$6.15 Trillion Problem... DO THIS NOW!

Summary

The video discusses the current bullish market sentiment with new record highs and the return of greed among investors. It highlights the significant amount of money in Money Market funds and questions whether this is 'scared' or 'smart' money. The script touches on the potential for a 'FOMO' (Fear of Missing Out) effect as the S&P and NASDAQ hit Fibonacci extension levels. It also covers Jerome Powell's testimony, Apple's rise as the world's most valuable company, and the upcoming earnings reports from major tech companies like Tesla and Meta, suggesting a positive outlook for the market.

Takeaways

• 📈 The stock market is experiencing new record highs, indicating a continued bull market with strong investor confidence.
• 🤑 Greed is returning to the market, with investors potentially shifting from money market funds to stocks, especially if they offer higher returns.
• 💰 There is approximately $6.15 trillion sitting in money market funds, which could potentially flow into the stock market if investors feel the current returns are insufficient compared to the S&P's gains.
• 📊 The S&P has risen significantly, with nearly a 20% increase in the last year and 28% in the past year, prompting investors to consider re-allocating their funds.
• 🔢 The market has reached a Fibonacci extension level, a technical analysis tool that suggests potential resistance or reversal points, but the market continues to rise.
• 📊 Every industry group is up, indicating a broad market rally, and major ETFs are also showing gains, suggesting a widespread bullish sentiment.
• 📉 Jerome Powell's testimony did not lead to any significant market reactions, maintaining the bullish trend.
• 🏆 Apple has become the most valuable company in the world and aims to ship 10% more phones this year, which could positively impact its revenue.
• 📊 Historical data suggests that if the market is up significantly by mid-year, there is a high probability of continued growth, especially if accompanied by multiple record closes.
• 📈 Market breadth is narrowing, with the top companies in the S&P driving the market's rise, which could indicate a potential concentration of investment in fewer stocks.
• 📅 Upcoming earnings reports from major tech companies like Netflix and Tesla could act as catalysts for further market movements, with expectations of positive results.

Q & A

What is the current sentiment in the stock market according to the script?

The current sentiment in the stock market is bullish, with record highs being reached and greed returning among investors.

Why might investors be upset with the S&P's performance?

Investors might be upset because, despite the S&P's significant gains over the last year, they could be earning more (5% a year or about 2.5% year to date) from Money Market funds.

What does the script suggest about the amount of money in Money Market funds?

The script suggests that there is a record amount of $6.15 trillion sitting in Money Market funds, indicating a potential shift in investment strategy.

What is the significance of the Fibonacci extension being hit on the S&P and NASDAQ?

Hitting the Fibonacci extension indicates a potential turning point or reversal in the market trend, which could be a sign for investors to pay attention to market movements.

What is the script's opinion on Jerome Powell's testimony?

The script views Jerome Powell's testimony as bullish, as he remained composed and did not create any major negative headlines that could affect the market.

How does the script describe the performance of the top companies in the S&P?

The script describes the performance of the top companies in the S&P as booming, with the largest companies driving the market's upward trend.

What is the script's view on the potential for a 'FOMO' (Fear of Missing Out) effect in the market?

The script suggests that with the current market highs and greed returning, there is a possibility that the record amount of money on the sidelines could lead to a FOMO effect, prompting more investments.

What historical pattern is the script referring to regarding the market's performance after the first 15 days of the year?

The script refers to a historical pattern that if the market is more than 10% green year to date at the midpoint, there is an 80% to 82% chance that it will continue to be higher.

What upcoming events are mentioned in the script that could act as market catalysts?

The script mentions upcoming earnings reports from companies like Netflix and Tesla, which could act as catalysts for the market, especially if they report beats.

How does the script suggest the market's direction after July 17th?

The script suggests that the market's direction after July 17th will be influenced by historical patterns and upcoming catalysts such as earnings reports from big tech companies.

What is the script's final target for the S&P, and why was it adjusted?

The script's final target for the S&P was initially 6200, but it was adjusted higher due to the market's continued bullish trend and the return of greed among investors.

