what is happening...... market crashing

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let's get into the content hey everyone

kevin here what the heck is happening in

the market bitcoin is

down under 31 000 the dow jones

industrial is down at the moment

882 points the s p is down

two percent the nasdaq down one point

three eight percent

gold is down one point one four percent

wti

oil crude is down seven point four five

percent

everything is just feeling like it's on

fire today and just for reference since

i did do percentages for everything else

the dow is down about two and a half

percent which is a good chunk for the

dow

so what is happening in the market right

now and what are some strategies

in this market all right let's talk

about this so first thing first

two things we've got this double up of

fear in the market right now we've got a

lot of fear

and uncertainty which remember to think

back whenever we had massive fear in the

past

in just the recent past that we might

remember more recently massive

fear march of 2020 obviously beginning

of covet 1.0

massive fear around the uh

election right before the election that

second half

of october was a very very fearful

period of time

and it's in these moments of fear just

like what we saw in may the middle of

may may 12th to may 14th

it's in these moments of fear that we

can sometimes see stocks sell off

substantially

and well below where some of their fair

values could be and that creates some

really neat

buy the dip buying opportunities the

problem is

right now valuations across the board at

least the stocks that i'm looking at

still feel relatively high see when we

look at some of our lows that we saw

in may we're still substantially above

some of those levels

at least in the stocks that i'm tracking

right now so i've got a different

strategy

which we're going to talk about that

strategy in just a moment but for

giggles let's take a look at the stock

charts

first of all here in case you're

wondering why for example the dow is

selling off so much

it's all of them together or selling off

almost in unison

especially the larger cap companies like

the microsoft's the apple

the nike the ibm procter gamble walmart

so on and so forth let's go ahead and

jump on over to the sticks here

and consider let's go to a company like

end face

and so end face today is down about a

half percent

and if we jump in over to uh

the day chart we're going to see that

we're still doing

pretty well above where we were in may

in fact we've got a line that we've

drawn here at about 154 155

you can see we're just now pulling back

to our support line

and dipping below is going to start

getting us a little bit closer to those

may levels

but we got as low as 120 108 at one

point

the same was true at companies like etsy

where in may we had the substantial

dip so you can see right here may was

pretty painful

we traded sideways for a while we had a

little bit of a run going into july and

since we've kind of been selling off

again

that as low as 153 on etsy let's uh take

a look at another one let's look at

apple here for example

so apple in may didn't hit

the lows that we had over in march but

it was

relatively low as well we were right

around that 120 level

pretty range bounded apple for a while

and since we've been soaring with the

exception of today where we've got some

red candling we're down about three

percent

on apple right now and consistently with

the

especially within the growth sector

we're seeing that may

was either the low or

the second low following march here

you've got

also a second low following march 191

and

over here you were sitting at about 192

as a low

on square so this march and may dip time

frame

pretty similar in some of the growth

spaces and this is important to know

especially when we look at

risk assets like even spax for example

that we had our lower prices in may

because while we're rotating back into

that direction

know that it was just two months ago

that we had

very very low prices at our higher risk

stocks

those are going to be our tech stocks

and our spac stocks

our higher valuation stocks our sas

stocks

software service stocks right take a

look at this you got that sort of double

dip here again that

march may low in tesla let's go look at

snowflake just as an example

see you've got in this case you've got

the may low is significantly lower than

the march low

but just for recency sake i just like

referring my pricing to

what was pricing like in may i did a lot

of buying in may

right around the big dip there was a lot

of pain in the markets and so when i'm

seeing this dip right here

i'm not really that jazzed to buy this

dip

in growth now every sector is different

and this is really important to remember

when it comes to stocks

when you see a dip it does not

necessarily mean it is a buying

opportunity now i understand i'm wearing

the rocket to the moon shirt and on the

back of this shirt it says buy the dip

but folks this is not exactly the dip

that i want to buy when we're still

above the support levels i want to be

shopping when we break below some of our

support levels especially if we could

break below a channel like we have right

here on neo

those are really good opportunities to

wait for

in my opinion now sometimes those just

never come right

and you're sitting around waiting for a

a low like maybe you've had previously

and you just never get to some of the

previous slows that you've had but

personally these dips right now i'm not

jumping up and down

about buying i'm just not super excited

about them

however i do have a strategy for this

market which we're going to talk about

and we're going to separate that again

into growth and specs and higher

valuation companies

but then also recovery stocks so let's

go look at some recovery stocks

recovery stocks stocks we've been

watching really sell off

since the beginning of may now they

didn't exactly follow the same pattern

as growth and speculative

in fact rather than crashing in march

they actually peaked in march

and that's one of the crazy reasons why

the s p 500

did so well over these periods of time

was because even though tech was

crashing the s p was still going up it's

because recovery was booming

through february and march but then

recovery

