S&P 500 Bear Markets

Hey everyone and thanks for jumping back Into the equity verse today we're going To talk about the S P 500 bear Market if You guys like the content make sure you Subscribe to the channel give the video A thumbs up and check out into the Cryptoverse premium at into the Cryptiverse.com now we've been following This bear Market you know basically the Entire time and we've also been Following this trend line for quite a While as well and we've watched every Subsequent rejection off the trend line And I actually put out a tweet on Tuesday so make sure you follow me on Twitter if you don't but I put out a Tweet after I noticed something I happen To notice that every major local top on The S P 500 during the bear Market Actually occurred on a Tuesday okay so Again don't take my word for it it's Always best to to uh verify right from The crypto verse right don't trust Verify so let's verify this okay so the Local top here on January 4th occurred On Tuesday January 4th we then had this Local top on Tuesday March 29th right The highest price that went during that Run up this one right here Tuesday August 16th And then this one was sort of like a Fake local top that occurred on a Thursday so we should have known better Right what happened the high if you look

Up if you look at this right here the High on that day was 4100 51 cents The high on the actual local top was Forty one hundred ninety six cents now It's only you know about 50 cents or so Higher but technically it went higher And as we know being technically correct Is in fact the best way to be correct And so what we've noticed here is that There's actually four days four local Tops by the S P 500 that all happened to Occur On a Tuesday of all days right the Tuesday curse right something I thought Well does anyone else notice this you Know is this is this a thing Um sure enough it's actually a very Common phenomena phenomenon in in equity Markets and that is it's actually called Like I think turnaround Tuesday so if You like Google you know stock market Turn around Tuesday what you'll see is That Tuesday is actually a fairly Important day for equities as often Times it can Mark a reversal in the Trend okay so what you'll notice is that And this is not just to the downside Right what I what I first came across Was that if there's any if the market Shows weakness on a Monday I think this Is generally in a bull market if the Market shows weakness on a Monday then Oftentimes Tuesday will will turn things Around right they call it turn around

Tuesday but in the same way if Monday Shows week or if Monday shows strength You can often see it turn back around The other way on on a Tuesday but to the Downside so Monday can often and provide At least some insight into into what Tuesday May bring and I think average Tuesday returns are are much are much More likely to be positive Um and actually far outweigh those that That are that are not based on anything But but if they're they're much more Likely to be positive if Monday is a Negative day okay that's what I want to Say so if Monday is a negative day I Think history shows that that Tuesday Returns tend to be a bit better Than they otherwise would but the other Thing to consider here is that these Trends won't last forever Okay so we've Been following this bear market for a While and I mean so far it's lasted About I mean if you assume that if this Is the low right it lasts about nine Months but again the average bear Market Lasts about nine months so so far you Can say that this bear Market has lasted An average amount of time if history is Any indication so then you might say Well if it's already lasted an average Amount of time then are we done here Right is the bear Market over there's Always a chance right I mean like who am I to say that that there's not a chance

But the main risk on whether the bear Market is over or not is of course you Guys know right it's whether we get a Recession or not because while the Average bear Market might only last nine Months that does not include a recession Bear markets that are inclusive of a Recession can last somewhere between one To two years so we need to be a little You know we need to be aware that that Is the main risk that exists and I see All sorts of debates about this you know If you follow various macro analysts I Mean it seems like for every possible Outcome someone has that opinion right There's a lot of people that have the Opinion that we already have been in a Recession and This Is Us coming out of It there are people of the opinion that A recession hasn't even been remotely Priced in yet because earning estimates For 2023 remain fairly elevated so There's a whole range of opinions out There and of course at the end of the Day no one really knows exactly what's Going to happen I mean you can look at You can look at things like the Inversion of the yield curve and and Other macro indicators but even then I Mean the the the the uninversion of the Yield curve could still take a long time To actually to actually play out right I Mean history shows us that once it once The two-year inverts to tenure it can

