The Wolf Of All Streets - Expect Massive Volatility In Bitcoin, Crypto & Stocks | Turbulence Is Coming

Episode Date: October 10, 2023

My special guests are Sidney Powell from Maple Finance, with whom we are going to talk about what's going on with the DeFi market, and Charlie Burton, a trader, who will talk about stocks, the Fed, and much more! Sidney Powell: https://twitter.com/syrupsid Charlie Burton: https://www.youtube.com/channel/UCqvRi6VUW6rqbrA1zwFl9Rg ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Is it time to expect massive volatility in Bitcoin, crypto and stocks? Is turbulence coming? Well, if you take a very close look at the bond market, that could be telling us that that's exactly what is going to happen. I'll be talking about this later in the stream and discussing it with Charlie Burton, who we've had many times here. He's going to share a lot of charts and thoughts on the market. But first, I want to talk about real world assets, tokenizing them. And I want to talk to my favorite person to talk about real-world assets with, and that is Sid Powell from Maple Finance. We're going to talk about how they're now allowing accredited American investors

to buy securitized T-bills, which is amazing, and just how big this market is. I know it's easy right now to focus on the larger macro stories, obviously, everything that's happening with geopolitics. But it's also important to talk about the future of this industry that we care so much about and all the progress that we're making. Frankly, I'd rather talk about that right now than stare at my Twitter feed. So that's what we're going to do today. Guys, you don't want to miss this one. It's going to be amazing. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel and hit that like button. Yeah, yesterday was a real eye-opening, cathartic stream with Dave, James, and Mike digging

into the macro with true experts and looking at what's likely to come and what could happen. Gave us great perspective. And I don't want to talk that to death all week, to be quite honest, right? I think we all know what's happening and we're going to see endless fake news, bad takes, poor interpretation, shitty analysis of what a potential war that doesn't even exist yet could mean. And honestly, I would rather take a more positive route moving forward and discuss all the incredible development in the crypto space and what's coming now. I've had Sid on quite a few times. I'm going to bring him on right now. How are you, man?

Hey, Scott. I'm good. I'm good. Thanks for having me on again. Of course. So listen, last time we had you on, we talked about a tokenized future, basically bringing seemingly all real world assets on chain. Now RWA has become one of the big catchphrases in crypto, right? When I was in Singapore for Token 2049, I think we missed each other there. Were you there? I was. I did Korea before, but I think, yeah, I think we did miss each other there. Saw each other in ConsenSys though. Yeah. So at ConsenSys, I wasn't seeing a hundred booths talking about RWA, but at token 2049, I saw seemingly literally hundreds of booths talking about RWA, right?

So this seems to be maybe the next big thing in crypto. Not that it wasn't something that we were discussing in the past cycles, but it seems like it's here, right? I want to bring something else right now. We've got Rwa.xyz. This is tokenized treasuries, which you told us you were focusing on last time, bringing T-bills, obviously, on-chain. $700 million here already with the likes of Franklin Templeton and Wisdom Tree Prime. These are huge names that are working on tokenizing T-bills. It is.

It's a big stat, but that's actually under-counting it because it doesn't even count the assets held by Maker at the moment, which is probably the single largest holder of tokenized T-bills on-chain. So, I mean, all told, you're actually probably looking at over a billion dollars of T-bills that are effectively finding their way on chain one way or another. And I continue to see new startups kind of coming through that are looking to do this. The narrative has shifted a little bit now from just tokenized T-bills to doing yield-bearing stablecoins, which are also, in my view, kind of a subset because they're still based on holding T-bills as the backing for all of those assets. But this has probably been the fastest growing sector of DeFi that we've seen this year. Yeah, it has. And you've been way ahead of it, right? Obviously, you just kind of talked about how there's a number of other people coming in. You see backed finance right here. Tokenized US treasuries arrive on Coinbase's base with backed RWA token issuance. You guys seemingly were first. And as we discussed right before the show, you said, well, naturally, everybody's going

to start rushing in, right? But it's kind of interesting that now we're already seeing this on L2s before it's even proliferated fully in L1s, right? Yeah, it's continuing to grow. So it really began in in february and unfortunately we weren't the very first uh ondo um ondo probably holds uh holds that claim uh but since then we launched a couple months later in may and we've seen growth to you know above 35 million uh on the platform and since then we've seen other players come in. So I'm not surprised that it's moving to base. I think base is a great venue. We've already seen some of these assets go on to Polygon. And I think you're going to... I think, put it this way, if you're one of the

