One Of The Biggest Market Crash Signals Just Happened…

Today's number is 17, because that's the percentage of stocks that are up over the next two months when we see markets with this signal, the Hindenburg Omen. So what does it mean for us as traders and investors? Could we be seeing the beginning of an incredibly fragile market starting to fall apart, with Meta dropping a key support and certain other stocks showing real signs of weakness? Well, one thing's for sure, it's been a pretty good earning season so far, with over 85% of companies beating the baseline. But that doesn't change the fact that there are certain risk-off sentiments starting to appear. So today we break down stocks, commodities, and cryptos, and show you why you need to be paying attention to everything right now, and not just one chart. Guys, don't go anywhere. This is going to be a big and very important video. See you soon. Well, welcome back, everybody, to The Daily Show. My name's Thomas Atkinson, and in today's video we'll be taking a look at the latest macro, the data, and of course, what Wall Street may not want you to know about the markets right now. What is it, and why should we be paying attention to the Hindenburg Omen? Well, let's kick things off here with some good and some bad, and some maybe ugly when it comes to markets. Then we'll go through some of the positive and negative gamma flows in the options market, and of course, the key levels. But straightaway, Chipotle, what a bad year it's having, with a year-to-date almost down 45%. And this kind of shows you that the middle class, or maybe even lower class, and in fact, just really the American consumer, could be weakening in front of our eyes. What was once hot is now not really. And of course, it shows you the cyclical nature and the danger sometimes of going into stocks when they're absolutely mooning out of control. What sometimes goes up so much will crash back down eventually. So let's talk about that as we unwind maybe potentially one of the biggest rallies we've ever seen when it comes to a bubble. And this is, of course, the AI bubble, which we know is, of course, a little bit obscure and wrong, but at the same time, when will it actually see problems? Well, Mark's done some great work here, and you guys know that we asked in the previous video, where do you think we're at right now? A lot of you came in between D and E when it comes to similar analogs. And this kind of points towards this type of market, basically a market that could top a little bit here in January and then become extremely volatile over the next 12 months. And I think this volatility, if you're new to markets, is going to be awesome if you're getting into trading, investing, and more importantly, just starting to find that kind of opportunity. This could be one of the most wild times to be in these particular markets. And make sure to subscribe to this channel if you're interested in finding out more, especially about signals when things go bad. So let's talk about the Hindenburg-Ohman, often considered one of the more bearish signals in markets. It's really the first sign of weakness that we've seen in a while. The last time we got similar signals, we actually saw them around the 3rd or March of this year, before, of course, falling almost 20%. And we also saw them over here in 2021 in November, but just before, of course, a massive drop off in markets that happened into 2022. It's been a pretty reliable signal when you're taking a look at it this way, but the key is, of course, in the data, and not necessarily just saying, oh, the Hindenburg-Ohman's happened, I'm selling everything, I'm running away, and I'm really scared. Let's actually break down what tends to happen two months later, then what tends to happen one year later. And of course, there are some bad cases here from Subu trade, where we see markets actually fall off in a big way. Notably, of course, the ones around 2021. And if you actually went back further, of course, the more notable ones during the dot-com boom, and more importantly, the global financial crisis. So two months later, the data stats aren't very good. In fact, only 17% of the time are markets bullish after such a signal. Now, what this could be doing is it could also be giving us a little bit of a reset before a follow up in terms of higher markets. You'll notice here, that's exactly what happened in 2021, where the market sold off this signal, then rallied straight back up. And do remember that fund managers are very far behind the general retail crowd at the moment when it comes to gains. If we actually have a look at the Hindenburg-Omen over a longer period of time, Jay Keppel here from Sentiment Trader has actually tracked it and noted that specifically around that one to three month period, we can see some weakness in markets, but at the same time, it often does tend to potentially still be higher one year later. Now, note here that during the global financial crisis meltup and also the one for the dot-com boom, we got quite a lot of these signals along the way. So just having one signal is not a sign of, oh, impending doom, everything's going to crash. It is a sign of volatility, though, potentially coming to the market. Because in essence, what it is, is it's a sign of internal breadth weakness. And if you have a look over on our ex-post, the link's in the description down below, you'll be able to check out what it is and how it's kind of calculated. So let's go from the negative side to the positive side. There are, of course, things that we've been talking about for a while now, which have made us think that the markets would probably be up into January of next year. And one of those has, of course, been our favorite since April, which is the Zwei breadth thrust. These, the triple 70 and a few others, we love them on the channel. We've used them so many times over the years, and