Ep210: Inflation Hits Earnings + Tesla Crash + Hedge Your Portfolio NOW!

Intro & Commentary [Music] all right today is monday april 19th this is a recap of the markets activities today we have a glitch in the system we get a red day can you imagine even though the down day also came with low volume we have a little bit of hesitation before earning season perhaps market participants are not very confident that earnings might not meet the expectations from the current valuations on stock prices and therefore we saw some profit taking in the market ahead of earnings we also saw a little uptick in the market for buying protection meaning buying puts perhaps on the spy or the names that they own in their portfolios we saw the fix rising higher today as a result likewise we saw yields rising higher again and therefore we are in the calm before the storm wait and see reflect on your positions and you try to de-risk as we head closer to the heat of earnings season therefore investors are waiting for signals we heard today from coca-cola ibm united airlines we have more earnings to come tomorrow perhaps most importantly netflix we will talk about that and a lot more in addition to the chip shortage what are the reasons behind it and when will we see the light in the end of the tunnel when will the supply catch up with the demand is it near is it far we will cover that and we will talk about dodge coin and the volatility in bitcoin prices over the weekend i will also cover the whole tesla crash the autopilot crash over in texas and we have updates from elon musk right after markets closing so we have a lot to discuss and let's start by covering how the market closed today and here we go the dao Markets Closing & Sectors Performance industrial average closing in the red down 123.04 points or decline of 0.36 the nasdaq down 137.58 points or decline of 0.98 the s p 500 also closing in the red down 22.21 points or decline of 0.53 and what about the sector's performances for the day leading the pack and the only sector of the market closing in the green today capturing the gold silver and bronze energy meanwhile leading the decliners today technology and consumer cyclicals technology was the biggest winner last week energy was the biggest loser last week so far during this first day of the current week we're in we are seeing the opposite picture moving on to futures crude oil prices closing in the green with gains of about half a Futures percentage point for both the wti and brent and what about softs the rally in lumbar goes on and on and on every single day the hottest inflation in commodities right now is going on in lumber prices and you are seeing certain stocks reacting higher like home depot and certain home builders lennar dr horton surging higher tracking the price of lumber we also saw gains in coca futures meanwhile coffee oj cotton futures traded pretty much flat today the only decliner in soft's futures sugar and i did close my sugar contracts today here is a reminder of the trade and the technical outlook for the char back then participate in the rally for soft's futures by buying sugar contracts and as you can see from the chart we do have a crossing in the macd imminent and sugar futures have been on a downtrend since the highs back in february and the expectations are that we are about to start another leg higher for sugar turning the tide on the negative trend and here we are facing the first resistance level in sugar futures which happen to be in or around the level of 16.8 now sugar futures can rally all the way to close the gap however i am satisfied with double digit returns in a short amount of time moving on to metals the u.s dollar taking a leg lower today and that in turn ignited a variety in metals futures at least in copper futures copper closing in the green along with palladium meanwhile we saw platinum pretty much flat for the day but here we have yet again gold and silver futures not participating in the rally in metals even though the dollar index is declining the reason is gold and silver are being impacted by the move in treasury yields treasury yields have more of a meaningful impact on metal prices than the us dollar at least during this current period we're in therefore we saw declines for both gold and silver futures what about meats here comes lean hogs aka the new big tech lean hogs rallying once again no end in sight piggies to the moon meanwhile we are continuing to see declines in feeder and live cattle futures moving on to grains muted activities across the board but we did see gains earlier in the day for soybeans soybean meal and corn futures Options moving on to the big casino the options market let's take a look at what's going on on the floor today leading number one apple with about 1 million contracts exchanging hands today about 72 percent of those were calls but notice the decline in the volume of options traded for apple this week so far versus last week apple was extremely hot the last couple of weeks we saw volumes exceeding 2 million contracts per day today we're seeing a steep decline so perhaps the tide will turn against apple here and we will see declines for apple in the next few days what about number two tesla with about six hundred thousand contracts about fifty seven percent of those were calls number three neo with about four hundred and 000 contracts traded today about 74 of those were calls the volume remains down and heavily tilted toward calls and what about the unusual activities that took place in the options market today we have a lot of protection buying lots of puts and why not take advantage of these cheap prices the cheap premiums for puts when the vix is reading at the lowest levels for more than a year these puts are cheap now but if the vix decides to explode higher again these puts will not be as cheap as they are right now therefore you gotta be taking advantage of these two prices by buying protection or perhaps taking bearish shots on certain names here we have the first trade we're covering for the triple queues the nasdaq they're making a bearish bet by buying the 314 puts expiration date 528 with expectations that the nasdaq will decline over seven percent by then they paid about three bucks and 25 cents a piece to enter this trade all in all bringing the total to about 6.3 million dollars what about the trade for the ticker snap snapchat also a bearish bid here by buying the 55 and a half puts expiration date april 23rd meaning this