So the stock market opens this week, upward does Baba sheep and flies downward, then on. Tuesday It runs up vroom vroom throughout the day and into after-hours as good news comes out for a vaccine. And today it opened up pre market before going baa baa sheep and selling off again. and then at the time of filming this video was on its way up again.

So what does all of this mean and what should we do to make money? And lastly, what is the sinister event that is luring around the corner driving this market and is likely going to destroy traders that don't watch the entirety of this video? Well, we're going to be talking about all of this in this video and the only thing that this modest, calm and quiet stock market Youtuber asks in return is that you hit that ravishing like button. And of course, if you enjoy exploiting the stock market, do not forget to subscribe for more short, sweet and simplified videos on how to do so. Ok so to start context. So after hours yesterday MRNA announced their first vaccine trial produced antibodies in all patients.

This caused a massive run in the overall market and of course 18% in Moderna stock after hours as well. If you missed these alerts, it's likely because you aren't following the app zip Charlie on twitter cough cough. But anyways, this vaccine news was clearly great news. and if you remember back to April we talked about how Moderna was the first company with a Kovat 19 vaccine to be tested in humans.

Derna is also one of the eight companies in Operation Orb Speed that are working on the vaccine and are also receiving funds from the Federal government. If you remember correctly, Operation Warp Speed was created to speed up the trials and allow the Federal government to shoulder some of the burden on this so that we can get the vaccine out as fast as possible. When companies do their face trials, they don't start producing the vaccines until it's actually proven in the phage trial processes. but part of this initiative makes it so that these companies start producing way before it's proven.

So then if the vaccine is proven then it's ready Hugo But the risk here is of course that all of the production would go to waste if Dean's didn't actually work. and that's why the government aka we'd the people we as Americans are shouldering that burden. But back to Moderna, MRNA was the second largest beneficiary of this, already taking 483 million from the Federal government and putting all this together. we have mrna as one of the front runners or the very first front runner in the vaccine race and the only one to get to the final stage of phase trials to date.

And in this next stage stage three, over 1,000 people will be given the vaccine and that will be starting at the end of July. But anyways, this positive news resulted in a huge run-up after hours and a lot of people do get confused as to why a run-up like this would be followed by a sell-off But if you think about it at this point after hours, everyone knew about the news so they were able to react to it in the after hours. and so the next day the news was old and since every reaction is an overreaction, it sold off. And this of course wasn't hindsight analysis.

This was actually what I told Zip Trader You members last night in our trade target section that we give to Zip Trader You Members. But anyways, nothing new here. We've been talking about overreactions in overreacting Corrections since I traded my way out of the womb. But back to the market.

you need to know what and where the catalysts are in order to make money in this market. And when it comes to vaccines, we have eight big players. We have Johnson & Johnson AstraZeneca Pfizer Moderna, Merck the Xrt, Ino and Novak's now. half of these players are already big players in the biotech industry, and thus the vaccine would represent a fairly small portion of their bottom line.

For example, if you compare the market cap of J&J Johnson & Johnson at 391 billion to Madonna's 30 billion, a 10 max is 6.5 billion, you could see a huge huge deviation in the size of these companies. J&J is much much more established and a win on J&J wouldn't have as much of an impact as a win on one of these pretty much no-name small biotech firms MRNA V, XR T, Eno and N VAX are all highly speculative place. that's why you see these run the way they do, but Jan J pretty much just stays flat. Jan J is trading around where it was that at the start of the year.

and besides the overall market making J&J barely did anything throughout the year. This was just the market correlation, though the reactiveness in the smaller stocks to a potential vaccine is much stronger because the vaccine is more impactful for these small companies. If you just take N VAX for example, N Max doesn't really have a proven candidate, never had a product reach the market prior to this, and yet it's run up from $3 to 117 dollars on just the potential to bring something to the market if you compare this to J&J on the ear. For example, during the same period where N VAX went from 3 dollars to 117, J&J pretty much broke even.

