Oh man, it's that time. the market again where the Bulls and the Bears are split. Is the market crashing? Is it going to crash even more? Are we going into recession? or is this chart something that could mean we're at a turning point? Yeah, let's talk about exactly that. First of all, Bank of America Let's be very clear, there's an analyst that's kind of like the Morgan Stanley of Bank of America and he's called Hartnet.

that's his last name. He is is somebody who is regularly cited in the mainstream media about his opinions of what is actually going to end up happening in the economy. Currently, this person's opinions are that we are going straight into a recession. For example, here he says oil up 30% after Russia Ukraine but flat since Israel and Hamas.

Therefore, oil pricing alone is telling you that we are closer to a recession. However, and unfortunately, this is substantially Complicated By the fact that every time there's conflict with Israel and Hamas whether they're Hamas Rockets or conflicts around Israel oil usually doesn't actually Spike longer term and even for the medium term I mean Occasionally, When we hear about attacks, we see temporary spikes and then retracements, much like we saw with this last attack. So a lot of analysts who were going a little bit further into the history of oil price spikes with conflict in the Middle East suggest that Israel isn't really a good Catalyst for actually leading oil prices to spike. That's because even though production could go down in certain countries nearby like maybe if Syria reduces oil production or Iran reduces oil production you just end up having Qatar or Saudi Arabia pickup production which Saudi Arabia prod actually promised exactly that when The Invasion began or I should say when the attacks on Israel began and then of course the counterattacks started being planned, that commitment was already made.

So likely because Palestine and Israel aren't actually relied on as oil producing countries in the Middle East you don't actually use Israel as an oil producing Catalyst However, Russia on the other hand is a massive oil and natural gas producer and the territory that they are trying to take within Ukraine is known as the Eastern portion of the Denero and the Denque regions, which happen to be where 90% of Ukraine's oil production comes from. So I don't necessarily agree with the Bank of America analyst here that oh, oil going down is definitely a sign that we were going into a recession Now I will say there is a better sign that we're going into a recession which Bank of America could have used and it's the Atlanta Fed Now real GDP report The Atlanta Fed Now real GDP report used uses multiple recent data points uh to predict what GDP currently is. we're going to quickly Refresh on this and then we're going to go into what's likely actually coming ahead of us and is there a signal in the market right now that says oh, this could be a really critical moment. That could be a big game changer for your portfolio.

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Uh, this will be your last chance to get in under $100 between now and Friday of next week. That is Friday the 10th. So what do we have over here with Fed now? and what is it going to mean for our portfolios? Well, here we go. So the Atlanta Fed Now GDP forecast is suggesting GDP is barely above 1% and this Fed Now forecast was laughed at because it was suggesting GDP for the third quarter was somewhere around 5% and GDP came in at 4.9% So this Fed Now GDP analyzer is actually pretty dang good if I was going to be Bank of America and suggest that hey, hey hey, we're going into a recession I Was The Same analyst I would have preferred to use this and that downward trajectory rather than this oil argument because I don't think it's as strong of an argument as they actually think it is.

Now what Some what is something that is more critical to pay attention to is the chart I'm about to show you. worth noting: that hard net right now is suggesting you are at a good entry point for things like gold. small caps value Banks Banks are like at the freaking bottom right now. look at banks at an 80e low versus the S&P 500.

I Wrote a little note that this could be because of uh basal 3 concerns higher uh requirements for bank deposits, uh reserve requirements or it could be because of another actual fear about another banking Crisis coming which personally I think is highly unlikely since the Federal Reserve has already turned on the money printer to end these banking crises. Uh, but anyway, they're talking about investing in deflationary assets over inflationary so that would be like gold. Some will make the argument that you know Bitcoin could be that, but you know that's that's a topic for a different video. So what's important now though, to look at is the chart right here.

Look at this folks. This is Bank of America's private cash allocation. So this is going to be individual depositors at Bank of America how much money are they allocating to Cash Plus treasury bills Compared to his history, Well, the historical average is about 13.6 13 to 13.5% You could see that as the blue line going across. Okay, great, where do we sit Now at 15.8% Where is the last time we had this kind of high allocation? 15.3% March of 2020 which was the bottom of the stock market, Yeah March 23rd and April 6th of 2020 were the bottoms.

And now we are approaching the highest levels of cash allocation yet again. Now the question is, how high does this Spike go? Because if you compare to 2009, which in 2009 in about February of 2009, you last hit the market, look at when the top was relative to 2009 roughly February of 2009 and when, uh, that's the the spike of cash allocation aligned with the bottom of the market. So in other words, the peak of the chart was the bottom of the market. Once you start getting an inflection point where people are moving from cash and away from treasuries and away from cash into stocks stock market bottoms.

So the question is, where do we inflect down again? It happened over here in March of 2020 that aligned with the bottom of the market. It happened in 2009 that aligned with the bottom of the market. Well, there's another statistic we can look at that help helps us get a little bit more color on this and it's actually in the Wall Street Journal. It's right here.

Okay, the Wall Street Journal shows the following where I've already drawn the lines for where the bottoms of the markets were. You could see the 2009 bottom of the market right in the middle. Uh, that's going to be right about here. I've already drawn that line in light pink.

