NEW Shift in the Stock Market

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below hey everyone we kevin here the

market is shifting and it's taking an

unusual path

usually what we see is a transition

between a flight to safety and risk on

trading we usually see that it's kind of

like one or the other and oftentimes we

think of it as sort of this like barbell

it's like one or it's the other kind of

like at the beginning of the pandemic we

had oh it's this it's the tech stocks

it's the zoom it's to stay at home

they're all doing really well and then

on the other side you have the recovery

stocks right the delta airlines the

spirit the carnival and when these were

up these were down right that barbell

has sort of evaporated now we see some

tech up some recovery up some recovery

down some uh some some tech whatever

right we see that pretty consistently

but something else that we saw the

beginning of 2021 was this really really

big sort of risk on movement and it had

a lot to do with spac ipos or regular

ipos dpos and ultimately crypto and

pretty much anything that seemed

relatively innovative

exploded with a huge risk on trend at

the end or sort of we could even say

beginning of december through about

march and in some cases through april

i'm going to show you some examples and

then talk about what's happening

differently now so let's take a look

here palette here direct listing uh the

direct listing took place in september

the thing direct listed for like 10

bucks this thing

runs in december runs into february up

to 45 at the end of january continued

renewal run here into feb and once we

started getting that sort of market pull

back around feb 19 we started going risk

off pounds here really started falling

until just recently when we started

getting a little bit more of a risk on

movement and that recent risk on

movement is something that i really want

to talk about but what for right now we

really want to pay attention to is look

at december to about march okay let's

look at another one let's do another

let's do a spec here let's do matterport

look specifically here at the run we get

a spec on february 1st i mean this is

like the perfect time to have a spec

because you get that beautiful run up

until february 22nd this was really the

end of the risk on era because interest

rates started skyrocketing we saw a lot

of these bleed out

let's uh let's think of another spec

here and we can specifically go through

some of the specs by looking at some

things that are doing a really

particularly well today let's look at

electromechanical for example uh

electromechanica uh which uh not

necessarily a spec but also took a part

of this of this crazy sort of risk on

rally faraday futures here look at that

risk on rally from november through uh

about february middle of february there

big big old explosion here in pricing

workhorse go back to workhorse when do

you see it you see the big run from

november through february you see it

over and over and over again it really

doesn't matter what you look at if it's

a spack or it's a higher risk play like

gevo or whatever here you go december

through february this was our at-risk

moment of time which what else is

interesting what else did really well

during that time sorry those lines look

crazy let me go over to trading view

really quick because those lines are

nuts that i have on weeble sorry i

usually have weibo much more zoomed in

so the lines aren't that apparent but

anyway on the day chart look at the run

in bitcoin look at this november mold

mostly starting in december

boom explosion now this lasted a little

longer went on through about april and

may

really peaking about april 12th cpi data

release time boom an explosion a risk on

explosion and risk on explosions they

come in waves and they go on waves but

something that i think is really

interesting is that crypto seems to have

decoupled itself from when risk on

trades are done see crypto started a hit

sort of a low in the summer around july

and we had a little bit of a recovery

here in august

and now we're seeing a little bit of the

uh the the sort of spac place start

coming back fractionally right we're

finally starting to see a little bit of

a recovery here when crypto was really

starting to recover here in august we're

starting to see a bit of that recovery

now in some of the more risk-on place

things that have just literally

bled out spacks that have bled out i

mean here's excel fleet this was a stock

that at 20 i said sell it's way

overvalued it's not worth it it's at six

dollars and 84 cents right now quantum

scape another particular stock massively

down but recently seeing a little bit of

risk on movement again and people

generally see some of these particular

companies as more risky

than cryptocurrencies and this is an

interesting deviation that we're seeing

right now because look at this even plug

power is slowly trying to start trending

back even though it went from 75 to like

25 or even lower at one point another

one i made a video about in january

saying this is mega overvalued probably

going to have a quantum escape style

collapse which it did it's interesting

to note that we're starting to see some

of these stocks on the day

have very interesting runs again like

very nice runs look at look at some of

these runs here camber energy naked

brand meta material electro mechanica

gevo excel fleet workhorse big digital

assets highly on

proterra

and then some cannabis plays in here

