The following is a presentation of TFNN. The morning market kickoff with your host, Tommy O'Brien. Good morning, everybody. I'm Tommy O'Brien, company alive from TFNN Wednesday morning, just after 9 a.m. Eastern time. We got about 25 minutes to go until the start of trading, and you've got markets in negative territory to kick things off. You're looking at an S&P, negative by more than 1%, trading at 4,039.  Man, quite a miss from Target. Target trading down 20% this morning. We'll jump over in a moment. It's not just retail, though. You get the Nasdaq 100 down 1.5% right now. 188 points in the red, 12,372. The Dow off 274,3207. We jumped to Bitcoin back under 30,029,455. We get the price accrued this morning, which is just above 1.12%. We were at 1.15 yesterday. We're at 1.1120 right now, accrued $1.60 higher on the session. We'll be talking to our man, Teddy Kegstad, coming up at 40 past the hour. We talk a little bit of forex. We always talk a little bit of crude as well. It's been quite the crude bull for a while. Man, you talk about a crude market. Watch out. Gold contract this morning, negative by $6 at 1811. Gold up to above 1830 yesterday before pulling back. We have a low this week of 1785 on Monday, and we jumped to notes and bonds. As we get a little bit of a pullback as well, you get the 10 year off 6 ticks at 118,21. We get the 30 right now, negative by 8 ticks at 138,13. We jump over to the VIX as we got markets accelerating to the downside. We had a 25 VIX yesterday. We got a 2730 VIX so far this morning, elevated just a bit. All right, let's kick it off a target. Yesterday it was Walmart. They miss in dramatic fashion and target. You can't overstate it. They're down $55 right now. What is that going to be? $42? That's 25 percent, folks. 25 percent. It's not stopping. You're basically at lows. You closed yesterday at $215. And keep in mind, you already down 2.5 percent from where we closed out Monday. So the market was already pricing in a 2.5 percent drop because of Walmart's disappointment. Walmart down double figures, I think, itself yesterday, which is pretty remarkable for the size of the company it is. But you're talking about target, man. Target, I think you kicked off yesterday at about $100 billion market cap. Yeah, you sure did. Because this morning, you shaved 25 percent off that. You're down to $75 billion. Now, taking a longer-term look at target, you've had quite the rise. You're going to open this morning at $160, right at the $618, folks. You were just trading late April at $254. My dad's newsletter this morning on marketing. He says I was reading it. He was saying, hey, this isn't growth stocks. This isn't multiples. This is, I think he put it, mainstream America, folks. Watch out for a bear market when you got companies like Walmart and Target tumbling to the downside. I mean, absolutely remarkable, right? So much for the 3A2. So much for the 50 percent retracement. We're going to literally open at just about the $618. Maybe that's where we find the bid. Maybe we give it all back. Absolutely remarkable. The run started on the COVID lows, folks. COVID lows. Are we going to go to COVID lows? We're going to open at $90. Yeah, far off from the $160. But as I just said, we were just trading at $254 a month ago. $254 a month ago. It's almost hard to believe, as I say that. We're going to open at $160 for Target shares. You jump over to Walmart. We'll pull up those Target numbers in a while in a moment. Walmart, now we have some Walmart in my newsletter, Rocket Equities & Options. Quite the pullback yesterday. We're going to open down about $2 today as they're getting punished a bit for the Target miss as well. You back it up to the lows of last March on Walmart. You're talking about a little $126 there. You had quite a consolidation. Walmart had been one of the better stocks this year, trading up to $160 in April. You opened the year at about $144. Walmart going to open at $128. The 50 percent retracement in the entire COVID run. Looking at $127. And if you make it back to the $618, you're only talking about $10 from where we are in Walmart. $121, the $618. So back to Target. Let's take a look at it. Margins, profits. That's what it's all about, folks. We'll slide it up to the headline. Costs, not at profit. That's one way to put it. The company sees a lower operating margin and inflation. Squeeze, freight and fuel expenses. Freight and fuel. I think I saw something like a billion dollars for the quarter. For freight and fuel expenses. Show little sign of easing. I would agree with that one, folks. We just saw the price of crude. Crude is trading at $111. I anticipate that our man, Teddy Kegstad, is not going to see that crude market pulling back. Many people do not see that crude market pulling back anytime soon. And especially when you talk about pulling back anytime soon on like a quarterly basis, right? On a two-month, three-month basis. We're going to be into the next quarter of these companies. And we've got crude sitting at $111 right now with no sign of easing in that crude market. So operating profit will amount to only about 6% of sales this year. 2 percentage points below the previous forecast. And the company's first quarter adjusted profit missed the lowest of 23 analyst estimates. So Bloomberg's got 23 analysts out there. They span a number of different estimates they were looking for, and Target comes in below them all. We were less profitable than we expected to be or attended to be over time. Excuse me. That's or intend to be over time. Looking ahead, it's clear many of these cost pressures will persist in the near term. Now, take a look at the operating margin under pressure after a pandemic era boom. I mean, they were doing almost 10% margins for a business like Target, man. That was some big, big margins. And just like that, you're down to, I guess, 5.3 is the number. They said 6% up there. You're down to 5.3. And yeah, it's going to continue for the near term.  Food, gas, inflation are drawing dollars away from discretionary general merchandise, forcing aggressive discounting to clear out product. So one of the things going on here, apparel. I mean, almost the scariest thing, and I'm going to dig into their conference call as well. That started at 8 in the morning, I believe. Yes, it did. Because they're seeing some trend changes that are not indicative of a strong economy, folks. Some of the wording that they used, there was a dramatic shift in terms of what people were spending their money on. Strong demand for food and beverages, beauty products and household essentials, went along with lower than expected sales in discretionary categories. People got less money, folks, or at least they're comfortable, less comfortable spending the money they have. Robust sales as U.S. consumers powered ahead despite the high inflation. Comp sales climbed 3.3% in the first quarter. Okay, but here's what you have to consider. That's three different months. We're getting inflationary numbers right now on a monthly basis when you get CPI, right? They're running at about 0.6%, 1%, whether you're taking in everything. That was three times the average analyst estimate, okay? Revenue rose 4% to 25.2 million. Walmart was only looking for 24.3 billion. But guess what? They're spending more money, and that's the bottom line. The value of Target's inventory surged 8.5% from the previous quarter and 43% from a year earlier. Their inventory went up by almost 50%. Yeah, that's not what companies like to have happened to put it lightly. They had huge demand last year. They tried to ramp things up this year. As we've seen across the board, there was a slowdown. They spent too much money. They have a huge inventory supply. They're trying to cost cut that. We'll finish up the conversation. We'll be talking to our man, Kevin Hinks from TD Ameritrade Network as well. We'll be right back. We'll be right back. Here's the gold trades on the New York Stock Exchange under the symbol VGZ. You can trust Larry's analysis. After all, he's got 45 years' experience as a day trader. Larry will also provide daily charts, videos, and data on the key markets that he's tracking. Expect notifications from Larry on market movement you need to act on at any time. First-time subscribers also get a 30-day money-back guarantee. If you're not satisfied, let us know and you'll get a full refund within 30 days of signing up. Subscribe to the Thibonacci 24-7 newsletter today. TFNN.com Educating Investors Steve Rhodes started his trading career as a student almost 20 years ago, and the student has now become the master. Steve won the prestigious Timer of the Year award in 2018 and barely missed that mark again in 2019, finishing it number two for the year. An amazing accomplishment. Steve Rhodes is committed to sharing his techniques and knowledge with anyone who wants to learn, and he shares his vast amount of trading knowledge every day in his Mastering Probability newsletter. Steve's award-winning newsletter, Mastering Probability, is delivered every trading day with updates throughout the afternoon. Sign up for Steve's Market newsletter, Mastering Probability, and you'll receive access to seven of Steve's educational webinars absolutely free. At TFNN, all our newsletters come with a 30-day money-back guarantee, so you have absolutely nothing to worry about. Visit TFNN.com and try Mastering Probability 30 Days Risk-Free Today. TFNN Educating Investors. Welcome back, folks. We got the S&P, negative by 48 points right now. You got the NASDAQ, negative by 200. You got Target, folks. Negative by, gotta do the math, 40, 50, $55, $53. Target is in the red right now. Absolutely remarkable when you look at where it is. You look at the expected move yesterday and the Thank Us One platform, $12. And that's in either direction. Let's talk about beating the expected move. With that in mind, let's jump over to our man, Kevin Hinks. Every trading day folks, 12 noon Eastern time on the TD Ameritrade Network right here on Tiger TV. Kevin Hinks, Tom White, Fast Market. They walk you through the day's market action. Man, we got a Fast Market and Target this morning. Kevin, good morning. Good morning, Tommy. Yeah, you know, this is interesting news out of Target because this stock is down 25% pre-open. Their revenues beat expectations. Their same store sales beat expectations. But just like Walmart, their products were higher, their transportation costs were higher, and their wages were higher. And, you know, when, how long will these companies take this hit before they start raising these prices? And it's not a matter of, you know, you think about this, Tommy, if Target and Walmart were to raise prices, right, create more free cash flow, create higher earnings. They could call the gouger right now and pulled in front of Congress. But the fact that they didn't, and they took the hit on their higher prices, means their stock tanks. So as the CEO of this company, what should you do? I know what I would do. I wouldn't worry about the heat coming from Capitol Hill, and I'd raise prices because clearly, their costs in doing business are higher, Tommy, but it's going to be an interesting trading day for Target, which started the day, Tommy, with a 15 PE. What's it going to be down 25%? It's a great point, man. I saw that PE, and I gave myself a little chuckle as well. I mean, if you're a long-term believer in these equities, you know, and what is the definition right now, Kevin, of