Global Stock Markets Collapsing — Circuit Breakers Triggered
Ivan Liljeqvist discusses the collapse of global stock markets, focusing on emerging market sell-offs and their potential impact on Bitcoin and cryptocurrency markets.
Summary
Ivan Liljeqvist analyses a severe sell-off in global equity markets, with South Korea down 11% in a single day triggering circuit breakers. He argues that emerging markets including Japan, the UK, and Germany are experiencing significant declines due to Middle Eastern conflict disrupting oil and gas supply, particularly Iran's blockade of the Strait of Hormuz. While the S&P 500 remains relatively stable, Liljeqvist contends this weakness will likely spill over to US markets and push Bitcoin into what he calls "the buy zone" — a buying opportunity he and his community have been anticipating since October. He demonstrates how his money scanner tool identifies real-time bullish and bearish flips across stocks, cryptocurrencies, and commodities, and closes with commentary on Jamie Dimon's criticism of cryptocurrency exchanges wanting to compete with banks without accepting banking regulation.
Key Takeaways
Full Transcript
South Korea is getting obliterated, down 11% in a day. Circuit breakers are triggered. Trading is stopping in South Korea because the stock market is just collapsing in real time. Yes, we do have a bloodbath. A bloodbath is going on right now, not in Bitcoin, but if you look at the emerging markets such as Japan, the Nikkei index is now getting absolutely destroyed, currently in a bear trend if we close the week like this.
Look at the UK. Some people say the UK is a bit of a developing country right now. If you look at the UK index, also down a lot, crazily down, still in a bull trend but looking at Germany — no energy, no nuclear, no gas, no nothing, industry dying — it's also now in a bear trend and hopefully can get a bit of support here at the 50-week moving average. But overall looking quite bad.
As you know, it is because of the current conflict in the Middle East. The oil supply is getting decreased a lot. Iran is blocking the Strait of Hormuz. Let's see how long they can do that, but it's true that the supply of oil is diminishing, supply of gas is diminishing. The EU is paying super high prices right now.
Based on this, we need to see what the spillover is going to be towards the S&P. The S&P is holding quite okay, still holding quite okay. You could argue that a lot of the Nikkei and UK and German dump is just a reverse to the mean because all of them have been pumping since the beginning of the year while the S&P has not really been pumping — it's been sideways and down. If you look at any other stock market, it's just been up this year.
Emerging Markets Were Outperforming Before the Crash
For example, the Japanese one, if we measure to the high, it was 22% up and now it is just 6% up. It's still outperforming the US markets if you measure from the beginning of the year. Germany, the same thing. If you measure from the start of the year to the top it was 2%, now it's down. The UK is similar. Let's see if the UK is up or down for the year — it's still up for the year, doing quite well. If you measure from this candle for example, it was up 9%, now it's up only 4.8%.
Overall, all of these stock markets have been doing better than the US and now they're just reverting to the mean versus the US stock market. But of course, if this has a spillover into the S&P, it will have a big fat impact on Bitcoin. Bitcoin is going to go straight into the buy zone in case the S&P keeps going down, which unfortunately it seems like the path of least resistance for the S&P right now.
S&P Distribution Pattern Suggests Trouble Ahead
Yes, it's technically still in a bull trend, but the way it looks, it will likely test this bull trend quite soon because it's weak. It's not testing these highs even now. It tried to for many, many weeks and now it's not even reaching up there. This does look a bit like distribution. Testing the bull flip wouldn't surprise me now that all of the developing markets are having a bit of a tough time. It's very likely that it's going to spill over on the S&P, and if it spills over on the S&P, Bitcoin is going to go into the buy zone.
Then all of these coins are going to go down even more. As you know, a good way to see good opportunities in the bear market is to look on the weekly, see whatever has pumped — for example, NEAR has pumped, Polkadot has pumped — and just short them. It's a fantastic shorting opportunity, especially as they start losing momentum as you can see them going lower on the daily. Fantastic short.
If you zoom out on NEAR, it looks horrible. It's basically testing this all-time low from 2023. It's a question of time before it tries to break this low here at approximately one dollar. Now it's one dollar forty, but as you can see, it's just lower highs and lower lows and lower highs and lower lows. Now maybe it's going to do another lower high here and then roll over.
Trading Both Directions in Range-Bound Markets
Looking at what our community is doing currently is riding the waves. If I look at the biggest trades of the last 24 hours in our community, you have Banksy shorting Solana. Don Banini has done something very interesting because Solana is in an eternal range and he trades the eternal range, basically going short Solana and then going long Solana and going short Solana and going long Solana. You can do both. You can do both shorting and longing in this eternal range that Solana is in, but also many other assets are in.
You have John John shorting Bitcoin. You have Stealth Capital shorting Solana. Both work in this environment because a lot of coins, as you know, they can have quite violent pumps to the upside. You can absolutely trade them on the way up and it's seen here for example with NEAR, with Polkadot. On the daily timeframe using the money line, as you can see here — green, red, green, red — on the daily timeframe you can snipe those moves. But don't get confused that it's some kind of regime change in the market. It's still bear and likely a lot of these coins that are up on the week, they're going to be returning back into the nightmare mode.
We have a button here called the nightmare mode where everything goes down. It's a question of time before they return to the nightmare mode. But for now, this does present interesting shorting opportunities for us.
Real-Time Bullish and Bearish Signals
Looking at the money scanner, because as you know, the money scanner tells you in real time when something flips bullish or bearish. For example, Secret flip bullish one month ago, fantastic returns. Siren flip bullish a day ago, fantastic return. You have Theta four days ago bull, fantastic return. Here is when you see in real time if something is inching to long or short.