teams building an L2, you want to have this product on there because it allows firms who like crypto startups or DAOs who raise money to then keep those assets on your L2 and then earn a yield from the T-bills. So I think it's going to emerge as one of those core pieces of infrastructure, like having a version of Uniswap or a money market on top of the, you know, in your DeFi sector on one of those L2s. So back to Centrifuge already indicated they're moving to base. We're looking at L2 solutions ourselves. And yeah, I don't see any sign of that slowing down. Can you talk about the mechanics of that yield on, I guess we have stable coins and tokenized treasuries here, but is that the same yield that's being offered by the bond itself? We all know that yields have skyrocketed for 10-year treasuries, two-year treasuries, literally

everything across the board. Or is there another sort of mechanism here for additional yield that's unique to DeFi or crypto once you actually put them on chain? It's a good question. Most of this is actually the sustainable yield coming from the bonds and the bills themselves. So if you look, there's kind of two major structures in how this works. So the first is that you can be an LP in a fund. So that's how Ondo works. That's how a couple of the others work. And in that, you're subscribing for a share for an LP share of that fund. The other way you can do it is through loans. So the way Maple

structure works is depositors are making a loan. And then off the back of that, we make a loan to an SPV that pledges the T bills as collateral, and then it uses the interest from the T bills to service that loan. So that one's a little bit, we feel it's like a more of a lightweight structure that's a little bit more flexible. But the underlying yield is coming from the T-bill. So it's not reliant on token incentives. And so it's therefore, in my view, much more sustainable.

And what we're seeing now is some firms, we're actually working with one like Stakeda, who's going to be launching a pool soon, who's looking for a higher yield than just T-bills because they're going to incorporate things like asset-backed bonds and others in that portfolio to get an enhanced yield. Other folks are looking at doing things like covered calls to enhance their yield as well. But we're seeing this desire to start to push the yield up, which is kind of natural, I guess, once it started to proliferate. And people want to get an edge through some kind of differentiation, right? Natural, certainly. But I'm not saying it's a bad idea because, you know, if you understand the risk and you trust the person who's actively managing to do it. But this just weeks of last cycle, doesn't it? The ever never ending chase for a slightly higher yield.

Yeah. History, history doesn't, um, history doesn't repeat, but it certainly does rhyme. Um, which we're seeing the other, the other thing is I continue to see new startups raising, uh, raising funds at the moment to do tokenized T-bills. And I think we're kind of hitting saturation point where I'm not sure there's too many more ways to differentiate it and also it's not exactly a high margin product so you need to find ways to kind of add other products to your stable like if you're if you're a venture or protocol looking to do this you're really only making maybe 15 to 25 basis points on this so for for all of us participating here, the play is to try and reach significant scale.

So billions of dollars in these pools to, you know, to kind of just justify it and keep the lights on. Right. So you're not looking to make a larger margin. You're just looking to have a much larger bucket of cash there that people are investing to make that small bit count for more, which that's the way we would like to hear it, right? Yeah, yeah.

I mean, which is the way competition should work. It should push down the fees that everyone's paying for this type of product. But it is, at the end of the day, it's kind of a commodity product. There's not too many ways to kind of set yourself apart with this. Like an ETF. That's why at least, yeah, yeah, exactly, exactly. Like look at the way the ETF market shook out, where the scale players like BlackRock hit economies of scale, and then they continue to grow their market share, which in turn gives them the ability to drop prices even lower on a unit economic basis.

Yeah, that makes perfect sense. I want to talk about a specific piece of news related to you guys. Maple Finance's tokenized treasury is available to US investors after securities exemption. Not a headline that we see very often. Usually when we see the US in a headline on Yahoo Finance, Coindesk, or any other site, it's telling us how we can't participate. Typically not great. Somebody's getting sued or they want to tell us about, I don't know, SBF's relationship with Carolyn Ellison, which we don't talk about here. Right. So good to see that this is actually a story telling something that the United States investors can do. Can you talk a bit more about this? Yeah. So this pool was offered under a Reg D exemption. So it means it's unfortunately limited only to accredited investors, be they individuals or entities, but it is at least a step in the right direction.

So we did PPM, so like a private placement memorandum, which serves as a disclosure doc for any accredited investor in the US who wants to use this and it sets out all the risks, how it works. But what's interesting was that the hypothesis before we launched this was that there wouldn't really be any appetite in the US because everyone has access to brokerage accounts. What we found is though crypto startups don't, everyone knows Operation Chokepoint, which I think Chokepoint 2.0, which you covered really well, but that's meant that a lot of crypto startups don't actually have access to banking and money market funds. So they've been interested in this product. But also at 50 basis points, it's actually not a huge cost for something to significantly better user experience. You get to self-custody your funds.

You can move them around at 24 hours notice. And you can see the interest that you're accruing in real time. So I actually think it kind of shows the UX of crypto is getting better and more people are opting into this over time. When I've spoken to other people, the kind of the analogy I use is that stable coins are kind of like a mobile. So it's like everyone used to have fixed line. And then some people who are early adopters would have mobile. Then everyone kind of had both. And then eventually everybody just dropped their fixed line.

