Hey hey, what's up My friends are accompanying me today is this two pair of Chopsticks I mean drumsticks, right? The reason they're with me is because I confiscated them from my son because while I was producing this video right, he's out there, you know, drumming thinking he's the latest hottest drama over there and it's affecting my video so it's like confiscated right? So without without him having it, he can't kind of like interrupt my video, right? So anyway, in today's uh video, uh, something special because it's something I haven't done in a while and I'm going to share with you my take on the U.S stock Market because I get it right Traders are thinking man, is this a good time to buy right? The stock market is rarely right. 20 from this lows over here, right to where we are here right now. But then the fundamentals in the market though the US is in debt. You know what if they can't pay back, they are damn and look at the banking contagion.

Rhino Svb Silver kit Bank right or get into trouble. Should I buy or should I sell? Great question, right? So this is why in today's video we're gonna find out, right? So the way I'm gonna do it is I'm going to share with you. Uh, bullish factors, right? which are good for the U.S stock market at the same time, right? Not all is Rosy because there are some bearish factors to be aware of as well. so we kind of like assess both of them right.

The pros and cons right then from then we kind of like come up with the decision whether should we be buying or selling stocks. So the first thing that will look at is the technicals. because I am a technical. Trader I Focus a lot on the technicals And looking at the technicals, this is the daily time frame.

You can see that the U.S stock market has been pretty much in the range right over the past one year or so. so this will be the highest that I would highlight out. and then this will be the lows. Okay, so from a daily timeframe perspective, it's a range between the highs and lows.

And of course, right, Uh, if you take a step back, you zoom out. That's where you get a different picture. So this is the weekly time frame. We zoom out a little bit right and you can see that now.

Okay, the U.S Stock Market. The picture is now different. So let's break down the recent, uh, one year of price action, Or maybe one or two years so you can see that in 2022, right? The stock market, of course, right? It took a big thing, right? You know that already Down about 20. Right for the S P 500..

Notice a series of, you know, lower highs, lower highs right and lower lows. Lower lows lower lows for a good part in 2022.. Okay, and then what happened is that, uh, sometimes towards October or 2022, there's lows over here, right? Kind of like bottom up and then had that nice rally up towards this uh, 4200 level price point. So if you look at the price action right, what I'm seeing over here is what we call a inverse Head and Shoulders pattern.

Not the most textbook example, but you can roughly see the Uh, the left shoulder The Head and the right shoulder and this will be the neckline. So so from a technical standpoint, if the market can break and close above the area of resistance, right, this means like the market could possibly rarely up higher and take out this all-time high over here. So from a technical standpoint, I would say things are looking bullish. right? As you can tell, buying pressure is stepping in right? This is the swing low over here.

Selling pressure. couldn't take this down lower to break below this swing low. Instead, what we got was a series of higher low, higher low, higher low and now the price coming back into this area of resistance. Okay, so you can see over here.

Uh, in fact, we can actually possibly even draw like a trend line right and see over here like something like a ascending mini ascending triangle. So if the project once again breaks above the 4200 level price point, uh, things will pretty much be looking good for the stock market and wouldn't be surprised if it retests this highs over here. So that's from a technical standpoint. What about fundamentals? Let's walk through a few fundamentals, uh, scenario or factors.

First one is the Fat Fund rate Market expectation. So what this is, or if you're unaware, is basically the markets expectations of interest rates. So you can see over here to break it down in June is expecting a about five percent July about five percent as well. So you can see that there.

By the way, this one is not cast in stone. This meaning these numbers this percentage is always fluctuates up and down right. So it's uh, it's a it changes over time, right? But as of right now, the rough pattern right is that we are expecting interest rates to kind of like pause or take a plateau right sometime in June and July. So we're not expecting higher interest rates and after which interest rates could possibly head down low for the rest of 2023 and 2024.

So again, that's kind of like the Market's expectations right now. And of course, this can change. For example, with the links CPI the Consumer Price Index report comes up. Inflation is 10.

Guess what? The FED will likely raise interest rate further, right? So again, this is not a cast and stone. This is kind of like dealing with probabilities and this is what the market is expecting right now. a pause in interest rates and then a decline in 2023 and 2024.. So what does this mean for the stock market? Well, this is bullish, right? Because when interest rates are low, it means that companies can take on more of that cheaply.

I Mean they can take on more of them, they can expand right, increase their earnings, and then naturally you know lead to increasing stock price. So low interest rates are usually good for the stock market and that kind of like explains the huge rally we've seen right from you know, 2009 all the way until to 2019 2020 period right in the low interest rate environment. Next thing to look at is the earnings right? How did the S P 500 Earnings You know Fair recently. So this is again published in May 19.

