Okay folks, so we've got lots to get ready for and lots to cover. number One: We're going to discuss what happened at the end of last week and what that means moving forward. We did end up getting that Fed rug pull on Friday with the Dow down a casual three percent, the S P 500 down almost three and a half percent, and the Nasdaq down just under four percent. Pretty damn bloody day.

What do you need to know? Number two: We're going to discuss the hottest plays and trading opportunities. One of them has a massive catalyst coming on Wednesday, and this is a stock that we've covered quite a bit over the last couple of weeks and has historically had some pretty damn insane runs. Let us get right to work after a quick plug from our sponsor Ziptraderu. So if you want 50 off lifetime access to our step-by-step lessons, private chat, daily morning briefings, and full price target list, Well, the Recession 50 coupon code is still active, but it will be expiring a week from tomorrow at the end of Labor Day.

A strong welcome to all of our new members that have joined under the sale over the last month, but this will be coming to an end shortly. Take some time to look over the link below to see if we would be a good fit to help you on your trading journey and to help you reach your goals because that's what it's all about. Now on Tuesday we made a video that made the case for another market rug pull and a foundational argument for that market rug Pull. thesis was that the market is essentially under factoring in what the Fed is going to have to do.

and the Fed unfortunately substantiated that thesis. On Friday giving an eight-minute speech that erased nearly 78 billion dollars from the richest Americans and God knows how much from the 401ks and investments of everyday citizens. This snippet from Cnbc really sums up the idea. Powell noted that the Fed's failure to act forcefully in the 1970s caused a perpetuation of high inflation expectations that led to the draconian rate hikes of the early 1980s.

In that case, then Fed Chairman Paul Volcker pulled the economy into recession to tame inflation, the key phrase here being the Fed's failure to act forcefully in the 1970s. He is saying here that because the Fed of the 1970s failed to step up enough to fight inflation, well, the Fed of the 1980s had to step up a lot more. He's making the case here that we better damn well be forceful or we're going to have another decade plus of problems and it's going to be a lot more painful down the road. At the end of this statement, he said we will keep at it until we are confident the job is done.

Now this statement, of course, is not a new idea. When you start a job, you better be trying to finish it right. But the parameters for when the Fed will be confident the job is done is what is very, very much debated. As we were saying here on the channel last week, markets were expecting the small, pansy, pitsy pansy of a downtrend to be all the proof the Fed needed that the job was done.

However, Powell made it clear on Friday that the job was not indeed done. He says quote: While the lower inflation readings for July are welcome, a single month's improvement falls far short of what the committee will need to see before we are confident that inflation's moving down. So what does this mean? Well, he is saying that he is not even confident that inflation is moving down at all. We were making the argument last week that hey, maybe inflation is done peaking.

but just because it's done peaking doesn't mean it's just going to go like this. It could go down slightly and then start plateauing, but if you listen to what he is saying, he's saying no. We don't even have proof that inflation is going down, which is a very, very low parameter to meet, right? It's one thing if you go down and you plateau it like three times the Fed's target rate, it's another thing if you're not even sure that you're done making new hearts. Which means when you hear that when you hear him saying that, that means that the Fed for all intensive purposes is still in full battle mode.

Which is not. It's not what the market wanted to hear, and it's not what markets expected. And in fact, this line here really emphasizes the issue and why I'm making such a big argument for another massive rug pull. Powell says history shows that employment costs of bringing down inflation are likely to increase with delay as high inflation becomes more entrenched in wage and price setting.

Employment costs. Meaning what? While job losses increase with delay meaning job losses are coming on the horizon? What is he saying here? He's saying that in order to pay for entrenched inflation in both wage and in terms of prices of goods and services, what do you have to do? Well, you have to have a wave of employment cuts, job losses. And he's saying quote, they are likely to increase with delay. Which means they are coming down the road.

Now an analyst from Kestrel Holdings told Bloomberg this. Powell is telling us that until we see substantial confirmation of slowing price increases, the Fed will keep its foot on the brakes. That statement really sums it up, doesn't it? Nope. The Fed is not looking for pansy little drops in inflation as proof that the battle is won and we can all go home.

