저자: Kevin · 외국인
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2022년 3월 증시 약세 속에서 진행자는 경기순환주 대비 방어주 쏠림, 원자재 쏠림 등 혼잡 거래의 위험을 경고하고 트레일링 스톱 설정을 권했다. 인플레이션 지표(CPI 지연 반영, 중고차·렌트 상승)와 Fed의 긴축 번복 가능성을 우려하며 현 시점에서 전액 투자는 피하고 콜 매수보다 풋 매도·콜 매도를 선호한다고 밝혔다. 원유는 고점 후 하락 가능성을 언급했다.
다듬은 글
to avoid in the stock market provide an inflation update and we'll talk about the Federal Reserve as well as upcoming catalysts this video is brought To Us by FTX which is linked down below and you can learn more about them and sign up for free cryptocurrency when you sign up for FTX okay so first listen to some of these quotes here from the suits stocks have had an epically bad start to the year that's those are the suits now calling it epically bad blue chips are technically in a correction that was on the front page of the Wall Street Journal today throughout the first 44 trading days of this year the Dao and spy had have had their worst year ever there's I'm sorry their second worst year ever in 123 years so second worst year ever out of 123.
that makes this a pretty special year you've got better mortgage the company that was famous for having their CEO fire like a thousand people on a zoom caller or multiple thousands of people on a zoom call just fired an additional 3 000 people this is happening at the same time as Banks and financials are just getting wrecked which is ironic because a lot of people are like oh but Banks and financials should be doing better during an interest rate hiking period right not necessarily because Banks and financials really like transactions and transactions go down in an interest rate hiking environment it used to be that Banks like the interest rate don't get me wrong they still do to some extent but lower transactions lower brokerage volumes killing financials right now and so maybe it's no surprise that credit card companies are starting to raise their fees for transactions we'll talk about that towards the end of the video and then when we look at some of the numbers that we've got out here Brent crude right now at 128.78 the 10-year treasury at 1 1.84 percent up a little bit from a uh yesterday and the 10-2 spread now down under 25 basis points we're at a spread of 23.88 for the 10-2 this is the lowest level that we have been and since the inversion of the yield curve in 2019 and remember anytime we've had an inversion of the 10 2 we tend to have a recession within 18 months thereafter now yesterday in my interview with Kevin O'Leary he says don't worry it has to stay inverted for a while but that part is up to debate to see how long it has to stay inverted so we'll see five year Break Even which is a measure of the potential future expectations for inflation just broke the highest level again it has been going straight up day after freaking day and you don't even want to look at this chart because it's gross look at this for a moment here it is at 3.51 it's absolutely crazy so the five-year Break Even is crazy and inflation is going nuts but we've got to talk talk about how to position for the stock market what to avoid and an inflation update as well as Catalyst update towards the end of the video so right now we know that cyclicals like financials energy materials Industrials and consumer discretionaries are pricing in at their lowest levels relative to defensives which are utilities consumer staples and real estate where the lowest levels since November of 2020 which is worth noting November of 2020 remember what happened right before November of 2020 in October of 2020 we had a lot of fear in the market we had fear that getting a new president was going to lead the market to fall that there was either going to be election uncertainty or that the results of the election would be uncertain and so we had a lot of fear in the market and anytime we get this fear in the market we see a move over to things like utilities consumer staples and real estate and we've even got a chart for this to kind of look at some of the difference here so let's go ahead and pull up that chart just to see the this is the cyclical to defensive chart right here and the more cyclical stocks become expensive the lower this this ratio is right the difference between the two here so right now anytime we see this line go down it means defensive stocks are taking a little bit of a stronger positioning and you can see that fall obviously uh over here this was our uh you know going mostly defensive uh time frame where we break under a hundred in terms of a ratio this is where people are more in defensives than they are in cyclicals which again cyclicals being like consumer discretion areas which could be like your etsy's or your Amazon right and real estate being on the other side being a defensive being more like investing in reads but anyway now we're seeing that same or similar kind of fear a level that we really haven't seen since about here which was around that November of 2020 time and we really took off when fear left the market so I think the easy way to kind of conclude this this sort of chart here is anytime you see the line go down it means the market is getting more defensive every time you see the line go up it means the market is taking on more risk and so the last time we saw that sort of low point was around that election time frame when we had a lot of uncertainties in the market and so you're seeing more people maybe crowd those defensive sectors right now and one of the big takeaways of the video here that I want to talk about is stock crowding because stock crowding in my opinion is generally what you want to avoid and so that could potentially mean that maybe their opportunity opportunities to buy the dip on some of those uncrowded positions and stay away from the more crowded positions and I'll show you a chart as to why but first what are some things that we know are really really crowded right now well in this particular chart we just saw defensive so we're getting crowded we also know that Commodities are going to the Moon I mean everybody's talking about how not only has nickel like 3xed over the past year and a half but that wheat's gonna keep going to the Moon that oil is going to keep going to the Moon we're getting these outlandish bets that oil is going to go from 128 a barrel to 200 a barrel or 185 dollars a barrel and that's crowding a lot of folks into these energy stocks especially uh like non-diversified ETFs like XLE or people are following oxy or Warren Buffett into oxy which Carl icann just sold out of took a billion dollar profit on it so he's getting out but Buffett and a lot of retail are flowing in we saw yesterday 340 million dollars of retail money go straight into energy that was the biggest retail buying sector out of all retail sale buys yesterday yesterday retail bought 1.5 billion dollars worth of stocks and so you're seeing a lot of money going into energy and uh and commodities right now and so they're becoming pretty crowded and one of the big lessons that you always want to remember when it comes to the stock market is take a look at this chart okay this this is a critical one right here it's this popular does not equal profitable anytime you get crowded stocks you tend to see an underperformance and that's literally what we've seen so far year to date this is a year-to-date performance stock of uh retail sentiment indices they threw Arc in here as the Blue Line the crowded fund index the Hedge fund's most crowded stocks all since December 31st and what you can see is this massive underperformance of these crowded plays so you see the s p is the top line that's down about 12 since December 31.
