Is the Stock Market About to Crash... Again? Best Education Page #Online Earning

 So in this video today

we are going to talking about

whether or not another stock market crash

is likely to happen.

So the last week in the stock market

has been absolutely insane.

And just for a quick recap here guys,

on March 12th the stock market

officially entered a bear market.

And this happens when a major stock index

like the DOW, the S&P 500 or the NASDAQ

has a 20% drop from a closing high.

And the market didn't just drop 20%,

we saw a massive sell off with the overall stock market,

which brought the DOW down to a low close

of $18,591.93

on Monday of last week.

So we entered a bear market,

and then the market absolutely tanked.

And from the peak to where we were on Monday,

the market was officially down 37%.

But after that, wait a second, everything changed

because the market left bear market territory

after a massive three-day gain of 21.3%.

And if you're keeping track here guys

that is the best three-day rally

of the DOW since 1931.

And on that note of the DOW exiting bear market territory,

we officially had the shortest bear market in history

of just 11 trading days.

So is that it?

Is it really just an 11-day stock market crash that we saw?

Well, I think not.

On Friday after this historical three-day gain,

the market dropped another 4%,

which puts us back to 27% below the February high close.

And I personally expect more pain to follow.

So basically I'm gonna tell you guys

why I think the stock market could probably crash again,

or at the very least we are

not going to reenter a bull market immediately.

And just so you guys know this is merely my opinion,

and this is not any kind

of financial advice.

Now the first reason why I believe this is a false signal

is due to the market volatility.

And that is essentially the up

and down movement of the stock market

because the stock market has officially become

more volatile than it ever has been in history.

And this is largely due to two different factors.

Number one, we are seeing record high participation

in the stock market thanks to the array

of free trading apps out there,

and free investing apps.

10 or 20 years ago it was a lot more difficult

to invest in the stock market,

you had to pay for an online discount brokerage.

Or you had to call your stock broker up on the phone,

and you had to invest thousands

of dollars in many cases

to open up a trading account.

Well now there are countless free investing apps out there

that allow you to trade commission free,

with no minimum account balance.

So as a result the barriers are a lot lower,

and more and more people

are investing in the stock market.

And when you have more people trading stocks,

moving in and out of the market,

it's inevitable that the market

is going to become more volatile

and we're going to see greater price swings.

And the other factor that comes into play here

is something called algorithmic

or computer trading,

which has had a hug effect

on the volatility that we see in the stock market.

And one of the interesting things to take a look at

is when we are seeing the most drastic

price actions taking place,

and if you look at the market over the last couple

of weeks, most of the drastic price actions

are taking place after 3:30 p.m.,

which is 30 minutes before the stock market closes.

And that is evidence of this algorithmic

or computer-based trading,

placing trades late in the day.

So now it's not uncommon to see the market

moving 2% or more up

or down after 3:30 p.m.,

when the market is coming to a close.

And that is largely due to this algorithmic trading,

placing massive buy and sell orders

based on where the market is closing.

And so as a result it is no longer uncommon

to see these 5% plus or minus fluctuations

in major stock indexes,

which is something we've never seen before

in normal market conditions.

And to be honest with you guys

these price swings remind me

of what we saw with Bitcoin back in 2017.

And this volatility is certainly not just my opinion guys,

you can literally see it

if you look at historical data in the market.

For example, if you take a look at this chart here

on the largest point gains

and point losses

of the DOW in history,

you will see that of the biggest point gains in history

in a single day,

seven of those happened this month.

So we've had seven record breaking days in one month

as far as the largest point gain

of the DOW in history.

And if we look at the largest point losses in history,

of the 10 biggest point losses

of the DOW, eight of them happened this year.

So we are seeing all

of these crazy price swings

as a result of algorithmic trading

and record high participation in the stock market.

So it is my opinion that this volatility

has provided us with a false signal

because the stock market officially exited

bear market territory last week.

