Is The Stock Market Crashing? (What To Do Right Now)

[00:00:00] Speaker 1: can you tell me why markets are dropping lower nasdaq market is down 2.4 percent we have meta down after reporting great earnings what is currently injecting fear into the market pulling together what's driving the fear right now all right sounds good and also if you can look into nasdaq market is also down 2.4 percent if you look at every red day for qqq how often is it a bigger red day than 2.4 percent the fear is three things stacking up all right let me know what it is [00:00:41] Speaker 2: on the fear side iran's navy says seven ships were hit near the strait of hormuz trump says the u.s isn't negotiating with iran and the times reports the u.s and israel are planning strikes after the election besant posted this morning that karg island has no crude tankers in sight and iran hasn't loaded a cargo since august 25th brent's around 111 to 112 wti near 99 that oil shock feeds straight into inflation fears yeah second ai spending doubt meta beat but bloomberg counts about 825 billion in future lease and contract commitments and the cost of ensuring meta's debt hit a record the new mexico 25 billion ruling landed around 6 10 and just piled on that's dragged amd down about six and a half percent Nvidia 3, SMH 4.5, with short bets near five-year highs. Third, the data's not the villain. Claims were solid, the small misses were noise, and the 10-year yield is actually falling near 5.01. So it's stock-specific fear, not rate fear. The connective tissue is stagflation thinking. Higher costs, weaker growth, less patience for pricey AI bets. QQQ was about 708 at 835, down roughly 2.4. The QQQ red day frequency question is still running. I'll have that number shortly. That QQQ number just came back. About 14% of QQQ's red days are worse than 2.4%. 449 out of 3,125 down days since March 1999. Strip out the dot-com crash in 2008, and it falls to about 8% since 2010, roughly 10% since 2016. So today's move is around a 1 in 10 red day in the modern era. The five worst, COVID in March 2020 with about 12 and 9.2%, October 2008 near 9, April 2000 at 8.7, and September 2001 at 8.5. One caveat from the data, big down days tend to cluster. So another [00:02:44] Speaker 1: 2% plus drop isn't unusual soon after one. I'm really glad you said that last point. I really do appreciate it. Just bringing more awareness of that. Although it is a significant red day today, another red day can follow if more fear, you know, gets instilled in the market. [00:03:04] Speaker 2: Exactly. What is headline about? Go ahead. I'm sorry. No worries. I was just saying one headline about a strike on Iran could do it since oil's already perched near 112 and any confirmation sends it higher. Are you holding anything through this or mostly watching? No, I I'm watching because [00:03:22] Speaker 1: when we zoom out and we look at the larger timeframes, I'm on the four hour timeframe right now for QQQ. Historically speaking, based off of recent levels, we have a really strong support range at 700. So technically speaking, we're approaching a, a major previous support range of 700, which tends to be considered not only a strong support, but technically oversold, correct? That's the right way to frame it [00:03:49] Speaker 2: price sitting right above a level that's held before with momentum stretch does set up that oversold bounce scenario. The catch is that in a fear driven tape support levels get sliced through more often than they hold, especially when the driver is geopolitical and not mean reverting. So 700 is where you'd watch for either a flush below that invalidates it or a sharp reclaim that confirms it. [00:04:11] Speaker 1: Okay, perfect. I appreciate the update. Thank you. [00:04:15] Speaker 2: Glad it helped. Talk soon, Ricky. [00:04:17] Speaker 1: All right. There we go. So just wanted to make sure that we understood what was instilling more fear in the market. So as of right now, especially when it comes down to meta. Now we got asked this question in today's live trading session, right? Because if you guys didn't see my recap yesterday, I shorted meta and we shorted meta as it became incredibly overbought. So it wasn't before earnings. It was after it reported. We opened up a short. I made about $3,800 on the day. Feel free to go and watch yesterday's recap video, the second one. With that being said, I don't carry these shorts overnight. So obviously if I would have known that it would have sold off an additional, I mean, it was still up like two or 3%. So if I would have known that it would have continued to sell off, of course I would have carried the short. This is a great reminder. No, no one can predict the future, right? It was just a simple technical overbought reversal. And I knew that there was fear about meta overspending. Did I expect it to be an exaggerated sell-off like this? No. It does look technically oversold in today's live session with my LPP team. I actually bought the dip into meta and we went long on it, but then I took profits because we saw the lack of progress and we saw how weak the NASDAQ market was today. With that being said, also, if you zoom out, you can also see that meta's kind of in that middle ground right now where the potential for profit, if it does recover from here, I mean, it's attractive 17%, right? To previous highs, but the potential for loss based off of recent lows is also 17%. It's a one-to-one ratio. Is that actually a favorable risk to reward to be in? Now, of course, markets tend to be more bullish than bearish, but with current concerns as of right now, obviously, it's going to be much easier later down the road to look back and be like, look, I should have just bought the dip as markets eventually intend to recover. But as of right now, there's uncertainty. Markets are still trying to overcome not just what's happening in the Middle East, right? So the tensions, oil prices rising, and as oil prices and tensions continue to escalate, and Iran or Israel and the US talking about attacking Iran after midterms, that's not shedding a lot of de-escalation certainty