Outlines

00:00

📈 Stock Market Reaches New Highs Amidst Greed and Record Cash Reserves

The script discusses the ongoing bull market, with record highs and the return of greed among investors. It highlights the dilemma of $6.15 trillion sitting in Money Market funds, which may be underperforming compared to the S&P's 20% gains. The author ponders whether the current market behavior is driven by fear or savvy investment, especially with the S&P hitting the Fibonacci extension level. The script also touches on Jerome Powell's testimony and its impact on stocks, noting that despite the Federal Reserve's stance, the market continues to rise. The author speculates on whether the market's upward trend could be fueled by fear of missing out (FOMO) and encourages viewers to share their thoughts. Key market indicators and the performance of various ETFs, including SMH and XLG, are reviewed, with a focus on the overall bullish sentiment and the potential for further gains.

05:01

📊 Market Divergence and the Impact of Big Tech Earnings

This paragraph delves into the market's technical analysis, noting a lack of participation from various industry groups despite the overall market's upward trajectory. The author suggests that for a broader market rally, rate cuts may not be necessary but could help diversify market gains. The focus then shifts to the performance of the top companies in the S&P, indicating that while many are raising funds out of fear, the largest firms continue to thrive. Upcoming earnings reports from major tech companies like Netflix and Tesla are anticipated to be positive, which could act as catalysts for further market movement. The author also references historical data suggesting that the market's performance in the first half of the year could be indicative of its direction for the rest of the year. The script concludes by reiterating the potential for the market to reach higher levels, with the author's original target of 6200 being revised upwards due to recent market enthusiasm and positive economic indicators.

Keywords

💡Record Highs

Record highs refer to the highest price levels that an asset, such as a stock or index, has ever reached. In the context of the video, it signifies that the stock market, particularly the S&P and NASDAQ, has reached unprecedented levels, reflecting a bullish sentiment among investors. The script mentions that the market 'just cannot seem to stop,' indicating a continuous upward trend.

💡Greed

Greed, in a financial context, often describes an investor's desire to maximize profits, sometimes to the point of taking excessive risks. The video discusses the return of greed as investors are enticed by the market's record highs and the potential for further gains, contrasting it with the caution implied by the large amounts of money in Money Market funds.

💡Money Market Funds

Money Market funds are a type of investment vehicle that invests in short-term debt securities with high credit quality. They are considered low-risk but offer relatively low returns. The script points out that with $6.15 trillion sitting in these funds, there is a significant amount of 'scared money' or 'smart money' waiting on the sidelines, potentially ready to enter the market.

💡FOMO

FOMO stands for 'Fear of Missing Out,' a psychological phenomenon where people feel anxiety about not participating in a rewarding situation. In the video, the presenter speculates whether the current greed among investors might turn into FOMO, pushing more money into the market as they fear missing out on potential gains.

💡Fibonacci Extension

The Fibonacci extension is a technical analysis tool used to predict potential support and resistance levels in financial markets. It is based on the Fibonacci sequence. The video mentions that the S&P and NASDAQ have hit their Fibonacci extensions, suggesting that the market may be reaching a critical point that could influence future price movements.

💡ETFs

ETFs, or Exchange-Traded Funds, are investment funds that are traded on stock exchanges, similar to individual stocks. They often track an index, commodity, bonds, or a basket of assets. The script mentions several ETFs that are performing well, indicating a broad market uptrend.

💡Jerome Powell

Jerome Powell is the Chairman of the Federal Reserve, the central banking system of the United States. His testimony and statements can significantly influence financial markets. The video refers to Powell's testimony, suggesting that the lack of negative news from his appearance is taken as a positive sign for the market.

💡Apple

Apple Inc. is a multinational technology company known for its innovative products and significant market influence. The script highlights that Apple has become the most valuable company in the world and aims to ship more phones, which could positively impact the stock market and investor sentiment.

💡Catalysts

In finance, a catalyst refers to an event or piece of news that causes a change in the direction or speed of a market trend. The video discusses upcoming earnings reports from major tech companies like Netflix and Tesla as potential catalysts that could influence market direction.

💡CPI

CPI stands for Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, often used to assess inflation. The script anticipates a CPI report and suggests that the market may react positively to the expected figures, indicating a potential bullish outcome.