they've always been pretty damn good. In fact, they've got 100% strike rate at six months and 12 months. Well, it turns out this is one of the best on record. So according here to Carson Ryan Detrick, you can see here the Zwei breadth thrust has been pretty good. And also momentum has been going in the favor of the bulls. In fact, the S&P has closed above the 50-day moving average for 125 consecutive days. And you may think, well, it's time for a pullback. Yeah, maybe, and that can happen. But have a look at the one, two, and three-month data statistics. Remember, when you're breaking down data, you need to look at both the bull and the bear case scenarios, and then see which is the strongest across the board. In fact, we've also had cuts as well at these highs. And again, from Ryan Detrick here, when you tend to get cuts near the highs, sometimes you get a bit of volatility around that, but generally it is actually bullish over the next year. So this is, of course, a bit of a sign here that the markets may have still a little bit more to go. We've argued recently that, of course, we saw probably the peak of the AI bubble surge in August. Based on our Google trend analysis, we found that that was a very key point. But we're also noticing here that even though it looks like Chipotle and many other middle-class and possibly lower-class, and even anyone eats, of course, Chipotle, markets are basically showing signs of weakness. We're also seeing Vegas stocks starting to show signs of weakness. So this is kind of telling us that there's something wrong with the economy. But meanwhile, one of the better reads on the market, which is, of course, XLY, consumer discretionary versus staples, is continuing to drive higher. And this is often meant that it's still risk-on for now in markets until this goes bad. So just remember, it's important to note what's happening in the macro, but also note what's happening when it comes to fund flow. Markets can stay irrational longer than we can often remain solvent. Let's take a look now at the S&P 500 high beta versus low volatility. You can see here from All-Star Charts, JC Parrot's over on X, basically has got some pretty cool charts here showing, of course, new all-time highs for these particular markets. Why is this important? Well, when we tend to see this high beta do well, it usually means risk-on. So that could change, and of course, it can happen like that, so we'll be watching it. But it does kind of still line up with generally bullish sentiment. Mover Wayne Whaley over on X has posted this study, which shows that similar structure, and the key is here is structure of markets, leading into where we are right now, has a 39 and one bull case read into January of next year. And if you note that that structure that we looked at, January seems to be coming up a few times for me right now, and I've been doing some work on a speech that I'm doing here in Australia for Brisbane, and it does seem like a lot of lines seem to go towards January. It could be any time, but for now, January does tend to come up quite a few times in at least my cross studies. So we've got kind of a bullish case for a lot of data points with structure coming in right now. We've got a bearish signal, no doubt a bearish signal in the Hindenburg Omen. We'll continue to watch that because that is a very strong signal over months into even quarters. So of course, it can take a long time to happen, but you cannot ignore it. Now it's happened, we continue to track it. We will do so along with structure of the market. So make sure to sub for that, guys, as this is an important day in the markets. Let's now take a look at something that I thought was interesting, which is obviously Tom Lee talking about Bitcoin back in 2017. Now he's a big bull on Ethereum, and obviously one of his new arguments has been that he believes what if we tokenized gold, and therefore would that hurt Bitcoin? Well, it's an interesting argument, and I just thought I'd bring it up. What do you guys think of the comments down below? Do you agree with Tom Lee? Could that ruin potentially Bitcoin's reigning of the supremacy, I guess, when it comes to being a trillion-dollar-plus market cap? You guys know I like the Holy Trinity, gold, silver, and Bitcoin. This, to me, is a very important structure into the debasement theory of currency, which of course takes a long time. It is not done in just a day like everyone else seems to think it is, but it is still one of my favorite cryptos. Well, it is my favorite cryptos in Bitcoin. So we'll see whether Ethereum ends up doing that, but it's certainly becoming an argument out there. Let's now talk gold for a second. And there's a little bit of confusion here. I saw in the comments, a few of you guys said, Tom, you said that it could go down between 10 and 20%. This time, yep, definitely. We obviously dropped 11% from the peak. And then you said it would be weak for around two months. Yep, absolutely. That's generally the way the data reads. So first up, we dropped very quickly down after seeing Euphoria. We were probably one of the only real gold bugs to really be talking about that because, of course, we believe in both the bullish and bearish case, but we still are bullish on the macro side when you come into 612 even decade when it comes to gold. And one of the things that we saw in a recent read is we lost 11% on gold, and then it said two months later, it'd be positive. That's correct. So basically what happened is when we're at the top, the data said that the 10th week would generally be down, which of course it was. It also said that we would usually lose between 10 and 20% of gold or silver price over that period. Remember, we lost 16% in silver down to the daily 50 moving average, which is an important point. So have we now done that? That's right. So what now happens is now that we lost 11, the stats are that if we