near-term, long-term, right, middle-term, when we get out of some of these influences, I saw one thing in the Target. I mean, inventory, they're struggling to figure out inventory. I think I saw something trying to pull it up real quick while I chat with you. Something like inventory of 43% from last year's level. Yeah. So I have here a quote from Bloomberg. The value of Target's inventory surged 8.5% from the previous quarter and 43% from a year earlier. Just very difficult to forecast from a year earlier when things were surging. Now we've got inflation out of control. We've got gas prices out of control. People might have a little bit less money, discretionary spending a little different. But I thought I'm in quite an inventory build, and that's going to give them some problems, man, as maybe they have to undercut it. Maybe they have to write off some of that inventory. But in the longer term, they reiterated their longer-term goals in my head. I just said to myself, what is longer-term right now? And I agree, man. You can't have a stock dropping off 25%. You know they're doing some soul-searching in the C-suite of the Target executives this morning. We got Lowe's out this morning as well, Kevin. Down a bit. TJ Maxx, I was jumping around earlier this morning. I saw the headlines with Target. I said, oh, TJ Maxx was out as well. Oh, they're positive. Well, you've got to be a happy camper if you're in TJ Maxx and you're positive as you get Target and Walmart getting smacked. The market, though, Kevin, you think this is a reflection a little bit of two of my dad put it in his newsletter this morning? That's kind of Main Street America, man. Walmart and Target. It's not just growth stocks right now that are really suffering in this economy with the S&P now down 50 points as we come into the opening bell. What's your take on how this hits the general market this morning? Yeah, it's going to be a little tricky, right? Because yesterday we had a rally in the really high-profile name that led this market on the upside. So we have a segment of the economy that is struggling with higher prices, but it looks like apparel at TJ Maxx and other parts of the economy are still doing well. This is going to be a down opening because the news and Target will permeate other parts of the economy. But let's see how this day finishes. I think you'll wait until midday and then you trade this a little bit going into the end of the day. So, Tommy, I think this is one of these days where let's pay attention to where the market opens, but let's all pay attention to where it closes as well. It's a great point, man. I thought of you guys do such great segments with the guys and girls at Lake Folio over there and I always hear you talk about Target and in my household, man, and in many households I imagine the brand recognition, the brand approval, just the general consensus of Target, they have a lot of good sentiment out there. So it would be interesting to see how this ranges in terms of a longer-term perspective. Down 55 bucks, though, man. That is quite a haircut.  You were trading at 2.20 on Monday, you came into yesterday at 2.15, so they were already down a little bit and now you're down at 1.61, just absolutely remarkable. With that in mind, Kevin, what are you guys going to be talking about at 12 noon today? Pretty good name today, Tommy. Cisco Systems in the first segment will do coals in the second segment. That'll be a little volatile, as you know, with the movement in retail. And then AMD, the chip member, the strongest part of the market yesterday were chips yesterday. So we'll trade AMD in the third segment today. Yeah, coals, man. So I got coals up on the Thinkorswim platform right now. Closed out yesterday at $48.47. With the Target news, you're trading down a bit to $45 and change this morning. You got about a $6 move, Kevin. $5.84. That's as of the close of yesterday in the options market priced in. I was telling the story yesterday. I was into coals this weekend, Kevin. I'm there with the family. We have a 15-year-old daughter. So we're at a mall in Lakeland, Florida. And there's a big coals. And with that, they have the big Sephora name outside of coals that they have now. You know, that's the rage. Target, of course, has stores within stores. Coals has stores within stores. And we found it so remarkable that the sign for Sephora, Kevin, was so big, even compared to the big coal signs, which are enormous, folks. You know, they're the big retailers. And we thought, I was like, is that inside the coals? It looks like it's its own store. You know what I'm saying? No, I'm pretty sure it's inside the coals, you know? And we go inside the coals, Kevin, and we walk around the Sephora, and we don't spend anything at Sephora because the 15-year-old, she wants to, she's looking up everything and she's price conscious herself. So she's figuring out everything there and then she's going to go buy it either online or somewhere else. But what do we end up buying, Kevin? We end up buying some stuffed animals while we're in there. I'm looking at shorts while I'm in there. So my own personal, it was a good experience. That was the bottom line. It was a good experience in there. There was a lot of great items that, you know, we got pulled into the store through Sephora. So it's kind of interesting to see, you know, I know that that's kind of the strategy out there. But man, quite a week of retail earnings. So we'll see where we go. You want to give us a little taste of what you think about the coals numbers coming in? Well, you remember, where do you put coals? Do you put them with the grocery retail like Target and Walmart, or do you put them with TJX in the discount retail spot or apparel? So, yeah, it's going to be kind of tricky how we figure this out. I'm going to have to do a little research here and figure out an opinion, because remember, this stock has already sold off pretty significantly here, down from, oh, in the mid-60s, down into the high four in the mid-40s. So how much of this is already in with, you know, with TJX up today? And as you said, the volatility, man. So Target only had about a $12 move priced in, and that was a $200 stock, folks. Coals has a $5, $6 move for a $45 stock, and I got it up here, Kevin, on the Thinkorswim platform on a weekly basis. This thing's been chopping around between literally about $45, and like you said, maybe $64, $65. We're going to open today right near the lower end of this consolidation. We'll see if it holds when they have their numbers. Kevin, we appreciate the time as always, man. We look forward to fast market coming up at 12 today. Thanks for having me on, Tommy. Have a great day. You too, Kevin. Take care, man. Folks, tune in every trading day. 12 noon Eastern time. We got quite a market. A fast market, you could even say. S&P's down 47 right now.  It should be an interesting open, folks. Stay tuned up right back to this minute. If you want to take advantage of this sector, now is the time to subscribe to my Gold Report. The Gold Report is a comprehensive look at the metal sector as well as the markets that move gold, which is the currency and bond markets. New subscribers get a 30-day money-back guarantee, so you have nothing to lose. Every Monday morning, I publish the Gold Report with coverage of gold, silver, bonds, the XAU, HUI, GDX, as well as more than 30 different mining equities. 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We are so confident that you're gonna love this new charting software that will even give you a 30-day unconditional money-back guarantee. Don't miss out on this incredible new piece of software. Get your copy of The Art of Timing the Trade Charts today by visiting TFNN.com. It is brought to you by Think or Swim. For more information, just click the Think or Swim banner on the front page of TFNN.com. Welcome back, folks. We've got markets open. You've got an S&P opening down 45 points. NASDAQ 100 opening down 196 right now. Let's jump around to some of the fang stocks. We kick it off with Amazon down 3.1% Amazon. Probably paying some penalty here for retail when you're talking about people spending money, when you're talking about costs, configured to their business as well. We jumped to Walmart, continuing the pain down 2.6% on the target earnings and target down 24.24%. Man, 163.14%. You jump over to the Analyze tab. Let's see what they're popping for a PE right now. I am interested in myself. I'm not sure how often this does even refresh. Yeah, it's putting 15.97 right now. I'm not sure if that's calculated on the last earnings, but nonetheless, you have a stock trading at 165 right now. You jump to Target, made 2.19 a share on a quarterly basis. You times that by 4, you're making 8, 9 bucks a year. So that's like what, a 20 PE? I mean, at least it's nice when you have some of these equities folks that you can calculate how long you'd have to actually wait just to make back what you put into an equity when you're talking about earnings, when you're talking about PEs in the realm of 10 to 15. PEs get hurt so tremendously because the multiples sometimes are based just on this future that right now is totally in question when you talk about profits, revenue, costs, supply, inventory, etc. Target down 22.7, so you catch a little bit of a bid. But as I said, you had a $12 move price in and you're down 48 bucks. Let's see how Coles is opening this morning. Yeah, you're down 8.4%. Coles paying the price right now for Target. Now, one thing in there is that apparel. They saw a big pullback in apparel. Interesting because TJ Maxx was able to navigate that. Okay. Will Coles be able to do it? We'll find out. They're down 8.6% today. Now, you take a look. There was the box on a long-term basis. You're below that box. You take a look at the three-year weekly. All right, we're coming down to the lows of October of last year, that low, $43.67. We have a low so far today of $44 on the dot, round number low, an old-time man basil Chapman right there. Yeah, it's a tough one. Avoid retailers. What do you not avoid in this market right now, folks? You know, that is the tough one out here as well. To say the least, as we know. All right, let's jump to housing. So, starts and building permits stall as mortgage rates bite. Residential starts drop 0.2% in April and permits fell 3.2%. Construction backlogs climbed to the highest since 1874. So, you have starts still going on, okay? But the backlog is the highest because it's taken so long to get all those houses done as well or just residential houses in general. So, starts decreased to 1.72 million annualized rate after a downwardly revised 1.73 million the prior month. There's your starts in terms of where you are on the graph. The average for 30 year loan, 5.3%. Up from 2.94% a year prior. The highest since 2009. Still, signs suggest pressures may be softening someone on both supply and demand sides of the market amid easing pandemic and rising rates. Permitting firms to work through swollen backlogs. Excuse me. Single family starts fell 7.3% in April to an annualized pace of 1.1 million. Multifamily that's more volatile because it includes apartment buildings and condos rose 15.3%. So, watch out for the volatility skewing that number there. The number of single family properties under construction continue to rise as builders make some headway reaching 815,000. The most since 2006 when you start talking about 2006, you talk about 2008, you talk about the housing market. Yeah, and