Europe Is The NEXT Black Swan Crisis - Fed DOT PLOT This Week

all right ladies and gentlemen I hope you had a wonderful weekend we got the end of the year fireworks kicking off we got Jerome Po and the summary of economic projections this week and then before you know it it's Christmas time but the rest of the world still has some action so we got a lot to talk about I'm going to cover everything from drones all the way down to rate Cuts in Europe in the whole world in China and then even pal so I I have I'm actually going to do it a little different

I need the you to like the video the thumbs up all that good stuff we are live Monday through Friday 30 minutes before open youtube.com/ thock Market you know all that but I'm actually going to speedrun through 15 pretty pictures so before I get into the keys before we talk about Europe pal all of that since we really only got like one week left before you get into the holiday mode which we're going to talk about too let's get a scope of things all around the world so the first thing I'm going to start with

is something that happened recently I was showing you this not too long ago we were talking when bonds were selling off and if you look last week there was a pretty surprising bond sell off but once again that government expenditures the government debt it is starting to climb back up at a pace that we really haven't seen since covid so welcome to the new year that's the first one the second one is the market breath this is something that we brought up a lot last week especially towards the end of the week remember last week

was a pretty bad selloff after getting like 13 green days in a row I think you had a 6-day selloff on the S&P 500 but the breadth is not doing good what that means is you don't have a lot of stocks advancing this is showing you right now you only have 31% of the S&P 500 that is outperforming the last time you had a record or a ratio this low it was around 1990 so that wasn't a good sign and it's going to lead into another chart this this one right here this one kind of

blew my mind this is the value ETF Ive but it had its worst selloff ever on record you had 10day selloff on the S&P value index and that has never happened before so again last week even though we are still elevated even though everybody feels generally the same you kind of had a violent move that's what we were talking about even the bond selloff the Thursday and Friday it started to get a little bit aggressive and then if you look at the market bread and how other things played out it's still what we've been talking

about you got a 100 names down on the S&P right now it's not as if everything went crazy this year even though this is the best rally we have seen in a 100 years so that's that chart this is another one we're going to come into China I have another China chart to show you but remember last week in the stimulus ended up being good they popped and then they came back this is something we got to watch both after Christmas and leading into next year but now if you go look at the difference between

now China Bond not only just China currencies and stocks this is a theme that has been tripping people out if you want to get more involved in China or you have been watching it I hope this info helps it's the Chinese bonds it's they're getting to a point where our rates are going high but Chinese bonds are going lower than ever and a lot of people right now they're arguing whether or not this is bullish or bearish because it's not typically something you have seen in China but right now China and their rate cuts the

stimulus all the things they're trying to do their bond are dropping they're going through deflation our yields are up and now what this chart is showing you the difference between us borrowing and China borrowing it's the most that it's ever been so this is very interesting this is why I keep having China on Watch and even once we wrap up the fed and get into our holidays don't forget the rest of the world they are all still still setting up for the dollar the election and all of that good stuff so there's that one and

another one we brought this one up a lot last week cuz it was a mass selloff but let me put it into context Uber and definitely watch the transport index because Uber is one of the biggest on that that's where a lot of people realize that change kind of messed things up with djt but if you go and look how Uber has sold off the last time it had a sell off to this point if you look at the RSI and the technicals it was April of 2020 during the pandemic so literally value and a

lot of things are selling off even though we're getting into that inauguration mode a lot of things have moved pretty big and now Uber last time it moved like this in this period it has been the pandemic and that is wild to me but there's that chart then I got fcoin and why do I have fcoin on here because Mark Andre and people keep talking about this but this has to do with crypto and crypto volume you keep hearing this one it's not as as aggressive as some of the other wild meme coins but once

again crypto volumes they're reaching records and the fact of the matter is crypto and this volume coming into it it has been one of the biggest things and now people are bringing this up cuz I think it's worth more than like Kodak and like I think it fcoin is worth more than 85% of the S&P 500 yeah so I don't know this chart was from the weekend though I don't know how that price is updated I have not been following but there's that and now Europe we're going to talk about this a little bit more

but already as of this year there have been more corporate defaults than 2009 and now the only other time where there was more corporate defaults was the pandemic in Europe so this Europe German situation we're even going to wake up tomorrow and Tuesday you're going to get data overseas that's why I'm saying once we get through po this is going to be something we got to watch out for but they are definitely on watch especially with what our dollar is doing and what they are doing with policy and now this is going to tie into

what we got to talk about today I brought this up a lot last week as well but you have to realize Europe and really just the rest of the world this is the ECB this is Bank of Canada this is Bank of Japan this is United States but as we're starting to say we want to cut the rest of them they are pricing in way more cuts and way more spending than anybody even then you would think that we would be more more or less leading the way and then Japan would be more aggressive but

