Yo yo yo, yo, yo yo, what's up guys, hope you're able to make some fat stacks on elementope today. I've i up, i got to be honest. I played puts should have played, calls should have played, should have played calls lmnop. I really genuinely screwed that one up, but i thought ah just playing what is up.

Everybody welcome to trace trades where you can talk fast and don't get classical by saying that mountain fashion, faster experts, so take what you say: the green assault, let's get into the video today, ah guys the market a little bit rough uh coming into tomorrow, which is The cpi data the consumer price index uh, which is inflation, data right uh, i kind of said in yesterday's video. I thought you were gon na - have a light volume day in anticipation of what is to come, certainly was not a standout day. I mean look at this. This is still certainly following.

If you look at the spy, the descending level is the volume that we've seen here in the past. You look at amc uh on the day and it was certainly a low volume day. It was actually a low volume green day got a decent bounce which we're gon na talk about by the way i wan na, i wan na discuss a little bit of something that i find to be a moment baby. So this is the agenda check this out.

We're gon na keep this short uh we're gon na go over amc. I'm gon na first discuss the call put cost curve which you can think of as sort of the volatility curve right. When calls cost more than puts what happens when puts costs more than calls? What happens when i discuss that and then i also have to talk about the tie to the spy uh spy is gon na hold some really major weight going into tomorrow and the rest of the week uh. This is a short week and the spy uh does dictate a lot of what small mid caps are doing right now, especially considering that amc is comprised in the the iwm.

So we're gon na spend honestly the most time looking at the spy, because it doesn't matter how amc set up right now. The broad market decides tomorrow wants to take a because of some bad inflation data. It is going to do that and it's gon na drag everything down uh with it quite unfortunately, so we just got ta be prepared for that. We're gon na talk about the spy tomorrow, cpi data, that's gon na be huge.

One big thing that, obviously you know is, has changed a lot in the last couple months is the cost of energy uh we've seen what's happening in russia and ukraine. Oil would be considered to be energy. I want to talk about this uh there's some mid estimates that are somewhere in the eight and a half percent range, we're gon na dive into sort of what i i think is most likely and then the bullish and bearish scenario, bearish being the more likely scenario Here, as i really don't think that energy cost has been uh factored into the latest cpi data, that's sort of come out. The consumer price index data we're gon na go over the apple chart, we're gon na review sort of what happened.

It was a good opportunity for a put two days in a row that i thought you'd see. The spy have uh some green, because it's really not enough to me uh riding. I guess. Maybe people are anxious about the cpi data, maybe that uncertainty is sort of driving uh markets down right now, but it did play out very well and actually gave the opportunity for sort of that retest that we always like to see right if it's gon na break Down beneath the level, you always want to take an entry, or at least i would personally on that retest and then rejection for a put, and it gave you that beautiful opportunity of a breakdown, retest breakdown, uh apple, did that beautifully today and then for tomorrow.

I'm not going to have a play of the day uh unless it's green, i would personally sit out. I think that the majority of the moves that are going to happen are going to happen in the pre-market and uh. Typically, when that sort of thing happens, you're kind of destined to see some chap around could be wrong uh. I always there on the side of caution.

If that's my personal belief, uh, i am gon na stick to that conviction. I'm gon na say tomorrow, i'm gon na sit out unless the inflation data is good, in which case i think, you're gon na see a really nice rally uh. You could basically throw a dart at a board if we've got good good cpi data, but i find that to be unlikely to begin with. So let's first start off with amc right.

Yesterday's video, i discussed the fact that uh, the call put cost is going to dictate a lot of how this stock moves and on friday, at close, you notice that calls and puts almost costed. The exact same i've talked about this in great detail before, if you'd like to dive into uh. You know some theories that i have. There is a playlist called the big squeeze theory.

