# Are The FED About To Make A Huge Mistake…
**Date:** 2026-04-23  
**Source:** [YouTube](https://www.youtube.com/watch?v=SotOfjAReno)

## Main Thesis
The market is showing signs of extreme euphoria, particularly in tech and high-beta stocks, while underlying inflation metrics and commodity prices suggest a potential for sticky inflation or even hyperinflation if the Fed eases policy too soon. This disconnect between market sentiment and economic reality, coupled with potential policy mistakes by the Fed, could lead to significant volatility and a market downturn.

## Charts & Technical Analysis

### 1. CAR (Avis Budget Group, Inc.) (weekly)

**Bias:** BEARISH
**Pattern:** short squeeze, parabolic rise followed by sharp correction
**Key Levels:** $800+ high, $443.94 close
**Historical Comparison:** similar to GME, AMC, and Avis in 2021

The chart shows a massive crash in Avis, down 37% in the last session, potentially marking the end of an epic short squeeze. The price had reached over $800 before falling to $443.94. This is compared to the irrational market behavior seen in 2021 with GME and AMC, suggesting that this could be the high water mark for the stock. Extreme volatility is expected, driven by greed and fear.

### 2. US500 (S&P 500 Index) (2-hour)

**Bias:** BEARISH
**Pattern:** potential triple top
**Key Levels:** 7151.8 resistance, 7063.7 support, 6795.0 demand zone

The 50 exponential moving average held up in the last session. The chart is now showing a potential triple top formation. If the market drops below the base structure around 7050, the next key demand zone is around 6800-6850. This suggests a weakening market despite recent resilience.

### 3. TSLA (Tesla, Inc.) (daily)

**Bias:** NEUTRAL TO BEARISH
**Pattern:** downward trend, testing key support
**Key Levels:** 437.03 most traded zone, 376.66 first key support, 331.83 potential downside target

Tesla earnings were a 'beat' but the problem was in the 'spend' as Elon Musk announced increased capital expenditures for AI and robotics. The stock was down in after-hours trading. The daily 20 moving average is a key level to watch. The chart shows a clear downward trend from the most traded zone around 437.03, with the first key support at 376.66 and a potential target of 331.83.

### 4. Inflation gauges (Core PCE, Trimmed mean, 6-month annualized rate) (monthly (2019-2025))

**Bias:** BEARISH (INFLATIONARY)
**Pattern:** re-acceleration of Core PCE
**Key Levels:** 2.0% Fed target
**Historical Comparison:** similar to 1970s inflation spikes

Kevin Warsh, a new Fed chair, questioned the Fed's favorite inflation gauge (Core PCE at 3.0% YoY), calling it a 'rough swag.' He pointed to Dallas Fed Trimmed Mean (2.3%) and Cleveland Fed Median CPI (2.8%) as alternatives, which strip out volatility and suggest inflation is closer to the Fed's target. However, the Core PCE shows an uptick, reminiscent of the 1970s, which could lead to sticky inflation, hyperinflation, or stagflation if the Fed eases policy too soon. This chart highlights the risk of policy mistakes due to misreading data.

### 5. Trimmed-Mean CPI YoY vs. Commodities (monthly (2000-2029))

**Bias:** BEARISH (INFLATIONARY)
**Pattern:** divergence between inflation and commodity prices
**Key Levels:** 3.6404% Trimmed-Mean CPI, 261.1066 S&P GSCI Equal Weight Commodity Sector
**Historical Comparison:** commodity spikes post-GFC leading to rate increases

This chart shows a divergence where the Trimmed-Mean CPI is declining, but commodity prices (S&P GSCI) are absolutely skyrocketing. Historically, commodity spikes have front-run inflation problems, leading to necessary rate increases. This suggests that the current inflation readings might be misleading, and the commodity market is signaling future inflationary pressures, which could force the Fed to raise rates again.