not surprising folks when you got a 30 year at 5.3%. Now, I don't this isn't like those years when you had people just flipping houses with no equity the market tanks, everyone's under water. Okay, not the case. Renser rising. They're keeping up with pace with some more people are paying. Okay, but be aware that it is going to impact that market and it's probably going to take a little time as people are able to afford less house. It's very simple. We all understand it, but it will matter folks. And you're just seeing it happen with people not taking on mortgages as fast as they had in previous years at a rate of 5.3% because on payment wise, it really does matter. Alright, there's a great article out here on Bloomberg talking about Pfizer, man, not in good light with Pfizer, but deservedly so. So, we'll check out Pfizer's stock today. That's a three-year weekly. So, you're down a bit. You were up to 61 bucks last year. You're at about $51 million. And so, what this was talking about was the Paxilvid type Paxilvid rain stymies drug combination research. So, resistance to solo therapy a matter of time, most chemists say. The drug giant Pfizer rebuffs outside requests for supplies for trials. So, it's going on here. There's a pretty informative article. If you get a chance to check it out. This is on Bloomberg out this morning. Pfizer's resisting requests for study supplies of its COVID-19 pill Paxilvid. Disappointing researchers who say combining the $22 billion therapy with other drugs might stave off resistance. So, what's going on is they have not started any combination of trials in people. And review of the clinical trials database shows no outpatient studies combining Paxilvid, which is a mainstay U.S. COVID therapy right now with other antiviral drugs or antibodies. Some academic researchers in advocacy advocacy groups say they can't get Paxilvid for human studies. They could maintain or improve its effectiveness and expand its use. I'm not going to read the entire article, okay? But what it does talk about this is HIV is another RNA virus, okay? And the combination therapy is on a mainstay for that from the 90s. And what basically ends up happening here is that eventually this drug will have resistance, okay? That is what happens. So, the appearance of resistance to Paxilvid is likely just a matter of time. And now these are all opinions, folks, okay? But that's one medical chemist and an industry blogger who said he surprised that the combination trials aren't already underway. It's a natural thing to try. You're going to see resistance get built to Paxilvid. That is where a combination therapy might be more effective. Resistance to Paxilvid is easy to generate in a lab. That's a Columbia University virologist, David Ho, in unpublished work, putting it all out there. It's a Bloomberg article. You can check it out. I'll post the link in the Tiger's Den of this article. But, yeah, it's kind of unfortunate that you're seeing, of course, profits being put ahead of public health, probably. The company recently said it has commitments worth $22 billion in sales for this year alone for two years. So, you know, maybe public pressure will do it. Maybe some regulation is necessary. But, you know, many of us are getting back to our normal life, folks. We're not living in fear of COVID, but that doesn't mean that we can't be aware that it's still hitting certain parts of our population. People are still dying from it. And you have a company like Pfizer that has a great drug there. They're making tens of billions dollars off it, but they're not looking for a future. I mean, if one thing this taught us, folks, is that maybe we look a little bit to the future here, all right, and do something proactive as opposed to being reactive. While combination studies may make sense at some point, the company isn't right now in a hurry to do something like that, CEO said in a May 3rd interview. So hopefully this gets a little bit more pressed, because I imagine it seems like that's the case. And we all know how it goes, right? That's what happens. Whatever it is, they mutate, they build resistance. Not too surprising if that would be the case. Pfizer flat today. Let's see how Target is trading eight minutes into the session. Ooh, down 25% no give up at all as basically coming right into session lows for Target. Walmart shares down 3.4% right now. TJ Maxx up 6%. A winner for them. We jump to lows down 3.3%. Stay tuned, folks. 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The funds are designed to be utilized only by sophisticated investors such as traders and active investors. Distributor for side fund services LLC Don't forget, you can listen to TFNN live on your mobile device 24 hours per day. Go to TFNN.com Then hit Watch Tiger TV That's TFNN.com Then hit Watch Tiger TV Welcome back folks. We're taking a look at the crude market. We got crude right now. We'll call it basically flat. You're positive 22 cents on the session but you were high, you were lower right now. We're trading at right at about $110 Let's jump over to our man Teddy Kegstad. We talk to Teddy folks every Wednesday at 40 past the hour. Put it on your calendar. You can reach Teddy every trading day at forex-trading-unlock.com Teddy Kegstad, good morning. Good morning Tommy. Boy, so I was jumping around to some of the forex markets. We can jump into that but I know everybody loves your take recently on the crude market. Volatility persisting man the market down about $5 I'll put it on a short-term 15-minute chart $5 in change We're at 115 yesterday Teddy We're back to 110 What's your take right now on this crude market? I think we're going to keep on pressuring resistance I think it's pretty obvious that the bulls are in control right now and I see us getting back above that 116 level and going back up to 120 I think pretty solidly within the next week or so. I just think the trend is really really supported right now. Tough to argue against that one to put it lightly man. For listeners out there, Teddy, thinking about trading crude I don't really trade crude at all I don't trade much futures in general myself but for those looking to trade this market I wanted to talk about this because even as a bull you got a drop from yesterday of $5 in a heartbeat nothing really dramatic I put this thing back to last week and thanks so much for filling in doing the program last Wednesday you had crude last Wednesday early overnight started $98 you must have had a heck of a program in it because crude made it up to 106 during the day makes it to 115 but how would you think about trading this if you do trade it when you have $5, 6, 7, $15 swings even within a larger trend Well that's a good that's a really good question because with this kind of volatility I mean the margins on crude are very very high and here's something also when you look at the crude market unlike most futures contracts it has monthly expirations so that rollover to begin with is constantly going on so that already has a big deal to do with pricing so if you're going to trade the crude market in any type of trend you have to really be aware of that to begin with okay so which month you trade whether you're trading the front month or one of the back months that's going to be something you have to take into consideration and also your risk levels what's your risk reward right now you have easily $5, $6 swings in the oil market so if you're having $5, $6 swings just in a normal gyration what are you looking to capture I mean you got to look to try and catch a $25 move so you have to have a big capital outlay for trading it so I think that's the one thing you have to be careful with and options are probably the way to go nice it's a great point man and not a lot of people probably think about it in that capacity and you should folks because it's all about risk reward and yeah you better realize that even if you're a strong bullman there's going to be $5 moves in a heartbeat no real news from yesterday to today that would really drive that market down I mean I'm sure there's news but you're barely off the highs we're at 98 bucks as I said a week ago you bought that you're up 10 bucks but guess what you had to take a $6 swing to the downside during that let's jump into a good point to real quick Tommy is that futures this goes with treasury bond futures too and tenure futures you know one of the ways that I still trade those futures but I trade them mostly even oil I use the currency markets I use the yen as my way of trading oil and the bonds so you've walked me through that before Teddy but we got a bunch of new listeners and I love the way that you walk through you know the yen oil intensive producing economies can you walk the listeners when you say that real quickly how they would do something like that in terms of what currencies move and why they kind of make those moves because I think that's great education you walked us through before sure okay so for instance like how what we're going to talk about here is how to use oil and interest rates the US dollar yen we know that interest rates are a function of currency pricing to begin with so the bullishness of the of the interest rates in America are definitely bearish for the US dollar are bullish for the US dollar yen cross then you couple it with the oil with a very strong bullish trend that we have right now Japan's a completely oil dependent country they don't produce oil you know so with this type of trend going on that also gives it bullishness to the US dollar yen so that's how I say how I use those fundamentals for those markets where you know am I currently in an oil position not exactly but I am because of how I'm using that trend to trade another market I remember the first time you went over that example man it was a great example for people to understand you know what really drives some of the currencies man and what drives it is real life you know talking about commodities purchasing power whether we all know interest rates of course as well so the yen I got the yen up here on a daily we make it to 131 and change a couple weeks almost yet a little bit of a pullback what day is that was that the day you're on the day after you were on the air kind of chopping around between 128 and 130 what's your take with the dollar yen coming well that's an interesting trade especially right now as we're talking it's pretty much off it's laying on the lows of the day and irony irony the other markets are kind of flat oils only you know slightly up or whatever right now interest rates are flat the yen right now I think it's just in a chop zone this is just a consolidation period remember that the US are giving me the Japanese central bank and their finance ministry we're going to try and defend their currency originally a month and a half ago that's what they were talking about they have yet to do a thing and we've been babbling between 128 now and 130 now for what is it a week and a half two weeks you know so it's interesting I think that as long as you know the bluff has been called on Japan so I believe that as long as the interest rates are under pressure and as long as the oil starts to continue to press resistance that the US dollar yen is going to definitely probe higher highs yeah maybe a little bit of consolidation there after accelerating from remarkably in March man 115 to 130 and change what other kind of setting up right now yeah no I could see it man you know I mean there's no there's