You can see over here the earnings scorecard. This is important, right? 78 right of the S P 500 That has actually beat earnings expectations over here. So this means that more than three quarters of the companies reporting in the S P 500 has beat earnings expectations. So they actually earn more money right than expected, right? Uh, by the analysts.

All right. So again, you make more money, right? This means that you know the company is healthy and chances are you know stock price will reflect upon it, right? So it's good for the stock, right? Overall, So so far Earnings is you know, looking good for the stock market as well. Now what about this one over here right? So now instead of you know looking at all the bright side, this is a few factors right that could affect uh, the U.S stock market. It's the bank banking right crisis right there we have seen recently.

So for example Signature Bank you know went down silicon Bank Silicon Valley Bank went down right. And what's interesting is that the size of these two Banks is large right relative to the banking crisis that we had in the 2008-2009 period. right? So most of the banks that went down back then is uh, smaller right than these two recent Banks And one thing about Bang Right is that the price is not just isolated to One bank because they're all interconnected right? You know. Bank A Land money to bank D Bank Billing to bank C Bank C Land to bank D bendy Bank D Bank D Lens back to Bang A and you can see that it's all interconnected wet right? So when One Bank goes down right and the Creditor the banks that is being owed money couldn't get their money back, That could actually affect the operations and they could also in turn go bankrupt if they are liquidity.

they don't if they don't have much cash flow to support the operation. So you can see that if One Bank goes down right multiple Banks right, they're all connected to it with not very strong cash flow. I could also go down along with it. So this is why uh, we have this kind of like a banking contagion out there.

So the fear now is that you know these two Banks right? right? It's actually three. Banks Let me just point out to you the next slide these three Banks over here. That could just be the tip of the iceberg, right? And if there are other Banks you know, uh, connected to it that have cash flow problems that you're not going to repay back their debt, you know this Could you know lead to another banking crisis? So there's the worry right now in the market. But in my point of view, I wouldn't worry as much, right? Why is that? It's because in the the FED right? They love bailing out Banks I didn't want the banks to fail.

They're like the lender of Last Resort right? You've got no money. Don't worry Papa Give you some money, go use the money and survive. And no, don't don't give problems in the market. So that's what the FED is likely to do because this has been their cause of action right over the last uh few years, last many years.

So they always be the lender of Last Resort and lending the bank money, right? So uh, I wouldn't expect a banking crisis because of the FED but in the grand scheme of thing, just to digress a little bit right, end up is the taxpayer are the one who actually know kind of like, uh, bear the course right because it's XPS money that's actually you know building up these Banks right? So I don't want to get Sidetrack a little bit right? I won't be too concerned about the banking crisis, right? Because the fed you know usually acts as a lender of last result. And what about this? The U.S debt, right? You know, You know the U.S debt is. You know it's risen right, Uh, astronomically right over the last few decades, right? And there's a U.S debt ceiling. And right now you know if the depth ceiling, it's uh, it's it's not lifted right? What's going to happen is that you have U.S will go bankrupt.

So should it be a cause of concern? Well looking at this chart you can see that since the 1980 to where we are right now, the U.S debt ceiling has consistently increased over time. So I'm betting that 99 chance right that the U.S debt ceiling will increase again and and also an adapt ceiling is kind of fake, right? You look at this point in time back I think 2019 or 2020. The U.S debt ceiling can even be suspended Means you have a credit card with unlimited spending amount, spend and spend and spend, right? So so the debt is kind of like, yeah, it's fake, right? You know you can just lift it up all right whenever you need to. So what's the point of having a debt ceiling in the first place I wonder, right? So they probably have a reason for why they even started it.

But you know, I'm not going to dive into it. But the main things I won't be too concerned about the U.S debt ceiling because it's just. you know it's just an illusion if you want to call it right. And it's kind of like you know a father right.

always giving his son money and our son always borrows money from the father and father. Keep giving. giving the sun, you know, doesn't spend the money wisely. always, you know, blows it up, you suspended on useless stuff and still goes back to the father.

and to borrow more and more money and the father still gives it and you wonder why. Well, the reason is because, right? the father doesn't want the sun to go bankrupt, right? Because it reflects back barely on their family name, right? So same thing. and it's the same thing what the Us is going through right now. because if they go bankrupt and look, they made them look very bad right in front of the world.

and I don't think that's a path that they want to to, uh, go to. And of course, like the repercussions right? that will come along with it. And also, so let's do a quick recap right to the factors that we've just covered so far, right? So we covered these few factors. And to sum up the technicals: I would say it's bullish right? As you can see over here long-term uptrend and there's a reason inverse it and shoulders pattern.

The fat fund rate is expecting interest rates to go down low. so again, that's going to be bullish for the stock market. Earnings has been bullish for the stock market as you have seen most uh, companies beating uh, earnings expectations. What about Banks right? So yeah, there is a possible banking contagion right that could lead to a decline right in a stock market sentiment in prices.