### 6. S&P 500 when AAII Bears > 40 for 6 consecutive weeks (weekly (1990-2028))

**Bias:** NEUTRAL TO BULLISH (SHORT-TERM VOLATILITY)
**Pattern:** extreme bearish sentiment often precedes bullish periods
**Key Levels:** 40% bear threshold
**Historical Comparison:** past signals (1990, 1998, 2008, 2012, 2020)

The chart shows that when the AAII Bears (American Association of Individual Investors) sentiment is above 40% for 6 consecutive weeks (a rare event, happening for the first time in a year), the market tends to be coin-flippy for the next two months but generally bullish over longer periods (3, 6, 9 months, and 1 year). This suggests that despite extreme bearish sentiment, the market could still see upside, though with potential short-term volatility.

### 7. Semiconductor Index (SOX) (daily (1996-2024))

**Bias:** BEARISH (EXHAUSTION)
**Pattern:** extreme overbought condition, exhaustion
**Key Levels:** 16 consecutive days up
**Historical Comparison:** never happened before

The Semiconductor Index (SOX) has been up for 16 consecutive days, an unprecedented historical event. This indicates an extremely overbought market and suggests potential exhaustion. While markets can remain irrational longer than one can remain solvent, this is a historic market precedent that could lead to a significant correction.

### 8. Semiconductors (SMH) (daily (since 2011))

**Bias:** BULLISH (SHORT-TERM), BUT WITH CAUTION
**Pattern:** momentum thrust
**Key Levels:** +18.5% 2-day rally
**Historical Comparison:** best momentum thrust ever seen

This chart shows that semiconductors have experienced the best momentum thrust ever seen, with an 18.5% 2-day rally. Historically, after such thrusts, the average return after 63 days is +12.11% with an 88% win rate. This suggests a strong market, but the extreme nature of the rally warrants caution, as it could be getting 'ballistic' and potentially unsustainable.

### 9. Technology Price Returns vs Forward EPS Growth (S&P 500 Technology) (yearly (2006-2027))

**Bias:** BEARISH (OVERVALUATION)
**Pattern:** price returns outpacing EPS growth
**Key Levels:** +90% price return, +58% 12m Forward EPS YoY
**Historical Comparison:** similar to previous tech bubbles

Technology price returns are significantly outpacing forward EPS growth, with Wall Street analysts upgrading everything. This indicates that the market is pricing in extreme gains, potentially getting ahead of itself. Historically, such divergences have led to corrections, suggesting that the market might be getting a 'little bit too ahead of itself'.

### 10. Home Sellers vs Buyers (US) (monthly (2014-2026))

**Bias:** BEARISH (HOUSING MARKET)
**Pattern:** increasing supply in housing market
**Key Levels:** 46.3% more sellers than buyers

There are nearly 50% more home sellers than buyers in the US, a trend that has been expanding since 2022. Most people are on fixed mortgages, so they are putting their houses into Airbnb or rentals to cover shortfalls (1-2%) with their wages. The real domino effect will happen if unemployment spikes, as people won't be able to cover their mortgages, leading to a potential housing crisis. This is a worrying sign for the broader economy.

### 11. IGV (iShares Expanded Tech-Software Sector ETF) (weekly)

**Bias:** NEUTRAL TO BEARISH
**Pattern:** dark pool cluster, potential profit-taking
**Key Levels:** $80-$90 support/resistance zone

The chart shows a beautiful dark pool cluster in the IGV ETF, indicating significant institutional activity. The 10th largest dark pool sweep (a faster transaction) came through just at the peaking period, suggesting potential profit-taking. While not enough clusters yet to confirm a turn, this is a level to watch, especially with the 2-hour 50 exponential moving average.

### 12. IWM (iShares Russell 2000 ETF) (daily)

**Bias:** NEUTRAL TO BEARISH
**Pattern:** dark pool sweep, potential profit-taking
**Key Levels:** $110 support, $120 resistance

The 10th largest dark pool sweep came through on IWM, just at a peaking period. The 5th and 6th largest sweeps also came in recently. This suggests that institutions might be taking profit, but there are not enough clusters yet to confirm a significant market turn. This is a level to watch for potential volatility.

### 13. USDOIL (CFDs on WTI Crude Oil) (4-hour)

**Bias:** BULLISH
**Pattern:** uptick, higher lows and higher highs
**Key Levels:** 98.960 resistance, 98.175 higher high, 97.550 support

The US Dollar has been on an uptick, making a series of higher lows and higher highs, moving towards the 99 area. This is a setup from the Day Trading Masterclass course, happening at an important zone (97.550). This move is going against the general sentiment in the press, which is becoming more bullish on markets.

