The stock market dropped dramatically as beer bug cases spread throughout the world, killing the economy and killing revenue. then as the ever so slow US government and Federal Reserve stepped in providing you tools and oodles of stimulus and quantitative easing. We got what many called a hashtag fake run up. that was then followed by a brisk sell-off and most people were calling here as the spot where we'd start seeing another huge sell-off.

But as usual, popular opinion was wrong and we saw the market rise basically day after day for the last week, giving us 23% of upside since the original bottom here Jim Cramer even reported that the Dow had its best week since 1938, while also reporting that more than 16 million Americans have lost their jobs in just three weeks. and on Thursday the market finished off strong before the three-day weekend with a one point four 5% increase the cap off the record week and this is all simultaneously happening as the world economy teeters and economic payroll ransacked the world. But this run up means that the market aka the S&P 500 is literally down only thirteen point six, five percent on the year. That means that despite the fact that we are in an unprecedented global crisis despite the fact that we have record unemployment claims and despite the fact that most of the workforce still can't operate, we were only down thirteen point six, five percent on the year.

But why did this run-up happen? Will we see a Easter sell-off? And how can we use this knowledge to make money? But don't you worry in this video, we're going to be walking you through all of this and all. I ask in return is that you hit that ravishing like button? Okay, so to start it seems like everyone and their mother was upset about this run-up. What you are looking at hither is the one-week performance of the S&P 500 in the midst of what could arguably be the biggest economic disaster in modern history. And what do we see? Well, we see Green across the board.

banks were up double digits and stocks in every major sector were green. Yes, folks, this is quite the picture. You would expect this to be taken from one of the biggest expansions in stock market history. Yet, it's been taken in the middle of an economic and public health catastrophe.

And honestly, a week ago, if you had told somebody that the stock market was going to go up or that you felt the stock market was gonna go up, they'd call you an idiot and they would have ran you out of town. But there are many factors that contributed to this run-up. So let's talk about factor number one. Numero uno number one was big government intervention from the Federal Reserve and from the Federal government providing an extending massive monetary and fiscal stimulus.

So this week, the Federal Reserve rolled out its 2.3 trillion dollar plan to stabilize the economy. This was announced on Thursday but was actually authorized by Congress earlier as part of the Cares Act But this action focused on providing aid to 40,000 medium-sized businesses that employ about 35 million. Americans So the Fed right now is trying to do everything in its power to avoid the U.s. from plunging into a depression? We already know that we're in a recession, but how do we set ourselves up now so that when this whole beer bug crisis ends, we can more smoothly recover? Well, of course, by first providing a backdrop of liquidity for banks and corporations so that they can then weather the storm and stabilize the economy, but also by backing up Main Street which is what we saw more of this week.

But why Why is it important to save small businesses? Well, unlike most corporation, small businesses don't have the same ability to bounce back after a prolonged period of zero revenue. Medium to small businesses that go bankrupt during this crisis will mean permanently lost jobs and new small businesses will take some time to build and reappear. But taking action to save them now means that less will go bankrupt and that means that they won't have to be built over again. And that'll mean that the jobs will bounce back faster once all of this is over.

But Charlie you the stock market is mainly major corporations. Why would stepping in to save small and medium businesses even help? Well the more businesses and likewise jobs that the Fed can step in and save The quicker the recovery will be At the end of the day, if we have to wait for jobs and economic activity to come back, that obviously is going to delay our recovery. But this action and continued intervention by the Fed also has the dual purpose of showing investors that the Fed will do whatever it takes to stabilize the economy. whether or not you agree with their injections of course, is a whole other matter.

But if you compare this to 2007, the Fed made many mistakes and as to doubt by Jim Cramer, they opted to do too little in the beginning, which ended up in them having to do too much this time around. The current chairman of the Fed Mr.. Money Printer himself pal well does not want to bring a knife to a sword fight. He's putting everything on the table as he'd rather step in and over correct now instead of under correct and faced the ramifications later.

