Space Summary
The Twitter Space The Path Forward for the Markets. The Next 5 Months hosted by YusufTrader1. Delve into the world of market predictions and macroeconomic analysis with an expert in economics and politics. This space offers valuable insights into trading strategies, portfolio management, and the impact of global economic events on market conditions. Discover expert commentary on current market trends and gain a deeper understanding of how political and economic factors shape market dynamics. Stay informed on key indicators and gain guidance on navigating the current market landscape effectively. Whether you're a seasoned trader or new to the markets, this space provides unique analysis and predictions for the next 5 months.
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Questions
Q: What key market trends are expected in the next 5 months?
A: The expert discusses expectations for market movements and key indicators to watch.
Q: How important is macroeconomic analysis for traders?
A: Macro analysis provides valuable insights into broader economic trends that impact trading decisions.
Q: What advice does the expert give on portfolio management?
A: The expert provides guidance on managing portfolios effectively in the current market environment.
Q: How does the intersection of economics and politics influence markets?
A: Insights are shared on how political and economic events shape market dynamics.
Q: Why is it crucial to stay informed on global economic events?
A: Being aware of global economic events is essential for making informed trading decisions.
Q: What are some strategies for navigating the current market landscape?
A: Trading strategies and tips are discussed to help traders navigate current market conditions.
Q: What role do current events play in shaping market conditions?
A: Current events have a significant impact on market movements and investor sentiments.
Q: How does the expert approach market analysis and predictions?
A: Insights are provided on the expert's approach to analyzing markets and making predictions.
Q: What can traders learn from the expert's commentary on market trends?
A: Traders can gain valuable insights and perspectives from the expert's commentary on market trends.
Q: What sets this space apart in terms of market analysis expertise?
A: The space offers unique insights and expert analysis on market trends for the next 5 months.
Highlights
Time: 00:15:42
Market Predictions for the Next 5 Months Expert insights on what to expect in the markets in the near future.
Time: 00:25:19
Macroeconomic Analysis and Trends Discussion on macroeconomic factors impacting market dynamics and trends.
Time: 00:35:55
Effective Portfolio Management Strategies Guidance on managing portfolios in the current economic landscape.
Time: 00:45:28
Politics and Economics in Market Movements Insights on how political events influence market trends.
Time: 00:55:37
Global Economic Events Impact on Trading Importance of staying informed on global economic events for trading decisions.
Time: 01:05:14
Navigating the Current Market Landscape Strategies and tips for trading in the current market environment.
Time: 01:15:29
Role of Current Events in Market Conditions Understanding how events shape market movements.
Time: 01:25:42
Expert Market Analysis and Predictions Insights on the expert's approach to analyzing markets.
Time: 01:35:19
Valuable Insights for Traders Gain perspective and insights on market trends from the expert.
Time: 01:45:55
Unique Market Analysis Expertise Offering unique insights and analysis on market trends for the next 5 months.
Key Takeaways
- Insights on market predictions for the upcoming 5 months.
- Valuable macroeconomic analysis discussed by a market expert.
- Trading strategies and tips for navigating the markets.
- Understanding the intersection of economics and politics in market dynamics.
- Insightful commentary on current market trends and developments.
- Importance of staying informed on global economic events for trading decisions.
- Expectations for market movements in the near future.
- In-depth analysis of market indicators and their implications.
- Guidance on portfolio management in the current economic landscape.
- Appreciation for the role of current events in shaping market conditions.
Behind the Mic
Invitation to Join
I sent you a cause invite if you got it. Can you? You got it? What's good, my guy? You said late, I mean, like late notice. I asked yesterday if you can join on. Oh, yeah. You good? You good? Yeah, I'm just gonna mention a few things about the forex market, and then we'll move on to the indexes, and then we'll lead from american markets from there. Okay. All right, sounds good. I'm gonna go on mute. Okay.
Market Overview and Observations
Good afternoon, good afternoon, good evening, good morning, wherever you are, everyone. I just wanted to talk about what's happened in the markets the last few months, and I just wanted to highlight a few things. So, from the last event that we had, as crazy as it sounds, we finally got to these levels that we were talking about. But this is only like halfway there, you know, Dixie dollar is almost at 100. Indexes are back at all time highs. I think in April when this actually a few weeks ago, when they started dropping, a lot of people got scared. I've never received so many messages from people. I found that many people in here also stock investors.
Reassurances for Traders
So a lot of stock traders also, that were holding stocks. So I had to try to reassure people and the media just ran well with it and things like that, you know. But I just wanted to highlight things. If you guys thought Jackson Hall's event, when Jerome Powell was talking, I think he was. Everyone knew that it was like the Fed. I was declaring victory, if that makes sense, you know. So as far as what happens to the markets now? Now the interest rates are zero.
Low Interest Rate Environment
I don't know if many of you started trading in 2020 or if you guys started trading recently, but just before Covid-19 happened, US interest rates were at 0%, I think, or 1.5%. What happens to the market in a low interest rate environment, especially in forex? I'm going to explain to you guys the fundamental drivers of currencies around the world and currency pairs. It is the marginal change in future expectation real interest rates of country A versus country B.
