The Federal Reserve is Destroying Everything.

There's Something Brewing and I don't

know exactly what it is but the market

is behaving Strangely I have some

opinions as to what's going on but some

folks are saying that the market is

crashing

inside out kind of like this is maybe a

weird analogy but kind of like if you

ever gardened and had aphids suck the

life out of your plants there apparently

these like killer wasps that'll come

Land by the aphid stab the aphid inject

a baby into the aphid the baby wasp then

grows inside of the aphid eating the

aphid from the inside out until all of a

sudden explosion sorry for the

graphic descriptive visual there

but somebody sent me a message and

they're like Kevin there's this growing

Divergence between the equal weighted

S&P 500 and the market cap weighted S&P

500

basically this is a way of saying that

like Nvidia is going up and everything

else is going

down there are two potential ways to

look at this one you could say the

true economic reaction to what happened

this week datawise isn't actually

broadly being seen instead we're just

sort of writing it off as oh it's a it's

a risk off selloff that's what we had in

the market today now why would I say

that mind you okay well mostly because

bitcoin's down about 3,000 bucks over

the last couple days so shorting Bitcoin

made sense on a day like today uh we'll

talk about that strategically in a

moment uh and you look at the QQQ you

actually see it ended up half a

percentage point but look at the downs

and they're pretty remarkable on the

downside you've got sun power down

99.82% % you've got Embraer out of

nowhere is down 5'7 enas is down almost

4% vertiv one of those derivatives of uh

uh server installs down 4% AMC down four

C3 AI is down four Sofi is down five

redfin's down four Robin Hood's down

three uh Tesla down two and a half after

the shareholder approval

vote all of these stocks are reminiscent

of generally risk on positions so when

everybody feels you for it and interest

rates are falling usually risk on

rallies well we had a great CPI report a

great PPI report and quite frankly we

should be assuming that the Federal

Reserve is more interested in pricing in

some more rate Cuts in fact markets

right now for the first time that I've

seen really since about January of this

year have started to price in more than

two rate cuts by December now that's

really interesting because previously we

went all the way down to like 1.14 at

one point we were barely pricing in rate

Cuts anymore uh and now we're back to

over

two this comes after the data we get but

an oddly hawkish Fed so how do we put

all of this together we've got this

Divergence in the S&P we've got this

Tesla uh weird activity we've got

Bitcoin we've got the sovereign debt

crisis in France we've got a lot of a

mess going on and a lot of folks are

legitimately wondering Kevin this is

strange help us make sense of this and

so while I don't know as uh you know an

expert exactly what is going on I'm

going to do my best I'm going to mention

that uh we are doing a quick one day

just because there's so many folks to

process here one day extension on the

coupon code uh that we expired this

Friday or Wednesday on CPI fed day I

didn't post yesterday I've been

overwhelmed sorry there's a lot going on

this is my p&l in the stocks and sight

group for this week which is really

exciting that's realiz p&l but it should

have been higher and no guarantees

obviously that my future trading results

which I send alerts for to those of you

in the stocks and sight group uh will

will always be profitable I actually can

guarantee that it won't be you could

lose a lot of money but my goal is to

provide perspectives and one of the

reasons I bring this up is I didn't

actually make as much money as I thought

I would on Tesla this week and and so

I'm very surprised by that because the

shareholder meeting was supposed to be a

giant negative Catalyst off of Tesla

shareholders backs so let's break this

down one by one first of all Tesla

Catalyst supposed to be really positive

stock down odd why margins have bottomed

I think sales are bottoming for the

company 2024 will be your flattening

period and you'll be off to the races

with growth again quite frankly look

making Tesla's valuation ironically look

cheap you can value them at a 1.67 Peg

and as long as you deliver about 3

million Vehicles by 2026 you know a

little more than two and a half years

away you're at a $300 stock really just

pricing in a solid margin and none of

the other stuff Insurance FSD I just use

a little bit of a higher margin to price

it in Optimus you don't have to go that

nitty-gritty and try to price in Elon

saying we're going to go to a 3050

trillion company you don't even have to

do that to get a nice return between now

and 2026 hopefully though but why then

if the negative catalyst is gone and

I'll play my interview with Yahoo

finance at the end of this where I

talked about

Tesla why then would Tesla sell off well

it's a symptom not of Tesla but off of

this riskof attitude that's going on and

it's an attitude that is

amplifying central banks are about to

break something see when we lose 695,000

full-time jobs and gain back 284,000

