The Charts Bears Don't Want You To See

Summary

This video script offers an in-depth analysis of the stock market and economic trends, contrasting the S&P 500's performance from December 2022 to July 2024. It examines moving averages to identify bullish, indecisive, and bearish market sentiments. Despite potential economic downturns, current charts suggest a strong uptrend, with prices above moving averages. The script also discusses various ETFs, emphasizing the importance of an open-minded approach to market analysis without making assumptions about future trends.

Takeaways

• 📈 The video discusses stock market and economic charts, focusing on a comparison between December 30th, 2022, and July 5th, 2024, to analyze market trends.
• 📊 Moving averages ranging from 20-day to 250-day are used to gauge market sentiment, with bullish, indecisive, and bearish trends being highlighted.
• 🔄 The current S&P 500 chart as of July 5th, 2024, shows a strong uptrend with all moving averages sloping upwards and prices above them, indicating a bullish market.
• 📉 Concerns would arise if the present day chart resembled the downtrend seen in early 2022, but the July 5th, 2024, chart does not show such patterns.
• 📌 The video emphasizes the importance of not making assumptions about future market movements based on current charts, advocating for an evidence-based approach.
• 📊 Similar patterns of moving averages are analyzed across various ETFs like SPY, QQQ, and SCG, with the current trend being favorable compared to early 2022.
• 💼 The video notes that even if economic data deteriorates, it would likely take time for such changes to be reflected in the stock market charts, as seen in past topping processes.
• 📊 The NASDAQ Composite Index and other sector ETFs like SMH and IYW are analyzed, showing strong trends as of July 5th, 2024, in contrast to their performance in early 2022.
• 🌐 The VTI ETF, representing the total stock market, shows a significant improvement from the 2022 downturn, with 83% of its trend dictated by stocks other than Microsoft, Apple, and Nvidia.
• 🛡 The defensive Staples ETF (XLP) is compared to the S&P 500 ETF (SPY), with the current ratio not showing signs of defensiveness or economic concern as seen in early 2022.
• 💼 The video concludes by emphasizing the importance of an open and unbiased mindset when analyzing market charts and economic data, avoiding assumptions about future outcomes.

Q & A

What is the main focus of the video script provided?

The main focus of the video script is to analyze stock market trends and economic charts, particularly those that might be overlooked by bears, and to compare the S&P 500 charts from December 30th, 2022, with those from July 5th, 2024.

What does the script suggest about the market sentiment as of July 5th, 2024?

The script suggests that as of July 5th, 2024, the market sentiment appears to be bullish, with moving averages indicating a strong uptrend and prices above all moving averages.

How does the script describe the use of moving averages in analyzing market trends?

The script describes moving averages as indicators of market sentiment, with different colors representing different time frames. A bullish market is indicated when the shortest moving average (20-day in blue) is on top, and the longest (250-day in black) is on the bottom, with all slopes up and prices above the moving averages.

What is the significance of the 20-day moving average cutting through other moving averages in the script?

The 20-day moving average cutting through other moving averages signifies a strong bearish signal, as seen in the early stages of the bear market in January 2022. The absence of this pattern in the July 5th, 2024 charts suggests a healthier market trend.

How does the script compare the QQQ ETF performance to the broader market trends?

The script compares the QQQ ETF performance by noting its rapid drop through the moving averages in January 2022, which was a concern. However, as of July 5th, 2024, the QQQ ETF chart does not show similar concerning patterns, indicating a more favorable trend.

What does the script imply about the importance of an open and unbiased mindset when analyzing market charts?

The script implies that maintaining an open and unbiased mindset is crucial for proper analysis of market charts. It suggests that making assumptions about future market movements based solely on current charts can be misleading and that flexibility in outlook has served well over the past 8 months.

How does the script discuss the relationship between economic data and stock market trends?

The script discusses the relationship by comparing economic indicators such as real personal income less transfers and nonfarm payroll employment with stock market trends. It suggests that even if economic data starts to deteriorate, it might take time for this to be reflected in the stock market trends, as seen in past patterns.