But when these 5% price swings

or more are becoming a common place,

we may not be able to rely on this as a signal

that the bad times are over.

Now the second reason why I expect

the stock market to continue to go down,

or at least be extremely volatile going forward,

is because the number of cases

of the virus have not peaked.

And if you look at pandemics over history,

in most cases a stock market rally

happens after the pandemic peaks.

And we have certainly not reached that point thus far.

Last week on Friday the U.S. became the country

with the most cases of this virus

out of any country in the world.

And if you look at the CDC website,

you will see that cases

in the U.S. are still growing exponentially,

meaning we have definitely not

reached the peak yet for this virus.

And so far at least 30 different states

have closed all non-essential businesses,

and I expect that number to increase over time.

Because if we do some basic reasoning here guys,

if cases are still growing exponentially here

in the United States,

and we're the number one country for this virus,

do you expect more

or less businesses to close in the future?

And this mass closure

of businesses leads us to point number three

which is unemployment.

The more businesses that are mandated to close,

the more unemployment is going to rise.

And speaking of breaking records,

we also broke a massive unemployment record last week.

You see up until last week

the largest jump in unemployment cases in history

in a single week was 695,000

back in 1982.

Well we beat that record by a multiple

of roughly four because last week

a record 3.3 million people

filed for unemployment.

And the scary part is guys

many analyst and economists believe

this is just the tip of the iceberg

as businesses have just began laying off employees,

and we haven't see the full effect

of this on the economy.

And some economists believe that 40,000,000 people

will lose their jobs by April,

which is astounding.

And that is a far cry from just 3.3 million

unemployment cases in a given week.

Now nobody knows for certain just how many people

are going to be losing their jobs,

but if a number like 40 million

is being thrown around then we are clearly

at just the tip of the iceberg,

and we've already broken a previous record

by more than four times

as far as unemployment goes.

And all this data together

is going to paint a picture

for the overall economic fallout

associated with these business closures

and everything going on.

And we won't be able to see that

until earning season begins.

And if you're not familiar with that guys,

that is when large publicly traded companies

begin reporting earnings

as they are required to do

on a quarterly basis.

And earning season begins the month

following the previous quarter.

So earning season for quarter one

is going to begin in April.

But there's another big problem here,

and that is the fact that this quarter

is not going to accurately reflect the economic fallout

associated with this virus

because for the most part January

and February were not big months

in terms of business closures

and the overall fallout outside

of what was going on in China.

So the real pain here is going to be seen

in quarter two,

which is April to June.

And those earnings reports

don't start coming out until July.

So I expect to see some bad numbers coming out

next month in April,

but even worse numbers to follow in July.

Now many companies have already

retracted their guidance numbers,

or their estimates for future earnings

and numbers like that based on this event that happened.

But there's a massive unknown here

as far as how much some of these companies

have lost in revenue

and profits associated with this virus.

We have no idea how many people

are truly going to lose their jobs

and file for unemployment.

We don't know how many are going to be hired back.

We have no idea when the virus is going to peak.

It certainly hasn't already.

And we have no idea how this is going to

truly effect companies until we see quarter two earnings

in July of 2020.

So based on that I believe we saw a false signal

of this bear market ending.

And I think there is more pain

and more volatility to follow.

But anyways guys, like I said in the beginning,

this is just one random person here

who dabbles in the stock market

sharing his opinion about what is going on.

And I would love to hear what you think about this

down in the comments section below,

whether you agree with me,

disagree or somewhere in between.

And real quick guys,

I just wanna give a quick shout out

to Unemployable for sending me this really cool canvas.

I'm gonna hang it up somewhere here in my office.

If you guys wanna check out their canvas website

where you can get motivational prints like this,

there's going to be a link for that

down in the description below.

But thanks so much for watching this video guys,

I hope you enjoyed it.

If you made it to the end

of the video, go ahead and drop a like

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And I will hopefully see you guys in the next video.

#Best Education Page #Online Earning

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