💡Market Breadth

Market breadth refers to the extent to which the movement in stock prices is widespread across various sectors and stocks. The video suggests that the current rally is narrow, with only the largest companies driving the market higher, which could be a sign of a potential market imbalance.

Highlights

The bull market continues with new record highs and the return of greed.

A record $6.15 trillion is sitting in Money Market funds, indicating potential for investment in the S&P which has risen significantly.

Investors may be experiencing FOMO (Fear of Missing Out) as the market continues to rise, especially with the S&P up nearly 20% in the last year.

The market has hit the Fibonacci extension on both the S&P and NASDAQ, suggesting potential for further growth.

Jerome Powell's testimony did not create any major market disruptions, maintaining a bullish trend.

Apple has become the most valuable company in the world and aims to ship 10% more phones this year, contributing to its revenue.

The market's heat map shows a broad positive trend across various sectors.

Historical data from 1928 suggests a strong start to the year could indicate further market gains.

Investors are starting to exhibit signs of greed, which could potentially lead to a market FOMO.

The market is getting narrow, with the largest companies driving the S&P's growth.

Netflix and Tesla are expected to report earnings that could act as catalysts for the market.

Meta's earnings report is anticipated to be positive, potentially influencing the market's direction.

The speaker predicts that the market can go higher, with the original target of 6200 for the S&P being moved.

Upcoming economic data, such as the expected CPI figures, could be bullish for the market.

The speaker encourages viewers to subscribe for daily market insights and analysis.