### 14. USDOIL (CFDs on WTI Crude Oil) (4-hour)

**Bias:** BULLISH (SHORT-TERM), BUT WITH CAUTION
**Pattern:** breakout from downward trend, potential base structure
**Key Levels:** 95.31 resistance, 94.27 higher high, 85.00 key support

Oil is showing a change in trend, breaking out of a series of lower highs and lower lows for the first time in a while. It spiked up, potentially due to geopolitical tensions in the Middle East. If it holds above the 88-85 level (key support), it suggests a base structure is forming. If it spikes above 112, it could force the stock market down.

### 15. UKOIL (CFDs on Brent Crude Oil) (4-hour)

**Bias:** BULLISH (SHORT-TERM), BUT WITH CAUTION
**Pattern:** slightly higher highs (wicks), potential base structure
**Key Levels:** 103.51 resistance, 103.11 current price

Both Brent and WTI crude oil have made slightly higher highs (even if only wicks), suggesting that oil is starting to base structure. If this happens, it could force the stock market down, especially if it spikes back above 112. This is a similar pattern to what's seen on WTI.

### 16. SPHB (Invesco S&P 500 High Beta ETF) (weekly)

**Bias:** BULLISH (EXTREME EUPHORIA)
**Pattern:** strong upward trend, absolutely ballistic
**Key Levels:** 120.24 support, 133.87 current price
**Historical Comparison:** witnessing history

High beta stocks are still very strong, with the tech beta side being 'absolutely ballistic.' This is a big run, literally witnessing history, with semiconductors being out of control. This suggests extreme market euphoria.

### 17. SOX (Philadelphia Semiconductor Index) (daily)

**Bias:** BULLISH (EXTREME EUPHORIA)
**Pattern:** extreme upward trend, out of control
**Key Levels:** 9909.27 current price, 9577.19 previous high
**Historical Comparison:** never seen before

The Semiconductor Index is just 'out of control,' with many consecutive days up. This suggests either a very strong market or one that is going euphoric very quickly. This is a super overbought market.

### 18. VIX (Volatility S&P 500 Index) (daily)

**Bias:** NEUTRAL
**Pattern:** no significant movement
**Key Levels:** 18.91 current price

The VIX market is not showing much movement, indicating a lack of immediate fear in the market.

### 19. US02Y (US Government Bonds 2YR Yield) (daily)

**Bias:** NEUTRAL TO BULLISH (STICKY INFLATION)
**Pattern:** sideways consolidation, not dropping
**Key Levels:** 3.806% current yield

Even though we're being told that cuts are coming, the 2-year yield is not dropping. It's consolidating sideways, suggesting that the market is not fully pricing in aggressive rate cuts, potentially due to sticky inflation.

### 20. XLE (State Street Energy Select Sector SPDR ETF) (daily)

**Bias:** BULLISH (SHORT-TERM)
**Pattern:** creeping back up, similar to oil
**Key Levels:** 56.89 resistance, 56.54 current price, 54.85 support

Energy (XLE) got very close to spiking back above 57 in the last 24 hours. Similar to oil, energy is creeping up, while yields are not dropping. This is the first sign that markets that have historically been doing better while the overall market was going down are now starting to creep up, suggesting a potential shift.

### 21. KOSPI (KOSPI Composite Index) (daily)

**Bias:** BEARISH (EXTREME VOLATILITY)
**Pattern:** extreme volatility, near bear market
**Key Levels:** 6444.81 current price, 6139.77 support

The KOSPI (Korean market) continues strong, but it almost hit a bear market in two and a half days recently. This is extreme volatility and a very worrying sign, something to watch very closely. It doesn't mean it's over yet, but it's a significant indicator.

### 22. MU (Micron Technology, Inc.) (daily)

**Bias:** NEUTRAL TO BEARISH (POTENTIAL DISTRIBUTION)
**Pattern:** new high breakout, potential Wyckoff distribution
**Key Levels:** 487.48 current price

Micron (MU) continues to do very well with a new high breakout. However, it's questioned if this could be a massive Wyckoff distribution to the downside. While semiconductors are still very strong, this pattern suggests caution.

