Folks Violence Incoming! We have a lot to discuss. Number One I Want to start by discussing the market environment heading into this week and the historical context for what we are seeing right now. Number Two, We will discuss the companies reporting earnings this week and then finally number three. We are going to conclude with a discussion on Wells Fargo's latest prediction on when the stock market bottom is going to be hit and I think you're going to want to hear it and today's video is brought to you by the MooMoo investing and trading platform and the up to 15 free stocks they are offering you just to give them a shot.

and Australian users can get up to 50 AUD Terms and conditions apply. Make sure to give them a look down below. Okay, so I want to go ahead and start with Market Direction and historical context. Now if you are new to our videos or haven't tuned in for a while, my thought process on this Market condition is that we are heading down overall until the fundamentals within the economy and Central Bank show convincing signs of reversing.

But of course all downtrends have bear Market rallies and in last, Sunday the Sunday of Lasts video I made an argument saying that we're likely going to have a Bear Market rally within the next two weeks leading up to the November 2nd Fed meeting. I Cited certain reasons like no New Economic reports a blackout period for the Fed and Fed speech, and of course an earning season which quite frankly, a lot of businesses still had pricing, power in and were able to pass on inflationary pressures to Consumers And so far indeed, we have had a few attempts at breaking out into a new Bear Market Rally and Spy is attempting a break over our red directional SMA And you look at days like Friday the day of Fry where you had the S P up over two percent NASDAQ up over two percent, Down up over two percent. And this may leave you wondering how frequently do these very green days happen in historical Bear markets? Well, I went and I dug up this data from Savaco Capital on Seeking Alpha which shows the top green days in the 2000 to 2002 Bear Market and the 07 to 09 Bear Market. Now in the.com bust era, the top three Greenest days were all over five percent up.

Then you had a lot of fours, threes, twos. And in fact, of the top 40 Greenest days, only one of them was below 2 sent up. And this is what the overall chart looked like during that time period. Despite all those up days, the market still net and in effect lost over 49 percent in that time period.

What about 07 to 09? Well, the top seven trading days are all above five percent up. Some of them were up as much as 11 or 10 percent and you go down the list. all about the very last one is above two percent up. So it is very, very common to see insanely green days in a downtrend.

In fact, if you're not seeing massive green days, it might suggest that your downtrend isn't really an overall downtrend anymore, because once markets have already stabilized out, that means that the emotions are already out of the market and you're starting to see a more realistic future priced in without all the Panic anxiety or the opposite of that which would be Euphoria And listen to this: During the 355 Trading Day bear: Market 180 days were read or down days 175 were green or updates. In other words, if you were a bear during 07 to 09, you would have been wrong technically wrong about half of of the days, but right on the overall downtrend, right. During that overall time period, the S P 500 lost over 56 percent. Yet almost half of the days almost half of the days were green days, and some of them to an extreme extent.

Every single time there's just a small update, you'll see a huge swarm of analysts come out and say oh, we've bottomed or you'll even see retail Traders Go and comment on videos or on Twitter or whatever and everybody will say Yep This is finally the bottom. You can't have a massive Green Day like this if we haven't bottomed yet and I would argue the opposite. I Would say that if you keep making new bottoms and everybody tries to call every single bottom what you haven't reached Peak Fear and anxiety. In fact, people are still very, very bullish because they haven't given up hope, so there's still a lot of bullish premium factored into the prices, but that's besides the point.

The takeaway that I'm trying to present here is that a lot of folks aren't aware that green days are extremely common during downtrends, and often very, very green days, which is a big problem for two reasons. The first is that the very green days, green weeks, or even green months, they can convince people that the overall downtrend is over, causing them to fomo in earlier than is ideal, and then get destroyed and sell out early. Obviously, if you're a long-term investor and you're just trying to get a good deal, maybe that's not as big of a problem, but most the time, the studies show that retail Traders they'll buy in at the dip, and then when the dip keeps dipping, they'll just sell out and lose all their money and they will never go back in. On the other hand, the second problem is that some bears can be so pessimistic that they won't recognize that almost half of the trading days are bullish and thus, insane trading opportunities.

