The Stock Market Crash Is Just Starting — Buy THIS Instead

[00:00:00] Speaker 1: Do not be fooled by Thursday's rally in the stock market. This stock market crash is just starting and stocks could fall another 50% or more over the next few weeks and months. For those of you who are new to this channel, my name is Stock Curry. I'm a former Merrill Lynch and Morgan Stanley investment banker. I'm going to very quickly go over why the stock market is just now starting to fall. I'm going to show you the technical analysis and how far it might fall over the next few weeks. And then I'm going to give you three stocks that are safe to buy the dip on. If you look at the S&P 500 features, you can see a very clear pattern here where the market started to fall a few months ago. And now that same U-shaped fall is starting once again. S&P 500 features also had a MACD death cross two weeks ago. And this is another indication that stocks are going to continue to fall. The bearishness is even more pronounced on the NASDAQ. If we look at the NASDAQ 100 futures, we see that same rise and fall from a few months ago and the same rise and fall happening again today. Just like S&P 500 features, the NASDAQ futures have also had a MACD death cross on the weekly charts. But it gets worse because NASDAQ futures also had an EMA death cross where the 10 candle EMA goes below the 21 candle EMA on the daily chart. And that happened about two weeks ago. The last time we had a death cross on the EMA lines, the NASDAQ fell below the 300-day exponential moving average. If the NASDAQ were to fall down to the 300-day exponential moving average once again, it would fall down to around 25,700 or about 9% further from here. And that is if we only get a dip in the market. If we get a bear market like we saw in 2022 or worse, a complete burst of the AI bubble like we saw in the year 2001 and 2002, we could be facing a 50% or greater decline in stocks. And the reason for this is because stocks are extremely overvalued right now and they need to come down significantly to get down to fair valuations. If we look at the top five holdings in the S&P 500, which include NVIDIA, Apple, Microsoft, Amazon, and Alphabet, they are all extremely overvalued. NVIDIA has a valuation grade of D-, Apple has a valuation grade of F, Alphabet has a valuation grade of F, Microsoft has a valuation grade of F, and Amazon has a valuation grade of D+. All of these stocks are extremely overvalued and need to come down significantly to get back down to historical valuations. There's a recency bias that over the last six years, stocks have rallied, and a lot of people think that because stocks have been overvalued, this is normal. It's not. Stocks will come back down to normal valuations, and that means a significant sell-off or even possibly a crash in the stock market. Now, luckily, not every stock is extremely overvalued. There are plenty of stocks that are undervalued that would be great stocks to buy the dip on right now. Micron has a valuation grade of A-, making it extremely undervalued right now. Likewise, Sandisk has a valuation grade of A+, and SMCI also has a valuation grade of A+. All three of these stocks would be excellent stocks to buy the dip on, but why buy the dip if the stocks continue to go down? Well, look at what happened to PayPal over the past few months. It had fallen significantly, and then it kind of had a bottoming out. And in this boxed yellow part, I posted multiple videos telling people that now would be a great time to buy the dip. And sure enough, a few weeks ago, PayPal skyrocketed at over 20%. In fact, it would have been one of the best stocks to buy over the past few months. Adobe is another stock that I repeatedly said was bottoming out. And last month in July, Adobe rallied over 22%. This chart shows the life cycle of a stock, and most retail investors will buy on the way up during the markup phase or distribution phase. And the reason for that is as the stock is rallying, there is a fear of missing out on these huge returns. You see all kinds of different influencers who are buying the stock and making tons of money. Maybe your friends or family are making a ton of money, and you don't want to miss out, so you go ahead and buy as the stock is rallying as well. The problem is, during the distribution phase, this is actually the worst time to buy because the stock is about to take a major fall. Now, where most of investment bankers buy is during the accumulation phase. After a stock has already fallen and bottomed out, when a stock is running at a dirt cheap valuation, that is the point at which you want to be buying. If I overlay the actual PayPal stock chart on this, you will see that it almost perfectly follows this pattern, where during the accumulation phase over the past couple of months, where I was telling everybody to buy, that is where it would have been a great time to buy. And sure enough, PayPal stock jumped just like almost every stock in the stock market does. So this is a great example using PayPal stock, how this actual stock market graph does in fact work in real time, and why waiting until the accumulation phase is the best time to buy. It also explains why trying to buy the dip as stocks continue to fall is actually one of the worst ideas, because the stock is going to continue to fall for much, much longer. And you'll know when the stock is bottomed out, because usually it will stay flat for quite some time near the bottom. And that is why a lot of stocks that are falling, that are still extremely overvalued, such as those top five stocks in the S&P 500, are actually terrible stocks to buy the dip on. Do not buy the dip. You want to wait until stocks have reached an accumulation phase when they're extremely undervalued, and you want to buy the dip on those stocks, stock like Micron, SanDisk, and Supermicro Computer, stocks that are extremely undervalued already and have a much higher chance of going up rather than continuing to fall further. I'm going to go into much greater detail about the AI bubble and how stocks could fall another 50% to 80% from here in my next video, so make sure to subscribe so that you can get notified about that next video.