Trading $50M At 25 Using One SIMPLE Market Cycle Strategy (4 Stages) - Ted Zhang transcript

Over 50 million being managed at 25 years old surpass now $400 million at River Asset Management. We always say it's impossible to predict the future and anyone who says they can predict the future is just full of crap. If there was a way to quote unquote predict the future, it'd be stunning stuff. Introducing Ted Zack. In this episode of Chart Fanatics, Ted runs us through the exact framework that he uses to manage over $50 million.

His price cycle is called stage analysis. We will find out why it's timeless. You'll see this repeat in all the asset classes. We can go through each individual stage at a time. Through this concept, you will be able to identify any of the four stages of the market. This is exactly how you can create high reward to risk profiles within the market. So this is stage one. A key tell for me is when the MAS, the moving averages start slicing through price and price oscillates up and down.

Stage two. And this is the uptrend. This is like early stage three. How you kind of tells a stock is topping is when you've had a big move and the rate of change of the stock kind of goes sideways. This is stage four, which is the downtrending phase. This is why it's so important that you'll be able to identify the exact theme and where you need to be positioned within the market. You want to forget the first eighth of a move and the last eighth.

And they're often two most expensive eighths of the move. So, forget about this first eighth, forget about this last eighth. Just catch that 68 in the middle. Stop guessing and start learning from true professionals like Ted in any strategy. system, you want it to be based off timeless principles. And in the universe, you know, one phenomenon that comes up time and time again is the concept of Welcome everyone back to Chart Fanatics, the go-to channel for all of the very best strategy and concept breakdowns in the world with the very best traders in the world as well.

Talking of which, today we have someone who we just hosted recently on words of wisdom. The famous I would say now at this stage, but absolutely incredible. The impact was real. The feedback was incredible as well. Over 50 million being managed at 25 years old. Surpassed now $400 million at River Asset Management. You already know who it is now. It's the one and only Ted Zack. Thank you, Bruce, for having me on. It was a great opportunity to come on to, you know, your other podcast and I'm excited to be here to talk about some topics um about the markets and trading.

It's not just topics, though. We've got like the cycle of all markets. Yeah. Is that what we're going to go over today? Oh yeah. And I'm super excited. And I know that you got a ton a ton of real life examples. We got a lot of examples. You know, we'll give them some quizzes as well. Perfect. Give the viewer some time to think through after we showcase the examples. Uh think through like the different parts of what I'm about to teach.

So I love that. I love where do we begin? Yeah. So jumping right into it, I kind of want to start off, you know, higher perspective. In a trading strategy or really in any strategy and system, you want to be based off timeless principles. And in the universe, you know, one phenomenon that comes up time and time again is the concept of cycles, cyclicality. You know, you see it. Maybe I can draw it here. We'll just say cycles.

Oh, sorry. You know, you think about, you know, from life, you have the cell cycle. You know, I was a bio major. Like I shared it. You still got I was a bio major. You have the cell cycle, you know, cell division. It goes through and then eventually cells die and our bodies have processes of destroying cells and then creating new cells. Uh you think about just in the business world, you have the business cycle, you boom and bust, the business cycle, you have the credit cycle with the Fed jacking up interest rates, pulling it back down, the loosening and tightening of monetary policy.

Um you have the water cycle and then in the markets you have the economic cycle and then we're going to talk about the price the oh sorry the price cycle today and you know I learned this concept from Stan Weinstein he has a book called secrets in profiting in bull and bare markets at my time at trader line which we talked about in the first podcast I did a internship with trader line and Stan Weinstein's working with them creating like a course on stage analysis so I was able to help build some of that and learn a uh from himself too.

So his price cycle is called stage analysis and we will find out why it's timeless. You'll see this repeat in equities, commodities, fixed income, crypto, all the asset classes, currencies as well, right? Yeah, currencies as well. In real estate eventually, you know, they tokenize it trades on the blockchain. So starting high level perspective there and now let's introduce stage analysis and the four stages say stage analysis at the top and then so pretty much with stage analysis I want to go through the downtrending part first because to me it's easier to showcase the whole cycle starting with the downtrends just say a random stock and I'm just going to draw the price line.

We're going to be simple here and then we'll go to the charts. So, let's just say it's oscillating. It's building a top and then it trends downward. So, we have this downtrend right now and two or three key moving averages to keep in mind. Oh, I do need some other colors. Yeah. Yeah. Two to three key moving averages we should keep in mind. So, let's just draw something like that. The red, we'll just say, is the 10 week moving average goes like that.

We'll say this is the 30 week. And the 30 and 40 week is really the key moving averages. Mhm. To keep an eye on to really judge what stage of the cycle a stock is in. And I'll do, do you know, would they be uh a great for this? Simple moving averages. I use simple. I use simple. Yeah, I remember we talked about I believe and then we'll just say gray is the 40 week and we'll definitely show this on national chart. It will make a lot more sense than my weekly lines.

So right now you have a stock you know building lower highs, lower lows below the 10 week, 30WE and 40we moving averages and this is stage four which is the downtrending phase. you know, price structure, lower highs, lower lows below the 10, 30, 40 week. And you know, when the slopes of the 10, 30, 40 week are trending downward and the 10 is under the 30, 30 is under 40, we're definitely in a downtrend. And from an asset management perspective, we're more longerterm traders.

We want to have the longer term trend in our favor when we're buying something or shorting something. So, in this stage, you want to look to short, not to buy a stock. So, this is actually stage showing. This is the down stage. Yeah. So, this is the Kathy Wood RK ETF that I want to show. And here, so the moving averages I have the 10 week is the red line, the 20we is the green line, the uh the 30-we is the magenta line and the 40we is the white line.

As you can see, just like on what I drew, prices, this is a weekly chart, by the way. Price is building higher lows, sorry, lower highs and then lower lows throughout this whole stage. Firmly in the downtrend below the 10-week moving average, the 20week, the 30-week, and the 40week. And you can see they're all stacked on the bearish uh they're all bearishly stacked with the shortest moving average on the weekly below all the longer ones.

So, that's how you quickly tell, you know, at this point when you start enough charts, you can instantly look at a chart and tell, you know, if it's in a downtrend or not. So that's a highlight of stage four. Why don't we go to stage one now? So stage one is essentially when the stock starts, you know, the rate of change of the stock, the slope is like like that. It's like a 45°ree angle or more and eventually the rate of change of the downtrend starts flattening, right?

So you know it just starts it starts oscillating and it turns flat. At the same time, the 10 week moving averages catches up the price and starts to head below it and price starts surfing the 10e moving average. Eventually, let's say maybe you have a pop right here, but it comes back down and continues to base. Mhm. The 10 week will continue to be under price. And this is where the 30-we moving average starts catching up to price price and it starts slashing through price.

Okay. The 40we moving average where is the gray one also starts to catch up to price and eventually when the 10 week you know gets it back above the 30 those lines converge we can say this is in the stage one basing period is that that what kind of establishes it exactly so in this stage oftent times news is the absolute worst at the bottom you know bitcoin bottom when FTX blew up when those banks also blew up like silvergate And a lot of times, yes, the the news is the worst at the bottom.

However, price isn't being pushed lower. So that is a huge tell of whether a stock is done going down. Mhm. Just horrible news. Sentiment is terrible. Everyone's neglecting it now. Says it's complete just say trash. But price starts to build like in this page, higher lows and higher highs and it the rate of change flattens. And a key tell for me is when the MAS moving averages start slicing through price and price oscillates up and down above and below the moving averages.

So this is stage one and in this stage I kind of see it as selling pressure has stopped from institutions and now they're starting to accumulate it again. They might see uh some some brighter future coming in from earnings or sales. If it's cyclical stock they might see you know interest interest rates coming down. Let's say if it's a home builder, uh a brighter future for those types of stocks, too. So, that is stage one.

And if we go back to the charts, let's use RK as an example. You can see exactly what I drew. The 10e moving averages starts oscillating through price. And now price in this early January 2023 period gets above the 10 and the 20we. You can see the 30-week magenta line come to price as well. and the 40we and like I said right here all the moving averages are slicing through price is oscillating up and down between uh all the moving averages sometimes stage one can last for a few weeks few months for this example art kathywood ETF it lasted you know for almost two years I'd say stage four ended around early 2023 and then stage one ended around this May 2025 5 era.

So almost over two years in the stage one period. In this stage, if you try to anticipate and buy too early, you you can get really chopped up and take a lot of unnecessary losses of course. So now I want to enter the stage two phase of a stock. And that is where you know more swing and position traders should go long or think about going long. And again the stage analysis is more of a longer term overview or just a higher level perspective of whether a stock is in a downtrend. basing sideways, building that stage one base, we're in an uptrend.

So, let's go back to the drawings. And just everyone remember this photo right here. We're going to erase it and then I'm going to talk about us entering stage two. Let's just go through one more. ANF, Abraham, and Fitch. This is like ARK K the Kathywood ETF and ANF Abber Fitch literally highlights the stage analysis process picture perfectly. We can see two full stages actually here. You can see abbercom Fitch was in a downtrend below all the key moving averages the 10 20 30 40 eventually the moving averages catches up to price. the rate of change of price in a downtrend flattens and eventually we get above the 10 20 30 40 week moving averages.