no real weakness I see consolidation if anything man at the highs and things can't go up forever consolidation sometimes if your bull is a nice thing to get a little break before that second charge higher what other currencies with movement Teddy I was looking at him you know we said a little bit of chop maybe a little bit of pull back from the trends that you've been talking about recently what are what other currencies you're looking at on your radar this week well definitely the euro is something I'm looking to sell rallies in I don't see it finding any truce bounce actually now interesting enough we've had a little reprieve and dollar strength with those currencies over the past few sessions and I would be very careful right now I think that you're kind of finding a point where you can start to sell into the euro US dollar as well as the pound US dollar now the US dollar Swiss we hit parity already that was pretty interesting remember we were talking about that weeks ago I thought we wouldn't hit parity until at least June something like that and like a balloon underwater we've done it so it'll be interesting to see how weak and I have to say like I think that we're seeing with the Swiss Frank is that this whole Ukrainian Russian thing when they open it up the doors to the bent the as far as what's going on with Russian customers and stuff like that that changes the whole value of the Swiss Frank Switzerland is no longer a neutral country you know and I think I think that we're gonna start just we could see this the US dollar Swiss get up to like 120 or something like that if the world really starts to view Switzerland is no longer anything more than just a little European hideaway okay and what we got 30 seconds man is is are we gonna get parity in the euro US dollar when is that coming that's coming that has to we have parity in the Swiss and we have the US dollar yen going like this and even the pound is bashing lows how can the euro not collapse you know just amazing going down below parity amazing moves I got them up on the charts and just mammoth moves as we know Teddy we appreciate the conversation the education as always man we look forward to talking next Wednesday man sounds good time we have a great day so you guys have a great one as well stay tuned folks we'll be right back to finish up the show sharpening your skills as an investor is like getting better at playing a musical instrument you 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different market fluctuations join Larry on May 17th as you host a live five hour trading webinar from 9am to 2pm eastern time giving you insight into how he analyzes the market and decides his plays the trading pattern explaining how to structure your trading day the times most likely to generate signals which signals to ignore and how to use the pattern to mitigate risk in this all day five hour live trading webinar take a seat by Larry Pesevento as he trades the markets real time including the Dow and S&P 500E mini crude oil, natural gas gold, treasury bonds wheat and soybeans, the euro dollar pound dollar, dollar yen and more if you've ever wanted to get inside the mind of a market master you cannot miss this live trading webinar to sign up today just visit the front page of TFNN.com this segment is brought to you by thinkorswim for more information just click the thinkorswim banner on the front page of TFNN.com welcome back folks we got the S&P's negative right now 1.5% you get the NASDAQ approaching 2% in the red right now DAWA 433 points Russell negative 22 I have the S&P up here a weekly chart all right you're trading above 4,000 4,020 we got some tough earnings out of target this morning and just some context folks I've said it before this market may be going lower okay we've been talking about that the 382 is well within reach we made it down to about 3850 I think 3855 was the low of last week the 382 is at about 3800 3500 is totally in play too that's 500 points below we're trading at folks that's about a 12.5% pullback just from where we are right now if you're in this market and you're thinking at all that you're overexposed it is not too late to sell okay yeah it's tough when you see that you could have sold the 4800 just at the beginning of the year you could have sold the 4600 at the end of March but as my dad said many times doesn't matter folks what you have is what it's worth right now doesn't matter what it was worth yesterday okay and make sure you're protected in this market because when you see stocks down another 4% right now target now more than 25% off of where you were yesterday and folks remember that's 25% from where you were yesterday target was up at 254 as recently as the week of April 18th you're off almost a hundred dollars from that price point man and we're seeing the effect of earnings we're seeing the effect of margins we're seeing it across the board higher crew prices we are in a period of extreme volatility for at least the next few months right fast forward two or three months down the road when the feds been hiking 50 basis points once twice three times what happens if inflation is still there what happens if there's an economic slowdown inflation still raging the feds hike 50 basis points three meetings and the data isn't slowing down to the degree that they want are they still going to keep hyping hiking are they going to risk really bringing us into a recession to bring down inflation you get the point be careful out there folks did not imagine a stock like target had a hundred dollars to the downside in a month and that's what it just did so not too late folks look at where we were at the beginning of last year 3750 look where we were at the beginning of 2020 3250 a lot of people at the end of 2020 when the market was at 3700 after being a 2100 would have loved for the market just to be at 4000 a year and a half then thanks so much for starting your day with me folks stay tuned it's going to be a wild one it's up next larry at 11 fast market Steve David


last class I ended up stressing on the importance of national output because it is the volumes of output that is more important than the quantities of money that is being circulated you might print a lot of currency but collectively it might be burst off if the national output declines. So we need to understand that it is the national output that is more important and it is important because that characterizes a nation's strength. So how do we measure the national output is a question we need to understand what constitutes output now let us for example take a nation's economy in a year and let us say throughout this year it produced 10 pig farms, 4 holidays and 20 pairs of jeans pant and this is the economic activity of a given nation in a given year. So does it mean that at the end of the year that the economy produced 34 pigs in pants no it is not, it is not just a mere collation of all the economic activities into one big sum that signifies the nation's output. So what do we do next how do we still find the nation's output in an accepted quantifiable form then we need to add monetary value to it. Now let us say these 10 pig farms valued was valued at 500,000 these 4 holidays in for 2 million and the jeans spent for 25,000 so the total market value is 25.25 million now whether it is the total market value or whether it is the value add that happens in the intermediate goods and services again is a question that needs to be answered. So to understand the intricacies of calculating the monetary value of the goods and services that are being produced the most widely accepted measure of a national output is its gross domestic product. Fundamentally the definition for GDP is the monetary value of all the final goods and services that are produced within the boundaries of a country in a one single year constitutes the GDP of a country. Now when we calculate the GDP of a country there are different things that we should have in mind what actually constitutes the GDP. We need to remove the intermediate goods because intermediate goods are the ones that become part of the final good that is being sold. So we need not take into account the monetary value of intermediate goods because anyway that is going to get factored in the final goods of which the intermediate goods is a part. By doing this we are eliminating the double accounting for the monetary value which we otherwise would have done if we had taken the value of intermediate goods also and then again taking the value of the final good.   So I just fell wood cut trees and give wood to somebody who finishes it in the form of a furniture and that company again gives it to a retailer who sells this furniture to a end user. So suppose I sell the wood to the company B for 1000 rupees and then company B makes fine additions converts it into a table or a chair and then sells it to a retailer company C for 2500 rupees and then that company C also makes some value adds and then finally sends it sells it to a end user for 3000. So in calculating the total output if we just add the sales of every transaction in this case it is 1000 plus 2500 plus 3000 the result would be 6500 and this would overstate the amount of the output because of the simple reason that it would have calculated the value of the lumber three times because in all three transactions have happened and the value of the carpentry twice because it has happened in two transactions. So a good way to avoid this over counting is to just focus on the value add now let us see how we do this I will just give you a small example so that you will understand what I am trying to explain now suppose the same transaction we are just going to concentrate only on the value add because company A sold the raw wood it had cut for 1000 rupees and had purchased no material input so whatever it has added is just the 1000 of the value that it has sold to company B and then company B adds value to the extent of 1500 and sells it to company C which adds another 500 rupees value before it sends sells it for rupees 300 to a end user so suppose we calculate the total output suppose we take this example to calculate the total output we know that there is a company A let us in this case it is the forestry company company B which is the furniture company and company C just retail outlet that sells it and then you have a sales price cost of material input and the difference between these is the value add on the first case there was no cost of material input so the difference is 1000 but furniture company B sells it to C for 2500 by buying this for 1000 from company A and the resultant value add that it has created is 1500 and company C sells it after buying it for 2500 from company B it sells it for 3000 because it creates a value add of 3000 of 500 so the total value add that is created is 3000 while the total transaction value is 6500 as I told you before this 6500 captures the intermediate goods for more than one time as a result of which there is double counting to eliminate this if you are just capturing the value add at each stage then we are doing a correct estimate of calculating the actual output which in this case is 3000 so a good way of estimating the output and let us say a nations economy it is an aggregation of such output from different industries from different sectors of the economy services or agriculture and each of them calculated in this way and if we just calculate the value add this 3000 in this case let us say