you see the crowded fund index and the hedge fund most crowded trades these are down to about 83 or 80 so basically down 17 to 20 percent and then of course arcs down there about down 39 along with the retail sentiment basket from Goldman Sachs down about 32 percent so you really see that if you're in crowded trades you tend to underperform and so one one of the warnings that I have for the market is that even though it's popular to get into those defensive stocks right now to get into the xle's the energies the wheat basket uh and and some of these these uh defensives one of the things to be cautious of is the more crowded the trades become the harder they can fall so be careful it's kind of just like that Meme momentum right that the more we go up the harder we can go uh go down and the faster we can go down and so one of the things that I advocate for is setting those trailing stops so if you're investing in these set those trailing stops four or five percent on some of the more crowded trades so that way in the event there's a U-turn you're a little bit insulated now the other thing that I wanted to talk about was uh inflation how obviously we're seeing a big move uh and a lot of fear that inflation is going to be a lot more long-lasting and the worst case scenario is that inflation ends up becoming anchored because when inflation expectations become anchored then the Federal Reserve has to work to unanchor them right now Jerome Powell is really proud because he says that they have done a very good job at keeping inflation anchored low and that's because when we look at things like indices and inflation expectations we see that consumers expect inflation to come down like half over the next year as long as that stays low the FED might not have to pull vocorus but we have these massive fears that we could end up in a situation where uh used car prices keep going up they're up 40.5 percent uh over the last year used cars make up 5.5 percent of CPI new cars are up 4.5 sorry 12.5 percent over the last year they make up 4.5 percent of CPI we know that uh rent makes up 9.6 of CPI and housing in total makes up 39 of CPI and this lags so even if we see car prices come down a bit if we just see rents move up the way they should because they use the stupid owner's equivalent rents and they super lag on CPI well then we could end up seeing inflation really move up substantially over the next few months especially as oil prices drive up inflation remember if we hit 150 a barrel we would expect CPI to be two percent higher solely because of higher input costs from oil which is a lot and so this does still create this downside risk for for the Federal Reserve and we've got the CPI report coming out in two days but I just want to urge a caution that that CPI report isn't really going to give us the data that we need yet whether we get a Miss on Thursday or we get a beat on Thursday doesn't really matter because we want to know what inflation is not from a snapshot from February but from March and April and May that's what we want to look at because remember how messed up it is how in terms of how they measure inflation for volatile things like gas prices well in CPI what they'll do is they'll say okay here's our CPI for February let's say the expectation right now is that CPI is going to come in at 7.8 percent and the month over month is expected to come in at 0.8 percent minus food and energy 0.5 percent so write these things down you should have these written down by the way these are the expectations so 0.5 uh month over month without food and energy so these are the expectations this is annualized 9.6 which just means we multiply by 12 right this annualized is six percent again multiplying by 12.
so these are the expectations but whether we get a miss really matter in my opinion because why well the energy shock isn't really going to be fully priced into this February CPI report because the way they'll look at February is they won't look at Feb 28th and say okay oil was let's say a hundred dollars per barrel let's include that in CPI via gas prices or whatever well they'll actually do because they're not looking at oil prices anyway they're looking at gas prices but gas prices follow oil prices but anyway what they'll actually do is they'll look at what were oil prices Feb won to Feb 10.
then they'll do the same thing for approximately Feb 11 to Feb 20 and then the same thing for Feb 20 to Feb 28 and then they'll take these three little baskets right here and let's say oil prices were 90 95 and 100 well then they'll just take the average and they'll say okay cool gas prices are essentially close to uh uh 95.