Nope, Powell and the entire Central Bank need substantial proof. Substantial proof that inflation is down, not just a pansy drop. A lot of people say, oh, it's all about the pansies, but it's not about the pansies. With Mr.

Jerome Powell, he was a pansy. Now he's trying not to be a pansy. Powell doesn't want to be a transitory panzer tory. which quite frankly, if you're critical of the Fed and their battle on inflation, this was the best statement you've heard so far.

Hey, we actually need to do something to bring down inflation just because gas prices have gone down slightly in the last couple of months. That doesn't guarantee that all inflationary pressures are just going to start dumping because a lot of the problems that cause the inflationary pressures are not exactly better. and I'd say in many cases worse. This analyst goes on to make this point.

With the Fed continuing to hike aggressively, earnings are likely to see further downside in the back half of the year, making the market look even more expensive, all else being equal. And this is the statement that I believe really sums up the market's reaction on Friday. If the Fed stance is that we haven't turned the tide on inflation much at all, then that means that the Fed is going to have to be a lot more aggressive with rate hikes. And that means that the current market is a lot more expensive than it has actually looked.

And that would be proven to be true as you go through the end of the year when earnings are substantially worse than the market is factoring in. The worse the Fed titans, the worse the economic blowback, right? There's a lot of people that think that you could have unprecedented quantitative tightening and fast paced rate hikes and not see earnings suffer at all. I am not in that boat. No, I am not.

It sucks. I hate it. I wish that we didn't have inflation, but we do. And when you have four decade high inflation, that becomes a situation where you have to have a solution that might be more painful than anything we've seen in four decades.

But in the meantime we just have to enjoy the roller coaster and hope for the best. Now I will say I do think the Fed still has a big, big credibility problem, I believe, and maybe you agree that the statements made on Friday were a lot more bearish than markets had acted like they were at the end of the day a few percent drop in major indices. even though it was pretty damn painful for just a one day drop, it still isn't much considering the market rebound rallied like 17 18 since Lowe's right, So I think that in effect, markets are looking at what Mr. Powell said on Friday and they're like, hey, he's a lot more hawkish than we thought? Yes, we agree.

but is he and the overall central bank going to actually follow through on the aggressiveness that it might take to bring the situation back to normalization? And they're thinking, no, definitely not, They're just going to be more hawkish than we thought, Which means we got to sell off a little bit and it's your best guess at how aggressive the Fed's gonna be. My thought process is they're at least pointing a little bit more in the right direction in order to solve the problem. Eventually, you're gonna have to rip the band-aid off and then we recover from that. The longer you wait, the worse it gets and the less tools you have available to you.

In any case, look at how the market trades this week, especially heading into Monday and Tuesday, because that's going to gauge exactly how the market has really taken the statement now that it's had about two days over the weekend to think about it. If it's up, the market does not believe the Fed and it's calling the Fed's bluff. If it's down, the market may be in the first steps to actually understanding and believing what Jerome Powell and the Central Bank is really saying. next.

Hot plays going into this week. Now the end of last week was incredibly challenging because the floors just really fell out all over the market. but one of the stocks we did see a win on was with Madame Nerf. I'll explain the takeaways and what you should know.

so on Friday we briefed on nerve at about 7 14-ish a share and by the next day's highs it ran up to 1202, which is almost a 70 increase to highs. How did we find it? And what does this mean in terms of future plays Moving forward? Well, the catalyst we identified on Thursday morning was that 0.72 Asset Management had acquired an 8.8 passive stake in the company. Who cares? Well, I care. Point 72 is Steve Cohen's massive hedge fund that you can say a lot about.

But all I will say today is that they know how to make money and other people know that. so people follow them. And so when you have the disclosure that a massive hedge fund has taken a massive stake in a sub 100 million dollar company, well, all of a sudden that creates a strong likelihood. Not a guarantee, but a strong likelihood that you're gonna see some boom boom afterwards and usually within the next one to three sessions.