this represents a nations economy then this 3000 is the value of the national output but it is extremely difficult to calculate the value add at each stage because the nations economy as is not as simple as this so the best way to estimate that is to calculate the value of the end use product that is getting sold so the end product that is getting sold is for a particular value and if that value is captured now that represents the correct value of the nations output we will discuss different ways of calculating the GDP in the subsequent slides now it is very important for you to understand that the example that I gave you just now it is just for you to understand that intermediate goods should not be included in calculating the GDP of a country second hand sales should also not be included because there is no value add in this and not to be actually explicitly told it is a good understanding that the black market economy never constitutes an integral part of a nations output a voluntary work or own work then inside the house let us say you are moving your garden in the process you are not creating any economic value so that does not constitute a nations output or does not constitute a part of the nations output or pure financial transactions like buying bonds or stocks because this is just a mere transfer of ownership without creating any economic value that also does not constitute a part of a nations output and transfer payments like the social security scheme or the welfare schemes which just transfer of money from the government to the other end user so they and they do not result in any final production so that is also not included in calculating a country's GDP now how do we calculate in that case the GDP of a country now typically there are the first method is the expenditure method which as I said before it just calculates the end value of the goods or services that is being delivered instead of calculating the value addition at each stages and this is popularly called the expenditure method in this expenditure method it divides expenditure on final goods and services into five groups and it combines these five groups in calculating the GDP these five groups include C which is the conception by households that is the consumer spending I which is the investment in productive assets and this investment is done by business spending for productive assets G is the government spending on goods and services the net of exports and imports now these form the five important the export and imports is the net of exports and imports plus the consumer spending plus the investment in productive assets by businesses and the government expenditure this constitutes the GDP calculated based on an expenditure method the important thing that we have to remember is that all of these categories are designed to avoid the double counting although we conception includes almost all spending by households business investments does not include all spending by households sorry business it does not include all the spending by the firms if it includes then it would end up in double counting because many of the things that the firms buy such as raw materials are ultimately sold to the consumers so we are just interested in capturing the investments done by businesses in creating productive assets that are more long term not short term for example if a business as a carpenter I buy an electric saw then it is a business investment for me but the wood and other raw materials that I buy is not a business investment because anyway that is going to get sold later which is captured in the consumer spending so we are interested in only capturing the business spending in productive assets the exports and imports are also calculated in calculating the GDP the reason that we are eliminating imports in the process let us for example say an Indian consumer he buys television from Japan now we should be very careful in not counting this because this expenditure is purchased in a foreign soil and does it create any domestic value so we need to actually detect the imports from this and likewise add exports suppose our goods and services are purchased by somebody outside the country that needs to be added and the net of exports and imports together with consumer spending investment and government spending actually constitutes the GDP and government spending will include the expenditure on final goods like the government spending on defense or infrastructure salary to its public servants these all constitute the government expenditure before that another method that is also used to measure the total output is to focus on income what do I mean by income now this income method assumes that income is the amount that is paid to the factors of production for the services that they have rented factors of production here I mean it is the capital and labor typically the services comes in the form of the wages is repaid in the form of wages interest dividends rent royalties now these are all the income that is paid to the factors of production now since income is just payment for the production of output it does definitely make sense to assume that the total income should ultimately equal the total output because the proceeds of production ultimately have to end up somewhere either in my pocket or in somebody else's pocket but it is very safe to assume that the total income should be equal to the total output but by and large the most popular method the convenient method that is used to calculate the GDP of a country is the method that I explained before which is the expenditure method which just captures the conception driven expenditure which is the household expenses the investment which is driven by businesses for the purpose of long-term and not short-term garment expenditure plus the exports minus the imports this constitutes the GDP of a country now while calculating the GDP of a country we need to have in mind there are different terminologies that you will encounter you would see a newspaper reporting the nominal GDP real GDP we need to understand the difference between the nominal GDP and real GDP a nominal GDP is one that does not adjust for inflation which just measures the at a certain price level now let us say in 1990 the nominal GDP uses 1990 prices in 2000 the nominal GDP uses 2000 prices so it does not adjust for inflation whereas in a real GDP the adjustment for inflation is also made it is using some constant base price now let me just give you an example for you to understand this now let us say the economy of a country is just in its producing cars now let us say at a given year 2000 that it produced 100 cars and the cost of the production was 50 per car the nominal GDP is 5000 so the at the end of year 2000 the nominal GDP is 5000 now let us say in 2001 the quantity of car produced did not change it is the same 100 but the cost of producing that car increased to 75 the nominal GDP in this case is 7500 now we would tend to assume that the country the GDP has increased as a result of which the output has increased there is increase in the economic value but on the contrary although the country produce the same amount it will it actually looks as though more was produced on the contrary it is because that the cost of production has increased and it is that increase in the cost of production that has actually caused the increase in the value so we need to remove this effect of inflation to calculate the real growth in the economy and that is why a real GDP is essential as for the basis of understanding the real growth of an economy vis-a-vis a nominal GDP because in a nominal GDP even if the same number of goods are produced higher prices will just cause an artificial increase in the GDP whereas in a real GDP the effect of inflation is removed from the real GDP only an increase in production which means an increase in the real output will actually cause a real increase in GDP so we need to actually understand the difference between a nominal GDP and a real GDP now there is also another terminology that you need to understand this is called the gross national produce a little different from GDP GDP includes all production within a given country let us for example take India now whether it is a foreign firm or an Indian firm the monetary value of all goods and services produced by anybody within the country constitutes GDP whereas GNP is the monetary value of all Indian production that is made worldwide so if we need to understand it from a different perspective GNP is GDP minus foreign investments in India plus Indian investment overseas for example if Ford is producing cars in India it is counted in India's GDP but not counted in India's GNP because Ford is not Indian likewise if Maruti is engaged in producing cars in Europe it is not counted in India's GDP because the production doesn't happen inside India but it is counted in India's GNP because it is India's production happening outside India so you need to understand the difference between GDP and GNP GNP is also an important economic indicator but usually we measure the strength of a country's economy by measuring its GDP and not GNP but it is essential that you understand what GNP is all about. Now I will just give you a small economic flow for you to understand what happens within a nation's economy now if you look at this this animation illustrates a country's internal economic flows it shows the relationship between the various elements in the economic value addition process and the expenditure components that come in the form of conception investments and government spending so I will just trace the path of this economic flow for you to understand this better the value add that you see here it is the sales minus the purchase of intermediate goods because that is the real value add that is being created as we saw in the previous example. Now the value add is constituted before that if you just calculate the total income minus the total value add the sales revenue minus the value add it is given in the form of these wage interest rent the profit the depreciation the rent the indirect business taxes. Now actually what we are doing is the total value added the GNP here in this case is the total value added which is the which actually removes the purchases of intermediate goods to avoid double counting as they represent sales of one business entity to another now the total income minus the total value add which is represented by the the resultant is the depreciation the wages interest rent business profits all of this constitute the value add. Now if you closely look what happens here the value add depreciation the wage rent the profit the indirect business tax now the wage rent all this gets into the personal income or also gets into RE here which is the retained earnings and the profit that the firm gets distributed you have to pay the firm pays income tax for that and after that gets into the retained earnings other indirect business tax indirect business tax income tax and then the personal income tax gets into the government's revenue after which the consumer has disposable income and then some government transfers enhances the disposable income of the consumer in consumer spending and the remaining goes to banks in the form of savings and it is from this bank that borrowings are done for investments. So business investments comes from borrowings from these investments consumers pending business investments come from borrowing from these