Take 12 to 18 months it inverted in July So this July will be 12 months late this Year would be about 18 months or so or Early 2024. so this trend here has been Reversed every every major local top Has been kicked back down on a Tuesday Meaning the local top was marked on a Tuesday and I actually put this you know I put a tweet out right on Tuesday on Twitter you know on Twitter if you make Sure you follow me there but I put a Tweet out saying look will the two will This Tuesday be the same thing I don't Really know Um but in fact if you if you actually Zoom in here what you'll notice Is that a new local top potentially we Don't fully know yet right until we have A bit more time to see how this plays Out it actually occurred on a Tuesday Again because Tuesday January 17th the High was 4015 39 cents the high today Was 4014 16 cents again technically Speaking yesterday was the local high Now I would be remiss if I didn't at Least point out the fact that this Market has been full of constant fake Outs right every time you think you know What's going to happen it's like the Market just ups and goes and does Something completely different right how Many times have you felt good because The market was trending in the direction That you wanted it to whether it was up

Or down and then the next day it was a Complete fake out and we just went the Other way whether it was going up and Then we switched going down or whether It was going down we switched to going Up the market has faked us out many many Times also note that just because we got To the top of the trend line doesn't Mean we have to always get an immediate Reversal sometimes we we sort of stay up Here for a while okay I will remind you That eventually this trend line will Break okay So eventually the trend line Will break we've had four tests of it so Far that were clear rejections And so far I guess I should sort of draw The circle here because that was where The local top was but so far this has Been our fifth rejection You know could we go back up and test it Soon yeah probably or could it be a few Months I really don't know right it's All it all depends on you know how many Market participants are are starting to Price in a potential recession versus How many people think we avoid it and That's where we you know ultimately Think that's where we currently stand Now the other thing that I think we have To talk about is the vix right we talked About the volatility index last week and We have to provide an update on that why Because what we talked about was that The vix has been a fairly good indicator

Of marking local tops and local bottoms Okay in the S P 500 and again don't take My word for it let's go verify it first So that let's you know let's not just Pretend like something is occurring just Because I say it is if you take a look At the vix what you'll notice I have two Rectangles drawn over here right so it You know generally local highs and local Lows the vix okay so the first thing What I'll do is let me hide the S P 500 So that we can more clearly see this and If we were to draw a line every time the Vix bottomed you'll notice that it tends To bottom in this 18 to 19 range right Somewhere maybe between 18 to 20 but It's it's you know it's usually 18 point Something or 19 point something in that Range is where it has been going for a Long time so this is one right so it's One time It also bottomed over here in April And over here in December And then potentially here right on Tuesday we'll have to wait and see okay It's too early to you know to make any Clear calls on that but again you'll Find that a lot of these major lows Right even over here in January a lot of These major lows what do you think they Correspond to right what do you think They correspond to you overlay the S P 500 what do you notice These lows on the vix tend to correspond

To highs on the S P right so the vix Bottomed here at around the 18 to 19 Level in August s p topped in August Same thing over here in December right The blue line that's where the S P 500 Saw another local top the vix is Potentially finding that local bottom Again around that 18 to 19 level you are Seeing the s p turn around once more and If you go back throughout the rest of The year right you look at Um you know you look over here in April And March or you can kind of see it was Almost like a double bottom on on the Vix here but wherever you take it if you Take it somewhere in between it still Gets somewhat close to marking the local Top right so the idea is that somewhere In that 18 to 19 range is where the s p Is more likely to turn around than not Right so if we're going to see a Continuation of the bear Market it's Around that 18 to 19 level that you see It actually turned back around and then The only other thing I wanted to mention Is that there was an exception right if You look early on in the bear Market the Vix actually bought them closer to that 16 to 17 level right So it went just a bit lower and then I Thought well has that marked anything Consequential right that 16 to 17 level If you actually draw a trend line you Can draw this back for years in fact on

