Stock Market Anihilation | How Much More Stocks will Fall.

hey quick reminder I'm going to be

streaming the Federal Reserve meeting on

the meet Kevin live Channel link down

below let's get into the hey everyone me

Kevin here okay obviously look this

sucks the market is not doing what we

saw in March where the market started

rallying before the FED meeting and then

rallied for two weeks thereafter so far

we're kind of getting a sell-off into

the day with the NASDAQ down almost one

and a half percent at the time of this

recording it's about four dollars under

that zero percent FIB line which means

we're breaking pretty critical levels

that we had around the start of war on

February 24th uh March 8th March 14th

right before the FED meeting it's crazy

and every bit of financial information

that we're getting is just pure

bearishness let me give you just a

little bit of a summary of some of the

madness going on first of all we've got

lower retail flows than usual 73 billion

dollars over a three-month period

compared to 77 billion dollars which we

usually had so we're kind of seeing a

little bit of this decline some some

folks are saying that money is now being

taken from the stock market and just

parked into like money market funds

because people are just tired of losing

money in the stock market because like

it's fine to buy the dip for a bit you

know like that should be the same buy

the dip for a bit

and then it's like at some point it's

just like wait a minute we've we've been

playing this game since December it's

been December January February March

April it's been five months of crap

we've had like two weeks of positive and

it's been five months of crap and we're

on number six right now we're literally

on the sixth month of crap in the stock

market so the average retail portfolio

right now is down 23 that is not like

down 23 from the peak no no like

negative 23 that's the average retail

portfolio and I know some people are

like oh I'm all in communities I'm fine

great congratulations cool yeah there

are going to be some people that made

money but the vast majority of people

are having a rough time and it's kind of

becoming one of those things where like

how could you lose less right you've

also got wealthier and older Generations

that are like uh I have to go back to

work if we keep losing my wealth so I'm

gonna sell and just like sit on the

sidelines and you know these are the

times where it's like wait a minute

maybe maybe because the macro

environment is just so freaky right now

and everybody's so worried about the

Federal Reserve maybe we're actually

potentially approaching a bottom because

everybody's expecting dronepal to be a

hawk today in fact even me like I made a

video watched this before the FED

meeting and I talked about all the

reasons why I think drum pile is likely

going to be hawkish today but by being

hawkish he's actually already

pre-pricing in so much fear into the

markets I mean we've got our three

percent treasury it's starting to

finally turn the real estate market

we're not sure if we're going to see a

flood of sellers or not uh we're we're

seeing consumers still spend and travel

like crazy which is great but I mean

let's look at some some of the

information we got about the market

Bloomberg is telling us that maybe maybe

there was a chance that we'll get a

tactical bounce in Tech Healthcare home

builders and Emerging Markets why

because right now we are pricing in the

potential worst case scenario for the

Federal Reserve they're suggesting that

markets are pricing on a 50 basis point

hike in May again in June and again in

July like just three method meetings of

50 BPS in a row and that might actually

set us up for a reversal if we end up

getting a little bit more of a dovish

fet if it's like okay we're starting to

see some of the overheating going away

okay we're starting to see inflation cap

out used vehicle index still coming down

Commodities slowly tricking down

trickling down look at lumber prices

they're well off their Peak I mean in

fact let's just do it together really

quick if we just type into Google uh lbs

price uh lumber from the NASDAQ we'll

get a little quote here here you go look

at the one year on Lumber let's get

Kevin back here there we go so you've

you've come off these crazy insane highs

that we had last year we're not as low

as where we were right before the you

know whole Delta disaster and certainly

right before the war disaster uh but

we're we're uh well yeah I mean those

levels we were at lbs somewhere around

five to six hundred dollars which if we

look at the grand scheme of things like

Lumber's still expensive right but we've

also come off some of these highs this

is actually very similar to what

inflation expectations look like we've

brought those inflation expectations

down very very exciting so uh I mean

hopefully hopefully but that's all we

have right now is hope that we peaked

with inflation in March but that's the

only hope we have for a potential

bailout and maybe we get some dovishness

that Jay pal says something the effect

of hey like it actually looks like

inflation did peak in in March maybe

that would give us some hope and

optimism today but here's another thing

that we've got we've got bearish

sentiment right now and buying of

downside protection at the highest level

since March of 2020 this means even

retail investors are hedging with puts

more than they have ever before since

March of 2020. in other words people are

like okay yeah no we have to like

continue to hedge here while at the same

time smart money is actually taking an

increased data in this market which

means they're going long

and they're taking more risk see if you

have a beta of one and the S P moves a

hundred dollars you're expected to see

your portfolio move a hundred dollars

right if uh if you have a beta of two

then for every 100 move in the S P 500

you would expect a 200 move in your S P