upcoming friday they're bidding that snapchat will decline over 7 by then they paid about and 35 cents a piece to enter this trade bringing the total to about 4.4 million dollars what about the trade for the ticker adi or seeing increasing activities of bearish bets and protection bets for names in the semi-conductor sector even for chips etfs perhaps the earnings will not justify where these stocks are being traded and here we have a short trade for adi they're buying the 145 puts expiration date may 21st with expectations that the name will decline over 7 by then they paid about a buck and 60 cents a piece to enter this trade all in all bringing the total to about 1.7 million dollars what about the ticker pto-n peloton we have bad news for peloton we will cover that during the headlines of the day segment but you saw the name declining significantly today on the heels of the news and here they're betting on more pain to come for peloton by buying the 100 puts expiration date april 23rd meaning this friday expecting peloton to decline over seven percent by then they paid about 95 cents apiece to enable this trade which brought the total all the way to about one million dollars what about the trade for the ticker ar kkkkkkkkk for arc invest kathy wood they're making a bearish bit here kathy wood continues to take insane amateur-like risk by selling her winners to fund the losers in this case they're making a bearish bid against ark invest by buying the 112 puts expiration date april 30th meaning next week with expectations that the name will decline over seven percent by then they paid about a buck and a half a piece to enter this trade all in all bringing the total to about nine hundred thousand dollars what about the trade for the ticker wday for work day also a bearish bit buying the 230 puts expiration date may 21st with expectations that the name will decline over 9 by then they paid about 2 bucks and 22 cents a piece to enter this trade all in all the total entry cost for this trade was about 1 million dollars what about the ticker xbi for the biotech etf we have a put spread here buying the 122 puts and selling the 110 puts for the expiration date of may 21st the 122 puts that they bought cost them about two bucks and a half a piece but they also sold the 110 puts collecting 50 cents a piece all in all the entry cost for this trade was two bucks apiece which brought the total all the way to about one million dollars lastly what about the trade for the ticker so double x this is the semiconductor etf we're going to talk about the chip shortage in a little bit but perhaps we reach the top here in the rally in semiconductors on the heels of the shortage specifically as we head deeper into earnings season so they are making a bearish bid here by buying the 400 puts expiration date may 21st with expectations that the soxx will decline over seven percent by then they paid about four bucks and a half a piece to enter this trade all in all bringing the total to about 1.8 million dollars and i did follow this trade Headlines Of The Day: Macro [Music] moving on to the headlines that shaped the day starting with macro news but before i start let's talk about my views regarding inflation why do i believe that inflation is coming i mean it's already here but let's entertain the deflationary camps arguments that the risk is deflationary because the federal reserve has been adapting this easy monetary policy of expansion for over a decade now and it hasn't resulted in inflation why is it different this time around first inflation is guided by supply and demand the current tailwinds pushing demand higher are rooted in money supply the increase in money supply is pretty much the source of this inflation but once again we've been having elevated levels of money supply for years and years and years even though this last spike the coveted spike in money supply is clearly very steep in a short amount of time meaning that the shock from that particular spike in money supply has not been felt in the economy yet in terms of inflation because the velocity of money hasn't moved yet keyword yet because as we continue to reopen the velocity of money will start to accelerate causing more inflation but here are other factors driving demand to surge higher we have the saving rates which is historically elevated and then we have real estate value the housing bubble the stock market bubble equities values everybody's portfolios are higher they feel emboldened to start spending and increasing inflation higher the demand surge is higher because they know that the value of their portfolio are elevated if they ever needed the cash it's gonna be there we also have wage inflation we talked about that in details during last night's video then we have psychology when the federal reserve last year was working to increase inflation expectations well here is what you asked for now the consumer is expecting more inflation that drives the psychology if i believe that inflation will continue to rise higher i will start spending now and thus driving demand higher we also have commodity prices whether we're talking about grains lumber oil metals meats all of these commodity prices continue to rise higher and therefore the demand for these commodities starts to track the price action higher now if you're going to talk to me about deflation deflationary forces the deflationary forces will be eliminating these factors that are behind pushing demand higher for example a popping of the housing bubble or a crash in the equities market that will indeed be deflationary because that will shake the consumer confidence to continue to spend now in the past the gap between supply and demand was not as large as it is right now meaning yes the money supply was abundant the monetary policy was easing we did not see inflation because every time the fed prints more releasing more liquidity into the system demand surges higher but the supply can catch up with that demand rising higher closing the gap you see the demand rising supply reacts right away rising higher to match the increase in demand and therefore you have a net zero inflation the problem this time around is that the fed decided to print on steroids ushering the biggest wave the biggest tsunami of liquidity that we have ever seen in a short amount of time likewise at the same time the supply chain was interrupted and shut down due to the cov19 crisis therefore you saw demand surging higher impulsively