What Did The FED Really Just Say About The Markets...
Duration
22:48
Captions
1
Language
EN
Published
Sep 17, 2025
Description
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Captions (1)
Today's number is 0.04
because what we just saw happen to
markets is incredibly rare and it has
many people calling that we may be
heading into what we call stagflation.
One of the worst economies that you can
get into. But is that really what Jerome
Pal was saying when he delivered a 25
basis point cut? Well, one thing's for
sure, he did say there were some
potential trying times ahead and it had
markets starting to get very volatile.
So, in today's video, we'll break down
what exactly just happened, why
everyone's trying to hedge the US dollar
right now, and where the construction
looks like it's falling off a cliff.
There's a couple of big problems, but as
always, there could be a silver lining.
Join us as we cover stocks, commodities,
and cryptos as we break down what you
need to know right now about markets
around the world. See you in a sec,
guys. This one is not to be missed.
Well, welcome back everybody to the
daily show. My name is Thomas Atinson
and in today's video we have a lot to
discuss because it was down with some of
the big tech and up with everything else
as the Federal Reserve delivered its
first rate cut in quite a while. Now,
why is this important? Well, it had a
little bit to do with actually the dot
plot and we'll take a look at that in a
moment, but it seems to be sugar rushing
the market at least for now. Is it going
to be just a trajectory to the sun?
Well, we've got some overlays that we
can use. And there are some similarities
still happening here to one of our
favorite reads, which is from the 1990s.
So, it was dotplot release up, then it
was something about AI causing issues
with the job growth from PAL down, and
then it was back up as he made that a
more positive tone. This was sure to be
a volatile session. The next 24 to 48
hours may be as well because of course
we have options expiration. More on that
later, but it was one of those times
where you had to look probably at some
of the numbers more than anything else.
And the first one was Steven Mirin,
which is of course a Trump appointee to
the Fed. Now, I believe he was the only
one that dissented when it came to a 25
basis point cut, and he was looking for
50 basis points, but according to the
overall dot plot, you can kind of see
here he's angling for quite a few rate
cuts next year. And this will have the
market salivating at least about the
shortterm gains in markets, particularly
the chances of way more cuts on the
horizon. Already we're seeing priced in
another two cuts for this year,
particularly in October and then
possibly in December. And then we're
seeing another four cuts getting priced
in by next year. Could it be even more
though? And could this cause us to go
into stagflation, which is of course
where we have low or no growth and we
have inflation potentially caused by
tariffs and other things. Well, of
course that's the concern always in
markets and there always is a concern.
You can see here according to the latest
report here from Goldman Sachs, they
really were mentioning a couple of
things in the report. First up, it did
seem like there were a couple of noted
risks, downside risks to employment have
risen even as inflation has moved up,
kind of signaling that we may be going
into that stagflationary economy. And I
did notice that Jerome Pal said this was
a strange thing and that these types of
things don't usually happen and go hand
in hand and all sorts of other problems.
So, it's basically expecting now that
we're going to get quite a few cuts. And
of course, this story will all be about
really that change of the Fed next year,
and that's going to be a huge point,
especially if we get tons of cuts around
that period of time. So, will it be all
green all good for now? Well, let's have
a look at a couple of things in the
economy. And first up, there are some
problems. Number one, job openings are
declining at a serious rate right now.
And you can kind of see here it has been
for quite a while. All the way through
2024 into 25 we've basically seen a
weakening jobs market. This is driven by
companies that overhired during this
spike over here from 2021 to 22 saying
you know what we don't need this many
staff and of course the advent of AI
replacing so many of our jobs. But it
was actually a story maybe even weaker
than that when you take a look at it and
it has to do with housing construction.
