So since Monday's bloodbath, we saw the market get beat down like a winter gnome in the summertime. and then we had a Tuesday where the market couldn't quite pick a clear direction for most of the morning. but then by the grace of the Holy Gnomes ran up massively towards the end. Then on Wednesday today, we've had mostly selling off once again.

So is the stock Market a hormonal teenager? Or is this behavior actually quite predictable and is now the time to take out a loan on your grand Papi's house and invest it into the S&P 500? Well, we're going to be covering all of that in details within this video. But first, of course, the only thing that I ask of you in return is that you hit that ravishing like button. A ravishing like per day keeps the evil stockmarket goblins away. Okay, so my first point: a lot of people are very surprised.

They're little surprised. Sera's that such terrible read days within a company such great Green Day's It seems that too often everybody expects the stock market to be black or white. It needs to either be crashing or it needs to be thriving. But that's not the way the stock market works.

The emotional nature of the stock market makes this physically impossible. Each day of the stock market includes people overreacting to that day's events, whether they be negative or positive. Charlie you dumb duck, Are you saying that this entire market is an overreaction? Well, I'm not making that claim and I never make claims as to where the overall direction of the market is going, especially in times of a crisis, because honestly, nobody knows where it's going to go and anybody that tells you they do is lying. But the thing is that the intra workings of the market remain the same no matter what crisis these are going on, no matter what market condition, and no matter what you want to feel.

Market reactions themselves are composed of intraday trading periods, and intraday trading periods are fueled by overreactions. That's because the stock market is inherently emotional over the short run, and it's inherently logical over the long run. For example, on Monday people overreacted to the oil crisis and the rapidly increasing beer bug crisis. On Tuesday they overreacted to the role of government aid to help the crisis.

And lastly, on Wednesday Tuesday they overreacted out of uncertainty over how all of this would actually come together, but this behavior isn't actually that crazy when considering the technical history. In fact, if you look at some of the S&P 500 worst days, they were later followed by some of the best days some of the biggest gains. but Charlie I see some days where they were followed by more selling off like this one hither. Well, fine.

let's look at this day: November 19th We had a 6.1 2% sell-off, followed by the next day a 6.7 1% sell-off. But that very same November 20th sell-off was followed by a 6.3 2% jump on November 21st. And it was such a jump that it also made it onto this list. So what does this mean? Well, overreaction and then big game.

The behavior is the same, so the market tends to behave in a way where the biggest losses turn into some of the biggest overreaction Corrections the next day. This does not mean that the markets going to recover, it means nothing about the underlying fundamentals. it only has relevance in the technicals. And because of that, it does provide us with these beautiful periods where there's so much volatility that we can take advantage of.

If you compare any two periods, the shorter period is going to have more emotion as compared to the longer-term period. That's why when you open up the S&P 500, you see that while productivity in the human civilization has increased over the last 100 years, there's been periods of setbacks because this is where different events happen that caused more emotionality. But if you break down even just random periods, you'll notice that every single day has its own emotional output. But when it comes to the long term, at times, it tends to converge to its actual value.

So as traders were trading off the emotionality of the masses, so it doesn't really matter, this matters that we can take advantage of them. How do we take advantage of these? Charlie Well, I'm probably beating a dead horse with this, but the first way is to take advantage of understanding where a direction is heading. If the market is in an upward direction intraday, or is showing signs of price trikes, play opportunities that have a strong correlation with the market, but also have gotten beaten down noticeably. for example, one of my favorite ones that I talked about is A and B.

So AM D tends to hold some strikes and provide good entry points during these market recovery periods. MSFT Microsoft also tends to do really well during market recovery, and if the market is in a downward direction, place VIX or Sqq VIX goes up with more volatility and s QQQ goes up as the market goes down. If you make sure that you're following these tickers, that means that when the direction of the market is determined at market open, you could say okay, well, this is the set that I'm going to trade. or this is the set that I'm going to trade based on if it's upward or downward and if it switches, you could say okay, wolf I'm gonna switch to the other watchlist and then you find your high probability setups.

If you're wondering how to find high probability setups, we have a ton of other content on that and you can go ahead and join us at Zip Trader Circle to find out which ones we're watching. But I've been hammering in my top three stocks every single week and these have been the big ones because of the market direction and the overall uncertainty, you'd like more strategies on how to trade these. You can start by watching my top stocks video in it I walk you through different strategies. Lastly, another thing that I like to talk about in terms of playing different opportunities is that if you don't want to follow the direction of the market, you can instead decide to play hype plays.

Now high plays are ones they go up regardless of where the markets going. And right now it's the beer bug sector. The beer bug virus vaccine sector that is doing the best because of all the hype going around. That for example, we called out Ino and IB IO and a bunch of other different tickers and we have a lightly watchlist with all the beer bug tickers updated and ready for you to go.