The same of course works for stocks. Here with stocks we can just select the US stocks what flip bullish or bearish in the last few days and then you have the oil companies doing fantastically well — 600% since a week ago. You have this Rackspace Technology 350%, Moix Labs. Of course it also applies to stocks. You have this petroleum 288%.
You can see you don't have to be a Middle East expert to trade all of these different moves on the charts. In many ways trading news is very bad because you don't know if something really is going to happen and if something happens, in what stock? There are endless oil companies, there are endless oil stocks. So what do you buy? Well, you buy whatever flips bullish and tells you that it's actually moving.
Here you had all kinds of opportunities just based on the price trend and you were able to jump fantastically on all of these different trends. As you can see currently we're seeing all kinds of companies bullish push in just the last few weeks and you see returns right here.
Commodities and Precious Metals Analysis
Looking at commodities, let's see what actually flipped in the last month. You have rapeseed, you have aluminium. Commodities have been calmer. If we look at gold and silver, they're not really doing too much despite them being quite close to their previous all-time high. Silver is in a bear trend and actually didn't get out of the bear trend. You remember we were flagging a bit that it's interesting if it gets out of the bear trend, but it didn't.
Gold is also consolidating a bit. Gold looks a bit better of course because it is in a bull trend, but both silver and gold, as you remember, they're old bull trends. For us it's more interesting to buy Bitcoin in the buy zone than to chase precious metals. We've been riding precious metals for over a year and now from a risk-reward perspective we will be deploying here in the buy zone instead of chasing precious metals.
If I go back here and go into ETFs, let's see what flip bullish or bearish in the last month on the daily. You have this PLC, you have gold ETF. Let's see, is this some mining? Yeah, miners, it's some gold mining ETF. A lot of commodities actually, as you can see right here. Income strategy ETF from Bloomberg flip bullish. If you want more stable, bigger bets, not just picking individual stocks, then ETFs are fantastic and we support that as well.
Jamie Dimon on Crypto Regulation
Looking at some news, we see Trump coming out swinging, absolutely swinging at the banks, saying that the banks are destroying the Genius Act. They are stopping it, they're not allowing it to pass. But Jamie Dimon has come out and said that all of these crypto dudes, all the crypto exchanges, they want to compete with us. So if you want to compete, become a bank. Don't try to circumvent regulation, banking regulation. Become a bank if you want to offer yield on deposits.
You and your peers have reportedly clashed with Coinbase's Brian Armstrong over the Clarity Act and specifically this idea of crypto exchanges offering rewards for stablecoins. Armstrong was on CNBC with Sarah Eisen a few weeks ago from Mar-a-Lago and he said there's a path forward for the market structure bill that's a win-win outcome for everyone. How are you feeling about it right now?
The banks feel strongly that rewards are the same as interest and that a compromise would be that you can pay rewards on transactions, not balances. If you are going to be holding balances and paying interest, that's a bank. You should be regulated as a bank. We've been firm on one thing over here. If you want to be a bank, become a bank. Then you can do whatever you want under bank law.
I remind people, your viewers may not know, banks have restrictions and requirements — FDIC insurance, anti-money laundering, Bank Secrecy Act, we have Community Reinvestment Act which means we have to open 25% of our branches in low and moderate income neighbourhoods. We have social requirements, we have liquidity requirements, capital requirements, transparency requirements, reporting requirements, board requirements, governance requirements. If they want to be a bank, so be it.
What we basically say is level playing field by product. It can't be you have these people doing one thing without any regulation like that and these people doing another. If you do do that, the public will pay, it will get bad. People should take a deep breath at what you want. We want competition. We're actually one of the biggest users of blockchain. We created the JPMorgan deposit coin, we've moved money real-time payments, we're moving a lot of data now using blockchain. So we're in favour of competition, but it's got to be fair and balanced, level playing field. It can't be...
Now the big banks just want a fair and level playing field. Fair and square. They just want fair and square level playing field, the biggest banks in the world. You can decide yourself the irony in that.
South Korea and Samsung
On a big picture level, this is the news, this is the market analysis for today. Basically the stock markets are showing weakness. The global stock markets are collapsing currently. Let's see if it's just temporary or not. If they go into bear trend, it's just very likely that they will continue in the bear trend.
Let's actually check South Korea in particular because we started this video with South Korea. If I go to stocks here on the money scanner and then we go to South Korea and we see all of the different stocks and what flipped in the last days, as you can see, it's fantastic returns for those that flip bullish in South Korea. But also, as you know, there are companies flipping bearish left and right as well. As soon as something is bearish, you have to get out.
Of course, I want to see Samsung. Samsung, where is Samsung? Samsung climate control, down. Samsung pharmaceutical, down. Samsung Electronics, down. Samsung publishing, down. As you can see, Samsung, they own like all of Korea. Samsung SD, Samsung Fire and Marine. What is this? You thought Samsung is only your phone? You see, Samsung is everything in South Korea. They own South Korea, and Samsung is currently down.
The whole market is down. The South Korean stock market, you remember what we said in the beginning of the video, is down 11%. Guess what? Samsung is also down 11%. Their whole stock market — they have kimchi and they have Samsung. That's it.
Bitcoin Buy Zone Approaching
Let's see what's going to happen, if it's going to recover or what. But if it spills over into the US, it's going to spill over into Bitcoin, which is going to be very nice because finally we will arrive at the holy land here in the buy zone. Fantastic buy opportunities. I'm very excited. Since October we're risk off, we're bearish, we're waiting for this and it's going to be great.