Stock Market CRASH or HUGE Reversal Next Week Is Critical!

[00:00:00] Speaker 1: on friday stocks came crashing down the nasdaq had a total range of 947 points now what happens next could determine is this an amazing buying opportunity or is this the start of a bear market today's video i'm gonna show you guys the exact levels i'm watching and i'll be trading this coming week now we're looking at how the nc's actually fared on friday we saw the sap was down at 1.82 percent we had the nasdaq down 2.86 percent and at one point during the day it was down more than four percent dow jones finished down 1.09 percent in the russell 2000 down 1.65 we look at advancing issues versus declining we can see it was overwhelmingly to the bearish side we had 70.2 percent of issues declining on the day however we look at a chart on the daily look at the spy real quick notice we came right into the zone which we identified in last week's video both of you guys are paying very close attention because we did indeed come down to a very important gamma level however if we look at the equal weight sp 500 real quick the rsp notice it's much closer to all-time highs than what we saw with the spy we measure all-time high to the closing price on friday it's only roughly 2.26 away when we compare that over here to the spy and we measure all-time high down to the closing price we're about 3.3 away so if everybody's freaking out oh my gosh the stock market is crashing it's never going to come back three percent drop is very very normal for a pullback now they quit now you might be asking mike what is all of this about well look at smh smh absolutely been getting destroyed on friday smh was down 6.98 percent then we see articles like this intel stock has the worst day since 1970 wiping out about 12 billion off the government stake now we look at intel look at that massive massive gap and if we even look from this recent high but i believe that's actually all-time high to the closing price on friday intel stock is down 53 percent well it's not just intel let's go take a look at amazon as amazon had earnings out last week as well amazon was down 1.41 but notice amazon's a little bit different on friday amazon gap down but notice it closed in the upper third of the range on friday then we come over and look at google earlier this week google had earnings out notice google had a big gap down went down a little bit more on friday but when we go ahead and we look left we are right back getting close to a prior swing point in the market now previously down here from this level we can see that google rallied up 49 and now from those highs down to the closing price on friday we see google is down roughly 31 percent now the mac the indicator does look horrible on this daily chart however what's kind of funny about this is when we look at this article right here we can actually see third quarter earnings has passed the halfway mark with 299 companies in the s&p 500 having reported of those 82 percent have beaten consensus expectations according to lseg data so with 82 percent of the s&p beating why why is the s&p down so much and is this nothing more than a trap trying to basically wash out some weaker bull players keep in mind this week we had the midterms coming up and with uncertainty in the market the market simply does not like uncertainty now we look at how the markets actually fared around midterms in the past from august 1st to elect election day the s&p 500 has only been up 1.7 three months after the elections it's been up 5.7 on average six months later 12.4 percent and in a year later it's been up 15 so again could that be leading to this is nothing more than a potential buying opportunity when we look at the fear and greed next we are almost back over into extreme fear we're right there on the borderline with the reading of 26 and we come over and look at the most recent investor sentiment survey we can actually see this week the bullishness actually stepped up from 36.9 to 37.8 we see the bears pull back a little bit from 45.8 to 41.4 and the neutral category also stepped up from 17.3 to 20.7 now if you're a trader that trades the nasdaq this week probably felt even more bearish for you however when we look at the sectors across the board look at this past week we had a majority of the sectors in the green there was really only three sectors in the red communication services technology and basic materials every other sector was in the green so you want to keep that in the back of your mind as well yes it may have felt extremely bearish however that could be your mind playing tricks on you and you could be missing a major opportunity now we come over look at this chart right here chart on the top is going to be the dow jones chart on the bottom is going to be the transportation index now we can see this past week dow jones actually went down but notice transportation index actually starting to gain a little bit of strength then we come over and we look at the spy versus hyg chart on the top is going to be the spy chart on the bottom will be hyg which is high yield bonds now normally when people are willing to take on more risk we're gonna see hyg start to go up and notice this candle that we had on friday we saw the sap gap down went way down we did see hyg go down a little bit but not a whole lot if we actually look all the way from basically the 20th of october to where we are now we've actually been going up here a little bit while the s p 500 continues to make lower highs and lower lows on a daily chart now as we get ready to actually look at the monthly charts and such i want you guys to pay very close attention right yes we may have a shooting star ish type of candle on the spy but something that's a little bit more concerning to me than that shooting star candle would be like in stocks like nvidia you can see we had this structure breakout point and now notice we kind of a bearish and golfing candle on the weekly time frame and the reason why i bring this up is nvidia is such a high weighting in the s p 500 and in the nasdaq and if we look from the closing price on friday to the top of that structure breakdown point that's still another 24 percent lower and this week we have some other major major earnings coming out we can see monday after the bill we have apple we have palantir on tuesday we get shopify before the bell after the bell we get amd we get smci and i got a question i'm really thinking about and let