my real concerns for this market

hey everyone kevin here so this is going

to replace the market closing video for

today and

this is my thought on sort of what's

going on in the market right now because

we have this continued uncertainty in

the market so much uncertainty about

this market

and i don't blame it because this

morning when we did a five-hour

market open live stream in front of the

sacramento capital building so the state

of california capital

building uh in this live stream we

pulled up this really interesting chart

which shows that

consumer spending spikes one month

after every time we have done a stimulus

check to

1200 stimulus check the 600 stimulus

check

and the 14 hundred dollar stimulus check

literally one month after every one of

those april last year january of this

year

and march of this year we saw a big

spike

uh in in consumer purchases it's really

interesting because it makes me wonder

if this is a k-shaped recovery where

basically the rich just got a bunch

richer

then is it not possible that the rich

aren't really spending that much money

other than maybe on things like real

estate and stocks

and the only thing really propping up

the fundamentals

for the companies wealthier people are

buying are actually

inflated and temporary consumer

purchasing numbers

so basically the rich people get more

money they overpay for assets like real

estate

and stocks because they're getting

richer in stocks over paying

for stocks because these retail numbers

are coming in so great

and the reality is the retail numbers

are only coming in so i'm great because

of the stimulus money and all the money

printing that's going on

well what happens when that wealth when

that well dries up

and that that makes me very curious

about where we're going for 2022 because

here's the thing

remember this right now we have the 250

and 300

uh per month child tax credit that

started on july 15th

that only lasts six weeks six months and

then you get the rest

on your tax return next year so okay so

people get a little boost

again unemployment runs off and runs out

in september

by somewhere around march or april of

2022

we're not going to have any more of this

funny money we're probably going to have

tapered

we're not going to have the unemployment

boost we're not going to have

uh stimulus money anymore we're not

seeing stimulus checks there's no talk

of new stimulus checks

sure there's talk about maybe extending

the child tax credit

but with this congress good luck i don't

see it happening

so in other words what are we up against

i think we're potentially up against

a lot of this funny money that's been

helping prop up the market

uh disappeared by the beginning of 2022

and the market likes to be

forward-looking and so i've been trying

to put together

why is it that right now we have all

this inflation

there's literally a lot of inflation

happening right now why is there so much

inflation right now

but bond yields are going down the

dollar is going up oil is going down

some commodities are going down

basically everything that says the

market is expecting lower inflation

to come is happening and at the same

time

the fed's talking about tapering

which which again

let me put it this way when the fed

talks about tapering

okay it puts less buying pressure

on bonds when there's buying pressure on

bonds

prices go up and yields go down if the

market is expecting

the fed to stop buying bonds then prices

should fall because when the fed stops

buying then there's less buying

pressure prices fall and less people

would want to buy now

if prices are going to fall because they

could buy later for less

but that's not what's happening right

now bond prices are going up

when we're expecting a lot of the buying

pressure to go down soon

which let me put this a little bit

differently because i understand bonds

are so complicated

it's complicated for me too i'm not a

bond expert

let's say you were buying a house in a

neighborhood

and uh you're like oh my gosh this

this there there are five houses on the

market right now all of them have

multiple offers

uh uh each house has two offers on it so

there are 10 offers on the market

everything's going for 20 grand over the

asking price do i want to buy

now or do i want to buy in december if i

know there are going to be

three offers instead of 10

on all those different houses so instead

of 10 offers total there are only three

way less buyers it's kind of like the

fed exiting right well then i kind of

like well i'll

kind of imply that prices should go down

in the future in which case why don't i

just wait to buy them

but the market's not doing that the

market's like no no no we'll just buy

right now anyway with bonds

and it's weird because that's what's

actually driving bond yields down even

more

people are rushing into bonds so it's

like wait

why why would you rush into bonds

you have to basically expect there to be

deflation coming or potentially even

some form of a market pullback maybe a

year from now

uh which potentially makes sense the

summer of 2020

because guess what all the funny money's

gone now all of a sudden

all the money that was propping up

retail stocks

and and apple and and whatever other

other stocks because people got all this

extra

stimulus money and all this extra

discretionary income all of a sudden

that's all gone

people are getting this renewed check

from the government now there's less

spending now you're comparing 2022 costs

which we've talked about before

about a month ago on this channel the

the comp comparison's gonna be disaster

you're gonna compare 2022

sales and companies to 2021 when

everybody had all their funny money

to spend that's not good

so you're now combining less money for

people

disposable income for people in 2022

with

all of a sudden uh evaluations having to

compare

to a strong 2021 potentially setting up

for deflation

so now we have to fight deflation with

wait a minute

if we fight deflation maybe we don't

have to raise

interest rates and the fed stays

strong with keeping interest rates at

zero but wait a minute

people aren't getting money and so all

of a sudden the retail numbers are all

too high we still see

evaluation reset of some sort i'm trying

to sort this all out myself

because it's very complicated

i think the bottom line for me is look

i want to be in this market but i'm also

not jumping up and down

you know people are asking me regularly

oh kevin we got another dip you know

look charge point's getting close to

that

that uh may that may those may lows

where it was like 19

now it's 23 or whatever it's falling

we we could just literally be in a

bleed-out

year over the next year

if the market is indeed propped up by

all the retail data that we got because

people had all this extra discretionary

income

disposable income which they no longer

will starting next year

which sets up for batteries next year

now everybody's talking about

oh q2 earnings q2 earnings

honestly i don't think no anybody's

gonna care i don't think q2 earnings

matter

what matters in my opinion is the

market's perception of what's going to

happen next year

and this is why i say it over and over

again this sort of just sort of

practical

bottom lines here get out get out of

call options

no call options owning call options now

that doesn't mean you can't sell call

options sure

yield farm sell call options sell put

options fine

but this like this belief here

reiterates to me that wait a minute

less money less propped up earnings

valuations could potentially bleed out

it's kind of like uh

think about oh my gosh like think about

this you know how with momentum stocks

we always we see them go cool straight

up

and then they kind of bleed out right

it's usually not always straight back

down it's like a slow bleed out

what if in macro a lot of the companies

that we like investigate

are just bleeding out like like look at

tesla for example uh apple totally

traded sideways over the last year

sure they're doing better now they're

finally breaking out but it makes you

wonder is that a sign of a flight to

safety

more than it's a sign the market's not

slowly kind of bleeding

we're going to bleed what if the s p 500

starts bleeding down

uh you know we'll see obviously i think

earnings uh in this next section here

could

could give us a little bit of guidance

because what's going to happen is what's

more important than q2 guy uh two

q2 numbers there's actually going to be

guidance what are companies saying

hey we're starting to see things slow

down you know if

all companies are like oh crap things

are slowing down well it makes sense why

people are fleeing over to bonds it's

like crap

things are nobody nobody at stocks wants

to hear slow down you get less

derivative trading you get less volume

less people interested throwing money in

the market more people interested in

holding cash

same kind of bleed out that's happening

crypto less money

bleed out begins is crypto the the sort

of the beginning of this

and so where does it end because look

i'm not a doomsday right at least i

don't think i am

i try to be very realistic but um

you know maybe maybe 2020 was just the

year of big fat

massive gains and uh the time between

20 uh you know right now february 2021

and now

summer of 2021 to the end of 2022 is

just going to be sideways trading i

don't know

these are just some thoughts that i have

right now and some concerns so i want to

hear from you

what do you think these are just some

things on my head or on my mind

uh hey let me know thanks for watching

all right bye folks