You could see the bottom of the market again during that Co era right here. Already drawn that light of pink. But we added one more. We added mark of 2003 which was yet another bottom of the stock market.

and this chart, by the way, looks a little bit different from the Bank of America one because this is institutional allocation. You could see that here: Institutional Investor Cash allocation. How much are they allocating to stocks? and right now that's sitting around 22% So about $1 in5. Again, that's different from Bank of America which is looking at their customers, their individuals.

how much are they allocating to cash? About little, you know, a little close to 15.8% So what does this mean? Well, it means the same thing. It reiterates that we are on a spike up look on the right side right here we are spiking up and the bottom of the market is usually associated with this starting to turn down. As soon as this starts turning down, stocks tend to hit their bottom. and so even though it's difficult to say that stocks have hit a local Bottom now, it's certainly true that we can say every time this Peaks the market starts rallying and the question now is is it possible that the market could Rally from where we sit now and the answer historically has been coming down to treasury yields.

Treasury yields have come down about 43 basis points on the 10e. within just the last week, they came down 9.2 basis points on Friday alone. That's because Drome Powell suggested maybe Peak rates are in and if Peak rates are in, you start seeing some more allocation from cash into treasury bonds. Treasury bond allocating starts leading treasury prices to increase yields to decrease.

As that happens, people can borrow money more accessibly and have confidence that at least the FED has some confidence that maybe inflation truly is starting to Trend down. The economy truly is starting to slow down as we saw with GDP or the Weak Jobs report on Friday with negative 348,000 household jobs created, that's a lot and if we continue that Trend with our next Catalyst being November 13th which is CPI day, if we continue that Trend it is possible we could see below 4% 10year interest rates and a rally in the stock market which then could become self-fulfilling to where all of a sudden the substantial cash that sits on the sideline turns into pent up buying demand and we go into an end of the year rally Now knock on wood that is a bull case scenario. What could unwind that bull case scenario? A hot CPI report I Think that's likely all it would take and in fact that could be quite bearish because if we get a hot CPI report then what we're stuck with is not just High rates that we have now, but potentially higher yields that then Skyrocket higher than where they were before. And if that occurs, people are going to start being concerned about something called that's very bad stagflation that could actually lead to an end of the year crash that some are saying could be worse than what we saw at the end of 2022 and that could then lead cash allocation to actually Skyrocket And when that inflects down, then that's when we truly end up seeing a bottom.

Those are the things that people are speculating on. It's worth remembering. All of it is speculation, but what we do know is that in the event reports continue to come in soft like the CPI report we're expecting and hopefully it does come in soft, then what we end up with is hopium that we could go into a bullish end of the year, an end of the year that actually ends up being quite green. Now again, that's hope.

But what you should do in my opinion is pay attention to those cash allocations and mark your calendar for November Tuesday November 14th at 5:30 in the morning. I'll cover it live of course. obviously. Also, mark your calendar for November 10th because that's when your opportunity to get into the crash courses for under $100 on pre-sale ends.

After that, it's over 100 bucks and they're expected to be over $200 each in the future. So your opportunity to get into them now at a very affordable price as they're on pre-sale is expiring. So make sure you get in because after Black Friday I suspect they'll be worth about double what they're trading for right now. So do check that out again by going to Meetkevin.com Now is there any other data we should be paying attention to? Well Catalyst coming up, we have trade balance on November 7th Consumer Credit Will be coming up with an expected survey of $9 billion of consumer credit growth.

We'll be looking at wholesale trade inventories on Wednesday We'll get jobless claims expected to be 220 on Thursday No big change here. We'll get University of Michigan on the 10th. again. that'll be when prices for those new verse Pro courses jump.

uh and then we'll be getting the CPI release CPI release is set for November 14th. so mark your calendar for that and the initial survey says. 1% on CPI month over month 3% for Core which excludes food and energy. That core read would be nice to come in soft.

That headline read coming in soft is certainly because of energy prices falling in the last 30 days in. October Thanks so much for watching! Good luck everyone and we'll see you in the next one. Why not advertise these things that you told us here? I Feel like nobody else knows about this? We'll We'll try a little advertising and see how it goes? Congratulations man, you have done so much. People love you people.

look up to you Kevin Paffrath there financial analyst and YouTuber Meet Kevin Always great to get your take now I Have to read you a legal disclaimer: Even though I'm a licensed financial advisor, licensed real estate broker and becoming a stock broker, this video is neither personalized Financial Advice or real estate advice for you. It is not tax, legal, or otherwise personalized advice tailored to you. This video provides generalized perspective, information and commentary. Any third party content I Show should not be deemed endorsed by me.

This video is not and shall never be deemed reasonably sufficient for the purposes of evaluating security or investment decision. Any links to promoted products are either paid affiliations or products or Services we may benefit from like my courses or my actively managed ETF which you could learn all about at Meetkevin.com I Do personally manage an ETF and I do hold various long positions including those potentially made in this video. However, I have no relationship to any issuers nor am I presently acting as a market maker.