To the upside, for folks who do have a short-term Focus So it's like The Fubbers, the fear, uncertainty, and bullish people are too bullish at every single bottom, and they deploy too much of their capital. and the insane bears are too bearish to the extent that they don't recognize that you have green days to trade off of. now. Building off that second point, which is recognizing short-term opportunities I Believe that heading into this week, we are seeing increased chances of a bear Market Rally Right now, we are in an era where the S.

P 500's recent up sessions are getting more powerful than the down sessions which suggests increased appetite to close shorts and overall buy back in. And according to Bloomberg the relative cost of protection against a 10 S P 500 decline keeps plunging, keeps plunging. Which means what it means: markets are less and less concerned about an imminent 10 drop or any sort of drop whatsoever. I Also believe that for the moment there is an inclination of markets to believe that the Fed's not going to drop any more hawkish Bombshells at the November 2nd meeting and perhaps spur a post-market rally which some people might be trying to get in before that happens.

Why do I think this is the case? Well Fed Futures are suggesting a 95 chance of a 75 basis point hike, but they aren't forecasting any chance of a 100 basis point hike. Instead, the minority case scenario is a 50 basis point hike right now, which means the market is leaning on the thesis that the FED is either going to meet their policy trajectory or they're going to underdo it to the dovish side. Which is another point in favor of a Bear Market Rally at least until the next inflation report or the next bludgeon report. Now at the same time, because this is a trading Channel we can't just have one thesis, right? We have to have a thesis that prepares for all outcomes.

And one of the contradictions to my Bear Market rally thesis is: if anything bad happens on this coming earnings week, we have a lot of major companies going and Reporting earnings and quite frankly, if just one of them drops the proverbial ball, you could easily get a collapse of any Bear Market Rally attempt. Now, the ones that I really care about starting this week are: UPS UPS is key to telling us where shipping demand is. We've seen that drive markets in the past and other shipping companies like FedEx Drive markets in the past. If shipping demand is dropping, we already know a lot and all that we need to know about online retailers.

GM obviously tells us about new car demand and the higher interest rate World production and material capacities Coca-Cola tells us how high demand will be for future diabetic treatment. then you have Hallie Burton You have the energy industry and components of that. 3M provides a ton of products to a ton of different Industries when Industries start Contracting they buy less materials from 3M JetBlue is going to show us how airliners are doing, how flight demand is holding up. Looks like it's holding up pretty be well actually.

but how are their profit margins? We know that flights had a ton of cancellations in the summer and a lot of airliners responded to these problems where they didn't have enough Staffing by just reducing the number of flights that they're giving and hopefully reducing the number of cancellations. But of course that has a hit to the bottom line and a lot of their fixed costs remain fixed regardless of how many flights are going out there. Then after close you have your really Heavy Hitters Microsoft alphabet Visa Chipotle I Mean Chipotle isn't really a heavy hitter, but it is a heavy hitter on the stomach. Spotify Texas Instruments I Think for me, the two big ones are going to be alphabet and Visa alphabet.

We want to see how that ad segment is doing overall usage and spending across their products. Visa I Have a bit of a beef with credit card companies right now. We keep hearing from credit card companies about how the consumer is alive and well and doing fantastic because consumer spending is once again at a new record high and in many cases, the consumer is spending five to ten percent more year over year. Which a lot of analysts are like, oh, they're spending five to ten percent more year over year.

That means they're very, very healthy and it's like, well, not exactly, could they possibly be spending five to ten percent more year over year because prices are up five to ten percent year over year and a big comeback to that as well. A lot of the credit card companies are reporting more than ten percent increases in consumer spending year over year, and it's like, okay, but if you separate the different segments out and you look at low-income middle income and high income folks, well, a lot of the excessive spending that surpasses the five to ten percent inflation. Well, that is coming from the higher income cohorts or some of the higher middle class cohorts who are spending more money on travel who are spending more money on pretty much everything as compared to what they were doing during the pandemic. But yes, let's get an update from Visa on the actual numbers and then Spotify I'm interested to see their subscriber numbers.

Netflix Made a big comeback Spotify Not exactly the same industry or same type of content relationship, but still similar in many ways. Wednesday Boeing representing Aerospace and Defense manufacturing. Hopefully, we don't have a massive, massive increase in demand for Boeing and their defense manufacturing segment next year, but we'll see. Then you got Waste Management Craft Heinz Hilton Meta Let's see how much their ad spend business is sinking and how much they're spending on this metaverse idea.