where the supply continues to lag the supply has further catching up to go and the gap has become extremely wide the supply is rising but it has a long way to go to catch up with the current level of demand the bigger question is is demand slowing down absolutely not the consumer continues to receive stimmings after stimmings after stemies and now the biden administration is talking about another round a fourth round of stimulus checks that will continue to push demand higher the pen top demand and that will in turn push inflation expectations higher and higher the stash has always been there but it has never been ignited because the supply chain was always there to close the gap this time around the stash is on fire and the spark was the kovid 19 shutdowns with the shutdowns in addition to the tsunami of money supply the gap between demand and supply is the highest we have seen in years and even if supply is ramped up higher it has a long way to go to catch up with demand and demand is not slowing down at all and this is why this time is different when it comes to inflation rising higher absent of a market crash a housing bubble popping or a crash in commodity prices the bubble will continue to inflate higher and higher and higher pushing inflation higher and higher and higher inflation gets out of control and then the federal reserve pops the bubble via increasing interest rates and tapering monetary policy now the deflationary camp are not discussing these facts with you they are assuming that the gap between demand and supply is very narrow and supply will take a booster and will be able to catch up with demand even though the gap is the highest we've seen in years and demand continues to rise higher and higher and higher due to more fiscal stimulus and by the way when you are listening to the deflationary camp ask them three questions if money supply doesn't matter a money supply doesn't cause inflation then you should be a believer in mmt right we should be giving free education free health care free housing free everything to everybody because the money supply does not matter at all if they deny that they are an advocate for mmt and they are perhaps a scam artist or they're very confused the second question i would ask the deflationary crowd you should also be a believer in hiking the minimum wage because higher wages will not cause inflation right the deflationary forces are so strong they can meet up and catch up with wage inflation so let's hike up the minimum wage so what do you say 20 bucks an hour let's make it 25 bucks an hour what difference would it make because the deflationary forces are too strong right and the third question i would ask the deflationary crowd inflation deniers if inflation is never going to happen because the deflationary forces are too strong and the velocity of money will never rise higher than why sensor the data for the velocity of money why is the federal reserve censoring and not updating the data for money supply and the velocity of money what are they trying to hide three simple questions for inflation deniers now let's move on to cover the macro news we receive today here is an update on the savings rate for all of your inflation deniers where is inflation is it here is it there i don't see inflation inflation is here and it will continue to rise higher why because for one the savings rate continued to surge higher and here we have an update americans are setting on about 2.6 trillion dollars in excess savings all of that steamy money excess supply of money will show up in the form of excess savings that is driving the pent-up demand and inflation expectations higher here is another example for the pent-up demand what about disney disney's opening here in california and the pent-up demand is extremely strong pushing ticket prices higher and people are stampeding like a bunch of mickey mouses to buy these tickets and now disney is fully booked we also heard from coca-cola in the morning they have reported earnings i own the stock and i expect it to continue to rise higher and the reason is this is a stock that benefits from higher inflation why is that because they can pass the extra cost the extra input cost to the end consumer restaurants stadiums movie theaters will have to pay more for coke products and coca-cola is rising prices for the first time since 2018 and by the way this will be a consistent theme throughout this earnings season you will hear companies talking more and more about inflation and how inflation is impacting their bottom lines inflation could not be more evident than it is in the semiconductor sector of the market we have a chip shortage that is impacting the product lines for auto manufacturers electronics causing shortages of supply across the market chip makers are trying to boost supply but their efforts are unlikely to help the deep shortage hurting production of cars appliances and many other goods chip makers are trying to ecap more supply through changes to manufacturing processes and by opening up spare capacity to rivals they are also auditing customer orders to prevent hoarding and swapping over production lines the bad news is that there are no quick fixes and shortages will likely continue into next year according to the industry's executives on top of the spike in demand producers have been hamstring by a series of freak events that have knocked out supply while ongoing u.s china political frictions and concerns of a prolonged shortage have promoted some manufacturers to stockpile chips so on top of the rapid increase in demand the hoarding and stockpiling we also have freak events weird events without explanations causing more disruption to the supply pay attention here because this is getting more interesting than a horror movie the current shortfall includes the less advanced chips that the industry's biggest players have been pulling away from to pursue higher margin cutting edge chips building new production capacity usually takes years so once again the gap between the demand and the supply is getting extreme the supply doesn't have a magic wand to catch up with this kind of rapid increase in demand the supply crunch was excavated by u.s china trade tensions especially during the past year including washington policies that gradually restricted the sale of american designed or made chips to some chinese buyers fears of sanctions prompted tech companies in china to stock piled ships and prepare for the worse for example