The 20 the 10 stacks above the 30 which is the magenta and above the 40 which is the white line and we're in a stage two uptrend and we're going to get through that like right now and then you can see again another stage four period below the 10 20 30 40 moving averages. The 10 is below the 30 and the 30 is below the 40. That to me is the key tell instantly to see or to examine if a stock is in a downtrend. Just look at the price structure of price and then relative to what it's doing against the 10, 30, 40 week simple moving averages.

And you can see went through stage four and then had the stage one basing period which didn't last too long. So now we're going to like an example of a shorter period. Stage one shorter than stage one. Let's say the shorter period only lasted like six sixish weeks. Wow. Yeah. So, that's a couple examples of stage four, stage one, and I'm going to introduce stage two and then eventually stage three before again inevitable stage four and then we'll go through a bunch of examples.

Sounds good. So, just picture the other side of the chart that I drawn. Mhm. you know, so they're coming down. Yeah. So you have it you have the stage one period. You have the 10 week now kind of slicing through price. Price is sometimes surfing it, sometimes coming back below it. Let's just make that better. Again, the magenta, the purple is a 30 week. Can say it's like that. And then the gray is the 40 week. So this is like kind of picture perfect stage one.

The price is oscillating in between the moving averages and eventually enough supply and demand digestion institutions are accumulating the stock and pushes into stage two. It now is surfing above the 10 week, 30 week and 40 week. So you start to see something like this where the 10 week starts expanding upward. the 30 week because it's a slower moving average. It trends below it, but there's that gap. Yeah, we're not going to do the 20we here just for the sake of excessive drawing, but we'll show on the chart and I'll talk about how I like to use, you know, the 10 20 week crossover as a shorter term a shorter longer term trend indicator.

But I'll talk about exactly when I when the stage analysis process indicates to you that it might be entering you know a longer term uptrend or a longerterm downtrend. So to dictate the different stages is the is a lot of it come down to the moving averages. Yeah. So it's price structure because we can take moving averages out of the picture and it's looking at you know an uptrend. you have higher lows, higher highs, and it's typically, you know, sloping at a 45 degree angle.

And then when it starts accelerating, that might be a time where you have to think about selling the strength. And then down trend are lower highs, lower lows. But the moving averages helps you, you know, normalize and smooth out the trend. I guess it's part of the trade management, right? In terms of being able to scale or trail um into out of your trades. Exactly. Trading education is completely broken. For years, the industry has been purged and poisoned by bad actors, fake results, and strategies hidden behind pay walls.

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But for for the viewers, you can easily just quickly tell what price relative to the 10 30 40 week moving average. Cut you. Then when it comes to stage two and trying to not execute necessarily but when you are trying to position is it based off anything specifically when it comes to price at all or is it mainly once you've identified it you then depending on the price action and the particular stock or crypto whatever it may be depends on what price action you're seeing at that time.

So for stage analysis it's more of a longerterm trend gauge. For entries, we like to go on the daily chart as well, coupled with the weekly chart. And that's not really for this session that we're talking about, the specific entry points. We're just going to go first on identifying, you know, the most basic thing. If the stock in a longerterm uptrend, is it kind of topping out or is it a downtrend or is it starting the base?

Gotcha. And if you have that, you have like the foundational first part of trading for us as asset managers and position traders, like what is the direction of the longer trend? And you want that wind behind you. Well, plus once you have that as well, that that insight and foresight into where we are. Yeah. Within the market cycle and price cycle. Exactly. Regardless of whether you're a position trader or even all the way down to scalping, there's benefit into having that non-exact so that you know what the higher probable move and direction is.

You know, and as traders and money managers, we we always say it's impossible to predict the future. And anyone who says they can predict the future is just full of crap. But if you study cycles and how they work, it can give you an idea of what to expect in the future. And if it doesn't align with it, then there might be something wrong. You have to re re kind of re-evaluate your analysis. Of course. Yeah. So if there was a way to quote unquote predict the future, it'd be studying cycles.

You know, also the human nature, emotional cycle of the markets too. from euphoria to depression, greed to fear, optimism, pessimism, you know, risk adversity, you know, during a bare market to risk-taking. Often times that happens at the top when most people are, you know, saying, I want in, I'm going take more risk. That often happens when things are kind of frothy. So, let's keep going in to this. Again, the gray or the silver is the 40-week moving average.

And again, because it's slower, it trends below it. And I'm just going to draw this up like this. Finish drawing the moving averages and then we'll draw price. So now, as you can see, the stock is in stage two. And this is the uptrend. And this again, I'm drawing kind of like the weekly move weekly chart. So you know how stocks they'll make moves up and then often times they'll base sideways and the 10 week can catch up like that and from that again with the base that's just proper supply and demand digestion of a stock institutions accumulating stock off weaker hands you know maybe day traders shorter term swing traders but when institutions betting on a longerterm trend that happened they'll keep accumulating and and creating that support which is the lows of the base.

Sometimes there'll be undercuts, shakeouts, and that's institutions grabbing that stock from the people and traders getting shaken out. So, eventually you have a base. This could be, you know, a few weeks, five, six weeks, seven weeks. It could be multiple months. And later on, we'll talk about one of my favorite setups, which is that first multi-month base after this initial big move up into stage two. Yeah. And so, eventually you start breaking out, go for another leg, a 10 week continues to follow suit.

Would this still be stage two, Eevee? But Yep. Still stage two. 30 week follows suit. 40 week as well. So this is stage two. So why don't we show a few examples and then we'll transition to stage three and then we showed stage four. Maybe I could do a quick schematic of a whole cycle. Yeah, probably. And then we'll go to a bunch of examples, some nuances as well because sometimes you can enter stage three, it looks like a stock's topping, but then enters another earning cycle, has another surprise, goes back into stage two.

Or there's another nuance setup that Stan Weinstein taught and I'll actually show you a trade we did for our turboction portfolio, you know, many months ago, last year is a stocks in stage four. Yeah. And usually we won't trade stocks at stage four, but if it becomes extremely extremely stressed to the downside away from the 30 40 week moving averages and then it forms a base around the 10 week, you can get the opportunity to trade that mean reversion back into the 30 40 moving averages and still catch a really nice move.

So this is stage two. Back to the charts. I'll just use the first two examples because they highlight this stage analysis so well. This was the COVID crash and that was a quick reset like it went into stage four quickly then back into stage two. But again, let's just focus on stage two. You can see like I drew the 10 week prices building higher lows and higher highs above the 10e moving averages and just surfing it so nicely respecting it perfectly.

The 30-we is far below it since it's a longerterm moving average. And then the 40we is below the 30e just like we have here. You can see 10 30 40 price is oscillating above. Yeah, you can see there's some basing form formations as well in abbercomia fitch. You can see that same thing here. We have the stage 4 below the 10 3040 stage one and oftent times we're not going to talk about this setup but purep covered it in your recent chart for the episodic pivot.

A lot of times it it when a stock goes from a downtrend stage four to that stage one basing period what it takes or what a stock needs is that catalyst and we'll refer you to that pretty video to watch like his concept of episodic pivots. And I know Abraham Fitch had one here. You can't see the gap because we're on the weekly chart, but that sent it into this huge stage 2 uptrend which made a 800% move in 52 weeks, about a year.

And as you can see, super linear trend. This pretty much locked everyone out. You can see barely any like multi-month basis. You had a few week basis to get on, but other than that, it was just a smooth trend above the 10 week. You can see the red line, above the 30-we, and above the 40we, just like we have in the schematic here. So now let's transition to stage three which is the top and phase. As the quote says nothing can grow like trees don't grow to the sky and eventually a stock will get tired. institutions forecast or foresee worse in earnings.

They might think the valuation's too high. And as trend followers, we're we're writing the cotail of these institutions, the Black Rockcks, the Vanguards, the Fidelis that operate hundreds of billions of dollars, accumulating these things, distributing them, and eventually a stock falls into a downtrend. So remember what we had before in stage two when the stock was in an uptrend and we'll just picture that the continuation here and I'll draw the top of the period.

So we had this uptrending stock it based broke out let's say bases again breaks out tries to base again and then it fails a failed breakout. Maybe it's on an earnings report and they release poor guidance or even sometimes the worst is great news, great earnings report, but some for some reason institutions forecast worse earnings coming up in the future. You have to remember the markets are a discounting mechanism. It's all about what is the stock going to do in the future six months, you know, 12 months down the line.

That's what institutions are looking for. So let's say that failed breakout happened. Let's draw in the moving averages now. Mhm. The 10 week, let's just say like that. And then again, just like on the stage one side, stage three is essentially the opposite of stage one. Stage two and stage four are the opposites. So the characteristics are are pretty similar. Um so in stage three, just imagine you to flip this over.