500 uh or your your beta weight of two

portfolio relative to the S P 500 so

twice the return right if you had a

return of say 300 well that would mean

you had an alpha of 100 you were at a

beta risk of two which was twice the S P

500 but you got to return three uh 300

which means you had a hundred dollars of

alpha in there this is why we call you

know there's the website called Seeking

Alpha right like people want Alpha which

is returns above your risk weighted uh

portfolio so what what we're learning

right now is that smart money is

actually going long and they're going

with higher beta which means if they

thought the downside was more they're

going to be losing more money going

towards the downside fast if you're

increasing your beta because like if the

S P moves down 100 you'll lose 200 with

a beta weight of two right if uh however

if they're going long and they're

increasing the beta that's a sign that

smart money is like um

technically this could be a sign that we

are uh actually uh in the direction of

at the bottom now it's so hard to call

the bottom because it's been such a

frustrating market right it's been so

difficult we just keep we run off of

these lows and we return right to them

and now we've broken through some of

them but look at some of these others I

mean we touched on these briefly the

other day but look at this net number of

stocks declining not yet at extreme

levels but I mean I have to say I mean

it looks pretty extreme to me I mean

that I'd disregard the title here for a

moment let me just hide myself for a

moment look at this folks right here see

like these little green dots right here

this means the number of stocks

declining uh versus like what the S P

500 is doing right you could see like

all of these super lows right here

really corresponded to lows in the stock

market uh and so look at this we're

getting this sell-off here and uh and

we're pretty dang low in terms of these

sell-off figures here right and so a lot

of folks are looking at this suggesting

hey like

well the things are lining up to say

that we're pretty dang near a potential

bottom uh anytime the stock market goes

down we also see excess liquidity uh at

lows which kind of makes sense and so

we're getting a little bit of that

lining up though not so perfect same

thing here long versus short volatility

even though the title says does not show

uh complacency uh I think it's an easier

way to say here that markets are really

showing that every time you get indices

going down right these Downs right here

that are in red you end up getting the

Blue Line your volatility ratio at these

pretty dang low levels and so that's

what we're seeing right here uh the same

thing with sentiment very much near

bottom right now the same thing with uh

net number of stocks making new lows

52-week lows this one we haven't seen

that kind of like extreme decline yet

though which potentially is a signal

like oh is there more pain to come uh

yeah I mean it's possible nobody wants

to to hear that it's absolutely possible

and we know 2022 is going to suck but

I'll tell you everything we're reading

right now is talking about how consumer

demand is outpacing concerns about

inflation that small businesses are

actually getting squeezed out of their

ability to to hire folks we saw that in

the ADP report this morning the ADP

report this morning was a disaster for

small business I mean if you look at it

right here on screen now you see that

like in the service providing sector

it's the very small businesses that are

losing most of the jobs because they

can't compete anymore uh with with the

large uh with the large companies who

are able to offer more benefits more

attractive wages uh so so we'll see

we'll see and then obviously we had a

Miss on on ISM this morning which uh is

is you know we disappointed on

expectations here which is not good

because uh this is a potential you know

evidence of a Slowdown in economic

activity and Jerome Powell is going to

get asked about that today it's like

look you know there are signs that you

have tightened enough there are signs

that the economy is somewhat starting to

slow even though the consumer's still

spending like crazy we just had a

negative GDP print and yeah some of that

had to do with inventory restocking in

the trade def uh but like we we can't

expect all levels of the economy to keep

booming while at the same time you guys

are going crazy with your your rate

hikes uh which they should have done

earlier but the level of hawkishness

we're getting right now might actually

if they stay hawkish lead to a policy

mistake and so I actually think the

market right now isn't pricing in the

fear of uh of of the FED raising 50

basis points it's the fear that's being

priced in right now that drone pile is

gonna come out as hawkish and they're

gonna make a mistake they're gonna go

we're gonna keep hiking we're gonna be

data dependent but we're gonna hike hike

hike you know he has that attitude today

the Market's gonna say that's it like

we're we're destined for a recession I

mean Jamie Diamond over at JP Morgan has

now increased their odds of a recession

from 20 to like 35 so uh they do expect

that if we have a recession it'll be

mild but still uh you are seeing the

market right now not pricing in right

hikes returning to normal we should have

done that already okay we're seeing now

fear that the FED is going to make a

mistake and what we're seeing Market

wide is that

sentiment pretty dang bearish she could

end up being a buying opportunity and I

know it hurts in the short term zip

sucks to buy when everything's red and

keeps going red

but that's how things feel right now and

the charts and what we're seeing in

terms of the data reiterating that

fingers crossed let's see what happens

fed meeting coming up soon remember I

will be streaming that fed meeting on

the meet Kevin live channel so make sure

to check out that channel link down