Transcription
2007, 2015, and 2018. All three of these particular times had something in common, and it led into a pretty bad period for both stock traders and investors. But could a gap above the 50 and 200 moving average be different this time?
In today's video, we need to explore deep dive into the S&P 500, what's going on from Wall Street, and some of the largest trades we've ever seen in certain sectors, and of course, the rise of semiconductors once again. The backbone of the US market is still alive and kicking. But could this be euphoria after the announcement considering things are not looking so good right now?
Well, maybe we need to check in on oil once again as the daily 20 moving average has been hit and we're seeing some stability come back through. Could things be about to get absolutely wild? Join us as we cover stocks, commodities, and cryptos in more detail right now together. See you soon, guys.
Well, welcome back everybody to what was a sea of green in pretty much every sector in the market except for energy and software over the last 24 hours as markets rebounded off the news of a ceasefire and of course hopes of maybe seeing more oil traveling around the world and an end to everything that's been going on.
More importantly than any of this though, we saw semiconductors and darkpool activity start to rise up in the hottest sector, which is obviously everything to do with AI and data centers. And this is something we brought up in our last video thanks to volume leaders here where we saw massive transactions coming in from Wall Street along the lines of darkpool or just huge ones that have been reported just before these announcements. Sometimes a couple of days before, sometimes literally just in the session before. and was Micron semiconductors in general, AVGO and many others that were leading to some massive gains.
But now that the markets have gone above and beyond maybe some people's expectations, did we move too quickly too fast? And are we now at a key point in terms of the options market and the level of 6,800 on the SPY? We'll be doing a deep dive a little bit later on as we go through really the key technical analysis and those three previous periods where we saw a massive moving average gap up to.
Speaking of gap ups, let's have a look at what happens when the market does something pretty rare. The S&P gapped up and energy stocks gap down. And according to the market stats, this has not really ever happened before in terms of such a wild gap. 2.6% 6% up on the SPY, negative 5.7% on XLE. And although that's never happened before, we do have similar cases through several periods of time, notably generally during periods of significant weakness in markets and actually continued weakness on the way through.
Now, we've been talking about 2026 from a up, down, and all-around year, and it continues to look that way. Although, this does look quite promising from several price action standpoints and the bonds market. not freaking out anymore. Of course, that can change just like this in that volatile period. So, it means that we need to be a little bit more nimble and of course thinking about markets in a different way.
One of the ways that we can think about it is making sure we're paying attention to the market's expectations on things such as Brent and crude oil. And we can see here that the shortdated opt uh shortdated calls and movements have actually changed quite a lot over the last 24 hours while the longer expectations of Wall Street have still remained pretty similar according to the latest Trading View stats here. And you can see that we're going down according to this to be back in the 70s during 2027.
Now, we do have an inflation figure coming out in less than 24 hours, and this is going to be paramount to the markets because, of course, while we already expect that inflation figure to be pretty bad, the main question is, has the damage already been done? Are we going to see a 20 to 30% or even more price hike across the board? And more importantly, are we going to see it into food and everything else for the middle class? Well, that certainly seems to be the case. And of course that will be a story that we'll have to unpack when we see flows move through.
But speaking of flows, massive flows coming into software. Now we've already looked at this and of course software was pretty much the most hated sector over the last kind of 6 to 8 months because of course the rise of AI but more recently we've seen tons of clusters of darkps and this reminds me a little bit of Intel. All those years ago, Intel came down and sat for quite a period of time before eventually starting to move up and doing pretty well. And it was one of those massive accumulation periods that we saw. And of course, right now, we've just had the number one largest darkpool trade ever go through just a few days ago. And we continue to see a lot of activity at this point on IGV. We'll check that out chart out a little bit later, but I want to continue to talk about some of the big moves that we've been having, historical stuff.
You can see here this one from Blue Kurdic basically shows that the S&P 500 Ford percentage since 1986 when we have oil getting crunched like it just did often does come with a rally and you'll notice here that sometimes it happens during a pit or a sideways market. Sometimes it does happen during full recoveries which is a good sign but it generally does mark a point of recovery. The question is, is it more like a dot style bust where we rally for a little bit? It's actually what we call a deadcat bounce and then market sell off making new lows.