chinese company huawei uses a range of chips in its telecommunication products and consumer gadgets and aggressively stockpiled components to protect against u.s export restrictions now the chinese companies are stockpiling for one month three months or even six months and they have disrupted the whole system china's semiconductor imports soared 15 last year and had a record 35.9 billion in march and here is the freak show park chip production was disrupted by events including a plant fire in japan and freezing weather in the southern u.s that shuttered production lines a drought in taiwan a major chip-making hub threatens to further reduce the industry's output since large amounts of water are used in the process but but but the deflationary forces bro maybe you should pray harder because of all these weird events from plant fires in japan snow in texas drought in taiwan what's going on here you gotta pray a little harder for the deflationary forces to start kicking and gearing higher but inflation denying is not just among the market bumpers the fed apologists the robin hoods and the likes it is also widespread within the highest authority of investment banking and their so-called experts wall street experts the geniuses that they are here we have the ceo of wealth management of the bank of new york melon this is the fancy bank you know when you work in wealth management and you have a wealthy client who says i have a billion two billion three billion five and they want the white glove treatment you don't send their accounts to blackrock and you know where the common man invests you send their account to the bank of new york melon and here we have the wealth management ceo denying inflation saying that inflation will be indeed transitory as papa jerome says and her reasoning is wait for it demographics or the demographics all the demographics we have this insane build-up inflation that we have not seen in about 40 years but all the demographics the demographics you know because when people get older these boomers and old-timers they're not gonna spend at all never mind that they have been locked in their houses for over a year now under house arrest due to the covert 19 lockdowns and the risk that the elderly population faces what do you think gonna happen when these old-timers are out and about they've been under house arrest for over a year you think they don't want to go to boca raton you think they don't want to go to cruises that this experience was not enlightening to them to make them realize that life is too short and you have to go out there spend and splurge the value of their real estate and stock portfolios retirement accounts and the likes is skyrocketing higher you think these boomers and old timers are not going to cash in and walk out happily ever after all but the demographics you know old-timers not gonna spend the demographics here is uh some demographics for you the geniuses that you guys trust at the back of new york melon the rate of vaccination in seniors we're now reaching over 80 percent of seniors in the united states have been already vaccinated when they are vaccinated all of that pent-up demand the savings rate seniors and old-timers are gonna spend like crazy demographics my ass senior travel surges senior here's demographics for you a survey of 1 000 consumers in the us indicates that if those fully vaccinated 54 felt safe lying and 70 felt safe staying at a hotel the vaccine was definitely a game changer said whatever that is a travel advisor with whatever that is it might surprise you that the demographic leading the surge in new travel booking is people over 65 all by the demographics but but but the demographics the deflationary forces broke although they were the most vulnerable they have been among the first to receive covet vaccination they can't wait to get the hell out of their houses all over the county people 65 and older are starting to look for travel destination and actively making travel plans the tourism industry battered by the pandemic is now getting a much needed boost from senior senior travelers there is a lot of pinned up desire among seniors said jeff gallach a professor of carnegie mellon university's tepper school of business it might be the taking of the clock that is motivating seniors to book as soon as inoculation makes it safe it may be that seniors are eager to get back out and claim reclaim their golden years in any event cruise lines and travel companies are responding by rolling out new programming and features geared to attract their older demographic but but but the demographics bro the demographics the only bad news i got for seniors is you know that uh casket shopping plan you put on hold perhaps you want to do some casket shopping earlier then you are comfortable to do so because even casket prices are rising higher funeral homes experiencing wooden casket shortage lumber prices hello plus all of the death from corvid and now we have a casket shortage honey it's a beautiful day outside would you like to go out and do some casket shopping but here it is even dying will cost you an arm and a leg in this inflation moving on to sentiment news what else the 21st Headlines Of The Day: Sentiment century's tulip mania and it's getting crazier by the day even though bitcoin prices shall we say crashed over the weekend you're not going to be able to see a crash anymore that's the next one and everybody's jumping to explain why bitcoin crashed over the weekend i have my reasons the upcoming regulations the environmental concerns banning bitcoin in china india turkey and more countries to come and coin not only stealing the thunder from bitcoin but also bringing up the speculation that crypto regulations will come out sooner and the reason is this rapid insane rise in dodge coin prices that is attracting the attention of the media the attention of the fed and the sec but perhaps here is another explanation for the mini crash in bitcoin prices over the weekend an outage in china specifically of all regions the qing jiang region and for the crypto maniacs you better run because they're coming for you and your tulips because the treasury department now has a green tsar the green lantern and he is coming for bitcoin why because the climate change impacts that bitcoin has on the environment of course the greens are rest assured is not coming for the global warming coming out of the printer machine from the federal reserve that kind of heat we can