What's going on guys welcome back to your morning, video today we're going to go a little bit more in depth than what we would typically do, and i've tried to make this video a couple times. But it's it's getting a little challenging to do, because i'm trying to bunch in a bunch of stuff all at once, so i'm going to go for it on this one and if i make a couple mistakes along the way, please forgive me i'm trying to pack In a lot of great info for you guys in such a short video um, so we're going to get into it all right. This is not to spread fear no doom and gloom. Nothing like that all right.

So this is my twitter page uh. On january 25th, we had a transaction in the stock market all the way down at 364.68, and that was a ghost wick. If you're not familiar with what a ghostwick, is you see this wick and if you're watching the market this morning, you would have seen it happen live, but whenever you get one of those big candles that just happened randomly whether up or down and create this big Wick, it means a transaction has taken place in the stock market. You yourself are not able to trade those transactions, i don't know who's doing them.

I don't know if it's a bank - i don't know if it's an individual, whom exactly is doing it, how the transaction takes place or the route that it takes. Don't know that, but we know it happened now. What's significant about these ghostwicks is that frequently the market will come back and retest those prices fairly soon, whether it be the same day or within a few days time? Okay, so considering that we typically only get ghost wicks that are a few hundred points, uh away from the current price action um and then the market typically goes back and and tests. Those areas within a relatively quick time makes it very, very, very unique that we got a ghostwick transaction all the way down to the price of 364.68, and i have some other pictures here, um that i could show you, which are all the way on the top.

So i will do that, go all the way to the top here's another view of it alright. So this is on an intraday scale. So this is a picture on an intraday scale. You see where the market went.

You see that big wick all the way down to 364 68.. This is where we might get slightly confusing i'll. Try to make this clear all right. So to me, we had a transaction take place at 364.68, so the market already traded to 364.68, even though the price is up here at the time on january 25th, trading in the 400 somewhere.

I think it's the 400s yeah 435. we already transacted. We already did deals we already auctioned the auction market at prices of 368.. Somebody transacted there right.

It happened, okay. Now what i find unique about the price point at which the market transacted is the fact that it's at negative four sigma. If you've taken statistics, then you probably are very aware of what i'm saying: if you haven't taken statistics, you might be slightly confused. I never took statistics, but i've been teaching myself this alongside of a stock chart, so i may not say everything perfectly so please forgive me.

Okay, now, before we go further, what i want to bring up is a picture on google. I always do this. This is a bell curve. Okay, this is um a bell curve and this is kind of showing you how statistics work in a nutshell.

So the way that i will describe this is if we decided to take a random set of data such as measuring a hundred guys and seeing how tall they are. So if we went out and measured a hundred guys, most of them are going to fall within plus three to negative three deviations of the mean. That means most of the guys that we measure the average or the norm will probably be let's say: five eight most guys will not be four or five. Most of them will not be eight foot, most of them will fall somewhere within one standard.

Deviation of the mean, which means most guys, are probably five foot eight and then from there you know a good amount of them may be, like you know, five, six to six foot. Okay, most of them won't be seven or eight or five or four most of them are going to fall somewhere within the range of six foot to say five foot, six: okay, but there will be a couple guys that you you measure and they are sure enough. Seven or eight and sure enough, there are a couple that may be five and four and a half, but those guys are very rare. They don't happen very often, but if we were to take a random set of data depending on how big that set of data, is it's very possible that we do end up finding someone who's four foot and someone who is eight foot? They do exist.

They are out there they're, just not very common. What's most common is probably five foot, eight five foot six or what not right in that area. So when you think about it, like that, we are telling you that if we took a big random set of data and measured a bunch of people, the average will probably be here. The outliers will be here - and here now reverse engineer that apply it to a stock chart.

Here it is. This purple line is negative, four, which you don't actually see on this. This only goes to negative 3. all right, but i have negative 4 on my charts.

Now look at the probability of most guys existing with inside negative 3 and plus 3 99 99.7 percent. That means if we went out and measured everybody in the world right now, 99.7 percent are going to fall within negative three to plus three standard deviations of the mean, which means most guys are going to be with inside three deviations of the six foot normal measurement. If that makes sense right, okay, but you will not find anybody - that's probably two foot right: a grown man you're, not gon na find a grown man. That's two foot tall you're, not gon na find a grown man.

That's 16 foot tall. It just doesn't happen right. Just doesn't happen, okay, they don't exist with inside the world of probabilities. It's just it's just not a thing right.

So now do you kind of have some context to that think about it. 99.7 percent exists within plus 3 to negative 3.. All right, we don't have plus 4 or negative 4., but if we did - and there was another percentage to give you the plus or plus 4 negative 4 - it would be 99.99 right so apply that to a stock chart. And here it is.

