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SP 500 Volatility Equals Profit !!!

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SP 500 Volatility Equals Profit !!!

SP 500 Volatility Equals Profit !!!

How To Profit From S&P 500 Downturn

Watch this video to the end and we’ll show you how to profit from S&P 500 volatility below, after the video (don’t leave the website).

SP 500 Volatility Equals Profit !!!

100% of the Time THIS Triggers an SP500 CRASH | Retail Investors Will Flip Bullish Before It Happens

85,584 viewsApr 28, 2022 

Game of Trades

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FULL VIDEO TRANSCRIPT

0:00

hello and welcome back to game of trades

0:02

your number one channel for videos on

0:04

the stock market and cryptocurrencies i

0:07

am very excited about this episode today

0:11

we have a lot to cover a lot of things

0:13

going on in the market

0:15

lots of panic here huge amount of

0:18

concern amongst investors and there’s so

0:21

much going on underneath the surface

0:23

it’s going to be tough to cover in just

0:25

one video but i’m going to try my best

0:28

to now just as a quick

0:30

background anybody who’s been following

0:32

this channel for some time knows that we

0:35

are very well aware of the long-term

0:38

risk in the equity markets just this

0:41

chart represents that very well this is

0:44

the real earnings yield of the s p 500

0:47

so real means inflation adjusted so when

0:50

you adjust earnings for inflation it

0:54

basically tells you how attractive it is

0:56

to buy the s p 500 current levels and

0:59

when you see the real earnings yield dip

1:03

below zero right this is the zero line

1:06

so it goes into negative territory it

1:08

creates a recession it creates a bear

1:12

market even in the s p 500 right all of

1:15

these red circles have corresponded to

1:18

lots of volatility in the financial

1:20

markets the 1907 panic world war one

1:24

then we get into the great depression

1:26

this is 1937 right here big 50 bear

1:31

market that’s pretty much the same bear

1:33

market as world war ii then you’ve got

1:35

the bear markets of the 70s this was the

1:37

1974 top then the 80s volatility with

1:42

volcker that was tightening into

1:43

recessions back here in this zone

1:46

inflation numbers were extremely high

1:48

and the market was going down the market

1:51

got absolutely destroyed in real terms

1:55

then you’ve got the top of the dot-com

1:56

bubble the top of the

1:59

great financial crisis before the great

2:01

financial crisis and then you’ve got

2:03

2022 100 of the time

2:07

this signal

2:09

triggers bear markets on the s p 500 so

2:12

we know that we are heading for a major

2:15

repricing of the stock market somewhere

2:17

in the next year or two a lot of the red

2:20

flags that we’ve been looking at to tell

2:23

us

2:24

what long-term stock market returns are

2:26

going to be a lot of these indicators

2:30

have been

2:31

showing some red flags so the question

2:34

is have we already started that bear

2:36

market was that the top of the bull run

2:39

that we’re not going to see again for

2:41

years to come or are there still

2:44

fundamental driving factors that could

2:46

drive the stock market rally a lot

2:49

higher before we get that top that’s

2:52

what we try and do in these videos we

2:54

bring you guys all the data all the

2:56

research that we make and put it out for

2:59

free for you guys to enjoy if you’re

3:02

interested in following these crazy

3:04

markets with us make sure to smash that

3:07

subscribe button of course don’t forget

3:09

to click on that like button as well if

3:11

you enjoyed this video and now without

3:13

further ado

3:14

let’s get right into it

3:20

[Music]

