Stock Market Volatility Breackout [SP500, QQQ, Tesla, ARKK, BITCOIN]

In this article we cover everything to do with the stock crypto and commodities markets in what has been a wild 24 hours of price action every market seems to be selling off and there's a lot of reasons why inflation the highest in 40 years the fed, sbi share price, coming out and accidentally saying some stuff that the market didn't like and then on top of that we now look towards the next.

Big news events will the market start to crash stay tuned to find out more well it's the 10th of february 2022 the market's closed and it looks like we've got a bit of a bloodbath on our hands and let's take a look at some of the deep things that wall street was doing throughout the session we will be covering off on some deep dives into the cpi then we'll be talking about some of the key indicators that we're looking at including interest rates and then going, Nifty share price.

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Through stocks indices and of course cryptos and commodities let's quickly start with what happened to the big stocks though apple down 2.36 percent microsoft all the big tech stocks and even tesla struggling with that 945 level that we've been discussing in some detail here on the channel what was more interesting was the rally we saw in the morning so the market news came out 8 30 a.m new york time then the market opened and it actually rallied off its base and

Almost went positive this is a classic wall street trap i don't know how many times we need to reiterate it but the first hour is always retail in in terms of the way that everybody's trading and what ends up happening is there are a lot of reactionary trades that you can make based on traps that are set here it certainly did happen and all of those gains were shortly wiped off with the market selling off into the close and the markets being down as much as two.

How did the Dow Jones perform today?

And a half percent at one point there for the Nasdaq but the full story comes down when we take a look at the sectors things like jets which have been following heavily here actually they did okay but semi-conductors were down three percent technology down two point six one percent also reits down two point eight five percent so that's real estate going down the interesting one for me though was utilities down two and a half percent often seen as a bit of a

Defensive sector it was getting bashed around and a lot of this comes down to this cpi result let's take a look at that in some detail now point six percent of course up from where they expect and it now gives you an index of seven and a half percent for the 12 months ending january that is the largest 12 month increase since the period ending february 1982. yeah 40 years ago was the last time we saw inflation like this and when we take a

Look at the inflation numbers it's pretty much across the board it's everywhere it's like a almost like a contagion when you look at it this way things like of course electricity energy services up 2.9 a pretty big number there and we had of course a big big rise in things like fuel which we expect because u.s oil if you've been trading it or even watching the market you knew they'd gone up a lot food increase as well as something.

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That's a little bit scary because everybody it's a basic necessity and when you see these costs going up obviously you need to look at okay what's the monetary policy going to do about these here's where the market got scared and it was the fed bullard's comments he says does not think that a half a point rate hike really helps us wow so in an interview that's not only saying okay cool we can go hard but we also don't think it does anything and

The markets have priced it in so in the previous video that we did we talked about a 50 basis point rate hike that we expect to see coming into the march period it's now being basically 100 priced in so that is two rate hikes for march the market expects it if it isn't like that well there could be a lot of volatility but it is priced into the charts and we saw a huge spike across all of the yields and everything was going crazy and we'll take a look at.

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That very soon but i still want to bring us back to the data just quickly we've reported on this one in previous videos we've talked about midterm election years and the fact that this is a very big year because it's not just a midterm election year but it's also a year that we're seeing rate hikes and obviously seeing some instability in the markets they're not notoriously good years you'll notice here if we take 2018 2014 and what we've got so far it's

Basically pointing to it starts and it ends at the same point but the fight in between can be extreme and i think it's going to symbolize really more or the similarities are going to be there with 2018 a sell-off in the first quarter followed by some form of rally because the market will be looking 12 to 18 months in front and it'll think some things might be sorted and then the reality might come back to bite and another sell-off near.

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The end of the year that's what's happened every other time it makes sense you've also got the instability of the midterms around this point so i think this is one of the really big characteristics of this year it's a traders year you'll be able to invest in quality stocks you'll be able to find good price but just never lose sight of the facts and these go back to 1950 as well yes things might be different but at the same time stats do hold up to a

Degree and what it's been telling us the whole time is this is going to be a traders year we always knew it up down and all around lots and lots of volatility potential bigger selling here in the first quarter coming into that 50 basis point rate hike and then maybe some stability for a little while until we get some extra sell-off pressure the big thing i think that we need to watch though is whether we see something happen at the end of,

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The year if we're sitting at 20 down or 15 down in markets or even 10 and you see a turnaround the stats would say come q4 into q1 of 2023 we might get a really really big turnaround let's talk about earnings it's not really a fundamental problem here i mean beat rate is still incredibly high this is off the street's expectations beat 645 misses 223 all right well it's about time we got into the charts and let's begin here with the vix the volatility