Well, how do we define that and look at it? Well, one of the ways we can do so is we can check out the most important sector. And Duality Research did a great job here over on X. We often repost Duality's uh posts. There's some great ones there that basically tracks semiconductors and momentum. Now, for a long time, we've talked about this. One of the reasons that we saw markets being so bullish, we believe, or at least in terms of index and different sectors moving, was that we're in late cycle but that we're also seeing a hold up of semiconductors as we head into massive IPO season. We not only have Open AI, but we also have, of course, some other big names coming out, including SpaceX and, of course, Anthropic. And all of those are being fast-tracked now to be in line somewhere around the World Cup in the middle of the year.
Now, one of the problems with IPOs is that they may take liquidity away from certain stocks in the market. And Tesla seems to be suffering a series of lower highs and lower lows because of that. But as duality shows here, semiconductors have not had that problem. And according to the latest information that I've seen, there is like no availability of H200 chips from Nvidia. and demand is still absolutely through the roof. So what this is suggesting that at least for now the AI trade is still on. Semiconductors are obviously outperforming the spy which we'll look at later on. A very important factor and when we see thrust like this generally it's either sideways in semiconductors or even more towards the bullish case. And I think that's very important to note that unless something comes out of left field the current structure of markets has been supportive of up down and all around.
Could we possibly still bottom 60 to 100 days? A lot of you guys have been pointing out that data stat from previous times that we've been in geopolitical conflict and obviously what has happened around there, which is markets will often rally a few times, drop and then stabilize at a certain point in the future or could we have just found the big low? Well, one of the data stats that we were looking at was macro charts one here, which basically showed that the markets themselves, everyone had gone into cash. And when people go into cash this high, that generally can be synonymous with bottoms. We also saw puts also come out big time. Subu trade here tracked. When puts get this high in comparison to calls, it can often temporarily or even completely stop the bottom, which has been what's happened over the last couple of years.
But the big problem right now is that the structure of markets is still looking a little bit negative. Although so many stocks broke towards the upside, the main problem is we just had a bad quarter and we still don't really know the main impacts of what's exactly going to happen. The latest update that I saw, only a handful of actual boats were going to be allowed through the straight and obviously that means still oil concerns into the future. And although things could continuously get better and better and better over the next couple of weeks, if it gets worse, remember that one first quarter of bad midterm election year, which is what we've seen here, often does lead into another very volatile quarter. So Q2, especially considering earnings is coming up, we've got CPI in the next couple of well, next day or so. Uh all of these types of things could lead into of course further weakness in markets.
So, a lot to look into there when it comes to these markets and more importantly sectors. We've also seen some other weird dark pulls come through. One of those was in transportations synonymous with the 2007 crash with of course 2022 crash coming in a full 6 months early here. And then of course what happened in 2026 so far which has been a hit on a massive transaction and it's darkpool which basically means it's in this case a sweep a very fast transaction and again it could be a sign of a weakening economy underneath the hood. Keep an eye on flows and we are actually at the moment right at that resistance point on the markets themselves.
So I thought what we'd do is we'd scroll through and we'd have a look at each time the market's done what it just did. gapping above both the 200 moving average and 50. Now, Paul Tudtor Jones often famously said that nothing good happens underneath the 200 moving average. When markets regain the 200 moving average, that's actually a really positive sign. But it's very rare to regain both the 200 and the 50 in the same session, just like we did just then. And this brings up some very rare statistics that we can go through.
One of those notably being here the rally of 2018 where markets came down underneath the 200, got back above and then of course came down again, then rallied, gapped above both the 200 and the 50 and then ended up in quite a large short after that. Effectively a deadcap bounce. Now in this case, we hit straight into resistance and we'll look at the S&P in a moment to see whether we're still around that kind of zone, but we did hit it and it was kind of bad.
If we go back over here to 2015, markets were very choppy during that year. And you may remember energy was also at the forefront of this one, just in a different way. Markets fell down, double bottomed, rallied back up, fell back below the 250, and then gapped up late in 2015, leading into a very similar scenario where we hit resistance. We ended up making a lower low, and things got pretty brutal.
