Big Reversal Will Start in the Next Few Days-Complacent Traders Will be Shocked & Caught by Surprise

Ajouté : 2026-05-27

[00:00:04]Now on Friday, we're going to get the Fed's favorite gauge of inflation, the PCE inflation data. It is going to rise.

[00:00:12]Could have possible volatility with that on Friday. But the markets have shrugged up the PCE, I'm sorry, the uh PPI and the CPI at least so far. That's not likely not going to be the case too much longer.

[00:00:28]Crude oil will eventually move to new highs and there'll be an inflation freakout. The yield surging and crude oil surging will see it show up in the inflation indexes. The PCE inflation index is the Fed's favorite gauge of inflation. The data will be out on Friday with our short trading week this week. Year-over-year is expected to rise to 3.8% previously at 3.5%.

[00:00:53]for the headline number the core supposed to inch up to slightly to 3.3 above the 3.2 too. Soon the narrative will be, we're already starting to see it in the betting markets that the Fed is going to have to raise rates. Fed can't lower rates. And again, markets will sell off on that, sharply sell off on that. And eventually the Fed when they do, the Fed will panic and they will slash rates and begin jumbo cuts and markets will rally on that. It will be too late. The Fed's already kept rates too high for too long, making those same monetary policy mistakes that they made back in 2007 and 8. The same monetary policy mistakes that they made back at the 2000 uh top there in early 2001.

[00:01:38]Narrative is going to be the Fed can't cut rates, but they will. They'll choose to support the economy rather than combat inflation. Said in 2008 when the Fed began jumbo cuts, inflation was higher than it is right now. and they were doing jumbo cuts and it continued to rise and they kept doing jumbo cuts.

[00:01:54]And you'll see the same thing happen here. Let's look at the GDP revision.

[00:01:58]This will be the second revision for the first quarter expected to be at 2%.

[00:02:06]Both the S&P 500 and the Nasdaq are starting the week off with an eight of a nine count in the weekly time frame. If we don't get a close below the bar from four weeks ago, this week or next week, eight or nine could be the high of the count. Could be this bar this week. Even if um we complete the count with the nine count, bar 9 does not have to be the high of the count. Although it was the bottom over here. Just a count I'm paying attention to. This is the S&P weekly chart. Somebody asked me about the semiconductors today. The semiconductor ETFs is getting a nine count this week. Last one gave us the pullback.

[00:02:48]This isn't going to end well when the AI bubble begins to pop here.

[00:02:55]NASDAQ 100 also starting the week off with an eight of a nine count and bar eight or nine could be the high of the count.

[00:03:03]Despite the micron rally today, uh Nvidia was still down 22% today. still having turned off of major resistance in the weekly time frame and the upper Ballinger band here in the daily forming this divergence earnings were a silver news event seen in the past with other earnings was already even though they had good earnings it was already priced in Nvidia reversed off of major resistance Micron leading a tech rally but initially the rally was on hopes of this ceasefire deal that will eventually lead to another 60 days of negotiations for the nuclear part. Oil dropped about 7% and then it recovered and it got a bottoming tail. Trump coming out saying they're making progress. They're close to a deal. Keep saying that. And yet again, they're no closer to a deal than they were right after Combat Operation stopped. Not going to be a deal. At least not yet. And again, the market is preceded in something that's not going to happen. And when they realize it's not going to happen, the market's going to tank and collapse and give it all back. Very similar to what we saw at the 2000 top. The Dow had a rally and it gave it all back and it ended up down 118 points, down 23%.

[00:04:19]Uh S&P 500 was up 45 points. Again, we were at much higher levels and we gave uh a lot of it back a little topping tail up 61%. NASDAQ, same thing. Rallied higher, but then moved off of the highs by the close, up over 1%. The Russell was up 1.79%.

[00:04:38]But peak a stinking boo. Look what else was up. The VIX. The VIX was up 2.5% to close just above 17. Now, tomorrow, Trump's going to meet with his cabinet at Camp David. And the narrative continues to be there's going to be this deal. Iran is saying that they want 12 billion in frozen funds to be released.

[00:05:01]They're in negotiations right now. Trump administration is saying Iran is saying they want it released up front or they agree to anything. And Trump administration apparently from what news media reports are saying willing to give it to them if they can get the highlyenriched uranium in things here.

