The Market Crash is Back | How Bad it can Get.

well he double hockey sticks i'm a little bit concerned because uh my

concerns of the market was gonna sell off after fed jerome powell's speech

were wrong immediately after jerome spoke but they are proving correct

today after all all we got yesterday was coddling and the market was really

comfortable with the coddling it got from jerome powell talked to us like we

were five today though reality set in and the fed

did nothing for us yesterday they didn't say they were gonna buy more bonds they

didn't say they were going to do yield curve controls they didn't say banks

could leave more of their money in the markets

rather than in reserves by extending the liquidity reserve requirements we have

none of that we literally got nothing today that coddling cuddliness we got

from yesterday is gone so what instead do we have well we get to look at bond

yields which those are not very pretty and nobody's really talking about this

but it's so important so i'm going to briefly review this five-year chart

which tends to have a larger correlation with the stock market over the 10-year

the stock market seems to be a little bit more sensitive to the five-year but

anyway obviously this is this is the one-year chart of the five uh five-year

bond here we see obviously rates coming down trending down from august

roughly to uh the end of december we get this slope of an increase here this red

line that we've got here we see a nice solid you know sustained increase of

bond yields where things are really becoming a problem is here recently

since january this is the slope we have had of bond yields increasing that is a

much much more rapid pace then obviously the red line increase here uh and it

just gets worse here around february 19th which is approximately when we hit

uh the peak of the tech market and then we started having the tech wreck for

about two weeks and then lately we've just been volatile up and down it's been

pretty much a disaster you can see the slope of this line is even more steep

this becomes a concern because we might very well run to new highs very quickly

in bonds and over this next three month period here my warning holds firm and

this is a warning i came up with about a week and a half ago when the market was

nice and green and recovering and everything was beautiful we're like yeah

we bought the dip everything's all good i'm like we gotta be careful

don't get lulled into uh overconfidence okay just because we

bought the dip and maybe we're up on some of our dip buys or we're not as

down as we were before doesn't mean we can walk around in this market

overconfident so thinking that oh there's no way it's going to fall again

it can and in my opinion if this acceleration in these bond yields

continues which i think it will

we're going to see some serious pain over the next three months especially as

cpi data comes in higher than expected we know it's going to come in higher

than expected year over year month to month could come in temporarily high as

well the problem is i really think the market's going to hear jerome powell say

inflation's going to go up temporarily and all they will have heard was

inflation's going to go up oh [Applause]

you said it shut it sell everything

it's it's the weenie babies of this world that are like

if we even have inflation temporarily i'm gonna move all of my funds assets or

we're gonna take a lot of our funds assets and we're gonna go out of

high value tech the companies that are changing the freaking world the

companies that have high multiples because they are companies that are

transforming the world the reason tesla has a future in my opinion forward pe of

70 is because by 2030 tesla's not going to be done growing tesla is just going

to be at the beginning of this massive climate change driven revolution towards

ev and energy and solar that we're seeing

electrifying semi-trucks oh my gosh it's going to be it's going to be 30 40 years

before we actually electrify our car fleets out here here we are worried

about what's going to happen in the next six months we've got 40 years of ev

growth ahead of us people like oh tesla's going to stop growing in 2030

really like the the point here is

you've got to ask yourself do you want to be with the weenie babies right now

who are investing in companies that are sure maybe beat down because of the

pandemic maybe get a short-term bump back there's no problem with that that's

not necessarily a bad thing it's a great sort of momentum trade hey encourage

looking into that look for those beat down companies i mean heck you want beat

down companies look at lordstown now i'm not endorsing lordstown yet but i'll

tell you in terms of beatdown that's beat down i'll do some research on

lawrence town we'll see do we wanna do we wanna jump into the negative news

like i'd rather jump into the fire pit with some of my favorite stocks when

they're down and double down on my positions in the fire pit then go

chasing stocks that are getting hyped up or that are getting rotated into by the

weenie babies so the thing about the weenie babies is they're very very

emotional as soon as we realize and i think we

gotta get through these next three months i think you know once we get to

like may june june july and we start realizing oh okay okay maybe jerome was

right maybe inflation is subsiding in the event that happens

we're gonna see these weenie babies rotate right back and to me as painful

as it seems to be sitting here going ah man like we were just up three percent

and now we're down five again and then it's like oh we're up we're up three the

next day and then oh we're down six now you know like it really feels like one

step forward and two step backs back this market and it's it's really

tempting to say that's it that's it sell out sell out i can't take the pain

anymore it's the same thing right it's the same thing as what we were talking

about during the crash your fight-or-flight instincts turn on it's

like i just i can't take the the day after day one step four two steps back i

can't take anymore it motivates you to get out

and these companies that are going to change the world over the next 30 years

uh and personally this is the best time to be adding to those types of positions

now advice part and not financial advice of course this is just for entertainment