Real Interest Rates and Their Importance
Now if I just pin something on the nest, if I can do that for you guys, let me just find it. Let me get it. Post something. Now, when everybody trades forex, 1 minute. Real interest rates expectations one year from now. Sorry, one year from now. So when most people trade forex, you guys are looking at seasonal data and things like that.
Calculating Real Interest Rates
But most people don't pay attention to what real interest rates are. How do you calculate what real interests are? Some people think it's the current interest rates that American interest rates at the moment are 5.5%. But when it comes to money, they don't look at it like that. To calculate real interest rates, you need to take the two year bonds minus the current inflation number, which is, PCE.
Comparative Analysis of Investments
So did I put it on the nest? I think I put it on the nest. So let me just put on the nest. Post shared. Okay, there you go. I think you should be able to see it now. Can you see it now? Yeah. So basically how interest rates work is, to calculate them, you need to calculate the two year bonds minus the current inflation. In America, the inflation number is calculated through PCE, which gives you what is known as one year rule interest rates.
Role of Investment Funds
Now the thing is, people buy bonds or they buy currencies. I'm talking about a large amount of money. I'm talking about pension funds, teachers funds, or as we know them, as the commercials. Or it can also be Saudi investment funds and things like that. You know, for example, Saudi Arabia's public investment fund, which is 925 billion, is starting to do international investments.
Interest Rates and Currency Trading
They don't really do as much, but they started to do. They're looking to buy, they already own government bonds, US treasuries and things like that, but they're also looking to buy up companies. So now it's a race between, I think it was Financial Times that recorded this story the other day I was reading. But anyway, the point is this, is that you need to start comparing what are the real interest rates by taking the European Union, for example, their two year minus their inflation and America, if you trade euro USD, remember what you are trading, seeks value.
Market Timing and Expectations
These algorithms that ICT talks about that, look at it in terms of the weekly charts, and this weekly chart is seeking value. Now I told you guys before, I think most people know by now that the market moves six months ahead. What you are trading now is people putting their money into these currencies, trying to make money in six months return. Now the way these people move the market is six months at a time.
Interest Rate Decisions and Predictions
Now if now the question is which country is going to cut interest rates and for what reason? Is the Federal Reserve going to be aggressive interest rate cuts? I think they will, in my opinion, because they were the first to raise interest rates every month, 100 basis points, 50 basis points, and towards the end they started doing 25. So I don't think the European Union needs to cut, nor does the UK or any other country.
Understanding Market Dynamics
So when you start comparing real interest rates, what we're talking about I'll also send you a 5.5. Most people think real USA interest rates expected. How do I post a picture? Where's the picture of? There is post. And then we go back to the chat. Put on the. What do I do this thing. Sorry, guys, I'm just trying to make you understand.
Factors Influencing Investments
So you should be able to see second picture, real interest rate expectations. So any investor, any hedge fund, sovereign wealth fund, teachers funds, school funds, police funds, pension funds, state funds, government funds, government entities, different countries, bank of Japan, central banks, they start to move a lot of money around to try to gain value.
Market Performance in 2020
There was a time in early 2020 where real interest rates was minus. So basically, you guys remember the crate bull market of 2020 in cryptocurrency, right? So assets that have a definitive value, like bitcoin and gold, they benefit from negative interest rates, not positive interest rates, if that makes sense. I'll give you guys a picture of how the United States looked like two years ago.
Long-Term Trends and Strategies
Three years ago. Sorry, three years ago. USA. USA real interest rates. I think it was negative six, if I'm right. So, yeah, it was negative six. And then inflation started going up, so. And then interest rates became positive. So when I, when I was saying, when I say things like, our Dixie dollar is bearish, I'm not basing it on a technical side.
Fundamentals and Market Sentiment
I'm trying to base it on how the chart would develop. How like, the thing about fundamentals that most people don't understand is this is, these things are the move before the move. So before the candle even prints. What is causing the candle to print? Money. Right. People are investing billions of dollars.
The Role of Commercials
I'm talking about large amounts of money and how the hedge fund managers or the commercials, the people who control the market, who decide the direction of the market, how they view things. Also, ICT used to say this funny thing is, if you're in line with the commercials, you will see the difference between a trade that is done in line with real smart money, which is them compared to what anyone else thinks, who's looking at the trend or anything like that.
Market Predictions and Historical Insight
Let me just post it on here for you guys. So when I was telling people that Dixie Dollar would get to around 100, these levels, it was not something I saw. I saw this like six months ago happening, you know, and I get it back in January, people, the usual trolls and things like that. But in January, we saw normally every January and every August.
Retail Traders and Market Movements
It's not the, it's not the commercials or non commercials. If you look at the cop reports, they're not taking part, it's actually the large retail traders that people don't respect, but you have to give them a level of respect because you need to have more than $2 million to show up on the court report. So I don't think these people are amateurs, although they lose a lot.
Limit Orders in Trading
But they must have a legitimate broker in futures chart. In the futures market, when they get to a certain amount, they are told, like from now on you can only do limit orders, you can't do market orders. Most people don't know that, but that's what they do. So what happened is you had a situation where always in January is the bullish move. We saw.