Now, if we do go into this type of sell-off, just remember the percentage of stocks above the 200 moving average, something we wrote about in our free newsletter that we provide each week. New one coming, by the way, over the next 24 hours, guys. Make sure to sign up in the pin comment down below. Completely free, one institutional insight every week, so you guys can enjoy it and hopefully find out a little bit more. But that actually showed what true capitulation looks like. We'll be showing another indicator later on today's video that does tell us a lot about what we see in a flash cell, which is something that we just had. So flash cells, true capitulation, a little bit different, but 2015 again gapped up, ended up being a bit of a deadcap bounce.
Then of course there's the famous one and the famous one all has to do with kind of in some ways a similar setup. a market that became very lacklust that is it didn't really return much as sectors and late cycles started to take over and then markets gapped or moved underneath the 200 and the 50 and then eventually gapped above just barely. It was a bit different of course in terms of an overall setup but we actually went below the 200 and the 50 then gapped straight back up and then ended up seeing a market that went into of course the famous global financial crisis.
Now, are these all the same? Is this just a stat that, you know, is interesting more than anything else? Well, I think what happens here is it shows that it's a very volatile market each way. And that more importantly, it's at the whim of many different pieces of news. And this has meant that we've still got a VIX that although got crushed over the last 24 hours by 20%, it's still elevated above 20. Now, if we see the VIX get back above 25 and we're still trading in a range like we are right now, that's going to be a sign that things could be getting a little wild pretty quickly.
Another thing that just happened is the US dollar did take a lower low but instantly rerounded ending up as a bullish hammer by the end of the day. Now, we've talked about the dollar. If it breaks through 130, obviously that probably is meaning that markets around the world are risk off. And if we managed to close underneath this level, then that would have been a pretty good sign that markets wish to, of course, go higher and it was basically risk on. Instead, what we got was we got a movement down followed by a movement back up. And although there's a big gap, it's not clear to see. This actually could be one of those patient trades where we may see an interesting reaction to the next couple of sessions. And if that type of thing happened, boy oh boy, would it be a totally different trade and of course tell us quite a lot about what's really going on underneath the hood.
To make matters a little bit more complex though, let's have a look at the US 500. Did we break the trend line that we've been talking about for ages? The answer is yes. By the end of the session, it became pretty clear that the markets may want to pump higher. And our day trading masterass has a very similar setup in it in the direction of trend as you break through the trend line. It was actually kind of replicable, but you would have had to have been there right at the end of the session and obviously you would have had to have tight stop losses, etc., etc.
Now, where's it gone? It moved instantaneously to where you would expect it to between 6770 and 68.50 basically holds what we would call the supply of the previous market movement. And this is not only the most traded zone of several ranges, which you can see here at 6850, but it's also previous resistance at 6,800, call walls, which you're about to see as we bring those up, and so much more. And although the last 24 hours all we've seen is stabilization, the problem with these markets is it's kind of like usually the elevator down, the stairs up, but nowadays it's the elevator up for some reason, and the stairs down. We were actually really technical on the way down, guys. And then we just go ballistic straight into the resistance. And I know this can be very frustrating for traders and investors out there because if you're not in it already, if you're not there at the exact right times or you don't make those right decisions that end up looking easy in history, then of course you get quite frustrated. But I will say that generally speaking, because markets buy on often grids, you do generally see Wall Street give a second chance if they wish to. So what I mean by that is markets can come back down to these levels, then rally. And of course, if this is a false break, uh, then we may see something like this occur. And if that happen, then of course, things could get diabolical pretty quickly. It is one of those story lines that's continuing and I think that's important to note when we're looking at these markets.
Well, let's take a look at the options and how everything ended up fairing. Of course, we did go into positive gamma through the session. dealers were no doubt hedging their way throughout the equity markets and no doubt using the futures for it, but we instantly saw calls get back in. Not only were people striking 6,800 the most, which we suspected they would be, but at the same time, we're now seeing calls all the way up to 7,000 with them now outpacing the number of actual puts in the system.
When we take a look at the zero DTE options, you can clearly see here that there is just calls everywhere. And again, 6,800 is the major strike. So, there's no probable guess why this has happened. Instantly, people just want to pile in and that's why markets are so quick to basically go straight towards where these core walls are. We obviously update these here daily on the show. And if it's your first time viewing, make sure to pay attention to some of these because they do end up kind of giving you areas, I guess, of critical resistance and critical support, but also kind of like those target zones to look at sometimes when you're in the shorter time frame trades or investments.