fisker plug power

smile direct what do all of these have

in common that are between 4 and 33 up

today well all of them have something in

common

they're all much higher risk plays i

mean even in the after hours you still

got camber and naked running camber 4

naked 8

why is risk running right now and more

interestingly why is crypto not

continuing to run with a movement to

risk on place what if crypto was the

signal that hey it's time to go risk on

it's time to go risk on now people are

like okay hear you loud and clear let's

go risk on and people are taking their

money from potentially the safety place

the google the alphabets potentially

even the safety plays of of uh well

this is a big stretch to say that

bitcoin is a safety play like apple and

google okay i'm not trying to say that

i'm just saying that what if the market

is evaluating bitcoin as safer and

potentially lower gain than some of the

alternative assets like spax or even

potentially altcoins right

i mean look at this for the last few

days here and this is really a recent

phenomenon you've been seeing apple

trend down this is just recently here

apple trending down crypto trending down

that's interesting

it's almost kind of like the safer place

you're trading down whereas the spax and

the crazy ones the ones with higher

valuations don't get me wrong i'm not

trying to diss them i love me matterport

okay but look at this insane run that

matterport has had over here in the last

month it's been absolutely crazy

and you're seeing this over and over

again at some of these higher risk

higher valuation plays palantir i mean

heck even tesla has had much more of a

substantial run we just broke out above

this trend line here which is in my

opinion substantially bullish for tesla

we're getting way lower lows

i'm sorry we're getting way higher lows

and we're getting higher highs this is a

very very good trajectory for tesla i

love it

even lucid look at lucid the explosion

of risk is back

but again

the type of risk on we're going to is

not like oh i'm going to put money in

the stock market i'm going to risk my

money investing into apple or google

because even google look at google a

little drop here at the end you're

slowing despite this insanely beautiful

run slowing to dropping look at nvidia

you've got

a slowing here in the growth at the same

time you're also going to recovery risk

look at dave and busters

recent runs here look at carnival cruise

lines riskier plays especially going

into the potential coveted winter folks

we are seeing a massive massive rotation

to risk what can we do to potentially

evidence this well look at this folks

typing into google finra margin

statistics

they just came out uh and

here you go folks look at this

finra margin statistics so how much debt

we took out in august

911 billion dollars of total debt

outstanding in august i'll make that

clear not taken out in august but

outstanding in august uh this is huge

this is the biggest number we have ever

seen in finra margin debt i was really

excited when we saw this slow down here

in july where we actually had in 2021

the first inflection point to the

downside in margin debt and then all of

a sudden it ticks back

up

this is crazy

this is a big big big bump we are now

back onto that trajectory of potentially

getting up to a a level where we will be

at over a trillion dollars of margin

debt uh that's insane

uh let's see here

okay now

how do we tie this together like what

what what do we conclude from this and

how do we invest all right

so i'm going to answer that first of all

i think when we go to a risk-on style of

investing we set up the market on

shakier foundations it means that

high quality companies really really

really good quality assets potentially

start rotating down like those mega caps

the apples the google the amazon the

facebook the netflix

although i personally don't love

facebook but i'm gonna lump them in

there anyway okay we potentially see a

drawdown in those tech names at the same

time maybe we see consumer staples move

up as inflation concerns continue to

press and financials consumer staples

could be things like general mills it

could even be things like caterpillar

right uh an industrial it could be

things like that's not a consumer staple

obviously that's an industrial it could

be things like target back to consumer

staples walmart right those could do

decent uh in-person spending uh and and

maybe companies capable of raising

prices staples you tend to have more of

an opportunity to raise prices

discretionaries you tend to have a lower

opportunity to race prices those would

be things like restoration hardware uh

or even etsy.com which i love let's see

okay that's a big hole in your mind all

right so shoot myself in the foot but

i'm always gonna be honest like it is

what it is and so if we're seeing this

rotation away

from potentially i'm going to say it the

safer cryptos i'm saying that because i

i don't want to compare cryptos to apple

and google in terms of safety okay some

people might i'm not going to make that

comparison i'm just saying if we

potentially see there's a drawdown in

safer kryptos ada ethereum btc

at the same time as maybe seeing

altcoins nfts go speculative to the moon

at the same time as we see some of the

higher quality tech companies fall down

in favor of potentially some more

speculative

you know

stocks or whatever

there are two things that could happen

one we could actually end up seeing a

glorious rally