What is the script's stance on making investment decisions based on the video content?

The script clearly states that it is for informational purposes only and should not be construed as a solicitation or offer to buy or sell any securities. It advises viewers to consult with a licensed and qualified professional before making any investment decisions.

How does the script address the potential for changes in market trends?

The script acknowledges that market trends can change rapidly but emphasizes that as of the last update, the charts do not indicate any immediate concerning shifts. It encourages viewers to pay close attention to the charts for any signs of change.

What is the significance of the defensive Staples XLP ETF ratio in the script's analysis?

The script uses the defensive Staples XLP ETF ratio to illustrate market shifts towards a more defensive stance before a downturn. It compares the ratio's performance in January 2022 to July 5th, 2024, noting that the latter does not show the same concerning patterns as the former, suggesting less immediate market concern.

How does the script use the total Stock Market ETF (VTI) to discuss market diversity?

The script uses the VTI ETF to highlight that the majority of its holdings are outside the tech sector, indicating that the bullish trend observed is not solely driven by tech stocks like Nvidia, Microsoft, and Apple. This suggests a broader market strength beyond a few leading stocks.

Outlines

00:00

📈 Stock Market Trends and Economic Indicators

This paragraph discusses the stock market trends over a two-year period, comparing charts from December 2022 to July 2024. It emphasizes the bullish sentiment reflected by the upward slopes of moving averages on the S&P 500 daily chart. The speaker advises viewers to pay attention to the moving averages and their implications for market sentiment, comparing current trends to past market conditions. The paragraph also touches on the potential impact of economic data on market trends and the importance of not making assumptions based on current charts.

05:01

📊 Analyzing ETF and Sector Performance

The second paragraph delves into the performance of various ETFs and sectors, including the S&P 500, QQQ, and growth stock ETF SCG, comparing their moving average trends from early 2022 to July 2024. It highlights the importance of observing the 20-day moving average and its relationship with other moving averages as an indicator of market direction. The paragraph also discusses the broader market trends as represented by the Vanguard Total Stock Market ETF (VTI), noting that a significant portion of its trend is influenced by stocks outside the tech sector.

10:03

💼 Economic Indicators and Market Outlook

The final paragraph focuses on economic indicators, specifically real personal income less transfers and nonfarm payroll employment, as key measures for assessing economic health and potential recessions. It contrasts historical data during recessions with current data, which has recently reached a new all-time high, suggesting a lack of immediate economic downturn. The speaker emphasizes the importance of maintaining an open and unbiased mindset when interpreting market charts and economic data, avoiding assumptions about future market movements.

Keywords

💡Stock Market

The stock market is a platform where shares of publicly traded companies are bought and sold. In the video's context, it refers to the collective performance of various companies' stocks and how they are analyzed for trends and economic indicators. The script discusses the stock market's trends over time, using charts to illustrate bullish and bearish sentiments.

💡Economic Charts

Economic charts are visual representations of economic data, used to analyze and predict market trends. The video script uses economic charts to illustrate the performance of the S&P 500 and other indices, comparing past and present data to assess the health of the economy and market sentiment.

💡Moving Averages

Moving averages are a technical analysis tool used to smooth out price data and identify trends. In the script, moving averages ranging from 20-day to 250-day are used to analyze the S&P 500 chart, with the position and slope of these averages indicating the strength and direction of the market trend.

💡Bullish

Bullish refers to a market sentiment where investors are optimistic about the potential for price increases. The video script describes what a bullish market looks like on charts, characterized by rising moving averages and prices above these averages, suggesting a strong uptrend.

💡Bearish

Bearish is the opposite of bullish, indicating a market sentiment where investors expect prices to fall. The script uses the term to describe market conditions when prices are below moving averages and the slopes of these averages are downward, indicating a downtrend.

💡Trend

A trend in finance refers to the general direction in which prices are moving. The video emphasizes the importance of identifying and understanding trends, such as uptrends or downtrends, using moving averages and chart patterns to inform investment decisions.