3:22

all right so i want to start off by

3:24

quickly talking about this

3:27

line here that was broken on the daily

3:29

time frame right we’ll we’ll see what

3:32

happens towards the end of the week but

3:33

when i look at these multi-year trend

3:36

lines i’m really looking at that weekly

3:38

close weekly close under it that’s bad

3:42

news from a short-term technical

3:44

standpoint but that’s not what i want to

3:46

do here what i want to do is take a look

3:49

at the rsi on this chart and we’re going

3:52

to take a look at the four hour try

3:54

because we’ve had a pretty violent

3:56

downtrend here and nothing goes straight

4:00

down nothing goes straight down online

4:02

you can think you’re in a bear market

4:04

you can disagree with us that’s

4:06

absolutely fine but there is such thing

4:08

as an oversold short-term reading and

4:12

what we had here right first of all

4:14

jerome powell spoke here market went on

4:17

an absolute tank here and it triggered

4:20

this signal on the rsi this oversold

4:25

technical signal here and you can see

4:27

just quickly looking back it’s only

4:29

happened a handful of times obviously

4:31

during this uptrend it corresponds to

4:34

big bottoms on the s p 500 you can see

4:36

that systematically right here but what

4:39

we’ve had since that reading you can see

4:42

let me zoom in a little bit more and

4:44

this is short-term stuff right i don’t

4:46

like putting out too much short-term

4:48

trading content but i feel like that’s

4:51

needed in the context of the size and

4:55

the volatility of the move that we saw

4:57

throughout the past few days so we’re

4:59

going to move on in just a second but i

5:01

want to quickly show you this here this

5:03

lower low on the price following this

5:06

rsi reading that’s extremely oversold

5:09

and this higher low on the rsi here

5:12

right so divergence between the momentum

5:14

and the price in the short term i look

5:16

at that and i say all right we’re

5:18

getting close to the bottom here unless

5:20

there’s some big black swan event this

5:22

is going to lead to a short-term rally

5:24

and i’m going to show you a few examples

5:26

of that first of all this is an example

5:28

where we had a lower low on the price

5:31

and a higher low on the rsi led to a

5:34

nice rally if we zoom out a little bit

5:37

more we don’t have any divergence here

5:39

until we get to october right here huge

5:43

huge move down you can see it in fact it

5:45

looks a little bit similar to what we

5:47

had here a type of bullish flag here a

5:50

lot of people were looking at that for a

5:51

breakout and it actually broke down and

5:55

accelerated to the downside before

5:57

triggering this oversold rsi reading and

6:01

then continuing to diverge in the days

6:03

to come eventually leading to a big

6:06

bottom at support that’s another point

6:08

just seeing this type of development

6:10

with no support under it you know that’s

6:12

not the same as when you see this type

6:14

of short-term development when getting

6:17

near a very important level of support

6:20

and let me

6:21

get back to 2022 what are we doing here

6:24

we’re seeing this rsi divergence build

6:28

while getting to pretty much the

6:31

ultimate level of support which is this

6:33

low march low so this is constructive

6:36

for the short term now let me get back

6:38

to one of the most concerning charts

6:41

that we’ve covered over the past few

6:43

months and that is the defensive sector

6:45

divided by the s p 500 we’ve had

6:47

consumer staples which are generally

6:49

seen to be very defensive we saw them

6:52

break out of this pattern here this head

6:55

and shoulder pattern and this is

6:57

something that we talked about in one of

6:59

our articles back here towards the end

7:02

of march we were looking at this and we

7:04

said that if we break out that’s a bad

7:07

signal if we break out above this line

7:09

of resistance it begins to look bad in

7:12

the short term for the s p 500 now we

7:14

did have that breakout and it’s a head

7:17

and shoulder pattern so that’s pretty

7:20

concerning because we talked about it

7:22

last time the measured target of the

7:24

head and shoulder is the height of the

7:27

head and you take that same measurement

7:28

and you take it out from the break of

7:30

the trend line that is how they work and

7:33

they are very very high probability

7:35

trades once they break so we’ve had that

7:38

break nothing’s a guarantee but it’s

7:40

very likely we’ll be heading to here now

7:43

why is that concerning let me actually

7:45

put this into

7:47

context i’m going to put the correlation

7:50

coefficient

7:52

between

7:53

this ratio and the s p 500 and it shows

7:56

you that the correlation is negative

7:59

it’s below that zero line so as a

8:01

general rule of thumb it’s not perfect

8:04

but as a general rule you can say that

8:06

when this is going up when this ratio is

8:09

going up the s p 500 is going down so

8:12

that is concerning if you’re expecting

8:14

this ratio to go all the way up to

8:17

this zone here but i do want to remind

8:19

you

8:20

that this can happen a number of ways it

8:22

doesn’t mean that the ratio is going to

