Guys holy, it's kind of toasty guys welcome back. How are we doing it's your boy, trey from trade holy? I mean this is just an absolutely disgusting. Don't you dare bite me, don't shoot there get titan's been just going ham on my leg today. It's been gnarly, but today the recovery continues on the spy and uh that has correlated to basically every small, mid cap company that you can imagine.

I mean microvision's having a great day cod k. I don't know what the this this company does, but they're having a phenomenal day. Amc is up about four percent game. Stop was up on the day uh as well mullen up 18 and was up as much as i believe, 40 or 50 up to three dollars and 20 cents sin up, 18 uh imp, even a gas stock, an oil stock and oil's been down is up on The day vld up on the day i mean you, can just go across the board: throw a dart at a board of small, mid cap stocks and they're going to be green you're.

Looking pretty good, so i want to address going into the weekend uh what we can kind of expect moving into next week, and probably the big thing that that may throw a hitch in plans. Uh was discussed today and that was a rate hike of 50 basis points. Now i looked historically because i wanted to know the last time that we saw a 50-point, uh basis hike, and that was a long time ago. So if you come over here and you look at this, it was may of 2000 since its last 50 basis, point rate hike in may 2000.

The fed has increased its policy target uh by only 25 basis points at a time. It was not always like this, and the reason that this has been pitched in the first place. You can come over here to this article from fed governor waller uh, he's saying that what's happening in terms of inflation uh, we may actually require a more aggressive approach for rate hikes right. I don't actually agree with this.

I think a 25 basis, uh rate hike, is actually a little more beneficial. I'm going to tell you why i don't think the fed will go through with it uh, and i want to discuss that here today and i was even put on this buy and meet kevin. But i think that there's an easier way to even summarize this, so that uh, you guys kind of you know - can understand this. I view it as like from point a to point b: let's say that this is a vehicle right here.

Uh and b over here is another vehicle, and between these two vehicles is, let's just say, 500 meters right. Does it make more sense to break super hard one, two, three four five times back to back to back to back to back, so that you can ease your way into the vehicle right? That doesn't really make sense to me what makes more sense - and this would be like a 50 point. Hike 50 point is slapping on the brakes a little bit harder uh. What makes more sense is to tap lightly on the brakes and you're 500 meters away right.

You want you want a slightly lesser uh amount of pressure to bring it over to the stop otherwise you're, just gon na be jerking around. Nobody wants to be sick to their stomach right if you're, if you're riding in a car - and you see, there's a vehicle in front of you and the driver is just slapping on that thing. You're not gon na have a very pleasant ride. It's gon na make it uh you're gon na get there nonetheless right, you're gon na stop in front of the car.

Just fine, but it's gon na make you a little seasick, nobody likes being seasick i'll. Tell you what i like to see shanty but you're gon na. Do you can skip the sickness part? I mean that's just that's just garbage, so i think a 25 point hike makes more sense and the only way that i could really see a 50 point hike which would actually you know once it's announced it would be bad for the stock market in the long Term it'd be good for the economy uh, but we obviously don't want. We don't want to see the market suffer right.

It doesn't really make sense. The only way that i can see a 50-point hike taking place is if they are drastically drastically underestimating how bad inflation is going to be. Have we seen it peak yet? Have we seen the peak of inflation right uh? I think it's going to stagnate a little bit before we start to see a decrease, but it makes more sense to watch what a 25 point hike is going to do over the next couple of months before you try to adjust right. The the circle kind of is to execute.

You want to go in a little bit of a circle here, evaluate eval, uh, basically redirect and then execute right. You just you just have to they're right now in the eval face and it wouldn't make sense to change it to a 50-point basis, hike if you haven't even seen what a 25-point basis hike is going to do to inflation. So i'm not even stressing about this. I'm not even going to consider this an uncertainty.

The only reason i brought it up in the first place is because uncertainty is what brings the market down and, as you can tell you know, the the fed governor talking about this today didn't even have an inkling of uncertainty, get pitched to the market and i Think that's for a reason. I think it's because the market uh doesn't think this is necessary, not necessary. They. They don't see this as a problem.

They don't see it as a threat. You can see that in the way that the stock market, in fact moved today now i did talk about how this kind of has bled over into uh into small and mid cap companies. That does include amc, so i do want to give you guys the ortex data for amc, which is currently saying that 21.2 or so days to cover skyrocketing, which is essentially just how illiquid how little amount of volume is rocking into this thing. Compared to how many shorts are actually holding positions, if you're, looking at iwm, you're gon na see a pretty similar situation where shorts really haven't been digging their way out of this hole as much as they should be yet down about one point, one: three percent of The day, still thirty eight point one two percent current interest of free float, which means that out of all the shares that circulate on a day-to-day to day-to-day basis, 38 of these are shorted in an etf right.

So i think, there's a lot more upside in the macro right. You look at this one, two, three months down the road down the line uh. I think that we haven't seen the peak yet, but i do think - and this is uh the part that maybe people won't like - i do think you need to see a retracement. Now.