I think that's the way stablecoins will go. There'll come a point where it tips above parity and everybody's just using stablecoins. I mostly only use fiat for kind of last mile stuff like paying bills and that sort of thing. Do you think a big part of that will be CBDCs and central bank digital currencies? Or do you think it will still be the private stablecoins that are so popular today or new versions thereof? I hope not CBDCs. I definitely would like to see this as something provided by the private sector.

And I think you have good stablecoin options at the moment, but I think more will come through because it's hard to see that a bank wouldn't try and, um, get in on the action and, and launch its own stable coin, particularly like, um, in markets outside the U S but I think the government doesn't have a great track record of providing infrastructure or, um, services or keeping them competitive. So I think it's naturally going to be, you know, the private sector is going to be able to hire better engineers. They're going to be able to attract private capital to invest in the growth and maintenance of the infrastructure to manage stable coins. I mean, we don't have the government managing

all of our telecom services or providing you with broadband. So it's kind of crazy to think they would be the ones providing you with, you know, digital currency. I 100% agree, but governments and money don't part too easily, right? So, but that said, I think that if we see reasonable legislation in the United States, for example, that just tells you how you can use stable coins, and specifically, more importantly, what would be required of a stable coin issuer to be compliant, that's the way forward. So I think that it's just a matter of actually getting that legislation more importantly, what would be required of a stablecoin issuer to be compliant. That's the way forward. So I think that it's just a matter of actually getting that legislation.

And I think it'll become very, very clear. I think so too. And I think, I mean, you could have a bit of an integration between the government and the private sector. If they gave Fed accounts to stablecoin providers like Circle, for example, then you still have oversight, you still have auditing and um and regulation of the stable coins but you just have the private sector actually hiring the developers and um and you know providing that service um for something that's not an egregious monopolistic um profit margin yeah i i agree with that exactly. Now I'm bringing up something for

our next topic, which I know you're pretty well informed on, which is the Financial Conduct Authority, the FCA in the UK, these new marketing rules coming into effect. And it seems that we have a lot of exchanges, platforms, protocols, basically scrambling, even though we knew they were coming, scrambling to be compliant. I know OKEx, for example, removed a ton of assets they were listing and the way that they, the language they were using to get compliance. And a lot of people have not yet been able to do that. But we have the FCA sets out expectations for UK crypto asset businesses complying with the travel rule. You guys can head into these links. We don't need to read them, but obviously FCA sets expectations ahead of incoming crypto marketing rules. And FDA, FCA already issues 146 alerts in

first 24 hours of new crypto marketing regime. Yeah. I don't know if you know the broad strokes. I mean, guys, at the most basic level, they're just making it a lot more difficult to market crypto products and the language you're allowed to use also how what you need to do if you want to send amounts across borders it's etc one of the biggest ones here that's going to absolutely crush youtubers uh is basically you can't have a refer a friend or an affiliate link that was one of the ones yeah it's one of the the main listed ones right here it literally is in that one of their headlines here go. Tough new rules designed to make the marketing of crypto asset products clear and more accurate. And the ban incentives like refer a friend bonuses will come into force on October 8th.

So that was two days ago. So, I mean, maybe you can give the broad strokes of your thoughts on what's happening in the UK. Listen, it's not banned. That's good. Yeah, that's one thing. It's so silver lining. I think as with a lot of this regulation, it kind of starts out with a good intention, which is, hey, let's stop people getting scammed by sending crypto to places where they don't

know what's going to end up and where they might have received a phishing link or something that's obviously scammy. And so everyone who wants to do crypto advertising has to register or do it through, disseminate through a registered person. And that kind of sounds good on the face of it, but then you get into the finer details of it and it starts to become really difficult. And I think historically, none of the regulation that kind of goes into this level of minutiae kind of works out as planned. For anything, not just crypto. Yeah. It's like the old cobra rule in India, right? You remember when they said,

so under the British Raj, at one point they provided a bounty for killing cobras. So suddenly everyone started farming cobras. And then when they stopped providing the bounty, they just released them into the wild. So you ended with way more cobras than than you had before um and uh not to digress too much but so in this rule some some of the issues i can see right so we have some clients in the uk and they're high net worths so they've gone through like an accredited investor check they understand the risks they're they're pretty sophisticated the issue is, can we send them a newsletter that updates them onto on, on what Maple's been doing? So a question like that for startups is, you know, is that advertising, is that advertising crypto services, or is that just keeping them informed on, on what a startup has been up to and kind of what's going on in this

space? So that's, um, that's, you know, that's, that's one thing that I think is going to impact, like how do you know, how do startups in the crypto space actually engage with the UK? Can they engage with the UK? What, what are UK based startups do? Because they can't afford to spend six months or 12 months getting registered just to put out a newsletter about what they've been up to. Um, so I think whilst the rule is well-intentioned, it's going to have all these kind of side effects and externalities. Yeah, yeah, yeah. Yeah, first of all, generally, these regulators don't understand the markets that they're regulating fully, especially one that's so nascent and fast-moving as this one. There's literally no way that – and you have to sympathize with regulators in this too, even in the United States. There's really no way that they can think of everything, right. And include it and be

