How Much Pain is Left.

hey everyone kevin here in this video

we've got to talk about consumer

capitulation updates and what the heck

happened today with the data what is it

scary for let's get right into that we

do have a two messages though number one

the comments down below will be off

because they're cancerous they're toxic

and i can't handle it anymore so it's

either i'm not making videos or i have

no comments at least for the time being

i hope to bring it back in the future

i'm sorry about it i can't take it

anymore next i'm only going to do one

pitch and it's going to be right now the

coupon code expires on the 28th you all

know that for the programs i'm building

your wealth link down below that's it no

other pitch this video okay let's move

on so first uh one of the big things

that we've really been talking about uh

has been retail capitulation and it's

time for an update on this because we're

going to get an update on the consumer

as well retail capitulation is really

really interesting how it works because

it comes in these these massive spikes

and it's usually representative of the

bottom of the market what you're going

to see is a

indicator i'm going to put up a chart up

and what i want you to look for is when

there's this this bright

purple line that goes way to the top

that's a sign of per day

retail capitulation which is measured by

out of the entire market

what percentage of stocks

did retail sell versus institutions

and when the per day line goes way up

especially above the 60 percent line

that's a sign of capitulation

when the 10-day moving average goes

above 60 percent it's also a sign

of retail capitulation and a potential

bottom of the market now why do we know

that's true and why am i pre-explaining

the graph because it's very complicated

when you first see it but now that you

have this you'll understand but why is

this so important because the dates of

retail capitulation watch this folks

december of

2018 the bottom of the freaking market

when the fed freaking u-turned

march

of

2020 baby and another time retail

capitulated was actually a time i said

this is absolutely ridiculous we should

all be using this as a phenomenal by the

dip opportunity which was absolutely

true

was the november elections the november

2020 elections that's quite remarkable

that we actually had seen in this chart

retail capitulation levels at those

levels and so looking back we're like

okay yeah those are great points when

was the recent

highest point that we've had in retail

capitulation so those were all around uh

over 60 we'll look at the chart in a

moment but the recent high was about the

end

of january which is also when i happen

to say that's it we've got to sit this

market out for a while which is kind of

interesting to see but what's also very

very interesting to see is where we are

trending now

from that capitulation point so let's

pull this chart up here

look what we got here this is the chart

again i told you it was going to be a

little complicated i'm going to walk you

through this one so the first thing i

want you to see is right here see these

green circles right here

these are capitulation points of over 60

which is that red dotted line there

right uh here you go you've got a couple

of peaks you have the highest 10-day

moving average right here in recent

capitulation

and then right here at the end of

january you get a spike

and we do have another spike over here

in a march that's relatively similar but

what i want you to pay attention to now

is that moving average which is the blue

line and look at what we've really done

first of all we've consolidated into

this lower section over here right we

could see that coming out of the last

two years of of fud and uncertainty and

madness

look at the trend here the trend has

actually been that retail is not selling

like when you draw these trend lines

it's like damn retail's getting it like

this is the time of our lives and okay

now that sounds like yeah it's like some

kind of motivational video coming up you

know somebody needs to start playing

some music like uh the ex or whatever

but anyway

uh this is the time for us to build our

portfolios and it is a gift that we have

pain in the markets and i think retail

is getting it and it also shows that

right now even if we just look in over

here it's really institutional selling

in fact when you see the market open and

you see the market do this it goes over

and then all of a sudden it does that

it's because the algos are out selling

since they're selling and playing bets

and placing bets because of the fed

because we're worried that oh the fed's

going to have to move from basically

fighting inflation to the markets like

crap while the fed's fighting inflation

we're going to see them push us into a

recession that's going to be problem

because if we go into a recession what

does that mean for us folks what means

problems because take a look at this you

remember this maybe you've seen this

chart before maybe you haven't the first

time i brought this up was probably

about 40 days ago

so the green arrow is where i first

brought this up which probably means we

are closer right now

to

over here somewhere right right kind of

there where the red line is which i'm

just gonna get rid of for a moment here

you know what we'll make it this sort of

red section there that i've left

uh and the problem with this section is

it tells us that if we take all bear

markets going back to 1929

that if we end up being in a recession

we have two more bottoms ahead those two

bottoms right here on the right are what

we still have to look forward to and

those are percentage declines in the s p

which would suggest that the s p could

go down to anywhere between 24 to 29

which we haven't seen yet year today

right

in fact let's just look really quick for

giggles because it you know every day

changes right so you just type it's uh

spy stock and we're only down 17.91

uh year to date on the s p 500. so it

really suggests that if this is 24 this

is 29 we still have potential pain to go

if we're heading into a recession and

now we've got this fear that the fed's

pushing us into an artificial recession

or like a technical recession when the

consumer's still strong and we've never

really had a recession where the

unemployment rate was going up usually

when you're in a recession like in a

recession a declared recession the

unemployment rate's going up like that's

not happening right now the unemployment

rate's down people we're still seeing

job gains it's crazy so this chart is