It's pretty similar. The 10 week starts catching up the price. price starts oscillating in between the 10-week moving average. Now the 30-week moving average starts catching up too and eventually the 40we moving average starts catching up. So this is like early stage three. Yes. When the rate of change I like that rate of change term. I talked about loving Jeruck Miller in my Words of Risom podcast. He talks about rate of change as well and how he like kind of tells and this aligns with Stan Weinstein as well.

How he kind of tells a stock is topping is when you've had a big move and the rate of change of the stock kind of goes sideways just like when you have a downtrend and the rate of change of the stock starts smoothing out as well. And for us using moving averages, that can be a simple gauge to tell what the rate of change of the stock's doing just from the slope of the moving averages, the gaps in between the moving averages and how price is respecting and price is respecting moving averages or not.

Is it chopping in between the moving averages like we have here in early stage three? So would rate of change be noticing the rate of change in price movement, volatility, etc. like these these components are starting to shift. So during stage two, no doubt the volatility is higher, the price movements per day on average are going to be higher. Kind of what I mean by rate of change is like it's it's kind of like a math like calculus concept, but we won't dive into that.

For example, a flat line has a zero rate of change and then you know you can have a it's kind of like a degree. Yeah, you can have a tangential line to price and then that's a higher rate of change. This even higher rate of change. This is like a vertical rate of change. And when that happens, usually you want to start to look to sell into some strength and that might put in at least a local top a major top. And then that's like on the upside, right?

And let's say now you have a downwards rate of change. You have a downwards rate of change. It becomes steeper and now it starts flattening. That's kind of the stage one phasing period. Course and now eventually it turns up again. Mhm. So we'll erase that. This is early stage three. Can you just take out all of it again? Yeah. I just wanted to highlight early stage three and eventually we enter the topping period and that can last you know multiple months as well and eventually fall back into stage four.

So let's just say we have this topping period maybe some undercut some fill breakouts and then it breaks down in the stage four and typically the 10 week probably is oscillating in between and then oh sorry can you erase this part? Yeah I drew that wrong. Yeah, 10 week. All right, perfect. The 10 week is now above price and price is surfing below the 10 week like what we saw in stage yeah in stage four before. Now the 30 week you know like I said it catches up the price eventually the 10 week crosses below the 30 week and now the 30 week will slope down too and then the 40 weeks the slowest one eventually it'll start sloping down too.

So now you have the stage three talking process like I talked about again opposite to stage one you have the worst of news stage three you have the best of news you have great earnings like everyone's in the stock there's only good news on CNBC and Wall Street Journal times uh barren a lot of times but you're expecting price at that point even with all this news you want to not really be adjusted exactly with the good news you expect price to go higher but if there's some like a failed breakout here off good news and then the moving temperatures are catching up, you know, getting above price.

Price is starting to get very wide and loose and sloppy. Um, that could be a big indication that a stock might start to top. So, like in this example, just to highlight, let's say if news, good news came out here. Yeah. That might be what causes it to go up, but nothing significant happens. It almost keeps its resistance. Exactly. Fails, fails to make any sort of worse meaningful move. Yeah. Even worse, if the news good news comes here and it ruin makes alltime highs and then fails.

Yeah. That a lot of times it's like, "All right, this thing's probably done." Or, you know, the news can come here, too. Like, it causes a short-term rally and it just fails. Yeah. And I'll literally show you example on Abbercom Fitch and it's something I shorted, too. So, no play. Yeah. Futures traders, it's time to hear about Apex Trader Funding, the largest futures firm in the industry. They have completely changed the game with their new evaluation.

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Trade at Apex today. Let's get back to the episode. Not not in clients because we can't short clients, but this is done personal. So, I'll still talk about the short. Typically, I can't talk about exactly why I do the personal. It's more client focused. I'll still talk about like where I got in and things like that just to highlight it. Mhm. So, now we've gone over the whole stage. Now, it's the fun part. We get to go through a lot of examples of course.

We'll go through some full cycles. Let's get back into the charts. You have RK here. And this is just it's such a perfect topping formation. It's it's just incredible. It's like textbook. So, you want to screenshot this chart right here if you want to see the full stage analysis. This was stage two above the 10, 30, 40. It's about a one-year move and eventually have this huge crack. You can see the 10 week is now slicing through price.

You can see the 30-we is catching up the price and now it's slicing through price, too. You can see the 40 weeks also catching through price and now it's starting to slice through price here. At this point the 10 crossed below the 30, not below the 40 yet. Another few weeks it crossed below the 40. Now the 10 is below the 40. It's below the 30. But that's not the full bearish alignment when you have the 10 below the 30 below the 40.

And this causes a lot of frustration. Imagine trading on this. You have 28 weeks of just chopping up and down in between the moving averages. You can see the moving averages are completely flattened now. Price is oscillating in between it. This is what we're talking about. Yeah. The rate of change. You can see that to the upside and that's sloping. Exactly. Exactly. And eventually something just cracks and see how tight the moving averages get here and they fall start forming that bearish alignment. 10 is now below the 20 is now below the 30, now below the 40.

Price is below all the moving averages. in our building lower highs, lower lows, lower highs, lower lows. So that is the full cycle right here. Exactly. Yeah. Would you say through understanding these cycles or this particular cycle should I say? So through understanding this cycle, is there an element where you can be purely technical based then through following the cycle through the price action with and what Stan Weinstein he had is a famous quote.

It's called the tail the the tape tells all. However, it's like if someone just fully trusts price, which one definitely could, you can just trade price action in the price cycle. But some for for me personally, for Connor, for a lot of guys at the firm, we like to back our price cycle analysis with some sort of narrative story theme, some sort of maybe fundamentals and or some sort of catalyst, maybe a technological.

Do you think that helps with the confidence behind it? Yeah. Conviction. Exactly. And you know as money managers we have to be able to we have to be able to explain to clients we can't be like you know price is doing this just trust it you know just trust the price but yes you could do that but for clients they'll feel much better you actually understand the story that's one of the nuances uh that people don't realize I think because they one it's like a almost a positive on the just a retail independent trader side uh to be able to just do that able to just use price not have to explain really anything to anyone else other than yourself.

But then equally, a lot of people's goals align with trying to be in the position you're in and what you guys do. Yeah. But then they don't kind of realize, okay, we have to take a more a professional approach, right? And a deeper understanding regardless of whether how powerful this concept and you know the cycles may be, we still need to add those layers. And those layers help those. Those layers help a lot because not all charts are built equally.

You know, it probably helps with that nuance that you talked about like making sure stage three is actually a stage and not we're not going to continue which I'm sure we'll go because if you have no idea what the news is doing. That's kind of like what we talked about. Often times news is worst at the bottom, news is best at the top. You can see like what sentiment is like with the stock. So there's a lot of layers like you said to add on to just this price analysis to give you more conviction, to give you more edge because when there's a confluence of everything, you can be more confident in your analysis.

And you know, we're not talking about a lot of other nuances, but two stocks of equal setup, one's in a stronger theme or group, that stock in the stronger them group likely makes a bigger, more explosive move. Yeah. So or a stock that has better fundamentals as well, you know, better story. there's that catalyst around it. So, those are things we're not going to get into. We're focusing on the longer term stage analysis to help you at least align yourself with the longerterm trend.

So, would you say stage one and stage three are centered around sort of trade management and positioning while stage two and four are where you could take positions. I would say stage one and stage three are the avoid stages. That's where you get chopped up. That is where institutions are accumulating in stage one and then distributing in stage three. But for us, we're not managing tens of billions. We can surf the smart.

What I mean in terms of management, what I mean is you'll be coming out of stage two. So that's where you're starting to scale out. Exactly. Yeah. Um and then same with stage one. If you have shortened, then that's where you would look to be again scaling in terms of management. But I understand your point. Like if a stock's turning from stage one to stage two, we'll put it on our radar and start like digging into the news.

Now asking AI, just understand the story. What's going on? Are there fundamental catalysts? Is there a predominant, you know, technological revolution or some sort of theme? What's the process to do that in terms of identifying when a stock could be changing from uh stage to stage or phase to phase? So like I talked about the rate of change of the stock and then the slope and alignment of the moving averages. But in terms of like how do you do that?

Are you just manually going through these stocks or is there a particular you scanner or settings or system that you have that will allow you to identify? Yeah. So this so I personally like to use my eyes more. I have basic filters like a price filter, average volume filter and then in deep view. This is the charting platform I use. It's called deep view. And they have these relative strength or absolute strength ratings.

Mhm. And so I like my momentum scans and typically most charts in there are probably in stage two. So I don't need to quickly go through it. Okay. But when I'm like so we we have a like I said in the first podcast, we record a video every day the market's open. We go through this inner asset correlation of stocks, of bonds, of crypto, of other asset classes. And for that, you know, we use our eyes to see like what stage these very up to date anyway and tracking these things regardless.

Exactly. And like you said, this is a longer term perspective. Exactly. Or going through ETFs like the RK, we have ETF list. We'll go through those. We're not screening things out. We're going through to see, you know, what are sectors doing? Is are home builders in stage four right now? Or is tech in stage two? And with this analysis now and on deep view there's a really cool feature where they'll plot the number of stocks of the deep view universe like they'll categor categorize it between stage 4 1 2 3 and so you have the numbers and you'll get a feel of like how the numbers are changing.