comprehensive. So it's almost like they just need to put a very, very basic lines on the road, you know, and a couple of stoplights and at key intersections and call it a day because digging any deeper than that, you're probably going to hurt the industry and yourselves more than you're going to help. Yeah. Yeah. I've, I've, I've thought about this a lot, right? And if you look at, like, if you look at big patterns in innovation, I mean, imagine, imagine if we take in the regulatory approach we take today when planes first came out, like we never would have got to a Boeing 747 because we'd still be working out whether people can fly twin props. And so with this, I 100% agree with you. I think we should just set out in all major jurisdictions,

it should be like a sandbox. It should set out just basic disclosure requirements and kind of best practices there and then allow enough degrees of freedom for innovation to occur. Like, I don't think you can kind of, I don't think you can necessarily mandate what technology needs to be built. I think you just need to set out

a fair level of disclosures and kind of, you know, some prudent aspects of risk management so that people can make informed decisions themselves. But the way innovation occurs is a random walk. Like, it's not a directed path set by governments. Yeah. Well, we got a few minutes left. Let's talk about the beautiful land of make-believe of the future. Is there anything else now that we're tokenizing T-bills that's getting you really excited right now that you're looking forward to that may be

another major narrative in the next cycle? Yeah. Well why I think now that we're tokenizing T-bills, like I think you'll see two, I guess a couple of things. One comes up a little bit is like hedging for that. So having derivatives or futures or swaps that we can use in DeFi to kind of hedge those exposures. Like let's say you've got a T-bill exposure, but you want, you think maybe the yield curve is going to be inverted in the future. So you want to lock in that yield. So I think those kinds of instruments are going to be really useful. It's more complex, but

I think that was kind of what was missing from a lot of the past DeFi. Like if you looked at it, a lot of the DeFi yields weren't coming from sustainable sources. So it was really speculative. So you couldn't have those kinds of secondary products built on top in a way that you might be able to now that you have kind of effectively tokenized credit markets on chain. The other one, though, is like more real world applications. I actually want to see more business use cases. We talk to a lot of real world businesses that are interested now in borrowing from DeFi.

So whether they be community banks, businesses that might be operating in trade finance, or it might be like folks who have large customers and they need accounts receivable finance, whether it's for energy or for retail or something else. And so I think over the next 12 months, what I want to see is more opportunities like that, whether it's trade finance, because these are areas where we can actually compete better than banks because we don't have to settle on T plus two, we can move funds faster on chain. And so it's actually going to serve a customer who might be exporting grain from Brazil to the US much better than what a bank can do. And what we've seen though is there's been a bit of a dent in the real world asset narrative of late, but I think it's going to come back. And what we need to find though is kind of the right use case where it's high

enough yield that on-chain investors are interested. It's short duration because people don't want to lock up their funds that long. And it's got to be developed. I think the emerging market threat is kind of coming off a bit, and it needs to be either US-based or European-based or Singapore or Hong Kong. So one of the more developed markets for this to occur. I mean, a loan against accounts receivable for a business is really interesting. Obviously, that exists in the real world, but you've got to imagine that now with all the financial strain that accounts receivable are

becoming even more problematic for small businesses as people either choose to delay their payments or can't make them at all. But I guess the question then becomes, how do you pay back the loan if your account's receivable or never paid back? Yeah. And there's ways you can manage it, right? If it's a small business that wants an account's receivable loan, but the customer they sell to is Walmart, very different credit risk. And Walmart is highly unlikely to default. Very different to having 10 small businesses are your main clients who need to pay you back. So it's more filling the gap of time with a reliable customer than just YOLO. It's time because crypto can move money faster. So if you can settle instantly instead of on T

plus two or T plus three, then you have a distinct advantage over banks and other other providers and the other thing is that banks are actually walking away from a lot of this business so if you're an unrated like unrated think middle market or smaller smaller business in the us or europe um you're not really getting served by banks you're you're increasingly having to go to credit funds where you get like gouged by by mid-teen or high teen rates and um that's been the trend for at least the last 10 years like we've all seen private credit grow massively and all i'm saying is is here i think um firms are doing this on chain like defy have a distinct advantage over a lot of those private credit funds because they don't own the rails in which they send money so they're having to to ping JP Morgan and say, hey, JP Morgan, can you send out money to this

borrower? Whereas we can just click a button and it goes from the smart contract to the borrower straight away. It settles in 15 seconds. Yeah, that makes perfect sense. You also said commercial or I guess maybe you said like community banks, not commercial banks, community banks. Interesting that banks would want to go on chain to borrow money instead of, you know. I'll tell you exactly. I'll tell you exactly why. And it's all since this is, again, no good deed goes unpunished. But this is one of the products of the banking collapse that we saw in March.

