector is. This is a pretty good chart here from Factset and you can see that it shows the tech sector is up 28% this year and its valuation is actually lower than where it started. So you might think wait a second the tech sector is to super overpriced. Well at least based on current earnings again current earnings what if earnings get worse? uh we are still kind of around that normal normal the new norm whatever you want to kind of think of it but I do think that earnings in Q1 will be incredibly important and if other companies start to do an oracle on us then we could be in big trouble.
Now I do love a chart of overall world strength and I think no one puts it together better than a fellow Aussie here Grant Hawkridge love Grant so shout out to you Grant basically we can see here that this is a market of all of the different uh of course, main markets that you'd be looking at. And you guys can see here, it doesn't exactly look negative. Now, if you're bearish on the markets, hey, I get you. The macro side for a while has looked a bit shaky. We've got unemployment numbers. There's so many things to be worried about. But the reality is, what is the market doing? Remember that quote, markets can stay irrational longer than you can remain solvent. Some of the biggest bears had a crack at markets. I actually wrote about this on LinkedIn. Follow Thomas Atinson. Again, links in the description down below in pin comment and you'll see my post on this and you might enjoy it because there's actually a couple of good reads in there for previous periods of time when the biggest smartest people had a crack at shorting the market. They got wiped out and then boom, it went.
So again, is there a problem on the horizon? Well, a lot of it depends on velocity and momentum. And of course, a lot of it has to do with whether the Fed will panic. So of course if we see in 2026 tons of rate cuts really really really really really quickly that is going to be a panic mode and of course it shows us there's something fundamentally wrong for the back end of this year in the first half of Jan do we usually get good returns the averages are very good according to the chart here from all these sources and you can see that the main thing is that we are in a bit of volatility post a rate cut which is very normal and this is normally the type of structure you get in fact Around the middle of December is usually where you see a secondary dip in markets. And then if a Santa Claus rally is going to start, we see kind of the market stabilize around this level and then usually push up.
So with all of this going on, with all of this fear and uncertainty, where do we see the value? Which sectors tend to be doing best? Well, we've already had gold going amazingly, and we of course are massive bulls and have been for a long time on gold and silver. Copper recently, excellent pickup. In fact, iron or also picked up. Energy could be a question as well, but there's always another opportunity. And one of those, of course, has been platinum and palladium over the last couple of sessions. Very nice moves there. And it just shows there's always something going on. But I just want to remind everyone, all you guys, cuz you you're smart. You know what's up. That it takes a long time to build a new mine. So, what happens if we really do go into a shortage? We just saw Samsung buying silver. Thank you, Samsung. We appreciate you. Let's give a clap to Samsung. Now, we're only giving a clap if we're invested. Otherwise, we're pissed off because probably everything's going to go up in price. But if we're invested, guys, we're happy because Samsung, of course, pushed the price. But it takes 15.7 years to get those those mines up and running generally. And uh that means that, of course, if you go into shortages, boom goes the market.
S&P number of days above 50 DMA. This is why we've thought this could happen and why we still kind of remain bullish in general structure. Remember, the market's done this so far. Check. The market started to get a little bit of vol. Check. The market generally then pulls up. Good. And then the question mark. And that's of course taking us into Jan into kind of the Feb March period. And if you know your stats on markets, you may know the importance of the first couple of weeks of Jan to the rest of the year. Oh, I'm excited to give that stat again. It's going to be a good one because that is very, very important. And we'll be of course tracking that super closely for next year because I pay attention like a hawk to the January stats.
Bitcoin ETF flow. Now, no one's probably happy with Bitcoin last 24 hours unless you're a bear, but the market did drop a level. It failed to recover properly. So flows, we haven't got any more new updated data from that, but we will. And you can see here liquidity was dumped. So, basically what happened is we took out the stop losses, we hunted those out, we pushed the market up and failed at supply. Uh, so we'll look at this chart a little bit later on today's video, but essentially at the moment, the bears are in control. And for a bull of Bitcoin, you do not want markets losing that 84K because that then opens up 75 and obviously opens up some interesting levels including the actual uh overall cost of Bitcoin. So, of course, the big line that follows it along in terms of mining production cost, that can be a good support as well, which we'll talk about in a moment.
Advanced decline line did hit a new all-time high, which means breadth improved, even though the S&P never did. And is that a bare sign? No. Most of the time, markets do not top out when you have breadth improving. So, that is usually an okay sign for at least at some point a bid to come in. Now the market is underneath 6,800 at the moment and you guys know that 6,800 and 6700 down here are both very key for the put zones now particularly 6770 for whatever reason and 6700 have been spiked up over the last couple of sessions. Take a look here at the negative gamma kind of pushing this idea that maybe we get a little bit more drop. If we do push into 67 it becomes very strong. You can see 68 for the next session is very strong as well. So what this is showing us is that it's unlikely the market's going to be easily able to push under 67. If it does, well, we have something to discuss. But at this point, of course, we're maintaining that generally those put supports should hopefully hold. We want to see bid. We want to see action. But yeah, 7K still seems the more likely target at this point.
And it's kind of the same thing that we saw on Tesla with the breakout. you know, the trend, double bottoms, broke out, massive positive gamma across the board, and all of a sudden, take a look, we're pushing towards that magnet number, that 500. So, I'll give you a congratulations if you had the steel to hold your Tesla or get into it. Why? Because it was, of course, a very key flow level. But I think it would it would show a lot of you guys why the importance of these options that we bring up in every video. Um, you know, we need to track them. We need to check them out.
