Folks Insanity incoming and yes Charlie is a little hoarse today. Let's get that out of the way I apologize in advance, but there's not much we could do about that. However, there are three major things that I would like to discuss with you: Number one, the market situation how markets have historically tended to perform before and after midterms, number two, the upcoming catalysts and companies reporting earnings this week, and then number three, the top three trades that you need to be aware of I will put all the time stamps down below and the only thing I ask in return is that you hit that ravishing like button and today's video is brought to you by our favorite One-Stop trading app MooMoo and the up to 15 free stocks that you will get when you sign up and deposit using our link down below. And as an extra bonus to celebrate their 10-year anniversary, they were giving an extra 10 USD cash back and this is a limited time offer.

Make sure to take advantage of that down below. So folks, we are coming off a very dirty week where we saw the Bear Market rally attempt throttled by a ever hawkish fed. However, this week will be an even more crucial week and is historically as well because of course we have the midterms. We have some big reports coming out and of course we have that CPR report as well.

The S P 500's average performance in the 12 months prior to midterms tends to be at about negative one percent, and then the next six months after tends to be a return of about 15.1 percent. Suggesting that regardless of the overall economic situation that the country is going through, midterm uncertainty, midterm uncertainty promotes poorer returns before the midterms and then better returns after the midterms. You look at the results So far under President Biden We are so far down about 20.6 percent. I've been paying attention to the elections folks and let me tell you, I've been hearing over and over again people criticize Biden because of inflation.

Well, guess what, they are wrong Biden has been very, very effective at deflating the stock market. Your dollars have never gone so far. Of course, with food and everyday items. that's another story, but just want to do a simple Charlie fact check Biden has been been very effective at deflating the stock market.

Trolling aside, this is perhaps one of the biggest outlying years in decades in terms of bad performance. The average S P 500 Index performance in U.S midterm election years is orange and this year is in blue. You can see the massive Divergence I mean it's insane. obviously four decade High inflation and tightening it at a pace that hasn't been seen in four decades.

That's going to have this kind of effect, right? And I was mostly joking about the Biden thing. You have to blame a lot of different policies over many, many decades for what we're seeing right now. Although I don't think the President's helping too much with his policies, but we're not going to say that because I don't want to be too partisan here, But these are some of the only negative returns that we've seen heading into midterm since 2002's midterms under President Bush and then 1990s midterms under President Bush senior and actually the worst since President Ford in 1974. And that was the year of the Nixon Scandal that ultimately led to him resigning a few months prior to elections and his VP forward taking over for him.

Now, despite my rapidly graying hair and chain smoking voice that sounds like I've been smoking cigarettes for like 50 years. Well, the fact of the matter is that I wasn't around back then. But you can look at the dating and if you look at the data or you're familiar with it well, this was a very, very recessionary period of time where inflation was running in the double digits. OPEC members had imposed an oil embargo against the U.S in response to the U.S involvement in the Arab Israeli War High inflation.

big geopolitical tension, a shortage of oil. Pretty similar issues to what we're seeing right now, honestly, but over the following six months, you actually saw S P 500 performance at 18.1 percent, which is incredibly solid. So then the question is, well, okay, could that happen again? If the situations are somewhat similar, well, context is key. Those midterms happened in the middle of a recession, and the FED had already been pivoting downward on rates for several months.

By the time another six months had passed, the FED had cut rates from Peaks at 1292 to under six, and soon we were out of a recession and the Fed was turning on the money printers. So the returns came with the backdrop of a Fed pivot. The Fed was already pivoting during the midterms, and so it was in the process of starting to stimulate. And then six months later, all of a sudden, boom chicka Wow.

While you're in this massively stimulated economy again, and inflation, of course, continued being really, really bad in the 70s and Volker had a vulgarit in the early 80s, But still, at that point in time, you had a very, very bullish situation for the stock market. So if you were going to compare the 1974 midterm elections to today's elections, well, you have to consider. Yes, they're very, very similar. But in the first, you were already in the middle of a Fed pivot.

