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.
The FED Fueled Fantasy may be coming to an END!