Now, what about the old Nvidia? It is boring, but we still look 185 is the call wall. About 175 to 165 is the put wall. It's very important it holds 165. And for options on the old Bitcoin, it's either now. So, of course, that 84K, you can see 48 I bit is 84K equivalent, or we get down to 43. Now 43 is a pretty much pretty much Bitcoin's production cost which has notoriously been a bullish position. So this is a very interesting chart and of course the bears I would say in the short term look like they're in control right now. Obviously if we get above 90,800 that's going to be really great for the bulls but yeah it is it is at the moment in decline.
Let's have a look at gold. You can see here still doing really well. 400's kind of like the target on gold at the moment and all-time highs could be coming for that rather than later. So, we did mention before the advanced decline is up for the S&P. That's fine. I checked the bonds market before this. I didn't see any problems. You can kind of see here high yield junk. It's not doing anything. There's no freak out in the bonds market, which generally means I'm not freaked out in the price action. Why should we be? When you look at spreads again, there's no extreme spike up here. We do have, of course, Oracle CDs going up, but Oracle seems to be the only MAG stock that's running out of cash and needing to borrow. So, makes sense for them. And you can see here that XLK, the tech sector, is pulling down. Now, that's totally fine. We haven't even hit an anchor VWAP level yet, but we would like to see some stabilization over the next couple of points. So, we'll see what happens. 139 uh to 140 141 would be a good like hold for this. So hopefully this doesn't drop too much more and Nvidia Spy is holding its own. Do remember semiconductors to the spy actually have been doing okay recently. So yes, they've dropped but until you get like a double topping pattern. There's no reason to panic yet guys. Remember IWC, other cap stocks, they all made new highs, which basically tells us that the market overall is still feeling relatively bullish and risk.
Now, what about yields? Well, we can see here the 2-year yield is obviously still declining. The 10-year yield is, in my opinion, looking a lot more bullish. The 20 and 30 definitely look more bullish. So, the market is disagreeing with, of course, what the Federal Reserve potentially is doing here in terms of cuts. And that will be an interesting tug-of-war that will probably play itself out on the dollar. But I don't have any updates on the dollar yet because I don't think there's that much going on there. That's that's going to be interesting yet.
US oil, it's in decline. So obviously that's why we haven't targeted barrels. That is not a good close should it happen. The market is down. The trend is down. We didn't see a break up. Oil services will suffer a bit here, which is obviously my favorite sector. Well, not my favorite sector, but one of my favorite sectors at the moment. My favorite sector is metals for sure. But uh this is this is certainly breaking down. So you can kind of see here that uh this is this is why you know the the political side of oil is so tough this year and we have warned against it many times. Angie stocks therefore no breakout yet. But I'd watch this space. I think there's going to be a surprise there into 2026.
Gold nice. doesn't look bad at all on the charts there for me. Silver still looks really bullish. Copper, okay, it's starting to weaken a little bit, but no break under 530. So, obviously, it's still consolidating here. And in general, the real market action in terms of metals has been platinum palladium. I mean, look at platinum go. And we did actually a a cross pair analysis on platinum. And I'll just show you here. I'll do a pro platinum to gold ratio and you can kind of see why I like it so much. It just looks so cheap to gold in many ways. Again, it's not a solicitation to buy it. Do anything. Please practice risk management. Do whatever you think is correct for yourself. But in terms of price action, you can see that as a flag to the upside and obviously that .5 ratio is a very interesting ratio for this. It hasn't really been fairly priced to gold for a very long time. So, you know, can we get back to those 2023 prices? Certainly one to watch.
In terms of stocks, Tesla did break up and out and this is more a sign of a positive gamma in play. And of course, there are gaps now, but it does point towards maybe a 500 or just underneath 500. Chinese markets, liquidity is still there, but it's absolutely no bid. So, we'll update when we get more information there. And the NASDAQ is of course pulled down. So, let's grab a fib here and just quickly fib the NASDAQ out and see if there's any panic zone. The answer is, of course, no. Uh, the level is around 24,600 and I think the S&P shows the best here. So, 6700, 6770, 6,800. All this zone here, this 100 points there, they seem to be a lot of puts. So, again, we're looking for bid off that. And I'm not really negative on the structure just yet. I think the structure looks okay still.
Ethereum did bounce up of course and now it's broken back down. Hasn't actually nailed this low level yet, but really all eyes are on Bitcoin. This is actually the tracking number of how much it costs to produce. And you'll notice that when it comes down to this level, it doesn't tend to sit there too well, even if it does sit there, it tends to base structure. And I just want to give you guys the price here because it's actually works out to be 74,000, which is just underneath that low level should we get down there. I don't know if it will. Uh, of course I still think that this level down here at 84 is going to be a pretty important zone for this either flag to continue down or for us to see rally. And of course, there are many cases to be made here that maybe we've even slightly broken down cuz you can see if you draw a trend line like that, it has closed underneath.
Guys, it is a very interesting time here in markets. I think markets still remain pretty much intact at least for now. I know there are plenty of fears to be had out there about things, but the main kind of concept we always like to say on this channel is is look at the flows, look at the movement, and obviously we know that there are plenty of large put zones. There are also huge puts and huge calls coming into the market into the end of the year. So, will we get a Christmas Santa rally? Everyone's talking about it. It's probably one of the most well-known seasonal trends, which has made it less desirable. It kind of reminds me of the sell in May and run away which hasn't worked for a long time guys. It's been really bad and that's why I laugh at it every year. But this one here, well, it's been pretty consistent for a long time. It's starting to get worse consistency wise, but again, we're looking for bid 6768. Remember, the S&P is one of the most important charts in the world. And all we can really see at the moment is just a huge amount of movement into concern, which is going through the metals. and the medals just seem to be some of the best sectors, which is probably okay if you're watching this channel because you probably don't mind them anyway.
All right, thank you so much. Sub if you enjoy the content. We'd love to see you here and I will catch you in the next one. Bye for now, guys.