THE MARKET IS SHIFTING: What You Need to Know
In a Nutshell
Markets hit new highs while bonds and oil are surging, pushing mortgage rates above 7% and raising inflation concerns ahead of CPI data. The SEC approved 3x Bitcoin and Ethereum ETFs, but the speaker warns these leveraged products are unsuitable for holding due to decay and risk of large drawdowns. Focus on risk management, avoid over-leverage, and monitor this week’s economic reports—especially Fed minutes and labor data—for signs of a potential market reversal.
These notes were generated by AI and may contain inaccuracies.
Trump asked to remind viewers that the reason gasoline prices are higher is no longer because of his initial attack on the Strait of Hormuz or Iran, but because of Russia's attack on Ukraine, which is why people are now paying higher prices at the pump. The speaker notes it is extremely frustrating that everything is everyone else's fault, but not Trump's.
The Nasdaq market is currently up 0.65%. The Nasdaq market reached a new all-time high today. The market is incredibly strong, but the speaker wants to remind viewers that an update was just received that the CEO of Saudi Aramco has warned that the world's emergency oil reserves are almost exhausted.
New day, new highs for US bonds. Whether it's 10-year, 20-year or 30-year bonds, they're all trading at near all-time highs. The higher the yield, the less it is like the stock market. The higher the yield, the more interest the government has to pay on the money it borrows, which is bad. In addition to this, any long-term debt, mortgage, credit card, car installment or loan will be more expensive if taken out now. The average mortgage rate is now over 7%, and that's only if you have a good credit score.
The SEC just approved their first 3x Bitcoin and Ethereum ETFs. Leverage is a wonderful thing when the market is in your favor. It's a terrible thing when the market goes against you. Whenever Bitcoin and Ethereum fall, they collapse by 50 to 80%. If they sell three times as much, this is a great reminder that there is nothing wrong with speculative investing. However, leveraged ETFs should never be considered an investment vehicle, meaning that holding these triple leveraged ETFs over time, due to path dependency and decay rates, is not a good idea at all.
This can be a tedious process, but it's better to have no leverage than excessive leverage. Even in these speculative assets, unless you are incredibly skilled at risk management and mitigation, and if you are new, respect your current position. If you are not skilled at risk management and mitigation, using 3x leverage will not benefit you.
The speaker does not believe in Bitcoin and Ethereum, but supports anyone's right to invest in whatever they want. Invest with the money you have and without any leverage, meaning at a 1:1 ratio. So, if the market suddenly starts to decline, as it seems likely to do, you won't be forced to sell or get a margin call or liquidation sooner than with one-for-one or non-leveraged ETFs. This is personal advice for beginners. It may sound very interesting to calculate how much money you can make with these leveraged ETFs, but make sure you also calculate how much you could lose if BTC drops to $50,000 or $55,000 or $60,000.
The speaker took a very small position today on WDC, shorted this in the LPP live trading session. They are in profit of $500 and it is consolidating now. The reason for taking a short position is because it gapped up. There is a possibility of a gap down. If you look at the 5-minute time frame, there is a setup, but it is not being actively sold. If you haven't shorted it, you're not actually losing anything because there is no definitive evidence of active selling. The speaker is also thinking of closing it because it's consolidating too much.
The speaker is actually long on MSTR with only 350 shares, so very few shares. They will sell some more shares now. Today is a pretty slow day.
The Nasdaq market is trying to move higher, but the initial movement has taken up most of it. The speaker's personal opinion is that the market is overbought and there is no good news. They're not interested in shorting the Nasdaq at this level because the market could remain irrational longer than we'd like, but they don't see anything attractive about taking a long position at this level either. It's not worth the risk.
The economic reports to watch this week include the Federal Reserve minutes coming out. The economic calendar is available at the very bottom of the Learn Plan Profit page. The ISM non-manufacturing PMI came in slightly below expectations today. Tomorrow, the big thing is ADP employment change data coming in. It is weekly. Fed members have their say. On Wednesday, there are Fed minutes. This is quite important, because through this we will know what was actually said during the last FOMC interest rate decision. There is information on initial claims and ongoing claims. It is very important to pay close attention to the labor market. There is a 30-year bond auction. It will be quite interesting to see how it turns out. On Friday there is the Michigan Consumer Sentiment Report. The week ahead is not too unusual, but it's usually in weeks like this that we see the biggest changes because that's when the unexpected happens.
In the oil market, UCO, which is an oil-based ETF, has reached a new 52-week high today. The opposite of that, SCO, hit a new 52-week low today. WTI is performing quite well. Most of the oil is in positive territory these days. Just keep an eye on the oil price. Trump can say anything to influence the market. But if we see that oil prices are at their highest levels in recent months and if we see that oil is the biggest factor in our rising inflation, then we have a CPI data report coming up that will track September data. Oil prices have been rising throughout September and October. So, there is a bit of a delay in this, but it will eventually be reported and then the market will react. If you see inflation concerns coming to the fore again, keep in mind that there will be no further changes to the way the CPI data report is calculated. It's already been rescheduled. So, it's final now. If it is higher than expected, the upcoming FOMC rate decision will add the possibility of another interest rate hike.
Pay attention to the bond market and the oil market and be aware of the various economic reports that are coming out this week. The speaker goes live every morning right after the market opens, and the link is given in the second link in the description below. This is a great way to start your morning every day, especially if you are new to the market and a little confused about what is happening. The videos help you, keep you updated with everything and make you aware of market movements. The daily cost is only $1.30. It's a one-time payment, lifetime access. If you would like to watch one of the live sessions before joining, you are welcome to do so. See the second link in the description below. Watch a recent live session. If you like what you see, you can join in the currently ongoing discount for October. If you have any questions before joining, don't hesitate to message on Instagram, the link to which is also provided in the description. Remember, this is zenplanprofit.com or the second link given in the description below.
Be patient, be prudent, and as always, let's make sure we end the year on a positive note. Good morning everyone, and happy Monday.
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