Now remember recently on this channel
we've talked about jolts and of course
the concerns there in the economy. Now
this is the macro side and we need to
remember that the economy and the stock
market will be different things. Stocks
care about profits and instant gains and
the economy cares about it realistically
a broadening uh prosperity and of course
you know everyone being employed. Well,
it turns out total housing construction
in the US is declining at a pretty rapid
rate. And you may notice that this
happens at uh semicconcerning times when
you go back through some of the
recessions. In fact, it is one of those
kind of I would call lead indicators,
although it takes a long time to show
up. You'll also notice here that when we
look at total building permits, they're
dropping off a cliff. And construction
employment has only just started to
really turn it around. And this kind of
reminds us a little bit of when we go
back into the 1980s and '90s. And we see
here that we had total building permits
falling off a cliff while we also had
residential construction employment
starting to fall. And this actually did
coincide with some problems in the
property markets. Of course, the US got
through it thanks to basically
immigration, also innovation at the time
and uh many other factors. But there is
a clear slowdown here in the building
sector. And I'm sure most of you guys
are already aware of this and it's not
big news, but it's the acceleration of
the slowdown that we'll need to be
looking at over the next 3, 6, and even
12 months. So, what does this mean now
for the cut? Is it enough to create a
sugar rush? Well, one of the things here
from JP Morgan actually shows that when
we get cuts, and we've shown a statistic
similar to this at all-time highs or
within 1% of all-time highs, it doesn't
tend to be that bad for markets. In
fact, it does sugar rush markets
sometimes. And the one I want to focus
on here is the narrative that we've
talked about many times, the 1998 to
2000.com boom. Now, we all know what
happened there. We got a couple of rate
cuts near all-time highs and we ended up
finding a massive bubble. Now, you'll
notice that when this came through,
there was still more to be gained in
markets. And it suggests, of course,
that people will pile in and you may not
get maybe pullbacks, but that's actually
not necessarily true. In fact, during
those periods of time, we actually saw
very volatile markets with huge spikes
and drops and all sorts of opportunity.
So, if you're just coming into markets
right now, it actually might be that
subscribing to this channel or any other
channel really about financials is going
to be one of the big things you want to
be doing because volatility is likely to
stay and it is likely to get pretty
wild. Notice some of these drops. They
may not look like much, but actually
these drops are quite significant and
they're bought fairly aggressively. And
this has to do with, of course, what
happens when we get these types of very
deep kind of pullbacks that are then
bought up on euphoria and then they're
supported by policies. So, of course,
we've got tax cut policies. We've got AI
making literally companies be able to
say, "Hey, we need less staff." One of
the biggest costs for most companies.
And then on top of that, we also have
this innovation concept where everyone
wants to buy AI because we can all see
it's the future. The question is which
companies are going to be winners and
also when does it get too expensive? Do
you want to be left holding the bag? But
no one cares when you're entering into a
bubble. And remember when people say
it's a bubble, guys, it's generally not
over. You need that euphoria to come
through because people in 1998, as
you'll notice here, did also say it was
a bubble, but then they all went crazy.
And some of the biggest bears went bust
right around here when they were trying
to short it. So, it's something we're
looking for, tracking it very closely.
I'm sure a lot of you guys are. So, why
is this important? Well, around this
point, we did see a slowdown in the
1990s kind of narrative. And we did see
lots of dip pullbacks, which a lot of
you might be excited for because of
course it suggests that there could be
some really good opportunities on the
horizon. Now, some of the ones that were
more, you know, negative after the
Vshape, well, they went kind of bad. But
I think it's not just going to be in
this. It's going to be in how does the
market perform after these cuts and do
we see the rise of small caps and they
break out? RK making a new high which
we'll look at later on. And of course
the Dow also performing a little bit
better over the last 24 hours with a
eventual recovery in the NASDAQ and S&P
after that initial sell that did occur.
