So Yesterday obviously ended red, which suggests there's still a lot of fear left in the markets. That's absolutely true. We don't yet know what we're going to get for our February March and April data, but what happened to Financial Conditions Something Jerome Powell Let the Federal Reserve pays a lot of attention to and what happened to our Breakeven inflation rates because what I'd like to see is as the stock market turned red and the 10-year treasury approached four percent. What did Financial conditions do our financial conditions properly and potentially adjusting for the pain that we've already seen in January data.

And is that potentially enough to keep our stock market from lagging even lower? Well, let's take a look. This particular chart here is a chart of the Goldman Sachs Financial Conditions Index. and the Financial Conditions Index is made up of the value of the dollar, the value of stocks, the value of housing the value of a treasury bonds. It's a little bit of everything.

a lot of it is based on the value of the treasury yields. So let's go ahead and see if we have any kind of Trends here. So first of all, it's worth noting that right now we are sitting at Financial conditions that are as high as what we last saw at the end of December. Remember when everybody was basically paper handing for tax loss harvesting? Well, that's roughly where we sit right now.

At a scale of financial Conditions tightness, we're sitting around that December paper handing level. However, we're not sitting at the levels of financial tightness that we saw in September and October And this is where we really started seeing Financial or inflationary surprises. and we potentially really started bottoming in a lot of stocks. A lot of stocks saw their bottom in Q3 2020.

Uh, um, two. Now, is it possible that October did end up marking the bottom, aligning with the tightest Financial conditions? Yeah, it is possible. Unless of course, we get more inflationary surprises in the Feb March April reports which obviously come out April Uh, it will come out March April May Anyway, if we get worse reports, we're going to zoom up. We'll probably see the stock market test those bottoms.

And so that's kind of interesting. If you align again the bottom of the stock market with financial conditions, you can see why. Have we been read the last two or three weeks here? Financial Conditions have been substantially tightening. Uh, and at the same time we've had this alignment, the 10-year treasure yield has tightened to the tune about 60 basis points.

That could move mortgage rates in the real estate market up probably somewhere around 60 to 75 basis points as well. if we Google mortgage rates. Right now, we drop to our usual 740 credit score. so we have a consistent look.

folks, we are back at Where are we? We are right back to the seven percent credit score almost sitting at 7.1 or not for a credit score 430. Your fixed rate mortgage that's pretty dang high and this is symbolized and brought to us by the financial. Uh, a Goldman Sachs Financial Conditions report. So this is something we're really going to have to pay attention to.

But what we'd also like to pay attention to is that well, I'd like to say that that Financial condition's tightening could be a sign that the Market's already trying to take care of that January hot data for us. so the Market's already at work and as long as we don't get worse data in February which comes out next month in March maybe the pain that we just went through will end up being temporary. Now though, let's also look at the five-year break evens: how are we doing on Five-Year break-evens Because five year Break Even suggests to us okay, is inflation going to get worse? Or are we topping out on inflation? So we'll just in this portion here Focus Specifically on what Financial or what five-year break-evens or the Market's predictor of inflation have been telling us for the past year. And that's very important because we know we are well above where we were when the FED last pivoted in.

uh, in 2018 at the end of 2018, where the five-year break evens were sitting about 1.6 percent. We were trending in that direction in January, but unfortunately, the January data really ruined everything. Here is the chart of the five-year break evens, and if we go ahead and draw a similar line over Here so let's go to our tool and grab a line here. What do we have? What we have is a five-year Break Even level that has peaked out about last week maybe somewhere around Monday Tuesday and we're sitting at levels that are at the same inflation expectations of what we had roughly at the beginning of December.

So really, we're relatively stable there. If we wanted to draw a larger downtrend, we can. Although that downtrend is not as perfect as what we've previously had where it started to look like we were almost breaking the downtrend that we had had a nice downtrend here, and unfortunately that somewhat broke here. so the downtrend just isn't as quick as what we had been hoping.

And that's really to say that inflation's probably going to take a lot longer to bring down than we were expecting. and that's why we're seeing some of that red here. The good news is we've somewhat peaked again on those inflation break evens, and that's fantastic. So maybe this is a sign that we're not going to get back to that 4.3 treasury yield.

We're not going to get back to that level of uh of of inflation uh that we saw previously and maybe just maybe we could stabilize. Now there is a thesis, uh, that, uh, hey, we're going to end up doubling double dipping with the next reports, but at least now could it show? Hey, things won't be as bad as what we saw going into Q3 where we had. uh, these these break evens sitting closer to 2.7 percent. or potentially the break-evens that we saw in October.

Well, maybe since we're peaking out slightly lower than where we were in October, maybe the worst is behind us in terms of looking at the chart temporarily thanks to the January data. again, we look at the January data and we kind of compare it to where the NASDAQ has been. We zoom out on the NASDAQ. We look at a Fibonacci retracement you saw where we were on the break.

