Stock Market Crash Warning — VIX Hit 24 + I Bought $160k Of This Stock (Options With Ryan)

[00:00:00] Speaker 1: The NASDAQ was down over 3% today. The VIX spiked all the way up to 24. The big question is, is Ryan, is the bull market over? Is the stock market done with? Now, if you saw some of the comments under my videos, you would think the answer to that question is yes. But today I'm here to dispel the fears and I'm even going to talk about one stock that I purchased over 100K in and I'm even gonna go over a few opportunities that I am taking advantage of. So let's go ahead and dive into it. Remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes. Only results may vary. Now, if you take a look at the account, you can see we took quite a big hit today. A big down day in the portfolio, over six figures even. But this right here is my public portfolio that I share here on YouTube. Now, if you do wanna see me hit my eight-figure goal in the next five to six years, be sure to be subscribed to the channel by clicking the subscribe button down below this video. Also hit the notification bell so you don't miss out on my latest updates. And if you do get any value out of this video, please hit the thumbs up button for me. I'd greatly appreciate it and I appreciate you being here. Now, let's go ahead and go to the realize, gain, loss because this is what's most important, right? What's on paper, as long as I don't sell my shares, I don't take a loss. But today, we did close out some covered calls and harvest some premium even though the market was down today. So I was happy about this but what I'm more happy about is my 1,130 clients here in Options Trading University all following the principles and frameworks that I share here in the mentorship. Also keeping cool, calm, and collecting premium during these big times of fear. As you can see, clients sharing inspiration on the day, right? Obviously, results vary based off account size and risk tolerance. But if you do want access to my Ryan's Trades and my Leaps, Entries, and Exits and you'd like guidance from me and my 1,000 clients, be sure to check out the top of the link down below this video. Also, I do discuss free trade ideas here on my Instagram where I do daily market updates and share a little bit of my personal life, my X account, and my free newsletter. Those could be found above, down below this video. So make sure to check it out. Absolutely free. So let's go ahead and dive straight into it, okay? I do want to dive not only into the market and where we went today because the news was really hit or miss, right? We didn't really know what the exact reason was why the market sold off. You could pinpoint it to Amazon earnings. You could pinpoint it to the AI spend in Google, you know, negative free cash flows, maybe even Intel's poor results, right? You could pinpoint it to any one of these earnings. But in the grand scheme of things, when the market pulls back like this, these are times to take opportunity, especially if in a bull market, okay? Now, let's talk about that because first I want to talk about the CME FedWatch tool, okay? This right here is what helps me determine if I'm turning bullish or bearish, all right? Now, the reason I haven't turned bearish is because we are not seeing more rate hikes being priced in. Now, earlier this summer, you saw me on the edge of potentially turning bearish. When we were pricing in four additional rate hikes here on the CME FedWatch tool. But as you could see, that fourth rate hike came off the table last week, this week, or yesterday, or actually this morning, the third rate hike just came off the table. So 450 to 475 basis points is off the table. That's not being priced in anymore. In fact, only two more rate hikes are being priced in. The one that was supposed to happen in December is getting priced into January. So it's getting pushed out to next year, 99% odds. And then the one that had 90% odds in March for 425 to 450 basis points is getting pushed out all the way to mid-June. So that's a bullish thing. Why is the market falling, Ryan? Well, we're gonna dive more into that as well. If we see the M2 money supply, we could see that we are clearly in a money printing type of environment, right? If we look at the M2 money supply, you could see September, $23.4 trillion, right? Versus back in 2022, when we went into this crazy rate hike cycle where the Fed was tightening liquidity, pulling money out of the markets, right? And increasing interest rates so that the 10-year was offering a very high yield. People weren't able to get loans as cheap. And you saw a lot of money coming out of the liquidity, right, out of the market. So during that time, there wasn't as much money printing, right? Maybe a little bit, but a lot of tightening. But right now, ever since 2020, the end of 2023, rather, you could see that we'd just been on a money printing streak. So these are the things that I like to look at when I zoom out and look at the macro perspective to see if we really are about to turn bearish and potentially go into a bear market, right? Because I don't wanna see my portfolio go down 50, 60%, 70%. That would be not worth it, right? So these are all things that I take a look at for you watching this video so that I could help you point, you know, I could point you to the right data to look at versus reading the news or the latest influencer headlines, right? So that's another thing to look at. Now, if we look at oil, when we, you know, opened up down this morning, I said, wow, like, did oil spike up to 120? Did we go, are we hitting crazy new all-time highs in price per barrel of oil? No, we're not. We're trading at 103. So, you know, things are looking pretty constructive here. We're not heading higher. We aren't heading much lower. We're right