So why is this all very important? Well,
we're heading into that first stage of
potential at least for now euphoria. And
do remember we've been talking about how
we expected rotation back in July,
August. We've gotten a lot of that. It
started to come through. Now we're back
to leading here a little bit in some of
the tech, but we've actually entered a
reading that is so incredibly rare and
it all has to do with Euphoria. In fact,
it seems that here that the reading has
only been above 85%. So this is of
course an extreme overbought 0.04%
of all trading days in the NASDAQ's
history. So this is a super rare reading
of extremely overbought proportions. And
you might say, well, does that mean that
the market's going down? Well, what it
does generally mean when you get into
these overbought extreme cases is that
markets can dip a little bit or at least
stay sideways. So they might grow and of
course the trend will generally be
bullish overall. So this is not a a
bearish signal for markets that it's all
going to collapse and crash straight
away. But when you get into these points
you might notice some of these not these
dates just after of course the election
last year. We saw a lot of markets hit
euphoria. Then of course we saw them hit
it again. Then we got a pretty
significant pullback. So are we in
extreme pull extreme overbought? The
answer is quite simply yes. We know that
already. But where is the trigger? Could
it be coming very soon? Well, we kind of
feel like it could be October and we'll
talk about that soon. But have a look
here. Even the Barclay's Euphoria index
that's in super overboard as well. And I
always say on this channel, you know,
it's patience, react, don't predict. The
current trend, as we've been seeing, is
bullish, bullish, bullish, bullish,
bullish, bullish, bullish. There's not
much you can do. But you'll notice here
that David Keller has actually gone
through and he's done the advanced
decline line which we love on the
channel. Of course, we do it for the S&P
every day. Um, make sure to sub for that
as well because good good little
indicator there. And you can see here
that it turns out that if you actually
look at the New York Stock Exchange
large caps, midcaps, and small caps, the
advanced decline actually has been going
down a little bit in more recent times.
Now, we're not seeing this in defensive
sector rotation. So it doesn't suggest
necessarily that there's a, you know,
it's absolutely a defensive move, but
still this is not exactly the normal
thing that you would see while you're
you're ramping in the market without a
pullback. So what other things are we
seeing? Well, one of the big ones is
that everyone wants to still be in the
US market. You can see here that people
want the US market from overseas, but
they're not doing it by buying US
dollars. Well, if they are, they're
basically hedging it instantly. So, the
ability of or the amount of people
hedging US dollars has just gone
parabolic. Everyone's hedging compared
to where they were last year. And you'll
notice that kind of coincides a lot with
liberation day. And of course, this is
the current trend. But what we did see
over the last 24 hours is that the
dollar index went down to support and
then kind of started to pick back up off
that level. And we'll talk more about
that soon. The other thing is, will we
still see a buy the rumor, sell the
fact, or is this just going to keep
ramping up? The first day you'd have to
say it was a buy the rumor, sell the
talk, then buy the talk because that's
actually how the market moved. But we'll
find out probably by the end of this
week. Remember, there is a lot of
options to expire and we are currently
in positive gamma. So, there's a lot of
money to be made by the street,
especially over the next session or two.
So, it's also about the structure at
which the markets go. If we end up
rallying over the next couple of months
and we end up creating a nice 1 to three
month gain, then it's unlikely we're
heading for recession anytime soon. It
also will matter what types of sectors
come with that. So, remember to pay
attention. We'll be looking at structure
and we'll be paying attention
particularly at of course margins
because if margins start to decline
again that could be another early
warning sign along with the construction
which is a very early indicator usually
and this all tells us that maybe even
the Fed won't be able to hold it up. So
there's a lot of things here playing out
and of course it'll be about discerning
which ones matter and which ones don't.
Another thing that we have been
mentioning is that it's unlikely based
on the first couple of you know days of
trading of September that we were going
to see an epic sell in September. And
the main reason that was was because
when we look at the stats here from
August and July and those kind of
periods or June um we actually end up
with October being the more volatile
time. Thanks to Wayne Whley study here,
great guy, definitely want to check him
out. He has here quite a lot of great
stats that show you that only six
similar Octobers were up and 18 were
down. So again, we expect volatility to
continue in markets. Yes, we do. Let's
now have a look at the charts and see
how it all played out. So the advanced
decline line, I think for the S&P, it's
looking okay in my opinion. Again, there
is no price action telling us to short
the markets. And you can also see here
that the markets went down through the
session and then they instantly got
bought back up. Now, I was hoping for a
6520. We talked about that in the
previous video. It didn't want to go
down that low. Just somebody just went,
"Yeah, yeah, yeah, let's buy that up."