Right now, we don't know when the Fed's going to Pivot. Perhaps it could be very, very similar in terms of results. If The Fed pivots. Within the next two or three meetings in the 70s, the FED basically said, hey, okay, inflation's bad, but we have to go ahead and stimulate out of this anyways, because everything is collapsing and so we have to get ourselves out of this economy and then we can worry about inflation, right? Obviously, you could argue whether or not that was the right move, but that's what they did at the time, and some people are arguing that's what we're going to see right now now.

of course, the other way to look at this data is from a policy result standpoint. There's really three major results from the Market's perspective: Active: If the Republicans win, both the house and the Senate markets will expect total gridlock the next two years, the Republicans won't be able to get bills through with a Democratic president, and the Democrats won't have enough power to get their bills to the president at all. Which means the uncertainty. The regulatory uncertainty the next couple of years has all of a sudden evaporated.

Number Two, The second situation is you get the Democrats winning both the house and the Senate. If they get a little bit of extra margin than they do now, you'd expect even more powerful pushing forward of their initiatives: more spending measures, new regulatory bills, and new tax measures which they have proposed spending measures. Of course, that could be very stimulatory to the stock market and the overall economy, but it would also be politically pretty toxic because of the massive inflation that we are seeing. although that hasn't stopped them in a lot of the other situations.

And then the third is you get mixed control at which case, you'd likely see very, very limited policy adjustments until the next election cycle in 2024. This would essentially be another gridlock and gridlock Again, would be looked at pretty favorably because all of a sudden, you have no uncertainty over the regulatory environment The next couple of years, no uncertainty over the corporate tax rate changes the next couple of years, which would have a direct impact to company. Bottom line: So you get gridlock based on both situations, and based on current polling that I'm seeing, it seems like these are the two situations that are the most likely according to 538, Republicans are favored to win the house and it's a dead heat for the Senate. But regardless, Republicans really just need to win one of these.

And all of a sudden you get a level of gridlock, which we didn't have before. So then that asked the question. Okay, what does the data The historical data show happens to the stock Market: when a Democratic president like Mr Biden is handed a split or republican Congress Well, according to Retirementresearcher.com when there is Unified Republican control across the White, House, the Senate and the house, you tend to average about 14.52 annually. When there is Unified Democrat control, you average the same.

Strangely enough, and when it's divided with a Republican president, you average 6.99 But when it's divided with a Democratic president, you average about 15.94 percent, which is substantially more two plus times. So speculate on this as you will. But the point is, markets historically seem to prefer conditions where you have a Democratic president and a republican gridlock. whether that's in the senate or the house or it's both.

Obviously this is just one factor and I'd argue the biggest factor in today's market is really the Fed and what they are doing and when they're going to Pivot But obviously the political environment heading into a massive recession is also going to dictate a lot. like the level of fiscal intervention, the level of taxes, the level of business regulation, the level of going after big corporations, or the level of over regulating or under regulating. right. And of course, trade policy is also a massive massive situation going into 2023 and this ever more reclusive world that we're living in as a result of the Ukraine, Invasion and so on and so forth.

Okay, earnings. This is another big earnings week, at least for the smaller and medium cap sectors we got Madame Palantir on Monday I'm looking at customer acquisition and more importantly, scaling and retaining of current customers. Honestly, this Market environment is very, very difficult for businesses to go and say oh, I'm going to go ahead and invest in a new platform to run my business on like Palantir. Obviously businesses are just trying to survive and even if they're like oh, I could save money using Palantir, well, at the same time they're thinking hey, I don't want to go ahead and try all these new aggressive measures to innovate when I could just try to use that Capital to just do what I've been doing and I know works and I can ensure my survival right? So what I would look at with Palantir is really not the customer acquisition.

So I take back what I said, but rather what I would look at is the level at which they're able to retain the current customers and whether they've been able to scale them in more because those are customers that already invested with Palantir already got their platform already started, adapting with their platform and benefiting from it. So they're the ones that are like, okay, we're saving money, we're more efficient. We're not going to stop using Palantir just because the Market's going down. In fact, it's a better reason to use them because they save money.

So I want to see that they're retaining and they're scaling in. Apron is a big squeeze candidate and also reporting on that day. I'm looking forward to that one. After close, you got Lyft solar, Edge Clover and TripAdvisor traveling spending seems to continue being pretty hot right now so I'd like to see an update from TripAdvisor sir.