January Market Trends
Indexed dollar in January was caused by large retail and normally January is to do with tax season, I think, in the United States. So December and January, large retail start to get involved and companies are sorting out there, they're moving allocations, their investments all over the place.
Effects of Corporate Investments
So you have a situation where they're not interested in dollar, they need to sort out their taxes. So therefore the large retail traders decide where the market goes, especially indexed to dollar. So I wasn't concerned about the bullish move because I knew when the big guys step in and they will start their six month program and things like that.
Future Market Developments
So although, yes, I think, I do believe maybe in, sorry, I do believe maybe in September there will be some resurgence. But as far as when you guys are trading forex, you guys should calculate euro, USD, the European Union real interest rates. That is expected to happen six months to one year from now.
Steps to Calculate Real Interest Rates
All you need to do is calculate, find the two-year European government bonds and take away the CPI number for Europe. In America, you need to find a two-year government bonds, take away the PCE number and that gives you real interest rates and that's how this market trades.
Upcoming Market Predictions
I will speak to Jay and say are your comments on the US markets and what is going to happen in September and what is your opinions on Jerome Powell? And I think we have a disagreement on this. I think I say 50 basis points, but I'll tell you the reasons why, although it's not going to be a positive factor for indexes, but you go first, I'll let you speak.
Discussion of Chair Powell
Cool. Cool. What's going on, my guy? First of all, I appreciate you for inviting me up here just to say a few things. Every time we get together, it's always pretty good, Mandy. But yeah, I'll just share, you know, I'll answer your question as far as what's my thoughts when it comes to September and chair pal.
Chair Powell's Dovish Approach
So starting with Chair Powell, for me, it went as expected. He was dovish. I think he's been telegraphing a lot of what he's going to do all year. So I think it was probably a while back when we talked about this, but after the first quarter and he expressed, hey, I don't have, you know, we don't need, you know, we don't have confidence to do the rate cuts.
Data Needs for Rate Cuts
At that time, I was like, okay, he's probably going to wait. You know, he's going to need to get data over the summer. They want to see inflation get back on track. And I think at that time I was like, okay, maybe June is when we could see a rate cut. But I wasn't too sure because, you know, I figured they might not have enough data.
Inflation Trends and Narratives
But now, you know, that went through the summer, everything is kind of, it seems back on track with inflation. That narrative is kind of dead. I mean, like I said, or at least like I told my people, you know, listen, I don't, you know, when it comes to this Jackson Hole speech, I think a lot of people have high expectations.
Rate Cuts Timeline
But if you listen to what Powell said in the July FOMC and just when he normally talks, you know, he's been telegraphing like, hey, we're getting closer. It may not be as close as what people wanted, but, you know, in the last FOMC, he basically say, hey, listen, if September is good, you know, will, it seems like rate cuts are on track.
Analysis of the Jackson Hole Speech
That was the biggest headline that I got away from that. So when it came to the Jackson hole speech, I think he delivered. Right. He addressed the weakness in the labor market. He specifically stated, hey, we do not want to see more weakening. Right. So the Fed is going to try to support their dual mandate, which is the labor market, as well as keeping prices stable.
Inflation and Price Stability
When you think about inflation and price stability, a lot of people think that prices need to go back down or, you know, they were pre-pandemic. That's not the case. Right. If at the end of the day we had a big increase in prices, and if you think about from the time prices increased to where we are now, they've actually been pretty stable.
Observations on Consumer Prices
I mean, gas has been in this three dollar range since about 2020. You know, all the groceries have went up since 2020, but, I mean, my grocery bill hasn't went, hasn't truly increased since then. I mean, you know, we had that initial increase, but from there it's been relatively stable.
Current Inflation Trends
So when you think about inflation is that prices have just stopped going up. That's really the biggest thing is that now we're not seeing those big increases no more like we saw when the pandemic stopped and everything went back rocking. So inflation is kind of, you know, on that path back to 2% or whatever, mace leaps basically saying prices aren't going to go up.
Predicted Rate Cuts
And so, yeah, when it comes to the rate cut, as far as what he said, he didn't, you know, say whether they're going to do 50 bps or 0.25 or 25 bits. You're right. I think, in my opinion, I think they start out with 25 bits, you know, just to get the ball rolling.
Future Rate Cut Speculations
If something dire happens, you know, between, say, now and end of the year, then maybe we can get, you know, the, another 25 or 50 bps. But I think the same way they were slow to start raising rates, they will be slow to cut rates. Right. Because it's, because my thought is this, as soon as he cuts rates, best believe the fear mongers.
Market Predictions and Housing Market Chaos
And, you know, those bearish folks, they're going to start talking about, well, inflation is going to come back. Right. So once he does this first rate cut, we'll have to deal with a little bit of that. I do think that when he does that first rate cut, in my opinion, I think the housing market is set to go crazy because there's so much demand on the sidelines for people who are waiting for rates to come down to actually buy that when he starts to cut rates, we're going to see housing competition probably pick back up like it was back in 2020. So, you know, for those who think a housing crash is coming, personally, I don't see it. I could be wrong. But in my opinion, with the amount of people I know as far as millennials, Gen Z's that's trying to buy houses and that's been patient. As soon as we get those rate cuts, it's going to be a frenzy as far as the market goes.
