Folks, the big money is sounding the alarm on this market like never before, both publicly and privately. You can smell the dirty Aroma of fear circulate around this. Market Yes, this Aroma has been present all this year, but as of the last week, you have seen a whole new level of fears over Central Bank policy trajectory over inflation and whether or not it's even going to come down into 2023. over whether certain emerging economies are even going to hold up if this current blood battery continues.

What happens to the global supply chain If you have entire economies collapsing. And folks, if you look at some of the leaked data that I'm going to present later in this video from Nomura, it suggests that a massive computerized sell order is about to be triggered. and if you are in the market on the day that it's triggered, you're going to get dumped on heavily heavily. Now, obviously for long-term or short-term trades, you're going to have a different plan of attack for when this actually happens.

But it is not my job to tell you what to do and quite frankly I don't want to tell you why, what to do, but what I do want is to keep you informed in a very violent way. I will put all the time stamps down below and I am very confident that this video will be worth your time. and today's video is brought to you by the up to 15 free stocks that you will get with MooMoo when you sign up using our link down below. Excellent platform and the 15 free stocks don't hurt either.

So I Want to go ahead and start by acknowledging what's so crazy in this overall slow and dare I say controlled collapse of various asset markets. What is so crazy is that everyday Market participants are getting this idea that big money doesn't really have a true thesis. Whether bull or bear, they are just kind of playing it day by day and to some extent that kind of makes sense. They've made a lot of bad calls this year and so on and so forth, but increasingly over the last week it has become very, very clear that that is just not the case.

They now have a very, very clear thesis and it's not to the upside. If you look at what big money is doing, what they are saying, and what they are planning, it is very, very clear that they are not planning for more upside anytime soon. So 2022 starts and projections amongst economists were for about 2.5 percent GDP growth for 2023 in the U.S and Euro area and slightly less in the UK about 2.2 percent. But then, as this year progressed, expectations for what 2023 would look like have dumped in each region, right? And it's not like it's been a sudden drop in little pansy.

Plateau No, no, no, it's been a consistent drop in each category month after month after month. To the extent that the UK's growth rate is now negative, the Euro area is barely above water, and the U.S growth forecast is barreling towards zero as well. Again, I Totally get it. Everybody wants you to say oh no.

Actually, the economy is stronger than it's ever been in history and we're going to see massive growth year over year. In reality, the best case scenario right now is looking closer and closer to zero percent for the entire year of 2023.. a year that we haven't even entered into yet. I'm not talking about 2022, which is already a disaster I'm talking about 20 23.

The fact of the matter is that we've had two downtrending quarters already of negative GDP growth and the prospects heading into 2023 are getting worse at the same time, where central banks are still front loading their hikes. We have more, not less negative headwinds heading into 2023.. what do you think is going to happen when we actually get? There are things going to get better than they were this year when you had much lower and easier monetary policy? So then the next question becomes: why are economic projections for 2023 getting worse the closer that we actually get into 2023.? Well, according to the Berg of Bloom, about 90 central banks have raised interest rates this year and half of them have hiked by at least 75 basis points in one shot in what B of a chief Economist called a competition to see who can hike faster. So remember when economists were making these projections for 2023 back in the beginning of 2022, they were using Mr Powell's assessment that inflation was going to quickly be proven transitory and rates would only need to rise by a total of about 75 basis points if that in 2022.

What ended up happening? Well, we were heading into the end of 2022 and it turns out that inflation wasn't transitory knock on wood if you've heard that before and at the same time it now seems that we are going to be getting more than four times higher Target Rates by the end of this year. You are looking at not 75 basis points, but somewhere between 4 and 425. And you look at this map of countries that are hastily raising rates every single time you do a jumbo raid hike, you substantially increase the risk of massive slowdowns, unemployment ticking up dramatically, or even some other crisis that's lurking underneath the surface being completely unveiled now. I Want to move over to some predictions on what this means for the stock Market? It was reported this morning that Goldman Sachs and Morgan Stanley are warning of mounting risks for U.S Earnings According to Bloomberg Analysts from both firms said quote headwinds to profitability are building, highlighting higher monetary policy and and pressure on company margins as key concerns.