lose more, generally it will recover back to at least some gain, as you can see here. So we're at that point where you've got to think that gold's starting to stabilize. We've got more in the chart coming on later on, but obviously we do think that we're in a big secular bull run here, and things are still looking very, very tasty for the precious metals. So this had to happen, it had to wipe off. Anyone, when you're going into like Costco or gold dealer and they're trying to charge you 15% spread, that's madness. You guys know that. That's just stupid. Who's doing that? So obviously we need to be countering that with knowing when markets get a little bit euphoric, but it's coming down to a very cool level. Let's talk about earnings for a second, because of course, 85, 86% of earnings are coming in positive. This is of course bringing up EPS estimates, and so far it's been a pretty good earning season. In fact, most fund managers are behind, and this actually also helps to push maybe these markets a little bit more into the end of the year, as a lot of them are going to be chasing to get those gains coming through. We saw Amazon's income statement, just a couple of reads, revenue up 13% year on year, operating margin up 10, EPS is a 39 cent beat, very, very nice. That actually showed up in the charts already showing bullishness. We checked that out in the last video. And then of course, Apple Q4 looking very good here. So you can see we have up 15%, up 5%, revenue up eight, it's a pretty strong number. So this might be down a little, but again, overall I would say the earnings results have been good from the big tech, which is a big thing because of course, yeah, Meta's shown weakness, but we do not want weakness out of all these because we are now in a concentrated market. 46% of the S&P is just tech pretty much. If tech loses, that's why you have to look at semiconductors that is going to be diabolical to the market. So just remember, it is basically two NASDAQs now. We have the NASDAQ S&P and we've got the NASDAQ NASDAQ. And that is the way we find ourselves here at 2025. So if they ever lose, my goodness, it's going to be bad for the S&P. Let's talk S&P now for a moment. Now, a few of you bought up the gap and you might be celebrating today because you'll be like, told you, man, the gaps are getting filled. So obviously the second gap fell, interestingly, 67.50. Now you'll see that comes up a few times. So we talked about this kind of upward trend line this year. We talked about being overbought. If it went through 69, I think it was 12 yesterday and closed, we would have said 7K. It's obviously weakened, little gap up, gap down kind of action. So we may see some possible further weakness, but let's look at the key levels here. And what I've done is I've put in a couple of VWAPs so you guys can see it. So first VWAP was hit and bounced. Of course, there's still bullish sentiment across the board here on markets. Now, if we drop that level, where are we going? Keep this in mind, 67.50. Now, 67.50 is a pretty key level. Previous resistance becomes maybe support and also a couple of other correlations. Now we talk about a lot of this in our day trading masterclass, which has links in the description down below. And what I actually call it is a position-based masterclass. The key here in technicals is always to build a massive case scenario of correlation of separate indicators and separate reasons. Remember, your idea of making money in markets has to do with bringing into cases many different assets to try to build that best storyline, because it's all about someone's taking from someone else. And you do not want to be maybe the person that has that weaker psychology as well, because that's often what you're looking for on the charts. That's why we say patience, react, don't predict. The reaction of a key level is actually what's going to tell you whether it's taken money from the general retailer or maybe a less sophisticated investor. Let's now take a look at the options levels, and you'll see these line up very well with what we've just seen. 6,800, 6,815, big put zone. Drops this put zone, where's it probably going to go to? Yeah, you guessed it, probably around 67.50. Why? Well, 67.50 is going to probably therefore become a bit of a put wall. So you can clearly see that these technical levels and options levels do line up. If you're first time here, make sure to sub, because these are very important zones. Now, one thing that was a little disappointing was probably that Tesla went back under 450, because we know 450 is pretty big positive gamma. It's unable to hold it. 440 though, 435, big put walls, so it needs to hold right now. And if it starts to get a little bit more of that strength back in it, then of course we're aiming for just under 500. So not really shocking on the charts yet, but we'll look at that later on. And NVIDIA has been in positive gamma ever since it broke up recently, so that's looking still pretty good. IBIT back to the 60, we drop 60, we drop that anchored VWAP level on Bitcoin, which we'll look at later. That is not going to be good, guys. We're probably moving on the way back down then if that does happen. And then of course we have gold here as well, which has been kind of hovering around that 370 now, but the 360 remains the key level, which is right around that daily 50 moving average. Now, just before we jump into the charts and we take a look at the key levels that you need to be watching right now, I want to say a big thank you to the sponsor of today's video, which is obviously Tiger Brokers. Now we've worked with Tiger for a long time and we always love them because they not only win plenty of awards, which is awesome from listening to feedback, but they do also offer a few special for you guys down below. So check out the links in the description if you're interested in Tiger Brokers. But I want to