These small companies like N VAX provides the most opportunity because the vaccine is make-it-or-break-it for their companies. These companies are running up based on hype around the vaccine. J&J Sure, there's probably some fight built in there, but it's not too even a percent of what these other companies are riding on at the end of the day. If J&J doesn't come out with a vaccine, oh well, they'll just continue selling baby powder products and their million other products and revenue streams.

And hey, baby powder these days is real cheap. The margins are great when you use asbestos, but anyways, companies like N VAX MRNA E Nu and V XR T have a lot more riding on this vaccine than the bigger established companies do. and thus the opportunities are stronger, therefore, fluctuations. So my suggestion here is to keep track of these and follow the catalysts.

By the way, if you need help keeping up to date with these opportunities, we do post lightly watch lists every night in our free Facebook groups at Trader Circle, so make sure to join us there if you haven't already. the link will be below. But anyways, enough with the rambling. You probably have two questions right now.

The first question is, how did a guy as handsome as Charlie get into trading? And number two: how do we practically make money off these markets with this information that we learned, how do we actually apply it to make money? But let me just answer number one first. Honestly, my handsomeness is really more of a curse than a blessing I Just wish people wouldn't objectify me for my impeccable facial structure. My modeling agent back at the Animal Planet used to call me be praying mantis. But enough about me folks, it's not all about me.

Question number two: How do we practically make money off these markets? Well, in order to understand how to make money you have to understand what factors, who, what factors are pushing for our upside, and what factors pushing for our downside. Now, I'm an infographic Chart nerd. so let's go ahead and put this all together in a chart or a table graph. So on the left side, we're going to put our elevating factors in.

On the right side, we're going to put our deprecating factors. These are factors that push upper at the market and push down with the market. So on the left side, we have a high likelihood for a viable vaccine. We have improving ways to treat, handle, and deal with the coronavirus, such as more hospital preparation, better policies, more drug management, and you know better treatments such as Julie ads or MD severe.

Next, we have the Feds interventions. How much action is the Fed taken in order to hold our market solid? We have reopening of economies. Then we have stabilizing of new cases. Then we have inflationary pressures.

On the other side, we have the deprecating factors. Our downward factors. We have the potential for increasing lock downs. We have the potential for increasing cases.

We have lower consumer spending and deflation. We have the Fed stepping back. We have the raising of interest rates, and we have tax and regulation policies. These are all the main factors that are at play in today's market.

They also explain the movement on the day to day level. In the past three days we've seen an increase in this thanks to mRNA that correspondent in a huge run after hours. We've also seen an increase in this on Monday California and other states signaled more lockdowns and this caused a beat down towards the end of that trading period. We've also seen an increase in this over the past few weeks, but on the other hand, if cases go up and lock downs get reimplemented, that means we have more room to drop lock downs in more room for cases to go down afterwards, both of which are positive catalyst of the market.

So you can see how this kind of plays into the emotionality of the stock market, but over the next few months we'll have more emphasis on the other factors as well. If the Fed continues to print and people feel more confident in spending, will inevitably get more inflationary pressures, which will push people more into the market and push profits up. If cases, on the other hand, continue, people lose jobs and the economy contracts again will have less money being spent and the velocity of money will contract and will go closer to this category, which is a deprecating factor. And as we add and flow with vaccines and treatments, we'll have more or less of this factor as well.

Asli As we get closer to the presidential election, policy related to each candidate will have more of an anticipatory effect on the market, your political opinion will, of course dictate which way you think the market will go, but there is no denying that policies have a huge effect on the economy and the market as a whole. Hashtag Charlie 2020 Hashtag: Vote Like a spoiled brat. Anyways, it's important to map these catalysts out so that you have a clear idea of what is actually moving the market on the day today. And if you track the catalyst category, you can track the opportunities that are affected the most.

For example, on good News of the virus vaccine, airline stocks ran up way more than the overall market. Where is in reopening news, airline stocks don't necessarily run up as much because cases still limit their ability to get back demand. In a situation of more lockdowns, stay-at-home tech stocks like Zoom and DocuSign tend to rally. And in the case of this category of factors, we've seen money run out of pandemic risky companies like airlines, restaurants, and so forth and into tech companies that are now safe bets like Amazon Facebook and Apple At least people think they're safe bets, but on the other hand, on days where we're more in this category, we tend to see money still going to tech companies.