Evens look at where that puts us when we look at the NASDAQ for example, this is the chart of the QQQ. We have now perfectly retraced uh on the NASDAQ to our Fibonacci level one up from zero. Here right now, this is very, very interesting because it's almost like we perfectly got rejected at our second level on the Fibonacci. And now here we are at falling right back to our support, which is the second level.

Now, in terms of a percentage for retracement, it's worth knowing that we got rejected at the 38.2 percent retracement. What that means is when we take when we say that the high of December of 2020 or November in this case of 2021 is the peak and the bottom is potentially November or excuse me, October of 2022. Then we retraced 38. We've got rejected and we fell to the next level, which is at about 23.6 percent right now, at least from a technical point of view, It seems like Financial conditions have tightened enough to where we should be okay in terms of tightness.

Given this hot January data we got, we have break even yields inflecting down, which suggests maybe we could have a slow bounce off of this 28 Fibonacci level. In my opinion, a reasonable trajectory on a technical basis going forward here could be a slow continuation of the trend that we've that we've had slow though very slow. So for example, if we, if we look for a trend here I think probably one of the best places to draw that might be here. Let's see what this looks like.

Let's kill that. let's draw a new line over here. Let's see if we can get a trend over here if we suggest hey, when could we potentially get to the 50 retracement line on a little bit more of a patient? Trend It might take us until about June and in my opinion, this trend line is a reasonable trend line to pay attention to and it really shows us a ceiling for those higher Highs coming off of the bottom and that suggests maybe still bouncing around. not yet breaking that 38.2 percent line until look at where that break lines up.

From a chartist point of view, that break to a leg higher breaks right here March 21st Now, why is that so interesting? From a technical point of view: Fomc Meeting folks, the Fed's Fomc meeting is on March 22nd. This means, from a technical point of view, for the next three to four weeks, maybe we'll trade sideways, leading into that Fomc meeting where we'll get CPI and Jobs data. but the market will mostly care about how is the Fed reacting and responding to that. and if the FED continues on sort of this dovish path.

even though we lost Leo Brainard from The Fad she's gone over to be the director of the National Economic Council she took Larry Kudlow's job. well, his previous job somebody else is there. now, you know. Mr v-shaped recovery.

Anyway, that's the NEC. So Leo Brainerd left. She was the one of the biggest doves at the Fed and now she's gone. You've got a pretty hawkish Fed actually right now, but you're even seeing some of the Hawks like Master Say, look once we get to five percent.

Uh, we're good. Like I mean maybe we have some more small hikes to do. But the leading data we're seeing from businesses and companies we're talking to. which, by the way, reiterates what I'm seeing in earnings calls and reports at companies, is that the tightening is happening What you're seeing it.

especially with some lag, especially with the quantitative tightening still ahead of us. But anyway, potentially from a technical point of view, we could bounce off of the 23.6 NASDAQ Fibonacci level here, which is basically where we closed. That level to tell you exactly is 289 64. We closed about two points above that at about 291.

So, but we did touch that intraday. We almost perfectly touched the Fibonacci Fibonacci intraday. In fact, if we look at the lows, I was about 40 cents off, pretty close. Anyway, Is it possible that then we have this sort of volatile uh, volatility? Maybe a slow Trend up with volatility going into March 22nd and then a breakout around March 22nd? Which is what the at least for me, my technical point of view is pointing out Yeah.

and then the next resistance level is really going to be that 50 Fibonacci In which case, this trend, if it holds, could potentially say it's going to be June before we actually break that 50 Fibonacci level right? So it's interesting we'll see. But from a technical point of view, I Think the retracement that we just had over the last three weeks is not a confirmation that we're back to a longer term bear Trend Mostly because if you look at the longer term bear Trend we've already broken that right, we're we're look at that. We're literally sitting on the 200-day moving average as support and we're not anywhere near that longer term bear Trend which would suggest longer term uh or second leg lower right? So from a technical point of view, which by the way I talk about technical analysis a lot as well. In the Stocks and Psychology of Money course linked down below along with all of my other courses, you can bundle up biggest.

the most popular are Stocks and Psychology of Money zero to millionaire Real Estate Investing followed by the Elite Hustlers course which we have an Elite Hustlers live stream coming up after this video. uh, those are linked down below with a flash sale going on now and you can learn about everything that I know in my perspectives over there. but from a technical point of view, I'm not very bearish right now. If anything, this is a moment right here.

I'm actually tempted on Monday to potentially pull the trigger on some option trades. Uh, we are we. We're talking about those a lot in the live stream yesterday. so if you're in the course member stream, you'll see exactly which particular stocks are really Prime for this option trade based on volatility analysis and now based on a technical analysis on the NASDAQ, we could look at some components of the NASDAQ and maybe pull off.

uh, some some, uh, some good, uh, yield farming so to speak. on Monday.