Let's have a look at the cues to see if we can get any more information from that. It looks like 610 is now the major resistance. And of course, as of the close, where were we? 606. So, we managed to see the NASDAQ move up quite a lot. It hit into that kind of key resistance at around 608 to 610 and then we've now seen a little bit of weakness come through from it. It was very strong and as you'll see on the charts when we look at the NASDAQ, it really just went straight into the supply.
The probable surprise was not only the massive dark pools and transactions we saw in semiconductors, not only the fact that there are literally no Nvidia chips, which probably comes as no surprise. Everyone's trying to build data centers as most of them are scared to get let somebody else get ahead. I think it reminds me of any of these other arms races, the railroad, the electricity, well, when electricity was invented, the.com boom, anything. Anytime this ever happens, everyone goes in, they spend, spend, spend, spend, spend, try to get ahead, and then of course, something usually goes wrong. But in this case, semiconductors still seem alive and well, and you can see here that 422 is the current price, and that's actually above the most struck zone at 410. So, we're in significant positive gamma at the moment in semiconductors, which explains why it had a massive session in it. And boy oh boy, was it a big one. I mean, when you consider that's the most important sector in the market, it still looks very strong, which we'll look at in a moment.
I bit time. Just wanted to look at Bitcoin. Although it's not through 40 or any of those levels yet, we did manage to get above 40. And you can see here, this is when we start to enter into positive gamma. So for people that like Bitcoin, it's the first sign of some recovery of what we've thought is a decent demand base for quite some time, but we haven't really seen extremely good price action on it yet. Uh just kind of like a holding pattern. Ethereum did a little bit better though, which I think is always interesting when you see another alt doing well.
Let's have a look at the backbone of the US market. Semiconductors have now outperformed SPY. Again, this is still an upward trend, which obviously is what you want to see if you're bullish on markets. If we ever lose semiconductors fully, that's going to be a major concern. So, make sure to look at semiconductors. Make sure to cover your semiconductors versus SPY kind of movement. You'll also note here that we're almost at an all-time high now of one session in semiconductors. And it's not actually because of Nvidia. You can see here Nvidia wasn't able to break 188. So, could there be an opportunity in Nvidia moving forward? Certainly. Uh, one of the things is is that we're clearly moving towards an everything kind of market in in semiconductors and we've been there for quite some time and this is just telling us that again the hype has spread and now everyone suddenly has the best things. But that doesn't necessarily mean it'll hold up long term. It's all this hype into the IPOs and I think that's kind of what's holding this market at this point. But do remember these IPOs aren't like they used to be. We're doing a special on it soon. We used to have IPOs that were billions of dollars. Now we've got combined liquidity that's going to be in the trillion. So yeah, I think there's going to be a lot of sucking of liquidity from certain stocks in the market, which again could be a concern as well. A few of you guys have pointed that out in the comment section.
Now, let's look at a couple of good reads. NASDAQ stocks above the 50-day average. Now what you guys can see here is that when certain stocks market indices go too negative that can kind of create like a temporary bottom in markets often where we get dead cap bounces or possibly the lows. And you'll note that if you go over the years and you overlay the NASDAQ that around this 20 period is worth looking at. We bought it up for the S&P but I thought I'd give you here the code for the NASDAQ so you guys can see it. 50day seems to be one of the better ones.
Speaking of the NASDAQ, we absolutely nailed the most traded level on the way down, the biggest level of supply, uh, and exactly where you would expect the market to instantly rally to, and it did so. And that's why at the time of this recording, we've got a little bit of negativity on the markets. Basically, they've reached the next level of equilibrium. And that happened with one session, which is a little bit unfortunate if you're not already in it because of course that sucks because it's not like you can just say what the markets usually do, which is close above, boom, boom, boom, boom, boom. The daily close looked excellent, but by the time of course uh you even saw the daily close, a few minutes later we were like over here. So, yeah, it's a pretty fast market, but I wouldn't say that you need to worry too much about it. Remember guys, you might think, "Oh, I should have done this, should have done that, should have done anything." Some of you are probably celebrating getting it to this point. It's always about the abundance mindset. I really try to stress that on this channel because what I know and what I know you guys know is that what you thought about 2 months ago that you missed, you probably forgotten about by now. But at the time, it was the biggest thing ever. Most scenarios you'll end up seeing again several times over. And the key is not to get yourself into the FOMO or of course the massive fear.
