Well, dang, i think, there's only one thing: that's going to keep this market down and that's what we're going to talk about in this video right after of course, i mentioned that you could get up to 41 off using that coupon code down below the pricing on Those programs on building your wealth does go up on october 29th, so check that out before the price goes up, got lots of inflation to deal with so cheers hop in now. See you soon. What in the world is going to be able to stop this insane market? Folks, i've been saying all year long that we might see an end of the year rally and while i was wrong about inflation inflecting down this year and looks like it will instead be beginning to middle of next year. The end of the year market rally has decided to come anyway, and this is very, very exciting, especially since we kind of dumped in all of our money into the market uh in this last sort of sell-off that we had here at the end of september.

But boy, oh boy, now i'm looking at the market, i'm thinking myself. What is the one thing that is going to be the catalyst that stops this insanity? Folks, it's not sustainable, or is it that's what we're going to talk about in this video? Because, folks, when i see dutch bros of nine percent, a firm up, seven point, one one so fies up seven you've got amc up 5.6 neo up almost five percent tesla of 3.42 to all the way over here 872., we're about to cross all-time highs, intraday at 904 on tesla docusign you turning back cloudflare the amazing uh cyber security company skyrocketing owlette's up two percent and the things that are down are down because either valuations are a little stretched or you had bad news. Uh, like you did over at zillow, where they decided uh the biggest the biggest piece of their business, is something that they're just gon na put on hold. But aside from that, the market's just going nuts, we started the day pretty negative.

Now we're going very green. It's kind of ridiculous, so is this sustainable and what's happening in this marketplace? What is potentially going to stop this insane rally because so far it certainly isn't interest rates because interest rates, while they are closely closely watched here, the cnbc here's the cnbc 10-year chart sitting at 1.58, we're not really seeing much of an incredible run. In fact, we saw this morning: interest rates sit around 1.62, especially after the bank of england suggested that they might raise rates sooner than expected to combat higher pricing pressures, meaning that the bank of england might uh - and this is according to jpmorgan chase by the way. Not necessarily bank of england, but it's about the bank of england but anyway, uh that that would be a signal that wait a minute if the bank of england is starting to tighten here at the end of 2021.

Is the federal reserve potentially behind the curve? Do they do do they need to speed up the rate at which they're tapering to stay at pace with what the rest of uh the globe is essentially doing in terms of starting to type or tighten some of these easy monetary policies? Well, so far, the treasury bond market doesn't seem to be too fearful we're sitting at about 1.58 on the 10-year yield. So if we zoom into the one month, it looks like we're kind of sitting around just below the resistance levels of about 165. That's about the highest level. We got.

We go year-to-date, we're still not at the high levels that we saw uh in around february and march, where we got to as high as 1.75. But we are around those levels that we saw in april and may which these were periods when we had a lot of stress in the market and now it's kind of like we're not seeing a lot of stress in the market, but we're also seeing those higher Rates and it's potentially because the market is just pricing in you know what hey inflation's going to be here for longer we're, probably topped out in terms of how high inflation is going to go. But this rate, where we sit now this five and a half, you know four and a half to five and a half percent. This rate might stay here longer, but we don't necessarily see it running away from us and exploding, and if that is true, then it kind of makes sense why the stock market is rallying, because the stock market likes to react to new news to new information.

To what i call inflection points rates of change, and ironically, i believed that a rate of change would have been inflation inflecting to the downside, not inflation, staying stable, but in a weird way, since we were expecting a change of inflation either to the upside or downside. No change was actually a change, so get that logic for a moment and then i'll talk about what could slow this market down. So here we had low inflation going into the pandemic. Then we had very low inflation.

Then, especially when we went year over year, we got high inflation and now we're kind of sitting right over here at the top of the line in terms of inflation charts. But we were expecting in september and october. Look we're either going to go one or two ways was the thought we're going to go up or we're going to go down while inflation's definitely going to be here longer we're seeing the wage pressures we're seeing the shipping container pressures we're seeing the supply shortage pressures. We think they're going to be bare shells in many parts of the country throughout throughout this holiday season, and even though businesses have stocked up, shippers are still having a very hard time dealing with all this madness.

In fact, i spoke with a wholesaler this morning and it's worth just mentioning what was said because in my opinion it was it was mind-blowing. He says that container prices are through the roof 16 to 20 thousand dollars for container two years ago. You would have spent two thousand eight hundred dollars to thirty five hundred 500 for the same container, and even though ports are now operating 24 7, you still have a huge backlog of ships and and new ships still coming in, there's no way we're gon na get These boats unloaded fast enough and we're going to have empty shelves. This uh this holiday season, which in my opinion, is bullish for etsy, but anyway he goes on to say that, even if we unload these containers, we can't get the stuff unloaded and distributed through the country quickly enough, because we don't have enough drivers, we don't have Enough stockers, we don't have enough workers whatever and so we're going to see empty shelves on auto, auto replacement parts, toys apparel getting killed in wholesale.