Market Trends and Bullish Sentiments
I'm in my contrarian mode a little bit here when it comes to September. So August was, it started off a little shaky, but now we came back booming. And ever since that August 5 low, I mean, the market has just been on a tear. I think coming into this week we have, I don't even think PCE is going to be really a factor, really comes down to Nvidia earnings on Wednesday and what they do, I think it'll be another blowout quarter, but any little blemish or slip up you know, you might see a little pullback or whatever, but at the end of the week, I think this could be a very bullish week, which will kind of set up that feeling of, okay, we had a basically a 10% pullback in the beginning of August, and the market has basically ate that up. So, you know, a lot of bulls are going to be feeling really invincible. I think people will be thinking that they missed out if they didn't buy that low.
Concerns Regarding Market Manipulation
And I gotta be honest, I feel like it's a little bit of a bull trap coming because September, we will have to deal with a little bit of election uncertainty. If anybody paid attention to the news this weekend, you got the Middle east situation heating back up again. You had Hezbollah attacked Israel attacked Hezbollah back. So, you know, that thing is going to pick back up. And because of the presidential race, going to be the perfect little excuse to, and let me not say a little excuse because I have a friend in the intelligence community. And that stuff that's going on in the Middle east, it is real. Like, it's real beef. It really lead to some big things. But when I think about manipulation and just media and the narrative and how it goes, you know, I think it will be contained to the Middle east. But, you know, emotions, people will make it more than what it is, and it gets people all riled up and things like that.
Navigating Election Uncertainty and Market Predictions
So, but yeah, you know, we'll have to deal with the election uncertainty. You have to deal with a little bit of this Middle east stuff picking back up. And who knows, they might even try to bring, you know, that Japan carry trade stuff back up to kind of again stir people's emotions, get people fearful a little bit. but yeah, you know, I do think that, September and going into October could be a little bumpy because the catalysts that are going to actually carry us into the end of the year, which would be earnings season, which doesn't start again until probably about October. If we're going to get another rate cut, that would happen in November, as well as just having certainty around who's going to be the next us president. All of that stuff won't come until about mid October, November.
Anticipating Market Movements and Economic Indicators
So going into this period where we don't have an earnings season, we won't have any real catalysts that could essentially push the market up. It brings me to a point of where could we run into that good old saying that everything is priced in, if that is the case? What I've been saying is, watch out this Friday when we get a good PCE number. If the market sells off on that good PCE number, I promise you will hear the narrative. Everything's priced in. And then, you know, we may have a little bit of a pullback in September. We'll have to deal with some macro stuff because that's really the only thing that's going to be, you know, popping off when it comes to September is we'll have an FOMC meeting. That's probably going to be a dud. We know we get in a rate cut. What more can he say? You'll have to deal with, you know, getting labor market data early in a month, we'll have to deal with inflation.
Market Dynamics and Seasonality
But that's, you know, that's really it. As far as market drivers, you got quad witching in the middle of September. So, you know, that's where I'm at. You know, it was a remarkable August, a remarkable summer. You know, I think that, you know, a lot of things have been going pretty well. We are, you know, pushing some levels that I didn't even believe we would get to the end of the year. So my expectations have changed a little bit. I do think we end the year much higher than expected, but it's gonna be a little bit of a bumpy road probably over this next month and a half. But once we get past that election, some of that stuff, man, the end of the year, it's gonna be crazy rocky, that's all I can say.
September Trends and Investor Strategies
But, yeah, that's pretty much where my head is, man. That's things that I kind of see in my thoughts and the data that I put together. I agree with you, bro. On my side, we're following the seasonal chart for the election year cycle and it shows a big drop in September. So although indexes, the rate cut will not actually benefit the big companies because of, you know, they've already done well with high interest rates. Right. So what difference is rate cuts going to do for them? It's more of a, it's more of a. The Russell 2000 is where the big companies are targeting.
Market Reactions to Economic Indicators
I mean, big investors are going for the Russell 2000 and that hasn't broken out of his all time high for three years. Right. So that's the one that, to keep an eye on. And I was surprised when the whole rotation thing happened with CPI last month. And I did not see that move coming, bro. The way Nasdaq dropped and S and P five, I said, what the hell is going on? You know, it made no sense. But I get it now, you know, like the whole rotation thing. First time you learn something new every day in these markets. Right. So also the issue with September is usually a month where a lot of asset relocations and things happen, right?
Market Cycles and Recovery
It's technically, as far as indexes are concerned, they always recover their losses. It's not an issue. You know, we've seen Nasdaq do 1000 points a week so they can recover all their losses in one month if they wanted to. They've done it in two weeks already. So they dropped for two weeks, recovered in two weeks. So it's not a big deal. As far as far as, I just wanted to advise the forex traders. There's real opportunities in these markets. A lot of money is coming to this market, but it will take a month and we'll see big positions in the cut reports happening as well.
