New Data EXTREME: Prepare for what's NEXT | Stock SKYROCKET

Hey everyone, me Kevin here. Wow,

markets are absolutely on a tear as

Donald Trump is announcing deals from

the Middle East and we are now seeing

the put call ratio. In other words, the

number of people buying bearish options

at a low that we have not seen since

December of 2020. In other words,

markets are the most bullish in the

options market that we have seen since

the end of

2020. This is pretty remarkable. And in

this video, we've got to understand

what's next because here's a clip of

what I said over 3 weeks ago. Take a

listen to this and then I want to tell

you what to pay attention to going

forward because I think that matters a

lot. Hey everyone, me Kevin here. Uh, in

this video I want to give a breakdown of

why I actually think now is oddly a bad

time to sell stocks. And I know that

sounds crazy, like what? Kevin's saying

it's a bad time to sell stock. I I know.

I know. Give me a sec. Hear me out here.

Okay. It's too noisy out here. All

right, here's the

scoop. Q1 earnings are going to be good.

As we've already seen, why would Q1 be

bad? January was full of hope. February,

March, mostly March was full of pull

forward. Of course, we're going to have

good earnings. So, we're probably going

to have good earnings for the rest of

the next four weeks. You know, Nvidia is

always late. Probably have good

earnings, especially with comments out

of Google. Hey, so far macro keeps

staying fine the way it is. We're going

to keep spending. Great. And then after

we get more good Q1 data, well, you

know, poopy doesn't hit the fan until

July. So, what's what's the rush? So,

why did I say that 3 weeks ago? Why did

I say don't sell stocks now? Because the

data is about to be good. It's not

because we believe that Donald Trump

tomorrow was going to go to 000 or slash

Chinese tariffs from 145 to 30. It's

because we believed that Q1 earnings and

Q1 data was going to come in because it

always lags. But that information was

going to be good and bullish because we

front ran the very April tariffs that

everybody was afraid of in April. That

meant we probably had bullishness coming

for markets and that's what we've been

talking about in the alpha report for

the last 3 weeks. But I also publicly

spoke about it on YouTube and you saw

the video. But now what matters isn't

looking at the past and going, "Oh,

look, yay. We have now broken the 200

day moving average on the NASDAQ 100

again. We're back technically to a bull

market on the NASDAQ 100. We're up 20%

from bottom to where we are now.

Technically, the S&P 500 is year-to-

date positive again, which is pretty

remarkable. We, as we just saw, we're

not only back at the greed indicator on

fear and greed indicators, but options

positioning is extremely bullish. This

is partly because corporations are

conducting significantly larger buybacks

than we expected, but also in part

because analysts have already downritten

a lot of Q2 earnings expectations, which

makes a lot of institutions think, okay,

has the worst been baked in and is it

now time to buy? Well, let's evaluate

what the next problems are that we want

to pay attention to, if any. So, first

things first, I think for the rest of

May, there's little that could really go

wrong. Now, that's not to say something

won't go wrong, but right now it would

almost have to be a black swan because

think about it, for the rest of May, we

don't really have any major earnings. We

have lingering earnings coming in.

Nvidia earnings will be coming in.

Nvidia has expectations, especially now

with these Saudi chip deals, of being

very, very enthusiastic. But broadly, a

lot of our earnings are already behind

us. We already have the Federal Reserve

meeting behind us and the 102 spread is

back at 47 under 50. So, under shock

threshold. Now, again, that's not a

light switch, so it could create

problems and who knows, sometimes when

markets are most bullish, people start

fading again. But because I think a lot

of people are utilizing the trailing

stop strategy that I've been advocating

for the almost the last month now, I

think a lot of people probably won't

until we actually get negative catalyst.

And so this then begs the question, what

negative caddies do we really have left

in May? Well, honestly, not much. So

unless we get some kind of really bad EU

tariff risk, that's probably the biggest

risk right now is tension between the

European Union and Donald Trump. The EU

doubling down on their support for

Ukraine. The EU doubling down on their

retalatory tariff threats against Trump.

Trump saying that the EU is being more

mean to him than China, which remember

we just still you know 5xed uh tariffs

uh across the board with you know China

has now 5x the tariffs on us that they

previously had and we have somewhere

around 15x the tariffs on them that we

used to have. So we are still at the

highest level of tariffs since the

smooth holiday era of the 1930s. So like

don't get me wrong, tariffs are still

way worse, but it's too early for that

sort of stuff to impact us. So the

biggest thing right now for May is just

EU tariff drama. I think in June, this

is where things get a little bit more

interesting because what happens in June

is we're going to start getting that

April and May data. Now hopefully after

this Chinese trade deal, we're not so

worried about empty shelves or this

inventory issue, what we're worried

about is now what we have to worry about

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investing life easier. Inventory issue.