You can dive into that if you'd like, but the volatility curve right, the the the ivs implied volatility uh prices in the cost of calls and puts it kind of ebbs and flows along with stock price and with demand on the derivatives market. One of the things that changes and one of the things that's sort of a black swan event with amc, is that there's historically always been more calls than puts that are bought on any given week. Well, this last week we saw a week where there was actually more puts. There was a lot of puts that got played, and i mentioned this in yesterday's video and that kind of rebalanced the cost for both calls and puts to be nearly equal, uh together.

In fact, today, if you look at the overall cost of calls and puts on the derivatives market, what you're going to find, is you go one strike out here and by the way it closed at 1872? So it's about a quarter away for each 19. Uh is 87 cents for a call. You look at a put 91., it's actually more expensive to buy a put right now than it is a call that is prime. What does this mean right? If you look at this and you think of this from a market maker perspective, what do they want to do? They want to collect premium when a market maker wants to collect premium? What does that sort of look like right well to collect premium? You have to sell uh either a call or a put, so if they want to collect premium or they're going to make the most they want to find whatever's most expensive.

In this scenario, market makers will sell puts this is actually inherently bullish. This was my prediction. I personally believed that you would see some green some rally start to come based on the call and put cost evening out, and that does appear to uh at least be have begun to happen, which is a good thing to see the downside i do want to Discuss this - and this does make me sad, uh is despite the fact that you do have this nice curve. I think the curve is actually going to even widen to the point: where puts costs more than cost, and i'm going to tell you why i i am bearish on cpi data tomorrow.

I think cpi data tomorrow is is not going to be good. I think it's either going to be stagnant or higher overall in comparison to uh what you've seen in previous months if we were to come and look at sort of the inflation uh inflation rates, what you're going to notice is that it just continued to grow month. Over month, this uh this chart sort of measures, the year-over-year growth of inflation. What you can see is seven point, nine, seven point: five uh, seven point: zero! Six point: eight six point: two! It's just continuously gone up really, since you could argue january of 2021, inflation has only gotten worse uh and we saw the the cost of gas energy go up exponentially with what happened in russia and ukraine.

This will become available tomorrow, as we just mentioned. This will be the march data, which falls in line pretty well uh, with right around when gas prices start to go up. I think this is going to price in. I think that you will likely see somewhere between eight point, four and eight, maybe even nine.

I was gon na, say 8.7, but up upwards to nine percent year over year inflation compared to 2021 march, when it was 2.6 percent. I think you're gon na see it higher. I really do uh and that's that's bearish. I think that will price in inevitably uh and i think that the uncertainty that will come from that right, if you were to think of the market in terms of certainties and uncertainties, certainties move the market up.

Uncertainties move the market down. Lately the fed has been hawkish hawkish, meaning that they want to tighten the economy. They want to combat inflation. They want to make it less accessible to borrow cash, a way that they do, that is by raising interest rates, raises rates right now.

Around 25 basis. Point hikes basis, point hikes right: if they're raising rates by 0.25 every single time they raise rates uh, that's not as aggressive as if they were to raise that which the fed has talked about to 50 basis, point hikes, which would be a half eight percent. Every time they raise interest rates, this would be drastically different and the reason i bring this up is if inflation is one of these two things stagnant, meaning that it remains very close to slightly above slightly below uh the previous month of 7.9 year-over-year inflation, uh growth That good bearish, i think that a lot of the market is going to start coming to the conclusion that the fed is going to become more aggressive, they're going to become more hackish and they're going to raise rates uh by 50 basis points instead of by 25.. I think if it goes up that the fed will obviously do the exact same thing, i think the market's gon na think that i think, if you see inflation, stay the same or get worse uh everybody is going to have the uncertainty.

This is uncertainty by the way, because it has not quite happened yet the uncertainty of is the fed actually going to commit to a 50 basis, point hike. I find that if this is the case, stagnant or higher inflation would cause this. I think it is. It is a real possibility.

I think it would take a couple months. This could also cause some pain. You could see the spy drop pretty heavy and continue to have some downwards pressure based on this, and i bring this up because amc and other small mid cap companies are tied to major indexes, which is the spy iwm tracks, the spy spy tracks. The generalized market amc tracking, both iwm and spy.