### 23. IGV (iShares Expanded Tech-Software Sector ETF) (daily)

**Bias:** BULLISH
**Pattern:** picking up, strength across the board
**Key Levels:** 88.74 resistance, 88.38 current price

Software (IGV) has been picking up, showing strength across the board. This is part of the 'backbone' of the market doing well, indicating continued bullishness.

### 24. MSFT (Microsoft Corp.) (daily)

**Bias:** BULLISH
**Pattern:** breaking out, upward trend
**Key Levels:** 432.92 current price, 412.57 support, 385.46 previous low

Microsoft is breaking out recently to a higher high after being in a substantial downward trend. It's been one of the best performers in the last two weeks, up 21%, which is a lot for a mega-cap stock. This is part of the 'hated sectors' doing better than expected.

### 25. MAGS (Roundhill Magnificent Seven ETF) (daily)

**Bias:** NEUTRAL TO BEARISH (AT RESISTANCE)
**Pattern:** overperformance, at resistance
**Key Levels:** 66.60 resistance

The Magnificent Seven ETF (MAGS) is showing overperformance but is now at resistance. This, along with Nvidia also being at resistance, suggests that these key tech stocks are synergizing at resistance levels.

### 26. AMZN (Amazon.com, Inc.) (daily)

**Bias:** NEUTRAL TO BEARISH (AT RESISTANCE)
**Pattern:** at the top of its range
**Key Levels:** 255.36 current price, 260.00 resistance

Amazon is right at the top of its range, similar to other Magnificent Seven stocks.

### 27. GOOG (Alphabet Inc (Google) Class C) (daily)

**Bias:** NEUTRAL TO BEARISH (AT RESISTANCE)
**Pattern:** near the top of its range
**Key Levels:** 337.73 current price, 350.00 resistance

Google is right near the top of its range, similar to other Magnificent Seven stocks.

### 28. META (Meta Platforms, Inc.) (daily)

**Bias:** NEUTRAL
**Pattern:** around the most traded area
**Key Levels:** 677.60 current price, 720.00 resistance

Meta is around its most traded area, similar to other Magnificent Seven stocks.

### 29. NVDA (NVIDIA Corporation) (daily)

**Bias:** NEUTRAL TO BEARISH (AT RESISTANCE)
**Pattern:** at call wall
**Key Levels:** 202.50 current price, 210.75 call wall

Nvidia is at an important call wall around 210.75. This is a key resistance level.

### 30. NVDA (NVIDIA Corporation) (weekly)

**Bias:** NEUTRAL TO BEARISH (AT RESISTANCE)
**Pattern:** at previous weekly close
**Key Levels:** 203.01 current price, 204.66 previous weekly close

Nvidia is at its previous weekly close, which acts as a resistance level. This indicates how bought up the market is.

### 31. TSLA (Tesla, Inc.) (daily)

**Bias:** NEUTRAL TO BULLISH (TESTING SUPPORT)
**Pattern:** testing dynamic support
**Key Levels:** 387.51 current price, 376.66 area to watch

Tesla is testing the 20-moving average, which acted as dynamic resistance on the way down. Now, it's testing it as dynamic support. The 'area to watch' is 376.66. It's important to see if the 20-moving average holds up after earnings.

### 32. Gold (XAUUSD) (2-hour)

**Bias:** NEUTRAL TO BEARISH
**Pattern:** spike up, then pull back
**Key Levels:** 4726.77 current price, 4800.00 resistance

Gold spiked up to 4800 but then came back down a little bit. This is a key zone to be watching.

### 33. Silver (XAGUSD) (4-hour)

**Bias:** BEARISH
**Pattern:** change in trend, shorting off
**Key Levels:** 76.6420 current price, 78.1364 resistance

Silver is coming under extreme pressure, showing a change in trend on smaller timeframes. It rallied up but is now shorting off, down 1.5% at the time of recording.