Tech seems to win-win on both of these categories, but it's not the same when it's on this side. Okay, and my last tip before we get into the sinister driver of the market. My last tip is to follow bad plays. I've always been a huge trader of bad news and bad news plays because every reaction is an overreaction and they've been so plentiful in these current market conditions.

We called out B BBY last week as it got beat down on negative news about closing their stores. It got beat down to Seven Seven and the next day it ran up all the way to 849. It then found a new bottom this week and ran up again to just under 9. Pretty great overreaction plan.

Every reaction is a dirty overreaction. Another example as well as far go bad news came out yesterday for them. They got beat down. Everyone was talking about how this was a trashy play, but then Boom! we got our overreaction correction over the next 24 hours and that nearly gained back all of the games.

Okay, but lastly, as promised, the sinister Driver of the stock market. What is the biggest danger that nobody's talking about right now? What is the biggest sinister thing that's half underneath the surface that you need to know as a trader? Well, honestly, there's a lot going on underneath the stock market. And I don't want to add to the fear-mongering but there's one specific sinister driver of the current stock market that both explains why the market is still adding more fuel and also points to future calamities. And that, ladies and gentlemen, gentlemen and ladies, is the issuance of margin debt.

Check out this chart that I stole from FINRA and advisor perspectives. This explains the current situation of margin debt. But first, what Charlie is margin Debt. Well, margin is when traders are buying stocks with borrowed money.

Why would they do this well? Because if the returns of the stock market are so great, it becomes profitable to not just use your own money to trade, but to borrow money in order to get even more gains. And if the returns on the borrowed capital are higher than your interest rates on that higher capital than boom, You've got tons of money coming in, and this intense borrowing of money to buy shares is sort of like a convoluted pyramid scheme. Market goes up. You borrow money from lenders and buy stocks, which causes the market to go up even more.

Other people borrow money and then market goes up even more. and eventually if something breaks and comes crashing down, you all have to repay your margin. And if you don't, banks suffer. This was an atrocious oversimplification, But you get what I'm talking about.

Let's look at the data. If you look at the chart, the blue line represents the S&P 500. The red line represents the amount of margin used, and these gray areas represent the previous two recessions. If you look at the last few recessions, we saw a huge increase in people trading with margin.

Before the dot-com bubble, they wanted to get in on the gains. Then we saw that again once in 2008 and in the last ten years we saw a huge increase dove drastically this year. But look at the rebound of the S&P 500 here. What rebounded with it? Well, the margin bet people weren't and are taking out margin again in order to get in on this run.

that creates a market that is built less on real value and more on speculative margin. And I'm not saying that margin causes bubbles to form and pop. I'm just saying that there is a clear correlation of risk between how much margin is being taken out, what is actually driving the market, and the occurrence of prior recessions. And these are all things to think about as you return to high levels of margin.

It's important to understand what's actually fueling this run, and it's important to understand all of the different factors that are causing it to run and drop. Margin itself doesn't mean that we're going to have a bubble, but what it does mean is that we have an underlying issue if everything starts collapsing again, but it is a risk factor that must be noted if you're trading in today's market. anyways. folks, if you have any questions, feel free to reach out to us in the comment section below.

Make sure to join us on Zip Trader Circle for a free nightly watchlist. And if you're wondering what broker who, what broker should you be trading these stocks on. We always like to send new traders over to Weeble. You will get two free stocks when you both sign up and deposit using our link below.

but it's a great platform. They have great features such as earnings calendars. They have really great scanning capabilities. What else do they have? They have After Hours runners, pre market scanners and stuff of that nature.

It's a really great platform and you also have your After Hours in pre-market trading which a lot of other platforms don't let you do and a lot of the movement happens in the the pre market in the after-hours so you might as well have that feature so you can take advantage of it and also protect yourself when the market turns against you. And lastly, if you are looking to learn how to trade if you want to be forged into a trader, we are offering $50 off if you type in Stay Home 2020 before checkout and that link is in the description below. Anyways, folks have a great day and I'll see you in the next video.