flattened at the same time as roughly

tech

tried getting out of the hole so to

speak and so you kept seeing the s p

500 go up right but we've seen this

downward trend for almost all of the

recovery stocks

since may in other words we really hit

peak pricing in may and now we're

starting to get concerned about

real growth for these companies a lot of

the recovery companies are still high in

debt

they're struggling to get enough workers

back yeah they're busy but they're busy

in part because

they don't have enough employees to

properly service everyone so you have

what are known as false weights

that is it feels like you have to wait a

long time to get a seat at a restaurant

or to get on a plane

but that's partially due to not having

enough staff not

solely because of uh having too much

demand although don't get me wrong

restaurants have been obviously way

busier than they have been in the prior

really 12 months we have had this

explosive reopening

but just know it's not all because of

more demand it's also because of a lack

of

the ability for these service companies

you know restaurants having waiters or

planes having airline staff or whatever

being able to actually service all the

customers they have this is why we're

seeing people pay with their time

instead of paying with their money

but anyway this is leading to the fear

that we're actually going to see

earnings come back or earnings draw the

valuations of these companies back to

normalcy

and this is why i'm also not buying the

dip on

the recovery stocks in fact you can see

for example on cheesecake here i drew

this line here

in in june and i'm like ah we're on a

not so good downtrend right now

now that or the rate of that growth

downwards has somewhat slowed

but it looks like we're getting ready to

meet that rate of decline again

not growth decline uh let's go ahead and

go to some of the other ones like let's

go to american airlines

and maybe we'll look at spirit but you

could see consistently

we're we're somewhere around uh the

middle of may

kind of as tech was was bottoming middle

of may to

beginning of june you're seeing a top

and it's been straight down let's go to

dal

for delta airlines same thing folks

maybe slightly different peaks

see maybe dal peaked in april but

overall the trend is very very similar

you get this high

at the middle to end of may and then a

rotation straight down from there

let's go to norwegian for example

uh norwegian cruise lines nc

nc there we go nclh okay perfect

so there you go similar pattern again

the sideways trading from march to june

and then the plummet the sell-off uh

simon property group i mean you can go

to almost all of them

simon property group didn't peak until

the first week of june though

and then let's go to macy's let's try

i'll just put in

m there we go we know the ticker's m so

may as well macy's actually out of all

of them

probably doing the best uh because we've

we've really probably peaked

i mean you could say we peaked over here

in march but sort of had the second peak

over here and

towards the end of june and only

recently been selling off but the point

is

recovery is starting to trend down and

it's because of the fear

of not only are we actually going to get

earnings

that were we've now built into these

stock valuations but it doesn't help

the fact that now you've got all this

talk about coveted 2.0 the delta variant

and concerns that oh no oh no i hope i

don't fall

because valuations are high at which

which we're not

in my opinion earnings from these

companies are not even going to help us

prop up the high valuations we already

have

for some of these recovery stocks on top

of that now you got kova 2.0

it's just a recipe for disaster for

these so why

then is the s p selling off well it's

finally selling off because you have

both

tech and higher valuation and sas

businesses selling off at the same time

as you have

some of these recovery stocks selling

off now

why would you have tech selling off at

the same time as you have recovery

selling off wouldn't it be one or the

other

not necessarily that's because we have a

lot of fear in our market right now

one of the fears is covid another fear

is

are we actually going to be able to hit

the valuations we're going to be able to

justify these valuations which

valuations are very very high

that specifically targets recoveries but

valuations are also somewhat high

over at tech then you've got to consider

this you're going to have

comps next year 2022 that are going to

look back at a very strong beginning to

2021

and the clumps just are not going to

look good you could actually see

negative growth

which you don't really want to say

deflation for but you can see negative

growth or a decline in sales

at businesses like apple or maybe

peloton or some of these other

businesses

we've already seen website traffic data

start slowing down substantially for

peloton

now peloton is moving to the upside

today partially because of a motley fool

pump

but also because well if people are

fearful potentially of covet 2.0

where do people generally put their

money wow it's no surprise etsy

wayfair upwork doordash peloton

moderna like hello it's the same thing

that happened with covet 1.0

so that's one of the reasons the green

stocks that you're seeing green

are green i mean even draftkings hey

people sports betting from home right

it makes sense personally i believe this

rotation to covet 2.0 stocks is a little

overblown i think the bigger reason why

and i want to clarify that okay because

i had to clarify that on my live stream

too

i don't mean to say that the delta

variant is overblown that's not what i'm

saying

i'm saying this rotation to oh well

let's all go run into peloton

i think that's a that's a false start i

i think it's inappropriate right now i

think we're going into a less

stimulative economy

where people are going to be more frugal

we're seeing peloton is able to

to ship these bikes much faster than

they previously have before

they're advertising how quickly they can

get these out the door

they're at under two week wait times for

bikes now

sure they acquired pre-core back in

april but i don't think they've retooled

those facilities yet

to manufacture bikes faster that would

be very very fast retooling

so there's still a lot of work to do so