If a lot of stocks are starting to morph into stage three and then a far majority of them are in stage four you can you could in your head start to get a little skeptical of the markets. Of course. Like if most of the stocks in the whole universe are in stage three and stage four, it's probably not going to be that great of a market. Of course. So we've gone through a full cycle with RK. We'll quickly just start running through, you know, five, six examples in stocks.

Go through crypto, commodities, bonds, currencies, and then we'll go through more stocks. Would you say that this uh stage analysis is it fractal in nature or is it predominantly for the higher time frames? Oh, it's definitely fractal in nature. 100%. We can go on the daily chart and use 10 20 period moving averages. Put a 30 40 week on, you'll see quicker cycles and they could be more for swing traders, swing cycles.

I don't know what day traders would use. Maybe, you know, an hourly chart for their quote unquote longer term chart while they mainly operate under a five minute chart, but I'm not a day trader so I can't speak for them. But we primarily operate under the weekly chart for a longerterm trend and then look for entries on the daily. And then it's interesting like you could say it's cleaner or easier to do from a higher time frame perspective less noise.

But then it's patience to be able to wait for this next stage to take place to then also even if you do execute in a stage two and then hold throughout and manage your trade for that length of time. um and then look to try and manage accordingly when we move to stage three. Yeah, that's a typically we're not typically we're most likely not holding through the whole stage two period because we don't want to hold through those base per basing periods especially modern markets you can have a quick 50% draw down in these stocks unlike you know in the 80s 90s a lot of stocks will be like an ANF they'll just trend straight up the 10e moving average I for these two first two examples it's like a perfect linear stage two uptrend but a lot of modern day ones they'll mean revert back to the 20 30 week and for us we don't want to go through those draw downs in that period because there's so many opportunities in the bull market we just want to rotate our money into the next stock that's ready to break out of a base surfing the MAS you know and plus even if you do have these cycles the reality of uh was it getting in at the absolute bottom getting out the absolute top is obviously it's not possible yeah it's it's a great goal to have right to strive towards but the reality is it's very far different because a lot of people will hold out, hold out, hold out, probably get blinded by then what the P&L looks like and then not actually manage or execute accordingly.

And a quote that I repeat in my head pretty much every day is Jesse Livermore and he found this 100 years ago. He pretty much said as trend followers, you want to forget the first eighth of a move and the last eighth. And they're often two like two mo two most expensive eighths of the move. And you know, and when we look at the chart, the first eighth is like in this area, in the stage one area. The last eighth is in the stage three area.

And that's where all the chop frustration are. Yeah. So, forget about this first eighth. Forget about this last eighth. Just catch that sixth ace in the middle. That's often the best. Same with on the short side. Forget about this first eighth. Forget about the last eighth. Just catch this meat in the middle. So, we went through RK the full cycle. Well, we'll go quicker now since we've broken the stages down, of course.

Yeah. So, stage two, stage three, and then stage four, and now another stage one basing period that has lasted over two years. And now we're back into stage two uptrend. Abracom stage three to stage four, stage one, back into stage two above the moving averages, ready to change. The stock slows down. Moving averages are oscillating and cutting through price. It's basing building lower highs and eventually breaks down and makes lower lows.

And now we're below the 10, 30, and 40 week moving averages. Now in a stage four downtrend again, recently actually I want to go into some nuance here right here. This gap down into stage four was actually catalyzed by better than expected earnings numbers. And that's what I was talking about on that example. It looked like potentially we could have been basing and maybe went back into stage two, but it was a clear telltale sign where you have great news and it gaps down.

And that's actually the week I shorted it and it was a nice move down. Very nice linear move down below the 10 moving average. And on the flip side, you spent a lot of time in in stage four. Now moving averages are slicing through price. This is stage one. It's very messy. It looked like, oh, we were about to break down into stage four again. And these are another one of those nuances. It looks like we're heading to stage four again, but Abbercom Fitch reports great earnings.

You know, the Federal Reserves cutting rates. We're entering this potentially economic boom cycle and boom, you make a 100% move off the lows. We're back in stage one. You can see price above the 10 week, above the 30-we, and above the 40we. So, that's some nuance there. Let's go to the semiconductor ETF and we're I'm going to start going faster now because everyone should understand more about the nuances. Covid crash stage four V-shaped recovery back in stage one and now we're back in the stage two.

Stage two lasted for better part of almost two years. Stage three started happening. Moving averages starts cutting through price. We have multiple rejections at the 10 week, 30-we and 40we moving average. And now we fall back in that 2022 inflation bare market below the 10 30 40 week. So stage one, I mean stage two, stage three, stage four, back in stage one. And then this is a choppy stage two, but still stage two.

Another ETF, ARCG, another family of Kathy Woods ETFs. This is just textbook again. You can see stage one basing period. You see how literally it just goes sideways? Yeah. Moving average is just sideways. That's a clear telltale sign. And then boom, you have a catalyst. And the catalyst was the COVID crash. The Federal Reserve starts printing trillions of dollars. The government starts printing trillions of dollars as well.

You have this huge move up. Again, you can see 10 week now surfing the 10 week 10e has that price gap above the 30 and the 40. That's often times you can say that's in stage two uptrend. You can see all the moving averages are strong movements, bullishly aligned. 36 seconds. That's Hola Prime's fastest payout on record. Not 36 hours, not 36 minutes, 36 seconds. The average payout time across the entire firm is 34 minutes and 98% of their payouts clear in under an hour, which has been verified by Deote.

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And let's get back to the episode. Higher lows and higher highs in price. Eventually, you have this big crack like RK. We start oscillating in between the moving averages again. They start flattening. They start bearish aligning. And then price breaks down in a huge stage four. And the reason we really want to know the longerterm trend is because like in a microcosm, yeah, you could have a temporary short-term uptrend on the daily, but you're buying that.

It rejects a 10 week and you enter frustration and you want to step aside because look, when we enter stage four, the point of stage four to the bottom stage four, that's a 66% drop. From the all-time high, you had a 78% drop. So, a lot of damage can be done in stage four. That's a lot of give back and for it's like every crypto trader journey. So and for our clients, you know, like what we talked about in the last podcast, our mission is to protect the the downside of our clients who most a lot of them are headed into retirement or in retirement and they just can't afford to have 30 40% draw downs in their assets.

Cool. So I mean no one can no one should want to go through 30 40% draw down in their client assets. And again, this ARC GTF is actually still in a stage one basing period after like almost 3 and 1/2 years. And actually, this is a current just about Yeah. Yeah. And disclaimer, this is a currently owned position in Turbo. We recently initiated it. You can see stage two beginning. Yeah. Beginning of stage two, 10 week 20, 30, 40.

All bullishly aligned. Price is surfing in the 10 and 20. And you know, I will quickly review kind of the story and narrative. To me, I was a bio major. I took some biotechnology classes and AI, there's so much data to analyze in biology. All the, you know, phase trials, all the data on proteins, how they fold. And with AI, you can analyze data so much faster. So, I think AI is going to augment genomics in a big big way.

And it hasn't really reflected in price yet. I've seen a lot of breakthroughs, but again, we're just starting to enter stage two uptrend. And even just the retracement back to previous all-time highs is a 250% move, which is, you know, pretty good. So, we'll see what happens here. No one knows if it's going to actually play out. We can just enter back into stage four, but that's why you manage risk and have stop losses.

Mhm. ELF is another textbook one. You can just see like RZ, you can see the stage two uptrend. You had a stage four in that 2022 period. Then you had better than expected earnings. you know, this became a fad. Um, I had I had some friends who were girls talk about, you know, they're going they're buying a lot of E.L.F. it's this like relatively quality but cheaper makeup you can just put on. Uh, especially people in college.

I was in college back in the day or just out of college. So, people aren't affording the top of the line makeup and perfect trend above the 10e moving average which is above the 20 which is above the 30 which is above the 40. And I might be repeating myself a lot, but that's what it takes to really master this concept is that repetition, looking at a bunch of charts and identifying in stage. Exactly. And aligning yourself with the longer term uptrend.

So what would you say there? You see how we were in stage two and then we dipped down very slightly and then went straight back up. What would that be talking about right here? Yeah. So without hindsight, this is a stage three topping process and actually at some point broke down in stage four, but just institutions decided it wanted to support the stock at an earnings report right here and it went back into stage two for a little bit, but then it entered stage three and then eventually stage four.

And again, just look at the damage that can be done in stocks. 78% decline. And so a concept we learned from Mark Murvin's his 5080 rule. When a market leader goes through its bull market period and it tops, there's a 50% chance it drops 80% and an 80% chance it drops 50%. So, we want to avoid that kind of destruction. You're close. So, that is five full cycles. Maybe I'll go through, you know, we're going to I'll save the rest of the stocks for later.