about the same as where we've been for quite some time, right? So nothing has changed there. The U.S. 10-year treasury, as you can see, the treasury yields are coming back down, 4.9% 10-year treasury yield. So bonds are getting purchased. U.S. debt is getting purchased, which signals, you know, strength and obviously confidence in the 10-year treasury or else people wouldn't be buying it, which is pushing down yields, which is also what we wanted to see. If we, you know, this morning I said, wow, are we hitting, you know, five and a half, 5.6, 5.8% yields? Because back here, this is what everyone was worried about. If the yields keep climbing, right, that does affect interest rates. So seeing that the 10-year treasury yield is coming down, looks good. Again, Ryan, well, if it looks good, why is the market selling off here? Okay, that's when we have to dive in a little bit deeper to see where the money is going. So we already identified, you know, some of the money's going to U.S. 10-year treasuries, right? The yields are coming down. That means bonds are going up. They're getting purchased. S5FI actually finished green yesterday. So, you know, S&P 500 stocks above their 50-day moving average actually is increasing into this sell-off. How is that possible, right? Well, there's 500 stocks in there and a majority of those stocks don't really move the market, but now a big majority of those are actually getting a little bit of love here. If we take a look at RSP, which is the equal weight S&P 500, you could see that this has actually been rallying as we've been kind of selling off in the broader indexes. So that's showing you that there's a lot of rotation going on as well. Okay, so this is a healthy type of pullback and correction. It's much needed to head higher here in the markets. We do have to see a lot of the weak hands, a lot of the margin and leverage players get cleared out before we can have a healthy rally upward. So 5%, 10%, even 15% drawdowns, corrections are of course painful, but they do happen in a bull market. So that's just something to be aware of. And we will also jump into some of the data that suggests where the market might be headed from here given the VIX spiked back above 20. So I'll point that out and then we'll get into some of the stocks that I purchased. But as you can see, you know, everything on that front looks pretty decent for kind of a longer term horizon for the market to kind of bounce back here. Now, if we look at the short term horizon, unusual whales, the market tide looks super red today, super red, a lot of put buying, a lot of hedging activity going on by institutions. And then actually towards one part of the day, there was zero call buying like on the top net impact chart. But as we finish the day, you actually see some call buying in SPY, Marvell and IWM. So pretty interesting to see there. If we look at the fear and greed index, we hit extreme fear for a brief moment there. And now we're headed back into the fear zone. So, you know, things are getting a little bit too fearful here. Could we head lower potentially? So let's take a look at that. Now, if we take a look at QQQ, all right, we were down over 10% today. We hit 783.70 on the NASDAQ or QQQ rather, which tracks the NASDAQ. And I didn't think we'd break that 685 level, but we did. Okay. We went down to 683. Is further downside possible? Yes, definitely. Especially because we aren't quite oversold on the RSI. We're at 34. Technically oversold is 30. And we have seen those levels like back here during the Iran war low, we saw a 29 print on the RSI. So absolute kind of black swan downside. I'm thinking is somewhere around this 660 area, which would be a negative 13% from these previous highs back on October 6th. Okay. So if we open up down next week, do not be surprised. Keep yourself kind of, you know, open to that possibility. And then maybe don't even look at the portfolio because if you're someone who, you know, gets a little bit more fearful as the market's coming down, it's best not to look at account values. Now, if you're someone like me or, you know, someone in options trading university, you're leaning into this. You're kind of taking advantage of the fear because put premiums are higher. Cash secured put premiums are more rich. And then there's also some discounts, which we haven't seen in quite some time. So on the downside, you know, 660 is definitely possible. That would be kind of an extreme case scenario. VIX would probably get up into the, I don't know, maybe the thirties at that point, maybe even 35. SPY had a bit of ways to go on the downside. So, you know, SPY kind of touched that area that I thought it would touch it today, 750. And then it bounced back up. So, you know, next area of downside is, is quite a ways down, maybe around the 740 area. Again, we could hit it, but just something to be aware of. SMH is already pretty oversold here. I would say, um, it touched these almost Iran war lows, uh, you know, earlier today at five 11. So that is kind of where we're at with the markets upside potential. If the good part about it is that when VIX spikes this high, okay, we do have potential to recover. Okay. On any good news, it could even be neutral news. But if we take a look at VIX, all right, uh, we actually finished at 1966 today, but we touched almost 24. I'm basically going to round up here. We touched 2399, basically 24 on the VIX. Now we haven't seen a spike that significant, um, since the basically the Iran war, uh, lows. Okay. Back here when we spiked all the way up to 30 on the VIX. So, you know, we saw it briefly in June, a little one in July, but this one was pretty big. Okay. So nice little spike there. A VXN went all the way up to 30, which is the NASDAQ volatility index. I like to look at this because it gives me a