Stock Market Crash Not Over Yet? False Rally? September Stock Selloff | 2020 Double Recession

The market is looking pretty bad once again on friday we were all thinking okay the buyers came in and brought this red candle up a bit which was a bullish sign but now we saw another gap

Lower in the markets today bearish sign so let's do our standard market review today and go over whether the market will continue to fall and whether this is the end of the major bull market we've just been seeing

First a quote though from my favorite market wizard ed sakota and he's my favorite just because he's super weird he said the elements of good trading are number one cutting losses two cutting losses and three cutting

Losses if you can follow these three rules you may have a chance and you guys know i absolutely agree that is the most important part of investing and that's why i rant about risk control in every video and why i'm

About to do it again because i told you guys with a market like this the way it's been going up no one cares about risk control no one cares about anything because everyone just seems like a genius

I put my money in and it goes up which is great i mean for everyone i'm happy for everybody but the downside like i talked about before is that people forget that the market could turn around like it did

Right here even though we just had that huge huge crash right here we got short-term memories so if you get used to this beautiful up day every single day thanks to master

Powell well then you might forget about risk control which is really what's going to give you that success over the long term so i'm looking at the nasdaq right now right and it has dropped

Almost 10 more if you counted to the lows so yeah this might be one of those buy the dip scenarios where the market turns around right away but it may also not be one of those scenarios and we may see a sustained

Move lower the thing is nobody knows and what you need to guard against is that sustained move lower if this thing doesn't turn around and when you do it properly you could get something like this and i've showed you

Guys this chart before but this was back in march during that huge crash the ccpv crash this is my equity curve right here in the green of my personal portfolio and this is the nasdaq you see how mine went

Flat when the nasdaq went down well that's important because when the stocks turned around i was already up here i never went below zero so when i was making gains again it was on top of the gains that i had already

Kept during that crash and that's the importance of risk control that's how you really build your wealth year after year because you protect it while everyone else is losing because the market is dropping but of course if this

Thing does rebound then you feel like an idiot because you're like oh why did i even sell i should have held on and i would have had more money but again that's not the way to think of things because

You don't know an example i was talking about in the last video was docusign our system got into docusign on the first and you can see it rocketed up that day and by the way the system that i'm

Talking about that i use and most of our fallable members use as well we go over it in this free training if you haven't taken it already there's a link in this video and down below in the description

And comments teaches you the exact strategy we use so you can use it yourself definitely worth your time taking it especially if you agree with me on this risk control bit that i'm talking about

Because that's what this strategy really really focuses on and this docusign is an example of what we just went through with that system so again we got it on the first and the thing rocketed higher so on the second we

Already hit our first target and at our first target which is 20 above where we entered we sell 25 of our position which is another risk management technique to take

Profits off the table and when we do that when we hit our first target we also pull our stop up to break even so the model got in right here at 241 shot up we took profits around here 287 or something and

Then what happened the next day the stock collapsed went back to our entry point but because we pulled our stops up we got out of it so we had a small profit and cut off our loss

That's all risk control and i was saying at the time i mean we didn't know exactly whether docusign was going to continue falling or if it was just going to rebound and make us look stupid but my point was that it didn't matter

Because we're following the risk control and sure enough docusign has continued to fall will it rebound on its 50-day moving average right here maybe maybe not either way we could say that we were successful

Because we protected our downside and we followed the system my bet if the market keeps going lower like this no docusign is not gonna bounce but anyway you can learn more about everything we're doing in this training check it

Out moving on you can see that we are in some really crazy markets right now like euphoric markets so this is citibank's proprietary positioning and sentiment model

And it shows the market is giving us its best effort to imitate 19.99 here's 99 right here peak euphoria especially in these tech stocks and here we are approaching those same highs and we all

Know what happened right after that pq for you we crashed hard lots of people lost almost all their money it was sad should i say risk control one more time yeah i'll say it

Risk control and hopefully you guys don't get too annoyed but i do see comments sometimes saying oh thank you ak for reminding me and i'm cool with that i could be a broken record no problem

I am a broken record most of the time anyway this chart from bca research shows how crazy this run in big tech stocks has been at this point it's reaching those 2 000 nasdaq 100 peak insanity levels so this

Graphs a bunch of trends over the years disney gold japanese banks nasdaq in 2000 tech stocks iron ore and now we got our fang plus microsoft stocks index which is

Once again hitting those highs now when you see things like this this doesn't mean that the market is going to crash tomorrow like this could just be a minor correction which we'll talk about in a

Second but when you see this data you also know that hey we are extended we are a bit euphoric here now it's funny that i say euphoric and it's actually might be a little

Improper because you got guys like bank of america publishing reports outlining how pessimistic we all are there's systemic pessimism that's pervading nearly all aspects of our society so it's weird because the price action in

The market looks euphoric but people are still all around bearish so this chart is the last 200 years of banking crises and this is around the world so you can see in the last 40 years or so there has

Been a huge spike and why is this spike so much bigger than the time period before well that's because of leverage it's the long-term dalio debt cycles that we're talking about here the

More leverage that you have in the system the more frail everything is and the more crises you're gonna get this is what happens with all the financial engineering and

Innovation but as you can see here the great depression had the biggest spike during this time period and after that there were relatively few for a number of years well what happened was the big reset which is part of the