talk about some of the reasons that we love Tiger. It's not just competitive fees or anything like that. It's also around earning season. See, they offer people that want to trade into one of the best markets in the world, the US market, 24-5 with Tiger Trade with access to 9,500 plus stocks and ETFs. They're always adding additional ones here, which is a big deal. But it's not just that when it comes to Tiger Brokers, it's also that feedback that I mentioned. So take a look here at the mobile app for Tiger Brokers. And what we'll notice is of course, we've got Nvidia up here. So you can see that we're kind of hitting that 45 times forward earnings, which is something we've looked for on Nvidia for a little while. It's one of those levels that when you're looking in the platform, you knew that this was kind of more of a fair value than where it was just a few months ago. It's one of those excellent tools that you can use in the platform. You can also see any fund managers and what they've been doing in terms of upgrading analysts, upgrading or downgrading, how their business is kind of structured in terms of its overall revenue spread, and so many other things in the feature list. I'm telling you guys, they've always been upgrading and some of the features are blowing me away with what you can get with access to this platform. If you haven't already checked out Tiger, make sure to do so in the links in the description down below. And of course, thank you to them for sponsoring today's video. Let's now jump on over to the charts that matter when it comes to lead indicators. The US 10-year is coming up on a trend line. This is a very important level. And you guys know that I am focused in on this because of course, if we start to break up this one, it could show inflation's coming back and there's concerns over that. Basically, the Fed said, yeah, we might not cut in December. Cuts are off the table. Who cares what they have to say, really? The main thing is, are the charts doing something? And should those charts be doing something that we're actually worried about? Well, so far, not really. In fact, the bonds market just doesn't seem to care about any risks right now. And one of the things that I'm looking at is I'm looking at this chart here of financials versus SPY, and it's back down to where it was during some of those more crisis-y periods, and no one seems to care. So the financials market is, of course, weakening at this stage versus the S&P, and that shows you we're probably through the mid-cycle and we're more going into that kind of late cycle in the markets. Another one to watch is Meta, which dropped underneath that 685 kind of level over the last 24 hours. And it brings up the case of, is this some type of head and shoulders? If we weaken, could we be going back down to fill a gap here at 560? Kind of a target for that level. And the next two to three sessions, I think are going to be important, will Meta find a buy the dip? It's the first major really to see weakness. Like we've long argued that Google's been really bullish, been phenomenal. Nvidia's been really bullish, it's been pretty good. And then, of course, we've got the Amazon, which I think could be doing quite nicely, especially if it breaks through 240. That's been probably the laggard of those now. And then, of course, we've had Apple up. Microsoft's just doing its thing on the sideways action. But yeah, that is an interesting one because if Meta keeps dropping and then we see this internal weakness, that could really start something a little bit nasty. Let's now move over to the U.S. dollar. So the U.S. dollar has been strong. And I'll give a little clap here because, again, this is against the press. And what I mean by that is back over here in July, everyone was talking about debasement. I've just seen everyone talking about how the American dollar's over, it's all over, this is over, that's over. This is why gold's going up. It is one of the reasons, but of course, the thing is that when everyone figures out something, often it goes off in the opposite direction. And I think that while we've been bearish on the dollar since January, we've been very bearish on the dollar, but around this point, we couldn't be bearish anymore because we had to be neutral or even slightly bullish. And the reason, if you go back to those videos, was because it became the overwhelming trade. So that's why it's kind of doing its little thing. Now, it did break up here. And the only reason I'm clapping is because I like to see a continuation. So I'd like to see it go back up to that 100, that parity level. And it just shows you, again, quality technicals, quality understanding of flow. It's just a fantastic thing. So congrats to you guys just for being able to see that and making sure that you're thinking about things a little bit different. I really love that statement as well. Think different, guys. It's an Apple statement, but I do like it quite a lot. Now let's have a look at gold. Gold rallied back to the daily 20 and it's rejected that spot a little bit. You can see here we've got the 38.50, which is the daily 50. I would actually quite like for it to do something like this. That would be sweet. And I'm not bearish on gold anymore in terms of, we've already seen the 11% drop. Yeah, it could get a bit worse, but I think generally we're kind of in a stabilization point for it now. So not too bad there. Silver actually hit the daily 50, like we thought. Comes back up to supply and now it's dealing with this pressure resistance level. So clearly a great level here for silver. If you're feeling a bit bearish, the question is, will it actually sell from there? And that, I don't think there's much edge on it at the markets. Speaking of something no one's looking at, oil. What if oil breaks 63 a barrel and then kind of does it inverse head and shoulders? Could be very strong. Proves