in some of these speculative stocks i

mean like insane rally in some of these

specular stocks i mean look

let me ask you okay what

what fundamentally underpinned plug

powers rally and look how long it lasted

okay january

to about february 12th so about six

weeks what underpinned a six-week rally

of plug power to

uh you know basically two and a half x

in value what underpin that

nothing but momentum hype and

potentially debt right what underpinned

quantum scape

going from uh what was it over here 26

dollars to 5xing to 132 in a matter of a

month uh maybe a little bit more than

what yeah about a month

what underpin that four week rally right

now that's something else to keep in

mind is the market we're in right now is

one such where we're not even seeing

four to six six week rallies anymore we

see these shorter term rallies like

robin hood had this maybe

week and a half rally and then started

fizzling again coming back a little bit

but you see these shorter term rallies

so is it possible that we're going to go

into this market where all of a sudden

this i really think it's a good analogy

even though it sounds a little

derogatory um imagine the sort of group

of of sheep and then you have like 10

different farms and those farms each

represent different stocks and then all

of a sudden it's all right all right

everybody today we're going to canoe

and the stock goes up right and then all

right everybody today we're going to

plug power

stock goes up and some sheep end up

staying at each of these farms so you

end up getting a slightly higher price

but the more and more the crowd kind of

runs around to all the different farms

the more and more we're actually pumping

up uh these stocks as people take on

more debt and start looking for riskier

and riskier assets

now in my opinion

trading wise and this is where the

strategy comes in my trading wise i want

to know that okay because as a trader i

want to be able to play

with the sheep

but get out early

that's the thing is i am willing to take

my attendees early take your profits

early

and move on to the next one begin and

then just sort of wait until they

finally come to you and then move on

early again right that's just my kind of

conservative nature but again my trading

portfolio is a fraction of my

fundamental portfolio generally probably

trading is going to be under certainly

under 20 percent

uh and 80 is gonna be long it's money i

kind of lock away and i park and i don't

want to pay taxes on that money

everybody should have their own ratio i

like the 80 20. now

at the same time with my long

fundamental portfolio i want to be very

careful that when i establish positions

i don't do so

on on hype periods of time so i have to

be careful like i really want to have

five hundred thousand dollars invested

in matterport i sold my matterport early

on the last big run i made a lot of

money on it i'm up uh about what let's

see double and a half so 150 percent uh

in in just the summer that's just summer

trading uh from from april to now not

the money i made before

or the money i expect to make but i'm

not going to put a 500 000 into

matterport especially because i expect

this thing to go back down to 17 now

today it's down 7 percent that's fine

like is that 20 bucks please go back

down more please get to 17 so i can

invest in more now i will uh dca in so i

might go 50 50 50 but i'm not going to

go up to 500 until i get to my target

numbers and then i'm going to go big

because i want to make sure the sheep

that are going to leave are going to

leave get them out i would make the same

argument if i wanted to establish a long

position on something like dutch bros am

i going to get in at peak euphoria at 62

of course not i expect it to be a trader

meme it did so well for so long so many

days in a row i'm not going to put money

into it it's the same thing with toast

until it gets to a reasonable number

again or at least until i feel confident

that the traders are gone look at dutch

bros it's down 10.29 today look at toast

it's had its first two to three days

really in a row here i can't even get

the uh symbol there we go t-o-s-t so if

we go to the normal candlestick here

you'll see uh well that looks a little

harsh let's go to the hour here i mean

it's true but yeah anyway you can see

toast on its ipo date ran crazy crazy to

66 i made a video about toast and i said

i think the valuation is way too high uh

and it did it did very well at the open

uh it still traded up and after hours

the next day but it's been actually

straight down since then so yeah the day

chart is actually accurate and so that's

that's where people kind of go in it's

like oh it's going to be the next dutch

bros right but remember short lived so

whether you're trader or fundamental

remember the movements are short lived

it's even for example and this is one

where i i should have recognized this

okay i will always tell you my mistakes

uh and my successes i want to give you a

balance of both

i invested in hippo

right here

it's about right here 490 480 right

around here uh something some something

around here it could have been on this

side yeah it might have been on this

side like that nine three date that's

what it was nine three uh i thought this

dip was perfect i liked it i thought we

were at the beginning of a potential

trend up here which we were but the

problem is it was a sheep example i

bought a i had a call option on it i got

out early on my call option i made over

six figures on that i did really well on