### 34. HSI1! (Hang Seng Index Futures) (daily)

**Bias:** BEARISH
**Pattern:** dropping, potential fall with US market
**Key Levels:** 25995 support, 26204 resistance

The Chinese market (Hang Seng) is down a little bit. If the US market drops, China will fall with it. It's currently not quite at the 25640 level.

### 35. ETHUSDT (Ethereum / TetherUS) (daily)

**Bias:** NEUTRAL
**Pattern:** no breakout
**Key Levels:** 2395.77 resistance, 2349.59 retail steal

Ethereum has not had a breakout yet for the crypto market. It's not quite through its resistance level.

### 36. BTCUSDT (Bitcoin / TetherUS) (daily)

**Bias:** NEUTRAL TO BULLISH (TESTING RESISTANCE)
**Pattern:** at previous resistance, potential flag formation
**Key Levels:** 78911.71 minor resistance, 89000-90000 potential target

Bitcoin is right at its previous resistance level (78911.71). This is the last 'bear level' for those who believe it's a flag formation and going down to 40k. However, 89k-90k is a potential target as there's not much structure supply on the left-hand side. The correlations are stacking up, with semiconductors being super overbought.

## Regime / Cycle Analysis
The video discusses the risk of sticky inflation or hyperinflation if the Fed misreads data and eases policy too soon, drawing parallels to the 1970s. It highlights a disconnect between declining trimmed-mean CPI and skyrocketing commodity prices, suggesting that commodities might be a better predictor of future inflation. The market is described as euphoric, especially in tech and high-beta sectors, with extreme overbought conditions in semiconductors. This combination of potential policy mistakes, underlying inflationary pressures, and market euphoria creates a volatile and uncertain macro regime.

## Key Calls & Predictions
- Avis Budget Group (CAR) crash could be the end of its short squeeze, expect extreme volatility.
- US500 (S&P 500 Index) showing a potential triple top, market weakening if it drops below 7050.
- Tesla (TSLA) earnings beat but increased capital expenditures for AI/robotics led to after-hours drop, watch 376.66 support.
- Fed's favorite inflation gauge (Core PCE) might be a 'rough swag,' alternative metrics suggest inflation is closer to target, but Core PCE is ticking up, risking sticky inflation/hyperinflation if Fed eases.
- Commodity prices are skyrocketing while trimmed-mean CPI declines, suggesting commodities are front-running future inflation.
- S&P 500 with extreme bearish sentiment (AAII Bears > 40 for 6 weeks) historically leads to short-term volatility but longer-term bullishness.
- Semiconductor Index (SOX) up 16 consecutive days, an unprecedented and extremely overbought condition, signaling potential exhaustion.
- Technology price returns are outpacing forward EPS growth, indicating overvaluation and potential for correction.
- Housing market shows nearly 50% more sellers than buyers, risking a domino effect if unemployment rises.
- US Dollar (DXY) on an uptick, making higher lows and higher highs, going against the press's sentiment.
- Oil (WTI & Brent) showing a change in trend, breaking out of lower highs/lows, potentially forming a base structure. If oil spikes above 112, it could force the stock market down.
- 2-year US Treasury yields are not dropping despite talks of rate cuts, suggesting sticky inflation.
- Energy (XLE) is creeping up, similar to oil, indicating a potential shift in market leadership.
- KOSPI (Korean market) shows extreme volatility, almost hitting a bear market recently, a worrying sign.
- Micron (MU) with a new high breakout, but a potential Wyckoff distribution is questioned.
- Magnificent Seven stocks (AMZN, GOOG, META, NVDA) are at or near resistance levels, suggesting potential for a pullback.
- Ethereum (ETHUSDT) has not had a breakout yet.
- Bitcoin (BTCUSDT) is at a previous resistance level (78911.71), with 89k-90k as a potential target if it breaks through.

## All Instruments Mentioned
CAR, SPX, US500, TSLA, USDOIL, UKOIL, SPHB, SOX, VIX, US02Y, XLE, KOSPI, MU, IGV, MSFT, MAGS, AMZN, GOOG, META, NVDA, Gold, Silver, HSI1!, ETHUSDT, BTCUSDT

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*Generated by FX Evolution Monitor on 2026-04-24 23:04:13*