tolerate and here comes your boy gary gensler the new head of the sec sec causing confusion over digital currencies in legal case with ripple they're coming for you folks party's over of course we have uh tesla witch kathy wood with her gambling habits continuing to pour more cash clients cash to gamble in bitcoin buying the dips every single name in the market selling her winners to fund her losers this is the investment genius that all of you morons and donkeys believe in and idealize mama cathy money tree what a bunch of fools and here comes the doge mania wait till this one crashes you're investing i don't know in a tulip if bitcoin is a tulip then what is dogecoin dogecoin is dog that's what it is it is being pumped by the con man of the century reverend elon musk but we now know that about a hundred people we have no clue whether reverend elon musk is among these hundred people but they control the entire 46 billion dollars dodge market you know what said doge day tomorrow even snickers is celebrating doge day wouldn't be ironic if the huge crashes on doge day because the insiders these hundred people they've hit the jackpot they created a joke pumped it higher and now they're multi-billionaires wait till they start dumping the donkeys the robin hoodies and the likes they stamped naruto style heads first on the next shiny object in this case dogecoin urging each others to hold and diamond hands all of that garbage but what happens is the back stabbing the early entrance in this pyramid scheme start to dump on the little heads of the late entrance it's the same story of gamestop hertz kodak the esg names palantir all of the names that these investment geniuses have been chasing since last year and here we have the ev mania still well and alive we have a chinese ev maker ever grenade and the value of evergrenade has surpassed the value of general motors ford bmw and renault mind you this company ever grand ever grenade whatever it is doesn't even have a product is this the most insane mania the most insane bubble in market history or what and it is happening at the riskiest of times we've already seen examples of booms and busts bumps and dumps and the most recent example is spax all six of shamath peloton tortillas social capital specs including three that already completed mergers have plunged more than the broader spac market since it hit its peak in mid-february so here you go all of you who are still in the cults of elon and mama cathy please take a look at the cult of shamath because it's not looking so good right now he cashed in made millions if not billions and left these morons to hold the bank and all of this mania in the stock market is happening when we have extreme warning signals for example the ipo issuance for this bubble has surpassed way surpassed the dot-com bubble highs meaning that this is the craziest most insane mania bubble in the history of markets and some of the new entrants in the retail crowd the robin hoods and the geniuses were the captain of the ship right now they got slaughtered already in plug power palantir neo jumia all the garbage they've been chasing and now we have this disappearance of retail traders from the market the volume is extremely low and now we have another batch that is about to get slaughtered because insiders have been dumping at the most extreme rate in recent market history the biggest dumping in over a decade insiders are jumping the ship meanwhile us retail traders are encouraged every day by the federal reserve wall street and the pumpers on social media to put our blindfolds on and buy buy buy the us quarterly equity offerings this is a nicer way for saying dumping reached the highest level in history what does that mean it means that companies are dumping more shares on the heads of the zombies chasing the price higher and higher to raise cash meaning that company insiders are not believing this bubble they're not believing the mania going on in the market and they are exploiting this mania by issuing more shares and raising more cash good entry point bro and here we have the deviation from the 200 moving average for the s p 500 also reaching historic highs highs that preceded the crashes of 74 87 2000 2008 and a solid sign of extreme euphoria more in sentiment news and here is the big bomb hiding behind the scenes the margin debt ratio this mania is being fueled by borrowed money and the margin now is reaching historic highs also good entry point bro what about the price to sales ratio reaching all time highs once again the price to sales ratio reaching all time highs do you need any more warning signals or is this clear and the end result of this mania will be a huge spike in volatility and the vix will rise higher according to goldman sachs expecting the vix to rise all the way to the highs of the year in the next few weeks moving on to corporate specific news Headlines Of The Day: Corporate News starting with the most important news of the day the tesla fatal crash in texas now we have two victims who perished in this accident and they are saying that this is due to the autonomous driving system more breaking news this time out of spring that is where overnight two people died when a tesla crashed into a tree and it's what appeared to have happened just before the crash that makes it especially unusual kprc 2's devin clark's live in the carlton woods subdivision in spring with what happened devin jacob and sophia that tesla that investigators say burst into flames has been removed from the scene but you can still see tire marks here in the grass leading up to that tree where the model s made contact two men inside the vehicle were killed and we understand that neither of them were in the driver's seat we're told that one was in the front passenger side and the other was in the rear passenger side when the vehicle failed to adhere to a curve and went into the woods because of the car's batteries reigniting the fire the firefighters say that they had to use 23 000 gallons of water to put the fire out this happened just after nine o'clock last night but investigators say they spent four hours extinguishing the fire the two men who were inside of the vehicle have not been identified and even though we know that neither of the men were in the driver's seat investigators are still trying to determine exactly what caused the crash as soon as we get more details we'll bring them to you for now reporting live in the woodlands devin clark kprc 2 news