I want to go through a couple nuanced ones and then crypto commodities fixed income bonds and then circle back for the other stocks. So FTI is an example is this nuance example that I talked about where you have a stock that looks like it went through the stage four period, stage one basing, a huge stage two uptrend and it gets wide and loose. Moving averages start slicing through price. Price is slicing through the moving averages. it actually breaks down to stage four um and then it comes back through up the moving averages.

Moving averages are still flat. So you can say it's in the stage four stage threeish period. Yeah. It's like okay super wide and loose but eventually this thing just refuses to go down and it enters another stage two uptrend again. And recently it broke out to new all-time highs on this piece of news that they're actually converting their aircraft engines into power turbines to meet the power or energy requirement needs of data centers.

So I like to label my charts with key pieces of news and now we're just in this super nice trend. From that news we made a almost 80% move now. So in those scenarios where these nuances take place, is it just a case of you still need to follow your system in terms of what stage is representing in real time? Exactly. Like your job is just to manage. Exactly. I was not interested or looking at the stock in this period right here.

Okay. Too wide and loose. There's nothing. But when it starts to get above the 10, 20, 30, 40 week and that starts foolishly aligning, I'll put it back on my radar. It builds this handle within this big one-year cup with handle. And on this catalyst, it breaks out into new highs. So that's a nuance take. AMR was another perfect one right here. Like when you say this starting to look stage three-ish, you had this huge stage one move, sorry, stage two move above the 10, 20, 30 week, 40we moving averages, moving averages catches up, catches up to price.

You see this wide and loose action. You can see like what we talked about before, the moving averages are flattened. Price is oscillating in between. In another reality, this could have broke down and retraced the whole move, but institutions decided there's more left in the move and we entered another stage to uptrend. Yeah. So, that's a couple nuanced um situations there. So, like I talked about how cycles are universal in the world, in the universe.

They're also universes. So, I want to go to some crypto first. Let's go to Bitcoin, Bitcoin weekly chart. And with crypto and commodities like gold and silver because it's there's no earnings reports, there's no CEOs being fired, there's no CEOs committing fraud, there's no news events, there's no short reports. It literally trades off supply and demand and human nature, which is timeless. Jesse Livermore observed it 100 years ago and it stayed constant throughout this whole time.

So, let's just zoom all the way out to Bitcoin. You could I could even like not even zooming in, I can just start seeing the price cycles. There's a stage two uptrend here. Topped in 2017. We can zoom in more. Again, people should know the colors of the moving averages now. So, I'm not going to keep repeating myself there. Moving averages slices through price. Price builds lower highs and lower lows. We're in a stage four period.

Again, now the rate of change stops going down. You start building higher lows here. We reclaim the 10 week. We reclaim the 20we. Eventually, we reclaimed a 3040 week. All the moving averages catch up the price. They start bullishly aligning. 10 is above the 20, above the 30 and 40. So, in this case, when we're seeing that change Mhm. where would be where would have to be you personally, but in terms of the concept Yeah. and the the stages, where would we the sort of eyes start to be looking more intrinsically for potential, you know, positioning or entry in terms of the EMAs?

Is it once we're above all four or is it once we're noticing, okay, we're looking like we're in a stage one. Okay, we're starting to transition to stage two, here's where it might get interesting or we're on average. Most people should start to look. Typically, I would want the price to be above all cumulative averages. Okay. With at least the 10 week above the 20we and above the 30. Okay. So, you want to see that real transition first.

Yeah. And then we'll talk about, you know, more of a trader continuation setup like I talked about the multi the first multimonth base. Yeah. After the first initial leg, there's earlier entries as well, like on the episodic pivots. And again, I'll defer the listeners to predates. Um, and then there's more of a quote unquote wine investor buy, which is buying like the first consolidation above the 40week moving average like maybe right here around this 5,500 level.

There's almost different nuances approaches that you could take with following the the same fees. Exactly. And right now I don't want to focus on entries because everyone's probably like where do I enter where do I sell? I just want to focus on a higher level perspective of the trend. Well the beauty is you can go to other episodes for entry techniques for example. Um but entries are usually very particular to a trader personality.

Exactly. And their time horizon because a lot of people watching no doubt probably more shorter term. But the beauty of this is as we talked about when you have this knowledge and awareness uh and because it's a universal cycle price cycle concept that can be applied to all of the markets uh that people are trading it allows you then to have that one bigger picture it's fractal in nature the thing I would say when it comes to it being fractal is then you have to learn the nuances of those time frames right exactly um so if you were to look at it on a on a daily or even a lower time frame you would still have to spend the time as you said for what you've done on a higher time frame perspective of building those reps of seeing the different stages and how they look on average from that time horizon.

So for you if it's been like weeks daily if someone was a day trader or even a scalper looking to utilize this cycle concept they would then need to do the same work of going to the whatever relevant type there might be 1 hour and so on. And you know, I've provided a bunch of tickers and examples. People can go back and chart it themselves and put on these moving averages and identify it. So, let's just go through Bitcoin quickly.

You know, it enter stage two. This one didn't last too long. Another stage three. Quick stage four. And then stage one again. And then you had this 2020 move. Yeah. Stage two. Stage three that lasted a year. And then this big stage four above the cub moving averages right here. The snapshot. remember it. You can see the whole cycle. Stage one, stage two, stage three, stage four. And again, stage one right there. Stage two, continuation.

Stage three, I mean, sorry, stage two. And now you have this potentially stage three. And I'd say we're we're definitely in stage four right now, building this downside continuation base. So, it's funny because we have Tom Lee giving $250,000 price targets. We have other people giving massive price targets for 2026 but that's not happening until you get back above the 10 20 30 40 week moving average. You would say it's actually quite good in a sense as well going back to what we talked about earlier about the sort of fundamentals and news.

Yeah. But then also the technical side actually one of the benefits is it can almost allow you to not get heightened by the news and the price targets projections. Exactly. cuz you know, okay, it doesn't really mean much because we haven't shifted back into stage two. Yep. And then or stage one to stage two. And then once price starts shifting back in stage two and the news is bullish, you can corroborate the news, the fundamentals, the macro with the price.

Now you can take it on as more of a key factor. Exactly. So that is Bitcoin. I'll quickly go through Ethereum. And there's actually a nuance trade here, but let's go let's just do the 2020 cycle because people we don't need to go through the whole thing of the whole Ethereum life cycle. But again, stage one, you can see moving averages oscillating through price slope is pretty much flat. Then price starts surfing the 10 week higher lows, higher highs above the 10, 20, 30, 40.

Eventually, this is late 2020 21 into 2022. moving averages slices through price. Price breaks down below them. Now it's below the 10, 20, 30, 40 week moving averages. Again, stage one last a couple years. Now, we entered stage two briefly. This is where it gets messy. It then breaks down to stage four, then breaks back up into potentially stage two, and then, you know, just chops around. But that one nuanced trade that we talked about when I was talking about stage four, that stage 4 B minus that Stan Winston talks about, it was down here.

So price gets extremely stretched to the downside. Mhm. It comes back up and it builds this base. On the weekly, you can't really see the base. I will go on a daily chart real quick. And I'm going to delete the lines so no one sees that. On the daily chart is what you saw here. You can see you had the stage four move below the 1020 50 200 day moving average on the daily and had this super super tight base little shelf above the 1020 50 period moving averages on the daily chart.

And so we just bought it in this area and caught a nice mean reversion into the 200 day moving average. But I don't want to talk about that too much. Let's stick to the full price cycle that is Ethereum. Um, let's go to gold now, which has been an extraordinary move. But let's go back to history. Let's just talk about let me see. Let's just talk about this. Let's let's talk about the big bull market in the 70s. Again, this was 50 years ago.

Mhm. It has stayed constant, timeless. Yeah. Again, we don't want we don't need to talk about too much of the context. 1970s, but we all know that was a stagflation decade, huge inflation. Oil spiked and gold as well as an inflation hedge as a hard asset. The futures, it seems like it started, at least on Trading View, it started in 1974. So, we don't know what happened behind that, but stage four period again below the 10, 20, 30, 40 week moving averages.

This stage one didn't last very long. It quickly enter stage two. Now we're turning above the 10, 20, 30, 40 moving averages. And this stage two lasted a while. It lasted from 1977ish to all the way to 1980. You can see price got extremely extended above the 10 week and it blew off. Put in the top, sliced all the moving averages. Now we're going through that oscillating period and eventually a year later in 1981 that is when we had a recession depressionish when when the economy contracted before Reagan came into office or was in office since he cut a lot of costs.

Um and I forget the Federal Reserve chair at the time but he was hiking rates too to finally kill inflation and we entered the stage four period again. And you can see below the 10, 20, 30, 40, that trended for a while. Again, these trends could last much longer than you think. Eventually, we broke back in the stage two above the 10, 20, 30, 40. That didn't last very long, and we had this a lot of chop. So, that's gold.

