This Hasn't Happened Since The Last Bear Market.

0:00 Good afternoon everybody. It's Friday, March 27th. We just closed out the week and well, we ended out with a bang, closing near the lows on the trading week, driven mainly by financials and our big tech stocks as energy names continue to take off. On today's stock market report, we're going to get you prepared for the week ahead. Go over some important levels, expected moves. We did tag some specific levels in the S&P 500. and we're going to give an update on the sentiment index, some various signal charts, as well as the current state of the market condition. So, let's go ahead and get right into it today. Welcome back, ladies and gentlemen. This is a oneweek view of the 11 sectors that

0:45 make up the S&P 500. And we have energy that led the way towards the bottom, communication services. If we look at a year-to-ate basis, energy continues to be the standout. It's up 40% completely just smoking every other single sector there. The second one closest to it is materials and then utilities. Now, something we've been hounding on for a while this year leading up to this year and even prior times is that when energy outperforms the S&P 500, this line goes up, right? That's just energy relative to the S&P 500. And if you look down at the S&P 500 chart, what do you notice? Right? Green line go up, red line go down over here. And we've been talking about this relative, you know, outperformance in energy. And the S&P 500, it was holding up rather well. And now it's finally playing that catch up

1:31 to the downside as the relative strength chart really starts to almost almost hit a new high since all the way back to 2022, 2023 in and around those areas. And as energyy's outperforming, they continue to rotate out of financials. So out of energy into financials, as you can see, energy has been going parabolic to the upside here. And we have financials going parabolic here down to the downside kind of just leaving these trend lines that we have driven throughout. If you want to know why, you know, we're why is energy stocks really driving so much? Well, oil has been a outperformer on the entire year. Yes, we spiked later on the year while energy was already going up. But also to note, oil was up already 15 to 16% before even seeing that massive spike. And right next to this oil line, you can see here

2:18 is the 10-year yield. And typically when you have oil, you know, lead the way, you could have the 10-year yield follow. And that's been putting pressure obviously on bonds. If you take a look at TLT over here, this has been going down. But I do want to call out that bonds have actually been a safer place to be relative to the S&P 500. As you can see, since February low over here, actually TLT has been outperforming the S&P 500. If you take a look here, this is the dollar, the 10-year yield, and the S&P. You can see the dollar has been heading higher. the 10-year yield has been hitting higher and both that is a wicked combo to see this market move down just like we saw the dollar fall here 10ear yield fall here S&P 500 rallied and we've seen this countless times so we got to continue to watch to see if these correlations continue to be negative and or potentially break you

3:06 take a look at the weekly chart on the S&P 500 our MACD is completely waterfalling over here the last time we did that was heading into April where we saw some massive volatility and it wasn't until about midappril where it started to cross back above which gave you the indication that we go long and we are working off that bearish divergence. I haven't shared this chart for a while. This is indicator that I put together quite some time ago. It helps me identify potential changes in trends and momentum shifts. It uses multiple time frames. It uses rate of change momentum, you know, all kinds of cool stuff. And you know, the last time we talked about it was pretty much right over here in September of 2025. Just notifying that, hey, you know, it turned it turned over here, we went through this, and then we went green when we started talking about it. like you know everyone's like oh so bearish blah blah blah it went we still went up higher and

3:51 then it started turning red and we kept on going higher but now as you can see it's been red this entire time and we just actually cut back down to those levels so so pretty interesting stuff there I'll be watching this you know into the future to see when it potentially turns green again which I'm assuming it will at some point if we take a look at the weekly implied moves here we have now gone one two three weeks in a row without tagging the weekly implied move which is a very rare thing to have happened, right? Two times is somewhat rare, too, but three times is even more rare. I I forgot to go back in time to see the last time that that has happened, but I will do so in the very near future. One of the key levels that we've been eyeing in targeting has been the quartertoate implied move for the S&P and we landed right on that today. I did start getting exposure back

4:36 into the S&P 500 amidst even this volatility that we're seeing here. I'd been rather low beta comparatively, right, to the S&P 500. Like for example, on this day right here when we were down one and a half percent or so, my portfolio was down 50 basis points. So I was underexposed, which is good in this situation. And now I'm pretty much a one for one of the S&P 500. And I'll be looking to potentially play bounces in and around the lows and or, you know, sell up towards the uppers uh levels there as well. Now, if I show you the S&P chart, I wanted to revisit some bigger levels. You can see the month-to- date, that blue line. We're underneath the month-to- date implied move. So, we're going outside of what the market expected, right? Go figure, right? We're seeing some, you know, elevated levels

