Okay folks, we are primed for something really, really big. Something big is brewing underneath the surface here. If you pull up the charts, you look at history. You look at previous times in history that we've had Middle East conflicts like this.

Well, it suggest that there's something big that's going to happen. For context, Right now, we're in a situation where you've had one side that is like, oh, we've heard warnings for the market to drop huge for the last year plus and we are burnt out of it not happening and we're not going to listen to it anymore. And then you have the other side That's like, ooh, interest rates higher for longer more crisis sees broad businesses aren't really getting much better, they're getting worse. But neither side is really that passionate about their opinions.

They might seem passionate on mainstream media, on the financial media, and so on and so forth. but they're not really moving their money where their mouth is. So essentially you're in this market where there's not much enthusiasm. Either way, I Mean you think about it.

This last week we hit Highs at 4385 and the first time we hit that level was in mid July 2021. That was about 26 months ago 26 months ago and at that point you had a market that was hotter than ever and people were throwing money Mone at everything. And interest rates were so low that money was flying faster than a bat out of hell these days you're at the same level, but there's just no enthusiasm anywhere. The enthusiasm is dead.

This is the context of the market that we're in right now. but I Don't believe that this is going to last for long. But let me continue with this context because the last time we hit all-time highs was January 4th, 2022, the first trading day of 2022. That was 20 months ago.

And if you look at Market history, the period of time where people are most excited about the stock market, where more people are entering the stock market, where people are going and they're looking up what's going on with the stock market new entrance are coming into the market. Well, the period of time when people get most excited is when stocks are at a new all-time high and we haven't been there for 20 months. The period of time where people get the most excited about the market is not when it's recovering and fighting its way back to all-time Highs but rather when you're breaking out past previous highs, you see the overall Market can behave unbelievably similar to an individual stock. Nobody likes the stock until it's broken out to a new all-time high and then all of a sudden it becomes a moment.

Play Everybody's playing that breakout wondering how far it can go, playing it all the way to the moon When you finally break out of that key resistance level. what happens? Well, lots of people start paying attention to that stock and and it's the same thing for the overall market. and it's quite a beautiful thing. However, when you're not there yet, it's not so beautiful.

Now, if you look at institutional and wholesaler average daily volumes, the amount of shares trading from April 2017 to July 2021 Well, 2017 to right before the beginning of the sickness crisis in 2020 was basically flat. Those time that that time period was basically flat, but then you had that huge huge uptick in volume in the early days of the crisis, and then once again in the beginning of 2021 as markets went extremely euphoric, right? You look at average daily share volume. It was bouncing around from 6 to 7 since 2012, and then all of a sudden it jumps to 109 in 2020 and then 15.2 by 2021. I mean just an insane jump.

Things were moving. There was a ton of money to be made. People were excited. Big small medium positions everywhere, right? But then what happens in 2022 and 2023? Well, volume drops like a rock.

and it had some pickups along the way, especially earlier this year. but in recent months it's been dead deader than a dog. moving to levels that are probably going to be even lower than they were pre virus, you look at the comps. for June June 2020, you're at 131 million in volume.

For the S&P 5 Hyundo June 2021, you're at 102 million, June 2022. you add a pickup at 106 million, but then June 2023. what's it At just under 88 million? This is the first time you've had a June under 100 million volume in 3 years. We had a big sell-off in 2022 and then a partial recovery in 2023.

But since recovery, Heights you've just had this slowly consolidating and stagnating and agonizing market, right? And that's why so much interest has drained out. However, this isn't going to last. Not only are there so many fundamental Catalyst right now for insane shifts, but historically consolidation only lasts so long. You look at the vixs.

the lovely vixs are fear and uncertainty and volatility index. it's been training. It's been trending down for years as markets have quieted down, but it's been on a slow and steady uptrend since hitting those lows in mid-september and newer attempts for it to calm down have essentially been ruined by the Middle East situation. The situation over in Israel.

It had a break out towards the end of last week and I believe that this is going to continue its Trend upwards quite a bit, and the way to profit off that trend is by playing Upward Movements and something that tracks it like a Uvxy which looks primed to break out to me. I would put Uvxy on your radar immediately, especially heading into this week, but let's move a little bit more into the Middle East situation. What's happening over in Israel and around that area absolutely awful, awful situation. You've got a never-ending escalating conflict and just horrific, horrific stories coming out, right? There are many ways unfortunately that this is likely to escalate, and that means the loss of many more civilian lives.

And it's just a horrifying situation all around, and similar to the situation over in Ukraine, it also means massive economic impacts everywhere, and even worse if this spreads. But the problem with the Middle East is it's of course, a crucial supplier of energy and also a key passage way. the Arab Israeli, War, 1973, for example, was a complete a complete disaster for the global economy. A lot of people are saying right now that this won't be a disaster, but if you look at history, a lot of the other conflicts that have been smaller than this one have been huge economic catastrophes, which is why oil surged nearly 6% after Israel begun their raids into Gaza.

This time around, we have not just the conflict in the Middle East, but with Russia as well who is also a big energy producer. And you're starting to see this come at the same time, where weekly Us imports from Saudi Arabia at crude oil of crude oil are at 20year lows, You pull up crude oil prices and what is happening to those. The more this escalates, the higher the price gets and that is exactly what we're seeing. Bloomberg Economist put out a report saying that a confined W that is limited to Gaza and that immediate region would result in a plus44 increase per barrel, which isn't a lot.

in fact, we've already seen that, but a proxy W which could be a multi-front conflict in Gaza West Bank Lebanon and Syria would result in Plus 8 a barrel. but a direct W and I'm saying W so YouTube doesn't screw my channel. But but a direct W including Israel and Iran in direct conflict could spark A $64 price increase per barrel. So far, we're in the situation where we're escalating from a confined W to a broader proxy W and we'll see if we get to that last stage.