Concerns Over Global Economic Stability
There is a concern, though, regarding the carry trade. It's the central bank of Japan. I don't know if you guys, I follow Governor Iwaida a lot. And I was watching his hearing before the, when they called him up to the lower houses of Congress and he defended himself. He said, listen, yeah, unless you're going to remove me, the central, my job is to remain price stability and wages too. That's Japan's issue. And he said to them that we will raise rates if we have to, you know, do you understand? And I've never seen anyone speak like that. And I feel obviously Japan, you know, like I watch a lot of japanese things and I was like, you have to have a pride issue in Japan.
Understanding the Japan Carry Trade
So he stood up to them and they were all shocked that he said that. He only takes his mandate from the ministry of finance and Central bank of Japan are good together. He doesn't take his mandates from Congress. Only Congress would have to advise the finance minister. And it works a lot of politics in how they do things over there. So he spoke to the lower house and the upper house and I, we saw already USD JPY, a lot of money. A lot. I'm talking about billions and billions of dollars is going into the JPY currency.
Investment Trends and Market Responses
And I was looking at CME Group death notion of volume. The JPY currencies is for the first time this year, number two after EUR USD. And when I saw that, I said, yep, JPY is going to the moon for its own reasons. But inflation in Japan also went up the other day. It went up like a big surprise. Jumped 0.3% or something like that, you know, so that's another excuse for them. But as far as markets are concerned, you're right, there's a lot of instability in the Middle east. There's only earnings seasons help indexes, right, the stocks. But as far as investments are concerned, the money, we are talking about money managers, their money is not going to come anytime soon.
Market Management and Allocation
It will take a month for them not to bring that money over because they have to sell. Guys, can you please stop requesting, I have to keep removing people. We haven't even said questions yet. But anyway, as far as money managers are concerned, money managers are people who manage rich people's money, if that makes sense. And they have a, you know, the famous 60 40 allocation, but they have 60% in bonds, 40% in stocks, equities. Yeah, they can flip it around if they wanted to, you know.
Forex Market Opportunities
But the point is, so going forward, the month of September is going to be action packed in forex, but not so action packed index. So anyone who has the skill to, you should concentrate more on different markets because forex markets move really fast and is that their time to shine, if that makes sense. Because as far as indexes are concerned, there's going to be a bit of sideways action. For now, until you said real quick, I got a two questions real quick.
Exchange Rates and International Trade
Number one, you talked about the Japan thing a little bit, and I definitely defer to you here because you're more versed international. So you do believe that carry trade, there's more of that to come or more of that to be played out like, you know, do you see that being over? I do, but not in that sense. In the sense where, because real interest rates are going down, bro, they're not going to ditch Dixie dollar completely, right. Because they can just buy the five year note and long term five year inflation is like 2.9% or something like that.
Conclusion on Monetary Policy Impacts
But the point is that as far as the carry trade is concerned, the central bank of Japan won't allow it to happen, but he will raise interest rates. Does that make sense? You know, oh, he's not going to protect that. He's not going to protect the market. Let me, I swear to God, every time, random people, you know, if you request to speak and we haven't, are open, I'm going to block you straight away.
Freedom of Speech and Online Interactions
You know, but I started listening to. But no, the point is, yeah, on this app you have a lot of people who think they can insult you and say things, you know, and most of them are young kids, live at their parents house and things like that, you know, I remember Elon Musk said when he first made Twitter, he said, freedom of speech is not freedom of reach, you know, and I give them instant blocks straight away. You get it. But sometimes it's as if what I say triggers some people, you know, because all of 2023, we have to fight that. We have to fight the prop firm influencers. We warn people about companies, those companies collapse, and now it's about who's the best trader, who's this? Who's that? You know, so I. The point is, I just try to keep it economical, macroeconomics and trading and stuff like that. I try help.
Market Commentary and Personal Regrets
I even try to. Sometimes I don't. I'm not giving signals, per se, I just give commentary on the markets as the day is developing, you know, just what I'm thinking. And it does help people to understand what the data means and things like that, you know, but it has reached a stage, bro, in terms of fundamentals and technicals, there's no competition, bro. I don't need to compete with anyone. You get it. You know, what we said was going to happen always ends up happening anyways. So it doesn't matter. Let everyone, you know, let everyone sing. Also, there's another issue. I might know all of these things, but did I trade it in this way, that I know all these things, but I didn't trade in that way. For example, like last year, I knew Nvidia would hit 1300, and I knew they would do a stock split because they wanted to have more money coming in, more people buying it.
Trading Decisions and Market Awareness
Did I buy Nvidia? No, I honestly didn't know. That was the one regret of when it comes to stocks. I didn't buy Nvidia. You know what? Even though I knew was going to do that was going to happen. So it's one thing knowing all these things, it's another. It's a completely different story trading it. And sometimes I think to myself, I should just be wealth management and tell people what to buy. And. And I think a few times, yeah. So the only way to do that is you would have to work for them. I would have to have a boss, and they'll bust me around. Yeah, man, it's a lot of. It's a lot of b's that come with that. You can't talk as freely as you want if you go into that area. It's a lot of restrictions.