Index or the fear index as many people call it we got a bounce off 20. now we kind of expected this to actually happen either way if you were trading the vix even if the result was let's say positive in the market went up remember the vix can still spike of volatility itself whether it's positive or negative it just tends to go with negative so it was a pretty good chance that it was going to go up it certainly did you got a nice spike of around 20 on this one

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And if the market continues to make new lows and we'll show you some of the key levels today in the video then we expect this to go quite a lot higher the vix will probably spike even further based on that let's take a look at some of the things that are freaking out the market right now are 1.6 percent yeah you heard that 1.6 percent two-year that's jumped from 1.35 yesterday this is a big jump in yields and it's not just in this i mean

It's over all of them and one of the key factors that many people look at which is the 10-year yield that's gone over two percent to scroll back and just to show the reality of how important that is take a look at this we haven't seen these numbers for a while now and we know this was a critical level everyone that i was talking to in the industry was mentioning this level so this is a huge crack here we've

Seen times where yields have gone higher eg 2017 to 2018 and then they started rate cutting and i kind of expect this is maybe the scenario we end up seeing from the fed maybe they go like lots and lots and lots of rate hikes and then they end up having to cut a bit to try to stabilize the economy they did it over here obviously there was other reasons as well maybe that's something that does occur but either way two percent plus is a big deal and now we

Look to the price action of the qqq so the Nasdaq the s p 500 to show us whether this market is going to react negatively towards that one of the key things that you'll always be looking at bring back the two-year go back to the one-hour chart and if this or daily chart if this particularly turns around and we start to see this actually lowering it could be a sign that the temporary bottom is in so just remember the two year is super important now what

Did this end up doing to the market well it caused the dollar index to spike relatively hard and it actually put pressure on gold versus us dollar as well which we'll take a look at soon and we got here that 95 80 level being put under pressure no close above it yet but certainly a significant zone that we talked about in the previous session gold also ramped and then sold off and same with silver it got above the 1830 it then sold straight off back into that

Zone and now it's holding around where previous resistances might act as support so watch gold but it'll be a little bit weird because really when you're trading gold right now some of the better trades for gold are going to be in the cross currencies so this is when you go and look at things like gold versus yen or gold versus pound gold versus euro that's going to be where some of the better trades are just because of the strength

Of the us dollar possibly coming out of this new rate hike kind of scenario let's move over to u.s oil still in the middle of nowhere we won't spend much time on this long leg doji high low open close we know that means indecision it may be a little bit of reprieve for the markets as well if oil starts to drop off a bit the biggest indicator that it might do that is really just its length away from the 20 moving average it's so far away from that and that is

The big issue when you move away from the mean it means that eventually you've got to go touch that and that can mean price stagnation for some period here let's talk about tesla stocks were moving hard and tesla was one that has actually had a terrible week when you think about it it had the hanging man it had the rejection candle had another rejection a long leg doji which we reported on and probably a very good day trade if you

Were shorting off on the market because whether you were shorting the qqq the s p or anything in the open after it rallied to those resistances they were all very tight stop-loss style trades you may have only had to have the stop-loss oak here and of course by the end of the session we ended up seeing a big decline in the markets part of this rally i believe was probably just people that were shorting covering taking profit and that was

Probably why we saw that small rally near the end of the day so what's next for tesla well of course any break of 950 is going to be a huge deal to the upside if that is possible and for the negative side this is a bad looking candle so if we continue down which we expect to probably do so hit around that 880 this is going to be where we find support now there might be some buyers at least temporarily but if this level is closed below expect tesla to move to

800. i don't think that's going to happen in the friday session there are a lot of reasons why and a lot of it has to do with options and where they're expiring on the spy as well which we'll take a look at soon but yeah tesla certainly moving quite a lot let's take a look at arc what was happening there well arc was moving and it moved to the downside another rejection candle off the 20 moving average it just shows you why it's so

Important to wait for confirmation when you're trying to get breakouts breakouts are probably one of the hardest trades in some ways because they're so often misinterpreted and there's so many fake outs as we call them in this particular type of market the trend line held we ended up getting the sell-off directly off that and of course now we have a shooting star style candle a new low on these stocks in the next session could land lend itself to quite a lot of

Shorting coming into the market and it's tough to short this but certainly that's what this chart is telling us no buying yet here or no strong buying on the mid on the long term for the arc style stocks let's move over to microsoft now this is a stock that we always see as being pretty positive in the markets two things are happening here we've got apple doing something similar that rally that happened off the great earnings is now coiling and consolidating and what.