there was no one behind the wheel so the mystery is and we don't have all the details yet but why wasn't anyone behind the driving wheel was the autonomous system engaged or not because from what we know the autonomous driving system in tesla will disengage automatically if the driver unbuckles the seat belt okay so i have my passenger recording me i'm going to turn on fsd mode now i don't have a nav point set i'm going to unbuckle this is what happens immediately [Music] the car literally has come to a stop and put on my hazards and you can't drive so the question is what happened here did the driver game the system by clicking in the seat belt even though they're not sitting on the driver's seat did they hack the system not to notice that no one was behind the driving wheel now we have elon musk fighting back and saying that this particular vehicle didn't even have the autonomous driving system meaning that something weird took place here the accident happened while nobody was driving what are the implications on the souffle here what are the implications on the stock of the souffle in my opinion we don't have all the facts here elon musk is taking his neck out by saying that this vehicle did not have the autonomous driving system now if investigators find otherwise that this vehicle indeed had the autonomous driving system and it was engaged during the accident then tesla now has more explaining to do tesla will be in a lot of trouble because the ceo himself said that this vehicle doesn't even have the autonomous driving system to be engaged in the first place however from the facts we know you cannot blame tesla for the stupidity of what this driver was doing because there was no one driving the vehicle if they decided to engage the autonomous driving system and decided to sit in the back seat and relax and the vehicle got into an accident and that's their fault the system is not perfect and it says that you have to be behind the wheel for the system to be engaged regardless this is bad news the story is far from over and it will bring more scrutiny and perhaps more volatility in tesla shares what about peloton we have bad news for peloton number one we have this horrific video that went viral of the child being almost swallowed by the peloton treadmill machine and there are concerns all over the place now for moms pops not just about their kids but also a bad pets cats dogs could also fall victims to this death machine very overpriced death machine by the way we already have a child who died and peloton is resisting the warnings from regulators about this product either will be recalled or warning stickers and warning notices have to be made clear for customers before they purchase peloton products and this is not the only bad news we got for you for peloton this network has accused peloton lululemon an icon of infringing patents for technology that improves the quality of video content over the internet what about pinterest a lot of you asked me about this name why did the name crash on friday last week i don't have an exact answer for you but my guess is that we have an insider who took a massive dump last week we will know in the next few days then what about airbnb here is the pent-up demand by the way airbnb ceo says companies going to need millions more hosts to meet surging demand and lastly we have a b and b beer and they are announcing that they will use solar power to produce their beer in order to attract the new younger generation who embraces companies with environmentally friendly practices and by solar power they probably mean that they will brew the beer outside outdoors under the sunshine perhaps to add 2 billion more in the market cap due to solar optimism moving on to the heat map analysis Heat Map & Themes Analysis what happened in this market today we have declines across the board perhaps profit taking we don't have a definitive move one way or the other because the volume remains low yet the psychology is clear taking profits from recent winners specifically when these recent winners have no macroeconomics or fundamental support knowing that we are heading to higher inflation and higher yields therefore making these names less favorable so once again the pumps in these names are to sell for now at least and therefore you saw weakness across the technology sector specifically in the igv software chips square and once again another day more pain for palantir we also saw losses for solar names big ones names like solar edge down over five percent sun run down almost seven percent we also saw losses for the mania names ipos whether we're talking about door dash airbnb snapchat pinterest all suffering massive losses likewise another mania name tesla also down over three percent today in the market pretty much all in all suffering pockets of losses even in the inflationary trade of financials industrials materials defensives energy or seeing profit taking all over the place yet the action is not definitive we are still in the calm before the storm what about the various themes of the market starting with the reopening trade we have a mixed picture here some names declining more than others and these names happen to be in the travel sector airlines hotels casinos profit taking from these names including cruises by the way and not all of the reopening names created alike for example i got questions about cody why am i still positive on cody even though i am turning negative on cruises airlines hotels casinos in the reopening trade take a look at the chart of disney hilton marriott even live nation some of these reopening names rallied all the way to surpass the pre-pandemic highs this is complete insanity and it is pricing a lot of good news already now contrast that with a chart of coca-cola or in this case cody cody's beaten down significantly and hasn't recovered at all cody is one of those stocks that warren buffett would call the cigarette butt thrown on the sidewalk but still has a few puffs left meaning that this is a value name it remains a value name within a very bloated market matter of fact a very bloated trade the reopening trade now kodi has its own problems but as we head closer to the reopening we're gonna see more demand for beauty products we have another indicator coming up tomorrow in the earnings of procter and gamble png's beauty unit has been suffering throughout the pandemic it is the weakest performer in procter gamble's business units last year will we see