Silver is also making a parabolic move recently, too. But I want to go back to the 1970s period with silver as well. Let's be honest, most traders don't fail because of bad sales. They fail because they have no one in their corner telling them the truth. Tradezella gives you just that, and it never stops working. This isn't just a trading journal. It's the all-in-one platform built to make you profitable. powered by an AI co-pilot that is literally by your side every single session, watching every trade, learning every pattern, and guiding you toward consistency in real time.

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Look, look at this amazing crazy parabolic move. Maybe we get that this time around. Who knows? But you can say this is a stage one really choppy period just going sideways. Now you see the ascent of the price going at a 45 degree angle above the 10 20 30 40 period moving averages. And now remember we talked about the rate of change the slopes. I'm going to draw this real quick. I think it's a good exercise. You can see the rate of change was pretty much flat here.

Then it turns up and these are just tangential lines. I don't remember too much calculus but this is a derivative of price. You can see another tangential line. You can see how it's becoming steeper and steeper. You ready? And now you draw another tangential line. You how steep that is getting. And then this final one is like it's literally just vertical. So that's when you know like it's it's starting to get unsustainable.

And I'm using log charts on the weekly where, you know, a 100% move is reflected the same. For example, a 10 to $20 move is the same on this chart as a$100 to $200 move because they're both 100% moves. Okay? If I change it to arithmetic, it just look it kind of makes something look more parabolic than it actually is because a dollar is the same. Like a $10 will completely bleed out a $10 move like down there. Okay. Yeah.

So that's why on longerterm time frames I use a log chart. Okay. So it'll kind of even it out to what in terms of a percentage. Exactly. Yeah. And like and since this made a parabolic move, when assets make a parallel move, it can often top even faster. Mhm. So, you can see it made a 150% move in like 10 weeks and then it dropped 72% in like 16 weeks and that's a quick stage 4 crash. Didn't last too long and then it tried to get into stage two again but failed and resumed a stage 4 downtrend.

So, we've covered a full cycle in equities. We've covered full cycles in crypto which is you can call it an asset class. Some people don't think it's an asset class. We'll just call it an asset class for the time being. I think by now we should Yeah. which recently came like 15 years ago. You know, gold and silver have lasted thousands of years. And I bet if there was enough liquidity, enough history, we'll see the same cycles happened, you know, when Jesus was born in the year zero or something.

If you can go to um like silver's breakout, gold's breakout these last couple years, would it be following the same exact uh cycle as well? So, you know, could have gold Mhm. had one of the best setups I've ever seen in my life. You know, the cup with handle. Yep. This is a 10-year cup with handle. Yeah. And the bigger the base, usually the more sustainable the move and we've had this two-year move just trending above all the moving average.

Stage two ever since. Yeah. So, I I would say this is like So, would that be stage one, the whole? Yeah, I'd say this is Yeah. stage one the whole time. So you could really if you think about it because within there if we wanted to sort of zoom in a bit you could also go through you want we could do that as an exercise you but it's very messy like a quick little stage four here back in stage one it doesn't mean you've traded it means that thingy and even if you did trade it you would still be following the protocols you need to put in place because I think a lot of don't we should say that don't get mistaken in terms of thinking just because it is stage one or two or whatever it may be that you need to execute anything Right.

And even if you do, then there's other layers that then need to come in between dependent on your viewpoint and your time horizon. Some people maybe, you know, you get into stage two and they're only looking for the quick pop the first one week, two weeks versus there might be others waiting for a year. Exactly. To your point, this is a weekly, right? So, you know, this is stage one for a while. You can potentially buy it over this pivot point like 1850 and that give a quick little 11% pop, but it's gold.

And so this was when the Ukraine war broke out. So you could have had a quick little, you know, macro catalyst trade and it just fell back in, fell back into stage four, back into stage two, stage three, stage four, quick stage four, back into stage two, and then boom, out of this 10-year cup with handle, and it's made a enormous move so far. And what's funny was I I remember trading this, too. Obviously, I didn't hold this whole time because we're shorter more shorter term than holding the entire stage two.

But back then when gold broke out, there wasn't nearly as much of a talk of $ 38 trillion in debt, this huge deficit, geopolitics, what a what? And now gold's starting to go parabolic after a two-year move. And people are saying gold's going to the moon, hard assets are going to win, dollars going to zero. And that's exactly the type of news where I start thinking like, okay, I'm a very virtue. Do I want to start looking for a stage three to start happening or do I want to start looking for this verticality to continue and then finally blow off because it looks very vertical.

Yeah. All right. If you It looks extremely vertical and it looks like we've been riding the mainly the 10 for years. Yeah. And this could go on for another two years. Who knows? But when you start hearing everyone rushing into gold, people waiting in lines to buy physical gold, our clients asking us like about gold and silver, doesn't we start Yeah, we start we starting on putting on that contrarian hat. But you don't want to be a contrarian too early because yeah, you know, a lot of people want to be contrarians just to be contrarian.

And I'm kind of taking I'm kind of stealing this wisdom from Stanley Dra Miller. He said contrarianism to him is often times overrated because a lot of the money is made with the crowd. The crowd often is right for a lot of time and if anything when you have those bubble moments you can make some of the most amount of money in the shortest period of times. There is those periods of time where you do want to be contrarian but just because you want to be quote unquote more intelligent than the crowd and just try to pick top of time.

Yeah. and try to be a contrarian just to be contrarian. You can really get chopped up and lose more money trying to be a contrarian than just being with the crowd cuz you know like Michael Bur the famous everyone likes the big Shaw but he held that position for so long right because even though he was right the crowd were able to the markets were able to continue on its path even though yes he was right and he had done all the research knew the numbers and that was a big part of the the film they made right was like he was confused why is this happening this is wrong and then it finally happened but it could have been a case where he could have got liquidated if Right.

Yeah. I think he he had credit default swaps on with the big banks. I mean, here in New York City and he's probably paying like 100 million plus insurance per month. Mhm. And so he was able to hold out enough like investors were asking for their money back. He's like, "No, I'm not giving you like that. That wouldn't fly in today's market. If a investor wants their money back, you got you got to give their money back." It goes to show cuz like you can be like you said you can go against the crowd but you have to be very mindful of where you try and time it right normally you will probably even if you're going against a crowd you want to see some form of catalyst to sort of lead you in or some sort of like pure pure euphoria vertical move like right now it's still pretty controlled.

It's starting to get a little bit but it's still pretty controlled. You probably see on multiple gap big c weekly candles. Yeah. Like if you go back to silver and remember this is the weekly chart not the daily chart. Mh. On the weekly chart this thing was gapping all over the place. Now this is probably never going to happen in today's age cuz there's like you know it was just less efficient market back in the day. Oh but you might have a kind of that type of you see like the last even now in particular gap this week move.

Yeah. Um and if that was to continue for another say a week or two, they were in really, you know, that that territory, you know, because you see all the the articles and news, it was such a focus on silver, which has never been happening. They've raised margin limits across many brokerages and and firms. And again, these are things that do not happen unless that euphoria and that moves happening. You can see in the price action as well, right?

And you know, we probably also have experienced traders watching this as we speak. for them, they definitely skip over a lot of the content, but I'm teaching this to someone assuming that they know nothing about stage analysis, of course. And that that's kind of my intention here. Of course. So, I'm trying to cover every single detail, repeat myself a lot because well, I think agree like I said because we do have a good stock audience, but I do think probably a large majority is futures.

Okay. And then we do have crypto and we do have uh forex as well. Okay. And with that though is that this is a universal concept. It focuses on the cycles as well. And again, even if you don't in terms of your trading, if you're a scalper, day trader, no problem. And even if this is something that you might not utilize to take trades or even manage because of your time horizon, whatever it may be. Yeah. This is going to allow you to understand the overall cycle and especially even just from a investing standpoint.

Yes. Because I'm very big on I was very big on, oh, everyone should learn to trade, but I don't think so. I think everyone should learn to invest, right? As in everyone, especially traders, because investing is the thing that will probably make them the highest return in comparison to say a lot of people just kind of get into a random crypto coin. Someone they heard it somewhere, read it somewhere. Exactly. Um, while using again even with crypto, they could use this same exactly stage analys.

So, I think this is a very, you know, timeless principle. It's also very universal and I think a lot of your viewers like you said will all get gain value from this because it's it's timeless across all assets. So, you know, we've covered full cycles in equities, we've covered crypto, we've covered some commodities and I'll actually give a bonus right now and I just more of a current analysis that could lead to potential huge move in the future.

Okay, I don't know the future but it's uranium. This is spot uranium and let's go through this is a 20-year chart almost. The last high we made all-time high was in 2008 in the great financial crisis. You can see I'm not going to zoom in. I'm going to be more of a macro overview. Stage two, stage four. A lot of like just randomness doesn't matter. We've entered the stage one potential stage three. Sorry, stage two potential stage three.

Then re-enter stage two. Came back into stage four. Now we're potentially in the stage two again. When I look at this, it's a 20-year cup with handle cup handle and we'll see over this 33.8ish level. That to me is the pivotal point as Jesse Livermore would say and there's a huge fundamental and story backdrop to uranium as well. AI, it's pretty simple. I'm not going to get into details. AI requires immense energy. Nuclear is one of the safest.