💡S&P 500

The S&P 500 is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. The video script uses the S&P 500 as a key indicator, comparing its historical and current charts to analyze the overall market's health.

💡NASDAQ Composite Index

The NASDAQ Composite Index is a stock market index of the common stocks and similar securities listed on the NASDAQ stock exchange. In the script, the index is used to illustrate the market's performance, particularly in the technology sector, and to compare current conditions with past market cycles.

💡ETF (Exchange-Traded Fund)

An ETF is an investment fund that holds assets such as stocks, bonds, or commodities and is traded on stock exchanges much like individual stocks. The video script mentions various ETFs, such as QQQ and VTI, to analyze different sectors of the market and their performance relative to broader indices.

💡Recession

A recession is a period of economic decline, typically characterized by a fall in GDP, high unemployment, and reduced industrial production. The script discusses the indicators used to identify a recession, such as real personal income and nonfarm payroll employment, and how current economic data compares to historical recessionary periods.

💡Investment Decisions

Investment decisions refer to the choices made by investors regarding the allocation of their funds. The video script emphasizes the importance of using charts and economic data to make informed investment decisions, rather than relying on assumptions or guesses about market movements.

Highlights

The video analyzes stock market and economic charts to assess current market trends and potential future movements.

Charts of the S&P 500 from December 2022 and July 2024 show a strong uptrend with prices above all moving averages.

A comparison of moving averages for different time periods illustrates what bullish, indecisive, and bearish market sentiment looks like.

The video emphasizes the importance of using a 'way of the evidence' approach, avoiding assumptions about future market movements based on current charts.

Charts of the SPY, QQQ, and other ETFs show how market sentiment can change rapidly, with moving averages providing key indicators of these shifts.

The video discusses how economic data, such as real personal income and nonfarm payroll employment, can be used to assess the health of the economy and predict recessions.

Current economic data does not show the concerning patterns typically associated with recessions, suggesting the economy remains strong.

The video contrasts the current market conditions with those during previous market downturns, highlighting key differences in moving average patterns.

The importance of maintaining a flexible, unbiased mindset when analyzing market charts is emphasized to avoid being caught off guard by unexpected movements.

Charts of defensive ETFs like XLP show how market sentiment can shift towards defensive assets during times of economic uncertainty.

The video analyzes the performance of individual stocks like Nvidia and Microsoft within the broader market context, noting their influence on ETFs.

A comparison of the total stock market ETF VTI with the S&P 500 highlights the diversity of holdings and sector weightings within VTI.

The video notes that while tech stocks like Nvidia have a significant influence on VTI, the majority of the ETF's trend is driven by other stocks.

The importance of monitoring economic indicators and market sentiment to make informed investment decisions is underscored throughout the video.

The video concludes by reminding viewers that market conditions can change rapidly and emphasizes the need for ongoing analysis and adaptability.

A disclaimer is provided, stating that the video is for informational purposes only and should not be considered investment advice.