personally

i think this this excitement here for

cova 2.0

uh in in some of these stay-at-home

stocks is a little premature

i think it's a sign that the market is

so uncertain it really has

no clue what it's doing and look i'm

just a dude on youtube i could literally

also have

no clue what i'm doing but i i at least

i'm going to

make and stake my flag so to speak and

make an opinion

and give you a conclusion and my

conclusion

is that the market is so fearful about

this missing earnings

uh justifying valuations the missing

comps

from for 2022 compared to 2021 right

that's

three different things right here plus

on top of that

inflation fears are we going to have

inflation are we not going to have

inflation

plus on top of that covert 2.0 so that's

literally

five pieces of bad ugly dirty uncertain

pieces of news right here

all five of those things when we look at

those five things we're like what's

gonna happen with those five things

we're like

i have no idea

right so that explains why the vix

volatility index

is through the roof today it's literally

up

30 percent and if you zoom out here on

the week chart

we have more fear more volatility right

now than we did in may

which is crazy because we had some

pretty rock bottom prices at least for

tech and growth

in may okay so you understand now

there is a lot of uncertainty i also

want to make this very very clear

that i personally just because people

are like kevin

are you changing your mind again no i

try i want to make it very very clear

i take all of the new information i try

to process it as best as i can

and then i align it with my expectations

for the market i still believe

by september october cpi data releases

so between september and november when

we get that data

we are going to see a market that has a

lot more answers to these questions

we're going to have better guidance

we're going to have better idea as to

what

website analytic data is like what is

guidance going to start looking like for

the beginning of 2022 have people really

pulled back on spending

are they still spending like crazy was

the reopening trade temporary or not

are valuations being justified or not

will there be more stimulus or not

a lot of these answers we will get

towards the september

october november period especially will

we see inflation inflect

down like we expect it to or at least

half of us expect

or are we going to see it inflect up

like the other half of us expect

so we're going to get so much more

clarity in september to november

we are going to be able to in my opinion

really enjoy

a nicer market in in september and

october now unfortunately i've been

saying september october november since

february

and it's been a crappy last five months

i totally

get it absolutely get it it sucks but

the point is

we got to make a decision and understand

what the heck is happening in the market

so how do we trade

first it's very important to know that

momentum-based

assets uh with the in my opinion with

the exception of like gme

and amc even though those are momentum

based assets they can be propped up by

hodlers a lot more because

they're sort of the og momentum plays

right but otherwise momentum place

like a new egg or a big digital or which

big digital is probably more trading off

of um bitcoin's price action here i

wouldn't necessarily call it momentum

but like uh whether it's emrin

or uh you know matt uh torchlight

whatever right some of the more recent

momentum plays

these are going to be your highest risk

plays and sure they have the potential

for big rewards but they also have the

potential for big

losses so you want to keep that in mind

in my opinion now is not the time for

mega mega risk

it's not the time for call options

unless you're doing something like a

straddle

so let me explain that so something that

i did this morning

is i actually sold a stock that was

running i sold just over 300 000

of a stock that was running i sent an

alert to everyone in my group that

here's why i'm selling it we talked

about why i'm selling it this morning in

the live stream

and when i closed that position out i

also looked for other opportunities

maybe where could i buy the dip

one of the things i did is i sold a put

a 20 23 put

on a particular stock and then i also

bought a 2023

call on the same stock so i've got a

straddle on that i'm using the credit

from my sold

put to buy myself a call so that way in

the event the darn thing runs to the

moon

at least i've got the upside with the

call but if it ends up trading sideways

i milk the credit and i've kind of

hedged that portfolio

that trade a little bit which makes me

feel a lot better since i've already got

other sold put positions on that trade

now that's a very simple quick and dirty

explanation of straddles i could do a

lot better job in a dedicated standalone

video

but i want to get some bottom lines to

you in these periods of

uncertainty i'm not looking to buy the

dip unless we get to

levels where all of a sudden i'm pretty

dang juiced up

looking at the market going oh my gosh

those are some really good prices

like docusign under 200 lemonade under

60.

end phase under 115. etsy around

150 140 apple at 115

you know amazon maybe under 3 200 again

or something of that effect or google

when are we ever gonna have a sell-off

at google again right

these are the kinds of things that i'm

looking for

and so that that is a strategy for me i

will expose myself to sold

puts on some things where i could farm

big old credits

uh and those are going to usually be

specs

is where i can get some good sold put

positions

because worst case if i have to buy them

i'm able to buy them pretty cheaply

i'm comfortable buying them at cheaper

prices best case scenario quite frankly

it just goes up a little bit i don't end

up getting assigned i keep the credit

i make money during a sideways trading

market and i'm happy either way

so uh big big big sort of ultimate

bottom line though

still saving cash as much cash as i can

the more cash i can save up the more of

an opportunity i'm going to have

to go big when we get the real dips no

margin right now

i'm actually more in cash than i've ever

been so just think some things to keep

in mind

these are my thoughts on the market if

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