People don't think it's safe, but it's one of the safest, most efficient, and cheapest form of energy. It also doesn't pollute the environment, and uranium is the fuel for that. So, we'll see what happens here. 33.9 is really the big level. You could have snuck in in this 27.2 area. We also have some uranium exposure, not directly to the spot uranium, but we have other nuclear stocks as well in the portfolio right now.

So, that's a bonus. I wasn't planning on sharing this, but I would This is a current setup. Pay attention to it. You can also look at the URNM ETF, which is uranium miners. This actually broke out into all-time highs. We're in stage two above the 10, 20, 30, 40 week. These are the miners. URA is another uranium miner also in stage two as well. So, pay attention to that. Um, we see there's a pretty good forward-looking prospect for this idea and we'll see what happens and plays out.

I mean this is a definitely secular trend with power generation because we just need so much of it to win the AI race. I mean all countries, all the biggest countries, China, Russia, Iran, of course the United States are all in this huge energy race to of course lower energy for residential homes like ourselves and just the average American or average citizen, but we need so much energy for data centers as well to power AI.

Mhm. So that's that. We've covered commodities. I want to quickly cover fixed income. Again, it's universal bonds. I don't know there's bond traders that follow you, but this is the sorry, this is the 10-year note. So, the 10-year bond or 10ear note futures, you can see there is a perfect stage analysis here as well. Oh, sorry about that. stage four, stage one, stage two, stage three, and huge stage four during this 2020 2021 2022 period that lasted all the way until late 2023.

The 10-year note futures dropped 25% which is a huge drop for US treasuries. Like it's it the the treasuries fixed income markets is probably besides currencies it might be on the part same par of currencies one of the biggest markets in the world most liquid most money flowing in on the debt markets and it's the US debt markets and credit markets so trillions of dollars are flowing into this and it's how we fund the government like the primary way is taxes and then issuing debt so I do want to bring up a point here if you don't mind so a lot of you know traditional assets managers, traditional adviserss, like what we talked about in Words of Wisdom, they're quoteunquote pie chart advisors.

They'll, if you're 60 years old, they'll typically have you maybe 60% bonds, 40% stocks, maybe 70% bonds, 30% stocks, and they'll tell you bonds are safe. Are they really safe, though? Well, looking at the evidence here, when inflation hit, that broke all these advisory models. Bonds dropped more than stocks in 2022. So a lot of people in retirement got killed because stocks dropped a lot and then bonds dropped which is supposed to be the balancing part of their portfolio.

The the models expected, you know, bonds to go up while stocks dropped. But no, if you looked at a simple chart in stage analysis here, you can tell that bonds was topping out as well. Yeah. And entering stage four decline. And you want to be out of the way for that decline. You know how bond yields and bond prices are in inverse to each other. You could have looked at the US 10year yield again like since it's inverse while bonds had a stage two uptrend the 10-year yield had a stage four downtrend and when the 10-year yield was basing the 10-year bonds were notes were topping out and then when the 10-year yield enter stage two uptrend bonds were stage four.

So that's another way to gauge prices of bonds correlation. Yeah, they have inverse correlations. Um that's just bond theory. We don't have to dive too much into I'm going off a tangent again. Yes. But I just want to cover quick fixed income as well. That's a 10-year note. And then finally, let's just cover our currency, the US dollar. Let's go to futures. Go to the Dixie. You can see I'm going to see if I can find a better price cycle here.

You know, I like this.com era more than the current one. But actually, let's just talk about the current one. You can see after 2020 in the 2021, the dollar dropped like 10%. Again, you can see 10, 20, 30, 40 moving averages downtrend. And from that, you can just so March 2020, this spike here, that was off the co crash. Looks like the dollar was a safe haven at that time. And when the Feds stepped in, printed trillions of dollars, did a lot of QE, you know what happens when that happens?

When you flood the system with a bunch of dollars, the dollars you currently have become worth less. So, we had this huge downtrend in dollars. Um and in in economic theory to when a country or central bank bank wants to protect its own currency or back it, it starts to raise interest rates to protect from inflation. And that's what that's what happened from 2021 into 2022. We wanted to beat interest uh sorry beat inflation, the highest accelerated inflation since the 1970s.

Federal Reserve jacked up interest rates to 5% and the dollar skyrocketed in the stage two uptrend 10 greater than 20 greater than 30 greater than 40 and then a vertical nature of you know at this snapshot this kind of looks like right here just picture that in your head real quick screenshot that in your head remember if you go back to ARK go back to this weekly doesn't look similar here I'll just quickly tab Mhm. Pretty similar.

You have the stage two uptrend, this huge sell-off like right here. Price oscillates in between the moving averages. Eventually, you know, this had a lot more chop, but eventually it did enter this downtrend. And right now, it's it's into the stage oneish period, but actually recently the dollar sold off hard this week, potentially back into stage four. So, that's the dollar. Um, we covered currencies as well. We covered commodities, precious metals like gold, silver.

If you were to look at We won't do it in this video. Um, but look at cocoa beans when they had this huge move. I mean, you know what? Let's just go over it. It's It's a great It's a great It's like a great example. Of course, stage one. Look how look how choppy this is. You want to trade this risk? You just get whipped around. You'll lose so much money. The moving averages are slicing through price. Price is slicing through and eventually boom.

I believe with cocoa beans, there was a fungus or virus that wre havoc in the African cocoa farms and that with commodities when you yeah when you have these imbalances supply and demand, you can have these monster moves and look look at the stage two uptrend. It went vertical above the 20 the 10 20 30 40 week eventually again the stage three potential formation stage four it had one last push had a failed breakout and then it topped and this huge stage four you can see this huge you can see the stage process going here and so what what I would want to see for cocoa beans or cocoa futures the bottom is you know price starts oscillating sideways the 10 catches up 20 catches catches up. 30 catches up. 40 catches up and then potentially we can go for another stage two.

Love it. Yeah. Orange juice. Everyone loves orange juice. Uh stage two uptrend. Stage three. The stage three didn't last long. Crash in the stage four. Yeah. in that and I believe this uptrend in orange juice was caused by I this was a virus um in orange trees that again supply and demand imbalance and I believe they resolved it here quickly and that's why prices crashed and then coffee same thing everyone drinks coffee I have coffee right here and if you want to chart the price of coffee you can as well stage two stage three stage four stage one back into stage two.

Briefly dipped in stage four and now I'd say this is in a stage threeish and potentially look into stage four. So we might have some cheaper coffee going forward if this continues downward which will be nice. But why like I mean a quick tangent here, you know all these big corporations like Starbucks, orange juice corporations, cocoa bean, like chocolate corporations, they probably have economic analysts. They might even have technical analysts. we don't know to chart the futures so they can hedge against whether prices are falling or not and obviously as you know Starbucks I would like lower prices in coffee and when prices you know if prices are turning up to stage two we can buy some cocoa futures to hedge against you know prices going up so that's a more real life application even with this type of analysis so we'll continue on now we've gone through every single asset class just showed you that it is a universal analysis technique.

We'll go back into some stocks. We'll quickly go through some other cycles and then for this time around I'm going to have a brief pause so listeners can join in as well. So, Nvidia, the leading stock of this AI bull market. Let's go through it right here. Federal Reserve jacked up interest rates around this area throughout 2021 and 2022. What is this period right here? So that's stage three. What about here? You have the 10 below the 20 below the 30 below the 40.

That is stage four. And now this is what basing period. You see the stock and the MAS converging that is stage one and then late November here is when chat GBT launch launched and everyone institutions realized to power chat GBT to power Grock you know Gemini claude you need these huge data centers with a lot of chips also known as GPUs Nvidia perfectly was in prime position to take advantage of this AI bull market and AI revolution you know GPUs are graphics processing units and they were used just for gaming processing, you know, the the graphics and games, video games.

And perfectly enough, they just in a way quotequote got lucky just be the right place at the right time with the right technology. And look at the stage two uptrend Nvidia made so far. It potentially topped out here into the tariff crash. But this another one of those potentially looks like stage three and stage four and back into stage two just because we're in this AI super cycle. And Nvidia continues to come out with new products now with the B with um the new B300.

No, yeah, with the new 300's generation of their chips. We have the H200's as well, which is the current generation. And this could just be in a multi-year super cycle. So hopefully that was a good exercise. We'll do another one. SMCI. I'm gonna delete these. This is more of a temporary move, but they supply the racks in the data centers. Also made a big move, but racks, it's not really proprietary. There's not a huge move to racks.

A bunch of companies can come with racks like Dell as well. So, you can see a stage two uptrend. We had the space here. Had a great earnings report. It had this blowoff move where it made like a 200% move. And then I'm going quiz the audience here. What is this to you guys? So that's stage three and why moving averages have caught up to price. Price is building lower highs. It's getting wide and loose now. And then what happens when it breaks this line I've drawn here into this area below all the key moving averages.