into the market. So if they do attack shortly after midterms, which is just in a few weeks from now, then markets can go lower. So that's kind of the pickle that I'm in that I do want to buy the dip and I have bought the dip. I was very vocal with my LPP team this morning, but you want to position yourself in a way that you don't get shaken out, right? Don't use leverage. Don't use margin. Don't bite more than you can chew. There's no question that there are a lot of deals presenting themselves, right? And whatever space and niche you might be focused on, but don't get that confused with, I'm going to buy very aggressive right now when things can actually get worse. And if they do get worse, will you start to feel the pressure? And if so, this is just a reminder that position size management is super important. It's better sometimes to buy one share than to buy 10 shares. If, if, you know, that means that you're going to have your sanity, you know, holding it overnight and over the weekend. Remember we are reaching oversold levels. This is just a great reminder to some of our beginners. If you're not the best at managing and mitigating risk, the reason that I asked the AI software that I was using, technically speaking is 2.4% at pretty significant red day is that not only are we technically oversold, right? Approaching that $700 support. Of course it can continue to drop, but the potential for profit, right? This is what I want you to understand. Let's say that we do bounce at 700, but there's still some range. Ricky, I could make 1%, but the potential for recovery is just significantly greater. Like, are you putting yourself in a position to succeed? The reason I'm trying to target beginners with this is that not only do I want you to take risks to reward into consideration, but beginners often are not the best at taking profits or cutting losses. So if you do short a position here, and then the direction begins to change, you're literally shorting at one of the worst times when we're at a possible support and the recovery is significantly greater than any recent or relevant potential for profit when shorting. Again, just my two cents. At the end of the day, you're an adult. If you want to short, you can do whatever it is that you want. I'm just making you aware where shorting does come at a greater form of risk. I've been very vocal that, yeah, I do enjoy shorting at overbought levels. When we begin to reach oversold levels, I do view it as a greater form of risk. So just wanted to do my part in making you aware in hopes that you approach this dip by opportunity in a more calculated and a more intentional way. And again, for those that asked in yesterday's video, what platform am I using? I'm using Webull. I want to remind you the first link in the description down below, whenever it is that you're ready. We're giving away $1,000 this Sunday. You can sign up for Webull. You have to use our link or you can get friends or family. If you already have Webull and you're like, oh, well, is it just for new members or is it just for existing Webull users? It's a promotion for Webull that they're asking me to do on a weekly basis. I select someone randomly that signs up for Webull right now, right? So again, first link in the description down below, you just have to have a qualified deposit. It can be five bucks. It could be a hundred bucks. It doesn't matter. It could be your partner. It could be your friend. It could be your family member. They have to use our link. So again, the first link in the description of this video, sign up for Webull, have a qualified deposit of $5 or $100 and you'll automatically get entered for our weekly $1,000 winner. And we will select that winner randomly on Sunday during our Sunday stock talk. So other than that, again, I know it's kind of maybe hard to see the light at the end of the tunnel when you're feeling the pressure and markets are down a significant amount. I think this is a great reminder of why you don't position yourself too aggressively, right? If you look at how the markets are currently moving and giving back all that they gained, we made you aware at these overbought levels, people were getting too greedy at overbought levels that never makes sense to be over leveraged in preparation for pullbacks when more deals begin to present themselves. And in my opinion, again, even if we do experience more volatility down here, it's a fair enough deal that when if and when markets do begin to recover, there's greater upside potential than potential downside risk. And that's just a very favorable position to be in. So I hope that you can see why at overbought levels, I often make videos about, hey, be cautious, don't use leverage, don't use margin. It's not to encourage you to sell, but just to remind you to not be over leveraged. So hopefully you have cash available on the sidelines. So when markets do drop, you're able to take advantage of them. And again, these are concepts that we talk about every day within our LPP daily live session. So whenever you're ready, you don't have to, I mean, you can just subscribe to us here on YouTube. But if you want to start your morning off with us every day, if you're a complete beginner, I would encourage you to check it out. Second link in the description down below, the cost breaks down to less than a cup of coffee a day. It's a dollar and 30 cents, but it's a one-time payment for lifetime access with the current sell we have going on in October. And it's about to end soon. So whenever it is that you're ready, check it out. Second link in the description down below. We also have a recent live session for you there. You guys just could scroll down, check it out, see what you think. And if you like it, then you can join us and start watching me trade live as soon as tomorrow. I appreciate you guys' time. I hope that we're in a thumbs up. If you want access to the AI software that I use, it's my GrokBot and my template, it's going to be in the comment section of this video. So appreciate your time. Like always, let's make sure that we end the year on a green note. Take care team.