Let's have a look at the US 2-year. It bounced back up after falling. Now, this is interesting because we're actually seeing bonds markets or at least yields going back up even though supposedly everything's going to improve. We also saw bonds themselves gap up, which is of course a positive sign for risk on, but then by the end of the day it was down a little bit and one of the markets that we've been watching recently, which was the move crash, did continue to get crushed. This one ended up being kind of a really good bottoming function which kind of said by around the 31st of March that we were possibly bottomed on the markets. And if you have a look at the S&P on the 31st of March, what you might notice is that was during the day that we got that announcement. And of course it was actually at least for now the bottom of that market. So it just shows you that those move index reads that we were talking about at least could be bought into your scenarios in the future.
Let's have a look at US oil. Uh down back to the daily 20 moving average. Nothing much to say here other than that's where we previously saw it pick up to stop a freight train generally take structure. So I think this will be an evolving story over the next couple of days into the weekend and could create of course some uh extreme volatility.
Double which is emerging markets. We saw them bounce up a lot because of course yeah well they're going to benefit from this news. risk back on to the emerging markets trade which has been kind of the better trade of the last I would say like 6 to 12 months and you can see here that it's very volatile right now because every time we see the straight closed I would say emerging markets are going to be at risk.
When we take a look at mag 7 little bit of a pickup we did see one of the largest trades ever come through here at about 58 so no doubt that that has led into it but interestingly while the mags are up things like Microsoft so software still not doing so Well, Amazon did pretty well and the rest are kind of yeah, I guess you would say lackluster. Maybe Meta did pretty good as well.
German markets right back at resistance or supply. So again, we went straight from breakout territory straight into resistance. And same with the Chinese markets, straight back into 26,100, which is where you would expect the resistance to come through.
When it comes to Tesla, this could be a suck of liquidity. You can see here, guys, so many taps to the 20 moving average on the way down. that provides opportunity in the future as well for something to look at. But right now, Tesla's still in that downward trend. And gold, while it did stabilize and maybe try to move towards 5,000, still making a series of higher highs and higher lows. It's really just stabilizing along with silver at this point.
Home builders still down pretty low. Remember, if home builders make a new low, guys, that is not great for the economy. So, something to track this year. And IYT is something we'll look at as well based on those big dark pool trades. So, that's transportation. the old school style of the backbone of the US economy. I think now it's semis but you know that's something to look at.
Another way of tracking semis I call this kind of the data trade Cosby. Uh as you can see here the South Korean market I think it's probably topped based on the technicals. Now that's my personal opinion. I I think this is extremely volatile and I know Samsung's doing extremely well on the earnings but just remember if you look at the left hand side it's also up 300%. So just remember that the markets are great at pricing in forward action. If there is something going wrong in the AI trade, I think we may see it in hardware first. So have a look there at the hardware trade if it does occur and we'll track it here.
Terms of Bitcoin, little bit of recovery here. 72,000 still marking out a little bit too much for it. But we did see, look at this, Ethereum did actually, cuz it's pretty much all the same levels, managed to close above 2,200. So that's a little encouraging for the crypto traders out there. I checked some of the other cryptos. They're still struggling across the board.
Do remember guys, inflation numbers are coming out very soon. So, we're going to find out more about really how bad is it starting to get. We do expect that this is going to be the continuing story of 2026. And one of the things here is that the market while optimistic because of AI, because of the demand, doesn't mean that it's the economy. And that's a very different thing. Stock market and economy, different stuff.
We'll obviously be updating you guys our thoughts in the newsletter. I've got a good one already planned for next week unless something crazy happens and we have to change it. Uh so may make sure to stay tuned for that. Totally free pin comment down below. And as always, please subscribe and smash that bell.
To summarize, right now we instantly hit back into resistance, but around the 6,800 level between 6,800 and 6850 is where I expect quite a lot of action on the markets. And we're looking for, of course, those big dark pulls to maybe even appear here. I always say abundance mindset guys, there's usually another opportunity and in these cases, Wall Street probably missed a bit of it liquidity as well. So if they do want to take it higher, they'll often take it lower first. Thanks so much. You have a great day. We'll see you in the next one. Bye for