5:21 of volatility, more uncertainty, geopolitical risk, etc. And that's causing, you know, obviously more volatility. And an interesting note on volatility is we're actually now finally having realized V match what implied volatility is actually portraying that it will do. these last two trading sessions, right? Volatility has been high and we haven't been really been doing anything for multiple days and now all of a sudden now it's actually moving, you know, it's it's realizing what, you know, the VIX is actually at. This green line is that quarter to date implied move. This orange line is the JPM collar. You can see that we came back down to it and then we broke down a little bit past that. Now, these other lines here, the gray line, the gray line is the year-to-date implied move. That's 8,000 to the upside, 5700ish, I don't have the exact number in front of me to the downside. So, if we get

6:08 down, you know, crazy price action, we'll be looking at those levels, too, and I'll be bringing it up because at that point, right, if we're down there and it's, you know, we got a lot of time left in the year, I'd have to show you historically what that looked like, but it typically ended up being good opportunities to get back into the market or, you know, if you buy the dip or whatever the case is. So, we'll talk about that. That's 15% away, though. Okay. If we take a look at the MAG seven stocks or the great eight I should say and where they landed outside of their imp or within their weekly implied moves. Google it was a two standard deviation move and so this one got absolutely cracked. Microsoft ended up closing outside of it too as well and then Meta as well. So those three right here were the big drivers of a lot of this sell side that we saw and it felt all you know rather kind of controlled algorithmic type you know selling to the

6:55 downside. It wasn't really capitul by any means. Amazon had a pretty wicked day just today and you know this prior trading day as well. So, we'll continue to watch this. If I give you the updated implied moves, this is what they are. I'm not going to read them all off, but if you want to mark these on your charts, go ahead and do so. With that, I want to just talk about the the financial and kind of how I'm kind of going about that. We talked about their performance on the prior video. We have Microsoft down here from a year-to- date perspective, down 26% and right next to that we have 20% down, and that is for Meta. And then we have Tesla down about 20% as well. So you can see just, you know, pretty poor performance overall from a year-to- date perspective for these magnificent seven stocks. But even such with those, you know, that poor performance, we haven't actually even came to like an oversold condition on

7:41 the bullish percent index in the tech sector, which I find kind of interesting. But the charts that, you know, have kind of got my eyes now for looking for bounce potential or the ones that have been selling off. Now, this is Meta. I don't have a position in Meta, but I will be watching this one into next week cuz once you get these extreme moves to the downside, right? Think of the rubber bands stretching out. You can have those snapbacks. I did start a position in Microsoft. And the way that I go about this first and foremost, for those that don't know, when I'd have to talk about the market conditions here momentarily, but market conditions when they are different, right, when they switch, I start to look for playing fade trades against trends. And the way that I do that is I go a lot smaller in size and I try and I'm I'm very quick to get out. So if I entered a little bit here, goes down a little bit more and it

8:26 continues kind of a strong stretch, I may even continue to just add a little bit into it. It's not it's not big positions. And then on the first kind of relief of the market, I'm typically out of it at that point. So I did start that with Microsoft as we've been kind of just coming off uh quite hard and very fast. And I'll be looking to exit one either potentially at an upper implied move for the week, which is, you know, up to and around 369 if we were to get there next week. And then I'd be looking to add if we can get down more into like 344ish range, that lower implied move to make it for the kind of the second ad in that position. Okay, if we continue on, the sentiment index is now getting a preliminary reading of 13.4. I'll be posting this the updated one on uh my

9:13 Discord here when this updates a little bit later tonight. If you can look here, this is where we kind of stand within the index. Just lower reads that we haven't seen since really April. But I will call out that we're actually starting to get a subtle bullish divergence here. And I call that out because some of these charts that I use, you can technically look into them as divergences for them. And another reason is because you can see that this was actually going down as well as the market was holding up and we were calling that out prior saying hey we have some negative divergences and the market's been holding up pretty well. Well it caught to the downside. So now we have a subtle bullish divergence trying to form here as well. Bullish percent index for the S&P. You can see that we are coming down into here. We don't have a full bullish divergence yet but you can see if this kind of takes out that low that would be a bullish divergence forming there. And the last

10:00 time we saw there was in December where we saw a nice little pop up before rolling over. Bullish percent index for the NASDAQ composite. Boom. Boom. As this one continues to sell off, we still have that building. Like I said, the technology sector still not in an oversold condition. We've have breath that has been continuing to deteriorate here. We're still not really oversold in the, you know, percent of stocks above the 50-day moving average, but you know, it's the lowest reading just another one since April, which was the whole tariff debacle. And then the 200 day percent of stocks above the 200 day moving average is also dropping there too continuously. And then the percent of stocks above the 20-day I mean think of it this way only 13% of the stocks in the S&P 500 are above their 20-day moving average. So a very small amount of stocks are still trying to hold up. So that's getting