investments the retained earnings the depreciation that constitutes I the C comes from the consumer spending the G is the government's expenditure so this I plus C plus G plus the export minus import constitutes the GDP. So this economic flow just gives you an illustration of how various variables flow within the economic system and how at different points of time it reaches different places and all of them again aggregate together in different forms either in the form of an investment which is driven by borrowings from banks or the internal surplus that is generated through retained earnings or depreciation which is added back these are investments from businesses or consumer spending which is that part of the spending that a consumer does and then the government expenditure plus exports minus imports. So this is how the economic flow works in any nation's economy now after understanding what constitutes an economy and how it is been measured we need to understand what actually fuels the economic growth there are three important factors that actually fuel the growth of an economy labor capital and efficiency. Now labor can result in economic growth if we are able to add more into the labor workforce or widen the employment workforce or the same workforce working for longer work covers capital can enhance the economic activity if we are enhancing productive capacity through investments and thirdly efficiency without enhancing labor or capital if more output we are able to generate through organizational innovation then we are increasing the economic growth and this we usually call it as the total factor productivity. I will just give you an example for you to understand this better let us say there is a textile unit and there are 10 employees and 10 sewing machines and each employee can make you know one shirt per day so at the end of the day we are able to produce 100 shirts using the 10 machines and 10 employees and let us say this constitutes the national output this is the economy of a nation now how do we increase the economy of this nation one we increase the labor by either adding more or asking them to work for more hours or we increase the capital by purchasing more sewing machines or let us say we do both we add 10 more people into the workforce and by 10 more sewing machines as a result of which the economic growth happens to the extent of 200 shirts per day as against 100 shirts before in this case we just increased the number of people available and the number of machines available an alternate option is to increase the efficiency by just changing the process of making these shirts by doing some study that can optimize the manufacturing process as a result of which more number of shirts could be made by the same number of employees using the same number of sewing machines in the process we have just increased the efficiency and this way we are also increasing the nation's output so we need to understand that either by increasing labor or by increasing the productive assets through addition of capital or by doing both or by increasing the efficiency we are able to create more economic value and create economic growth now just as economic growth is possible there is also times where there are economic downturns and just as labor capital and efficiency cause increase in economic activity it is the same labor capital and efficiency that causes output to reduce or the rate of economic growth to reduce the lack of labor the drop in efficiency or the lack of access to capital will cause an economy to contract and economic downturn is characterized usually by words like recession or depression and there is an old joke to differentiate between recession and depression I am sorry yeah recession and depression a recession is when your neighbor loses his job a depression is when you lose your job a recession in an economic definition means that there is a contraction in the economic activity there is a general slowdown in the economic activity if the if the growth in GDP was 6% in the previous quarter and if it has fallen down there is a general contraction in the economic activity then there is recession the one that differentiates depression from recession is the period of recession long periods of recession let us say the contraction in economic activity happens for a longer period 2 to 3 years then we are in a state of depression or if the real GDP has dropped by over 10% then we say that the economy is in a state of depression so whether it is recession or depression the understanding is that the economy is contracting now such economic downfall downturns can happen because of a number of reasons one could be because of natural calamities like war or earthquake or or epidemics which can create a total fall in the economic growth or a general fall in the demand for goods and services in the US after the war the great depression in the US in the 1930s witnessed the economic output falling by 30% and during times of economic distress which is not because of natural disasters or epidemics the tendency is to save more and spend less because once we realize that there is an economic distress we are a little insecure about our future so we tend to save more and spend less and when we spend less the incentive to invest and produce more is also missing so investment by businesses is also on hold and when you consume less there is lower production there is layoffs which again causes lower income levels distribution again lower consumption and this spiral keeps repeating itself but mind you that this economic contraction has not happened because the capacity to produce more is missing this is despite the fact that there is capacity the actual output fall is because there is a short fall in demand and when such short fall in demand occurs and the pricing mechanism do not adjust quickly then there is this economic downturn which is not again because of the supply side because the capacity to produce is always there but it is from the demand side that has caused the short fall in the demand so we should understand that the economic growth is just not the supply side we also need to understand that the demand is also essential and at times of great depression it becomes the government's job to sustain this demand through its fiscal or monetary policy and this forms the basis of the famous kinesian theory which says it is the government that has to create a demand by investing during times of great recession or depression so we need to understand that there are two sides to the economic theory the supply side and the demand side the actual output will actually fall short of the potential output when the demand falters there is capacity to produce but if the potential to consume the capacity reduces because of changing demands then we need to know how the supply and demand need to be adjusted and there are good theories the law of supply and demand which ensures that there is a balance between the supply and demand when the supply side and the demand side are balanced to the optimum extent then we have a good economic architecture in place but it is not as easy as it is said there are various variables that change the relationship between the supply and demand and the characteristics of demand and supply also varies across different types of goods and services that are being used some services are very critical that whatever be the price people need it so the classic theory of the classic law of demand and supply will not hold good for critical services so we need to understand what are these types of services how the demand and supply all things being equal change with variations in price and are there goods and services that have a constant demand or remain unaffected even if prices changes why is that so and how other economic variables change the behavior of the quantity supplied and quantity demand demanded vis-à-vis the price of these are things that we will understand we will try to understand in next class when I just bring in the concept of the supply demand characteristics and to understand how the supply or the demand of a particular product keeps changing with the price of the product or the service that is being delivered and how later we will see how various policies of the government be it the monetary or the fiscal policy actually tries to control regulate the supply and also stimulate the demand before I end this class I will also show you a small video that gives you a quick capsule of the economics understood at a very broad level what is economics and what is GDP so all this all of that that I told you in the last two sessions I will try to capture that in a small video of 5 to 6 minutes so that you will better understand and appreciate what economics is and how that a nation's output which is actually calculated by way of GDP and how GDP is being calculated and what constitutes GDP so next class I will get into the characteristics of supply and demand and its behavior with price thank you


you need to learn to tolerate ambiguity. There's almost nothing that a CIO ever deals with that's in a nice neat package from start to finish and that is completed very quickly. Things tend to have long incubation and resolution time periods. For me, the funny thing is that when I became a CIO long, long, long ago, CIO wasn't commonly used in higher ed. I went to a meeting and I remember asking some people who are my age now, so why do you need a CIO? And they said because the provost and people like that don't have enough time to do this emerging technology. So that's how naive I was. I think the most rewarding thing about being a CIO is you get to make a difference. So you can be talking with a chancellor, with ICE chancellors, with senior leaders across campus on the issues that are the most important. So when you're looking at what can we do to improve the quality of our student experience, what can we do to help our faculty succeed with their research, that the CIO has a voice in those discussions. I think that the business of higher education is a noble endeavor and I'm thrilled about really contributing in a way. I've chosen a life of service. My role is a service role. I embrace that role and I'm really proud to be able to serve the primary mission of the university. Aspiring CIOs need to recognize that they will not be ready at any particular point because they know everything that needs to be known. They have to feel confident enough about what they don't know and willing to go find it out. But there's never a point at which you have complete mastery. It's really a question of how do you understand what's important and what's not. First, I tell them not to be scared off by the horror stories. There are plenty of folks that wanna share with you how this is a 24 by seven by 365 job and you have to turn your whole life over to it, which if you wanted to, it could be all consuming.  Helping others to achieve their potential has been something that I've taken an immense amount of pride in. The proudest moment probably came when our president at his state of the university address cited some organizational changes that we made as examples of how part of the university was really thinking strategically and in a transformative way. And he was citing it as showing an example of showing others how they could make some difficult decisions and really come out on the other end much stronger and advancing the university. So that was indeed a good moment for all of us.