me know in the comment section down below do you guys think amd is going to have a similar reaction to what we saw with intel where intel was down over 30 percent then on wednesday we get uber we get qualcomm we get we have arm we have mcdonald's and we look at the big expected movers this week hubs expected to move 17.5 percent we can see snap on wednesday expected to move 15.9 percent palantir on monday 12.2 percent apple is only expected to move four percent now maybe that's gonna be good because apple is also one of those stocks that have such a large graduating of the indices i want to pause for a moment let everybody know right now take profit trader is 40 off zero activation fee take advantage of this offer use the link in the description box down below use promo code mike and don't forget you can always go to proper mike.com and sort by prop firms or prop firm challenges right now if we sort by the 50k account and we go all in meaning the true cost which is the evaluation fee plus any activation fee right now lucid trading is the cheapest 50k account if you guys want to check it out proper mike.com and like i showed you guys a little bit ago rsp the equal weight sp 500 has actually been holding up rather well for instance look at the equal weight sp 500 on the monthly time frame we almost had a one two reversal right back up closing in the upper third of the range this month we compare that over here to the spy spy we actually close in the lower third of the range and notice we have that very large wick on top of that candle and that's because the heavy hitters out there the market is not rewarding them for their earnings we can see the mac the indicator on the monthly chart look it looks a little bit tired it looks like it wants to roll over and we are way elevated above that zero line now pull back if we look right over here on the composite profile look at where we have a high volume node somewhere around 681.98 that would bring us a little bit below this structure breakout point that we have right over in this area now if we compare this over here to the weekly time frame we can see right now on the weekly we have now had three consecutive weeks where the market has went down the mac the indicator continues to have a bearish cross of the two lines and really working its way down towards that zero line there's quite a ways we could still drop before the mac the indicator actually reaches that zero line now we look at the volume profile this whole area right here think about this is nothing more than inefficiency in the market can we see the smp coming all the way down towards those levels well if we pull a fibonacci retracement from the low all the way down here from about march 30th all the way up here to this recent high notice that 38 retracement kind of brings us right within that zone so that most certainly would be something we want to pay attention to also from all-time highs all the way down to 38 retracement that'd be roughly a 7.49 drop if we make a 50 retracement that would that would be a retracement of almost 10 percent from those highs and that really doesn't correlate with that with that infographic that shared with the guys earlier about how the market trades around midterm elections and the economic data if you go ahead and you strip out the inflation's data really is not doing all that bad now on the weekly could this be a double top top one top number two and we talked about coming down and we have to break that neckline now on the spy that neckline actually comes in at price point at 749.60 and what was kind of interesting about that price point is we looked on the spy we talked about this level last week look at 750 look how much gamma exposure we have right now at that level 233.8 million contracts then the next level i'd be concerned with is going to be up here right around 760 and above that this is where things could really start to change if we can get above 766 and or 769 then i think we have a chance for a more stable market as we are below 769 and 766 we're likely to get large moves and it could be in either direction large moves up and large moves on the way back down and if we look at where 69 actually is and if you actually look 69 would be very close towards that weekly candle now we go over we started looking on the daily time frame real quick here's that zone we marked off basically candle body to the candle wick back here from september 16th and right here right around 750 is where we had that high gamma strike price now as i'm looking at this you can still see here's a high lower high lower high and we have a low lower low lower low and another lower low so can we you know try to work our way back out of this now from a reward the risk standpoint getting long somewhere for a bounce this week kind of makes sense we can put our stop loss a little bit below this low looking at minimum for that gap to be filled on friday which actually comes in at a price point of 769.36 and if you look we kind of have a whole consolidation box up in this area so if i were to go ahead and box this out it'd be something like this and notice we're in the lower area of that box now ideally would be even a flush below this box and then see the market simply return right back up through it now we come over and we look at the 30 minute chart look at the macd indicator on the 30 minute chart way below the zero line you see it's trying to get a little bit of a hook and to me this would lend to the case we're likely going to get a bounce in the near future now it's just not this chart that i think we're going to get a bounce because of but also if we come over and we look at the volatility index on friday the vix was up 12.91 up here at the highs i think the vix was up like 30 something percent making a high somewhere around 23.94 closing out at 19.41 now whenever the vix is up more than 10 it implies that within the next one to two days the market will have an update in the market so that could be monday that could be tuesday in the market and we already talked about those earnings that we have coming out early this week so now sunday night does the market give us a shot that maybe come back down ideally i'd love to see a gap down on sunday night so i could look to buy it for a rip right back up now if we can get above value area high somewhere around 757.38 then i really want to start targeting gap resistance at 761.34 then i really want to start running to see can we go up