Stock Market Volatility Is Set To EXPLODE Again Soon, BIG TIME!
Title: Navigating the Volatility in Technology Stocks: A Comprehensive Analysis
Introduction:
Unless you’ve been living under a rock, you would know that technology stocks are currently on fire. However, with the recent increase in volatility, it’s crucial to understand the potential risks and opportunities in the market. In this article, we will delve into the current state of technology stocks, analyze market trends, and provide valuable insights to help investors navigate this volatile landscape.
Understanding the Market Dynamics:
The debt ceiling discussion has been a major topic of concern. While the deal between Biden and McCarthy has been reached, it remains to be seen if Congress will vote on it and agree. The market has responded positively to this development, but caution is advised as we have yet to see any significant signs of a market turn.
Key Indicators to Watch:
1. Credit Default Swaps: The recent surge in credit default swaps, particularly in treasuries, is worth monitoring. This can provide insights into market sentiment and potential risks.
2. Core Inflation: The battle between the Federal Reserve and the market regarding core inflation continues. With calls for another interest rate hike to address the high core inflation rate, investors should keep a close eye on this indicator.
3. Asset Managers’ Behavior: Asset managers’ consistent neutralization and hedging of their bets indicate cautious optimism. Observing their purchasing patterns, particularly in tech stocks, can provide valuable insights into market trends.
4. Market Breadth: The breadth of the market, represented by the performance of individual stocks compared to the S&P 500, is currently at historically low levels. This suggests that a majority of stocks are underperforming, highlighting the importance of diversification and index investing.
5. Sentiment Surveys: Monitoring sentiment surveys can help identify potential market turns. A significant increase in bullish sentiment, coupled with a decrease in bearish sentiment, can signal a market top.
Analyzing Tech Stocks and Other Sectors:
While technology stocks have been leading the market, it’s essential to consider other sectors for potential opportunities. Large-cap tech stocks have been outperforming small and mid-cap stocks, indicating a potential imbalance in the market. Exploring sectors such as energy and metals, which have experienced both hot and cold markets, can provide alternative investment options.
Pre-Election Year Patterns:
Historically, pre-election years have shown a pattern of underperformance in the market during the summer months, followed by a strong rally towards the end of the year. Understanding these patterns can help investors anticipate market movements and plan their investment strategies accordingly.
Chart Analysis:
Examining key charts, such as the NASDAQ versus IWM (Russell 2000), can provide insights into market rotation and potential turning points. Monitoring the skew indicator, put-call ratios, and volatility levels can also help identify signs of market tops and bottoms.
Implications for Bonds and Central Banks:
Treasuries, which have been underperforming, may present an opportunity if rate cuts are anticipated in the future. Monitoring the actions of central banks, particularly the Federal Reserve, can provide insights into liquidity levels and potential market impacts.
Case Study: Tesla and Other Tech Stocks:
Tesla, one of the most traded stocks, has experienced significant volatility. While it has shown strength, caution is advised as it approaches critical resistance levels. Analyzing the most traded stocks, such as Nvidia, Amazon, and Disney, can provide valuable insights into market trends and investor sentiment.
Conclusion:
Navigating the volatility in technology stocks requires a comprehensive understanding of market dynamics, key indicators, and sector rotation. While technology stocks continue to dominate, it’s crucial to consider alternative sectors for potential opportunities. Monitoring sentiment surveys, chart patterns, and central bank actions can help investors make informed decisions. Remember, timing is everything, and staying informed is key to success in the ever-changing market landscape.
FAQs:
1. How can I identify potential market turns in technology stocks?
Monitoring key indicators such as credit default swaps, core inflation, asset managers’ behavior, market breadth, and sentiment surveys can provide valuable insights into potential market turns.
2. Should I focus solely on technology stocks for investment opportunities?
While technology stocks have been performing well, it’s important to diversify your portfolio and consider other sectors such as energy and metals for potential investment opportunities.
3. What are the historical patterns in pre-election years?
Pre-election years have shown a pattern of underperformance in the summer months, followed by a strong rally towards the end of the year. Understanding these patterns can help investors plan their investment strategies accordingly.
4. How can chart analysis help in identifying market trends?
Analyzing key charts, such as the NASDAQ versus IWM and the skew indicator, can provide insights into market rotation and potential turning points. Monitoring put-call ratios and volatility levels can also help identify signs of market tops and bottoms.
5. What role do central banks play in market volatility?
Monitoring central bank actions, particularly the Federal Reserve, can provide insights into liquidity levels and potential market impacts. Understanding their policies and decisions can help investors anticipate market movements.
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At some point, a bull market will end and a new bear market will begin. But how can you tell when the market bottom has been reached. How can I profit from the present market", I mean I've heard of people making upto $250k in couple months during the red season and I'd like to know how.
The FED has been buying NVDA calls, lol
Thanks Tom great analysis
Until this guy gets bullish, I keep riding it!
Yup and weak seasonality in August/Sep makes me wanna wait on the sidelines a bit before I buy anything else. I'm more of an investor/swing trader.
simply the best
@Tom…what is this green Fed liquidity line you are showing? What’s it called and where are you sourcing the data for it please? Because FRED data shows a declining Fed balance sheet and discount window usage by banks has also declined.
Tom, have you ever analyzed how changes in the U.S. Treasury General Account (TGA) affect liquidity in the Bond and Stock markets. If debt ceiling is lifted this should have a massive effect??