It all depends on how fast media distributes that information, which is part of the reason why if you're informed, you could be on the front lines before everybody else starts finding out and buying it up. which is indeed something that we try to do in our daily morning briefings. But of course you can do it on your own. It's just that this is what we offer anyways.

my thought process moving forward. for nerves specifically, you probably have another pre-market pump ahead of you and then a take profit period. But moving forward. The big most important lesson here is that if you find that you have a small stock that has just reported a big hedge fund taking a stake in it, whether it's passive or active active is indeed a little bit better.

But whether it's passive or active really, then that stock should be on your radar for future proof of concept rallies to trade off of Get In, Get Out, and take those damn profits. Next, we made a video on Thursday, the day of Thurs with my top five squeeze stocks and my analysis on each of their setups and each of them is going to once again be on my radar. Heading into this week, this is going to be a crucial week for pretty much all of them. Pay very, very close attention to the ones that were green from that list on Friday when everything else just dumped.

If they can be green on a massive red day, those are the ones that there's a lot more lurking behind the scenes. Bed, Bath and Beyond, for example, was up almost six percent. Believe it or not, they have a conference call on Wednesday that will provide a business update that can cause a lot more attention to be paid to the stock. Again, I believe that based on the current setup, based on the proof of concept we saw on Friday, and based on the catalyst this week, it's likely that you see another large upward attempt in Bbby.

This week, Weber was up one and a half percent on Friday and is retaining its value quite well and could easily be prone to a breakout rally given some momentum. I'm also watching Aprn very closely for some proof of concept early this week. Their attention sure is strong with this one, but I want to see a new breakout attempt. You go over to the Options de Chaina of Coals expiring September 16th, and you have some significant concentration at 6, 7, 8, 9, 10 and really all the way to 12, which indicates what well it indicates that options traders are pricing in a solid move towards 12 before expiration two weeks from now now.

I'm not going to say that Blue Apron is going to be able to fight off a massive market-wide downtrend if that comes this week, but it's worth knowing about because the retention it's shown so far has shown some evidence that it's been able to hold its own, which means it might continue to do so, which means that you might see a bigger squeeze on shorts. And finally, let's go ahead and cap this video off with inverse Etfs when markets are very, very volatile. Whether good or bad, inverse Etfs tend to be the most useful tool that you'll ever find. In fact, every single day at the bottom of our daily morning briefings, we include directional Etfs because we know that they are some of the most effective tools.

There's one for the upside, and there's one for the downside. As long as the market's moving, there's going to be trading opportunities on one of them right now. My favorite one to know heading into this week is the Triple Q pair S Triple Q Shorts Qqq which is essentially like betting against the Nasdaq 100 and Triple Q is the inverse of that. Now a quick tip.

so a lot of people are like, hey, wait a second Unless I have a crystal ball, how can I tell which one is going to go up? Well, you can't 100 But if you want to start stacking probabilities in your favor, focus on the Etf that is trading in an upper direction at least. Then if you don't get the entries and exits completely right, Well, you'll still have the trend on your side, Right? And they say the trend is your friend. Now, what does that mean? Upper direction? Well, if you go to your one day one minute chart on the Etfs, there's always going to be one of the two either S Triple Q or T Triple Q that is trading above your red directional Sma line. The one that is broken above it and is gaining on top of that.

That is the one that we consider in an upper direction and that means that if you're buying that one instead of the other one, at least at the very least, you are trading with the trend. And then when the trend breaks, you're like, okay, hey, the trend is broken. We're now in a downward direction. In some situations, you get into an environment where there's uncertain direction.

right? It's wishy-washy It goes back and forth over the right direction. Lost the main line. What do you do then? Well, you avoid it like the plague and you go trade something else. But usually it's one or the other, right.

Especially when you have these days where there's aggressive movements. Anyways, folks that caps off this video have a great rest of your day. Make sure to hit that ravishing like button and subscribe. Thank you again Ziptrader you for sponsoring today's video.

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