 Okay, hi everyone. It is Friday 23rd of April and I thought I'd jump on and get together. The usual man in the note on the live stream, senior trader Tim Duggan live in Dublin as you can see. And then head of trading peers current to have a bit of a discussion really on two points. One is, we've had a decline in US equities yesterday in fact the biggest slide we've seen in US stocks for for five weeks and this came down on the back of the announcement for US President Joe Biden proposing doubling the capital gain tax for the wealthy. So wanted to get a take on that from both of you. And then, also, not to put, you know, Tim's feet too close to the fire but there was a tweet that went out earlier this week and, and Tim was was was talking about his thoughts about why he feels that we might have seen the top already for this year and, and rightly or wrongly, I just wanted to get the rationale really behind that but also because I know will have a similar let's say trading disposition and style to Tim has also been making some bearish noises. But I wanted to get peers involved as well and I definitely just want it to be an open forum of like where are we at as far as a collective here because what I feel is, I'm a little bit undecided to be honest I do think there's upside. I still feel bullish at this point, but at the moment I'm two to one down. So I just want to know, and I think this is a really healthy thing for any new trader is when we're at let's say a juncture for markets to make a decision let's say going forward. I always find it's best to talk to other people right like what other people think and bullish and bearish. I just want to hear the rationale and then hopefully I can formulate a better opinion myself so I guess Tim will start start with you and, and the kind of thoughts that you had earlier in the week so where did they, they come from. Oh, can't, can't. No pressure, you know, I should be able to hear me now. So, okay, I wasn't very well on Tuesday morning but I was well enough to look at the market briefly. I came in at the top the watch the open. And it just really if I share my chart you'll kind of see fight transition over to this one. I'll be able to see, let's see, oh this the big alright and that does play a part here, but I looked at the spools. And we're at this point here in the spools. And I just thought you know hold on, we took a dip back to the 41 44s last night. And we should be doing we should be kind of at this point we should be kind of cruising on as which is what we've seen a lot of right. You know, a lot of this. And I just it just it just felt like, well we had a gap here on the overnight Monday Sunday to Monday trade. And just thought wow we're not even really making any decent attempt on getting bit over there. And I don't know maybe I've just seen too many highs too much irrational exuberance into these markets and I've just had enough. I just don't believe in the lungs anymore. And so sure enough. Following that, I got strengthen the phone to Joe Biden. And I said don't worry about it Tim, I've got your back. Irish could Irish connection kicking in again. It's it's that green telephone he has on it. That's that's that's that gets him through to this one. So, he said Tim, don't forget, don't worry about it, you know, short triple short leverage ETF on the spy. I said great. So, here we are. We came back to that point pretty much the same area. And here we are. You know the harmonic pattern of the downtrend, whatever, but if the real reason why I transitioned this from a thought to a tweet is this is the VIX right and I talked about this in a video that was too X rated too steamy for Anthony to publish on Twitter or on YouTube. He wanted me to want to be to fully explain it here. So here it is. And this is the VIX. Now we're only looking at daily bars for a ready year, but let's go into Max monthly. This is going way back here to 2005. I remember trading through 2017 2016 2017 2018 and really, we were in a low volatility environment, you know, the top of the VIX was really about 16 and a half 17s. I mean, yeah, we had Balmageddon early 2018, which you know had this self perpetuating VIX, Balmageddon portfolio insurance, lots of people liquidating shorts in the VIX. We printed up to 32s but by and large if I if I gave you the full full chart here you can see this level 16 spot 48 was kind of a highs of 2017 right and this was really the ceiling of volatility in those years of trading. And look what happened. You know on Tuesday. Let me let me tidy this up right. Get back to a day. Get back to one year one day. Look what happened on Tuesday we came we came down. We dodged and then we started to rally off of that level. And I just thought well resistance turns support turns resistance to support. And I think now this is set to bounce hard off but what was the old ceiling on the VIX. And now it's set to bounce and sure enough we are getting you know the VIX is from there we're up. 25% on the VIX. So this is really my thesis and you know, I don't, I