it's the opposite it's these European places in Canada they're kind of imploding or at the very least they all want easy policy moving into the future with everything going on so whether it's tariffs and how things play out I do think we are going to watch a lot of either risk or success in a Tailwind out of whatever happens in everywhere else of the developing World outside of the US and then we'll even see where Japan ties in but that's something to keep in mind and even with the trend as we get through the data

and then this one right here now uh we're going to come back to this one on stream uh but this one's important because this is all of the bubbles in the world going back to 1718 the Mississippi company the south sea company the Roaring 20s and it's showing you how much they Rose how much they declin the velocity the duration Peak to off the valuation and then what happens to bonds and policy rates so where we stand right now with the Magnificent 7 this little Rally or again I I think it is its own bubble

do they have Fang yeah so remember Fang that's funny they called it 2020 come on that was 2015 uh but the whole idea here is that Fang kind of doing its own thing here since that bottom I mean last end of last year beginning of 2023 or or beginning of last year end of 2022 but since then we are up 186% 28% velocity hasn't came down and it's been about 1.8 years again Bitcoin from crypto all the way to the whole like Elon thing that lasted about 1.7 years you went up, 1600% and then it

declined 78% so this chart we're going to come back to it but the fact of the matter is we are waiting for policy and a lot of things the breath all that I mean you are still being led S&P 493 S&P 7 I mean that is something you have definitely noticed by the end of this year so we'll come back to this one thought that was interesting and then spy last 12 months not only has this been one of the best rallies in the last 100 years but here's going to this one's going to blow

your mind China has done better uh China in the last 12 months is up more than the S&P 500 I know isn't that wild so that's why I say I got to be picky with the value out there but keep in mind a lot of things have moved towards the end of this year and that's why again things are going to start getting active after the election and even already after this week because you are getting for a new year and just imagine how much has already changed from all of 2024 even comparing it to

all of 2023 so thought that was a fun fact and then now back to China once again these are the easiest Financial conditions there since June of 2020 during the pandemic the only other time was November 16 after they did their first devaluation so yeah China's still struggling the difference is I don't know if their economy is I think it's worse than these times but it's just been so long that it's been in Decline but now like Financial conditions remember they're easing cutting rates stimulus they're doing all this and the conditions are showing ease but

the sentiment and the activity has still yet to pick up and when it does that's where we're going to get our rally so watch out for that and then I think I got two more for you yeah China car production this is just I don't know if you want to call it tin or not but it is something that we have noticed on the climb but it reminds me of 08 remember China stepped in in many ways once we started to do pretty bad and the way I'm looking at it is if Europe does start

to do bad we're not accepting in the Chinese cars but they are uh I feel like China and Europe if we file find some sort of decline next year between the two and they actually underperform and the dollar kills it I would be on the lookout to see if China Auto production or broad China production comes in to replace that downside so we'll see but for now a lot of people are talking about this just even on the broader sense and even tied it in the Tesla EV sales China is going nuts in Autos so

thought that was interesting another one again remember last week with the stimulus it was a big pop and drop I think there's going to be one more move we're going to talk about but after seeing some of the biggest outflows after the biggest inflows once again we're going back the highest outflows in China in nine weeks and then finally here's a nice little chart if you did a fund manager survey uh they did they interviewed all of these fund managers and you could see this is how they felt right after Trump this is how they

feel pretty much last week or like last week of November and then this is how they felt prior to the election on trade taxation geopolitics and what they think or the areas that'll be most impacted so generally some people overshot some stuff it's funny because they weren't worried about taxes but now after the election it seems like fund managers are bringing that worry back up trade is still the number one again trade and tariffs that ties hand in hand and then everything else immigration people weren't worried before ironically you would think they were with how

much we talked about it but that's chilling out so remember a lot of these ideas I keep telling you nothing has changed yet so we'll see where all of this takes us but chatt Adonia that probably took a long time but yeah that was 15 pretty pictures there so now let's get right into it all the good stuff bud run it baby still get a spread started with a but still reinvest feel how I feel you feel like some blessing I just want the L I just want protection I'm up and I'm down but the

session right off the bat took a long time but there you go all the pretty pictures for the week again after the end of this week I'm going to be done with streaming and the watch list for the end of this year so I hope all this helps uh we got to talk about it though there is going to be a big key in the holidays but now kicking off this week like we talked about even on Friday the fed and the summary of economic projections that is going to be the main key remember we

said be on the lookout for a hawkish pause meaning or excuse me a hawkish cut where they are going to cut right by 25 give the market what it's already pricing in get to stick to their plan but then the Dot Plot is either going to stay the same or it's going to get more hawkish and imply less rate height rate Cuts in the future so that way everybody gets what they want and then you don't have everybody going crazy in the future but in a weird way my expectation I think best case scenario for