So community banks were reliant on depositors for funding, but deposit capital is now super flighty. Anyone at any moment could just withdraw their funds and send it to a G-SIB like JP Morgan because they're concerned about the health of the community banks. So community banks are now going to need to tap capital markets for more stable and longer-term funding. And guess what? DeFi is going to be open for business. We've already seen one community bank in the US borrow from Maker. And so I think you'll see more community banks try and opt for that, particularly if we can offer them a term duration loan.

We're probably going to be able to get it done faster than what capital markets could. And so, yeah, I think there's a huge opportunity there for DeFi to serve community banks and add, put it this way, add stability to the financial system in the US. It's funny to hear that term used, right? When I think most people's perception of DeFi right now is extremely negative because of the hacks and exploits and lost funds. And I mean, I know it ain't DeFi, but yesterday I got a whole bunch of fake text messages from friend tech. You know, it's just endless sort of phishing attempts. And so, I mean, I know we're about uptime, but how do you sort of, uh, explain to people the unknown, unknown risks of DeFi or how can they calculate that when considering something like this? Don't want to

see a community bank get rug pulled. No, no, no, no, no, no, you don't. Um, and so I think cyber, like cybersecurity in general is already pretty important for financial institutions. I think this just adds a new dimension to it where it need to watch out for approvals on wallets and how they're sourcing funds. I also get a ton of scams. I think what happened though is that on a daily basis, if you go on your spam folder, you probably see hundreds of spam emails.

And I think what we'll need for DeFi is better filtration systems. So maybe MetaMask provides you with a filter and says these things were scams and just filters them to the side. And then only shows you kind of real interactions with your wallet. And also maybe things like Chainalysis and TRM become products that are available to the everyday user so that you can filter and check that the contract you're interacting with is legit. And then the final thing would be insurance, like just having insurance providers who provide more protection against hacks and things. And I think if you look at the size and severity and frequency

of all these hacks, I think it's definitely an insurable risk across the sector that people can pay a premium for and get protection. I think that'll encourage more institutions to come in over time. Totally. Well, I mean, what I hear here is that the usual, we're still early basically, right? But we're actually starting to see it, but that there's this endless world of legacy market products and strategies that can all eventually be brought on chain. It's just going to be a matter of time and security. But I think we'll get all of it. It always takes a little bit longer than we think at first. But then in the longer term, we always underestimate. Yeah, yeah. It's the S-curve. We always underestimate how much progress

we'll make over a 10 or 15 or 20 year period. Yeah, people don't struggle to think exponentially. But once it goes parabolic, it generally doesn't come back with adoption. Price maybe, but adoption not so much. Thank you so much. Where are you headed next for a conference? So next time we make sure we don't miss each other. I am going to be in Solana, um, in,

uh, Amsterdam for a Solana break point at the start of, uh, start of November. So hopefully I'll see you there. Maybe we'll see. That said guys, everybody follow him.

He still has like one of the best names, syrup, Sid on Twitter. I love it. You know, maple syrup. You guys get it. Clever.

Anyways, thank you very much. I'll see you soon. Thanks Scott. See you, man. Bye guys. And so listen, I'm going to bring Charlie on in just a couple minutes, but I wanted to talk about the actual title of this stream, which as usual seems hyperbolic and clickbaity, but that

doesn't work for us anyways. Here's the one thing Bitcoin traders should be watching, right? And this applies not only to Bitcoin traders, if you ask me, but Bank of America's latest take on US Treasury notes suggests a major market event ahead. Now, basically what they're saying here to give you the really quick and dirty is that they're massively oversold. Bonds are massively oversold, which we can see, and that they are extremely, extremely far and discounted from their 200-day moving averages. Now, anybody who does use moving averages knows that eventually price generally reverts to the mean, right? And people use 50 or 100 or 200-day moving averages as the likely place for a mean reversion like that. But

it's also important to note that that mean reversion can come with those moving averages coming down or up to price. It doesn't necessarily mean that where that moving average is now is where price is headed. But basically, this is saying when bonds are this oversold, here you go, treasuries trading over 5% below 200 DMA, note oversold sell-offs all coincided foreshadowed events. October 87 crash, May 94 tequila crisis. I honestly, dude, I want to have a tequila crisis right now. June 99 internet bubble, March 21 crypto pop, October 22 NASDAQ pop. This is Bank of America analyst said in a note titled the price of money sent to clients October 5th.