Long-term debt cycle as well so if we look what might happen now we might have to go through that great reset and then we'll have a quiet period once again and speaking of pessimism these two graphs right here

Are charting the tone of news this one is the new york times over here and then the world news over here and basically what it's saying is that the tone of news is getting more and more bearish

It's more bearish now than it was in the depth of world war ii so the question is is that news really feeding this pessimism or is the news catering to what people want to hear we're near all time lows with the

Portion of population satisfied with the us so how many citizens are happy with our country so is the news just catering to that or is the news causing that because all we see is terrible stuff all day now my theory

Of this pessimism and you don't need this chart to tell you that people just love crapping all over the us right now especially our own citizens my theory though is that part of that comes from how fragmented we've become

And i'm talking about things like the internet everyone can find their own tiny little group to sit in nowadays which is good thing because everyone's interests are met but it also means that there's a lot

Of tiny little groups that i don't think we had before so there's not much unity and without that unity yeah one of the more popular things that might happen is a person talking down on

Their own country saying it's horrible when in fact all these people don't know how good they have it compared to some other countries and i get this the most when i start talking about china and the ccp

Because the first reaction from so many people is like hey aka what about the us it sucks here and i'm thinking okay yeah the u.s government is not perfect our system capitalism everything nowhere near

Perfect but i'm confident in saying that it's better than what's going on in china with the ccp it's like yeah we have systemic racism that we need to fix here but it's better than being over there where you'll be put into a camp

And have your organs harvested depending on you know what religion you are if you think they treat people of color better in china the answer is no and even without comparing the two

Directly or us with any other country you gotta remember that there's a reason why u.s culture is everywhere is because there's some fundamental belief here in freedom and capitalism and working

Hard and getting what you deserve from working hard might not always work out like that but the ideology that we have here is really important and that's something that you do want to preserve even as you

Try to fix problems in your country identify them and fix them but you don't have to be super pessimistic thinking the grass is greener somewhere else and that's my patriotic speech for you today here's

Another interesting stat the percentage of americans who own equities has fallen from 63 to 55 since 2004. and according to bank of america this is once again pessimistic behavior not

Risk seeking now there is a demographic component to this because there's a bunch of baby boomers who are retiring and because of that they're going to switch over to bonds instead of stocks that's what you do

So you have less risk so you can preserve your capital but with negative real yields those preferences are probably going to shift back into stocks again so it'll be interesting to see how this changes

Another crazy stat is that central banks have bought 1.4 billion dollars worth of financial assets every hour and the market cap of the nasdaq 100 has gone up 1.6 billion dollars every hour how interesting i wonder where all this

Money is flowing the s p was also very close to having the greatest rally of all time it just needs to cross that 3630 level to do it now i'm not entirely sure what would kill that record but i think it's

Probably a bear market or the technical definition of a bear market which is what 10 so it might still be in the running we're technically only down six percent in the s

P but then we have that question again is this a short-term correction or something more long-term well if you switch to the monthly chart of the s p you could see the last candle that we had which is the august candle

You can see it closed really strong big solid green candle and this puts the odds in favor of us closing higher into the end of the year and the reason we look at these monthly candles is because they have the least

Amount of noise where the market closes at the end of each month is kind of important and it's easier to see the trend this way too now if you look at the big picture of the s p you could see it's in this really

Large holding pattern and right now we're brushing up against the top which is a resistance but if we're getting these strong monthly closes then the likelihood of breaking above this holding pattern becomes

Much higher so if we're looking at things long term the bull market is still intact and it looks okay but over the short term things are a little different if we look at sentiment and positioning the narrative that the fed

Is going to keep printing money and never let the market fall is now consensus everybody thinks that all the surveys the bull bear surveys are a multi-year highs everyone's super bullish

And speculative call buying is at record highs so sentiment and positioning have become major headwinds and a source of trend fragility and remember sentiment and positioning they're like contra indicators so if people are super

Bullish and euphoric that's a bad sign for the market you want people more pessimistic and bearish same thing with positioning for everybody's position long then where's the only way the money is going to flow

It's got to flow out of the market so if you have bullishness and strong positioning that's not good at least in the short term now if we look at the breadth of the market which is how many stocks are

Going up versus down that's weakening as well and it's setting up for a near term top and a 10 to 20 percent retrace in the coming weeks macro conditions are rebounding and

Liquidity is flush but yields are starting to rise too and credit spreads are diverging from stocks normally those two go together so this divergence again will likely lead to a near-term top in the coming weeks

So looking at the markets even though the overall bull market should be intact it's not out of the question that we get a 10 to 20 retrace here which especially wouldn't be surprising given how crazy this

Market has been it's just gone straight up so something's got to give right but once again you don't know for sure when something's gonna be a dip or is it gonna be a serious crash you gotta play it as it's happening and

That's once again exactly where risk control comes in you need your stops in place you need your targets in place and then you need to execute on those things and the executing is a whole other story because

You need to get your psychology in place so again we talk about all of that in this free training and how to put it all together and how to trade it and how to protect yourself especially in this volatility if you want to check that out

There's a link in this video and down below in the description and comments definitely do that now don't wait get your protection in place if you like this video make sure you subscribe because we'll keep updating

You on what's going on with the market do that and we'll see you in the next video stay followed out there bye you