Welcome back again folks. This time is about Tesla. Tesla has been truly bashed around lately with short sellers attacking and news about a famous short seller attacking it big time. Cryptocurrency attached to Tesla now? That's a big question. As soon as Elon said he was accepting Bitcoin for payments for his cars, Bitcoin started surging. As soon as he says, hmm, maybe it's taking too much power to produce and generate the Bitcoins and cryptocurrency, I'll slow down on accepting Bitcoins to paying for his cars. And now Bitcoin started moving down on that. So it's a little bit weird now that Tesla and Bitcoin are both really live together and in fact it shouldn't really be. The idea behind all this is now we're getting way oversold on Tesla on the Tesla side and Bitcoin was doing the same thing. Now when everyone is bearish and we're on the oversold side, you may expect some sort of bounce at one point. So this is what I was looking at and looking for some sort of support and a breakout from that old support. And this is what we had this morning. Nvidia is moving up, AMD is moving up. We might think that we should see a relief on Bitcoin and crypto moving up. So this is a line that I had, you know, and the 57475-ish, which happened to be the pre-market high on Tesla. The idea is, you know, we've seen that before as soon as we break the pre-market high, depending on where we were previously. We are entering the bull side of things. Now look at this line here. I'll draw it here. You know, this is the pre-market high right here. It was an old line that you can see here. So as soon as we step above this line, we are entering the buyers, right? You guys all see this, right? So my idea was this is if we get above that, we could enter long. However, we need a confirmation. Tesla has been faking us out sometimes. So the idea was to be sure that we're not getting faked out. And this is the opening. We opened up hesitation and then it started moving up on volume.  We're moving up. However, broke under the Tima. Tima is that neon green line under the Tima. And there was a slow drift going down. And slow drift going down. However, if you look at the strike on the 580 for tomorrow's expiration Friday, there was a crapload.  Not all at once, but all together in the first four hours of trading. And now this is when I was looking at an entry where on support support is what is the old support resistance line that we had at the pre-market high and want to show you before. So basically this line here will act as support looks magic. You've seen that one before. Now, if you saw in chat, I said, I'm not interested. I'm putting levels in. And I'm not interested until I see we're reaching that level. Now I'm going to switch to the one minute, one minute. And this is going to tell you something. This is where the sniper mode comes in. Look at this. We touch it. Are we going to get there? See the volume is increasing. I'll show you that here. Volume is increasing. See this volume increasing. And then we're slowing down. Oh, again, touched it again. This is the entry. This is when, you know, you're doing a double, you're having a double bottom here right on that support. So basically if we get a flush, you know, it's an exit point because it's not going to get through. So basically if it flushes, it's going to flush, test the line and flush real. Usually that's what it does. Or we're going to bounce on it and then move up. Now I'm going to switch back to the five minute chart. So this is when we entered right here five, five 80 calls and the price paid for the call was 530 per contract. Now I have a rule selling half at 100%. So basically I sold half at 1160 as we were moving up. And later on, we kept on moving and moving. We broke that high to move up. I called the next line to be five 89. We were very, very close to it. I decided to take more out at very close to five 89. This was 11. Sorry, I said I said 1011 60. It's 1060. You know, 100% and confused because the other exit is 1170. So this was a second exit calling for five 89. Funny part is, you know, after hours, we went to five 89. So all in all, I was looking at support for entry reason being I was bullish on it and option volume was super high. So basically I'm not only chasing at any time here. I'm waiting for the right place to enter. And even if I know that these guys paid a lot more for their option creaming than we did here, we're expecting probably some more upside. The idea is to stick with the rule, which is half out creating a free trade. We're making some money. And I kept 20% on for the rest of the play. So I hope you guys understand a little bit on how to be a sniper, look for support resistance and make sure that you can be profitable on this. All right. Nice to have you with us.