Powell coming into the holidays with everything is that he doesn't change it if the Dot Plot could stay the same if he could cut and get everybody feeling the same and we have literally a non- exciting Christmas I think that would be the number one objective here for Powell coming into an election or a new a new regime of all these policies and everything else so we'll see how that plays out but like I'm saying here and I keep talking about it do not Overlook Europe Europe in their policy it's kind of getting out of

hand again tomorrow we're going to hear something about the German snap election and then you're going to keep getting more data but the fact of the matter is I think Europe is affecting our bond rates and inflation regardless of what happens with our policy if Europe keeps going down the route that they are on it is going to guarantee that we get inflation again if their economic activity declines that's going to change a lot of things too and what I'm saying here is just do not forget about this because after the SCP Europe and China

are going to be the only things moving so if there's any big changes in there towards the end of the year I would pay attention for it but like I'm saying here with both the dollar getting stronger if Europe does worse it's going to get our dollar a little bit more out of hand Beyond whatever we do but this has been something I've been telling you guys for a while go look at the dollar and the Euro that's that one part but just remember if we start to watch a lot of people diverge from each

other in terms of central banks we've been doing the same exact policy cutting and raising with a little bit of a delay but generally everybody's been doing the same thing at the same time except for Japan but now if we watch to see Europe and China diverge again China's cutting while we are cutting but then now are we going to start raising and now Factor Europe into all of that but if they start diverging and doing their own thing their economy plays out a certain way that's going to have an effect on all of our

policy or at the very least the outcome and then ultimately inflation so that's what I'm going to be watching for the other part of all of this this week you are going to get retail sales on Tuesday that's still Big Data again the bonds had a wild week last week it got a little aggressive and I think that's because of Europe that's what I was saying there where it's like well I don't think our data moved us up too much but Europe was bad once again the budget stuff the cuts the inflation even Swiss surprise

with another one I think all of that started away a little bit more on the bond pressure so we'll see what the retail sales does cuz that could move the bonds around and then the final thing cuz I brought this up just keep in mind remember when all of this started after the election and we started watching a couple of different things you know the market was loving it then it come down then start loving it again but when TLT and the long-term Bond rates were higher the market didn't necessarily drop but it was harder

to go up as the bond yields got relief we went up and then now bonds it was chill up to here I thought they were going to stay there but these last two days I think it's Europe and some of the other stuff because now once again if the bonds show pressure I don't think you're going to advance as much and then once the bonds cool down then the rally can resume so keep that in mind I hope that helps that's key number one and now key number two I've been stressing this for a long

time right now but after the FED after December 18th it is going to be holiday mode I mean not only am I taking off by the end of this week some people are already taking off and this doesn't mean that it there's going to be anything about Direction don't forget the January effect Santa rally whatever you want to call it there's actually good seasonal factors between now and like even the end of next month so doesn't say anything about Direction but I am just expecting lower volume and a higher likelihood of non domestic effects moving

us more than domestic news that's something that we've been going over I mean you have heard about the drones and people like ah drones and Jersey and even then the theory right now uh even over the weekend there was a lot of people there was a video by like some drone expert and long story short now people are saying that it's sweeping for a weapon or it's a drill and they're saying like radiation in New York go look up on Twitter Google it people already put in out articles about it but the fact of the

matter is I don't think we're going to going to get any news maybe besides that that moves us if anything is going to affect the market between now and after New Year's it's going to be China or Europe it would have to be a Black Swan other than that it'll be low volume trading yeah maybe we go higher or lower I think that'll just depend on the bonds but you shouldn't have any change in narrative I mean the market shouldn't be taking an off-ramp anytime soon I don't think in the next couple weeks if it

does I will return I'll let you know but for the most part we are still riding that way from the election and now we are getting into the later stage of it and it will get a little bit more bumpy and then the final part this is what I'll tell you from now till the end of the year if you really want to get ready earnings and biotech I can't stress this enough if the end of the year is going to be slow last year we did the same thing and we saw a lot of

this there was a lot of those big earnings FedEx Nike we're even going to get that this week but then a lot of Biotech approvals I might be down if it's slow I'll go through and get you all the biotech data for now between the end of the year because you will get some late late stage FDA approvals and all that we saw a ton of those last year so I'd watch out for that other than that though don't blow up your account take it slow start thinking about next year and we'll see where Powell

