Has The Stock Market Bottomed? My $351,667 Trade...

What's going on, everyone? So there's a big question floating around and that big question is, has the stock market bottomed out? Will we see a reshape recovery or will the market make a new low? Is this the best time for me to invest or should I wait? So in this video we're going to break that down and I'm going to break down my thought process on what I think will happen in the next upcoming months and, and my position on all of this that's going on. All right, so before I start, just to kind of give my opinion some weight because I see a lot of people on YouTube giving their opinions, but they don't really have a position on the overall market, right? So I have an opinion on the market and beyond that opinion, I'm backing it up with positions. So I have about a $350,000 position built in showcasing or representing that I think the market will go down. Right. So basically on this account, you guys can see I have about 147 grand in puts, right, you guys can see SPY puts. And I have one Tesla put on this. And then I have 200 grand split on a few other accounts where I'm also playing the downside. And I'm probably going to build that position, hedge some other other positions and take the trade from there. Now my whole idea is once again, I think the market is going to see a new low. And if the market sees a new low, that's when I will basically make money. And once again, I have about a 350,000 position built up to that. And I'll make a video breaking all that down too. But now why do I think the market has room to go down? Why don't I think the market's recovering? Let's jump into that. Now we're going to break down Spy. Spy is an ETF of the S&P 500, which basically represents the overall stock market. Now looking at spy, let's look at it from a bigger perspective. So right here I have a three year, one day chart open on spy. Now you guys can see just before I start, this is basically a V shaped recovery. For anyone that doesn't know, you can see market dumped in December of 2018. V shaped recovery. This is what a lot of people right now think is going to happen. They think we're going to see a straightforward V shaped recovery. Now why do I think we won't see that and why do I think we may possibly go down further? Now the reason for that is obviously, let's Jump into what has happened. Now, obviously right now we want you to understand that the market has been going down because of this virus. This virus has basically stopped our economy and the world's economy. Now, obviously, that is impacting the market in a very, very negative way. Our economic system, me personally, I think, wasn't strong to begin with, right? So I think this virus just kind of adds onto that and creates a bigger, bigger mess that a lot of people didn't anticipate. I don't think anyone really anticipated that. Right now, looking at this, we saw a high of 339 back in February of 2020, right? During that time period, in about five weeks, we saw a low of 218 on spy. So basically we went into bear market territory. So bear market territory basically means that whenever, whenever it goes from a high point and drops 20% or more, that basically puts us into bear market territory. So obviously we dropped way more than 20%, we dropped over 30%, and that put us into bear market territory. Now, obviously, looking at this, I want you guys to understand a few things before we move on. Number one, you're not ever going to see the market just continuously fall down. It'll fall, pick back up, fall, pick back up, fall, pick back up. The same goes when it's going on. The upside, it'll go up, it'll have a pullback. It'll go up, it'll have a pullback. That's just understanding basic price action. But now, in this situation, when the market goes down like it did in this situation, right, you have to understand the Feds will step in because they can't have the market fall this much. The President will step in, which he has, right? So if you look at all these events where the market popped up, you're going to see either Trump stepped in and he tried to downplay everything, showcasing that, oh, it's not a big deal, we'll have it under control, kind of instilling confidence within the market. Or the Feds came out and they said, hey, we're going to do an emergency rate cut or, or, hey, we're going to print $6 trillion more and we're going to put it into the market to kind of help this bad economy that we're going to face. Now, obviously news like that is going to benefit the market in the short term, which it has basically done. So looking at this, you guys can see, once again, we dumped, pullback, dumped, held and then dumped to a low of 218. And once again, that's where they came out. And they said, hey, we're going to pump in $6 trillion into the market. We're going to have the stimulus plan, right? Going to talk about the stimulus plan in another video. What it covers, what it doesn't, take it from there. Now obviously, once all of this came out, that is creating short term bullish news. Now, once that short term bullish news was created, we basically saw a 20% rally from the lows. Now seeing that 20% rally from the lows is showcasing a lot of people like, oh man, we bottomed. Oh man, the market's going to go back up. So during this area, what's happening is people are a, some people are stepping in and buying. They're saying, okay, the market's bottomed in. I need to buy, I need to buy, I need to get in. I