[00:05:19]If Iran does uh cave and end up making this deal and dragging out negotiations for another 60 days, then they are successfully stringing the Trump administration along. They successfully Iran successfully got the US to stop combat operations by doing all their chaos in the street of Hormuse. Again, Iran has no intention of making a deal. They're trying to negotiate and into the blockade, sell their oil so they can get money, trying to negotiate the unfreezing of funds and the lifting of sanctions. The Trump administration agrees to all this stuff, they'll throw away all their leverage and Iran will continue to be successful with their negotiating tactics.

[00:06:08]Again, I think it would be a huge mistake for the Trump administration to hand over ash to Iran. Trump has criticized past administrations for doing this. It would be hypocritical of him to do so. Gail says he's not going to do it. Negotiations have dragged out longer and give credit where credit is due. The Iranians have successfully dragged out negotiations stringing the US along. Now, I don't understand why the Trump administration continues to try to throw a lifeline to the Iranian regime to ensure that it survives. I have no that's beyond comprehension. I do not understand why they would do that. They signed this two-month deal. This is going to push it on into the summer and we get closer and closer to the midterm elections. I doubt Trump's going to do that. Trump administration agrees to this deal, then Iran is successfully playing the Trump administration. If Trump says no and goes forward with combat operations, continues the blockade, then they would be able to successfully bring this thing to a conclusion in the coming weeks ahead, long before the midterms and and again before the Independence Day holiday on July 4th. I don't think they're going to let it go that far. I am surprised that they've let Iran string negotiations along this far.

[00:07:30]Ran's hoping two things. That Trump will just claim victory and go away, walk away to political pressure. They're hoping that they can string negotiations along and get closer and string negotiations along. Get closer and closer to the midterms. The closer and closer we get to the midterms, the less and less likely the US is going to uh resume the the odds favor they won't resume combat operations and finish the job. Decision. We're at a point now.

[00:07:57]Just say this. Wall Street believes there's going to be a deal. That's why we're getting a rally. Have I ran coming out? Oh, no. There's no there's no deal in sight. Same old back and forth. Back and forth. Just telling you the the narrative is there's going to be a deal.

[00:08:13]Crude oil is going to go lower.

[00:08:16]The stock market and Bitcoin, they've priced in something that's not going to happen. When they discover that it's not going to happen, they'll price in what's really going to happen. And that's going to be giving back all of this rally in the stock market like what we saw in 2000. 2000 top was on concerns of inflation. The 2007 top was on concerns of inflation. There were other things involved later with both of those tops.

[00:08:39]Both of them peaked on inflation concerns quickly. We had a very similar situation at the 2000 tub. Again, it's believed that we were going to have the soft landing and everything was going to be great. the internet was going to change the world and the.com stocks lead the charge higher as we saw the.com bubble burst the surge and then again right here concerns about the inflation and in 3 days we had a dramatic drop shortly after the peak over this 3-week period as I've talked about giving back the entire rally this was a uh 17 1.5% rally similar to what we have right now a lot of choppiness off of the off after that.

[00:09:25]We don't have to do it the same way. We could just see something similar to 2007 where we had the immediate collapse here of 20%, here we had a lower high and 5 months later you've got the collapse after a bunch of volatility and again a lot of volatility as distribution taking place as the top was forming. So again, you could see something like this, like this rally given completely back couple of weeks and over a matter of days towards the end of it, the 3-day uh collapse there that happened towards the end of it. Top here was on concerns about inflation that was with the release of the CPI data, concerns the Fed was going to have to raise rates.

[00:10:06]Well, they ended up doing it. I talked about how the inflation uh the crude oil surging rise in the CPI data again marked the top rise in the CPI in 2007 market peaked three or four days later it topped in in October 2007 both tops one of the catalyst were uh the concerns about inflation nobody right now that the US is going back to combat operations everybody thinks there's going to be a deal and nobody thinks that this could possibly happen. They didn't think it could happen back then either.

[00:10:41]Even people that are considering that as a possibility, they're still going to be shocked at the dramatic drop. And again, we gave it nearly all of it back. Final climax rally in 2007. We gave it all back, continued to drop. And again, bare market, the the sell-offs to kick off the bare market, there 20% or more.

[00:11:01]One's going to be more when we get it.

[00:11:03]As I said, we've we've have a very similar situation where we had a runup 10% sell off very similar to what we had at the 2000 top and then this final climax rally uh that was again we gave it all back then or or most of it back uh and then we went sideways getting a lower high but it marked a peak. When the bare market kicks off, we should see a 20 plus% crash. So that would take us beyond this low. We've had all these divergences on the S&P 500 on other indicators and now we're getting in on the RSI pushing up here again. I told you we had a little topping tail there.