The vix Right so you know if you look over here Right the vix has been putting in these Higher lows essentially off of this Trend line going all the way back to Like 2017. So there's you know there's a potential Outcome at some point during the spare Market That we hit the lower bound on this and It could be a very big fake out right Um not that dissimilar from what we saw Over here in in January or in in end of 2021 and and early or into 2021 and Early 2022. so that's something I think That's worthwhile to watch as well but I Mean at least for right now we we sort Of saw a turnaround point at around that 18 to 17 level we might have even Wicked Below 18 maybe not 1801 or so it looks Like it's the lowest I I believe it went But somewhere around that level right 1819 somewhere in that ballpark is where We found the vix at least finding a Local low and the s p potentially Finding another local high okay so these Things are I think useful to follow and In addition to these local lows guess What right local highs on the vix tend To correspond to the the bottom on the S P 500 right local lows on the S P 500 Every single one for for basically the Entirety of this bear Market When when the vix is finding some type

Of of a um sorry I drew this one at the Top Of the s p when the vix is finding some Type of a of a high here right when the Vix is finding a high the s p is getting Close to its bottom right when the vix Is finding some some type of a high okay And it's not as clean as the as the lows But you will find that fairly frequently When the when the vix is finding a high Between like that 33 to 35 36 range it It has this is the this is the the the Um This is the top right and then here was Here was also the top but it's not as Again it's not as as great of the signal But you'll notice that a lot of times The s p finds some type of a bottom and Turns back around the other way once the Vix gets up into that level that 35 36 Level so what I'm looking for is you Know if the vix wants to turn back Around here and head back up this way Um that likely is going to mean the S P 500 is trending down okay and if the s p Does a fake out here and goes back up Then I think we have to watch this lower Trend line down here which is where We've been bouncing off of for a long Time I'd like to finalize this video by Actually looking at at our you know Comparing the bear Market chart for the S P 500 and really isolating you know Some of the prior bear markets one of

The ones we've looked at before is the Financial crisis but you can see that It's actually diverged from that one Right we're really not following this Analog anymore Um and so arguably because nothing is Really broken right I mean you know the Fed's been hot talkish but you haven't Really seen the collapse of a collapse Of the financial system like we saw back In 2008 And so you haven't really seen this like Rip the Band-Aid off Um you know bear Mark or you haven't Really seen this like rip the Band-Aid Off meltdown like we saw back then so It's probably more worthwhile to Continue to observe this bear Market Until it's no longer won uh in the Context of other bear markets that we're Not really a rip the Band-Aid off Meltdown but just stays you know a Slower bleed okay uh here's the.com Crash I mean you can see that the.com Crash I mean it just lasted for it felt Like I'm sure it felt like forever I Mean it was like almost three years I Don't I don't really think this bear Market's gonna last three years but you Can really see just how long the.com Crash was was drawn out but it might be More useful to actually look at this Within the context of periods of high Inflation and and I think some of the

Things you should look at would be Things like the 1973 to 1974 bear Market Which was also filled with a period of High inflation and recurring inflation And what you'll notice is that there was Sort of like a a stage one of the bear Market right so we went down And then we kind of went sideways for a While right where we yeah kind of put in New lows but nothing really that Dramatic right so we went down for a While and then sideways for a while you Look at the S P 500 and that's kind of What's happened I mean you know if you Look at at this rate it went down for a While and while technically we put in New lows it's sort of just gone sideways Right yeah if we're being honest with Ourselves right I mean this has been a Phase where the Bulls and the Bears Haven't really been right okay bear Markets as we know make fools of both The Bulls and the Bears right they make Fools of both of the Bulls and the Bears Because the Bears are constantly calling For lower prices whereas the Bulls are Constantly saying oh the bear Market's Over and then you get these like crazy Rallies to the upside but the thing is Is most rallies that are returning like 20 in like a couple you know maybe a few Weeks these are more common in Bear Markets than they are in Bull markets And so one might argue that a