definitely one to be concerned about if

we don't have a recession the gray line

which on thursday on the 28th very

special day july 28th we are going to

see whether we're in a recession or not

and i think it's really going to be a

dictator as to are we going to follow

that gray line are we going to follow

the black line obviously fingers crossed

i hope it's the gray line i am mostly in

the market i've made many many many

videos on this both publicly and uh with

course members but i think i've been

very clear i'm mostly in the market here

i'm you know i was a buyer today i'm 80

to 85 percent in uh i have no margin at

all which i'm very glad about i've

converted some of my real estate uh to

to stocks as well and uh i paid all my

taxes so i'm really really in a position

where i'm ready for this market to rip

you know but i'm willing to be patient

okay good so what's the data that came

in this morning that's a little bit

concerning well the data that came in

this morning was another consumer

confidence miss which it's so weird

because it's kind of like i i almost

feel like the way they measure consumer

confidence is they go up to people who

are sitting at restaurants or who are

partying and traveling going hey man how

you doing i'm great dog

and then they're like well how do you

feel about the economy and spending

man

[Laughter]

it's like all right we're putting you

down as a negative like that's just kind

of what it feels like people are doing

right now like people were having a good

time people were

mostly happy which is a great thing

so consumer confidence numbers though

this morning came in at 95.7 versus the

expectations of 97 so yet another miss

here but beyond that annualized and i

hate that they're doing this but because

annualized means multiplied by 12 right

annualized home sales plummeted versus

expectations we were expecting 655 000

new home sales new construction home

sales for the year an annualized sort of

rate we actually came in an annualized

rate of 590. that's a 10 it's an over 10

miss and get this folks we saw prices go

from 444k

to a median price of 402 000 that means

the real estate crisis is starting

telling you folks you you know i'm a big

fan of getting ready by real estate and

that's what i'm doing i'm looking to

plop as much money into stocks as i can

right now and have no debts so that way

when the stock market rips whether

that's what i think the second half of

this year

closer to the end of the year the better

uh and then it's real estate by time i'm

actually using stock money that i've

gained to go buy more real estate now if

i'm wrong and the stock market crashes

more then i guess i'm buying less real

estate

but that's called placing a bet

so we've got a few other charts to talk

about and then we're done all right so

this is important s p's decline driven

by price to earnings so far hold on

actually first i have to show off does

anybody uh you know i would say comment

down below but you'll have to hit me up

on discord by going to medkevin.com chat

does anybody actually use like these

little things for espresso they're so

convenient and clearly i need to have

some more

[Music]

delicious actually no espresso is

disgusting and i don't put any sugar in

it i don't know why i punished myself

but then after that i have the little

orangina things the little gummies

they're so freaking good i don't have

the bag near me but anyway okay

so smps decline driven by a price to

earnings so far

so this is an interesting chart so you

see the blue line here

is a percent return due to margin

expansion and the black

box is a percent return due to earnings

growth in 2022 year to date for stocks

in total and because we've seen

compression in uh in earnings basically

because multiples have kind of

contracted or at least the multiples

we're assigning to earnings which are

compressed by by margins simply put the

the point of this chart is just to say

that most of the s ps 500 decline

has been the result of uh right here

multiple compression and margins go

getting squeezed by inflation and

multiple compression whereas we've

actually had positive s p growth because

of earnings growth and so when you

combine these two things you get that

total net like what negative 18-ish

percent year-to-date for the s p 500 but

this chart according to bloomberg is

suggesting that they believe that most

of the negativity that we've seen so far

has been margin and multiple compression

and that's a problem because if this

black box ends up becoming negative then

that black box has to add to the blue

box like a lego and then you end up

going to you know negative 24 negative

30 percent here today while we're in a

recession and boom you've got your

explanation as to why you're down

another 10 on the s p 500 meanwhile of

course retail buyers don't give an f

now this is a neat one this just shows

you of the s p 500 which is the blue

squiggly line and then retail buying net

retail buying into leveraged etfs and it

really shows you that even though there

are a lot of people usually in the

comments writing stuff like oh i'm

making so much money off of my triple

qqq uh or and then other people that's

usually on green days you get that and

on red days people are like oh i'm

making so much money of my sqq it's like

the comments always come out to prove

themselves right but whatever

i think it's really really interesting

that uh retail had the lowest inflows

right here around june 22nd a little bit

about the third week of may and roughly

around the second and a half to third

week of july i don't know what it is

with that time in the month like right

around the 20th of every month that sees

the lowest inflows into these these

funds but

the one that really corresponded with

the s p bottom was over here in june

which is around where gas prices peaked

but beyond that i can't really tell a

difference between buyers going in uh

you know via this over here and this

over here i mean this is probably a

little bit more consistent and thick

over in march so it's become a little

maybe sparser but i mean there's some

interesting points where people go

shopping uh who knows we can talk about

it in a discord remember metkevin.com

chat that's totally free it's not a

pitch or anything retail positioning

here you go

you've got uh well this is z z-score

okay i don't really want to explain that

right now so instead what we're gonna do

is i

i'm going to a park have a wonderful day

thank you so much for being here and

we'll see in the next one thanks bye