[00:11:37]The candlesticks mean nothing unless they're confirmed. We get another one today. A little tiny topping tail. A spinning top candle of indecision looking candlestick. We have a divergence developing on the RSI on the osmos. And I told you they can get is if the if we get the scenario where the five leg push higher is not done yet.

[00:11:57]But we've got these divergences uh going on multiple point divergences on indicators and now we've got it on the RSI. Simple divergence. You see it up close here. And we get a little spinning top looking candlestick with a tiny topping tail on the peak of it there. Again, a candle of indecision. So with the diversions developing on the RSI, there's a good chance we could see that complete this week here. either immediately or in the next few days we could see it complete and begin to play out and start producing a reversal.

[00:12:27]Again, it's likely we're getting uh leg uh five and a five push higher. Now, it might be over here if we set up a lower high confirmation to the topic tail on Friday. We did not. We went higher and now you've got this diversion. talked about both of those scenarios given us these multiple point divergences in the 60minute time frame on the RSI and the MACD. Uh so we'll see if it completes uh here this week. If we complete it and we finish the five leg push higher then again we could begin the reversal process. Here I've marked push higher.

[00:13:04]Again this is still question mark and may not yet be done but it could be done here this week. We are getting an eight of a nine count in the weekly time frame. Bar 8 could be the high of the count I talked about in my last video, but I've marking this as a one, a two, an extended three, four, and then five here that could wrap up here this week.

[00:13:29]Today we get a candle of indecision.

[00:13:31]Here's that candle of indecision up close on the daily chart. And again, we got a topping tail in the form of a gravestone dogee. But the candlesticks again have to be confirmed to mean anything. We gapped higher. Now we get another gap today. And we get this candle of indecision in the form of a spinning top with a little topping tail.

[00:13:48]Little candle of indecision. So we'll be watching to see what becomes of this candle in our 4day winning streak to move just above this high over here. Now still slamming into major resistance in the weekly and the monthly time frame.

[00:14:04]Please support the channel with the link directly below that allows me to be able to provide you this information. If you could take a moment to help out, I'd appreciate that. Follow the link below to take you to a secured site and can donate any amount you want. I don't have sponsors, just a direct relationship with you. So, thank you for your consideration for that. The VIX, the VIX is turning back up above the lower band.

[00:14:26]The VIX, well, the market was up today.

[00:14:29]So was the VIX. As I've said again, we can see the MACD not cross over and end up moving towards the center line and going back into positive territory as the VIX makes its way to push back above 50.

[00:14:42]The S&P is moving to new highs yet again. And the VIX is not moving to a new low. The VIX is getting a higher low. And we never took out the lows back over here. A massive discrepancy between the VIX and the S&P which is a massive warning sign. The VIX still has a 50 above the 200. Again, another huge red flag for the stock market. This is what happened uh at the 2007 top. This is what's happened at other tops where you get 50 getting back above the 200 period moving average. The S&P is in a topping process.

[00:15:18]The S&P 500 is still slamming into major resistance in the weekly and the monthly time frame, likely completing a wave five to complete the cycle top. Get the tech bubble top back at 2000. They didn't believe that was possible either, but yet it was. The S&P The S&P has an 8week winning streak. We'll see if that winning streak breaks this week as we're at key resistance levels. Still, though we've rallied higher, we're still at major resistance here in the weekly time frame. We're still slamming up into this upper channel from the 2022 low and the channel very much in play. We're just slamming right into it here. Bearish divergence is in the weekly time frame.

[00:15:59]Again, also hitting the long-term monthly channel, the 100-year channel.

[00:16:04]Have the channel here from the 2022 low.

[00:16:07]Look at the look at the weekly chart with futures. I posted this chart on X.

[00:16:12]Futures opened higher on Sunday. Again, we're slamming up into this upper channel line uh from the 2022 low again on the S&P futures.

[00:16:22]It's a weekly chart. We have a channel from the 2022 low, but if we go all the way back with our log scaling to the 2020 low, you have this massive rising wedge. And you could even take this trend line all the way back to the 2009 low, and you've got a massive long-term rising wedge in the monthly time frame.

[00:16:40]again here again connecting this 2021 and 2022 high right here. It's pointing straight up to where we're at right now.