better kind of read on fear in tech stocks, which is what I'm primarily in because I believe tech is the future, right? So we hit, actually we hit 31 today, which we haven't seen since the AI sell off back here. And then the Iran war lows. So typically what happens, you could just see, I'm not going to even say what happens. You can look at the charts and see typically what happens next. Now, could we head a little bit higher? Again, I said, yes, we could, but we're probably closer to a bottom than the top. Obviously that's just my opinion based off of VIX data. And we will actually take a look at VIX data right here. So this is just, you know, pure data going off of S and P 500 forward returns. This is 10 years of daily closes. Okay. From 2016, all the way to now, which is 2,512 trading days. So buying fear is paid and the bigger the spike, the better it paid, right? You could see the following two weeks after a VIX spikes above 20, the median return in the S and P 500 is 1.63%. Average 0.84. And it's positive 65.9% of the time. The following one month, which, you know, giving a little bit more time to be right. 2.28% median return and 0.69 average, which is 65.9% of the time. And then the following three months, which I think is a better kind of outlook because yes, it's a little bit longer for a buy and hold investor. That's a very short timeframe for an options trader. That is something that's a, you know, I would say a little bit longer of a timeframe, but following three months, the average median or the median return is 5.29%. Average is 3.79 with a positive, which is positive 79.3% of the time. Okay. So I'm just going based off data. You could see as the, the bigger, the VIX spike VIX crosses 25, 6.62 median return in three months. Okay. So just something to go off of. I like pulling up data, taking a look at that and, and being more logical with some of these pullbacks. Okay. Because it's not like, you know, every pullback is going to lead to some sort of bear. Market. Um, now let's go ahead and talk about some of the opportunities. Okay. Google, Google was a big one. I got a lot of feedback in the comments. I did see, you know, people were mad that I didn't address the Google earnings. I filmed the video, the last video prior to the earnings. Okay. Earnings came out after hours. Um, I typically film these videos, uh, before the close. You could see right now, uh, Google went all the way down to two. Let's see today, two 77. Okay. Now is Google over? Is the business done with right? Is the search business slowed down a bit? They didn't see as much growth. Let's talk about it. Okay. Let's talk about the fundamentals on the company. Why I purchased a bunch of shares in Google and why I am even more bullish on Google than ever before. So we'll take a look at the earnings. Okay. They beat right cloud doubled. Okay. The cloud business grew year over year, 103%, right? Even their search business grew 12%, right? Which is, which was kind of a slow down, right? And on what was expected. So they still have tons of cash, right? Negative free cashflow, $9 billion. They obviously announced that they are upping their CapEx for 2027, which kind of transitions us into another topic of AI infrastructure stocks, but we'll stick to Google right now. They're spending, right? To acquire more customers and service more customers with their cloud business, their cloud and TPU business. Now, as a business owner, I could understand why they're doing that, right? If they just kept doing the search business and they didn't innovate and spend more to build out another sector of their business, then the business would eventually collapse, right? But they're growing at a very fast pace. Now I watched a video and it was pretty interesting because if they were to spin off their Google cloud business, which includes the TPU business, right? Growing at 103%, that stock would probably be trading at anywhere from 35 to 55 PE. Okay. That stock would be very much rewarded for the growth that it experienced. But because people investors are looking at Google as a whole is specifically their search business, which is 49% of the revenue right now. I believe that Google cloud will increase and probably surpass that. Uh, there's B there's more heavy weighting on the search business, which makes sense, right? Because people are using, uh, the LLMs are using chat GPT. They're using Gemini. They're using, um, you know, other things that don't involve search with advertisements. Okay. Now their advertisements is still a, a cash cow business, 60, 63.35 billion. That's nothing to, you know, kind of shy away from. That is a big portion of revenue, uh, coming from the actual, uh, advertising business. So it's not like the business is over, just slowing down a little bit because of AI. And obviously why I look, why I like Google is they have so many users. We all use Gmail. We all use Google products. They can easily monetize if they really wanted to tomorrow, just like Meta did with Muse, uh, AI. And we saw the stock jump, what? 15%, 20%. So just something to keep, um, in mind. Okay. Now just taking a look at some of the, some of their numbers, you know, it doesn't look too bad. 25% year over year growth revenue, double digit growth. That's great. Operating income, 30% year over year. Right. Um, obviously we are seeing a loss on some of their other bets, like their project sun catcher business, Waymo and some of the other things. And then obviously, um, you know, their equity stake in spacex is, you know, wildly swinging their, uh, their P and L. You could see loss on securities, uh, negative 8.66 billion. So something to keep in mind as well. But again, um, I really like their business. The one thing, one segment that I believe will also grow is their subscription revenue from