This purple line is negative 4.. This blue line is negative. 3 all right. So now let me bring up this chart all right or no sorry different one.

No, it doesn't matter. It doesn't really matter all right. So here's the thing we had a transaction take place in the market on the spy this year, all the way down at a price of 364.. All right when you apply probability, statistics to a chart on a yearly scale, meaning we take all of the data.

That's being presented to us and i actually have one i believe right here: okay, when we take, i think this is that's not the market. Sorry, okay, when we take over the last year all of this data, so imagine all these candlesticks are guys right and look at most of them fall, and this this this line here is the mean all right. So this is the mean. So when you think of the bell curve right right here, this middle level, the mean that's that okay, that's the mean, and you will see most of the data exists with inside the blue and the blue right.

99.7 percent of all the guys are going to exist inside plus three and negative three, because most guys are not 17 foot tall and most of them aren't two foot tall. Okay, most of them are probably about six foot, five, eight, which is the mean, as you see most of that data kind of hovers right in there. So this is the average okay. So when we apply that to a stock chart - and you see that we had that random ghostwick go all the way down to the price of negative four to me, that was the market pricing.

In the probability that we could see, the market fall all the way down to that price. Now, why didn't it go lower? Because 99.9999999999 of all data exists with a negative, four and plus four okay? Think about it like that, if we're talking about extreme events or extreme outliers, most guys aren't 17 foot most aren't four foot. There might be one or two people that meet that okay, so it is potentially possible, but very rare okay, so think about it like that. Now, when you look at the stock chart of the s p 500 - and you see that a transaction took place all the way down at negative four to me - that's the market, making a transaction and pricing in a potential probability.

The market can go as low as 368 over the next year, but it might be hard for it to go below that, because 99.99999 of all random sets of data exists with a negative four plus four okay, so nonetheless, i think over the next year. Yes, we could be seeing the markets down towards prices of this level and, if you ask me, i believe that is where we could be seeing a good bounce so we'll see if it gets all the way down here. I think that's a high probability area. We could see a dead cat bounce, so this is the discussion if we're actually going into some sort of recession - big big market downward turn to me.

That seems like a highly probable level that the market would try a dead cat bounce. So with that being said, ladies and gentlemen, that is your small little class for today. Now, let's jump into the charts all right so now, when we look at the charts like we normally do all right, this is kind of how the market is set up right now on the spy all right. This is the nasdaq all right.

So let me bring up uh, there's a nasdaq and let's bring up the spy here. All right, i think today is highly probable. We could actually do a bounce day if you ask me and we'll see, but here's the deal if we look at the nasdaq, the nasdaq is trading down um on a scale towards negative threes, all right and if you look at the spy, the spy. Arguably, is trading down towards some negative fours and negative threes, just depending on which time frame you're looking at so arguably the market's kind of in a little bit of a bounce area, all right so nonetheless, what we're looking at today is.

We had a ghost wick on the market all the way to there ghostwicks love to get retested. So whether or not that happens today, maybe the next couple days. That is a potential area of interest for some traders. 4.

22.09. Also. Is it any bit ironic that the top of this ghostwick goes all the way to our probability statistic level there, and is it any coincidence to you that this ghostwick here goes all the way pretty much to this probability, statistics level like why not just go here Or like, why not go like right there or something like that? A lot of times those ghostwicks are gon na go to a probability, statistical level which, again, if you look at this look at where that goes to go down to probability, statistics levels, okay, so with the market here today, um, the current support. Pre-Market that's been supported, is kind of this deviation here at 4, 11..

So for more weakness. Obviously you got to go and maintain below 4 10 ish or 411 on the spine, okay and for the market to really see. I guess you could say bullish activity as in like swing push trending long, you'd have to get back over 416 right, so the up move for now could very well be back to the 416 okay, because you know you can't really break out unless you're going break Out on the upside, unless you go above that, so for now your two closest probabilistic levels are going to be 416-ish 417 on the spy 4, 10 69 on a spy um 324.08 on the nasdaq and 314.84. So pretty much.

If this market continues to fall apart, say on the spy and on the nasdaq, then nasdaq we're just looking back down to three fifteens, arguably down to three elevens fifty fives, the spy continues to roll over breaks this and we're gon na be looking down to 405s 403S, now, if the market does sell into these prices on the day on the nasdaq um all right and it sells down to these prices here on the spy i got ta say these are probably areas where i'd be intrigued. To watch for some sort of bouncing action, so i will say if the market sells all the way down to these prices a day. This is probably an area where i might consider looking for some reversal long bounce sort of trades, but i would not be considering any sort of swing, long move unless the market was actually over 416 and even then i probably wouldn't just kind of using that, in Terms to get the point across so i think we hit home on enough enough points here today. I hope you guys have a great day.

That being said, appreciate you guys tune in and i'll see you in the next video.