Continuation of periods where you see Like three percent gains in a day four Percent gains in a day well that might Seem very bullish it might actually be Confirmation that the bear Market's not Over the fact that you're getting those Types of days still because in a bull Market you don't really see that it's More so just a slow Trend up followed by Pretty quick moves to the downside right Like a slow Trend up followed by a quick Move the downside to sort of scare Everyone out whereas bear markets you'll See fairly quick moves to the upside and Then the market will then just slowly Bleed again for a while okay so you have To we have to be you know we have to Remember this that it it operates like In this fashion and it's a way for People to just slowly lose all their Money right like they sell at local lows And then when the market goes back up They want to then fomo back in only for The market then it just sell off once Again right so again if you go look at The 1973-1974 bear Market which again Was also during a period of high Inflation What you'll notice is that it lasted Approximately 632 days or 633 633 days Where are we now 378 or you know 378 379 okay so in a Month from now we'll be at 400 Days This one lasted another 230 days after

That where would that put I mean it put It sometime you know it closer to the End of this year if it were to follow The 7374 bear Market in terms of Finalizing it right and if it's going to Follow this I think this is the way it would have to Go right you have the the first part of The bear Market which is sort of like The um like the liquidity crisis where You know the fed's draining liquidity Out of our system we've talked about This before right we're all standing Around the pool we all are cool you know We're all holding cups of water that's Our liquidity the FED drain is draining The pool and at some point as investors We're like oh that looks like a good Deal let's all throw in a cup of water Let's add liquidity to the system and Maybe the water will temporarily rise But the FED is still draining liquidity So I mean while it might go up in the Short term we're still fighting the FED Right you're still fighting the FED If The Fed is still going through a period Of quantitative tightening or QT right I Mean we had QE for a while for like a Decade now we're in quantitative Tightening and until they actually pivot We shouldn't assume the conditions have Changed and furthermore whenever a pivot Does occur history shows us it's not Really a great sign right so this this

This cycle has been somewhat You know it's had all sorts of Curveballs one of the main curveballs I Think is that normally the FED raises Rates into a strong economy this time They raised rates into a weak economy Because we have high inflation so it's Not you know it's not even the most Comparable to 2000 and 2008 because in 2000 and 2008 the Fed was Raising before The s p rolled over so that by the time The s p rolled over the FED had the Luxury to cut rates now we don't really Have that luxury so if it's going to Follow the 73 to 74 bear Mark you kind Of have the stage one of the bear market Then we go sideways for a while So it's kind of like you put the bear Market on pause for a while and then you Have sort of the second stage of the Bear Market which arguably in if if we Want to repeat would be the recession Phase right like the uh oh earnings are Going down oh people are unemployed okay That would be that phase if it you know If it comes of course there's plenty of People that are betting that that phase Won't come there's plenty of people that Are saying hey that phase will come let Me show you another example because if You think that it has to follow this I Mean let's wake up here for a minute There's also a period of high inflation In the 40s and look what happened then

We just scraped the lows for years I Mean imagine how painful this would have Been if you sold the bottom because then You just basically wait for it to come Back up or sorry you if you sell the Bottom and then it comes back up you Constantly wait for it to just go back Down it finally gets close and then it Just rallies again for and doesn't come Back down to the lows for another year Or more This is how brutal bear markets can be Sometimes especially during periods of High inflation so What we I think we all need to Understand is that you know bear markets Are are brutal for and again they're Brutal for bulls and bears just because You're a bear doesn't mean that a bear Market isn't going to make you lose Sleep I mean they do right they they Constantly cause you to question what's Going on they question they make you Question you know your overall thesis on On the market constantly I mean imagine What these people over here in the 40s Must have felt looking at the lows and You know someone's selling here only to Finally see it come back down Um you know almost a year later only for It to just go slightly lower to then Just bounce back up again and then just Keep doing it over and over and over Again and then it ended at a slightly

Lower low a very slight lower low take It out to the next Peak and what does it Look like You know you look at it like this when You look at the when you look at the s p Like this on on this particular bear Market it almost makes it seem like it's Just irrelevant right over the grand Scheme of things right so the eventually The s p will you know will Trend higher I think okay But you have to you sort of have to go These through these bear Market phases And and they make you question Constantly everything so you have to Have a strategy right you have to have a Strategy you have to stick to it you Have to remember that the bear Market Could last a long time we may go a lot Lower or maybe we only put in slightly New lows or maybe we don't but it can Last it can it can last a quite a long Period of time and again if you if you Look at say like the 73 to 74 bear Market and overlay it to a new high That's what it looks like right so it Had a pretty Swift move down But once it moved down it then moved Right back up and imagine had you sold Here right imagine if you'd sold here In um you know day like 500 of the bear Market You probably would have felt pretty good For a few months but if you didn't buy