don't want to miss this, miss these cheap prices. So that's one thing that's happening. You know, this FOMO going on, fear of missing out, people are chasing, people are getting into the market. Now beyond that, there's a few interesting things that happened right last week that I think a lot of people are overlooking. Now. Those few things that happened go down to this right here. So the first thing is there's something called pensions before window dressing. Before I get to window dressing, this, pension funds are basically rebalancing their portfolio at the end of quarter one. So quarter one ended on March 31st. Up until then, the there's a lot of pension funds that are moving money from bonds to basically the stock market. Why there was a huge dump. So they're readjusting their portfolio. So, A, I think that somewhat created a little bit buying pressure. B, I think we were way extended on the downside. So seeing something like this was pretty normal. C, you can see there's no real volume. Even if you go to spy and if you go to nasdaq, even if you look at any marketplaces on this move up, there was no real strong volume showcasing or supporting that move up. Next, there's something called window dressing. So window dressing is basically where a lot of big firms come together and they try to look, they try to make their quarters look way better than it is. So there's a rumor, not saying this is true, not saying it's not true. There's rumors going around that a lot of big portfolio managers, hedge fund managers and so on came together and they kind of wanted to nt one on a good note. So it was kind of like, hey, let's not be aggressive on selling. Hey, let's hold the market off. So once again, I don't know how true that is. How true that's not. Once again, that's a rumor. So that's what window dressing is. And that's what was quote unquote done. Now, going on to my second point, which kind of correlates with that a little bit. Now, the way that kind of connects to my next point, once again, all rumors. I don't know how true it is, but just trying to connect the dots from some places, right? If you guys really think about it, look at when Trump came out and he started saying, we are going to have a painful two weeks ahead. Now, obviously this has been a mess. The whole virus thing has been a mess from a few weeks ago. But it's like, why would he come out at the end of Q1 and kind of state that, okay, now the next two weeks are gonna be bad? Why did, why was it a few days ago where he came out and he said, oh, by Easter our economy's gonna open? And now he's like, hey, we're gonna have a painful two weeks at the end of Q1. So it's like, I don't know if he has buddies or what's going on. Once again, all speculation. No one knows. But it's like when you start putting A and A together, it kind of starts paying, painting a certain picture. Now, beyond that, let's ignore all of this. This is all said and done with. What is going on with the market right now? We saw market make a new low. Market retrace, no strong volume in the retracement market, had a hard time breaking the 260 area, as you guys can see, hovered around there for the past few days. Now the idea is, what's going to happen next? Why would the market go down? Has the market factored everything in? Now? I think the market is going to make a new low because of the following reasons and I think this is what the market is focusing on. I think in the upcoming weeks, the market is heavily focused on the economic data that's coming out. So we have a lot of economic data that's coming out, right? So there's this website I use. You guys can see right here on this website, you can see tomorrow, right? We have jobless claims coming out at 8:30am Eastern Standard Time. Beyond that, we also have the unemployment numbers coming out on Friday, the first Friday of every month that's coming out on Friday. So I think the market is going to be heavily focused on these two as well. Now beyond that, there's also a lot of other economic factors that the market has not really looked into. In my personal opinion, which I'll break down now. The reason I think we're going to see a new low and other things that are going to cause that is I think number one, Q1 earnings. So we are going into earnings season. Quarter one just ended. Since quarter one just ended, in the next three, four weeks, we're gonna see a lot of big names report earnings. Now when they report earnings, everyone already kinda knows that their earnings are gonna be bad. But that's not what the market is focused on. The market is going to be focused on, okay, you have bad earnings, we kind of factor that in. But, but now for Q2 and Q3, what do you think will happen? Do you think you're going to perform at this level or a lower level? That's where. That's what I think the market is going to really narrow into next. Right. Looking at big names on what they think their estimates are going to be. Now if their estimates are lower than projected, I think that is not really factored into the market. That also depends on how low, how high, which is kind of like a huge can of worms to open up. But I think that's one thing that the market is going to heavily focus on. Now number two, which I think hasn't really hit the market yet, is basically the mess that this virus is going to leave when and if it kind of eliminates. So let's look at the best case scenario right now, the best case scenario, let's just say the by May 1st.