purposes only because i'm just a dude on youtube who suggests that you should

totally check out my programs on building your wealth link down below

using the 38 off coupon code because well we extended it for a couple days as

people are getting their stimulus checks and supposedly everybody's supposed to

have their stimulus checks by tomorrow but anyway what's what's kind of my

thinking here so my thinking is look as much as possible i am identifying

opportunities that as soon as they fall below certain price points i'm going to

be buying them heavy obviously i announce all of the buys that i make in

the stocks and psychology money group but the point here is i think possibly

you might be considering or should consider doing the same thing as well

ask yourself forget what what prices went up or down

today or yesterday or last week look at the actual prices themselves and

compare that to what you think the company's worth

and then look hey if we can get another 10 discount over

the next few weeks what if we get another 20 30 discount over the next few

weeks first question that should be going through your mind is am i going to

get margin called because if you're going into this madness these next three

months over 20 margin i think you're doing it wrong i think you're really

doing it wrong uh right now as of my last calc's i'm right about 20

a 28.2 margin so i'm getting down under

20. and that's without selling any stocks although i'm considering doing a

couple cells and then i'll really have i'll really be right at 20 so we'll see

what happens there but the point is right now

if you're good on margin identify those stocks and maybe consider even setting

some limit orders where you look and say hey all right we know tesla's 666. can i

get 625 again can i get 39 again on neo can i get 23 again on lucid can i get

140 again on end phase are we gonna go sub 200 on docusign or is etsy gonna go

under 190. look don't get me wrong the high flying

stocks of the day are always the sexy ones to look at too right and this is

what happens you get a stock like uh startup

i'm sorry startup uh upstart that's uh that's up 40 50 on the day then it goes

trending on robin hood everybody buys in at peaks and the thing goes up a hundred

percent look that that is freaking amazing i and so far i'm bullish on what

i'm seeing in upstart uh but i have to say personally don't love the idea of

chasing the high-flying trending stocks i'm trying to look where other people

aren't looking like some of the names that i mentioned here and one of the

reasons for that is the next three months are gonna be painful and i

strongly believe that and i'm planning for that pain

but the nine months after these next three

months like once these three months go by and then we get to the next year from

say you know june july all the way to june july of 2022

do i really think the tech stocks i'm buying today are going to be cheaper

than where they are today personally i don't think so maybe that has to do with

my inflation beliefs maybe you've got to ask yourself do i actually think we're

fighting deflation and the reason we're not seeing so much inflation is because

we're money printing our way out of deflation because of

global competitiveness globalism uh capitalism leading to price cuts and

price competitiveness and technology leading prices to decline do you believe

that or do you believe look man biden's gonna come in raise taxes we're gonna

get the infrastructure man all this spending oh my gosh three plus 1.9

that's 4.9 trillion dollars that's like 25 of our gdp a little less 24 23 of our

gdp that's that's not like how could there not be inflation if you believe

that that's fine then hedge yourself and what's doing

well in the inflationary time right now we call it the reflation trade right

reflation stocks are are classic banks commodities and the ones that are deemed

to be a value right which right now is retail hospitality travel the airlines

and so on this is all part of the big what i call the weenie baby rotation and

that's not to say you can't make money on those stocks i'm not mad at you if

you're making money on the airlines or carnival no no i want you to know i'm

happy for you all i want to say is it these things come and go in cycles so if

you're tech heavy and you feel like you're bleeding it's normal if you're

recovery and and reflation heavy and you're winning right now good

great that's awesome but look for those opportunities where things are selling

off now how bad do i think this can get this market volatility and crash crap

over the next three months i think we can revisit

pretty close to some of the lows that we've seen

over the past few weeks but i don't think we're going to

get exactly to those lows or exceed those now i could be wrong but here's my

thought when we first got hit with this boom

bond yields going up and everybody's like

we'll sell everything i think we had a substantial

overreaction so some of those really low prices we saw like if we pull up tesla

for example uh just as a simple easy one to pull up we know there was a time this