This particular person is a wholesaler and he literally has people calling in saying what do you have in stock? We'll take everything because they're at the lowest levels of inventory that they've been in in the last 20 years, so it's insane you've got these crazy, crazy pressures and they are lasting. They are persistent. This was the word that jerome powell was concerned about, but this persistent inflation is not right now at least suggesting runaway inflation, and that's this inflection point right here and i personally think this is what the market is reacting to is that right now we have indicators That all right we're just we're just stuck here, we're stuck in the mud, we're stuck in high inflation for a little bit longer and by a little bit longer that could literally be six months that could be a year longer. Who knows, but we're not seeing those signs of this sort of rampant increase so now with the stage set? What what, if anything, is possibly going to make this market crash and slow down, because, folks, right now it is going absolutely nuts.

We are making money hand over fist right now. I don't know when to sell calls - or maybe i do and we're going to talk about that in just a moment, because it's just too nice seeing all the green coming in. But folks, these are the times to be fearful when people are greedy thinking now is the time to bind no. No.

No. Now is the time to wait and prepare right. This is why i buy the dip, and this is why i love it when a month ago and i was buying the dip like crazy people, like, oh, my god, kevin's an idiot he's catching a falling knife. Me me me.

I heard the same bull crap in march of 2020, okay, but now, while the market's zooming and it's easy for any idiot to make money and it's time for us to be cautious. So what is our next catalyst? And this is what we have to pay attention to. Folks it is earnings. The first set of earnings were last week.

Banks in the us have done exceptionally well with their earnings, jpmorgan chase bank of america, wells, fargo, city group, morgan stanley all beat their guidance, their guidance, it's really really good uh. So so they guided a certain number and they beat those expectations. Jp morgan had profits of 11.7 billion dollars, an increase of 2.2 billion from a year ago, quarter recorder charles schwab, had one of the best winners. Ever this quarter, net income, increased 1.53 billion up 119 insane and the banks all as a whole.

These are some of the important things because we read all of the earnings calls which was really really useful. All of them indicated that they are bullish on the market as a whole, which feels good. You know i i like hearing that when things are going up, the banks think they're going to keep going up uh, but it also makes me uh. You know on the sidelines a little bit like okay, where are the cracks coming from? So some of the signs to look for increased credit card spending bank of america reported that credit card spending was up 22 compared to 2019 credit card.

Loans are up 7 from 2019, but delinquencies are down. These are both really good things. I mean i don't like seeing: borrowing go up necessarily, but still this this is pretty decent, especially with delinquencies down. Spending on branded cards at citibank was up 24 jp morgan says credit card, delinquencies are extremely low and loans are up so we're also seeing consumer spending.

That's skyrocketing: we get a consumer spending report, retail sales numbers last week that blew everyone out of the water. We were expecting a contraction of 0.2 percent. We got a gain of 0.7, it's mind-blowing bank of america sees this consumer spending, increasing credit card. Late fees are going up and balances are growing, but again delinquencies are down.

So this is interesting. You want to look for little signs of stress like this. We've got and talk about a little stress there. You just you turn it with this.

We've got increased, checking account deposits, some of the highest savings rates that we've seen in a while bank of america with 16 higher checking balances, jp morgan, 20 up, citibank, 14 up wells, fargo. Four percent up lots of more money, lots more money sitting in people's accounts. Jp morgan says the economy is growing at four to five percent. Jp morgan says we will probably uh not not.

We will probably not be talking about supply issues a year from now and thinks that the economy is good and we shouldn't focus so much on supply chain issues. In fact, let me just read you his quote, because it's a good one all right. This is straight from his earnings skull. Yes, i'm not hearing much different than you're hearing i'm just.

I know that over the over the focus, i know the over focus over time is so extraordinary. Sometimes in the press that people forget about the big picture, the economy is growing at four or five percent. What people are buying has changed, which has also hurt supply chains a little bit, there's not one company. Now, that's not working aggressively to fix the supply chain issues, in other words, everybody's trying to fix them.

Sales are still up credit card debit card spend is up, consumers are in great shape and capitalism works. I doubt we'll be talking about supply chain stuff in a year. I just think we're focusing too much in simply dampening a fairly good economy. It's not reversing a fairly good economy.