What we're worried about is consumer

momentum. Now, there's something that I

like to refer to and I like this

reference. Uh I think about Newton for

example and Newton's laws. Uh objects in

motion remain in motion and objects at

rest remain at rest. Right? Something

that can happen when you go through the

drama that we had in April, no

guarantees, but something that can

happen is when you slow out the

consumer's willingness to spend, you

basically, I like the plane analogy, you

stall them out, right? So, you freak

them out and they're nervous. Oh no,

we're going to hit a tree or we're going

to hit a wall or whatever. They're like,

oh no, no, no, no, no. You know, now

you're stalling out the plane.

Well, you could potentially keep that

individual much more cautious.

Hopefully, you we didn't stall out the

economy, but maybe that momentum is now

a lot slower. Now, instead of flying at

450, you know, knots of ground speed,

we're sitting, you know, closer to our

stall speed in slow flight at 120 and

we're like, I don't know, man. Let's

let's just be cautious over here.

Sometimes that can happen where the

consumer slows down. Now, the good news

is markets going up could help the

wealth effect and people's desire to

spend. But sometimes when businesses

start cutting, they don't stop cutting

just because some of the catalyst ended.

So, for example, Microsoft now laying

off 3% of its workforce. What

potentially happens if we see that

consumer and business momentum of

cautiousness continue? When do we

actually start seeing that sort of data?

Well, realistically, we're not going to

get the April, May data until probably I

would say mid uh well, I'll I'll say

early June uh to late June. That's

really when we're going to get the data.

Now, I actually think that if we can get

to

August, August, September, uh without a

significant rise, so call it 1% uh in

unemployment, that would be one

percentage point. So, let's make that

clear. I'll put a P behind that. Uh, so

that would be going from like 2.4 to 5

point uh 4. Sorry, going from 4.2 to

about

5.2. If we rose a percent in

unemployment, this would be problematic.

This would actually trigger uh Fed cuts

rapidly. But not only does it trigger

Fed ruts rap cuts rapidly, it also makes

people nervous and creates more of this

sort of Newton slowdown, which we don't

want. We don't get that data until June

or late June, which means really markets

are probably going to start getting

nervous about that June data. End of

May, June

nervousness. Now, who knows? That could

just be uh it it could not happen. It

could be little, you know, diply

doodlas, whatever. I continue to

maintain, as I have for the last 3

weeks, and I've been very clear about

this, trailing stops are the way to go.

Trailing stops are a great way to take

profit on stocks that are having a

momentum run and you don't, you know, as

soon as that momentum dies off, you want

to just automatically have that stuff

sell and free up some of your cash.

Doesn't mean you have to sell out of

everything, right? But you take a little

bit off the table and you go invest in

something else. That I think is the way

to go for May. So now when it comes to

the Federal Reserve, we don't actually

have the Fed meeting uh until the third

week of June. I think it's the 18th and

19th. Uh if I remember that correctly,

it's it's right around the 18th or 19th.

We can perfect that or correct me in the

comments here. We don't need to look it

up right now. But the point is markets

are only expecting an 8.3% chance of a

cut in June. In other words, it ain't

going to happen.

you know, maybe you're at about a 39%

chance of a cut in July, but

realistically, you're not pricing in a

full cut until September, and the Fed

doesn't need to because the unemployment

data is still stable. Now, yeah, 27

weeks unemployed is rising. Uh, you

know, we're seeing sectoral weakness.

We're seeing uh, you know, the jolts

levels and the quits levels all indicate

a slowing economy. But remember, slowing

does not mean crashing uh, or a

recession. I kind of think I always like

going back to the plane analogy, but I

say this all the time that you we don't

know what we know we're having is a

slowing economy, right? So, we're we're

coming in for a slowed economy. Well,

that could be a crash where, you know,

we hit the ground and and the economy

basically goes negative and then we

climb out of that negative because, you

know, the economy can climb out of a

negative unlike a plane. or you have a

soft landing where you know you come in

it's almost like you touch and go then

you take off again right we know we're

on the declining growth phase will the

Newton damage so to speak of April lead

to more continued cutting we're just not

going to know until June or July really

you know because the Fed's going to wait

for that data not just April data but

May data how are people responding after

April 12th April 12th Monday, yesterday

morning is when we actually got the

details of the China trade deal. Okay.