According to Morgan Stanley's analyst, there is still a long way to go before reality is fairly priced in, and a big argument for this is that the S P 500 earnings estimates have yet to reflect actual Market expectations. They aren't factoring in an actual earnings recession, yet. Look at this chart hither. you can see that the S P 500 dumped, but forward earnings per share AKA predicted future earnings have continued staying on an overall uptrend as if nothing bad has happened.

Yes, you had a small pansy correction earlier this year, but overall, much higher. Much higher earnings per share estimates than you've had in 2021, 2020, 2019, so on, and so forth. You compare that to the covet drop, the stock market dumped, and forward earnings per share dumped soon after. This time around, big money is essentially dumping stocks, but aren't changing their forward earnings estimates on those very same stocks.

They are still expecting companies to earn more money per share year over year as compared to say, 2021 or 2020 or 2019, 2018, so on, and so forth. And by a substantial margin. Which means what? Which means what? Well, it means that markets think that they should dump shares, because in the future earnings are going to be paid less for there's going to be a smaller multiple on earnings. But still, even though we're into the fall, they are still.

They are still not questioning the actual earnings themselves. at least not on a broad level. If you look at this estimate, markets think the only reason the only reason to sell off was specifically because of the multiple crunch. They do not think that earnings at all need to be adjusted.

Now it is one thing when big money is giving a earnings estimate that they don't actually believe. and it's another thing if they actually believe it. And as I was saying previously, whether the big Money had previously actually believed these earnings estimates or not, nearly all of them are shifting tone in the direction of this going down and heading into an earnings recession. Nissa Quote the hot inflation print stoked concerns about the outlook for equity valuations and profitability.

Said Goldman's cost it. His team expects S P 500 net profit margins to fall 25 basis points in 2023. Weighing further on returns on Equity Here you have a prominent Analyst at the Sax over at Goldman Probably one of the leading Sacks and his team of Sakis expecting profit margins to fall 25 basis points in 2023.. Fox Business Reported Bank of America warns of new lows for S P 500 as inflation shock ain't over.

S P 500 could decline another 22 percent from current levels. So B of A analyst Hornet argues that the inflation shock will continue and an earnings recession will drive stocks to new lows. The B of A analyst said that the past bear Market show an average Peak to trough decline of about 37 percent for the S P 500 over 289 days. That would suggest the current Bear Market which began in early June will end in October with the gauge around three thousand and twenty points or another 22 percent decline from current values.

You read between the lines and connect the continuing inflation shock prediction with what he is saying here and the upcoming earnings recession. It suggests that Hornet is basically saying hey, hey yeah, maybe this bear Market is going to be over in October or November but it's not going to be a massive rally afterwards. Maybe you get a bear Market rally and then you're right back into a new bear. Market To gloss over some other predictions to kind of confirm the tone here, a former TD Ameritrade technical analyst just came out and said stocks have yet to bottom as shares of several major firms remain quote disconnected from reality and warned the market could fall another 22 percent.

Jeremy Grantham Who? Yes, I Know he's kind of a Perma Bear, but he is the chief investment strategist for a fund that has held upwards of 100 billion dollars in assets under management and he said that the S P could plunge another 26 percent Morgan Stanley the Stanley's of Morgan expect the S P 500 to plunge another 15 to 25 percent within the next four months. So again folks, you're hearing all these peachy predictions that are just wonderful and berries. and Moses the Market's going to fall in another 15 20, 25, 30 percent according to a lot of different whales. But what these institutional big money players are not talking about is the critical cell levels for computerized trading units across the market.

As you know, much if not most of the trading that you see on the market is executed by machines or is started by machines, not people machines, mostly reacting to different binary scenarios of whether to go up or down. And much of that trading is done via CTA funds that make trades based on models or computer programs that are very intelligently or sometimes not so intelligently designed. and the CTA funds are mostly programmed to do what amplify momentum if stocks are going up, it tries to ride that momentum to the upside if stocks are going down, tries to ride that momentum to the downside, amplifying the moves with massive amounts of capital in both Direction And in order to understand how the market is really moving on a day-to-day basis, you have to look at what these funds are doing. these computer Algos people say, oh, watch what the buy and holders are doing But the truth is that buying holders, they kind of just buy and hold.

So what you see on a day-to-day basis is mostly just people who are either spec Traders big whales, spec trading or machines. I'll go trading back and forth. So in order to really understand where the Market's going, you have to understand what they are doing. And this leaked chart from Nimura shows the CTA position estimates averaged out for all the major Global indices and the main areas to know about are these levels to buy, Andy's levels to sell, they show the number at which buy triggers are activated and cell triggers are activated.