That is stage four. Now what are we in right now? You can see slopes of the moving averages catch up the price. We're back in stage one. Tesla, everyone knows Tesla. We've gone through so many price cycles. We'll cover the 2021 into the 2022. You can see stage four decline 2019 like I talked about like Abbercomi Fitch some sort of catalyst that sends into its new uptrend around this area. Late 2019 was an earnings report.

They they delivered better than they expected on, you know, Model 3s, Model Y's, and Tesla vehicles and catalyzed this 2,500% move. Also fueled by the quantitative easing by the Fed and a lot of injection of money. However, when interest rates came up, Tesla topped. What is this area? I gave you a hit. That's a stage three topping phase. And then what about now? Now the 10 is uh below the 20, below the 30, below the 40.

Price making some lower highs. Now this is stage four decline. And again, let me highlight the damage from all-time highs to lows 76% decline. And that's on Tesla. Mhm. A trillion dollar company that wiped out to like 300 billion, 200 billion. So a lot can happen in stage four. You want to get rid of just stay clear of that. InoQ really has no fundamentals. It's this quantum computing company. But again, it respects the laws of supply and demand of human psychology.

And that's why stage analysis applies. You can see this price cycle here. Stage two uptrend. Stage three. What is here? You're below all the moving averages. That's stage four. What about this quick little few weeks? That's stage one. back into stage two. Stage three. Try the poke its head in stage two. And now it's back into stage three. I guess the challenge of this really is in real time it can be hard to identify the stage more precisely.

But your job is to again as we talked about earlier you try and identify and you manage risk according to the stage. Well for this next one I can we can go through real pretend to go through real time. So, RGTI is another quantum computing name. Let's scroll all the way back then. What is this? 10 is below the 20, below the 30, below the 40. That's stage four. Let's just go in real time as it plays out. You can see it's still in a downtrend, still surfing below the 10 week.

Oh, and now you have this price spike. Mhm. Now it's slicing through the moving averages. Moving averages are converging. Okay. To me, in my head now, I'm thinking you have this big volume up. Yeah, moving averages are converging. You're starting to surf the 10 week. This is a potential stage one. Let's see if it can develop into a stage two uptrend. Continues to work. You know, the 10 is getting back above the 20, back above the 30, back above the 40.

And now look, you see how the moving averages are curling up now. Mhm. It's it's stage two now. But now you just don't know what can happen in the future. That's how you manage your risk, right? Sometimes stage two will last forever. But this time around it chops around, enters back in this super choppy period and then eventually RGTI has this huge stage two move off some catalyst here. You know, Google came out with their willow chip.

This is why it's so important that we're talk I'm I'm bringing up some news events and some context. But backing it up with the price cycle, the news flow catalysts, then you can put a lot of Well, you see this is prime example here, you could move to stage two, one, two, three times, right? Yeah, exactly. Three times within there. And as long as you manage your risk, you might take two losses or break evens or however you manage.

But then as long as you continue to follow your system and your plan, when it comes to the third attempt, it then works out. And that, you know, they a lot of the time can be 20, 30, 50, 100% move. Yeah. Which can make all the difference on a yearly P&L. Mhm. And so now it's is the volume, as you can see at the bottom, is the volume an element to the Oh, yeah. when it come the execution by this the more volume you have on a breakout from a stage one base the higher probability is that actually might sustain a stage four the same on the flip side as well if transition stage four you don't necessarily need high volume selling because stocks can fall in their own way as well if you don't have buyers it and there's only sellers it doesn't have to be a lot of sellers it'll it can still collapse got you so we've gone through you know RGTI was this situation where you had this huge move.

It started to look stage threeish, but it went for another stage two move. A shorter one though, and now it's back in the stage three oscillation period. Got either then. So, right now, oscillation period, but we could if we see moves back to the upside, the uh moving averages start to, you know, slope in the right direction, we could go back to stage two again. So, I'm I'm going to go through a few more. I'll be quicker on these ones because average aspect.

Um, is there any particular settings that you use? I know you can you can change the settings accordingly, right? So, is that close to to just uh I use the 10 simple moving average on the weekly, the 20 simple, the 30 simple, and the 40 simple. Just very simple. Yeah, I like I like simplicity. So, Rocket Lab space launch company. Mhm. You can see they IPOed quickly entered stage four, stage one for two years, and now the stage two uptrend right here.

Planet Labs, another, you know, more satellite imaging company, IPOed, pretty much stage four, straight off the IPO because it came out in that 2022 period when interest rates are high. Yeah. Like it just wasn't a favorable environment to IPO. there wasn't demand for stocks and you had the stage one period and now the stage two uptrend again above all the moving averages and to me like I can instantly look at a chart in a second tell what what stage it's in that's the repetition that's the repetition looking at like hundreds of thousands of charts and now I want to go into this example of of MADNA So we had this stage four and Madna was tricky, right?

You had this huge stage two uptrend move during COVID. They supplied the vaccines. Then it topped in stage four. It looked like it was stage one basing. You see that? And actually briefly into stage two. Yeah. But sometimes it could just fail. And back in stage four, continue stage four. Oh, potentially stage one here. Oh, we're poking it head out. But then boom, it failed again back in the stage four. And this will just happen.

You just don't know in real time. And that's why you have to have your stop losses. And look, if you bought here at that stage two breakout, that was a great buy. In hindsight, it might not work. But I'd say from a stage analysis perspective, this is a great buy. Very clean flat base above the 10, 20, 30, 40 moving averages. That's a great buy. But it just failed and you have to get out. Yeah. Is this another is this an aspect of why you guys do like the shorter term in terms of the trades wise to sort of negate any of these failed breakouts and larger pullbacks that might take place?

Yeah. Like from the high to low here that's 30%. Like we're going to be all out by then. Like if we bought this, if we go on a daily chart, we'll definitely be out and we'll try it again if there's some other time. But look from that failed breakout high, it dropped another 86%. And what's crazy is from the tippity top to that point, that was a 75% drop. From that point, which was a pretty valid stage one breakout, it was another 80% drop.

So you can have destruction in stocks, but now this one is starting to look more real. You see like the volume wasn't as big here. Mhm. Now you had on the downside volume increase. You can consider that capitulation. Again, the moving averages catch up the price. probably news start like start converging getting super tight and now you have this breakout and MADNA much cleaner breakout exactly Madna talked about it's forward revenues revenue guidance and it broke out this flat base above there an element as well that the lower it gets the kind of the higher the chance of that breakout not necessarily no because this was a special case where you had many you know you had stage four then it comes back into stage one and it fakes yell out goes back another stage four this is not as clean of a one there's more noise like the ANF, RK, Socks, RG, ELF, it was very clean.

Stage one, stage two, stage three, stage four, stage one, stage two. So these are the nuances that sometimes can happen in stocks. And so I I'll skip a couple of these smaller ones. This is a current turbo trade actually. And this, I think, is a perfect segment into the first big linear move up from stage four decline and stage two. and then we'll talk about the multimonth base breakout setup and then I'll we'll wrap it up for this segment.

So this last example is a current trade. You can see again perfect stage analysis stage one this basing period in 2020 into stage two, stage three, stage four in this rare earth ETF. Then we had the stage one base high volume breakout in stage two. This is a really big linear move. And this is where um one of my favorite setups is the first multimonth base surfing the 10/20week moving average in a stage two uptrend after a big linear move up.

And you start to see the characteristics of a shakeout at this week here. It reclaims the lows. It starts to get tight. It builds higher lows. It tightens up on the right side. And we're entering the 75 area. And it's been, you know, a nice 20, 30, 25, 30% move so far. Yeah. So, I have so many other examples of multimonth bases, but we we won't get into this specific setup and concept in this episode on chart fanatics.

Perhaps if RZ likes to have me on the future, I don't know if I do well. Um, we can talk about this concept in the future. 100%. So, appreciate that. You know, to summarize, we've talked about stage analysis. It's this timeless and universal principle that we've seen in cell cycles and life cycles and business cycles and human nature, you know, euphoria, depression cycles. Everyone's seen that one chart of like, you know, someone's in depression, and then you start to get a little optimistic, then it becomes thrill, then becomes euphoria, then it's like, uhoh, some fear, and then you repeat that again.

Exactly. And now you have the stage analysis price cycle which is a more longerterm analysis to keep you in the longerterm uptrend or downtrend keep you away during the stage one and stage three periods. So I hope this helps especially for the the newer people or individuals getting into the markets and for experienced people. But hopefully you learned some nuances with stage analysis as well, which I've picked up over the years through Stan Weinstein himself and helping build his course with Trader Lines.

So, we love that. No. Well, Ted, thank you for breaking that all down for us today. Everyone at home, drop a comment with your biggest takeaway from this episode. Any maybe particulars that you've noticed when you go to try and look at some of these charts that we've covered today or even charts that you've looked at yourself. Any questions, drop them in the comment section below. Any links for TED will be in the description, so make sure you check those out.

As always, other episodes are on screen. Hit like, hit subscribe if you're not already. I imagine you are, but if not, then they should, right? Thank you, Russ. It's pleasure. Thanks for having me, honestly. Spin shot for next 100%.