I mean that's, that's very, very, very, very bullish in terms of a line here from the ceo of uh jpmorgan chase. Jamie dimon he's basically saying shut up about the supply chain. Issues like we're golden here, then there's uh. Obviously, investment banking revenue has skyrocketed, and so now the question is okay, great, so the bank's killed it uh retail is crushing it.

Consumers are crushing it. People are saving more than ever, which is kind of crazy, because i thought that once we got through the um, let's see money supply velocity, remember back in the pandemic. We always talked about the velocity of money. How many times money would circulate through the economy and we thought we would get massive inflation, and so as soon as we saw the velocity of money come back up and what's crazy, is it just hasn't? It's been flat, it kind of blows my mind: q2.

2021. It's still flat the m2 velocity of money. We thought this would go up and it really just hasn't and part of that could be because people are just saving more money but um and potentially even investing more money which averages down the velocity of money right. But uh the velocity of money was a big conversation in terms of potentially what would uh really push up inflation and again just not seeing it right now so kind of weird, i'm looking for the holes and, quite frankly, the biggest catalyst that i could see right Now, in the market for this market, potentially slowing down is tech earnings, that's it and what we're going to be looking for are margins.

It's that simple. I think we're going to beat a lot of top line revenue numbers, but the top line revenue numbers aren't going to matter. It's going to be obvious. People have more money than they've had ever before, and even though some stimulus has been taken away like stimulus checks and unemployment, we now have the child tax credit.

We've got potentially more money flowing to people than ever before, especially folks with children, as especially as a lot of folks are going back to work, not just necessarily at jobs which we're seeing lower of that. But a lot of self-employed folks going back to work which we're seeing more of them and or even creating new businesses and new jobs, which is incredible, but really what we're going to be looking for are how much these supply chain issues are killing companies margins. If at all, and then in the earnings calls we're going to know how long are these this pain? How long is this going to pain going to last essentially and how much of these pricing problems have we been able to pass along to consumers so take, for example, a tesla model? Three it used to sell for 39 000 and, let's say, prices went up. Five percent for materials - well elon musk literally just raised the price of the model three by five percent.

It's now like forty 000, something something so personally to me. I think the consumers are paying more and they don't care. They just want the stuff which is kind of crazy, because usually we're like super anti-inflation and it's kind of implies that people just aren't going to buy. You know all the just wait or whatever maybe wait for the future for things to settle back down or whatever, but i think people are tired of waiting.

The pandemic has led us to be tired of waiting tired of being patient. Now we want to pay for things faster and by paying for things faster or at all, because we have to wait so long for some things. Now we are we're paying a premium and we're taking it, we're accepting it so that is potentially going to lead. This rally to continue, but it is also something that could slow this rally down completely.

If we hit a wall at earnings, because uh margins get destroyed, which i don't really expect uh, then uh, then the market could fall substantially. If we just get netflix has bad earnings, tesla has bad earnings. Apple has bad earnings uh. You know all these companies that are expecting to report very soon.

If we just get bad margins across the board, it's not going to be so great, because people are going to be a little concerned. In my opinion, in the market about the overall profitability of these companies - and that means less cash is coming to us in the long term and the longer we have to wait and the higher inflation is the less valuable that money is, which means we discount stock Prices, but if we come out like we did with the banks last week and it's just like supply chain issues, smashed no problem, we raised prices and we dealt with the issues and we still delivered. This rally could continue but i'll be real and transparent. I am in margin, i do not like being in margin.

I am probably going to do a little bit of trimming and uh. Some uh call options selling to where i'm willing to essentially trim certain positions if they continue to run, which is fine. Taking a little bit of profit is, for you know, frugal and and uh a smart thing to do and rallies, and not necessarily everything and certainly not on like long hold positions where you're going to have massive tax implications. But you could be smart about what you're doing uh, and so you know i want to get rid of margin again big priority, and so i'm going to be sending lots of alerts.

When i make that transition in the stocks and psychology money group link down below you're, welcome to join, you get lifetime access to the lectures and, of course, you get access to uh the um, the buy, sell alerts and such but anyway, uh check those programs out Link down below and uh use that coupon code before the price goes up on the 29th. Thanks to all this, inflation, that's happening and i'm very excited for earnings season, and this is the only thing that could stop this market right now, in my opinion, is earnings all the other negative catalysts are really out of the way debt ceiling budget deficit. Taper big deal like nobody, cares about this of their stuff right now, now, potentially we're being blind to a black swan. So we got to be careful.

We got to be vigilant and watch out, but earnings. That's the big one right now and we could literally see one company's earnings, go very bad and it could affect the entire market. In my opinion, because hedges are gon na hedge and it's gon na mean short selling and it's gon na mean prices are going down. So keep these things in mind.

Thank you very much for watching and folks, we'll see the next one. Thanks again, you.