10:47 pretty frothy. This is the NASDAQ record high percent index. And I like to use this for a bottom fishing indicator. And really what you need to see is a close under 20. And then you see a breath for us back up through 35. And you can see over here it's caught multiple bottoms dating back to the, you know, do bubble, the financial crisis. This was a kind of a more of a false signal here until it bounced up and then sold off more. This one caught that bottom, this bottom, this bottom. It even even helped us out in 2022 over here. And then coming out of the correction there in 2023 going into 2024 as well. So, this one's still pretty far off, but I figured I'd just bring that up. If we look at this indicator, this is the old fool indicator. The old fool indicator is taking the NASDAQ composite and dividing it into the put to call ratio and applying some simple EMAs, a 21 length

11:34 and a 50 length. And we watch for crossovers. And we had this crossover over here in February. And the market's kind of just been perpetuating itself to the downside from there after a bunch of whip saw. So, we'll continue to watch this and see maybe when this flips uh back to more bullish, too. This is more of a lagging indicator. Like you can see over here, you know, it took a while to catch the bottom, but it's still a useful tool. We are deeply in negative gamma territory. We just got the lowest print reading here since I mean, as far as back as my charts goes, which is July of 2025. Typically, when you get these, you know, extended readings, you can start preparing yourself for a bounce. It has tend to happen, but you got to just pay attention to where volatility lies. is we're at 31% which is the the highest closing print of this entire

12:20 year. And you can see these gray shaded areas, these gray shaded areas are just highlighting the times that we've been in negative gamma. And you could see they're early indications potentially of, you know, explosive moves in volatility. And we've had early indications basically for the bulk of this year that volatility could rise. And so far it's been doing that. And what do we do? Well, we start lowering our position sizes. we start I start fading more extreme moves because I know that my personal style of swing trading playing breakouts they they you get a lot more fake outs and shakeouts and it doesn't tend to work as nicely. So I my strategy changes as the markets change and you just need to understand that there back month first or sorry uh not back months for funs I'll show you that one in a second. This is the VIX futures curve. This is a pretty massive

13:05 backwardation here. What does this tell us? Tells us we got problems right here and right now. So this is still in backwardation. When you have negative gamma, when you're in under the flip line, when you're in backwardation in the volatility index, this is where, you know, things can start to really get hectic. And that's what we've been seeing just these last couple of days. Uh and I say just last couple of days is because, yeah, we've been selling off up into it, but we haven't seen the realization of volatility versus that implied volatility reading that we've really been getting. uh volatility of volatility index is printing a 133 also you know not the highest print of the year not the highest close but still these are really elevated levels and when you get these really extreme levels right this is the spy I said okay what

13:50 are the times that we've gotten greater than 133 reading greater than 133 close and you can see you get some pretty wide range candles in and around those times so we just got another print here so I would be expecting yes it looks like you can potentially catch some bottoms, but I wouldn't be thinking of it as that. I would just be expecting wider swings. That's what happens in gamma. Your rallies are much more aggressive to the upside. Some of your times your sell side can be much more aggressive as well. And as this is taking place, we do have a pretty extended reading here on back month versus front month volatility well under one. And we're getting a point uh 943 reading. And once again, these are the levels that you want to pay very close attention to because you can start to see the market kind of uh

14:36 level out and bounce in and around these places. Some tier one charts that have been updated. I'll share with you systematic positioning indexes in their quote unquote oversold condition. One of the lower prints since we've seen since April, CTA continue to drive some of this sell side. This isn't updated, but V control funds as well, I would imagine, added to the sell side today, given the context that we're actually getting realized volatility that's matching this implied volatility here actually come into play. So, I would imagine that V control funds, you'll see this line go down here into next week. Bond market volatility continues to be rather rampant as well. Just some pretty unstable stuff going on in these markets. So, we just need to continue to be careful. I'll close off with the expected move for the SPY. The weekly implied move is and by the way we have a

15:22 shortened trading week and this is still $19 on the S&P nine bucks here on the spy and bring us up to 65339 down here to and around 614. So a big snapback rally would do in what it would bring us right back to the monthto date uh monthto date expected move as well. So you know that's pretty common stuff. So, if we're going to get somewhat decent news over the weekend or, you know, you know, have a quarter end markup, whatever the case is, even a move just to up here really doesn't help the S&P 500 all that much, but it would probably, you know, create a lot of fervor in the markets and on, you know, various social media sites and so forth. Today's and yesterday's sellside was really like all alarithmic. Just look at this straight kind of line here. So, just watch for trend breaks going into the next trading session on Monday. 645

16:10 to the upside. 623 to the downside. That's the daily implied move. And my quarterly lower I this is ignore this. I didn't update that. I I must have moved that on accident. But we did tag our quarter to date which was at 6399. And if I were to show you what that looks like on this chart, we're basically, you know, right there at 63406. So, a lot of volatility. people, just continue to manage your risk. Be prepared for this market to rip some faces on some rallies, but even a rip up to 6,800, let's call it, on S&P, still the market has not fully kind of proven itself yet. Okay? So, we just got to continue to just manage risk as best as we can. Hope that helps. I'll see you on the next