Transcripts

in this holiday weekend video we'll

focus on the stock market and economic

charts the Bears don't want you to see

we'll be moving quickly so feel free to

use the pause button on your video

player left side of your screen is a

daily chart of the S&P 500 it's dated

December 30th

2022 let's quickly set the stage with

this chart and then we'll look at the

exact same chart dated Friday July 5th

2024 it's a two-year chart 2021 on the

left side of your screen moving averages

range from the 20-day moving average in

blue all the way out to the 250-day

moving average in Black this is what it

looks like when the net aggregate

opinion of all Market participants

regarding all subjects on all time

frames is bullish this is what it looks

like in here when it's indecisive and

this is what it looks like when it's

bearish and we know from past videos

this is what a strong Trend looks like

this is our indecisive tight cluster in

here in

2022 and this is what a downtrend looks

like thus in the present day concerns

would increase if the present day chart

looks similar to January February and

March of

2022 if we fast forward to July 5th how

does the exact same chart look

today very very similar to the

commentary in recent weeks and recent

months present day chart looks like like

a strong uptrend with blue the fastest

moving average on top black the slowest

moving average on the bottom the slopes

of all the moving averages are up and

prices above all of the moving averages

even if the economy started to roll over

and economic data started to deteriorate

significantly in the coming weeks and

months it would most likely take time

similar to this period or topping

process in here on the left side of your

screen since we're using a way of the

evidence approach let's do the same

thing with numerous charts including spy

same moving averages here's the peaking

process this is the look we want to

avoid in the present day the right side

of your screen over here is July 5th

2024 similar situation you can see very

early in January 2022 in the early

stages of the bare Market the 20-day

moving average in blue dropped like a

stone and cut through the rest of the

moving averages do we have something

similar on July 5th on the right side of

your screen we do not the 20-day moving

average in blue still has a strong

conviction look similar situation with

the triple Q's when the market started

to become concerned about fed policy

interest rates in inflation QQQ dropped

through the moving averages rapidly all

of this occurring in the month of

January in

2022 we saw something similar in the

present day we would be concerned unless

you're guessing or assuming you know

what's going to happen based on the

chart in front of us we still have a

very favorable look from a trend

perspective scg the growth stock ETF you

can see late in

2021 prices above all the moving

averages in a matter of weeks it drops

below all of the moving averages and

notice once the 20-day moving average in

blue

drops below the 250-day moving average

in Black here it never recovers that

level on this rally attempt here in 2022

that eventually

fails right side of your screen same scg

same moving averages we have a strong

conviction look under our approach this

chart is telling us to continue to be

patient with our long and profitable

positions NASDAQ composite index left

side of your screen

notice how much white space is between

the moving averages here early in

2021 look how much tighter prices

relative to the moving averages in Q4 of

2021 as the Market's rolling over the

NASDAQ makes its final Peak here well

before the calendar turns to 2022 and

once again this look in here is the type

of look that we want to

avoid if you're reviewing things

objectively on the on the right side of

your screen we don't have anything in

the present day chart dated July 5th

that looks like q1 of

2022 things can change rapidly but they

haven't changed yet and if we look at

this chart or any other chart and we

assume or say they're about to change we

could have said the same thing every

single day over the past 8

months SMH the semiconductor ETF drops

Like a Stone in January of

2022 do we have something similar and

concerning on July

5th we do not focus on the right side of

your

screen same exact chart same moving

averages we're looking at Nvidia on July

5th it's still hugging its 20-day moving

average up here and it remains well

above an upward sloping 50-day moving

average in red and well above an upward

sloping 250-day moving average in Black

contrast that with where price was in

here in January of 2022 and February of

2022 this really doesn't look anything

like this over

here another tech sector ETF

iyw the chart changes rapidly in early

2022 and by the time the ETF Bottoms in

November of 2022 price is well below a

downward sloping 250-day moving average

in Black same chart on July 5th

continues to have that strong Trend

look how about the broader vti ETF the

Vanguard Total Stock Market ETF it too

in a matter of trading sessions went

from the top of the moving average stack

to the bottom of the moving average

stack in January of 202 2 and before

things started to get really really

dicey in this window here look how tight

the moving average cluster is after that

really bad things happened how does the

exact same chart look on July 5th better

worse or about the same the answer is

significantly better relative to January

of 2022 also

noteworthy the broad total Stock Market

ETF top 10 holding here left side of

your screen sector weightings here now

let's move to the notes in the upper

right hand corner 70% of the exposure in

vti is outside of the tech sector and