If the spy goes down, you were just going to inevitably have that selling pressure across small mid cap companies. I think amc would get dragged down alongside with that, which is why i wanted to bring this up right. Despite the fact you guys seen just now that calls equalling close to the cost of puts caused the price to go up that. I think that is a a provable thing in which every time this has come close to happening or puts costs more than calls.

You see upwards pressure, because market makers want to start selling puts and collect premium from the downside which pushes price up. The spy could hold this back. That's just the absolute truth, which is only going to sort of coil this up more uh. I believe more people are going to become put happy across the market which is going to inherently make puts across the market more expensive.

You could actually see uh a week two weeks where puts are just sort of more expensive than calls, and you can think of this as sort of like if i was to draw out a mini chart. Let me just draw a mini chart: you're kind of coiling up you're coiling up the chart and what happens when you coil something up right when you coil something up when it moves breaks up hard and i'd kind of consider. This call put uh inversion and cost to be exactly that. A coil up the longer it coils up and the more expensive puts are the cause, the bigger move.

You can expect the exact same way that, when calls are extremely more expensive than puts are you typically have huge down moves like eight eight percent down moves or seven days in a row where price went down uh, it happens in both directions and i think that's Something to uh keep your eye on. So that's why i think spy is important, i'm watching for this. I personally believe tomorrow's probably going to be red and if it's red for the spy, it's going to be red for amc likely the rest of the market, but it's all dependent on this cpi. The boiler scenario is, if inflation's down, i think if you look at inflation and instead of 7.9 percent, it drops a percent.

You may be skating on the edge of territory where the market's not going to be thinking about a 50 basis, point hike. If, tomorrow cpi comes out at 6.9 percent, i could see a rally, i think that's genuinely possible uh but unlikely. I find it to be very unlikely. It's very improbable.

I don't think that energy has quite been priced in yet uh. I think that tomorrow is a little bit bearish and it lines up really with uh how the spy is sort of set up right. Now you look at the spy and uh kind of kind of chart this out and what it looks like. It really looks like it wants to take the downside on this uh this this falling flag.

I i mean that's, that's a pretty bearish stance. Only real thing that i like here is that the spy does have a gap uh between these two days. There is a gap that could fill to the upside uh, starting between 4 45 50 up to about 4, 45, 90 or so could feel it uh, but you're you're, looking at basically wyckoff man composite man coming out here and slapping and saying you know what your Inflation turns out that math doesn't exist, uh you try to think with common sense and that doesn't work because we're just gon na say things are great. All right.

America is doing just fine baby trust me when i say that things have never been better. Sorry, i forgot my my my loop monitor stopped working uh, but i find it unlikely. I think i think you're more likely to see a bearish day. Absolute truth, that's my personal opinion, but ultimately you come to your own conclusions.

I'm analyzing! What i think makes sense. You you got to do the same thing for yourself grant's grand scheme of things, though uh you're waiting for that 50 basis: point hike if inflation's bad. That would be the uncertainty that i think is going to be hanging over everybody's heads if inflation's bad uncertainty - and this will hang around until it happens and then it'll price and then you'll switch to certainty. Uncertainty is going to be.

Will there be a 50 basis? Point hike and then it either it'll either happen or it won't happen, and the fed has just kind of been hanging that fruit over everybody's heads. So i think the transition from uncertainty to certainty then is going to look something like executing a 50 basis. Point hike and saying we are going to do a 50 basis. Point hike.

You would actually see the markets have an initial price in imo in my opinion, and then start to rally, i think, you'd watch that reminds me a lot of when uh, when russia invaded ukraine right when that happened, you signed initial pricing bam. Everyone's thinking puts for the day right. Well, no, because the uncertainty of will there be war turned into a certainty and people were able to make a decision in some sort of way so priced into the pre-market in the futures market. You got a rally for the rest of the day.

They could see the same thing with a 50 basis. Point hike so that'd, be the uncertainty, we'll see how long the timeline lasts. We have to kind of see what uh, what tomorrow looks like we'll go from there apple chart. Let's look at the chart, let's kind of look at what the what this looked like for the day great opportunity for a put market didn't go up right, spy went down that dragged everything down.