Market Predictions and Trading Strategies
I've had people ask me to do that, too. Like, I don't like all the restrictions. I want to be able to say what I want to say. But also, even people ask me, like, look, I'll give you another example what is about to happen now, look, here's another one. He's not listening to me, bro. Anyway, anyway, what I was trying to say was, bro, was that as far as the market is concerned, it benefits gold and cryptocurrencies. They're not going to be affected by the rate cut, if anything is positive for them, because assets that have a limited value, limited quantities, benefit more in rate cut environments. So I did advise people, buy up every crypto. Buy crypto if you want. That's my advice. But this is once in every year. Once a year, there is a turning point, or, like, divergence.
September Predictions and Market Dynamics
I mean, as indexes go their separate ways. Big bitcoin decouples from Nasdaq and goes its own way. Does that make sense? And then, my bad aim to cut you off. But the second question I have for you mentioned about money managers moving money, right? we both know that they're still, like, what, 6 trillion on the sideline? Something like that. Yeah. So I just wanted to kind of be you up on that point of your, I think you nailed it with, you know, September is going to be that rough month, but I think that's going to be that opportunity for them, like you, because you mentioned something. You said money managers got to take some time. They got to sell stuff. What better month, it's gonna be like, what better month to do it in September, when you're gonna have a bunch of noise going on, you have people confused.
Market Timing and Investment Strategy
But also, I remember earlier when me and you talk, you had mentioned how when that first rate come through, that's when, you know, people are gonna really put money into the market. We're gonna really see that bull market start up. And I agree. You know, I'm thinking in my head, and I'm like, yo, okay, they might pull it back in September, but when that rate cut happened, that six points of my trip up, listen, all I know that fourth quarter about to be crazy. It's going to be the middle of October. All the way to end of December is going to be crazy for, but the thing is, for them not to do that, they need to start selling bonds. Now. Does that make sense? So it takes a while to go through clearing houses, and this is a lot of money we're talking about.
Clearing Houses and Market Movement
And obviously, the clearing houses citadel is not going to clear these bonds or the Fed is not going to, because the Fed has a backlog. Priority is countries, their treasuries. So company, all these money managers, wealth management, all these funds, they come second. So there's a queue to clear these bonds and these things. Do you understand? And the Fed has a lot of reverse repo money, so they can clear it as much as they want. This selling of government bonds and treasuries will reduce the reverse repo to zero, if that makes sense. But if the reverse repo comes to zero, interest rates need to start going to zero also. This is a fundamental thing that people don't understand.
Market Dynamics and Investor Behavior
You know, as long as the reverse repo markets still has some life in it, and every week they're buying 330 billion. How is this going to be reduced? We reduce reverse repo from 2.5 trillion, 2.2 trillion now to 300 billion. There's still some life in it, you know, so it's. September is the month where everything reallocation happens, you know, does that make sense? The reallocation. And also this reallocation benefits bonds, because if they're selling bonds, they're going to start buying foreign bonds. And to buy uk bonds, you need to buy british pounds, to buy european bonds, you need to buy, because, you know, the money managers, they will always have this 60 40 thing.
Global Markets and Currency Considerations
Do you understand, bro? But if the Ford, if the 60%, which is safety for them, is no longer beneficial to do in the United States, they're going to start looking at other countries, UK, Canada and things like that, and other countries. So for that reason, they're going to start, they're still going to refill their 60%, but that 40%, I'm talking about $2 trillion worth. And they're going to split that 20% on Russell, 2080% on Nasdaq and S and P. Do you get it? So that's how they're going to view the market as. But all of that, before they move to stocks, they have to replenish their bonds.
Interest Rates and Market Signals
Their safety for their customers is first, and there's no safety indexes for them at the moment. So until Jerome powell gives the signal that he's going to, he does the rate cut. And they want to know, they also want forward guidance by how much is the Fed going to cut. So right now, they're going to position themselves in totally into the money managers are going to start selling bonds and they're going to stay in cash for September and then after September, when they get clarity at the next FOMC, we're going to see, after 15 September, we're going to see some crazy price action in the markets. Lots and lots of money coming in. And that's why I was trying to tell people, forex, September is a good month to trade.
Trading Opportunities and Market Trends
If you're going to trade indexes, start looking at the rest of 2000. If you want good price action, a Nasdaq and S and P 500 are going sideways, they're going to be in the doghouse. You know, I'm going to just say this use of you might you. What I say every time we get together is classic, bro, because everybody who follow me, they know I've been a big fan of iw women, the small caps all year. So what you say is just got, I'm hyped. I know I'm gonna go crazy. I've been, you know what it is? Patient. It's people. It's gonna go crazy.
Understanding Market Movements
People look like people. People look at charts, but they don't understand who starts the move. Jim? Stan, somebody has to start the move. Why are you always entering on the third or fourth candle of third or fourth week? And to find how these people start the move, you need to start reading, bro. I tell people if you can afford a Bloomberg membership or financial Times membership, it's only going to cost you $50 a month. But that $50 a month, the articles, every morning they say to me, good morning, Yusuf. This is what the market is doing today, the close the open, things like that.