Well, how are people responding to that

Chinese trade deal? Well, I don't know.

When are we going to know retail sales

for a full month after the Chinese trade

deal? Well, technically, we're only

going to get half of a month for May

because the uh tariffs go down tomorrow

on Wednesday. The tariffs get reduced.

So, you only get half of the month of

retail sales data to understand how

consumers are reacting. your first full

month post tariff reduction won't

actually be until June and so that June

data won't come out until July and some

of it won't come out until mid August

which is why I maintain this idea that

the Fed is going to be slow. We probably

should not expect a rate cut from the

Federal Reserve until September. And in

the meantime, trailing stops are an

opportunity and we won't know if this is

going to be a uh, you know, bare market

rally or back to a bull market and

everything is fine. Mind you, tariffs

are higher than they've been since the

1930s, way higher than they were on

January 1st. And we don't exactly know

what the damage of that is going to be.

this idea that CPI prices this morning

actually came in you know pretty well we

beat by 0.1% on all except course core

year-over-year which came in at a match

but the components even super core was

pretty reasonable somewhere around 2.4%

4% on an annualized basis. These numbers

are not bad. Now, does it make sense

though that April CPI was lower? Sure.

We technically had so much inventory

front running in March that why would we

expect a lot of inflation from inventory

that we front ran in March? Because of

April tariffs, we haven't gotten through

that inventory yet. So really, we won't

see tariff impacts on even that 10%

portion until we probably get through

about 3 months of inventory. So April,

May, June, which again puts us at July

CPI, which doesn't come out until

August. So I want to be crystal clear on

this. And so I'm just going to write it

down because I know people are like,

"Oh, but cin whatever." There's always a

weenie baby somewhere. There's a weenie

baby born every single day. But what I'd

like to do is just make this crystal

clear because that's my goal on this

channel is just to give you my crystal

clear opinion. Okay, my take is that by

August we'll know recession or not.

Okay, if no recession, we're probably

higher for longer. You know, this means

if you're in real estate, hey, take

advantage of the new 179 deduction uh

for 100% accelerated depreciation

through the new tax plan. That's what

we're going to do at Houseack. We'll

take advantage of that. We'll take

advantage of ADUs. We'll take advantage

of tax deductions on ADUs. We'll take

advantage of uh of, you know,

potentially lending uh in the event that

there we're we're in a soft landing

environment. I think we will know by

August. We've got some cool ideas coming

for wedge lending that that are already

in motion. Uh but in August, if we do

end up in a recession, that's when you

want to be prepared for the Fed pivot.

Uh and that's where a trailing stop

could aid you because if we have

recession uh you know via

unemployment skyrocketing like we saw

with the Microsoft 3% layoffs Nissan and

these other companies uh by August again

you know call it 5.2% unemployment and

rising this would it seems less likely

but it's possible uh then you're

probably in an environment where you're

going to want to wait until the Fed

fully U-turns. Now, it's interesting.

It's going to be really fascinating to

see what happens between now and then

and what kind of momentum damage has

been caused. But right now, the wealth

effect is suggesting that no recession

is more likely based on the market being

bullish right now. Now, does that make

me bullish? Yeah, it makes me cautious.

I don't mind waiting until August. In

fact, I have exposure to a stock we were

just talking about in the alpha report

that's like 3x since I bought it. It's

up 25% today and it's up 90% over the

last 5 days. I last pitched it about a

week ago uh in the Alpha Report. Uh but

uh but but regardless, if you want to

join that, go to meet Kevin.com. Give it

a 30-day trial. Try it out. If you like

it, stick around. If you don't like it,

you can always uh you can always pause

your subscription. It's a click of a

button. Uh that said, I'm very curious

to see what ends up playing out. Uh, and

I'm just going to keep providing data

points where I can. And we're going to

be watching this on a daily basis, which

I'm really excited about because I enjoy

sharing this perspective with you and my

ideas with you and uh hopefully you take

something away from it and learn from

it. So, this is what I'm watching. Let

me know what you're watching in the

comments down below. Thanks so much and

we'll see you soon. Bye. Why not

advertise these things that you told us

here? I feel like nobody else knows

about this. We'll we'll try a little

advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Praath there, financial

analyst and YouTuber. Meet Kevin. Always

great to get your take.