It was a 1.71 red day. Uh and apple had a very clean breakdown underneath this channel that we had previously mentioned. So i gave two scenarios. I said: if this, then that uh, the call scenario would be a bounce off of this bottom downside level of support.

This falling support line. Uh didn't get it gapped out of the pre-market and from that gap down it came up and tested the support line. Entry on that would have been absolutely perfect. You get the breakdown, as i've drawn out many many many many times this textbook.

This is exactly what you look for for a confirmation, uh situation in any of these sort of stocks. You look for a breakdown underneath or a break above a specific level, whether it be support or resistance and off of that break of that specific level. What you're? Looking for is a retest as not a support, but a resistance right check. This out breaks down underneath comes back up.

This was previously support. Right here comes back up to test, it rejects as resistance and then has a big move to the downside. This is exactly what apple did, and this was an awesome opportunity to enter for long puts, didn't quite hit all of the uh, the lines that we had drawn out. Let me just back up, so i can show you.

This came really damn close at the close uh. You look at this on a five minute chart you kind of look at what this looks like. This is a pretty smooth sell-off. I mean that that's that's nice and uh nice and easy to sort of ride.

The wave down on uh you can take runners the way down. You kind of see this dancing around the v-wop doesn't quite get that break false break out here. Rejection rejection, rejection, it looks pretty weak, i mean anytime, you can't hold the volume average price, which is this gold trend line, indicating the average price anybody paid on the day. Uh weakness, that's not a good sign still off into the close.

I probably wouldn't have caught that i probably would have had a full exit at this point. Seeing sort of this potential for reversal, i'm kind of a chicken got ta, be honest, uh, but the opportunity was there. It was a clean setup. That was a really awesome opportunity to uh to play apple going into the put side if you wanted to take advantage of that sort of situation.

So, pat yourself on the back, if you made some cash, if not that's cool, i hope that you learned something regardless about charting uh, that you can apply anywhere else. You want, you know. That's all! That's all i'd like to do is try and pass along things that i think are uh good to know with that being said, there's not gon na be any play for the day tomorrow. I don't like the the uncertainty of cpi.

I think that if it is bearish or well i'd, say bearish, i think if it's bearish, it's gon na price in in the pre market and uh. I i i don't like when the spy makes major major moves, uh in the pre or the futures market, and usually you get some flat. Training flat trading is not great for trading. I personally sit out unless the market's green tomorrow, the market's green tomorrow inflation's good.

It drops a little bit then. At that point i would consider playing you know some some blue chips. You're. Looking at video, you look at tesla, you look at the spy and you look for these sort of setups, where it either breaks out of.

Like a channel. You see it break out it tests it. You can take a bounce right. That sort of opportunity is pretty solid.

It takes a flat top breakout comes up test, it breaks it. Bounce, take an entry here same sort of stuff. We always talk about right, uh. I i would take any blue chip stock based on that sort of setup, but i'm only gon na do it if there's something that's uh, if the market's green and inflation is uh not as bad as we think that it may be so, i'm gon na sit Tomorrow, out, we'll have another one for you guys tomorrow after we price everything in and we can have an idea of the direction of the market, i'm just gon na be conservative.

Here. I'd rather sit out on my hands than uh than make a bad decision. So that's what i got for this video uh, not fun, to talk about, bear markets and all that sort of stuff. I don't think we're quite there yet, but tomorrow's a pivotal day, it's not huh.

Let's be real, let's be real and look at the fact that you could see. You know looking at the chart uh some more downside for the next couple weeks on the spy, considering sort of what things look like things look a little bit rough uh inflation may may be a little rough here and that's kind of what we're waiting to see. What's going to happen, is this gon na bring to no uncertainty, or are we going to continue to recover in the market uh the way that we've seen over the previous couple of weeks? So that's what i've got for this video catch y'all later appreciate. You much lovely taps peace,.

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