Investing in Information
And I thought, yo, these people are such good customer service, but they talk about a lot of good things that are important. And I watch Edgar Dimis video. He's more of a long term portfolio allocation person. He's bullish throughout the year. Then I started watching like every morning at 07:00 in the morning, I watch Bloomberg TV and I listen to the, you know, the investment managers from different banks and what they come on and what they say. You know how much you learn just by watching Bloomberg TV? So much you learn. And as a trader, you need to start thinking you're gonna make money in trading.
Beyond Trading: Investment Strategies
Yes. That's cool. What do you do instead of giving that money back to the market? How would you invest this money? There's more to trading than just buying and selling things. You know, people are following these little kids with all these little cash out certificates and things. That is not the definition of a real trade. A real trader is someone that has side investments, long term plays and his date and does day trading to make an income, but they position themselves as long term. And I say to people, if you applied for JP Morgan or HSBC or Barclays, as a trader, what would you say to them?
Seeking Opportunities within Market Constraints
I trade euro USD. They're going to say, get the fuck out of here and close the door on you until you get the hell out of here. Do you get it? So there's more to the markets than meets the eye, you know? And you cannot trade your way all the way to success, in my opinion. You need to also have, you need to start moving your money, allocating it in stocks and things. Like I said to myself in 2023, October I think was October 25, if I simply bought all these stocks, I wouldn't need to trade today.
Reflections on Trading Success
I swear to God, I would have flipped 30 grand to $150,000 and I knew which stocks were going to blow out. And I said to myself, I'm in the wrong industry. I need to just be an investor. Does that make sense? And sit on cash and let the cash do its own thing, you know, to get it so that it's crazy, but, you know, in 2020. I remember when the Ukraine war started in 2022, what is the options trade? The one that is one year long mad investor. Let me get him on. He's on here. I just want to ask you, is it 88 Tlt or something like that?
Options Trading Talk
The one that do with government bonds? What is it called? Yeah, TLT. Yeah. If someone bought one year long trade on options on TLT, they wouldn't be millionaire by now, bro. Does that make sense? Bro, that was the perfect option to buy. Does that make sense? And you bought the. You did the one year out. One. The one year out. You talking about like a leap. Yeah, that one. If you did that, you would have been bang on the money, bro. Jerome power.
Near-Future Market Predictions
By the time your contract expires, interest rates at 5.5%, bro, listen, I'm saying this. You could still do it now, right? Like, I know t is. Let me look at the chart real quick just so I can get a price on it.
Discussion on TLT and Investment Strategies
It's. I think I know it's still under 100. Yeah, it's at 98. And if we're going to go into a rate cutting campaign, say, over the next twelve to 18 months, bro, TLT is going to about 120. So you buy your elite engine, just chill. Exactly. That's, that's the best thing to do, you know? But, that's how I would do the opposite of the 2022 trade and be on the. I would do puts on TLT. That's how you look, call it. Right. So I will be on the put side of TLT going for after September, though. Let's find out what Jerome has to say first because, you know, the old man might. We're data dependent, and I swear to God, I've never looked at data more in shock lately. Like I used to tell people. Yeah, remember what we said back in April? Good data will be good data no longer is bad data seen as good. If it's bad, you sell. If it's good, you buy. You know, does that make sense?
Analyzing Market Trends and Questions
So. And luckily we spotted that trend change very early on, bro, you know, so. And when the ISM numbers came out negative, easy, 600 points sell on Nasdaq, one of the best trades ever, you know. But anyway, guys, any questions, you can come forward and we'll answer your questions. If you have any questions, the call is recorded, by the way, if anyone wants to. Yeah, you know, people gonna ask if they can hear the call again, so. Hey, my friend, desperately. ICT concepts, good to see you, Patrick. Louie Cheese, why they call you? Yeah, sorry. Gun. Yeah. How you doing, my guy? I'm good, how are you? I'm well, I'm well. You know, I always come up and I love to talk about commodities, man. Oh, yeah. You know, when with rate cuts coming and a lot of risk on sentiment coming, I'm really liking soybeans and soybeans oil, the derivative long going into the end of the year. I like a lot of the meats as well.
Commodity Positions and Market Dynamics
So like lean hogs, feeder cattle, live cattle, I'm really looking at a good position, trying to position myself well in those as well. They repriced aggressively. If you look at the chart on the, I believe it was lean. Was it? Yeah, believe it was lean hogs, well, they re priced aggressively, like literally like almost 20, $21 in like two days. And they just gapped down, you know. So we know that gap bill is coming eventually. And on my side, I just wanted to let you know, anybody in here know that does trade commodities, to be aware that, you know, the energy sector. I'm not too sure about oil. I'm not too sure about natural gas. ICT I want to ask you a question. Sorry, bro, to cut you off. No, you're all right. Sorry, but I'm bullish and we're bullish on all.
Insights on Energy and Inflation
I just want to get the oil about ICD concepts. If you can get the invite. Yeah, I love to hear about, I love to hear because it's not looking pretty. No, it's going to, it's bullish because on the court reports the commercials have, oh, basically everybody short oil. Right. All three parties are short oil but open interest keeps reducing and whenever that happens there's going to be squeeze. Yeah, yeah. What's up? Look, don't forget that they gonna use that middle east tension. I wasn't factoring in that. He's so right about that. Telling you when that it's already popping off now. So ICT concepts, what's your opinion? You're the expert on all.
