The Stock Market is about to FLIP.

oh man we have just hit a number that

brings us right back to the Great

Recession we have now had just as many

months of seven percent moves in the S P

500 as we last had during the bottom of

the covid market March of 2020 and the

bottom of the Great Recession in 2009

that could be a pretty good sign that

we've experienced a whole lot of pain so

far and maybe a sign that we could be

getting closer to a bottom hey everyone

meet Kevin here the stock market is

potentially about to flip again and

stock capitulation often happens right

before

elections but if it doesn't happen we've

got three major reasons in addition to

what I just showed you about these stock

moves that could sustain a very real

rally in this video we're going to talk

about those three reasons we're going to

start with a little look into

capitulation around elections that we're

going to talk about these three reasons

the stock market can actually be set for

a massive rally and then I'll show you

which sectors are overbought and

oversold so first let's go ahead and

take a look at the capitulation right

which is really uh extended selling uh

or substantially more selling than

buying especially amongst the retail

cohort right around elections if you've

been a subscriber of this channel since

the 2020s you remember Paul that sounds

terrible since 2020 I don't want to

sound that old since the 2020s oh my

gosh it's like we're in 2030. if you've

been a subscriber since 2020 you

remember I was buying the dip like crazy

right to the Moon rocket launch in March

of 2020. that was great and I never

thought we'd see that kind of pricing

again yet on some stocks we actually are

starting to see March of 2020 pricing

again just look back a couple years it's

scary but what we also saw was right

before the presidential election we saw

a lot of capitulation a lot of selling a

lot of pressure in the stock market to

sell take a look at this chart which

shows you that not only do we see that

sort of capitulation right around the

March 2020 era right here which is this

sharp light a blue line here but we also

see that right here the November 2020

elections I remember in the two weeks

right before that thinking to myself man

what is with all this selling you know

what it is it's uncertainty about the

potential for contested election now

this election midterm election we're

wondering are we going to get gridlock

are we going to get more democratic

control right now it looks like we're

going to gridlock uh and what's

fascinating is we could we still have

one day left to see some form of

capitulation moves here we did have

negative moves last week but we're not

quite in any kind of capitulation Spike

territory we're still according to Vanda

track seeing positive net buying from

retail so what three reasons do we have

in terms of why stock market performance

could actually outperform going forward

rather than continue to underperform and

bleed out the way it has been so let's

get into those three reasons reason

number one stock market performance

after the inversion of the three months

and 10-year treasury yield curve this is

free currently deemed the last shoe to

drop for the Federal Reserve that is the

last inversion that we tend to see in

the bond market is the three-month

10-year treasury yield and while we had

an inversion in the twos and tens and

some of these other things long ago the

threes and tens is the most recent and

last shoe to drop you could see that

charted right here where we actually

just went negative within the last week

we're barely positive right now but we

went negative which is great because

after the inversion of the yield curve

we tend to see some stock market

performance take a look at this chart

brought to you also by Vanda track look

at this s p performance following the

three-month 10-year inversion first 100

trading days so right here you have the

inversion point

and what you'll notice on the right is

you have returns following the inversion

in 8106 68 1900 78 73 89 and 98. you

notice the max downside that we got was

three percent and in three

out of these nine scenarios so in 33

percent of the occasions we went

negative

in 66 percent of the occasions we went

positive but look at the magnitude by

which on average we went positive one

percent two percent six percent six

percent eighteen percent twenty four

percent

so certainly if we took an average here

we'd be somewhere around an eight to ten

percent performance or if we took a

median number we'd be right around a six

percent performance expectation versus

the potential downside median of about a

three percent performance expectation so

somewhat more bullish

in the first

260 days so that's the first 100 days

after inversion in the first 260 days we

get a little bit more Divergence though

and this really leads to some some

detail that we have to dive into here

first without looking at the detail we

get four scenarios here I'm sorry

there's five scenarios that are positive

and four that are negative and you can

see that there are cases where and it's

it seems to be less likely you know more

likely seems to be going positive here

right five out of nine scenarios so more

likely to go positive but you do have a

couple scenarios that in the next nine

months after the inversion you actually

had more pain and that was in 68 right

before that great inflation period and

leaving the gold standard and in 2000

that was still where you had two years

to go in the.com bubble now a lot of

folks are making comparisons to the.com

Bubble now however one of the big

differences between now and the.com

bubble is our stock market today has

collapsed three times faster than the

stock market collapsed during the.com

bubble leading some to say that the

collapse we saw in the 2000s and how

that took three years could potentially

only take one year now well folks the

Market's been falling since the end of

last November and now we're in November

again three times faster one year

negative performance doesn't mean we

could potentially be at a bottom it's

hopeful but nothing is certain so what