Um, Tuesday after close you got your Disney your ooga booga. AMC AMC has been pretty quiet and they got the Avatar movie coming out next month. Maybe that helps get some interest only available in theater so that's something your upstart I do like upstarts business model I've been a fan of the business model, but obviously not doing that great in a lending crisis and an overall macroeconomic crisis that we're in right now. That's another one though you want to look at to see if they are retaining if they do have any level of retention.

I Think on the other side of this upstart's going to do very, very well, but who knows when the other side is going to be right. Lucid Affirm Marathon Digital Holdings Moral Lovely Mora right Almost said Marathon I prefer it if it's pronounced Marathon Mara is a kinky girl, but hey, she can be dirty too, which is also very very good Wednesday You've got the Trade Desk Roblox Cgc Wendy's Rivian Dutch Bros Great coffee, but not in terms of the stock when Unity Beyond Meat Beyond Meat is another short squeeze candidate that you want to know about because oftentimes when they were report earnings if they do have just a beat of expectations to a small degree, all of a sudden you get a squeezy mix squeezy. Thursday You got Neo Yeti Six Flags Line Electric, Matterport, Aora, Funware. And then that's about it in terms of what I care about for earnings this week in terms of catalysts Tuesday Of course you got the midterm elections.

Some insane volatility should be around there. Wednesday You got some of the FED Branch speakers talking up a storm as always. and then Thursday you got the CPI. Now if you are someone that is still hoping for that fed pivot, The Holy Fed pivot.

Well, this. CPI If you want any chance of a Fed pivot anytime soon, this CPI needs to really show at least some progress. It can't get hotter, It can't stay stagnant, It needs to show some progress. And I don't just mean on the year-over-year term.

Obviously, inflation is down year over year when you compare it to the all-time Highs But I mean you want to see at least a small negative number I Don't think you're going to get it I Think it's going to continue to be hot or at best flat, but there is some hope there, right if it comes out hot. The Hawkish said that we just saw last week is going to trample over this report and over all asset markets like a dam truck on a slippery highway. So yes, the CPI is going to be very, very indicative top trades. heading into this week.

We'll start with Madame Apron Apron is trading very low heading into this week. It has a recent history of massive squeezy Mcqueezy rallies from these levels and earnings are coming tomorrow, which implies some big volatile trading this week. You combine that with the short squeeze setup at 39 of free float being sold short and perhaps you get some ripe upside realization. So my thought process.

well I Don't see earnings being exactly amazing for Apron. Maybe they beat the low expectations, but I Do think the first opportunity for a squeeze would be earnings not being as bad as expected. The second opportunity is perhaps the periods after earnings pass by regardless of whether they're better or not than expected. Last earnings report wasn't great either, but it still marked a turning point that led Apron from going from three to eight in the span of a few weeks at the end end of the summer right this time around.

Market Willing I expect a high likelihood of a similar situation. and finally, one of my favorite pairs right now is the Yin and Yang Pear. A lot of extra volatility in Chinese indices as of late, and they have been providing a lot of bullish and bearish setups on a rolling basis for Traders Yang which has been making a killing shorting Chinese Equities just attempted a change of Direction below or SMA while inverse Yin skyrocketed on Friday the day of fry. One of the beauties of inverse ETFs like Yin and Yang is that you can trade both sides of the move, right? My biggest tip though, trade with the overall technical direction if you are above your red directional SMA We consider that to be in an upward Direction and you're probably more likely than not to stay above it for that session if you're currently above it and it's not showing choppy price strength.

if you're below your redirectional SMA you're in a downward Direction and you're probably more likely than not to stay below it and in that downward direction for the rest of the session. and again, if it's a choppy Direction I'll just drawing. it stays choppy and uncertain in terms of direction for the entire session. so pick the member that is in an upward direction.

If you do just that, your odds are at least more in your favor in my opinion, right? Anyways, that caps off the video. Make sure to have a plan with everything that you trade in the market of stocks because if you don't have a plan, you'll be slapped in the face like a dog. I Appreciate you sitting through the entire video with the Charlie Horser Charlie Horse and Voice have a great rest of your day. Make sure to hit that ravishing like button and subscribe if you want to join MooMoo and get up to 15 free stocks.

I'll put the link to them down below and of course we have the link to zip Trader You and our step-by-step lessons, private chat, daily morning briefings, and full price Target List below as well. Have a great rest of your day and we will see you in the next video.