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The stock market is currently unstable, and despite a seemingly calm day in the S&Ps, the session is volatile, akin to a wild ride.
– Don highlights that the Federal Reserve’s influence on the market, termed the “FED fueled fantasy,” might be nearing its end.
– Observations from the trading session:
– The bond market didn’t rally with the market, indicating persistent pressure from bonds and interest rates.
– Oil saw a significant rise, which might destabilize the market further given its current high level.
– The US dollar remains strong, which contrasts with the market rally.
– Major tech stocks like Apple and Tesla didn’t support the rally with Apple down by 1%.
– Don reiterates concerns about major market cap stocks like Nvidia, Microsoft, Apple, and Meta, suggesting they might be in a bubble.
– The video brings attention to potential risks in big tech stocks as they have surged considerably since the COVID-19 pandemic. Comparisons are drawn to other sectors like energy and financials, which haven’t seen such drastic surges.
– Don believes that the market’s current dynamics stem from the FED’s strategies during the COVID period, including low-interest rates and significant stimulus efforts.
– He suggests that the market could experience heightened volatility and that some tech stocks might not remain as robust as they’ve been.
– Don concludes by emphasizing opportunities for traders, pointing to specific strategies and stocks, hinting at building short positions in tech stocks like Microsoft and Meta.
– His final remark suggests caution, as the era of market behavior heavily influenced by the FED might be winding down.