don't yeah we're up. We're right 25% on the VIX sense that. Yeah, I guess. Is this a question of timing I definitely think that we had gone through a period where if actually if you look at the S&P on the daily chart and you look at the month of April I mean at some point this this has got to stop going at that rate because it was going pretty vertical at that point. It's almost like for me, the macro view I've had is that the markets have almost looked to price in perfection going forward, the Fed holding off COVID being controlled, vaccinate rollout reopening underway, earnings going to be explosive. And then these kind of few things come to fruition, you have a little bit of a global development with COVID people start talking about, okay, what about the impact that might have then on the longer bigger picture on demand side for the subsequent slower in some of these other very high demand areas for a lot of goods and services so is this a case of a little bit of a pullback now, but we go higher later or what's your take. The first thing to say is that Twitter is a dangerous thing. You know when you throw tweets out like that. I mean, Tim talking. That's that's a call right there guys. So when was that you marked the date what date did you send that tweet 21st of April was it. Let's see. I think that's a very ballsy call personally. I don't agree. I don't agree. Personally, I think when you're looking at the shorter term that kind of technical thesis you just put forward there looking at the spoons yeah looks like I agree you know that way we had that pullback mid week and then we tried to push higher again and it didn't quite get there and obviously the Biden tax news came in and dealt the market a blow but if you look on a longer term look on a weekly chart for example then you know we're still at the very top of what looks increasingly more like some kind of exponential rocket ship. And so, I think as ants just said, April, you know back in the March start of April has been a, you know, supersonic right and I think this is a little bit of a pullback and that's healthy on a long term upward trend. So if we just get into that macro point, the tax, the threatened tax hike is that is that the moment is that right, wealthy investors are now going to panic and sell stocks before this doubling of their capital gains tax comes into place and get sell their stocks book their profit before the tax hike. You know, is that going to lead to sustained selling is that going to lead to wealthy people not investing in stocks anymore is this the end of this post COVID bull run. No, in my opinion. I mean, firstly, I guess there's a couple of points to say firstly, this I think is Biden's, you know, he's stepping out and that's his big kind of grab the headlines. So that was talking to me if you listen to our podcast today. We'll know to be talking about it before the podcast anyway me and that was talking about how there's midterm elections coming. Yes, the perfect election hearing type, you know, headline grabbing democratic kind of comment right to ramp up those taxes and fine, but there are certain senators. There are some basic sentences that right they're all for tax hikes but not, perhaps not so much on the capital gains side and certainly not to the degree that Biden's threatened and so I think this is Biden's setting out his first stall and I think yes we will get tax increases for tax increases. I don't care if you're wealthy. You need to pay more tax this is a fact when I'm all for that, but you know not doing it in too aggressive a way that it's going to kind of implode the ship but there's certain senators keep your ear out for Joe Manchin is the Virginia senator and also Kristen cinema, who's the Arizona senator there to democratic senators who are on that kind of the side of the party that a little bit skeptical about tax hikes. So if Biden wants to push this through, he's going to need all these guys on board. And I think those that are on that side of the party will probably in the end push to a watering down of what Biden said earlier this week that's one thing to say. That's one thing then just say taxes to go up, you know our wealthy people going to sell stocks. It depends on how much the tax hike is, and maybe, maybe they will, but that doesn't necessarily two things that doesn't mean that the economy is going to crash and therefore stock markets have topped and then they're forever going to go down again. I was reading in the FT about one uber wealthy hedge fund managers crying about this, of course, and he's saying oh my God it's the end of investment and wealthy people now they're not going to be investing in in companies and investing in these new technologies and innovations for growth over the long term instead they're going to consume, they're going to use this money to consume. Well, they're not you know wealthy people that they're already consuming all they can. They've got surplus capital that's why they're investing it so what are they going to do with this surplus