Transcripts

new record highs the bull party

continues and nothing seems like it can

stop the party but here's something

that's interesting greed is now back so

now that greed's back and we're at Fresh

record highs what is going to happen

with the record number or the rise to

the $ 6.15 trillion currently sitting in

Money Market funds uh I don't know about

you but if I was getting 5% a year or

about 2.5% year to date

well I would be a little bit upset with

what's been happening with the S&P

because it's up by nearly 20 and in the

last year up by 28 so people are

actually raising even more money right

Rises to a record so is this scared

money or is it smart money right now the

record is at new highs we've now also

hit the Fibonacci Fibonacci extension on

the S&P so with all this money being

raised are these people who are scared

or are these people who are smart with

really comes down to for me is whether

or not this money is going to come off

the sidelines and start to get a little

bit of fomo because uh this would be

difficult to watch 5% is nice it's

beating inflation but hey 20% is like a

lot better and the market just cannot

seem to stop and now investors are

wondering what to do and Jerome Powell

just finished his second day of

testimony today so what are stocks doing

well I just told you fresh record highs

we've now hit the Fibonacci extension on

both the S&P and the NASDAQ it's a

summer melt up and every single Industry

Group is up the NASDAQ incredibly also

actually came back down and bounced off

its Fibonacci Fibonacci extension and uh

most ETFs that I watch are up SMH up

2.3% the Magnificent 7 1% xlg 1% the Dow

Jones pushing off what used to be

resistance bullish the Russell over its

50 dma oh my goodness equal weight S&P

over the 50 uh equal weight uh techn

techology new alltime highs whoa we're

noticing a theme here yeah it's up and

the theme is pretty clear investors are

starting to get a little bit of greedy

so with all this money and the sidelines

will this greed turn into fomo drop me a

comment and tell me what you think but

if you're wondering what to do let's go

through and look at the news down um

Jerome pav didn't really make news so

that's excellent right he was really

good today they were grilling him pretty

hard but this guy knows how to stay

composed and uh it looks like he was

Aging in front of us looked looked like

he was getting a little bit old but the

good thing is that we closed that new

record high so there's the news and the

reaction to the news the news and my

opinion was bullish no major headlines

and the reaction to the news also

bullish so what we expect to happen is

happening what is that it's bullish in

case you're not clear and we still have

a lot of cash on the sidelines the king

is back in the driver's seat or um Apple

they're now the most valuable company in

the world as of today and they aim to

ship 10% more uh phones this year after

bumpy 2023 remember that Apple sales

account for roughly half of the

company's Revenue so that would be like

pretty good why hey Apple's pretty big

there's still challenges not going to

try to deny that but hey look at the

heat map today boom boom boom right we

got chips up this this sector over here

is looking really good everything's

actually pretty broadly uh green looking

at the last week hey it looks a lot

better than normal right it's not

perfect but hey it looks okay in the

last month there's still work to do so

um like I said uh what's going to happen

from now and what does history say well

going back to 1928 the first 15 days

have been incredible and I did the math

uh here's where we are right now so if

we look at uh if we look at U month

today I'm just going to Rattle off the

numbers fairly fast so we can just push

forward and uh talk about more stuff so

the S&P we're looking at the number

right here so S&P up by uh

3.14% whoa right how in how long it's

been 10 days whoa um NASDAQ uh 5% 4.98

and then chips whoa 7.89% so chips Le

Tech and Tech lead spy okay so if chips

lead tech and Tech lead spy what's going

to happen after the 17th well history

says that if we get a dip right after

we're more than 10% green year to date

at the midpoint um 80% 82% chance we're

going to be higher and it's like a lot

higher now seven or 10% whoa if we get

more than 20 records uh record closes

into the first half of the Year see see

it's just as good 80% hit ratio and uh

still pretty good 5% 99.6% we're already

at three so is this it are we going to

keep going higher so now what it really

comes down to is what happens here on

July 17th just before we look at that

I'm going to ask you for a huge favor if

you could please consider smashing that

thumbs up subscribing to the channel

that would be greatly greatly

appreciated so what we've been talking

about is that in the in the last three

months again after the quarter is over

now we want to see that rotation start

to happen that's why I'm focusing on the

weekly chart here but now let me show

you something different because um with

a lot of these charts really starting to

coil up and uh kudos to Andrew who

pointed that out today along with cat in

our group um these charts are not really

doing anything so if we look here to

like the daily chart man nothing Burger

on iwm look at RSP big old nothing

burger right markets continuing to blast

off and these things are doing nothing

so if the Market's doing this but a lot

of groups are not participating why

could that be I've mentioned it in a

previous video but I'll go through it

right now if rates don't go down it

means sorry so we don't need the market

to sorry we don't need rates to go down

for the rally to continue for the S&P

what we need Ray cuts for is for the

market to broaden out so that is what I

think is important that's what Jerome

Powell talked about today the path for

us to get to Cuts so the market is

getting narrow and we can see that by

looking at something else like xlg which

just looks at the top 50 companies in

the S&P right the top 50 the top 10% so

these stocks are doing the same thing as

S&P right Mega big up so it's not just

the Magnificent 7 it's just a theme of

the biggest companies are working people

are scared it's why they're raising even

more money to put them at into money

market funds uh but the biggest

companies are still booming so let's

look here what happens after the 18th

well Netflix reports and as of right now

it's a whisper beat we know that

guidance matters we know that being at

all-time high matters but Tesla's up

next as of what I can find right now and

that would be a Beat so Tesla would

report a beat on July 23rd and I think

elon's going to be a little bit excited

why he's got the robo taxi and stuff so

I think he's gonna pump himself up then

we look over here to meta right cool

sailing here for Mark Zuckerberg right

Born in the USA or born in America here

we go right that's a pretty nice speat

it's like 10 per. so do we have to go

lower after the 17th well sell and Mayan

go away did we go lower in May no we did

not right little dip Boop right Nike

Swoosh right check mark up so no we

don't have to do anything history is a

guide but we want to be receptive to

what could be coming as catalysts these

will be the Catalyst this is big tech

and as of right now we're seeing beats

across the board so drone Pilot's like

hey guys hold my beer time to go up I'm

giving you the thumbs up why hey

everything looks good and uh this is

incredible so yesterday after only one

day we basically hit both my target so

I'm very happy with this because no one

one believed it coming to here and a lot

of people don't think there's upside to

the market why they're raising money so

where can we go well we can definitely

go higher my original Target was 6200 so

hey let's move the uh like we're playing

football right we're going to move the

uh move the uh um whatever you call it

we're gon to move the yards right there

we go let's move the goalpost why man

we're just starting to get back in greed

right the party's not even started and

if we look here to data for tomorrow

we're looking for 3.1 on Headline CPI I

think that's going to be bullish so with

that said thank you for tuning in maybe

you want to subscribe on the left or

hang out with me at 9:15 a.m. tomorrow

thanks so much