thing went down to somewhere around 530 a share uh pretty dang low let's see

here so going into the days interval we had five thirty nine was the low when we

pull up weeble here uh 539 was the recent low uh i would not be surprised

to see us sort of leave the bounds that we've been trading in the last few days

retest these lows and in fact i'll draw a line down we'll see how it goes

wouldn't be surprised if we get within about 10 of that which would be

somewhere around 580 something like that wouldn't be

surprised if we end up testing you know have some volatility maybe we'll trade

within the lines here it's possible we could dip down again to some of these

levels i think if tesla to me goes under a six uh it's time for me to start

really buying some more maybe even like 610 somewhere here so like this is going

to be my buy range right here uh all of this is going to be my hold range and

certainly if it goes up it's just 10 d's but i'll have cash on the side so that

if we do revisit some of these lows over here

and we're within 10 of the bottoms 10 10 to 20

of the bottoms that we saw on uh march 8th march 9th around that period of time

march 7th right around there then uh then that's going to be time for

me to buy because i don't know that and certainly what do i know but again i i

believe because we had that peak shock factor that slap in the face that

markets are more like okay all right we get it bonds are going up

yeah we might not have we might have another jump of bond yields going up

again maybe the 10 year will go over two percent right uh and and we'll see more

of these sort of v's and this sort of jagger as we re adjust here uh

over time i think this is all just going to be a little blip on the radar but it

just would not shock me at all and so that's going to be my current target for

a lot of stocks you know even if we go on over to

like a neo or palantir pound here being you know relatively close to some of

these numbers pound here though did go down to 20 on its lowest day uh down

into the 22s for a period of time here so uh same thing here if i went 10 20

somewhere around here probably would have to be around 22 for something like

pound here uh to really say okay here's a 22 line we're close here so somewhere

between these this area here maybe under 23 for palantir somewhere kind of in

this box right here so if we break through the bottom here maybe it's time

to go shopping again and again these are just my projections

my opinions i'd rather at these levels i'd rather hold cash is the argument so

i'd rather hold cash right now just in case uh you know that dip comes if it

doesn't come that's right we've got enough attendees in the oven so to speak

and those will print really nicely if we fall i go shopping again but i'm gonna

wait to be within 10 to 20 percent of those rock bottoms so just to do

another example here let's uh let's pick just one more here why don't we pick

uh i don't know we'll pick zillow okay just out of nowhere here let's let's

pick zillow so zillow uh just here in this last crash here went down to about

122 ish we're at 133 so we're already kind of retesting into those spaces same

thing look at this i mean now the market is just continuing to sell off here uh

for example look at a square square went down to 191

10 is going to be about 210 so again this is me thinking we're not going to

hit that dead bottom again but i wouldn't be shocked if we retest some of

those figures so it wouldn't shock me if we go back into that range of 220 to 210

over here at square i don't think we're going to reach those those low lows over

here we had a lot of buying pressure come in when we really hit these lows of

the day here and that's why we barely we didn't even close at those lows right

that was just intraday but anyway those are my thoughts on pricing because when

that rotation rotates back which it always does and it's so hard to say that

when it hasn't happened yet because it's like oh god well what if it doesn't what

if inflation comes and it all just goes to zero

you know those are the fears that we mentally drive into our mind especially

when we look at things like the pawn chart that we're talking about here with

this increasing slope that we continue to see yeah i mean it makes you nervous

right you you don't get blamed for feeling nervous

about this and so ultimately my strategy is just

very simple focus on what i know is going to do well

long term i know that in the short term reflection stocks are going to do well i

want people to make money there i'm grateful for that i want to make money

in the long term mostly because i don't want to go into reflation

make money sell try to time my way into tech when the rotation comes back pay

taxes potentially miss the opportunity have loaded up on on tech or some of

these other stocks that i like like the the etsy's and so on

and uh and then try to buy in at higher prices plus pay taxes by missing the

bottom not interested uh so those are my thoughts now uh i do want to say here's

your slope let's do this one more time here this is our slope of the 10 year

this time uh we are on the 10 year and the 10-year right now is at 1.73

let's go back to about six months here so instead of a year

so the last six months you can see we've had uh sort of a growth here from about

september to where we are now of the red line let's do a slope here from top of

market uh like feb 16 here yeah we see the rate is accelerating here also the

green line has an accelerated slope certainly if we go over here to feb sec

or march 2nd same problem

and if we continue to go in over here uh yeah yeah look at that even if i just go

from peak to peak over here we still have a higher slope than we do at the

green point here so rates are still accelerating at a faster pace

than uh or growing at a faster rate than uh than we even had at the end of

february so the short-term forecast

not so good and i'm a little bit concerned about it but i'm staying true

to my strategy and i'm diamond handing thank you so much for watching if you

found this helpful consider sharing check out the program's link down below

and we'll see in the next one [Music]

you