and fill the gap and then once we fill the gap i want to be on the lookout for something like we saw this past week we had this large gap over here as the market came up look at the mac the indicator did it kind of flattened out we started to get a bearish cross right up here near these highs where we filled the gap and then rolled over so i want to see do we see another similar pattern like that basically show up this week now we come over we look at the futures markets i'm loving this chart and that is the fact that look at where value area low is we have value low on the weekly time frame somewhere around 76 94.75 now why do i like that so much because anytime we close outside of value this case outside meaning below value area low then there's a high probability the next one the two sessions will come back and we'll we will revisit that value area now since this value area comes off a weekly volume profile then one session equals one week in time so either this coming week or the following week highly probable we're going to come up towards that level also if we look right here a little bit more conservative target we have a clear structure breakdown point right there where the market broke down from we should come back and test that area then look what we have right here we have high volume nodes on the profile which also should act as a magnet now we can basically see we had a straight move down from this week's high all the way down to the low and we had a dual volume profile rotation last week we had the rotation up all the way through value area high and then all the way back down going substantially lower the smp last week had a range of 261 points and if we were to pull a simple but not your retracement swing high all the way down here to the swing low notice where that 38 percent level comes into play right here near the high volume nodes and just above that structure breakdown point in the 50 percent level falls just shy of that untested value area low now we look at this for sunday night what do we have shaping up on the volume profile you can see value year low and value high has definitely shifted down the last two sessions and as i look at this value low is going to be down here around 7600.75 the point of control will be 76 12.75 and value high will be 76 76 and a quarter now one of the ways we can play this would be can we get a dip below value area low early on sunday night and then start to move on the way back up target the point of control is target one then any of these other additional high volume nodes on the way up the first one above the point of control will be somewhere around 76 30 then up here around 76 40 then 76 57 ish then value area high and then can we start to run up and maybe even test the untested point of control from thursday now do i think we'll make it all the way up here monday probably not we actually look at the economic calendar do we have any major economic news monday we have the ism numbers coming out at 10 a.m on tuesday we have the congress elections taking shape so maybe we'll get a little bit of volatility around that but really it's all going to be about the news on friday it's going to be the nfp so we get the average hourly earnings the non-farm employment change the unemployment rate and we're only expected to add 63 000 jobs now if we look at the last nfp data we had come out we can see they forecasted 89 000 we only added 29 000 jobs now it was an ad and the previous notice they actually revised down from 162 in september with a revision of 133. now we come over look at the nasdaq the qqqs on the monthly chart now this to me looks kind of like a bearish engulfing pattern you can see the candle did come up make a new all-time high mac the indicator still has a bullish cross but look how far away from the zero line we are it is substantially well above that zero line which would lend to the case we're likely going to start to get a pullback or at minimum have price consolidate up here and get the mac the indicator a chance to work its way down we look over here on the composite profile i kind of like this area right up here anywhere from 622 all the way down here to about 600 this high volume area on the composite profile looking at this from a structure breakout point right here on 636 would be a logical area for the market to come back and retest if we just simply look at this last swing on the way up you can see the 61.8 level matches up very close with that structure breakout point so that's most certainly something i want to watch for but i want to play devil's advocate here real quick because it's really easy to jump on the bear train at this point in time and maybe this does turn into something a lot more nefarious but for the time being i want to give the bulls the benefit of the doubt and that could be do we simply just continue to form an upper level consolidation which then could lead to another breakout this could kind of be like a little bull flag here would be the flagpole we're building out the flag and could we get a continuation on the way back up now we look at this on the weekly time frame we can now see we've had the last three weeks down in the fourth week back we kind of had a a selling tail on top of that candle now we've already broken below this high volume node starting to get into this minus development area within the volume profile now if you look at the mac the indicator something else that was glaring as we came up and made a new all-time high notice the mac the indicator on the weekly did it make a new all-time high the simple answer is no this right here was a big telltale that as we push up there was a lot more weakness in this now one of the next areas i'm really watching is going to be the swing point we have right over here somewhere in the ballpark of about 660.76 now we come over and we look at the gamma strike prices real quick look over here on the right the highest gamma strike price we have is gonna be right down here around 680 and notice as we scroll this if i scrunch this up a little bit where do we have a majority of the gamma down here at lower prices now we do have quite a bit up here at 700 which could act as a magnet but let's pay attention to this real quick if we can hold above 680 then one of the areas i most certainly would want to target would be up here towards this gex one which is going to be right up here right around that 700 strike price notice the hvl levels up here high