is the next indicator that we have

because we don't just have one indicator

the market could be about them we have

three we're going to talk about that

right after I mentioned stream yard one

of the most reliable platforms are for

you to stream video to multi-streaming

platforms whether you want to create

content on Twitch on YouTube on Facebook

you want to stream to multiple platforms

at the same time and then get an HD

download full HD download of your

creation you want to put overlays up you

want to put comments up you want to do

all of this with stream make sure you go

to metcaven.com stream yard it is what I

rely on ever every single time I go live

I rely on it so heavily that I will put

my Federal Reserve days on stream yard

and when I'm traveling mobile the

ability to share video and audio with

different streaming tabs is so critical

when I don't have my stream switcher the

browser features of stream yard

basically replace thousands of dollars

of equipment for you that I have in the

studio go check out streamer go to

metcavin.com stream yard any kind of

video creation work where you want to go

check them out metcaven.com streamyard

so reason number two potential Peak fed

funds rate actually being higher than

where we think it really will go now

this is an interesting argument because

if you look at the current fed curve

markets seem to believe that the FED is

going to hike all the way to about

5.25 percent and a lot of this comes

because of the Wall Street Journal and

good old Nikki leaks talking about how

we're going to probably see or we could

see right they like to use words like

May or could we could see

5.25 or 5.5 as a terminal fed funds rate

and this has led markets pretty red last

week because you know we had also pretty

hawkish Powell mostly after somebody

suggested that stocks were going up and

markets were responding positively even

though they weren't the most stupid

suggestion a reporter could have ever

made during a Federal Reserve press

conference but anyway

5.25 is what the market is currently

pricing in as sort of a peak fed funds

rate and this could also end up being

flatter which would be a problem because

this here would signal more pain for

stocks and if we get a little bit of a

steeper sort of return we'd have some

gains over here for stocks now 5.25 is

currently the estimated Peak but that's

not actually what Vanda track is

reporting as their potential Peak they

actually assess that the peak fed funds

rate could be 4.76 percent that's almost

a half percent lower than the current

Peak the market is pricing in and if the

market is pricing in higher than reality

then the Market's going to have to

adjust to a lower rate what does that

mean stock market going up why could

that potentially happen well two

potential reasons number one is the fact

that we're seeing actual observed rents

declined significantly faster than what

the Bureau of Labor Statistics is

showing in their CPI report remember we

get a CPI report this week we get that

on Thursday at 5 30 a.m I'll be

streaming it live and while we don't yet

expect the BLS to show any kind of peak

and shelter inflation we know it's

coming which is optimistic and even the

FED knows it's coming they're just

waiting for this inflection to happen

for the CPI this week I I'm actually

relatively optimistic we're expecting

0.6

0.6 on the month over month which

actually in my opinion is great because

it's relatively High last month we had a

0.4 and anytime we get a high estimate

it's really easy to come in under it

what's bad is when we have estimates

like oh it's going to be zero and then

it comes in at like point one on the

month over month right that's bad but

anyway let's see what happens with CPI

but this is one of the reasons they give

is the inflection point of rents but the

second reason that we should think about

I've gathered this from other sources uh

but it's also I think very valid is that

payroll growth is set to be at zero

percent by the second quarter of 2023.

that's really going to help Drive

pressure down on the FED to keep hiking

so maybe Vander track will be correct on

this but we also have a third potential

reason to be happy folks and then we're

going to talk about the oversold and

over uh bot uh sectors and folks it is

the potential for a Rally post election

remember this red here is post-election

and usually in the about 50 days that

are left in the year after an election

about 52 days after the election

we tend to actually see

kind of nominal slightly positive

performance but it's in that next

calendar year starting in January that

we really get some beautiful average

long-term returns take a look at the

chart here if we get a split House and

Senate or any form of gridlock we're

expecting between 1.4 and 2.9 percent

Returns on average by the end of the

year and if we look at next year we're

looking at potentially as much as 18.7

to 19 rally mode baby so very very

bullish signs here where the overbought

and oversold here you go folks if we

compare sectors to the two-year real

rates to screen out what is out of sync

with the federal reserve's hiking hiking

cycle what do we see we see sell signals

at

energy nickel the dollar

uh Italian and Brazilian equities and

silver here you go Divergence of uh

anywhere between here seven to fifteen

percent

and where do we see buys well

potentially Taiwanese Equity cotton

technology stocks discretionary U.S

consumer yeah consumer services and

coffee baby buy signals across the board

here also anywhere between five six to

17 percent

so if you want to get some of the best

data every single day what do you do you

hit that subscribe button and come back

to this channel uh multiple times a day

as I try to post as much as possible

remember we're also now hiring paid

interns go learn more by going to

metcaven.com

jobs2023 is going to be a phenomenal

year and our rocket ship is get some

room on it has got some room on it and

we'd love to have you aboard thanks so

much and we'll see you in the next one

that's metcaven.com jobs and check out

our sponsor metcaven.com streamyard