But remember, there's a Fed right? Who's usually the lender of Last Resort which I believe that they will step in or inject more liquidity and flood them with more money if they need to. so wouldn't be too worried I think it's more towards neutral right there. Neutral. So let's put it like a dash and same thing for you us that right? They're probably going to raise the debt ceiling again, so wouldn't be too worried.

Probably neutral as well. So overall, I'll say uh, there are more factors right to be bullish on the stock market than not. So now the question is, what stocks do we buy? Well, let's find out Now let's have a look at a trading setup. I'm keeping my eyes peeled on, right? It's none other than Decker's outdoor Corporation so give you a little bit of a context.

All right. As you've seen earlier, the S P 500 the price Action Now of it is actually more of a range bound like this on the daily time frame because it is the price action of the S P 500. Whereas if you compare with Deck right, you can see that in terms of relative string like this stock is a lot more stronger. It's in a very nice bullish uptrend.

and that's not all. If you go up to the weekly time frame, it's actually trading at all time highs right over here. All-time highs I Believe. So let me just zoom out a little bit a little bit I Need to confirm? Okay, yeah, pretty much at all time highs and it's been around since like 1993 1994, right? Amazing! So yep, the stocks are showing signs of strength.

Just recently broke out of two all-time highs and also you can pay attention that price currently is retesting towards this previous resistance resistance resistance which could become support on the weekly time frame. So let me just highlight that out right so you can see it over here. Where is the rectangle Two? There you have it. Okay, so I'm just going to highlight the box so we're all kind of like looking at the same thing.

Okay, so this is the weekly time frame level so you go down to the Daily time frame. Okay, so we can see that this this box was highlighted earlier. So daily time frame if you look at the price action again similar Market is in a very nice uptrend. You overlive the 50 period moving average.

Often people ask me right now, is this the simple moving average or exponential weighted moving average? To be honest, it doesn't really make much of a difference, but in this case, uh I Believe it's a simple moving average right to 50 day simple moving average and you can see that it's respecting it pretty nicely, right? You know, bounce off here once, then go up, come back, bounce down up, down, up, down up and we're back here at the 50-day moving average once again. And another thing to also pay attention to is the price action of this: Market I Want to remove the 50-day moving average first and notice that this Market has a tendency of Faking out the previous swing low and then you know, rebounding backup height. So for example, this is the prior swing low price came down into this level right, took out this low, stock out the stop loss that were placed below it, and then had a nice bounce up higher. So same thing uh over here as well.

this was the prior swing low, Price came down lower, took out this lows, took out the stops below it, and then had a nice bounce up higher. So what I'm looking for again for this particular setup is again, uh, similar. We have multiple Confluence factors coming in our favor. Number one, we have this area of our support that you've seen on the weekly time frame.

previous. Resistance that could become support Number two: this is a swinging over here and the price could possibly know take out the slows and then quickly rebound back above it right so it could be in the form of like a hammer Candlestick pattern showing you a bullish price rejection. And of course number three, you saw that it has uh Confluence of the 50-day moving average where you know earlier I brought it out with this 50-day moving average Confluence as well. So uh, these are a few factors that you know is walking out for this stock, right? The three factors that I think is a bullish sign.

So what I'm looking for is again, uh, if the stock price could show me a bullish price rejection like maybe in the form of a hammer taking out the slows at this area of value at this area of support, I'll be looking to enter on the next candle open or sometimes I place a buy limit order if I'm feeling a little bit of a cheapskate. My stop loss is usually a distance below this lows because I don't want to exit to get stopped up prematurely so usually something along here. just my stop loss. So this is my entry.

This will be a stop loss. Okay for potential targets, right? One level you can reference to is just before this recent swing highlight is called this: TP Okay so there's a potential uh trading setup that I will be looking at. you could possibly look to capture that one swing up higher right. If the market comes into our area of value, give us a value entry trigger and those will be those will be the entry, the stops and Target that I will be looking for.

And of course if you want to, you know as you've seen this stock right, it's in an uptrend if you want to continuously. uh, Hold Your Position to write the trend up higher you can as well. So one technique to share with you is that maybe instead of capturing a swing, what you can do is uh, you can use maybe a moving average to Trail your stop-loss like maybe the 100-day moving average. Or you can even reference, you know, uh, price structure to trailer stop loss.

Meaning that as the price continuously make a series of higher highs and higher lows, you continuously hold the trade right. But if it breaks and close below, let's say the previous swing load or the previous area of support, it breaks in close below it. Then you exit the trade. So there's a trade.

Another method right that you can. You know trailer stops and to write the trend up higher. so again, different ways, different folks for Different Strokes right? Kind of leave it to you to which trade management you prefer. but this is, uh, definitely a potential trading setup that I'm keeping on my radar.

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