capital, still the stock market, even if tax rates are higher is still probably the best and easiest vehicle for them to grow their capital and surplus capital that they don't need to spend right. So, it might trigger a sell off, but then I was talking to add, they'll sell off right realize their gain, pay the tax at the lower rate, then they've got their cash, and what do I stop it. And especially if there's been a dip, right, we'll just buy again. So, in my opinion, this whole tax argument doesn't necessarily mean everyone's going to sell and this is the top. I think the question. Well, yeah, let me get a final point before I throw it back for it. We've just we're seeing the early phase of the cycle here. So this is the post recession. Okay, and the stock market is a lead indicator to the economy. All right, so the stock market has been pricing in the early phase for well at least since November, right, at least when the vaccine kind of things started to kick out. So, the early phase I'd say is the easiest phase to make money was an investor buying large everything's going up. All right, you can pick and choose and you can make more return here than here but basically you're going to make money. And stocks outperform it's their best. It's actually their best part of the cycle in terms of upside. What's going to happen I'd say from the summer onwards where we're going to kind of finish that early, you know, recovery phase and we're going to be into the mid phase, and for the investor that's the hardest phase. It's the hardest phase to find Alpha, because there's less sector divergence. Okay, so it's harder to kind of use a sector rotation play and we're in a bit of a new world because it's post COVID and stuff's going to change you know is, are we going to change our travel habits are we going to change our going to the office habits well yes but we're not quite sure by how much right and so I think I think the second half of this year you're going to it's going to be harder for investors to find out performance but I still think generally that big tidal wave of monetary and fiscal stimulus coupled with huge amounts of cash that consumers are now sat on having spent no money for a year. I still think that that trio, that catalyst is still going to see the stock market trend higher from this point. Tim, you. Okay, you were going to make a point earlier. Okay. So, coming back to one of the key things that well, you know, will myself but a quick little momentum traders power before this conversation in the room and, you know, something I had discussed on Twitter with people, you know, someone came back to me and they said, Oh, what Tim so people are going to be buying negative yielding bonds. And I'm thinking well, that's no this whole world of, you know, it's either bonds or equities or the post office. Yeah, it's a much broader world. Now, we have positive yielding crypto assets. You know, we have positive positive yielding defy token space. There's going to be a hell of a lot of startup and innovation coming as we unlock around the world so that's you know money into speculative startups. You know, property is huge these these historical low interest rates, people are going to want to pile into property wherever and whenever they can. I think I don't I don't I don't think a Bruton investor is going to just plan to commit more capital to something that is going to be subjected to 43.8% capital gains tax at this time. I'm just saying I think you're going to get taxed on property though. You would, you would, but it's a surely it's a safer wallet like it has a much lower volatility on your on your on your principle. Yeah, that's true. If you want to put crypto in your bucket. That's your fertility. Well, it's horses for courses. Yeah. So what I, you know, I look, I said on Twitter, I'm perfectly happy to eat this tweet, because I don't get married to any idea about whether the markets going up or down. I, you know, I just trade markets in the direction that they look like they're going to move at any given time and I'll change that idea in a matter of seconds if I have to. So, you know, maybe you'll be prepping a hat for me to eat soon enough. That's fine. You know, I'll put some sauce on it. As this, as I kicked off this conversation. And again, a kind of valuable point to come with this for anyone I think new to markets particularly is that this is a healthy discussion right. It's good to flesh it out and kind of be stress tested on your view, because in a sense you're exercising that view in your strategies and your execution so it's good to have like a well thought out and have conviction behind your call and absolutely it's not makes a market we don't all have to agree but I think there's a lot to be said for for thrashing out what I'd love to happen though if we put this up on YouTube, drop a comment. Let us know what you think, you know, what, what does it matter what we think, what do you think. Absolutely. Let's get their opinions come off. Absolutely. All right. Thanks both. Thanks guys.