part-time jobs we start wondering maybe

the FED has gone too far and they don't

even realize it

yet and I think that is the Crux of the

problem we're facing now it's not the

sovereign debt crisis in France though

the sovereign debt crisis in France

which quick explanation of that France

has a lot of debt to GDP like over 130%

I believe it's either 115 or over 130

the elections in France have led to the

belief that the country is either going

to default on some of its debt or it's

going to take on a lot more debt and

have a a less stable fiscal house

basically you know cut taxes lower

revenues increase expens what whatever

the assumptions are you're seeing

widening spreads in the French bond

market for for these compared to other

countries that's a problem because some

people view that as Maybe creating a

liquidity problem for an indebted

country and if a country can't get

access to money things start breaking

you start getting all of a sudden maybe

the European Union is going to have to

do something dramatic to try to save

France but then it Stokes inflation yet

who

knows all that like all these big words

and noise

aside the market is looking at things

going hm cracks in the jobs Market

cracks in people people's personal

finance cracks in France

H this is all symptomatic banking crisis

right office real estate this is all

symptomatic of a fed that's gone too

far and the FED told us to our face hey

you know we see the balance of risks

between going too far and doing too

little oh really you see those Balance

risks

as so clear that you would rather give

us a hawkish SCP than revise your SCP

incorporating the last amount of data so

that you can actually prove your data

dependent how can you possibly say your

data dependent when you say yeah this

new data came out but we generally just

don't revise our opinion after the data

comes out well which is it are you data

dependent or are you not data dependent

so what you end up with is a market that

goes holy fuk we have a Fed that is so

delusioned or or delusional or deluded

that they think they're balancing risks

when we're looking around going look at

all of the problems we're seeing and so

what you really have is a riskof selloff

that's coming as a result

of the federal reserve's summary of

economic projection

on Wednesday remember folks one of the

most critical pieces of it was the FED

telling us hey long-term we think rates

are going to be higher oh and shortterm

we think rates are going to be higher in

two places they ignored data and said

rates are going to be higher for longer

what so you're telling us on one hand

you're going to be data dependent but

then when cracks are starting to form

and data is coming in better you're not

being data dependent you're sticking

with that strategy so what sells off

risk assets okay risk assets are

interest rate sensitive stocks smaller

cap stocks growth stocks where the

growth is a little more speculative

Nvidia let's be clear is a growth

stock but at least right now the market

values it as non speculative growth

people like data centers uh uh based on

gpus

and Cuda will be the

future all Nvidia right whereas with

electric vehicles you have Elon

badman eeve may not be the future China

China China whatever right those are

those are sort of countervailing factors

that you don't actually have at Nvidia

and you are still going through a growth

bottoming process in Tesla it hasn't

bottomed out yet growth so I think it

has mind you but at least in the data we

haven't seen it uh or in earnings we

haven't seen it yet uh that's mostly

because I think this interest rate offer

is actually very good from Tesla and I

think it's working very well but that's

not going to eliminate the concerns that

the broader Market has so it's much

easier to go okay I want growth what am

I going to invest in well Nvidia is

going up so let's buy more Nvidia okay

but what about Tesla the growth stock oh

the growth stock that hasn't been

growing its stock price for the last 3

years no thanks that's an overvalued car

company that's sort of like your general

like perspective of the market so and I

don't align with that now I'm not always

right but I personally think at some

point I don't know when I haven't sold

all my Nvidia I've certainly trimmed my

Nvidia at these levels and I'm not

actively increasing my allocation to

Nvidia uh but at some point we are and

we're already starting to see it mind

you we actually talked to course M oh I

haven't announced that here on the

channel yet oo I might have to I I have

to do a separate video on that but we

did a course member uh live stream uh a

couple days ago and what we did I think

it was actually yesterday morning what

we did is we looked at Invidia server

availability for h100s at under $4 and

the trend is straight up in English

these servers are becoming more and more

cheap which increases the break even

costs if you're going to build a data

center which makes it less desirable for

you to buy data center chips which

increases the chance that orders are

going to slow for NVIDIA sooner so like

let me rephrase that if Nvidia is going

to crash the first thing you would see

is more available server

time separately we are starting to see