volatility levels if we can get back above those levels that would actually indicate that we get more stable prices as we are below these levels that's where we get large moves in the market look as we broke down below these levels big big move on the way down on friday now if we can get back above it then it's more orderly a little back and forth and give me more of a trendy market where the volatility starts to contract here just a bit now jumping back over and looking at the queues we said 680 was a high gamma strike price well if we look at 680 that is basically just above where we were on friday and 660 would push us right down towards there now let me go back real quick and just check 660 did we have any gamma exposure and really not a whole lot we have a little bit at 670 but not really anything at 660 which would kind of correlate with this swing point over here now mac the indicator still looks horrible but can we start the firm up if we lose this low right here that's basically to validate this double top pattern now depending on how we want to draw this out the more conservative target for that double top would put us somewhere around 573 if you want to go for the whole complete pattern the more aggressive target that would give us a target of about 588 but keep in mind we still got a break and hold below 661 in order for this to be a valid target and to be a target i want to focus on as we look at the daily chart we have the first anchor view app we closed below it we got down below it we closed below it and then within the composite profile notice this is very poor structure on this area and keep in mind this is nothing more than an inefficiency in the market and the market loves to come back and repair inefficiencies in the market now if we do start to bounce where do you think we might bounce towards yep right back towards the high volume area 709 or maybe up here towards about 718 that'd be enough to fill this first gap over here then as we go over and start looking at the 30 minute chart notice this looks like we want to get a bounce early this week as the mac the indicator is way below that zero line now ideally on monday i'd like to see the market gap or at least push below the low on friday and then firm up and try to come back above it now are we going to get that probably not we'll probably open up somewhere in this area and maybe even start to run up towards this gap resistance at about 698.80 or so then beyond that i really start to focus on this gap being filled keep in mind friday's gap blower was two consecutive gaps in the same direction which after that happens quite often we start to get a little bit of a bounce in market now as we come over look at the nasdaq futures look at the range this week 945 points and we're able to take out one of these untested point of controls at 28 457.50 but just like we talked about with the s p 500 look at where weekly value low is in relations to where the market closed at we close well below that level and just like we talked about with the s p anytime we close below outside of value highly probable we're going to come back and visit it within the next one to two sessions since again this is a weekly volume profile then one session would be one week in time so either this week or next week now value low is 29 190.50 if we can get above that then i would want to pick off this high volume node on the composite profile 29 425 then the point of control at 29 555 and then value air high at 30 000.00 now let me know in the comment section down below do you guys think the market will make it all the way up here the 30 000 into this week let me know your thoughts in the comment section down below now let's say that we hold below that value area low how low could we potentially go well if we zoom this out we have another untested point of control all the way down here and a price point of 27 300.50 that is substantially lower now do i think we're going to make it down there i'm really not sure at this point in time for me i'd really like to see a bounce now if we look at this on the daily volume profiles what do you have taken shape we just barely closed above value area low which comes in at twenty eight thousand five oh eight now the point of control is going to be twenty eight thousand seven ninety four and value high will be twenty nine thousand twenty four now one thing to note we're gonna have three consecutive untested pointy controls on the nasdaq we have the one from friday we have the one from thursday at twenty nine thousand five sixty three and then the one from wednesday at twenty nine thousand eight forty now anytime we start getting two or more stacked point of controls highly probable we're gonna come back and test it so guess what my target come sunday or monday is gonna be this untested point of control at twenty thousand seven ninety four so if you guys see me going long long long during the live streams either sunday night or even monday morning you guys already know ahead of time why i continue to go long because for me this is gonna be a very high probability target now what we had on friday as well when the market opened up thursday night at 6 pm meaning the futures markets we did produce a little gap which has not come back and been filled just yet now one thing i do want to make note of if we start trading below value low and we're staying below it then we really want to look to see is the market going to make it run and go back and try to test the lows from friday now one of the charts we want to pay attention to this week is going to be crudel crudel was on the move up but look at the candle on friday we have a shooting star type of candle and the location of it is very good as well you can see it's pushed up to a new recent high but again look down here at the mac the indicator is the mac the indicator pushing the new all-time highs the simple answer is no we come over and look at the 10-year yield what's it doing well it's been on the move down the mac indicator is down by the zero line we are down below five percent at four point nine three three percent however that might not be good because the yields were going down as traders and investors were scared and they just simply didn't want to lose their money so they wanted to park it into a safer asset going into bonds as they bought bonds that ends up pushing yields lower now if you guys have heard about my 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