okay sorry one sec there we go yeah so uh that that shows how CPI lags CPI lagging is a problem because it means if we end up getting like an eight percent read this time let's say when the expectation is what I say was 7.8 we get an 8 read fine probably gonna end up being worse next month so I actually think April uh for the CPI release we get in April that's probably the one that's going to create more help hard palpitations than this CPI release so I'm not hanging my hat much on the CPI release I'm more concerned about that longer term because if we don't see that inflection point down there's still a massive risk that the FED ends up you turning ugly on us now the easiest way in my opinion to understand how the fed's kind of been playing us is to think about it like this so let's say that going sort of down here is them supporting the economy and being being like helpful to stocks right to being helpful to us right so the fed's kind of been playing down the fears of inflation forever calling inflation transitory well in December we got this really ugly shock where all of a sudden they're like uh-uh big U-turn oh crap inflation's Horrible inflation's no longer transitory we have to taper faster we have to taper more aggressively this is terrible right absolutely terrible for uh for stocks and this is why we saw that pain in December and January especially when those minutes came out in January well because of the crisis in Ukraine we've kind of seen a little bit of a softening in the FED stance but I don't want to say they've kind of that they've turned super dovish I think they've more gone on to pause here and there's a real concern about them going into this pause mode because we're going to get this data here for uh Feb CPI you know then we're going to have the fomc meeting on the 16th so this is on the 10th and then we're gonna get the uh March CPI in April Marge CPI we'll just write April right here and it's entirely possible that if we keep seeing inflation come in with these terrible reports that the federal actually just sort of be like patient for the time being we'll see these over and over again 25 basis point hikes over and over and over and over again but if CPI continues to come in high it's still entirely possible that the FED could end up having to vote for us and they come in with some crazy interest rate increase where all of a sudden they come in with like 100 basis point increase or 75 basis or 50 basis point increase and then they rug pull us so this is still very much a reality or potential for 2022 and this is why the the two big things that I want to really address in this video are number one be careful about those really crowded trades but number two we're not in the clear just because this CPI report on Thursday comes in ad expectations or below or above stand by like it I don't think we're in this market where we want to be all in just yet at the same time you're still seeing companies raise prices I mean just today we saw Apple raise the price of the iPhone SE by seven and a half percent also according to the Wall Street Journal visa and MasterCard are now raising their merchant fees these are the fees that businesses have to pay uh they don't really they're sort of invisible to the consumer because we swipe our card we don't really see it but they're sort of the back end fees and uh both of them was visa and MasterCard are raising their fees in 2021 just for example Merchants paid 55.4 billion dollars in merchant fees and credit card fees these fees by the way lead to like huge profit margins for visa and MasterCard there's a reason they bring like 40 to 50 percent of the bottom line a lot of it has to do with these fees and so apparently these fee increases will affect uh mostly online purchases though it looks like really all fees are going to be increased with the exception of some of those on Lower businesses with Visa who have less less than 250 000 in annual consumer credit card volume which that's a really low number I mean if you're only selling 250 dollars in Goods uh that's that's not a lot for any business so that's like the the micro businesses there are getting a little bit of support but otherwise those fees are going up so all across the board you're seeing companies and of course every earnings report that we've looked into all across the board you're still seeing price increases those have not all been reflected yet in CPI so I think we have two massive warnings uh and of course shout out again to FTX before I recap those two FTX is the awesome way for you to use a trading views technical indicators at the same time as being able to trade cryptocurrencies I have this up every single day on my computer and you should as well check out FTX via the link down below but the big takeaway here is twofolded the number one big takeaway in my opinion is be careful about those crowded trades the ones that seem really sexy the one everybody's going into you know the Palladium or the nickel or wheat and oil related trades and those are great for making quick money momentum meme style but always remember to set yourself a stop loss so that way when and if that trade reverses you've got some protection I do think that buying Commodities could be a hedge against maybe your let's say Tech portfolio or portion of your portfolio or maybe even the indices in general because the more we see oil go up for example the more the spy and NASDAQ seem to come underweight so it's entirely possible that those could be a hedge but again just set your limits so that way you're not part of a big sort of uh cycle to the downside in these I mean there's a reason the CEO of uh Occidental Petroleum today mentioned that we're not planning on significantly increasing our production because we're just going to take the extra cash we're making now for more expensive oil and we're going to use it to pay our shareholders when the oil Market comes down again like when the CEO of the oil companies are telling you this it's because they know these prices don't last they come up and then they fall they come up and then they fall it's all a game so just remember that if you're making bets on these and then uh another thing obviously to keep in mind is that fed rug pull that we talked about be careful because there are a lot of things that could still lead them to rug pull us there's also talk and I thought this was sort of just an interesting little bonus note one of uh the individuals who was interviewed on CNBC this morning they mentioned that we might actually walk into what's being referred to as a sentiment recession which is if the global economy starts getting too nervous about uh the outcome of potentially war with Russia in well certainly war with Russia and Ukraine but also potentially war with the European Union Nations or NATO then there could be a quote sentiment recession where you see people purposefully start pairing back their borrowing which you're already seeing in China and increase their savings and then you get those negative coughs where all of a sudden you actually start seeing negative year-over-year comps and that's your start to a potential recession which could be why that 10-2 yield curve has also Fallen but best case scenario we could get over these hiccups these shorter term catalysts inflation Catalyst Russia Catalyst we just go back to the moon but until some of these catalysts get cleared I I'm not super impatient in trying to time my entries but I'm definitely entering when there's when there are big fear days so uh but again still not all in certainly not yoloing onto call options more interested in selling calls selling puts and staying out of margin and debt all right that's that for that video FTX by the link down below and we'll see in the next one bye
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