more available server time at lower

prices okay see where I'm going with

that okay now with that uh I suppose it

should I really should just pull up that

screeny really quick let me pull it up

because this is the kind of stuff I

always like to give a sort of early

perspective on uh to course members and

and again I I'm I'm sorry I don't want

to seem flippant with like the

expiration the net price after a coupon

code goes up over time that's very very

simple we're just doing a quick thing

today to catch up on people who still

want in before we remove the coupon code

uh completely uh and and then all of a

sudden it's substantially more expensive

to get it so if you want lifetime access

get in before 11:59 tonight okay uh and

then everybody's off for the weekend

which is great but take a look at this

uh this is the chart that I posted in

Discord ignore all this red Oh wrong

thing uh H okay hold on a sec uh I'm

going to post in just a moment this

chart in Discord or that I posted in

Discord I want you to ignore for a

moment all of the red that's all like

sort of my note-taking and theorizing

but just know percent of minutes an hour

an hour with on demand availability for

h100s and and the trend is is clearly up

I added the red line but you can see the

trend is clearly clearly up all the

other stuff is more like course member

notes and stuff I talked about uh now

this is just one data point and

obviously the plural of you know one is

not uh like a guaranteed Trend so I I

could think of a more eloquent way to

say that but let's just make this very

simple the market is showing frustration

over the Federal Reserve reaction to

really good data the Market's flushing

out that wait a minute you said you're

going to be data dependent and you're

not being data dependent that pisses a

lot of people

off okay so what happens you sell off

interest rates sensitive in Risk Assets

Now what is one of the easiest risk

assets to short Bitcoin just buy

something like biti that does not make

me anti- crypto that doesn't make me

anti Bitcoin it makes me look and say if

risk assets are going to sell off what

is also going to sell off and is immune

to the fluctuations of company earnings

calls or company announcements or Nvidia

going up right like if I shorted the

cues I'd lose money today because N

Video went up so much and and the cues

are up obviously shorting Nvidia is very

very difficult I've lost money shorting

Nvidia before it's a bad idea and I've

I've told people regularly that even

though it's desirable to short it's a

very very hard stock to short until the

downtrend starts you're more likely to

get burned before you actually start

making money and that makes it a really

really hard short which is probably also

why the stock isn't going down because

nobody wants to short it because nobody

wants to get

hosed but fundamentally it should be

going down at some point I just don't

know what that is so I'm not going to

touch it so instead of shorting Nvidia I

just go short Bitcoin because it's

immune to Nvidia it's immune to

individual company idiosyncratic issues

at companies or announcements earnings

surprises whatever and it goes down when

risk assets go down if you look at the

1hour chart of BTC we are on a pretty

solid downtrend right here we keep

hitting lower lows and we're getting

lower highs pretty consistently the

trend is here this is just on the hour

chart we got a double top at

71 so uh I I I you know I don't know

that there's a hurry but if a we're

going to have a risk selloff shorting

Bitcoin and shorting

coinbase could prove profitable could

not guarantees not a guarantee not

personalized Financial advice you could

lose money I know some people ask me

that Kevin weren't you buying a bunch of

Tesla calls I was uh on

Wednesday pretty sure it was the answer

Wednesday on Wednesday it was either

Wednesday morning or Thursday morning I

can't remember it may have been Thursday

morning we did a course member live

stream and I'm like I need to get out of

my Tesla calls not because I don't

believe in Tesla and believe that this

is a good Catalyst but because the

momentum that we're seeing after the

vote has been approved is not what we

are expecting so something broader is

happening so we're going to take profits

and when I say we I mean me I should

just say I'm going to take profits I

don't TR for you if you lose money it's

your right I just provide perspective

that's all I do uh and so I closed I

don't have any Tesla calls right now

which I want Tesla calls but I'm

grateful today I didn't have any Tesla

calls cuz the darn thing crashed right

at the open like I went into this

morning with zero Tesla calls and look

at this I mean look at the lines we're

in no man's land we just crashed down to

my 82 to 183 range you know these lines

have been here for a while I didn't add

these today to be like haha see look I

have L like these lines have been here

for a while then it crashes guess to

where oh wow 178 bounce and plays

literally within this trading

range I'm actually just noticing this

right now because I didn't pay attention

to it too much today because I didn't

have calls on it today so I'm like oh

how convenient you know now in hset I'm

like it's perfect bounce bounce bounce