[00:16:47]We hit it just over two weeks ago there.

[00:16:51]Now we're slamming up into it yet again.

[00:16:53]So we're still at major resistance in the weekly and the monthly time frame to new highs is creating the push to new highs is creating a divergence on the osm oscillator and the RSI but it's creating multiple point divergences on other things like you can see it right here with momentum there is a multiple point negative divergence developing we break the winning streak this week I'll be watching to see if signals start turning back to bearish this week or next week at some point we begin to see a reversal. Signals remain bullish. They have to turn back to bearish if the five leg push is done or about to finish.

[00:17:33]Signals are to turn bearish right now.

[00:17:36]Well, here we've got a drop back below the low from three sessions ago. If that's going to happen, we get a candle of indecision.

[00:17:50]massive multiple point diversions was on the S&P 500. This diversions gave us nearly a 10% sell-off. Uh the next diversions will produce a reversal.

[00:18:00]You're getting multiple points of diversions and good chance this finishes this week and maybe sooner rather than later here on our short trading week.

[00:18:09]Got the PCE inflation data come Friday.

[00:18:12]S&P sold off 10%, recovered that and then moved higher. So stock market is pricing in a peace deal. A peace deal that is not going to happen. And when they realize that it's going they're going to give back all of this gain these gains and then some if we begin the 20% plus crash immediately which would likely happen if the US resumes combat operations. Uh oil is going to spike and the 10-year yield's going to spike. And that would uh freak markets out. The markets would begin to price in a oil an oil shock which has not been priced in yet.

[00:18:50]But I told you last week again if we got the lower high then the five leg push might be done. The topic tail we'd have to confirm that. If we push higher then again the fifth leg is not done. And that is uh what is likely happening right now.

[00:19:06]We're finishing the first leg. So again I'll be looking to see if it completes this week. Maybe rather than later here maybe quickly or over the next few days.

[00:19:16]Could still see some green here on the awesome oscillator if we try to go a little higher overthrow the upper channel line in the weekly time frame.

[00:19:25]Friday momentum turned back to bullish again. Trending signals remain bullish.

[00:19:30]Wave five will likely be something similar to the wave one that was over about a 3-day period here. We've now rallied 5 days, five sessions off of the recent minor low S&P daily. Here we still got larger diversions developing.

[00:19:45]Again, this divergence gave us the 10% selloff. You've got a larger divergence developing on the OS oscillator on other indicators as well as I've talked about in the weekly time frame with the tech rally today. NASDAQ did get the green bar. So, we still may see S&P do it, but it may not last very long. We gapped higher on NASDAQ. Never got the bearish reversal of conditions. S&P flipped back to a bullish reversal of conditions with momentum here. NASDAQ has remained with a bullish uh reversal of conditions.

[00:20:14]NASDAQ daily chart here and now we're getting the divergence uh forming on the awesome oscillator. We've already had it on other indicators. The RSI had it but it's getting a triple negative divergence now on the RSI with the previous diversions that developed over here.

[00:20:32]NASDAQ 100 was up point 1.76% today up 519 points. NASDAQ 100 has these divergences and we have even when it had one on the RSI the S&P did not but now forming a triple divergence and you're getting in here with momentum and the stochastic and the rate of change and testing the broken trend line right here of the channel a divergence on things like the money flow and it's just uh a lot of divergences are developing here multiple points of diversions now same thing on the 60-minute chart same thing on the 60-minute chart on the NASDAQ as as the S&P. We're getting uh new highs, but indicators are not moving to new highs here in the 60-minute time frame on the RSI, the MACD. You're forming multiple points of diversions. So, again, we're likely in wave five. We'll see if that completes this week here, either immediately or in a few days.

[00:21:25]Still slamming up into the trend line of resistance here. Just slightly overthrowing it, but slamming up into it at extremes here. the S&P 500 about this uh deal giving hopes over the weekend and so that's why we had the rally crude oil dropped and then we had the the micron uh tech rally on top of that moving off of the highs as tensions heat up the US launching new strikes on Iran targeting u missile sites and boats Iran was uh laying uh new mines down in the straight of Hormuse and the United States stopped them so some tensions there crude oil crude oil was down uh about 7% or so and it got a bottoming tail very similar to the bottoming tails back over here. It ended down uh it ended down 2.98% back down here towards my original trend lines. I had drawn this uh red dotted line right here and told you we had a tighter triangle there. We broke that boundary. We've moved back to my original trend line here, including the shadow here, excluding the shadow. We still have a triangle. And again, we recovered off of the lows. We saw the selloff, but the the sell-off was bought at the cloud of support just as we were down over here. So, I still think there will be an upward resolution to crude oil, and I think it will move above 119.