And they certainly did. Is this a
warning area, though? Well, I would say
generally it is. But if we take a new
high, that usually means more gains to
come, at least in the short term. And
that's what I'm looking at over the next
24 hours. 6636. Because if that level
gets closed above, it suggests there's
quite a few good positive sessions to
come and that we may push quite a lot
higher, maybe triggering a 67, even
possibly a 68 before anything really
goes bad. These levels are super solid
overboughts, but at the same time, when
levels are taken and closed above, you
know, that is a squeeze style situation.
And you'll see here, this is the level
that we were hoping to get over the last
24 hours to see bid buyers, but it went
down and it pretty much hit around the
options level low. So, it was a it was a
pretty tough one to get unless you were
on the smaller time frames, but that is
how the market has been a little bit
recently. Let's have a look at why all
of this was. Well, everyone tried to
short. I don't know why it is every
time. Every time anyone wants to go a
bit negative on the economy, no, no, no,
no, no, no, no. Too many people jumping
on the puts again. 6,600 puts all over
the place. Obviously, we are pushing
higher. 6,700 becomes the next target
for the options on the call side. And
you can see here that once we get
through the next 24 hours, which is
pretty wild. Certainly a lot of puts and
a lot of calls floating on there. Then
66 continues to be that positive gamma
style situation into the OPEX. So,
there's a lot going on here. I expect
the next 24 hours to continue
volatility. And if you had to guess, a
lot of the time the Thursday is more
bearish, but who knows? I mean, the
price action is coming in super bullish
right now. So, you wouldn't really be
thinking that this time around. Now,
what about Tesla? Well, it continues to
be in positive gamma. 425 plus close
suggesting there's more buying on the
way. And of course, we talked about 450.
Nvidia still stuck. It's looking a
little bit more like it's back in its
sideways action. But if it ever does get
through 185, that's going to be a huge
sign for Nvidia in terms of the rallies.
And when we're looking at, of course,
what we've been talking about on
Bitcoin, it still looks pretty strong.
Now, there was actually I I still don't
really know if this is real or not, but
there was that Trump Bitcoin statue
supposedly erected outside the White
House or something. And uh yeah, well,
either way, Bitcoin's of course in the
news a lot this year, and we know here
that it is in positive gamma. So again,
that strengthens the case for the crypto
market at this stage and gold struggling
with the 340. As we mentioned over the
last 24 hours, there was a lot of
resistance being hit and gold was of
course at the forefront of that. All
right, let's jump into the charts now
and have a look at the yields. Yields
went down, yields went up, yields kind
of stayed the same. So no break
underneath the important 3.4. And even
though I think the dot plot kind of
points in my opinion to way more cuts
next year, especially if the the things
play out, the market's not quite pricing
that in. And that's because, of course,
Jerome Pal said, uh, this is unusual.
We're seeing inflation kind of doing
this a little bit here. So, that's a
problem. Yeah. And then we're going to
have to cut rates because the jobs
numbers, they're just bad. I mean,
basically, they just said it's bad. Not
so good. Kind of bad. uh we're going to
have to do this. In terms of consumer
discretionary versus staple, it's still
strong, which means of course buyers are
still around. And you can see here RK
got a close above the previous high. So
what this has done is it's solidified
that there are buyers here in RK. Now,
of course, there's always a chance. This
is a false break. uh there always is a
chance of anything but at this stage
again I'd be just going this is looking
momentum like the markets are of course
pushing higher in futures and that seems
to be kind of the way it's looked at.
IWM was doing really well versus the
NASDAQ and then it got crushed back
down. But I think the Russell of course
was a bit of a beneficiary of rate cuts
and more expected and treasuries held
around 90. But I'd still expect the
potential for 9293 and maybe treasuries
have started their move slowly towards
100 over the next coming months and uh
possibly even more. The currencies you
can see here the Aussie even fell off.