Teledoc a Kathy would favorite Kathy Wood Kathy could, but Kathy probably shouldn't And on Thursday you have your Shopify your McDonald's your Southwest your MasterCard Comcast Credit Suisse more updates from E-commerce obviously with Shopify more updates from airliners and credit cards and obviously Credit Suisse will be interesting given some of the compounding risks they are facing. And after close, you got your Apple, your Amazon, your Intel, your Pinterest and your T-Mobile the biggest companies overall this week. That could provide a shocker to the overall Market are of course Apple and Amazon You already know that iPhone Demand and iPhone's production reports are suggesting a little bit of an iffy Outlook and Amazon we haven't heard much from, they've been very, very quiet. Maybe now is the quarter where they actually go and they speak up and they start causing some startling across the market.

Founder Bezos of course just said that it's time to batten down the hatches and we know who has been batting down his hatches. But the question is is Amazon batting down their hatches as well. He still serves as as the executive chairman over there. And of course when he's saying something like batting down the hatches, the data that he's probably getting that from is at Amazon or at least has something to do with Amazon And thus, when you see the earnings report, you should see some inclination that that's what's going on.

And then on Friday you have your Exxon, Mobil, your Chevron and some green energy companies like Nextera and Jinko. Okay, Okay, let's go ahead and conclude with Wells Fargo's prediction on when the market bottom is going to be hit. It was incredibly difficult for me to find this comprehensive research piece that they had released just amongst their top execs and shows exactly line by line when they believe the Market's going to bottom. So here's a picture of the front page of the report that explains very, very well when the market is going to be bottoming and their highly researched opinion and this is exactly when Now I Don't know if this is too early of a prediction I Think this might be too bullish, but this is what they are saying.

Of course, I'm just trolling, but this is what they actually said and this is what they actually said publicly. quote stocks should see a buyable bottom when the CB Poe Volatility index, the Vix tops 40 from today's 30. Reading a spike likely to coincide with the FED returning to rate cuts and creating a Powell put Wells Fargo Strategists say the analyst looked at the Vix data going back more than 20 years and found that whenever the volatility index top 40, the Federal Reserve usually was about to start cutting rates or had already begun doing so. Okay, so when you're making an argument from Vic's height aka, the vix needs to be at a certain point before you can declare a bottom, that's another way of saying that there hasn't been enough panicking in the market yet.

Fear and uncertainty and doubt and anxiety have not have not peaked. They have not caused Peaks to levels where the Vix would be at levels that are historically significant. Which means there's enough Bulls in this market to keep prices high enough and suggest that we haven't bottomed out yet. And this is something that we've actually talked about a lot in the past.

The Vix is in this weird Middle Ground where it's elevated enough to cause constant turmoil and pain, but not elevated to the point that suggests insane Panic has happened. We've been barely able to even stay above Vix 30 for any consistent period of time. This year we've just been in a heightened anxiety range of 20 to 30. but long-dated history suggests that real Panic is not until you hit 40.

Levels of the Vix that we saw far exceeded during the 2020 lockdown era. And from my take I Believe that after the short-term blip of what I believe is going to be a market bear Market rally and some settling of markets, overall, you're going to see another Catalyst strike and markets are going to go into another round of panic and Vix is going to do another attempt and break deeper into the 30s. and then eventually when you get the final Panic Catalyst which I don't know what that's going to be, but something that just causes Peak panic in this overall bear cycle. Well, that's going to cause you to get deep into the 40s and that's going to have to happen before the crisis is really over.

And at that point when you've gone over 40s, that's probably going to be around the period of time or the Fed's like, okay, shite, we got a reverse policy. We got to go back into bailing out the market and so on and so forth. But of course, who knows when that's going to happen. And really, this is all educated guessing based on the data.

but at the end of the day I mean that's kind of what we do here at the stock market anyways, folks. I Hope this video was very valuable for you. If you have any comments or feedback, make sure to let us know down below let us know your thoughts on this current market condition. If you want to make sure to get your 15 free stocks with MooMoo before the deal expires, I'll put a link to MooMoo down below.

And of course, if you want to get access to our step-by-step lessons, private chat, daily morning briefings, and full price Target list and all other trading resources I'll put a link to zip Trader you down below, have a good day folks and I will see you tomorrow.