SQQQ appears to have capitulated on Friday before the debt ceiling announcement, MEANING the Nasdaq has topped.
Approval of a higher debt ceiling is not a good thing when core inflation is 4.7%. just saying.
Feel bad for all the bears! So much build up for a huge crash. Debt ceiling getting resolved and likely heading to 430 on the SPY. There will be a correction back to 370 or so, but the bottom was in October. Its been months now consolidating, expansion is next
Sounds like the horse is behind the wagon. 72hrs to read the details, then voting.
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless. In just 5 months my portfolio grew by $300k in gross profit, the main thing is to diversify your portfolio and you will see amazing results by investing smartly.
0:38 – Debt-Ceiling discussion
1:16 – CDS, Core Infaltion, Money Flow, Net % FMS OW Bonds
2:52 – % S&P 500 Stocks Beating the Index
3:26 – Sentiments
4:02 – Forward P/E Ratios, Pre-Election Seasonality
5:12 – SKEW
6:01 – NDQ/IWM, NDQ and VXN
8:21 – PCC (Put-Call Ratio)
8:47 – TLT
9:21 – Copper
9:55 – SPX, QQQ, CBL, FED
10:34 – MOVE, VIX
11:14 – SPY and DXY
11:33 – XLU/SPX, Stats
13:04 – Options, Big Vols
15:43 – Rotations
18:29 – DX1!
19:34 – GOLD
20:18 – NatGas, USOil, XLE
21:16 – TSLA
22:36 – AAPL
22:52 – SMH
23:45 – NVDA
24:58 – AMZN
25:27 – DIS
26:03 – DE40
26:27 – XJO
26:57 – US30, QQQ
29:01 – US100
29:40 – SPX, Wychoff Schematic
30:40 – RS1! and Bollinger Bands, US500
32:12 – BTC
32:56 – News
Spinning top Tuesday. Bearish engulfing Wednesday, directional not till Thursday.
Tom, you’re my hero. What is the relationship to the debt crisis and TLT? I know you went over it before but what if there is a default what then!?
Oh I love Ralph from The Simpsons. LOL.
The pain on the short tech trade was severe; exacerbated by the fact that it was very difficult to scale out on pull backs because the weren’t any😂
Bear market rally. NOT!!!
You’ve been calling this destruction for months when are you going to be right?
Why do all the calls cause a gamma squeeze but all the Perz when there’s too many puts it just doesn’t go down and it doesn’t cause a dump it’s like it works when it’s going up and there’s tons of calls it keeps going up but if there’s so many puts it never goes down I don’t get that?
What is your take on $SONO? They were just awarded $32.5 million for a patent infringement law suit against $GOOG.
All the bears coping and crying 🤣
Rocketship is taking off
This sumbitch going higher
Federal Reserve may soon lose control of interest rates, claims Heresy Financial. This comes as a result of the United States government's intention to embark on a $1 trillion borrowing spree. This might cause the banking sector to lose so much liquidity that rates spiral out of control and are no longer in the control by the federal reserve. I'm sorry to say that despite investing, I lack the mental capacity to evaluate each company's performance and decide whether or not now is a good moment to acquire stocks. My reserve of $650K is being wiped out by inflation and the recession.
so are fund managers net short bonds or overweight treasuries?
Premium news feed circled in this video: Local couple buys house.
Thanks…
can you do paypal stock please?
It looks like the FED is quietly helping to pump this AI rally, alongside share buy back schemes to help the execs get their bonuses and then sell at the top to the retail investor – more fraud at the very top! I could have sworn they were meant to be tightening!!!
The way its ramping so hard, feels like a sell the news event on the debt ceiling. Obviously we'll watch for signs of that, but the harder it runs, the more I'm convinced
The same high-yield potential exists in both bullish and bearish situations what matters is knowing where to look. I have been diversifying into the stock sector and trading aggressive through an advisor. Away from all the distractions around I still make profits from my investments, made $300,000 last year.
Bear market bottom was in months ago.
March '09, a generational opportunity to buy in the market..!
When NVIDIA broke 80$ in 2020, it was a "nonesense breakup".
Three years later, it has not reached these levels – most likely it never will.
Yes, timing in NVIDIA is so dangerous now, but predicting it will crash is at least adventurous.
Maybe 300$ is the "new bottom".
Be careful with bear biases – good luck!
Very good channel. I Really like the unbiased analysis along with the flow of the videos.
To obtain financial freedom, one must either be a business owner, an investor or both generating massive income, despite the fact that I invest, I am saddened by my inability to evaluate each company's performance and determine whether or not this is the ideal time to purchase stocks. My monetary stockpile is being depleted by inflation. At this stage, I need accurate market trajectory data, but I'm not sure what to do.
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s … I would greatly appreciate any suggestions.
Interesting , the stock market is currently experiencing a decline while bond yields are on the rise. However, there seems to be skepticism amongst investors regarding the Federal Reserve's plan to continue increasing interest rates until inflation is stabilized. As for myself, I find myself at a crossroads, uncertain whether to liquidate my $250,000 stock portfolio> I'm seeking advice on the best strategy to capitalize on this current bear market.
Would be great if could also show the upper part of tradingview with the title and the symbol
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless. I’ve only ever saved($510,000), never invested but want to start.
at 10:18 what are the green and purple lines?
What the?!?! 😂
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Mrs Claudia Jenkins