8:24

go straight up into this zone and the

8:28

market is just going to crash

8:29

immediately right if we have if we have

8:33

this type

8:34

of price action right let’s say for

8:35

example we have this type of price

8:37

action we have a little bit more

8:39

volatility in the coming days and then

8:42

we have this move back down here to

8:45

retest

8:46

that neckline before we ultimately get

8:50

into that big volatile move towards the

8:52

end of the year so i’m not this is not a

8:54

prediction this is just to keep your

8:57

mind open to different scenarios and in

9:00

that case that would mean we could see a

9:02

recovery

9:04

for 175 days in my opinion based on the

9:07

research that we’ve made

9:10

we think it’s going to take us at the

9:11

very least back to the all-time high i

9:14

wanted to show you something that we

9:15

talked about in the article that we

9:17

posted at the beginning of the week we

9:20

took a look at the vix here uh the vix

9:23

that had bounced off this trend line

9:26

here i’m going to talk about that in

9:27

just a second but most importantly we

9:29

have this trend line here that goes from

9:31

the top of the covet spike right this is

9:34

the volatility index of the s p 500 so

9:37

when you have this big spike in

9:39

volatility that’s when the market is

9:41

crashing and that’s the coveted low and

9:44

so this is the volatility here these

9:46

spikes are the volatility that we saw

9:48

towards the beginning of the year and

9:50

you can see we have this nice downtrend

9:52

line that could potentially act as an

9:55

area of resistance and i’m going to show

9:57

you why

9:58

that works it worked between 2018

10:02

and

10:03

2020 you have this nice trend line that

10:06

captures all the big volatility spikes

10:09

now this was towards the beginning of

10:11

the week and you can see we weren’t

10:13

quite there yet we weren’t quite at that

10:16

vix trendline resistance if we press the

10:19

play button on this chart and let me

10:21

zoom in a little bit you can see we tag

10:23

that trend line perfectly and so the

10:25

risk reward on the s p 500 is really

10:28

starting to shift dramatically here very

10:32

very different to what we had

10:34

right here at the

10:36

towards the end of march and by the way

10:38

this is why we have the website we made

10:40

this service so that we could give you

10:42

guys frequent market overviews on

10:46

everything that we’re looking at all the

10:48

indicators all the developments that are

10:50

important to us and most importantly how

10:52

to find the proper risk reward in the

10:55

market because you can be bullish on the

10:57

market have a macro bullish thesis

10:59

that’s great but if you can’t use tools

11:02

to time it properly you’re going to get

11:05

left behind the vix is now at very

11:07

elevated levels meaning we have wild

11:10

moves on the s p 500 and that often

11:13

leads to the biggest trading opportunity

11:17

so we look at these types of charts to

11:19

evaluate that risk reward and we’re

11:22

going to be doing that very frequently

11:24

and doing that very very meticulously

11:26

over the next few weeks as we see that

11:28

volatility play out and we try and

11:31

identify those levels and those

11:33

opportunities in the market right that’s

11:35

why on the 31st of march as we had that

11:38

massive rally on the s p 500 we took a

11:41

look at the vix and it was at support

11:45

right so you don’t buy at support you

11:47

buy when the vix is at resistance here

11:50

this chart was really telling you that

11:53

volatility was at a higher probability

11:55

of expanding again and seeing a pullback

11:57

on the s p 500 and that’s why since

12:01

the end of march

12:02

our rating on the s p 500 our short term

12:06

rating on the s p 500 has been a whole

12:09

now the pullback was definitely a lot

12:10

more aggressive than what we were

12:12

anticipating there was definitely a lot

12:14

more volatility that’s why we use these

12:17

kinds of tools like the vix like

12:19

sentiment like put call ratios inter

12:21

market analysis all of the things that

12:23

we look at to give ourselves the best

12:26

odds so that’s what i mean when i say

12:28

that the risk reward here is changing

12:31

it’s shifting very rapidly on the s p

12:33

500 we’re going to be changing our short

12:36

term rating on the s p 500 and in fact

12:38

all the sectors and assets that we look

12:40

at we’re going to be changing them this

12:42

week if you want to have access to this

12:44

kind of research that really gives you

12:47

an edge

12:48

over other traders in the market and

12:51

gives you that additional insight to

12:53

navigate the market make sure to go to

12:56

gameoftrades.net so i hope you guys

12:59

enjoyed this episode if you did make

13:01

sure to smash that like button it really

13:03

does help

13:05

push our videos out to a wider audience

13:07

and post the effort and time uh that we

13:10

put into putting out this research

13:14

it helps push it out so it is really

13:16

appreciated in the meantime i wish you

13:19

good luck on your trading and see you

13:22

next time

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