But this is nothing new and the Fed has taken unprecedented actions throughout this whole crisis. However, this in ever-increasing quantitative easing, will undoubtedly continue to attempt to hold up the market. Okay, numero twoo numero dos easing of the oil crisis. This week, we saw some stabilization of oil prices.

so you may remember. back in early, March Saudi Arabia and Russia started dropping excess oil onto the market. This resulted in a price war that further aggravated the world economy as oil prices dropped to their lowest level since 1991. We talked back then about how this is a disaster for the U.s.

because when Saudi Arabia or any major oil-producing company drops oil onto the market that lowers the price of oil. and if it goes below the price it cost to produce oil in the US, it kills our industry. And that's important because industry is 8% of our GDP and one of the biggest industries in terms of capital expenditures and high-paying jobs. This in and of itself is enough to cause its own economic disaster.

But this week we saw some light at the end of the tunnel as Trump spoke with the crown prince of Saudi Arabia and the week ended with Russia and Saudi Arabia reaching a deal to cut oil production. This resulted in more stabilization of price which then led to more stability in the overall equity market. Okay, number three, Numero numero tres a better outlook on the beer bug and its economic ramifications as China reopened Wuhan and many of their factories. And as that news spread this week, it's no doubt that investors started getting more optimistic about both international and domestic economic exposure.

With the world's second-largest economy starting to recover at least as far as we know, the overall outlook for both the global economy and our own economy is looking at least slightly better. Plus American businesses that have branches in China are starting to reopen and get back to business. This is great for the overall picture and it's great for investor sentiment. Okay, numero: Quatro Bernie Sanders drops out now I Don't talk politics often on this channel, but what I do is just to say how the market reacts.

Obviously everybody has their own opinion and I'm not getting into that wormhole. But immediately after Burnie dropped out, the Dow jumped about 800 points. Now, why would it do this well? The biggest gainers of Bernie's dropping out were the health insurance companies in the health insurance sector. With companies such as Melina and Anthem running up massively and regardless of your political leanings, it's quite hard to argue that Bernie Sanders It's hard to argue that he would have benefited health insurance company profit margins or the profitability of the sector as a whole and thus him drop II.

Now it makes the case for a brighter future for health insurance companies, but it's also true that Sanders had proposed wide-ranging taxes on most of Wall Street and intense regulations that at the very least you could argue would make investors very wheezy. So it's really not a surprise that him dropping out would have a positive impact on the market. but Charlie Who cares if the market went up last week, what will it do this week? Well, as traders, it's not our job to predict the direction of the market. As traders, it's our job to create a direction that we are given.

We don't decide the direction of the market, but the market decides it and then we play off the market. But with that being said, I will present some of the facts so that you can go ahead and come to your own conclusion. So this run up from the bottom means that at the current price we are at, we are just thirteen Point Six, Five percent down on the year. It also means that if you compare where we are trading now to where we were trading at just twelve months ago on April Twenty nineteen, we are trading only three Point Zero, Seven percent down, and we are only twenty-one point Three percent down from our highs just two months ago.

Now, as a recap, T'v 2020 Beard Bug Crisis resulted in one of the fastest sell offs as compared to some of the other crashes on this short, but it has also resulted in one of the fastest initial recoveries. But the gravity of this situation isn't really depicted well on this chart. We have this small pansy curve here in the 2020 Crash, which looks like nothing compared to all the other crashes. Now of course this is still in the beginning and the other ones.

We have data for the entire crash, but if you look at the underlying fundamentals of the 2020 crash and you compare that to the underlying fundamentals I Love literally all the other crashes such as just with unemployment claims, it's much worse. Here's 2020. Here's the charts for the other crashes: 2020s unemployment claims are much much worse. In fact, it's practically off now.

I'm not saying that this won't quickly recover once the dirt bug is gone, but what I am saying is that the idea that the market should only be down thirteen point six five percent from where it was when the full economy was booming. I Am saying that is a bit ridiculous. It is hard to argue that shutting down most of the US economy would only result in a little bit over a thirteen percent reduction in chair prices for the overall market. That is quite ridiculous, and nobody in their right mind would say that, except perhaps all the people that bought in here.

But while I am of course a eternal optimist for the long-term growth of US equities, it's hard to argue that in the short-term are not susceptible to more sell offs. and there's a few big factors that you need to keep an eye on to understand what's going to move the market more down and what's going to move the market more up. Number one, and perhaps the most important is how long this beard bug crisis is going to last. Obviously, it's the beard bug crisis that got us into this economic catastrophe, so it's also going to need to be the beard bug crisis that gets us out of it or at least starts us on the pathway to get out of it.

