Why the FED Can't Save the Stock Market

This is a technical analysis of the US stock market for 2020
I analyse the broad market and give potential scenarios for the future of the stock market. I discuss whether a US stock market crash in 2020 is likely. Will it be a correction or a full stock market crash? I use long term charts and the market cycle theory template to illustrate potential outcomes. I also use fibonnacci retracements to indicate targets for the next economic recession
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Game of Trades Technical Analysis uses simple momentum indicators like the MACD and RSI to analyse and predict trends or trend changes using divergence and overbought/oversold readings.

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[robertof.]

Imagine listening to your advice last year and missing out on a nearly 100% move.

[fisshbone]

Props for keeping this video up, Peter. It's important to be transparent about your sentiment, even if it ends up being wrong.

A lot of the people who are clowning on this video should realize that opinions need to be evolving as new information presents itself. March-April 2020 was basically the sharpest drop in the "covid era" of the stock market & there really wasn't ANY analysts at the time who could guarantee that we'd hit new highs over a year later.
(In fact, Peter was one of the first people that I saw take their head out of the sand and change their sentiment about us hitting new highs)

[chrismillson]

<With makets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio>>

[Educated_Guesser]

The FED is facilitating companies to accumulate more debt in order to survive but they are unable to create consumer demand. The consumer is in a coma and the companies that are in trouble had too much debt already. This debt overload is the FED's doing anyway because they kept interest rates too low for too long. This left bond invester with no yeild so they put way too much money in equities (inflating stock prices). Companies paid little in interest costs so they put their earnings into stock buybacks (inflating stock prices) intead of reducing debt loads. Now we have stocks selling at crazy multiples for companies with terrible balance sheets, and with diminished demand prospects and little profitability. Throwing money at this mess will not make companies profitable again or fix their balance sheets any time soon. A lot of these companies should just go through Chapter 11, wipe out the bond and stock holders, and reorganize clean, lean and mean with new ownership. Extending credit to every POS company just incentivising more irresponsible corporate behavior. The airlines, in particular, deserve Chapter 11.

[Midas]

The problem is that most people view the virus as the biggest danger to the economy - it's not. It's a fuse that's poised to ignite a tremendous amount of far more serious problems.

The debt to revenue ratio is the highest it's ever been, half of all earnings in Q1 2019 were just due to share buybacks (And half of all buybacks were completely financed by debt), banks were struggling in 2019, there's already been a bank failure - just a small one in West Virginia, but, it always starts with small banks. Wage growth had gone basically nowhere for 10 years, and even at the bottom of the drop so far, most long term indicators of values were only slightly below the PEAK of valuation in 2007 (And, that was a 56% drawdown, and an unusually *high* bottom historically for a recession). Longer term RSI hit the highest level it's ever hit. Indeed, this recession has the worst parts of both 2000 and 2008 combined, and then some, and that was before the virus and oil (Though it seems the oil price war has come to an end). All comparisons I mentioned include 2007, 2000, and 1929 - we're more dangerous by almost every metric than all of those dates.

The virus is a catalyst, to be sure, but even without the virus, this was always going to be a catastrophic recession. The Fed can't actually stop recession, and they already used up most of their ammo in 2008 and weren't able to replenish their reserves. Historically, a central bank has usually needed to cut interest rates by 4% in order to stop a recession, and cutting into negative rates doesn't have the same effect; the US got nowhere close to that.

If someone believe that the virus is the only issue, they haven't been paying attention, or they don't know what to look for.

[curdt]

13-17 million unemployed. Businesses with little to no revenue for 2-3 months. People dying and we haven't reached the peak as of yet. People think the virus will just go away and back to business as usual. Bankruptcies shooting up. Foreclosures spiking. This is not going to end well.

[Deep]

Very nice way to explain three scenarios and how us economy draining in C19. This is clearly a global recession and for next 6 to nine months we will be seeing (as you mention) several bull traps/short term opportunity (risky) as we have seen in 2009. I'm glad you talked about inflation. You should add GDP, CPI, and Unemployment rate that are started to look bad in March. Bull trap is keep ignoring these numbers to generate FOMO among investors.

[NatetheHoofGuy]

I agree with your analysis. The longer this goes the more the consumer will have changed its habits and the less likely the economy will resemble its former self. We’ll be lulled to sleep over the next few months but when the markets reevaluate the new economy this summer then those lows will be tested. Right around the time we think the virus is behind us.

[TheJker]

In a recession, it’s not a one way street. There could be several bottoms and tops.

[markderlo]

here we are: one year later 02 April 2021 and the stock market hit new all tome highs ! sp500 is now 4015 !!! so your material is a 100 % miss !

[CrossRhodes]

You have to remember that we were on a gold standard in 1929 and the fed could not simply print money as it can now. That is a big part of the deflation during that time.

[deejayspillz]

It’s wild how your page blew up since I first started following you. Good for you! Well deserved.

[Donteventhinkaboutit]

Interesting to review this with 20/20 hindsight. I don’t think anyone thought the Fed stimulus would in fact save the markets

[BRYDN_NATHAN]

Thank you. 0:10:32 "Pump the Fed dump the calls." 👍

[VixGuyOfficial]

The 2020 version of "You can't fight the Fed" -- Stock prices no longer reflect value, profits or other underlying economic fundamentals, but rather are simply a function of the Fed balance sheet (aka, how much helicopter money Fed can print).
Yes, definitely agree on the analysis and market is heading a lot lower in late April/early May.

[GS]

Watching this video in 2021 and laughing 🤣🤣🤣🤣

[joseho-guanipa]

This is my favorite finance channel, your videos are always spot on, get to the point quickly and you are never wrong. Learned a ton here.

[scottsmith]

I appreciate you sharing your predictions. Most chartists on YouTube are too scared to commit. It’s a waste of time to even listen to them.

[charlottetrades]

Thanks for adding Fed impact. I remain bearish as well. Working SPXL when green. With rollover, ready to deploy SPXU, TVIX and UVXY with increased volatility.
Great work and appreciate your opinion.

[TheApexEntrepreneurs]

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” (warren buffet)