00:00 Josh

after an abrupt midday reversal, a blockbuster earnings report from Nvidia, not enough to sustain the earlier rally. Yahoo Finance is Jared Blickley joining us now with a trading day takeaways. Jared.

00:09 Jared

Thank you, Josh. We got to start with that risk off reversal and what a difference a few hours makes. I was here for the jobs report this morning. It was kind of a non-event because the market was already flying high. Let me just show you the XLK, this is the tech sector. We opened up uh with XLK up about two and a half percent. Everything was looking good. I was thinking, all right, well, we should be able to sail to record highs now.

00:36 Jared

And that abruptly came to an end around 11:00 a.m. That’s when the selling started. and by the way, that’s when Bitcoin broke 90,000 to the downside. We’ll circle around to that later, but check out this. Uh XLK, the tech sector closed at the lows of the day. So very ominous there. And just in general, I was also watching the Nasdaq 100 and we got a rare signal. I explained this uh just on the close today. Uh but we were there, let me get to the intraday. We were up 2% and then we closed down more than 2%. That is a signal that you typically don’t see when the market is only down by a small amount. We’re down by like 7, 8% here.

01:17 Jared

This is something that we were seeing around these April 8th bottoms right there, uh after the uh post liberation day sell off. So this is a rare uh pattern. I did find one historical analog. Maybe it means nothing, but suffice to say there are some strange things going on in the market right now.

01:34 Josh

What other markets did you see involved in that sell off?

01:37 Jared

Uh I’m glad you asked. So, the dollar might be in play and also the Vix. So let’s tackle those one at a time. Uh here is the US Dollar Index and it is it didn’t have a big jump today. This is a year to date and here is where the price action is right now, but we did get to the highest level in about what is that? three months or so. and the importance of that is when the dollar jumps higher by a large amount, sometimes that weighs on equities.

02:07 Jared

Like I said, that’s not what happened today, but breaking to a relative new high might tell the street, might tell uh traders and algos that this is the beginning of a larger move to the upside. So, there’s part of that that may be a play here. We’ll have to watch the US dollar Index. Here’s the intraday. I didn’t see any big movements and that’s just a whole lot of chop.

02:24 Jared

But suffice to say, if we start treading uh trending above 101 there in the Dixie, just call it so-called US Dollar Index, that would be a warning sign. Pretty big one, I think for the market, the way it’s situated right now. Here is the VIX. Now, 26.42 is elevated. I will show you that on in the context of a three-month chart.

02:45 Jared

So intraday, we actually had a little bit higher spike in the middle of October. and remember that was that uh China tariff scare that never materialized. but where it is right now, that is trading at the highest level since October. Here is a here’s the year to date chart. And what stands out here, I think we showed this yesterday too. That was a much higher VIX level that we saw in April. So there weren’t uh we don’t have nearly as many concerns as fears as we did that back then.

03:11 Jared

But as I’ve been talking about, the VIX has been trending higher. Um there’s just been kind of gently sloping. If you take a look at the two month here again, you can see rounding here. Uh the VIX also historically tends to spike in October and November. So the worst might not be behind us. Uh we’ll have to see what comes in December, but that’s a whole another can of wax.

03:36 Josh

What about, you mentioned Bitcoin, you want to circle back on that damage?

03:41 Jared

Yes, so that is my third point here. We got some crypto card carnage and I was watching the market. I I tried to match all the headlines today with the tape. and one of the things I noticed was that about 11:00 a.m. and we’re going to see a different timeline here because this is in YouTube UTC intraday. but around 11:00 a.m. was when Bitcoin crossed 90,000 to the downside and that’s when the selling really started in the stock market. And sometimes these weird correlations, they snowball on each other.

04:16 Jared

And getting back to the VIX for a second, tomorrow is options expiration. So, uh dealers, the way they’re positioned right now, it’s called negative gamma. When you see when you get a small movement down in an index like the S&P 500, well, that magnifies it because they have to hedge their position by selling more into the market. Very wonky options stuff, but suffice to say, I think there was a confluence of things that really came together today. Uh call it a perfect storm if you will. And the good news is, we were only down by what, 2% or so, it’s not the end of the world, but we could see some more carnage later.

04:55 Jared

I want to get back to crypto because I didn’t show our crypto heat map and I didn’t show a Bitcoin chart just yet. You can see it’s down 3.2% over the last 24 hours. Let me put the year to date up and so we can see the last time we were at this level was at Mar was in March. And what I was talking about yesterday, my big levels here. Well, one was 90, that’s obviously broken to the downside. Next one is about 75 and I would call that 73 to maybe 76,000. If that goes, then we got a whole different deal, a lot bigger sell off on our hands.

05:27 Jared

So here’s that level once again, 75,000, that’s a big kind of roundish number and we do have support there. That’s also the prior highs from 2024 or at least early 2024. 75 needs to hold here and that’s still 12,000 away. So we could see more selling into that.

05:49 Josh

All right, thank you, buddy. Appreciate it.

05:51 Jared

You bet.