Back It it would I mean who cares right like If you sold here you watched it go down And then you don't buy back the market Could still leave without you right it Always reserves the right to do that Um so again you know we can look at Plenty of bear markets there's all sorts Of bear markets here's another one where You saw one last move to the downside And then that was it so I mean it really Just goes to show you that every bear Market is different right no bear Market Is the same sometimes they look similar Right sometimes they'll look similar Like again the financial crisis they'll Look like they're very much the same Until they diverge just like just like When you compare this to the 40s they Look very similar until they diverge and The 70s It looks similar but eventually they're Going to diverge and do something Different Um here's the one in the 80s okay Not that dissimilar I mean you know the Moves aren't identical but you can kind Of see Um very similar it probably would have Had very similar you know effects on Investors right all these you know highs Followed by a lower high and a lower High and a lower high and it just it Just kept going on and on and on and I

Have to imagine I have to imagine that Every single lower high Just like today right just like today Every single lower high not only in in That bear Market but if you go look at Say like the the.com crash I have to Imagine that every single lower high was Also full of people's calling for melt UPS to new highs right every single one Now I was an investor back then I was Only 18. but Every single lower high I imagine was What there were calls for just melt up Rallies to new highs it gets everyone to Fomo back in they they buy the new local Top and then it just goes right back Down okay so I look and I'm not saying That you know you should be completely Out of the market I'm not giving Financial advice or anything like that My point is that if you get into a nasty Cycle of of you know selling the bottom Right selling the bottom and then buying The top it's a great way to lose all Your money in a bear market right so you Have to have a strategy you have to Stick to it no matter what that's my Opinion Um and then just follow it through and Then eventually well I maybe shouldn't Maybe I shouldn't say like stick to it No matter what I mean you are allowed to Change your opinion about things but Um if if you can come up with a strategy

And stick with it for the long haul History shows us that it it will Typically work out even if it takes a While right even if it takes a while it Will work out what typically won't work Out is if you buy every time the market Is pitched or every time the market is Is going higher and you sell every time It's capitulated this doesn't really Tend to work out very well and if you Take this within the context of of the Bear markets that we've seen This is where we currently stand okay This is looking at sort of the lower Bound ranges and the upper bound ranges For the bear markets that were Continuing you know continue to be bear Markets at this phase we're actually not As bad off I mean as we were back over Here over here we were sort of in the Middle of of the range now we're Actually getting a little bit closer to The top of the range so if this bear Market wants to continue which I imagine If it does it'll be based on recession Fears then we would be coming into this Area over here you know sometime over The next several months right if on the Other hand we see a fake out to the Upside then we still you know or maybe It's not a fake out right if we have a Move to the upside it doesn't mean it's Over it it means that it's time to Probably really start to pay attention

Because the bear Market is is going into A new phase while we while we wait to See the resolution of whether we get a Recession or not but again I mean I just Want to sort of finalize everything by Saying look so far this bear market We've seen local Tops on four Tuesday This is potentially the fifth Tuesday Right the local top occurred on Tuesday January 17th Does that mean we can't go higher no it Does not we could we could always pop Back up and maybe we'll get rejected Next Tuesday right I don't know or maybe We'll finally break through but it does Go to show you uh that this trend line Has provided resistance several times so Far and despite all the Declarations for Sustained melt tops in December and in August and in March and last January They all eventually resolved to the Downside and the bear Market continued If you guys like the content make sure You subscribe to the channel give the Video a thumbs up remember what you have Into the cryptoverse premium at into the Cryptoverse.com thank you guys for Tuning in I'll see you next time bye