The longer it lasts, the more businesses and jobs that permanently go under and have to be built back and the longer or shorter than predictions are the worse are better for the market. Now number two is the Domino effect. So you see major companies that were weak even before the crisis are now much more likely to start tumbling as if they were weak in catering before the crisis. Obviously, this crisis is going to push them over the edge and if it lasts long enough, enough of them will go over the edge to cause a domino effect that causes more companies and more jobs to go over the edge, which causes more companies and more companies and so on.

And this domino effect could affect multiple industries. And any news of this happening or any speculation of this starting to happen would be something that could take the market very rapidly. Number Three: The third reason that we could have another sell-off number three is job reports. So excess is an estimated job losses is going to serve as a negative catalyst throughout the crisis.

Of course, investors are already factoring in massive job losses. No one will be surprised if we have tons of job losses. Obviously, it's heading in that direction we've already had ton, but sustaining and longer-term job losses will begin to sneak in as time goes on. And if we continue to see these month after month after month and we're not opening up, this is obviously going to sink in more and hurt equities as a whole.

But Charlie Who cares about education, knowledge, and explanations? I Just want to make money. Okay, so the first thing that you need to do in order to make money in these market predictions is to be Direction independent. You need to accept that the stock market does not care about your feelings. One of my favorite quotes is that there is no price too low for a bear or too high for a bull.

I'd say this is one of the most important quotes in the history of the market. I See this behavior constantly and I've seen this throughout many market conditions. Investors and traders are often extremists. They either think something is worth absolutely nothing and deserves to die, or it's worth everything.

It deserves to be royalty and own their firstborn. But folks, you need to stop picking sides. Why be a bull or a bear when you know that you'll be wrong a certain percentage of the time? Yes, in the long term it pays to be a bull. but as traders, it doesn't pay to be able or a bear.

It pays to be Direction independent. But Charlie How can I trade stocks on both sides? Well, by making a plan for when the direction is up and when the direction is down? When the direction is up you can play stocks that have gotten being down the most by the crash for example. Some of the biggest gainers this past week were also some of the biggest losers in the crash such as the cruise lines and Airlines obviously trash companies in the short term but huge beneficiaries. When we have days of recovery and on down days you can take advantage of down swings by short in the market by buying inverse ETFs S picks you goes up when the market goes down and that's why it was so profitable to trade SPX you in the first few weeks of the March sell-off But another way to play off the weaknesses in the overall economy is to familiarize yourself with what's actually going on.

For example, if you go into the oil crisis as this oil crisis continues, you can familiarize yourself with how to trade movements in oil. Last week and the week before that week all about you Co and ESCO and it provided many great trading opportunities as the fight raged on. Now you Co and ESCO are not the best opportunities to play right now because they're about to go through a split. But my point is to keep up to date with what's happening in the economy so that you can go and trade the underlying indices and the underlying commodities that are affected by the events and the last way.

And perhaps my favorite way is to keep up with the catalysts themselves. For example, we put out lightly watch lists every night in our freeze traitor. Circle Facebook Group and the way that you can keep up with these is just by joining. and it's a free group.

And we put literally tons of categories of different tickers that are valuable for you to watch and then trade the next day. For example, some of our previous picks were MFA and excess PA I'll put the link below if you're interested in joining, but the biggest advice that I can give you is just be Direction independent. It doesn't make any sense to bet on one side or the other when the markets can just go either way. Instead, trade what the market gives you and then if it doesn't give you a good setup, then don't trade it, but trade what the market gives you at the end of the day.

I Also feel that the market is trading too high and is quite overdue for a sell off, but the stock market doesn't care about my feelings and if I let my personal biases cloud my judgment, that means that I'm not going to be taken advantage of days where we do have up swings and there were quite a lot of Ups swings in this last week for example. So be Direction independent and trade like spoiled brats. Anyways, folks. I Do hope that this video is valuable.

If you have any questions, feel free to reach out to me. In the comment section below, If you're looking to use this time where we're all sheltered in place to actually invest in yourself and grow your account, you can learn to trade with Zip Trader You! This is of course our private tutoring chat and premium course where we walk you through everything you need to know in order to grow your account. Great for folks who either are struggling to grow their account or have no prior knowledge of the stock market. Because we walk you through everything, you can learn more by going to Zip Trader you calm or clicking the link in the description below.

Anyways, folks, have a great day, stay safe and I'll see you in the next video.