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You'll notice is that microsoft is showing this type of pattern where if it weakens through here all of a sudden we're breaking that trend line that's been holding now for such a long period of time and we could potentially be looking at some serious shorts because remember here this trend line held up and yes we had the earnings which put pressure on it but this will be the first time it just floats through plus

The daily 200 moving average apple's the same double top formation here very possible weakness coming through the next market all of a sudden we see apple selling off these are the two big stocks in the market they are showing bearish signs they're not exactly saying hey yeah we're gonna go into a new long after that last 24 hours of trade and this is across most of the markets iwm just proves itself again as why it's a

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Little bit scary to trade any type of breakout on it remember s p 500 qq nasdaq they're the ones that you want to be really showing the way for the market not so much this one it rejected created a shooting star another kind of bearish sign here in the markets if it gets the follow through let's talk about the major markets though we'll start here with the qqq big rejection fill the gap that we maybe

Suspected could have happened which was that gap up and it kind of looks weak where's the next level 352 353 that is the previous resistance becoming support so if we break down this market using the nasdaq let's take a look here at the two hour and what you'll notice is that's exactly where the supports are around that 14 5 level so 14 5 if we get down here what do we expect to happen.

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For day traders they're going to be looking at it very carefully do we see lightning bolts do we see double bottom or accumulation patterns here do we see some sign that maybe we want to buy out or buy that dip certainly a valid case if it closes underneath here though we get that significant drop off to 14 000. this is what we call like a critical level it's very important how the markets react here and for the friday session it would be

Surprising to see it break this zone and again the spy will show us the way with options surprising not impossible so resistance was met gap was filled market at this stage looking negative but we clearly have on the spy the scenario both the bulls and the bears if the bulls get it ever passed here guess what you'd be wanting to buy and you'd be wanting to buy fairly heavily

Up until that 473 now that's not what the scenario is right now but the story would be incredibly significant because we have the rejection candle you'd be snapping that off and saying all of this was fear here's where participation comes in and the next zone would be up here so that's the bull case scenario we've also got the chance of this 445 area becoming like a little by again similar to the nasdaq they'll hit at the exact same time notice how the markets

Are interconnected of course they're all going to hit the key supports at exactly the same period and a close below this level so a close below this level all of a sudden exposes a big zone so that's going to be that 430 area and that's what a lot of people are going to be freaking out about double topping this zone across most of those indices and all of a sudden we close underneath and we move towards the 430. that's gonna freak a lot out and i can

Absolutely see why how it reacts to this zone will show us whether it wants to go further or not and like we always say when the vix is above 20 we need to be fast we need to be nimble and we need to be quick have your take profits have your stop losses it's a day by day hour by hour type of trading environment at this stage algorithms are everywhere and that's why it's so fast let's take a look at the options and why we kind of suspect we have some suspicions over

Whether the market can actually go any lower than that support during the friday session one of the big reasons is because there's so many puts and there's a lot of puts specifically around that 440 so we think 440 is going to be a big zone and this was taken from the wednesday session let's have a look what happened during the thursday session a lot of calls were opened and a lot of puts were opened and the puts specifically were targeting around

That 445 440. again we go back to the spy what was it telling us it was telling us that this is the zone that we expect to find some form of support so the perfect thing for market makers right now would be actually to close it right around here and if they could do that for the friday session believe me they're happy and they're getting the lobster lunch on saturday

They're getting the bonus because they've done well at stealing everybody's money for the week that would be pretty nasty but it looks like the most likely scenario and we've been reporting on that most of this week keeping it in this range is the most profitable thing to do at this stage let's move over to the crypto markets all the alts really got a lot of hammering put on them alts suffered worse than bitcoin or ethereum the two

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Big ones held up surprisingly well and 46 000 this red box here continues to be the big problem you'll see the sell-off it came with the rest of the markets the nasdaq seems to be kind of harmonious with bitcoin here we see the resistances we obviously do not want it underneath this long leg doji over here and if it does get underneath the 50 exponential moving average the blue line on the daily which is sitting around forty two thousand eight hundred forty three

Thousand you'd have to think that bitcoin is going back down at this stage it actually looks better than a lot of the markets do because it's holding around this area and the bull case is just anything above 46. fantastic the bulls are back and this market can be separated from the rest it's the same with ethereum testing around 3000 psychological number obviously a break below would be negative for the markets in this case so the market looks ahead

Now to next week and i think a lot of this comes down to we've got ppi on tuesday which is 8 30 a.m but the big one is going to be this and unfortunately this is the market we're in right now news news news news news all news is now important that's red and fomc meeting minutes 2 p.m next week on wednesday at 2 p.m new york time so this will be the important one definitely stay tuned here on the website and make sure you subscribe smash.

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That like button if you enjoyed this article and we'll be reporting on all of this and more it's an exciting time in the markets but also a little bit scary for some so remember be fast be quick and on top of that if you're making investment decisions have your conviction either way bye for now