You can see here, they just give a quick kind of chart showing every time they're overbought and oversold what happens. And this is the part that's going to get you guys all excited. The latest oversold reading looks analogous to the one observed in early 2021, following which Bitcoin rose to new record highs above 60,000. By the end of May 2021, Bitcoin fell back 60,000. Yeah, dude, we were all there, thanks. In other words, broader markets, including Bitcoin, could see increased price turbulence. So the moral of the story here is when we see bonds this oversold, generally we see risk assets go up, which is counter to the narrative of what you would expect if we actually see a war or something of that sort. Just to say of that type, let's take a quick look at TLT. This is the iShares 20-year treasury bond ETF.

This is the way, by the way, that a lot of people look for exposure to bonds without actually buying treasuries. But you can see here, guys, even on the monthly, it the way, that a lot of people look for exposure to bonds without actually buying treasuries. But you can see here, guys, even on the monthly, it's oversold, likely bullish divergence here, right? Almost at the lows of 80.51 historical lows going all the way back to 2002. So TLT on the monthly oversold as I'm saying here. And that 200 moving average on the monthly is all the way up at 117. While this is currently at 85.95. I mean, I haven't even looked, but take a look at the weekly. The 200 moving average is all the way up at 117, while this is currently at 85.95. I mean, listen,

I haven't even looked, but take a look at the weekly. The 200 moving average is all the way up at 132. Also, although we're over an extended period, oversold on RSI with bullish divergence. I bet it's the same on the daily. Look at the volume that's been coming in. Daily, it's clearly bouncing, oversold bullish divergence again, and the 200 MA up at around 100. So the idea here from that article is that there's a whole lot of room to move right now for bonds if you believe that this has been an over-aggressive sell-off. Take a look at 10-year yields here. You got the weekly, and I pointed this out on Gareth Soloway's channel. I'm not a huge fan of TV, but it tends to work sometimes,

Tom DeMark, but you do have a cell nine that's printed here with overbought RSI once again. You get maybe a few more candles before it tends to head down, but that looks like a correction would be likely in the 10-year. I mean, taking a look at the daily 10-year looking massively overbought again. And then we go over to the two-year, right? And we know the yield curve has been rapidly uninverting here, which I can show you again later. But this is coming up into a key area. I mean, you're talking about the highs from 2005, 2006. And again, if you look at the flip side of this, obviously, I showed you TLT. You guys understand when yields go up, bonds go down.

When bonds go up, yields go down, right? The value of a bond goes up that you could buy as the yield goes down. Anyways, still overbought here. And those 200-day moving averages way down here at 1.4% versus 4.98% where we are. So the bottom line is these yields have a long way to move just to revert to the mean. That was a lot, but that's why we're expecting more volatility as we see bonds massively oversold and yields massively overbought. I mean, go ahead and bring on everyone's favorite Brit, Charlie Brody. It just happens, man. I don't even think my wife would agree with you on that one. Well, I mean, that's a counter indicator of the same thing, right? If you are the favorite, it's unlikely your wife thinks so.

How are you doing? All right? I'm good, man. She would never admit it anyways, right? She might think it deep down. She admits it to everybody. I mean, the flip side. She would never admit it if she thought you were the best because then you get a big head and get an ego and all that. So listen, man, I think we can start here, obviously,

what I just kind of said, but yields, I think we can start here, obviously, what I just kind of said, but yields, I think leads us into the dollar, which leads us into what's going to happen with markets. And I think, you know, we're at a very critical juncture here. I don't know if you would agree. Yeah, I do. And it's funny. I mean, so often when I come on, you know, my analysis is pretty much what your analysis is, roughly speaking. So it seems to be the case. And, yeah, it was interesting just picking up on what you were saying about those 10-year yields and 2-year yields. I was literally with my traders in my trading community this morning talking about exactly that, just how stretched they are. But as you quite rightly said, you know, markets can remain stretched for a lot longer than people can remain solvent. But so catching the turns is interesting. I did think, funnily enough,

looking at the two-year yield, I thought that breakdown in the yield yesterday, if you go back to your daily charts, I thought that was quite an interesting breakdown on the daily chart there of yields yesterday. Yeah, I'll show you guys. Sorry, I just got to zoom out. Yeah, that was a pretty big breakdown and drop and close below the 50. And now that's resistance. Yes, yes, exactly that. First close below the 50-day moving average, a true close below it since it broke up back in earlier on this year.

Yeah. Yeah. So I do think it's a really interesting juncture. We've seen obviously the interrelationship between yields, the stock markets, the dollar, it's all there. So where do you want me to start? The stock market, the dollar, where do we go? Up to you, man. I mean, listen, the dollar finally... I would love if you could bring up your screen, of course, but the dollar, last week's chart finally last week's candle finally showing some potential top toppiness here right i mean that is a that is an aggressively horrid looking

uh candle for those who trade those that gravestone doji whatever you guys want to call it you know a huge upper wick tiny body indicating that this is where finally the bears have really decided to step in yeah i think what's been interesting i mean i i've been i've been um long the dollar a while ago i've been short it so i've been long it recently and i've i'm out now so i've been short the euro dollar um but i'm out now of that um it's a few weeks ago, didn't catch the lows, of course, and I am now long. So just so if you get me back on in a few weeks time, I'm long currently Eurodollar, i.e. short the dollar. Short the dollar for those who don't understand that, right?