Both very very important to follow. So let's start with the S P 500. So CTA positions net and in effect are programmed to buy and amplify momentum at about 4272 points and they are programmed to sell at 3711 points. Keep in mind these are averages and these are estimates so it's not like all of a sudden everybody has it set to the same number.

No, this is an average estimate if you go and you look throughout the market and the diff different funds that Nomura was able to scout out. But today the S P 500 sits at 3869. which means if we drop just four percent lower we will hit the sell limit. For the S P 500, you could start triggering a massive massive wave of cell orders that creates an insane amount of more weakness onto the market and creates a cascading effect that continuously knocks out trigger after trigger after trigger to sell.

It's kind of like if you have an overall stock market that's on a stop loss and every single time you go through a stop loss, all of a sudden all these new massive sell orders get brought onto the market and it starts dumping even faster. And then if it dumps fast enough, you knock out the next stop loss in the next stop loss, and so on and so forth. And actually, if you look back at the last year or so, you could actually kind of see areas where you had a market-wide stop losses, different levels of support where the market just couldn't go below it. And then all of a sudden once it did, it just shot below it so fast that you couldn't even say wow.

And if you want to reason example of a smaller version of algorithmic trading, look at this. So if you pull up the chart from last week, this is when the CPI report came out. Do you think that the big Money sat down with copies of the CPI print and just read it fully and analyzed it before selling abruptly? No, Obviously not. There was no time, it came out and within seconds down.

Crazy. So the situation is. hey, Elgos are programmed to react simply to the digits shot out on the CPI print. If higher than expectations, sell if lower than expectations, hold or buy depending on wherever the parameters are.

And so when you're looking at the buy and sell triggers for the broader CTA funds, this is what we are now facing on a much bigger scale, right? What about the Russells The Roskies? The sell order trigger is at 16.89 It currently trades at 1803. you only need another 6.3 drop to trigger that. What about the NASDAQ 100? It triggers at 11 189.. currently the NASDAQ 100 is trading at 11 855.

you only need a five point six percent drop to trigger that. So my thought process and takeaway here: Well, I Don't think that we are in the end of paying for the stock market until inflation has steadily dropped probably three or four months in a row and the FED start signaling a reversal of policy. I Think it's impossible to trust any turnaround in stocks until that happens. and I think that you're starting to see the big money.

Really, really acknowledge that that is the operating thesis. And not only is that the operating thesis, but they are well aware in my opinion, that all of a sudden once you start going down, you're going to start activating these massive sell orders all the way down like we've seen from much of the previous year. So anyways, my thought process is that if you are a Trader from a trading perspective, be aware of these price levels because they're going to be price levels where you're going to see a lot of extra volatility around them. right? If you hit one of the cell levels, you should start seeing a lot more selling and a lot more selling pressure overall than you had seen before you hit that level.

Now, of course it's not going to be exact, but you get the overall idea. And for folks who have a long-term perspective or for the part of your account that has a long-term perspective, make sure that you understand that this is going to be a very, very unique opportunity and might be an opportunity that we haven't seen in decades. I Think when all of a sudden done, we're going to have so much upside, it's going to be crazy right now. Honestly, if you bought it and you held it five ten years, you're probably going to do great.

But if you're a long-term person, you like slowly buying the dip or you want to wait until you get the biggest drops I Think you're going to do even better again. Who knows? Perhaps we go into the next 50 years and it's just this great reset and we're all living intense around a candle enchanting about the Earth or something like that? I'm not sure, but at the end of the day, this is how I see it. and I don't think this is fear-mongering at all. In fact, I was rated number one peacemonger three years running in surveys that I conducted with myself.

and the truth is that acknowledging that pain is coming is not an invitation to do nothing. it's an invitation to be aware of what's going on. trade off the trend if that's something that you have a focus on and of course, take advantage of opportunities when you see fit. Anyways, that caps off today's video.

Make sure to hit that ravish and like button and subscribe. Make sure to get your up to 15 yes, 15 free stocks with MooMoo And if you'd like to learn how to trade with our step-by-step lessons, private chat, daily morning briefings as well as our full price Target List: I Will put a link to zip Trader You below have a good one folks and I will see you in the next video.