Hello! In this presentation, we will be taking a look at business transactions involving cash. We will be recording these normal business transactions in the format of the accounting equation and later be using the same or similar transactions to record with regard to debits and credits. Objectives. At the end of this, we will be able to list transactions involving cash, record transactions involving cash using the accounting equation. First transaction. We are going to list through these transactions and we are going to record these transactions with the accounting equation. Learning these accounting equations and these transactions using our normal rules and thought process. So remember that this is our accounting equation. We are going to have assets, liabilities and equity. When we record transactions using the accounting equation, we often use the accounts involved and this is sometimes called an extended accounting equation, a format that can be used to record transactions. It's useful to start recording transactions in this format and then later on move to debits and credits. This format being useful because it is an equation and therefore it's going to be a good place to start because everybody has some experience with equations. However, as you can see just from this example, it does get a bit complex or a bit messy and it's much easier with debits and credits and that's the reason we will move to debits and credits. But the normal rules that will be the same when recording transactions or some rules will be the same. Those rules will include that every transaction will have at least two accounts involved and every transaction will have an equal, will remain in balance here, meaning assets equal liabilities plus equity will always remain in balance. In this case, in the asset accounts, we have cash, receivables and supplies. Under the liabilities accounts, we just have the accounts payable and in the owner capital, we have the capital and the entire income statements of revenue and expenses. We'll then have the total assets equaling total liabilities and equity and see the impact on net income first transaction owner deposits cash $70,000. First question, I'm going to go through the start process here and we'll continue with the start process all the way through recording journal entries. Is cash affected? In this case, we're going to say of course it is we're dealing with the cash accounts and therefore we're going to be dealing with cash and cash is going to be increasing. So we're going to increase cash and of course cash is within the assets section. Then we need to know what the other side of the transaction is. Now when we're dealing with the owner depositing money, it would make sense for us to think of the owner's equity or the owner's capital account. If we're talking about a corporation, it would be the selling of stock and so and that would be stock holders are capital that would increase. In this case, it's going to be the capital account. So we have the 70,000 within the capital account. We know that it's increasing a couple different ways. One, we know that cash went up and when cash goes up, if the other accounts is on the other side of the equal sign, it to then must be going up. We also want to double check ourselves though and see if it makes sense that capital would be going up bringing up the equity section. And we know that capital represents what is owed to the owner in a sense, meaning the company has assets at this point of 70,000 and the company owes that either to a third party, a liability or to the owner. In this case, it clearly owes that who has claimed to that 70,000 the owner, not a third party. The owner's the one that put the money in the business. Therefore, our debits equal our credits. We have the total debits here. Well, what am I talking the assets in our account equation are in balance in terms of assets equaling liabilities plus equity, meaning total assets equal total liabilities plus equity, no effect on net income. Next transaction, we're going to start with this beginning balance. So this is going to be where we are starting at, then we're going to add the new activity, the new activity being reflected here, and then we'll get to the new balance. So note that as we record these transactions, we're always going to start where we started in balance, we're going to record something that will be in balance, and we will end with something that will remain in balance. So next transaction, we're going to say we received cash from client for work done 7000. So we received cash, that's going to be our first question is cash affected keyword is received. Therefore, we know that cash is increasing. So we know that cash is affected. It is increasing. If cash goes up, then we need to know what other accounts is being affected here. Why are people paying us cash? Because we did work. So when we do work, we earn revenue. So here's revenue revenue is part of the equity section. And we can think of it in terms of if this side is going up assets going up, then this side must be going up, equity must be going up, and therefore revenue must be going up. Now, when we consider the equity section, it can be a little bit confusing that because the entire income statements, including revenue and expenses are included in the equity section. So remember that net income is calculated as revenue minus expenses. If revenue goes up, net income goes up, whatever happens to net income will also be what is happening to total equity. When expenses go up, they bring net income down, which brings down equity. Therefore, if we take a look at our equation, we see that the cash is going up by the 7000 and the revenue is going up by the 7000. Note that revenue also only goes in one direction. It only goes up as do all income statement accounts, meaning revenue and expense accounts. Revenue and expense accounts only go in one direction. We can see now that our total assets equal our total liabilities plus equity as shown here, and that our net income has increased net income calculated as revenue of 7000 minus the expenses, which as of this point, of course, there are none. We then need the ending balance. So note that it's not good enough to stop there. We need to say, this beginning balance is in balance. This is what happened at this time. Where are we at? Where are we ending at? In this case, of course, cash is at 70,000. We got 7000 more. We are now at 77,000 in cash. Over here, we had a capital account of 70,000. Nothing happened. So we're just basically bringing that 70,000 down 70,000 plus zero. Here we have zero. And then we have 7000 increase. And there's our 7000 here. It's useful to bring all the other zeros down. So these other accounts, of course, nothing has happened. We're just bringing those zeros down. And as we do that, then the total should remain in balance, meaning assets of 77,000 equal liabilities of 70,000 plus seven or 77,000. 77,000 assets equals 77,000 liabilities and equity and the total net income at 7,000 at this time. Next transaction. Once again, we're going to look at this beginning balance and note that we're not looking at the beginning balance, the first beginning balance here. So in our prior slide, we're eliminating this now. Now we're really, once we move on, we're really just concerned with this part here. So that's where we're going to start with. And then we're going to do the same process. This is where we were before this transaction. This is going to be the transaction we record. And then we'll show where we are at after this transaction. So we have paid cash to employees. Same questions, we're going to say is cash affected keyword here is paid, therefore cash is going down. So we're going to decrease cash this time. And then we just need to know what other account is affected. Of course, cash is an asset. The other account that affected when we pay employees, remember, we are not to the employees here with the owner. So we are always recording these transactions in the as if in the perspective of the business owner. And therefore we would have an expense of wages expense over here. Now we know it's going down for a couple different reasons. Once we know it's wages expense, it might be a little bit more difficult for us to say these wages expense going up or down. That's why we focus on cash first because if cash went down, and it's on this side of the equal sign, then if this is the other side that's something is happening to it, then must be going down, meaning it's bringing down total equity. Now note that as we think about the expenses, if we double check it, we might think that expenses only go one way expenses typically we typically think of expenses only going up. But when considering expenses and as the relation to equity, they bring equity down. So keep that distinction in mind as we move to the next type of transactions that we as we move to debits and credits, we're going to basically be saying that expenses go up. And that brings net income down and that brings down equity. So here we're saying it goes down. And that doesn't necessarily mean that expenses go down, expenses just go one way, bringing down the equity second section, bringing down net income. So if we were to record that, then we're going to say cash is decreasing by the 420,000. And then that's going to decrease the total assets, of course. And then the equity is decreasing over here with the expense pulling down total equity. And then we see that our total assets equal our total liabilities for this transaction, the 420 decrease in cash matching the 420 decrease in the equity due to expenses going up. We see that net income is affected by a net loss in this case, meaning revenue minus expenses are going down for this transaction. We have a loss of 420. Then we're going to see our total here. So we have cash beginning bounce of 77,000. This is what happened this time we reduced cash by 420, leaving us with cash of 76,580. Then if we see what happened over here in the last other side of the transaction we worked on, we had expenses of zero, we had more expenses, which means it's going to bring down equity by 420, and we brought down that number. Then we just need to bring down the numbers from the prior beginning balance before this transaction, including the capital of 70,000 plus nothing happened this time means we have 70,000 revenue of 7,000 plus what happened this time gives us revenue of 7,000. And we bring those down. The others are just bringing down the zeros as you can see. So we have the zeros being brought down here, here, and here. And then if we were to add up the total assets, 76,580 cash being the only asset at this time would equal then the liabilities and equity of 70,000 plus 7,000 minus 420,000 76,580 total assets equaling 76,580 total liabilities and equity net income at this time is now 6,580 calculated as 7,000 minus the 420 next transaction paid cash for supplies. So we'll go through our normal thought process again. Remember that I'm going to go back to the prior slide. This is the ending balance for this slide, which will then be the beginning balance for the next slide. We're not worried about anything prior to that. When considering the new transaction, we're just concerned with this balance, the new activity that will then happen, and then the new balance. So we've got paid cash for supplies, 240 is cash affected. Yes, it is. And then is it going up or down keyword paid? Therefore, cash is going down. So we're going to decrease cash. I'm going to write that with arrows first decrease cash. Then we need to see the other side of the transaction. Now you might be thinking if we bought supplies, it should be some type of supplies expense. However, in the case of supplies, we typically are going to use supplies as our introduction to inventory, meaning we're going to put it on the books as an asset and then decrease it as we use it. And therefore we're going to put it on the books as supplies, an asset. So we're going to increase supplies, the asset as it is consumed, we will decrease the asset and record the expense. So we got one asset going up and one asset going down in this case. If we can look at this example here, then we see that cash is going down. We see that supplies is going up. And this is going to be an unusual transaction in that we have one side of the equal sign both going down and going up. So that's one example of one of those just kind of unusual transactions that often throw people off because when asked what is the effect on the accounting equation, we're typically wanting to say that cash is decreasing assets. And we have to remember that the other side is increasing assets. And therefore there's no net effect on assets. And even though a transaction is happening, there's no net effect on either assets, liabilities or equity, because the assets are going up and down. Nothing happened liabilities. Nothing happened to equity. Therefore, there's no impact on total assets or total liabilities and equity from this transaction and no impact on net income. This once again, one reason that debits and credits are often a better tool than using the accounting equation, because we will see a debit and a credit for each transaction. Then we want to bring down the total. So here's our beginning balance. Here's the transaction. Here's the total. And note that as we look at this beginning balance, we do have a utilities expense that was recorded after the wages expense here. So if you're looking at these numbers and you're saying it's a bit different because we got the utilities expense 525 that was actually added another transaction added in between here. So then we've got this number. We've got the 86555 minus the 245 gives us the 86310 in the cash. And then the supplies zero plus 245 gives us the 245.  We know that the 86310 plus the 245 for total assets equals the 86555 and the total liabilities and equity of 70,000 plus 17,500 minus 420 minus 525 also equals 86,555 net income is at 16,555 calculated as revenue of 17,500 minus wages expenses of 420 minus utilities expenses of 525. And again, note that this last slide, we're focusing in on the cash. So there are some transactions that happened after in between slides here in that we have the revenue and the utilities and we're focusing in here on the cash transaction related to the supplies objectives we are now able to list transaction transactions involved in cash record transactions involved in cash using the accounting equation.