YouTube, from, uh, YouTube premium, which is growing at 11% rate. I think they can up that a bit more as well as their YouTube ads business. Okay. But Google cloud is the real revenue driver there. Um, as far as growth goes. And I think that will surpass or maybe match Google search at some point in time, especially with their TPU business. So I do like it. Uh, what we did, you can take a look at the portfolio. Remember this, not financial advice. I'm just sharing what I'm personally doing for educational purposes. Only results may vary. Let's take a look at the account. You can see I have 500 shares of Google. Now 164 K was my cost, um, with an average price of three 32. And then I have some two 75 puts that if I get assigned on those in 28, eight days, I'll have 600 shares and I'm totally fine with that. And I even have a little bit more room to add more if Google does stay down at those levels. But I do think that, uh, Google's a bit too cheap here. I know on the PE ratio here on trading view, it's showing 14, but I, I believe trailing PE is probably closer to 18 to 19, which is pretty low, right? That is a very low PE in regards to the S and P 500, which the average right now is somewhere between 25 and 27. So, um, in the long run for me, it's paid to dip into Google, uh, when it's below the 200 day moving average. And this was a more than a three standard deviation move below the 200 day moving average. So, um, you know, for me, I really like it at these prices and we'll see how it works out. But, you know, again, have a pretty large position there. Now that kind of transitions me into, okay. AI infrastructure is the AI infrastructure trade over. Okay. And one thing we want to continue to see, like we even talked about in previous quarters is the mag seven spend, right? Are the hyperscalers, like we're talking our Amazons, Googles, Microsoft, meta, Tesla, right? Apple, NVIDIA. Are they spending more on AI infrastructure, data centers, chips, switches, electronic equipment, all that kind of stuff that goes into the data center, right? Physical infrastructure, as well as energy. Um, and we could see that. Yes, right. They are. So four out of five are actually spending more, right? Amazon. You could see their, their full year, 2026 capex, 220 billion, and they're going to spend meaningfully more in 2027, uh, guided 40%, uh, more in both 2027 and 2028. So they're accelerating their spend, right? You could see Google accelerating their spend, they up their capex to 195 to 205 billion in 2026 for AI data centers and infrastructure. Microsoft was the only, or Microsoft did increase as well, 175 billion. Meta for your capex, 135 to 145 billion. And Tesla was the only one that didn't increase because they're spending more in factories and, uh, you know, for the optimist and robo taxi. Now we have Apple earnings next week and we also have Nvidia coming out mid November. But as you can see here, everyone is increasing spend might not be so good in the short term for the mag seven, but in the longterm, it's good for, uh, the AI infrastructure plays. So the first one that I'm looking at, and these are all going to be ETFs. I think ETFs could give better exposure and a little bit more diversified exposure to some of the AI plays. Now, my favorite ETF is DRAM. Okay. DRAM has exposure to Micron, 25%, SK Hynix, 25%. Both of them had phenomenal earnings, STX, WDC, um, even the Chinese company, I think it's CMXT and, uh, a few others. Okay. SanDisk as well. DRAM here, right near those kind of lows that we saw back during the July AI sell-off, as well as, um, a few days ago, almost oversold on the RSI. And MACD is actually bullish. So DRAM looking very good, very stable at these levels. And I have a pretty big position. You could see my DRAM position. Uh, we have 800 shares are actually more than that. We have about 1300 shares and I'm going to get assigned a thousand more shares today after the bill at 53 and a half. So really loving DRAM. And I think DRAM is a wonderful opportunity here, given that it's well off all time highs. Another one is light. Now light has a lot of the photonics plays. What I like about light's a lower priced ETF. So a little bit easier to do the wheel strategy on with a hundred K portfolios or less, but it does have exposure to coherent coherence at $300 stock. That's why I like light again, lower price, but it does include coherent CN, uh, lumen, and a few others as well that are positive earning. So, um, I like light. I think it's at a great discount here. And this is another one. I have a very small position in the portfolio. You could see here, two puts that are going to potentially get assigned in November, but I have a big COHR position with over, uh, 600 shares. Okay. So that is going to be light. And then the last ETF is EUV, which is the Corgi lithography and semiconductor photonics ETF. So this has a lot of everything. You know, you have your Taiwan semiconductors, you have your lamb researches, your applied materials, I believe is in it as well. And a few others. Um, but this one is a little bit more broad. This would kind of be the most broad, uh, ETF in the semiconductor space, similar to an SMH, but I like EUV here. I think it's trading at near the lows, almost oversold on the RSI. If we get one final flush on Monday or Tuesday, um, then I think, you know, there's some value to be added here. So I hope you enjoyed this. Quick update. And I hope you enjoy your weekend. Don't pay attention to the markets too much. This next week is going to be pretty volatile. We do have, um, you know, some things on the table, earnings, still more earnings on the table, but, uh, things will recover. It will take some time, but keep in mind some of the data we talked about today. Please give it a thumbs up and I'll see you in the next one. Take care.