takes us but now let us get into the play so right off the bat baby play number one the earnings play so we'll go over the biotech here in a little bit but Nike and FedEx I did make a play on Friday they have earnings I think it's like Tuesday and Wednesday or Wednesday and Thursday Thursday we've had a lot of good luck with these so I don't know if we're going to keep pushing it but I did go a little bigger on both of them in advance I'm either going to hold them or trim

them right ahead of it but these are going to be both pre- earnings opportunities and then afterwards once we get done with the fed and end of the year if there's not much action this will be the freshest set of data that people will be acting on again should be very familiar with end of last year we played a lot of these similar trades it was the earnings the biotechs the small caps it was almost exactly like how it is right now you just have a bigger Tailwind with the election so we'll see where these

all play out though but that's going to be play number one then play number two the kweb in the arc so I'm still in both of these from last week remember took profit on both of them they both went down and I went for a double dip with the initial amount not the profit amount and I grabbed the January so sadly I'm thinking that these may need more time but guess what your opportunity is in play cuz I bought the kweb I think what it was like a 40 for January I got that at 18

cents you can now get those at 9 cents so it is down 50% and I think there is the ones like 37s or 35s if you could get closer to the money these would be the better play CU now how am I'm going to go about these I'm going to hold them just like the other ones if they come back and I get lucky and they go back to green awesome but if I want to add to this play after I'm down that's why I think if you didn't get the play you wait till I

go negative on that but now the goal would be get either more time or way closer to the money cuz when it does make the next pop then you're going to be be able to have a better chance to profit so the arc too I think I'm in at the 80 calls they're both January they both Dro 50 right now so what I'm going to be looking for is either the March calls closer to the money for cheaper I made the other K webs free or I'm going to go for another January that's closer so

no guarante of making the play but like I'm saying here now we're watching how this develop we've already taken profits like three different times on these so we'll ride these through but I do like both of these plays for different reasons and now China I do think you got one more little pop after Christmas and if if you don't all the catalysts are going to be around like I think second week or third week of January and then we'll see where China the stimulus the tariffs the policy all that stuff is really at so that

is play number two and then finally play number three man the dollar I can't stress this right now it's kind of been going crazy last six or seven days it's the central theme to everything we've been looking at and as far as playing it now I don't know that's going to be difficult because all I know is if it goes past 31 like 3080 and hits through that that high of 2021 it's going to go nuts the strong dollar all the things are still in motion so you could play uup they're very hard to play

because the dollar moves very weird but remember you could play a strong Dollar by things that will go down if the dollar goes up AKA short the Euro short the pound even short the end for crying out loud so stuff like that that's where I'd be looking at but the fact of the matter is just from now end of the year even beginning of the year if the dollar starts going crazy uh like we said eventually markets love it but eventually that's going to have a negative effect and the chickens will come home to Roose

so we'll see where that plays out but that is play number three and then finally the plays that I made on Friday I sold my free Teslas I think they ended up going up but remember they only had like one more week of time they were still really out of the money I made them free I think I sold them for more around the same price I had two of these free contracts they went up to like 175 then they went back to break even and then came up to 100% so I was like you

know what they're losing their time they did not they they have trouble going above 200 we'll find another double dip so I made those completely gone now I was going to say free but remember I sold the other three got our money back so this was just pure profit that was my first play and then I grabbed Nike I grabbed the December 27th week after hings 65 puts and 90 calls these are about two standard deviations I grabbed 10 of each the puts were 23 cents a pop and the calls were 46 cents a pop

and the plan is either hold both of these or most likely I'm going to sell them before earnings if I could get one free and then we'll trim it and then hold one or two for the play and then I did FedEx I didn't grab a put all I grabbed was December 27th 347 half calls at 80 cents I think this is just outside of two standard deviations grab two of them so that one if it does go up I'm probably just going to make that free and hopefully try to get a free one and

then we'll see where the earnings takes us but other than that watch the bonds again Bond spy rally correlation is going to be key don't forget about the dollar we'll see where earnings and then again even Tech last week couple of the S&P or the QQQ editions we'll see where that takes us how crypto ends the year even gold I'm still in that micro gold play that one got clapped on Friday uh but other than that man we'll see where it all goes and happy holiday Merry Christmas and that is your watch this ladies and

gentlemen make sure Hy healthy ready to go make sure post your watch this make sure we see you there in the morning I need the armor on I need the helmet shining and I need you to remember the flesh don't care about eternity cuz it ain't going in there oh my goodness think lar baby Paton I love you drink that water stay hydrated healthy let's have a good weake enjoy the end of the year baby get go eggnog I hate eggnog I hate it but I love you drink that water you already told you that

let's go baby and hard [Music]