this quarter a turnaround where the beauty unit starts to catch a bid on the expense of a retreat of growth in the households items unit if that is the case then png's earnings will be a very important indicator for cody's outlook what about the inflationary trade all in all mixed picture but muted across the board we are seeing some profit taking here and there in certain names because investors are getting a little worried that stocks have been rising higher and higher and higher in this case the inflationary trade are we already pricing the good news heading into earnings season and if that is the case then why not take some profits off the table and perhaps buy some protection what about the disinflationary trade what's going on here specifically the mania names red across the board and the losses are more significant in names with high multiples like shopify square docusign tesla peloton we are seeing de-risking ahead of earnings in addition to the fact that yields are rebounding higher Technical Analysis moving on to the charts analysis starting with the 30 minutes chart of the spy we have a down day a mini gap lower but we don't have a surge in volume and we haven't broken any bullish trend if anything this is just another dip we need a confirmation we need to start to go down closing some of these gaps and not bouncing higher you will know right away from the behavior of the chart if this indeed the reversal when we reach one of those gaps and fail to bounce higher and when we get there i will give you support lines for now we're moving on to the daily chart of the continuous contract of the spy futures once again a massive rally higher on low volume gapping higher overnight and i told you that this is a typical behavior that precedes a massive flush down there is a turnaround imminent in the spy a move lower what will that catalyst be could be earnings it could be a rise in yields it could be whatever it doesn't matter but we have a technical reversal imminent take a look at the macd indicator we are starting to curl downward and the next step is to cross to the downside creating red impressions on the histogram likewise the rsi indicator is at overbought territory meaning that we have a correction imminent and the destination could be number one you have the gap indicated in this yellow circle and we have the very important support line of 3960 that could be the next destination for the spy to fall back too what about the cues 30 minutes chart we have a similar story here with the spy yet the downturn is more evident in the queues than the sky excuse me the spy the spy was trading in the sky but perhaps we have a reversal falling down from those skies we are forming a bare flag formation in the queues we have a lot of gaps to fill and the ultimate destination if this run higher is indeed over we have to look down all the way to 323 as the ultimate destination for the correction of this leg higher what about the futures contract the daily perspective once again i've been saying that the level of 13 900 should be respected meaning that you cannot just blast above that level in a day or two before spending an advocate amount of time trading at this level and the reason is from a technical perspective that you need to gather more energy more buyers before passing such important level which happens to be the former high we have a negative divergence in the rsi and it looks that we have an imminent crossing in the next few days a negative crossing in the macd indicator if the queues break and start trading lower we will be looking at the level of 13 599 as the next support moving on to the iwm 30 minutes chart we talked about the failure of the bull flag to form higher not once but twice resulting in a bare flag formation which played to the downside today and we have yet another bear flag formation if that plays out tomorrow we have the levels of 218 to look forward to but the most important chart to watch for small caps is the what the russell 2000 because we have a negative divergence we don't have a decisive crossing in the macd indicator but perhaps we are getting extremely close because the level of 2264 remains an extremely important point for the rut 2000 to close above it is struggling over and over and over again and if that continues it is just a matter of time before the russell 2000 breaks down says goodbye to 2264 ending the bull run that started all the way back during september of last year once again the iwm on the russell 2000 is now dependent on the reopening trade and game stop if these two crash we see sell the news in the reopening names gamestop goes down for whatever reason that will be the turning point for the russell 2000 what about the dollar index massive day down breaking the bullish trend and now it should be consolidating at the levels of 91. that should be a strong support for now however look at the macd indicator it is indicating a momentum in the downward move in the us dollar meaning that the sell-off in the us dollar could catch some steam in the next few days and go down all the way to the levels of 90. now if the dollar goes down all the way to 90 then copper and oil prices will rise higher but does it mean that gold prices will rise higher here's the answer we had a big down day for the dollar but gold refused to rally higher why is that because the other force moving gold prices up and down we're talking about treasury yields have stronger control over gold than the us dollar gold has two enemies the us dollar and yields gold rallies higher when the us dollar and yields drop lower that took place last week and therefore you saw gold rising higher but if yields continue to rise higher then gold will struggle even though the us dollar could continue to drop lower and lower moving on to bitcoin believe it or not the bullish trend in bitcoin remains intact because you have higher highs and higher lows and this trend has not been broken yet furthermore while the negative divergence in the rsi remains on the table bitcoin could give it another shot to finally break the negative divergence so for now the bullish trend remains intact however keep in mind when you are trading bitcoin not to rely solely on the technicals because this is a highly volatile asset up 20 down 20 that's nothing for bitcoin price action therefore you have to look at the news the psychology the other factors impacting bitcoin prices for example the rise of dogecoin that is stealing a lot of steam