I've talked about this before my theory and i'll gladly own this. If i'm wrong trust me, if we ever, if we never end up tapping the wedge and it just rips all the way back up the iwm rips, all the way back up, which means that amc, gamestop all small, mid cap companies rip back up. The theory is still the same. It just means that one of the boxes didn't get checked right the other day.

It is what it is i'll admit that uh that fault when the time comes, but i do still believe you are going to see it right. It did go above the line in which i have mentioned, but this pattern that you see right now on the spy is what i like to call a rising wedge and i'll draw this out. I know most people probably know what this is, but i'm going to take 15 seconds in case you don't uh. A rising wedge is when you see a stock sort of lose volatility and momentum as it's climbing and it forms what appears to be a wedge.

Typically, this pattern means you're going to see some form of a retracement uh with time to come. That looks something maybe like this right. I may be easier to draw if i, if i use different colors, so here's here's. Let's just say this - is the spy right.

It's wedging up, wedging up wedging up the red lines are the wedge in actual formation and then coming back to black. What a break of that wedge would be. Uh would look something like this and i do think that is going to represent essentially the pullback that we have had in the spy and in the market, which is going to bleed off in amc and gamestop and all these other stocks, because amc right now uh Has a very similar, rising wedge a standing level of support, ascending level resistance it it creates what appears to be a wedge typically, that means you're going to see a pullback. Occasionally, you see breaks above the wedges, but time will tell right at the end of the day uh.

I just personally want to see that confirmation that confirmation is going to be huge and if it does happen, don't panic right. Only panic. The only reason that i would panic is if uh it broke beneath that previous falling wedge, which is a sign of an eventual upcoming bullish reversal uh, and we haven't seen that yet right, we're still looking pretty squared away and pretty solid uh, which signifies to me That we're sitting nice so uh when i title this video holy it's for a reason. It's because this looks like the real deal guys i mean this is forming up pretty much picture perfect.

It's touching the top of this red line and this will either be a false breakout and it'll come back down and hopefully retrace or this is an actual breakdown, in which case i'll actually say. I'm surprised, i i didn't think you'd see this. This is a little euphoric for me. I think the market is maybe overreacting right now.

Uh, typically overreactions do bring some form of retracement in either direction. Uh. So time will tell i mean: we've we've grown in the last uh four days from a low of 417. All the way up to 444 dollars a 30 point swing.

A 30 swing in the matter of four days is ridiculous. I mean these really aren't days that you see out of the spy very often so you could say that's a basically. This is the market squeezing that sounds kind of weird to say, but you were literally watching the market squeeze right now, which is uh good, to say the least. Right, i stand firmly by what i stated yesterday you are, you are witnessing the reversal and the rotation into small, mid cap companies and if i can't convince you just look at these charts, i mean this is literally it mulling up 18 amc and gamestop suffering a Little bit, but to be frank, i think that does come back to gamestop earnings being poor and algorithms swing both of these stocks together, no matter whether we like it or not, right, i'm not tying amc to gamestop they're different companies.

I get that right. I'm not here to argue one way or the other you invest whenever you want uh, but i do think gamestop earnings did play a part in how both of these stocks move. You can't you can't deny the fact that they, both tanked right off the bat in the after hours yesterday coming off of gamestop's earnings release uh. So i think that in the short term is holding it back, but you can see iwm monstrous move at 0.99 percent, which is almost as much as the spy, and that is actually good to see that that in tanda movement means that algorithms are buying small, mid Caps alongside large cap companies, because we didn't see that when spy was ripping back here, you look at all this growth right.

Look at the spy ripping right here. You compare this to iwm uh a year ago. Nothing just chop chop chop chop chop, really, no growth! Since february february was about the the most growth we've seen out of small mid cap companies, uh they've just been stagnant, since so to see it moving in tandem. You want to see that continuation, because that is going to signify to me uh that the theory will come true, that small, mid cap companies will have a good sized move, and i will finish it off with this.

I'm going to finish it off with this uh. I if this ends up coming to fruition the spy ends up getting a bounce off of this wedge. Uh, then i'll, let you guys go enjoy your weekend. I am actually picking up a couple month out call position to swing off of the spy, because i think that's how violent the the movement's gon na be and the recovery is gon na be coming off of uh off of uh.

This. This fed rate hike and the uncertainty starting to vanish within the market. So if we don't get it so be it, i won't. I won't grab a couple month out swing, it's not the end of the world, but you see that bounce.

I just want to. Let you guys know that it is something that i am going to do. I am going to be picking up calls a couple months out off of that bounce of the falling wedge. If it does come to fruition so uh, that's about it yeah it's a great day.

You really can't complain with the markets moving the way they are right. Now i got ta say it's great: to see the energy back on twitter. It's great to see people uh, feeling good and it's great to see people making money. I've seen a lot of people uh, making great plays off of unusual whales and uh these breakouts.

On these small mid caps, i think i saw a guy had an 11 000 gainer off of cod k didn't play it myself, uh, but that was off calls and man. Let me tell you nasty you throw 100 bucks into that, and now you got five figures. So that's what i got for you guys appreciate y'all catch you on the next one uh as always: much lovely taps, happy friday, peace.