Hopefully not a direct conflict would likely bring in the US and that would really really send shock waves through the market. If you look at history and what has happened, well, overall, defense contractors make a lot of money. The government has to spend a lot of money, so it creates an economic boom, but in the beginning it causes a lot of panicking in the stock market and certainly a lot of volatility. And quite frankly, if oil prices go up, you can kiss the stock market rally goodbye.

You can see us going back down to 2022 lows and probably below there because you're going to get in the situation where interest rates have already climbed a lot. But if oil prices get up 6470 $80 a barrel more, you're going to be at all-time highs for oil prices. and that's going to result in all-time highs for inflation. That's what you saw in the 1970s conflict, and that's likely what's going to happen here.

If this continues to escalate, good good luck keeping inflation down. When oil nearly doubles, you're going to have inflation. That's way way way worse than we saw ever in 2021. So this is what markets are having to debate right now, and it's unlikely.

It's very, very unlikely that they'll stay so calm and so quiet as they are today. At the same time, Hedge fund billionaire Ray Delio Mr Del Dalo is now predicting a 50% chance of the rest of the world getting drawn in he said quote. In my opinion, this W has a high risk of leading to several other conflicts of different types in a number of places, and it is likely to have harmful effects that will extend beyond those in Israel and Gaza. Primarily for those reasons, it appears to me that the odds of transitioning from the contained conflicts to a more uncontained hot World W that includes the major Powers have risen from 35% to about 50% over the last 2 years.

And so, of course, like clockwork, Treasury Secretary Janet Yellen is out once again. Warning that Common Sense must not Prevail Our favorite Angry Bingo Grandma always wants to make sure that you're not prepared for any kind of Fallout She's the type of person that when the Trojan Horse is coming in is like oh, don't worry, it's a horsey. We love horse. This is the same angry Bingo grandma.

That said, inflation won't be a problem in botched predictions on banking collapse after banking collapse and economic data after economic data. So yes, maybe it is time that we start batting down the hatches for our favorite angry Bingo Grandma Maybe one day she'll win her bingo game. So how do you trade off this oil crisis well by playing oil? ETFs and leveraged ones actually? UCO For example, leverages the price of oil tox, which means your gains are doubled for every move upward in oil. As oil rallies, a lot of people are going to be playing tiers like UCO to take advantage of that, and it is is breaking out concretely over our directional SMA indicating a statistically significant breakout.

If you are expecting that, this Middle East crisis is going to get worse. Unfortunately, it's likely going to get worse, at least in my view and the view of many analysts. Well, it's easy to assume that UC is going to continue to break out. Remember though, gains are 2x, but so are losses during a downtrend.

If you are someone who doesn't want to trade the chart and instead wants to randomly Buy and Hold that's not going to be good for you. If you're somebody that doesn't want to trade the chart, you're going to get ruined on these types of stocks if you're somebody that doesn't believe in Risk Management Well, you're going to get ruined. But if you're somebody that wants to trade and you want to actually play the game instead of let the game play you well, you're going to find yourself with a nice rally Rito And that always makes Charlie Charito very happy. You know I'm in the process of moving to Miami and my fake Spanish doesn't work here.

They look at me like I'm a Morito. Maybe they are righto also notice SLE Q which shorts the NASDAQ is breaking out the last several times it originally broke above our red directional as M line It then went on to Rally aggressively this time I see a broader breakout past these previous two highs, which quite frankly were dainty, downright dainty compared to what will happen if this Israel situation gets worse. Meanwhile, with all of this happening, of course, the inflation and government spending apologists are back and yelling again. Paul Krugman Who is one of the most out of touch and overly sided Nobel Laurates in the world posted this on X the other day quote: the war on inflation is over.

We won at very little cost. He shows a chart of the six-month change of CPI inflation. It shows it going from 7% to under 2% Problem: Well, of course he excluded food, energy, shelter, and used cars. Basically everything that you need to live now of course.

I Know for economic elitists, well they think Oh, The Peasants Only peasants need to care about the price of things like food, energy, shelter, and cars. I Get it? That's from the perspective of somebody who's studying at prestigious universities and getting these Nobel Laurate prizes. But overall, inflation is at 18% when you're adjusting for pre-pandemic prices. And it's quite frankly, because government spent too much of your money.

They spent Way Beyond your money and they printed and inflated away the value of your money. Remember, some 80% of all dollars in existence today were created over the last 2 years. 80% you imagine? If you thought taxes weren't bad enough, you were getting silently taxed by the massive devaluation of your dollars. And that is just a fact.

And people like Krugman are trying to pitch you that hey, we can print as much as we want without any long-term negative impacts. But that is just quite frankly, not the case. And you need to make sure that you're informed because these types of arguments are going to push the government to spend even more money than they are. And trust me, they're not cutting back at all.

They're going to keep spending. But these types of people are trying to argue that hey, there's no ramifications for Endless spending. And he's kind of right because he's not going to have to pay for any ramifications. and probably you won't either if you figure out how to trade the market and the trends to your benefit.

But the average person is going to be screwed by this and they need to wake up before it's too late. Anyways Lots going on in the world right now. Lots to think about and a very, very very big volatile Market Coming this week, have a great rest of your day and we will see you in the next video. Make sure to hit that ravishing like button and subscribe if you appreciate it.

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