Yeah. I'm now short the dollar just as of last week. I was sitting on a beach in Greece last week and managed to play certain trades. So interestingly on your chart there, on your weekly chart of the dollar, look at your 50 period moving average. This is something I often teach with traders is if you get a price overshoot a key moving average, like a 200, you had some charts up earlier on or a 50, but if that 50 still sloping down, even though prices, yeah, absolutely. Yeah. And we, maybe we'll have a look at a chart of gold actually during this session if we've got enough time because there's a lovely example on gold at the moment. So for me, when price goes up like that, you're right, lovely reversal.

Of course, the dollars had, what, 11, nearly 12 straight winning weeks. It just gave it back at the end of last week. But with that 50 sloping down, it's often a sign to me that, because I use moving averages a lot, that price will often want to retrace back towards, and you were just talking about mean reversion, back towards the moving average, which is sloping away from it. So it's not 100%, nothing is, but it is something that I use within my analysis. And it's interesting that the dollar index looks like that. And by proxy, the euro dollar on the dollar index looks like that. And by proxy,

the Euro dollar on the weekly chart looks like that as well, but turned upside down, of course, if you could take a look there, here's the Euro dollar, although yeah, it's actually did kind of play out. We'll just go ahead. Yeah. I'll pull it back up. I think it's just a different, uh, oh, I see template. Here's a 15, 200 right here. Although we barely got a 200 there. Cause it's a monthly. That can't be the weekly. No, I'm going to go to the weekly now. There you go.

There you go. So you can see that very clearly there, that 50 facing upwards. So price has extended the wrong side of it. Then what I'm usually looking for is some kind of support to come in. And if we start to see a turn, saw a few divergences on the euro. I use a MACD. I know you use an RSI. But just coming into last week, and then we start to see those tails there,

then – oh, sorry, the divergences are on the daily chart. My apologies. But that timeframe, that weekly, it's a lovely example of 50 period moving up, prices below it. I'd like to see a retracement, at least to try and close the gap. Yeah, I mean, it's not surprisingly for everyone, when you're looking at a DXY chart, you see that ugly weekly candle on the top, you can pretty much guarantee you're going to flip to a Euro-US dollar chart and see a beautiful hammer on the bottom. Oh, yeah. You've got an EMA up there. I use a beautiful hammer on the bottom. Oh, yeah.

You've got an EMA up there. I use a simple. That's why. Yeah, this is, so do I, to be honest. I just hit the wrong one because it was on that MACD chart. Yeah, I mean, you can see this beautiful hammer reversal. You can see all this demand with these downward wicks right here. This week, obviously, has three days and eight hours left,

but this looks reversing. And it's quite interesting, lining this all up from a macro perspective as well. We're just starting to see the narrative start to change from some of the Fed speakers as well, aren't we? They're starting to say, well, the market's done a lot of the heavy lifting for us now. So we're just starting to see some rhetoric change just over this last week as well. And of course, Fed futures pricing for the November hike is basically almost at zero, it's at 13% at the moment. So I think it gives the, at least in the near term, the dollar the opportunity to have a little bit of a reprieve and at least take a bit of a rest. Then we'll see if things start to progress from there. My view is if we do start to get a rally going, I'm going to take a bigger picture view that this might

actually be the beginning of something larger. But I'm a bit tentative at the moment. I want to see the price action. But I think that what's going to happen is we've got obviously got the debt ceiling coming back into play middle of next month and all sorts of other things going on from a macro perspective and political perspective as well, of course. And so it wouldn't surprise me if we're in the early throes of probing a low. It's not to say we couldn't do another test of the lows yet, but that's what i'm looking for is potentially this could end up being a bigger move i mean honestly if you're taking even just a general look i mean this was the lows of 2023 effectively are here right that's the second day so i barely count that and here and all these candles have swept those lows yes yeah exactly and i still keep coming back to this range and I know it's not going to

happen now unless the euro goes and has a big run to the downside or massively to the upside in the next three months but it's only done 800 just over 800 pips range for the year its average range is twice that it's over 1600 pips so a disappointment for the euro dollar in many regards from a range perspective it's very compressed which may bode well coming back to what you've said about hundred pips. So a disappointment for the euro dollar in many regards from a range perspective, it's very compressed, which may bode well coming back to what you said about where things going over the next 12 months from a volatility perspective, because quite often when we get these sort of compressions, you know that they don't last forever. Yeah, I mean, this is what I would be looking for this up when I'm looking at this too. I would definitely get long euro tier