You just have to set alerts for different shows of priced rights and then take advantage of them. So my next point is that in these market conditions, you need to be logical and not emotional. So many people these days are asking me Charlie Should I sell out at 50? Should I sell out at 20? Do you think blank stock is going to go to 100? Do you think it's going to drop to 10 when I hear when people ask me this is blah blah blah blah. As traders, we cannot allow ourselves to think in terms of will it go to X Blank spot.

We are not psychics and we can't look into a crystal ball and say hey, this is going to 15 dollars and I think one of the most worrisome things people do is they're like charlie, Is this stock going to open up or is it going to open down? Please tell me, Who cares Folks, who cares if it opens up or down, we need to have a plan available to take opportunities regardless of whether or not it's up or down. This is, of course, a new Bemis and it's something that's going to kill your trading progress and blow up your account. Our job is not to make weird guesses, but but rather to make a logically back decision based on the statistics of what's going to work over the long run. What does that mean? In layman's terms, it means taking high probability positions.

It does not mean guessing on price points. For example, Let's go ahead and say we were trading six this morning. A lot of people would open this chart and say oMG I wonder if Six is going to open up today or down today. oh I Feel like it's going to go up today because the market is volatile.

Whoo! And then this clown of a trader would then say oh, it got oversold All shucks I'm wrong I guess I just didn't want to make money today. it just wasn't in the picture for me. No, instead of saying that, you could have had a clear plan, you just totally shot yourself in the foot. What you should do instead is take what's given to you and make a decision based on that.

If you open into a downward direction, that's a deprecating factor so it doesn't make any sense and locally open into a downward direction. We had that deprecating factor. We went to oversold and then we had some signs of recovery. Then later we have the market taking a turn.

We get our elevating factors and we get clean running up period after period. So my point is respectfully that if you decide to spend all of your time trying to guess if it's going to open up or down or is it's going to get to X price point or get down to Y price point and you're just going to have a bad time. If you do this, you're completely missing the point of trading and it's totally reckless to trade in this sort of manner. Instead of asking me or yourself whether something will happen, you need to instead ask.

Does this setup make sense? Statistically, if it doesn't then don't take the position if it does take the position. But anyways, folks, my suggestion with this is to just use these times as an opportunity to just really fine-tune your skills in terms of creating a plan and understanding what it is that makes a position good. Understand that you need to have elevating factors and Understand that you're trying to avoid deprecating factors. Yes, the overall market crashing or the overall market in a downward direction.

That's a deprecating factor that's something that we need to take advantage of so that we can then flip the script and trade in verses where it makes sense VIX Sqq, Q, and so on. But my final point here is just don't take anything for granted. You're going to hear tons of people say oh, we're guaranteed to hit a bottom or oh, you know, the stock market's gonna keep crashing until it hits zero dollars. You're gonna hear the extremes from both side, and you need to make sure that you're taking everything with a grain of salt.

Because at the end of the day, nobody knows how this crisis is going to play out and nobody knows exactly where the cards are stacked and as traders. What this all results in is us having more ability to trade off emotions because there's so much emotion right now, but also understanding that the longer that we hold a position, the more risk we have because of the fact that the stock market can turn against us so quickly based on just the drop of a hat if some new piece of news comes out. So be very cautious of that. And as traders, never forget that our job is to trade the price action, so it really doesn't matter whether the market is going to start suddenly recovering or it's going to suddenly drop.

Just target moves that do well based on the current day and take it day by day. If you're somebody who is looking into swing trading, understand that there's a little bit extra risk now, and you need to be extra conservative in terms of the reversal criteria. If you're holding something for a week, understand that. Hey, things could be completely different in seven days, right? So make sure you're setting very conservative reversal criteria.

Somebody who's long-term investing in this environment understand that historically, the market has always rebounded when it comes to trading. Obviously, we want fluctuation, but when it comes to investing, it doesn't make a difference. If you're investing in something and you're not planning on selling out for 30 years by nature of an investment, then there's not really a reason to be concerned. Historic, through, the stock market is always done well, and if the stock market decides to break the trend and goes down for the next 30 years, then we're all screwed anyway.

So for folks who are investing just to understand that investing itself is a long-term game, trading is a short-term game. And so when it comes to a market recession, you don't need to be all emotional and panicky, just focus on the opportunities at hand. But anyways, folks, let us know if you have any questions by commenting below and if you have any video topic suggestions for future videos. Also let me know below because we are starting to take off some more topics that people have previously suggested.

And of course for folks who are looking for a nightly watchlist and a community full of just wonderful traders such as myself, we do have the Trader Circle which I'll link to in the description below. Anyways, folks have a great day and I'll see you in the next video.