yet this is the look of the chart on

July 5th Nvidia only

5% of vti's Holdings if we add Microsoft

Apple and Nvidia less than 177% of the

makeup of vti meaning mean 83% of this

trend here is dictated by stocks other

than Microsoft Apple and Invidia and the

look of this chart here really doesn't

look anything like q1 of

2022 we're not making any assumptions

about what Monday looks like what next

week looks like or the next 3 weeks or

even the next 3 months this is the chart

in front of

us left side of your screen defensive

Staples xlp in the ETF World relative to

spy the S&P 500 ETF 5 or six weeks

before the S&P 500 peaked this ratio

started to take on a defensive look in

the first few trading sessions of

January xlp ided by spy a defensive

ratio was already above all of the

moving averages and the slope of the

250-day moving average in Black in here

was flattening out and the fastest

moving average the 20-day moving average

between late November here and 2021 and

early January here shot through all of

the other moving averages in a

concerning manner how does the exact

same chart look on July 5th better worse

or about the same relative to this look

here in January of 2022 we could see

this in the very early stages of the

bare Market the answer to that question

is significantly better if the look of

the chart started to morph into

something more like this concerns would

increase and if it does it just tells

you to pay closer attention it is very

very easy with a look like this to

remain patient the look of this

defensive ratio on July 5th is not

screaming major concerns in fact you can

make an argument it's projecting

economic

confidence Common Sense tells us these

bullet points here for the most part

encapsulate the order of operations as

the market shifts from growth to

contraction and eventually into a

recession the National Bureau of

economic research they're the ones that

officially declare economic recessions

straight from the horse's mouth in

recent decades bottom of your screen the

two measures we have put the most weight

on are real personal income less

transfers and nonfarm payroll employment

relative to those measures are the

charts concerning relative to these

bullet points and what do we mean by

that looking at the first data set real

personal income excluding current

transfer receipts we live in a world

with NeverEnding calls for recession

there's always somebody pounding the

recession table and today is no

different just like the charts of the

S&P 500 this is the look we want to

embrace over here the Shaded area show

you the look that you want to

avoid shaded area indicates when the US

economy was in a

recession clear weakness here weakness

here data plunges in the 1990 1991

recession

noticeably weak in the 2001 recession

the data moves sideways and then falls

off a cliff during the financial crisis

thus in the present day do we have

something that looks more like this

region in here or something that looks

more like this concerning region in

here this chart was pulled off of Fred

during the trading session on Friday

July 5th data set recently made a new

all-time high

just like the chart of the S&P 500 this

is the data set in front of

us major data set number two that nver

uses to determine whether or not the US

economy is in a recession see weakness

before the 1945 recession weakness in

this window here easy to spot weakness

in the

1950s not difficult to see the change in

Trend in the data here late 1960s early

1970s double dip recession in the

1980s non-farm payrolls rolled over in

the 1990 1991 recession they started to

descend rapidly in the 2001 recession

and rapidly in the financial crisis

recession if we look at the same data

set on July 5th does it look more like

the left side of the screen or more like

this concerning rollover period here in

1990 the data May shift very very soon

but the chart in front of us says it

hasn't shifted yet we really don't even

have to update the models this week last

week looking good looking good this week

the S&P 500 was up 106 points we're in

Striking Distance of some Targets on the

secular volatility research project

possible we could hit those in the next

one to three

weeks still on track relative to this

topic here and there's nothing on the

chart of the total Stock Market

ETF that contradicts any of this nor any

of

this waking up every day with an open

mind about a wide range of outcomes from

widely bullish to wildly bearish has

served us well over the past 8 months

and we all know if we're going to

properly use a chart like this it's

extremely important that we head into

next week and every week with that

flexible unbiased and open

mind the material in this video has no

regard to the specific investment

objectives financial situation or

particular needs of any

viewer this video is presented solely

for informational purposes and is not to

be construed as a solicitation or an

offer to buy or sell any Securities or

any related financial instruments nor

should any of its content be taken as

investment advice

any opinions expressed in this video are

subject to change without notice and

Shaco Capital Management LLC or CCM is

not under any obligation to update or

keep current the information contained

herein CCM and its respective officers

and Associates or clients may have an

interest in the Securities or

derivatives of any entities referred to

in this material CCM accepts no

liability whatsoever for any loss or

damage of any kind arising out of the

use of all or any part of this material

we recommend that you consult with a

licensed and qualified professional

before making any investment decision