bounce over here bounce bounce B these

are some pretty gnarly lines uh this

purple one I think I did some random day

trade with it usually you want to pay

attention to my yellows which are like

these are pretty decent and my Blues are

usually the strongest sometimes if I

like see something intraday I'll throw a

purple down but I I need to just get rid

of those and just stick to these two

colors otherwise we're going to start

looking like the rainbow but this is

crazy and then when we fell out of that

range we couldn't get it back up we kept

getting rejected there so ta is not

fugazi it's it's pretty straight up uh

like this is what happens the reason

this happens is because a lot of people

look for similar Trends and it's sort of

self-fulfilling in that sense uh anyway

okay so so fed being pissed off is

getting priced in obviously consumer

sentiment was like poopy D doopy this

morning on the consumer sentiment

numbers and the inflation expectations

were higher but they shouldn't be

because inflation is falling unless of

course this one inflation report was

just an outlier and we're not going to

go back to bad like good inflation

reports I don't believe that but that it

is a possibility and then you have

stagflation but overall my point of view

and I'm going to play my Yahoo finance

interview here but overall there's

something going

on too many things are starting to crack

and you're starting to see the vix go up

that's your volatility index uh in fact

look at the day chart here uh yeah but

you're barely going up so this is the

weak chart on the volatility index it's

been straight down on VA on the day

chart you're pretty dang low on

volatility still but but something is

starting this is the non- average

Candlestick let me go to the 1 hour

something's starting to brew I I one

hour still it's it's too hard to really

see uh that there's anything yet I mean

all I know is the vix was up 6% today

but I wouldn't be surprised to see this

have another little leg up I mean

certainly before the election you know

stocks almost always sell off before the

election but anyway I don't know exactly

what's going on I know risk assets are

most at risk of a sell-off here there's

some weirdness going on where Nvidia and

probably honestly indexation is just

propping up the market indexation is a

problem indexation is a problem because

you just continue to allocate to stocks

that are going up um you know without

much in my opinion fundamental thought

actually zero fundamental thought in

indexation but whatever uh Apple's doing

well but not as well as I thought I

thought we're going to go over 250

pretty soon the trends started dying

within the last uh you know couple days

here now I made money on Apple but I

also had some trades that were red on

Apple uh but my net net up so look if

you want all my Buy sell alerts I send

them in my stocks and site group I send

you my thesis if my thesis is wrong I

show you like here's how I'm flipping on

it or whatever like yesterday I was

shorting coin if I didn't get stopped

out on it it would have been really good

today so I did take a little bit of it I

think I I was down like 6K or whatever

uh which is a big deal but uh you know

it would have paid out really nice ly

today but my stop loss triggered and

usually I don't set stop losses but I

was playing with this new feature on

Weeble stupid because if I kept it I

would have been up quite a good chunk

today um but that's okay would have

could have should have don't do what it

could have should have so again fed

pissed off because of the FED a lot of

cracks in the economy that the FED may

not be paying attention to therefore uh

you are getting this environment where

interest rate sensitive stocks are going

down at the same time as bond yields are

going down you're at 422 on the 10year

so it's like oh that's weird usually

when yields go down risk assets go up uh

yeah exactly and then I'm just pulling

here if we're at 422 on the 10 year and

on the 2year we are at 47 oh wow we just

inverted

more

wow 48 basis points inverted we just

went up another eight basis points we're

going deeper into inversion well that

sort of corroborates what we're saying

here uh greater risk of recession that's

what's being priced

in this this is why I haven't gone full

bull you know a couple days on Wednesday

after the FED meeting I'm like okay

these CPI numbers take me from like a 4

and 1 half to a 6 and A2 along with PPI

and and the other numbers that we're

getting but 6 and 1/2 even to seven is

still a d or C on the bull scale like

low uh

so these cracks it's just G be a matter

of time to see how bad they end up being

anyway if any of this makes you nervous

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coupon code over at kevin.com thank you

so much and that coupon code is

dotplot plot is what we're calling that

right now and uh we'll see you in the

next one thanks so much goodbye why not

advertise these things that you told us

here I feel like nobody else knows about

this we'll we'll try a little

advertising and see how it Go

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber meet Kevin always great to get

your

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