[00:22:50]And uh again, I think you're going to see crude oil surge, cause the 10-year yield to go higher, pricing in higher inflation. That will freak markets out.

[00:23:00]The United States allowed negotiations to drag on. They're not going to do it forever. At some point, they're going to have to go back and resume combat operations. That is unless Trump wants to make a bad deal. He says he doesn't.

[00:23:15]When that happens, when they resume combat operations, and nobody thinks that's going to happen. I'm telling you, there's not going to be a deal, at least not yet, they're going to need more military nudging to either make a deal.

[00:23:27]And it's possible you even see the regime collapse. The market is priced in something that's not going to happen.

[00:23:33]It's going to get a reality check and it's going to price in what's really going to happen. And it's going to be a dramatic drop because nobody thinks there's total complacency. Nobody thinks it's going to happen. Even the people that are looking for that outcome are now becoming convinced it's not on the table anymore.

[00:23:51]And when it happens, it's going to create an oil shock and it's going to shock investors and traders who are not expecting it. Priced in something that isn't going to happen.

[00:24:04]At least not yet. Not going to. I'll say it again. There's not going to be a negotiated settlement of peace. at least not right now and would have to become in a much weaker state in order to get them to make the necessary concessions that would be acceptable to the United States unless Trump wants to make a bad deal which I doubt he's going to think he'll choose com going back resuming combat operations and the markets do not expect that when they do the the the uh triangle is going to break out and begin to surge going to move to new highs and this thing can go up rapidly very quickly that's going to freak out markets as yields sore and later uh inflation indexes rising even higher then it will be believed that the Fed will have to raise rates to combat inflation and markets will tank and price all of this in they have priced in something or mispricing the market pricing in something that is not going to happen but everybody everybody thinks that the crowd the crowd is usually wrong when everybody believes something usually the opposite happens look at Bitcoin back at the top everybody believes believed Bitcoin was going to be at 200 250,000 by the end of 2025. It peaked in October and it collapsed. It collapsed 52%. Very short amount of time. It collapsed 36%.

[00:25:25]Over a period of just a few weeks down to the November 23rd low after the October 6th high. And we had the largest liquidation in history in crypto with Bitcoin and crypto right after the peak because everybody believed something that wasn't going to happen. They mispriced something in Bitcoin getting a false breakout created the largest liquidation. People were liquidated because everybody was long. Everybody believed Bitcoin would be at 200 to 250,000 and it peaked out at 120 126,000 there in October. The crowd was wrong. So too with the stock market, the same thing they priced in something that's not going to happen. Going to continue to monitor this triangle. MCD is coming towards the center line here.

[00:26:14]We'll see if it tries to firm back up as it did the last couple of times. We firmed up and then when we went positive territory at the bottom uh back in early 206 massive surge the 10-year yield. It's pulling back to fill the gap here back to the 20 period moving average. And again, we're not quite filling the gap over here. We still we have a bunch of gaps that aren't filled anyways. But again, we're pulling back. No diversions here. Again, you're going to see the 10-year yield soon break out. This is the thing that's going to freak markets out very very soon. Nobody believes that's going to happen. Remember down here I was telling you that we were bottoming getting a higher low and everybody was saying that that the 10-year yield and the dollar were going to collapse. Both of them were bottoming a massive triangle on the 10-year yield as I've talked about. Soon it will break out and we will move above the 2023 high. See the 10-year yield move above 5%. That's what's going to freak markets out. And again, here it is a bigger picture in the weekly time frame. I believe we're already in wave five. The triangle's done and we're already in the wave five. I think we're already in wave three of wave five. And I think we're in these smaller subwaves in this extended wave three of this five leg push higher.

[00:27:26]And we're going to break out above this triangle. And we're going to you just saw it up close a moment ago. I've just taken it further back over here. The 10-year yield, the bond market will begin to price in higher inflation once we see crude oil break out. Eventually, we'll see the uh inflation indexes go much higher. We were told they were going to go down and they're going up.

[00:27:46]We were told the 10-year yield and the dollar oil were all going to go down and they're all going up.