that i probably closed my call option

somewhere around 6 25 so not fully

peaked but on in terms of my shares i

held my shares as i promised i would and

unfortunately as as the sort of sheep

left that that motion left uh i'm i'm

basically at kind of where i bought it

maybe down about fifty to eighteen cents

uh a share on that not a big deal but

it's worth noting when you're a

fundamentalist

that doesn't mean you were wrong it just

means the real fundamental rally has not

actually happened yet very important to

analyze these things so things that i

think are potentially other

opportunities for your lungs though are

stay away from uh you know for for longs

don't bag hold uh momentum stocks okay

but look at something like docusign we

know docusign is not a momentum stock

it's selling off though probably as

people are taking money from this and

getting into those momentum stocks those

movement stocks

the ones that just rally like crazy and

come back down

that to me is an opportunity to build

positions in things like docusign you

want to build positions for fundamental

purposes when people are not looking

crowdstrike another one starting to

trend down there's another one uh cloud

flair cyber security forum just starting

to trend down

and this is what i like i like those

long opportunities but i want to be very

very careful that i'm not kidding myself

and establishing longs in things that

are either really frothy on valuations

because they just came out of an ipo

or their momentum stocks i time and time

again hear people say things like hey

kevin you know i bought something when

it was really risk on uh like fastly for

example

people buy something when it was really

really risk on and uh this was this we

had some crazy crazy rallies there

towards the end of 2020 there but fastly

also participated in that sort of crazy

january to february run right here uh

and and just sort of bled out since then

now

if i'm holding on to something after

massive momentum and it bleeds out and i

gotta ask myself why did i buy it if i

bought it because i thought it was going

to the moon that's not a reason to be in

a stock and it's time to get out now

personally

okay between you and i and i don't own

any yet but i'm looking at fastly as hey

can this be a turnaround fundamental

story because nobody is freaking looking

at it right now nobody gives a crap

about fastly right now it's not sexy

there's no momentum it is the dirt field

that has been stomped on and everybody

has left everybody cares about this crap

because it's green but you got to be

careful folks this this is where you can

get hurt look at that another rally over

here the sun power rally from january

again to february 19 fish we get the

signal prey on the bloomberg terminal

what happens boom

plummet uh and so now this is where it's

time to do real fundamental analysis hey

is it fundamentally worth around 23

bucks what about charge point with the

lock up expiration coming tomorrow right

but

uh again i want to be very very very

crystal clear here

this is a very unique market because

people are going risk on on risky assets

and that makes sense when you go risk on

you go risk on risk gaskets i love that

for my fundamental portfolio because

while everybody goes nuts over where all

the sheep are today i am going to be

hunting for barkins and that's what i'm

hunting for and i highly recommend that

honestly play both sides okay play both

sides

if you're going to play with with the

the crowd do that but remember that is

not your position to build fundamentals

do not call your bags on momentum plays

your fundamental investments do not kid

yourself in fact the best thing for you

to do and this is what i talk about

stocks of psychology money the best

thing for you to do is write down when

you make a trade i am buying

gevo

because it's going to the moon okay

all right then let's be clear don't bag

hold it when it's down 30 over the next

you know three weeks or whatever i am

buying docusign because it's a

fundamental play that has been

discounted uh in fact the more it keeps

falling the more i'm going to keep

buying and i would even write this down

i'd go if it drops to 190 i'm going all

in right that way when it's 190 and

you're like oh crap man i bought so much

at 250 and then it actually did go to

190 you don't sit there like a paper and

you're going i'm too nervous to buy it

you wrote it down

you knew what would happen it's kind of

like with sofi you know so far i

invested in at uh i sold puts because

the iv was insanely high i sold puts

when the stock was 17.50 but i wrote it

down i put it not only my alerts but i

also put it on my public.com profile i

put in

i believe there's a good chance this is

going to go down to 1480. it ended up

going down briefly for like a day to

1380 bounced around 1480 a while it was

a good support line nonetheless even

though we briefed it below i bought

shares saying literally on my public uh

profile uh i got them right where i want

them and the things back to 17 now

that's what i expected and my sold puts

printed attendees and i also bought

shares towards that loan why because i

wrote it down so so freaking important

and so that's why this is a very

important video on the market rotation

and i hope that you found it helpful if

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uh okay folks thank you for watching

this i hope you found it helpful goodbye

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