from bitcoin in addition the threat of upcoming regulations all of these factors are emboldening insiders and high rollers at the bitcoin table to take some chips off and when these whales dump you're gonna see a lot of pain one massive dump will not end the story however if we see repeated action of dumping from large whales then that will create a domino effect and we could see a crash in bitcoin and by the way that could happen any minute so if you are investing in bitcoin you better have balls and ovaries of steel for me i don't want to assume this risk and this stress to be frank there are other ways safer ways to make money besides chasing the 21st century's tulip mania what about yields what's going on here we talked about the bull flag formation yesterday that is playing out and the ultimate test will be the level of 1 excuse me 1.620 basis points breaking above 1.622 basis points recapturing that level of support will mean that we have higher readings in yields to come by higher readings we're talking about 1.8 and all the way to 2 if that happens you are smart enough to know what will happen to the nasdaq and the mania slash growth slash high multiple names what about the tlt we also have somewhat of a bull flag formation that could break to the upside now we can have two bull flags one in the tlt and the tbt or the 10 year treasury yields one of these will play out for now yields have the advantage if yields go all the way to 1.620 basis points close above that level and the tlt will start to collapse once again so it is the battle between the tlt versus yields which one will play out which bull flag will play out to the upside the bull flag and heals is already playing out but will it play out enough to break above the resistance that is the million dollars question what about the vix the vix is ready countdown is here the rocket ship is about to be launched are you in the ride or not what do i mean by that have you taken advantage of lower ratings in the vix to accumulate insurance on your current portfolio meaning did you exploit the lower readings in the vix and the lower premiums for put options to buy some protection like i did did you even make bearish bets buying puts on the names you are highly confident will break down after earnings because puts are cheap right now but if the vix starts to play out higher specifically with impulsive moves higher than the premiums for those put options will start to skyrocket therefore you get a book here seed right now what's going on with apple we have the event for apple coming up tomorrow and traders and investors already bought the rumor and now the question is will they sell the news will the apple event be a hit or a miss what will they announce that will excite investors to push the price higher and higher because apple had a magnificent run in the last few weeks so the risk versus reward says that we will see a sell the news phenomena absent off an announcement of the icar absent of that i do believe that apple will reverse lower and therefore the risk versus reward says buy puts and this is exactly what i did today specifically expecting apple to go down all the way to the levels of 131 moving on to tesla what about the souffle no major update here for the souffle obviously we have the bad news of the crash once again you cannot blame tesla if the driver was negligent we don't know all the facts yet and this stock will become volatile based on the flow of news we have broken this support of 720 not by much the name went down all the way closing the gap and rebounding higher without recapturing the support of 720 we're not going to make a big deal out of it right now i do not expect the stock to move impulsively higher or lower before earnings the price will stabilize in anticipation of earnings and that will be an opportunity to open earnings trades in tesla what i will be watching for tomorrow is now we have elon musk saying that the vehicle did not even have the autonomous system to begin with will this be enough for tesla to recapture the support 720 tomorrow this is exactly what i will be watching for moving on to the conclusion of this video we don't have any important events Conclusion & Outlook regarding the economic calendar but we have the apple event and as i mentioned before this is a nothing burger absent of the revelation or unveiling of the icar if the r car is not announced if we don't have any more details regarding the icar then this is a nothing burger hey here's new ipads for you big deal sell the news then we have earnings and these earnings are extremely important in the morning we have johnson and johnson will we hear an update regarding the vaccine and if we have positive developments regarding the johnson johnson vaccine then the name will spike significantly higher and the reason is a lot of short covering we also have procter gamble this is a bullet stock it is a no-brainer buy but we want to see how the various units that they have the difference of performance meaning are we seeing a slow down in households products for example meanwhile the beauty segment is heating up this is one thing we have to look for in procter gambles earnings but the big one tomorrow will be netflix after the bell now netflix usually has an impulsive move right after earnings up or down however that move is quickly reversed this has been a consistent behavior of netflix it pops higher after earnings or it crashes after earnings and then the move quickly reverses why did we see a massive increase in cash flow positive cash flow for netflix last quarter the answer is the decline of the u.s dollar this quarter the us dollar traded higher so this cash flow advantage of last quarter will not be the case during this quarter for netflix furthermore netflix is in the mid of the streaming wars meaning that perhaps we will hear a massive spending plan to create new content but that will squeeze down the margins of netflix the message here is up or down it doesn't matter what the reaction is after earnings for netflix the growth era for netflix is over and now the name becomes a cash cow can the business generates a lot of cash and maintains lower margins and if that is not the case then netflix will fall add a favor that's all i got for you tonight and i will talk to you again tomorrow if you found the information presented in this video helpful please subscribe press the like button the notification button and follow me on social media [Music] you