Trading Strategies and Market Behavior
I wouldn't say I'm the expert, but I definitely trade it and it definitely lives on my balance sheet. Yeah, I can hear you. Yeah. I mean, I mean we range a lot between 73. 73 is a pretty consistent price for oil. I mean if you look at one of the number one inflationary markers within local economies, gas and gas prices are always a thing, right. I don't think that oil is going to be super uber extra dramatic. I see a lot of gaps that we can fill. I'm bullish on a lot of those gaps. But within the election year we're dealing with a commodity that kind of defines inflation, at least within households. People are going to really get upset the more and more they have to pay for gas is very much going to be I think, a geopolitical kind of asset that could be utilized within an election year.
Market Predictions and Trading Considerations
But I believe it's going to continue ranging if you want to know the truth. I mean it's not a huge surprise that we see oil between 81 and $72. That $9 range is what we essentially live in and that's what I trade. You know, I'm willing to trade intraday and I'm willing to live in that 78 price. A lot of the gaps, I mean oil's got a lot of gaps so we just live in those, man. So quite honestly it's not really a secret. It's just a very ranging market and. Very consistent on the futures market. And oil, do they do the month by month contract? They don't do like indexes three months out, right? No, they're month by month they are.
Understanding Oil Trading and Market Dynamics
What's really nice about oil is. What'S. Really nice about oil is where and how it plays to like its historic average. Like it's constantly reverting back to a mean. So you're going to go within a month or a monthly projection and then you're going to revert back to its mean. So we max out either the bullish or the bearish side. So we're kind of looking at it from the monthly and the weekly levels, and then we're just trying to play institutionally what's beautiful. And I want folks to understand this the same way act is taught, like the 20, the 80 and the 60. Within institutional levels, oil trades within a 25 cent range. So you can constantly find.
Execute Trades on Institutional Levels
You can put the quarters on there with it being a dollar, so you can play 7676-2576-5076-7577 for example, if you're just utilizing quarters on an asset like oil, you'll find that those are very, they work very well from an institutional level. So you can constantly find at least a 25 cent, 50 cent or 75 cent trade. And that's typically all I'm looking for. Youssef. That's good. I never knew that, but I'm trying to diversify. Oil is one of the easiest things to trade, I believe, because it's. You can look at the MCL contract at a dollar a tick, you can look at the CL contract at $10 a tick, and you can look at a tick value as being $0.01 within your incremental price deviation or range of $1.
Market Characteristics and Trading Strategy
So understanding that dollar price range, it isn't a seven digit asset like something like an index, and it is constantly ranging. So you get clear and clean algorithmic price delivery, and it makes your ability to trade within these institutional levels, in my opinion, very attainable, especially for newer traders. Nice. So thank you, bro. Much appreciated, bro. Heifer, any last question? Sorry I cut you off earlier. Sorry. No, no. I just, you know, I always speak about commodities with you, and I love your macroeconomic reports and just the fundamental analysis and how it plays into what we do over here.
Continued Interest in Commodities
I want to start researching soybeans myself, bro. Yeah, soybeans. I'm telling you, bro, soybean oil. Exactly. Yeah. Larry Williams made the distinction between the two, you know, and he, see, he goes between either one sometimes, you know. Yeah, he called that drop earlier in the year, earlier on soybeans, perfectly. I don't even know. Yeah. Oh, also, I want to tell you that gentleman that you introduced me to, Jason Superior, he's really good as well. With the crowded marketplace. He is really good as well.
Evaluating Trading Insights
And he kind of trades in a d, he said, like a decor related sense from the CTA advisors. That's. Yeah. What he has going on over there is. He was, he was a market wizard. Many people don't. He was actually a market wizard. He was interviewed on market with us. I let, I learned the short squeeze of the long speed from him. You know, when a market becomes too crowded, what to look for, things like that, you know? Exactly. Exactly. Yeah. But, yeah, that's pretty much all I got, man. I'm looking forward to an amazing fourth quarter as well.
Opportunities Ahead in the Market
We've been doing well. I would advise everyone take advantage of the next few months. It's going to be crazy. Lots of opportunities for everyone and lots of money to be made. But don't be surprised. New levels of forex, new levels of indexes. Oh, yeah. And many opportunities I were going to see. The easing cycle has begun. I've never seen Jerome Powell so dovish like he did, declaring victory when he was speaking on Friday. You know, the guy was actually smiling at the end of September and see what we are.
Conclusion and Thank You
Thank you, everyone. Thank you. I see concerts for dropping in late and thank you Zay, for co hosting. I will be on Zay's YouTube page next week, Sunday on his one and to discuss things more in detail on his side. So what we always try to do is we give some half, we say half things here and then we give more, half. The more important things. The other half, we give it to his channel. On his channel, you know. So if you can follow him on YouTube, he's a youtuber on sativa Sundays is called, right? Yes, sir. Yeah. If you can follow his page.
Final Remarks and Goodbye
And I'll see you guys. I'll see you guys on there. Thank you all for coming. And the call is recorded so you can all listen back to it. Thank you, guys. Bye bye. Take care. Thank you, everyone.