and especially when DXY looked so toppy there. So I definitely agree. Did you want to take a look at that gold chart? I got XAU here. Yeah. Can you go to the weekly with those moving averages? Oh man, I don't know what I did. Did something. One second. Yeah. Weekly, 5,200. I've got some wild. Trading view has changed to be very annoying with their auto uh here we go anyways i just need to save the settings but um yeah i know yeah the um what i think is interesting with gold right now is it's come down to that 200 days you've just said sorry 200 week moving average yeah um so again from a moving average perspective that's nice and as you've put on there it's clipped some nice technical uh prior highs and lows as well and

look at that 50 facing upwards as well so that would always suggest to me that there's the potential for a bit more upside and obviously with what's going on over in the middle east at the moment gold's um caught a bid and but if the dollar is going to retrace more as well, then the story bodes well, certainly over the near term, for gold to generally seek out some higher prices. Absolutely. Anything else you want to take a look at before I let you go? Stock market.

I might as well have a look at that. What do you want, SPX or SPY? It's interesting. SPX. SPX. Here we go. Stock market. It might as well have a look at that. What do you want, SPX or SPY? Since you're speaking about that. SPX. SPX. Here we go. SPX. Honestly, I haven't even been looking at these. It's fun when you come back and see price at levels you drew a long time ago. Yeah. Well, we had that breakdown there on that one. And it's a decent bounce in the last few days, really. Again, as we're starting to see risk on come in, of course, yesterday and from the weekend was interesting to see how it was going to play itself out. I'm looking at the stock market right now.

You know, I was short. I, again, have been short. I've not got long. So I'm not going to say that. But I'm now being trading stopped out of my short. And I'm looking for some more upside now. We've talked about seasonals previously as well. October is a classic month of making lows, but really it's about, for me,

about November, December, that classic Santa Claus rally sort of period. I think we're setting up quite well, potentially for that. But then again, I've got a bias at the moment because I want the Euro dollar to go up. And if the Euro's going up, the stock market are going up as well. Right, because the dollar, which it just means the dollar's going down.

Exactly, yeah. So I would like to see that. But the leader is obviously the NASDAQ. The NASDAQ's that bit stronger than all, of course, than all of the markets. And it's already doing, faring quite well, the NASDAQ's that bit stronger, of course, than all of the markets, and it's already faring quite well than NASDAQ. I'm leaning back towards the long side. I'm not long at the moment.

I'm waiting for a bit more confirmation. It's actually the Dow that I really like the look of, even though it's not the strongest. If we can zoom out, if you can zoom out a bit on the Dow. Where's the weekly? On the daily. Oh, wider on the daily, gotcha. Yeah.

So the Dow, I think, I just love this chart because around about, hold on, let's have a quick look at mine, around about hold on let's have a look at quick look at mine around about uh 34 300 so clipping through a lot of the the price action because yours is now so zoomed out can't quite see but um going back across all the highs of early 2023 uh around that sort of level a bit higher i'm looking at cfd chart um so a bit higher towards those highs of that first month or two of yeah across there yeah there's so many attempts that the dow had at trying to breach that whole zone going through this year yes exactly where you just had it yeah um that is such a lovely level so what i'm looking for is if the Dow can get back up to that level then I'll

start looking at entries on the long side because it's what I call a pebble on a pond and a pebble on a pond you imagine you're skimming a pebble across the surface of the pond and it bounces bounces bounces and eventually falls through this is that in reverse it's had an attempt at the upside and a breakout yes it's failed so far, but that could also be a false breakout. So I think that level is something that all traders should be keeping an eye on because if we can breach back above that level, then all bets are off. It's kind of these higher lows you're talking about, right? It's sort of the, it would be a descending triangle, but all of this ruins that. But yeah, the idea basically that you get, yeah.

But that level is still- The higher lows pushing towards resistance. Yep. That's still an interesting level overall, if it gets there. There will be some butts at the moment, but that's something that I'm looking for over the next few weeks. It would tie in well with that November, December period. We'll see. Well, I enjoyed being your assistant. I enjoyed, I needed to put my glasses on to be able to see the charts today. I guess next time we'll figure out how to get yours up here again. Well, thank you, man. I always

appreciate the perspective. It'll be interesting to see where we're at next time you come on and if we get that Santa Claus rally or if geopolitical events have different plans for us. Thank you so much, Charlie. Have a good one, man. All right, everybody. That's it. You guys may have noticed yesterday that we moved the Crypto Town Hall to the Crypto Town

Hall Twitter account, crypto underscore town hall. We will be there in 25 minutes. Guys, that's all I got for you today. It was fun to talk about something that wasn't the war, even though obviously that will continue to press on all of us, I'm sure, for quite a while. Guys, I will see you all on Twitter spaces and then back here tomorrow at 9 a.m. Eastern Standard Time. Peace.

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