The euro of course fell off as the
dollar strengthened. But the other story
was gold. Hit 3,700.
Very nice, which was of course our first
target and then it pulled back a bit. I
still re I think there's going to be a
big one big move on gold uh down at one
point soon. And it's not saying I'm I'm
bearish on it. You know, I'm bullish.
But that RSI read we got the other day,
it makes me it makes me want to, you
know, leave a little bit of a powder dry
for the old gold. Yeah. But ultimately
we're still thinking 4,4200
and silver of course dropping here a
little bit again getting an unwind
thanks to that dollar strength at least
temporarily. When we have a look at oil
it came back down to support. It's
holding that level. Okay. So of course
this is a zone we'll be watching very
very closely on oil and semiconductors
came down to the first level of support
that roll reversal and then they were
bought back up. There's a lot of
overbought reads here in these markets,
but again, we don't have those triggers
yet. Tesla ended up closing at a new
high, suggesting, of course, positive
gamma. Again, it's in an overbought
read. There's overbought reads
everywhere, but that just means that
maybe it's good to have powder dry. Uh
it, you know, you probably don't want to
buy here. Some of you may want to, but
it's up to you. And uh we're seeing this
across the board, even in Chinese
stocks. Have a look here at Barber. It's
going ballistic. I mean, people have
gone ballistic on on some of these
Chinese stocks. I mean, look at BYU. Uh,
how do I spell BYU? Let's let's see.
Bio, we'll just use this one. So, you
can see, look at this. 11.33%. Just a
week ago, we were talking about this in
our private community. The thing's gone
up 39%.
So, that's what I say about China. When
they go, wow, it is like the rocket ship
to the moon. This thing is, it's like a
penny stock, but it's not actually a
penny stock. And you can see here again
an over we get an overbought signals on
many different markets around the world
but they're all still in an upward
trend. So uh you cannot say that it is
time to to go. Now what about the US 2K?
Well it hit our first major target. So
I'll give you guys a clap for that if
you held in. Well done to you. And again
it's not really giving us a sell signal.
If we were seeing sell signals we'd be
underneath 2370 kind of area underneath
the daily 20 those types of things. And
NASDAQ just closed new high. So, it's
still up, still bullish, still doing its
thing. It's loving the sugar rush for
now. Uh, and of course, it's all about
the sugar rush. And even in the
cryptoverse, as we've been bullish here
on Bitcoin, we didn't get no 111 110
kind of prices like I would have
preferred to get a little bit more
buying in. But anyway, it is what it is.
And, uh, the market is pushing higher
off the back of that positive gamma in
the options world with Wall Street. And
of course, just in general, I don't
know, maybe it's a statue thing. Uh but
certainly across the board uh generally
speaking markets are a bit riskcom. So
markets are up here guys but there are
weird signs starting to show up at least
uh for the temporary potential here of a
volatile period. We are going into OPEX.
You guys know where the markets are at
at this stage and I'll be looking for a
close above the S&P high of the last 48
hours. If that does happen oh I think
it's like two three sessions. If that
does happen, it suggests there's more
squeeze to come. And for now, yeah, we
don't have any signs of decline. So, of
course, just remember there's always
opportunity. There's always abundance.
And you do not want to be FOMOing into
anything. Always about replication when
it comes to trading and investing. And
that's something that I've really
learned very hard lessons on when
earlier in my career back in 2007, 2008,
2009. But at the same time, it stuck
with me forever. So, don't be a dumb
dumb. Always remember when you learn a
lesson, try to implement it. And of
course, don't make that mistake twice.
Make sure to sub sub to the channel if
you're interested in finding out more.
Follow us over on X. Follow us on
LinkedIn. And then, of course, check out
our courses if you're interested in more
details about how we find some of these
things. And as I mentioned, at the
moment, the Federal Reserve is
concerned. You can clearly tell. But at
the same time, they've got a dual
mandate, but the mandate went to jobs,
jobs, jobs, jobs, jobs. And for now, the
sugar rush has continued. We'll see you
in the next video.