pretty well in the markets. We'll talk about that in the weekend if it does occur. And where are we find ourselves right now? Equilibrium. Why? We've got two doji's next to each other. It's clearly a bit of a indecision, even though of course the trend is down and you could make a lot of great cases. In fact, our day trading masterclass nailed a massive trade in there towards the short, which you could already have broken even or even very nicely taken some profit off that. So it just shows you there's so many opportunities all the time, different timeframes going on. Beautiful supply there though. Now let's move over to Tesla. Bit nasty, this one. Should have really probably seen a little bit more rally. You guys can see we've come down now to the most traded zone, although it's pretty well traded through the whole range. So I'd like to see it pick up, especially before 420 on this stock. So yeah, we need to see more price action bidding. Hopefully that comes in next one, two sessions, but obviously you can do whatever it feels like. The main thing is that if you do similar style trades, you know, on repeat, generally it'll get there. And we're looking for 500 or just under 500 on that stock. So we'll see whether that can keep going. Now Nvidia and semiconductors. Semiconductors versus SPY, very important chart. Maybe it'll gap under, who knows, but at this point it's still up, it's still bullish. So it's very difficult to be super bearish on the market, even with the Hindenburg Omen. You can see here Nvidia, yes, couple of weak days, but generally it's going up. If big tech's going up, you cannot be that negative on markets, generally speaking. Although we may be able to pull down, of course, to that 3750 zone on the S&P. That's going to be a pretty important one if it does occur, because it's going to have a decent amount of correlation on it. What about Chinese stocks? Still like one step forward, two steps forward, one step backwards. So it's still technically an upward trend. It faces off on its 618 fibs, so clearly this is where the weak sellers are going to come in. So we'll see how it acts maybe in here, and we'll check that out on the weekend video, along with our inflation special on that. Now let's have a look at the NASDAQ. Two major market kind of, we don't know what's going on kind of sessions. Again, no closure at the new highs. So we'll be watching this very closely. We've got a special coming on the NASDAQ for the weekend as well. A lot of things to break down here, and actually a lot of evidence that we need to look at. But for now, of course, the trend is up. I mean, it is what it is. You can't, don't want to really fight that too much. But let's have a look now at the crypto markets. So we knew 116.5 would be an important resistance. We knew that 106 would be a pretty key support because it's that anchored VWAP we've been looking at. Once, twice, three times. What if this fails though? Could we be looking at a flash sell on Bitcoin? This is such an interesting chart. Guys, I know that you're probably thinking, well, interesting doesn't make us money. That's true. But I just love this chart because even though everyone's like, oh, it's the trash and everything, to me, it's such an interesting storyline. We've got the halving cycle ending. Technically, you could make a case for this being the all-time high for Bitcoin and this being the beginning of the end, a Wyckoff distribution. You can make an incredibly bearish case right now and an incredibly bullish case. And that's the interesting part about it. Who's going to win? And I think there's gonna be trigger points moving forward that probably show us that. And I think the wrong side might get squeezed. I mean, like get smashed. So this chart, I think it's super exciting. And a lot of you probably think, no, it's not. But hey, this is technicals. These are markets. This is what we love. There's always that guessing game a little bit with, of course, bringing the evidence whenever you can. So we are trapped at this point between super key levels. And I don't think we're gonna know until either we break down here and see some consolidation after that, or we break the 116.5 kind of level and see a massive squeeze. So I'm excited on that chart. And I'm sure some of you are. So some of you are like, my God, shut up, dude. Just make it go up. And of course, all cases are very interesting. Guys, if you haven't already, make sure to sub to the weekly newsletter. I was gonna release it today, but I think I'll release it on the weekend because I've got a special coming up. There's just a few things that happened over the last 24 hours that I wanna change the charts. Do remember, there is one thing in that particular newsletter I do not include anywhere else in our distributions because I wanna make it a little bit special. So make sure to sign up for that. We've also got, of course, follow us on X, follow me on LinkedIn as well. And yeah, if you're interested in some more things about repeatable courses, check out our personal kind of courses there, day trading masterclass, advanced class, options classes, many different things to check out. And also remember the sponsor of today's video, which is Tiger Brokers, couple of specials for FX Evolution members. And one of the things that I just really enjoy is great feedback being offered and awesome tools. And if the tools are free and the platform, hey, even better. So guys, check them out, have a wonderful day. Remember this big thing, abundance mindset matters in markets. If you feel FOMO, it's usually not gonna be a great trade over the long run. And the problem that most people have is that we feel these emotions. We do it once or twice. It works. We think it's normal. It's not normal. You have to be able to manage your emotions. That's a big tip for today. We'll catch you in the next one. You have a fantastic session. Bye for now.