We find a cure and we're like, okay, we're able to eliminate this virus, or let's say by May 1, this virus starts slowing down. Right now if it starts slowing down, it's not about, once again the virus, it's about the mess it has left behind. And I think a lot of people are overlooking that. And that's not really being factored into the market. Now even if you go back to 2008 and even if you go back to 2001, you'll see a lot of times when the market dumps. During bear markets, we have seen 10, 20% moves up, we have seen dumps, rallies, holds, and then the market started selling off. Go back in time. Look, look at that. Look at the 2001. Look at 2008. Look at what happened after the big dumps. The market sell off doesn't happen right away. It has started happening slowly afterwards because that's when the real Economic factors started kicking in. So the economic factors in this situation, from my personal opinion, kick in into something as simple as let's say jobs. I'm not going to break down every element, but let's just say jobs. How many people right now are unemployed? Now obviously the government is giving a $1,200 stimulus check and the Feds are stepping in and helping as much as they possibly can. But, but I think this help is not going to be enough to really help people. It's not really going to help people to an extent that's needed. And obviously $6 trillion are being printed from thin air, which is obviously gonna cause inflation. And that's a whole nother topic right now going into the jobs factor. How many people here? Once again, if you look at all the people in this, during this situation, there's a lot of Americans that don't have savings, that are living paycheck to paycheck. They don't have money to go and live off for even a week. Now that's probably over 70, 80% of Americans. I'm not gonna focus on any other country looking at that aspect. If this goes on for about four more weeks, they're going to be behind on a lot of bills. Consumer spending is going to go down, which is obviously going to impact the overall economy, right? That's also going to impact the future growth of some of the companies. Let's say Apple, if people don't have money, Apple, future projections are going to go down, which is in fact going to hit their profits. And if their profits get eaten alive, that will obviously impact their stock price and their stock price will bring the market down. That's just one example, right? So people will obviously spend money on necessities, but even that will be kind of tight. So I think the aftermath of this overall virus, right? People with not people not spending money, people being afraid to go take vacations, let's say, right? Airline industry, another special industry, people not taking vacations, right. People not spending, people not flying. Small businesses being closed down. So many small businesses are being closed down because they are living month to month. They cannot survive one month without getting funding, right? And yes, the government is stepping in to help them out as much as possible. But when you go look at the actual reports and the aftermath of all this, you're going to see that in the next upcoming months, this is all going to become a worse and worst case scenario. And that's if this all settles down by end of May. Now, I'm not going to sit here and say it's going to end by end of May. I'm not going to sit here and say it's not going to end by end of May. No one knows when a cure is going to come out. No one knows when this is going to end. But even looking at the best case scenario, like I mentioned, I think that still leaves us more room to go on the downside. But if let's say this doesn't until May and we go till June, July now, that creates even a bigger mess and that I think is going to drive the ultimate markets down even more. So that's my basic take on the overall market. I think we're going to see the market make new lows.

Once again. This is only my personal opinion, not investment advice. Market could go up, market could go down. No one really knows what's going to happen at the end of the day. But the whole idea is for you to do your analysis, for you to do your research and based on whatever gives you the highest probability, take that trade, take that position, obviously protect your downside and take it from there. Thank you so much for watching guys. I will see you guys on the next video.