Meet Kevin sells everything, but a short-term bottom looks to be forming in the S&P500.
This blog is going to be ballsy.
As I type this, the Dow Jones is down -600 points.
The S&P500 is down 80 points.
It looks like it could be a continuation of the fear of the bear market.
The day before yesterday, super popular YouTube "guru" that sells courses on "Stocks and Psychology" and always preaching to keep buying the dip SOLD HIS ENTIRE PORTFOLIO 2 days ago. Angering many of his long term listeners.
"I fear we are at the lifeboats phase of the Titanic." He said.
I want to say that underneath the headlines and the obvious fears,
No matter what the optics are, statistics is pointing me to the other direction.
A short term bottom is forming.
Nothing is absolute, but statistically, the odds of a short-term bottom is higher than not.
Sure, the price might "drift" lower, but the selling momentum should be waning. Unless the Fed presents something bonkers tomorrow. Or something extraordinary like a new COVID wave... then the markets can be pushed further down.
As of yesterday's capitulatioin and reversal, guess what I saw?
I saw Smart Money go up and Dumb Money go down.
Weak hands are selling to strong hands.
Smart Money is slightly Optimistic. Dumb Money is running for the hills.
Ask yourself who Meet Kevin is, and who are the people watching his channel.
Breadth and Fear indicators are pushed to correction extremes. Only during the COVID crash were they pushed much further.
Company fundamentals are stronger now than before.
We are on the recovery end in the economy and not a crisis beginning.
Let me pull back further on the Smart Money/Dumb Money.
The last time Dumb Money was this negative was towards the tail end of the COVID crash.
Hence, when I see people like Meet Kevin who knows alot about the obvious things about the stock market sell everything, but seeing what people "under the hood" are doing, I have to say that if you are short the market, it's probably a good time to start closing them.
Prices might go further down, but selling momentum should lessen if HISTORY is a guide. I think 1H22 will be a sideways, slightly down market, and 2H22 is where most of the positive action will be. I already warned my listeners to my 2022 Market Outlook Webinar a couple weeks ago.
But this looks to be a "trading" short-term bottom. How much legs it has depends on what the FED says. However, even if the Fed says something encouraging, it takes awhile for econ indicators to change so I don't expect any strength in the market to take out new highs. If I were a trader, I would take short term bets on good solid stocks with visible earnings that are too cheap to ignore. I would sell into strength and then wait and see.
But everything you read here is for educational purposes only.
Do your own research. Consult people you deem experts.
I am only adding in a point of view that might be different from the lens you are watching through. Market statistics is not full-proof, but it gives better context making better financial decisions and doing proper risk management. Stay safe everyone!
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