hi this Erin ku here on the 10th of

April Good Friday and I've got pretty

tragic news there's been a death with

someone that we all know intimately

really well and the death is the bad

that's right the bad market is

officially dead but the good news is the

bull market is back so let's take a look

at a chance to really understand what's

going on

all right so over here we have the S&P

500 index and a bull market is defined

as a drop 20% or more from the higher

the market so the high of the market at

the beginning of the year was 3 3 9 3

and we dropped into a bear market over

here this is the 20% mark so he went

from the top of the market or bear

market and it took 16 days it was off

the fastest in history for Bhumika to

turn into a bear market and he went in

fact all the way down to a lot to 191

and that was a 36 percent decline from

the high and as I mentioned before if

you look at all the bear markets in the

last 100 years the average decline of

the 21 bear markets in last hundred

years was actually - 36 percent so it

was pretty coincidental ok now a bull

market is defined as a rise of 20% from

the law of the market so from this low

of 2 on line 1 if you take 20% it's 2 6

3 0 this is the 20% increase from the

mode so you can see that the market has

just crossed that level which means

officially a booming market has begun

and then by a bear market lasted only 90

days it was one of the fastest bear

markets in the history of the world in

fact I turn bullish on the markets way

before that happen in fact I went

bullish on the markets and started to

buy stocks and take on bullish trades

over here on the 3rd of April

why because I saw

bullish engulfing pattern making higher

low from the previous low so when I see

higher loss and see a bullish engulfing

pattern I turn bullish in the markets

and for my students I'm buying stocks

right now in fact if you take a look at

my private telegram chat group with my

students this was back on the 3rd of

April as you can see over there right

and my message to my students was yes

the bullish engulfing pattern on the

espy sentiment has turned bullish I'm

starting to buy stocks right now

now many people were surprised that the

bear mark and the sofa they said how to

the bear market and the economy still in

tatters right people are still dying

people losing jobs how can this be I was

not surprised because if you are one of

my students you have seen the signal

that the market has actually hit a bear

market bottom the signal that the bear

market was dead and I can share view

what are these signals that I look at so

for future bear markets you can look at

these signals yourself so what are the

30 warning signs that the bear market

comes to an end so what are the early

warning signs of a bear market ending

well therefore things have looked at for

the last 20 years and they've proven

very reliable even for today's bear

market so what are the four things the

first thing is I noticed that bear

markets that the bottom when one with

extreme volatility as well as extreme

oversold conditions I'm gonna show that

to you in a chinois what that means

right number two is when we have got

peak levels of unemployment that's right

you heard me right when unemployment

hits a peak usually it signals the end

of the bear market next when the market

rallies in the face of bad news and the

fourth thing I look at is when the S&P

500 didn't yield exceeds the yield on

the third year Treasury bonds these are

the four leading indicators but bear

market bottom so let's look at the first

one right now one of the most powerful

signals that the bear market is born is

when I see

stream volatility and this is measured

using ATR Average True Range when you've

got big 80 hours it signals a bear

market bottom if it coincides with

extreme all the sub conditions now I

have actually taught this in my previous

video which you must watch where I show

you basically the last 50 years how

accurate this signal has been so I will

get to indicate this if you remember to

my previous video do watch it I look at

what is known as the normalized ATR or

Average True Range as well as the

Williams percentage are that measures

other soul conditions at the 52-week

level alright so basically what am I

looking at when the ATR is above 80

right this that 80 level is dotted line

and if the Williams R is below minus 80

and they both happen at the same time is

the signal of a market bottom and they

must both happen in the same time right

so you can see over here this ATR

crosses above 80 and the Williams R goes

below minus 80 right so when they both

happen that signals the bottom over

there that's how I could tell now if you

go back again 50 years this signal has

been very reliable I've shown that my

previous video to watch that can see

last year we had a 2018 bottom same

thing we lives are below minus 80

coincided with ATR above 80 so when I

think are the two signals together boom

that's a bottom that's a bottom right

and again can go back so that was the

first sign of the market bottom now the

second sign of a bear market bottom is

when unemployment in the US hits peak

levels that's right you heard me right

when you've got massive unemployment

people out of jobs that's the time the

market has bottomed and there's the time

to buy stocks and it's us be content

uted people always think hey I should

buy stocks when they

are going well when people are fully

employed wrong the time to buy stocks is

at the bottom and death - massive

unemployment say if you look at this

chart over here and you see what I'm

talking about now over here you can see

this blue line this represents the stock

market the spot price okay that's the

blue line going up this black line going

up and down represents unemployment

claims or jobless claim benefits okay

now check something out notice that when

unemployment claims go up and is walk

back unemployed right like over here you

can see this is the four hundred and

fifty thousand mark of people who are

unemployed okay

and notice whenever the unemployment

goes above this level it signals a

bottom in the stock market the market

bottoms that's when you buy to catch the

next blue market can you see that over

here same thing when unemployment goes

up above this mark over here it signals

the end of the stock market bottom and

time to buy to catch the next boom

market right over here the same thing

note this over here again you can see

unemployment going up to 450 thousand

that signals the bottom of the bull

markets or the bear market to buy to

questionings bull market right

it sounds weird but that's how it works

so where are we now in terms of the

unemployment claims in the market well

check it out

currently right the US jobless claims

have hit six point six million six point

six million people are out of a job now

that is terrible that is really really

awful I wish that it did not happen but

the point is from the perspective of

investing that's when it's time to buy

stocks because it tells us that when

unemployment like look at this whenever

unemployment really flies really high

right it climbs really high amongst the

bottom of the bear market okay now the

next chart shows you the same thing you

can see over here

this red line represents the stock

market okay and the blue line represents

the unemployment rate how many people

are unemployed in the u.s. now look at

the 6% ma notice whenever the

unemployment rate goes above 6% what

happens market bottom time to buy right

goes above 6% market bottom right ghost

above 6% game market bottom goes above

6% again market bottom above 6 the same

market bottom so we're in the

unemployment rate goes above 60% 6%

right is the ball of the market come to

buy stocks to catch the bull market now

where's the unemployment rate right now

it is now at a whopping my god 14%

I am unemployment rate in the u.s. right

now there's no people unemployed

so that is the highest spike in

unemployment that again reverses to

muddy bottom of the stock market which I

always counted you did buy that's how

the market works all right so far we

have the first 2 signals right extreme

volatility extreme initial conditions

we've got peak levels of unemployment

and the third signal is the market

bottoms when it starts rarely on bad

news that's right see bear markets die

on bad news not on good news in other

words whenever you see a lot of bad news

in the media but the market no longer

goes down it starts going up it tells

you that the market is falling because

there are no more sellers left everyone

who has needed to sell has already sold

and that's a sign of capitulation so for

example take a look at this this was

back on the 5th of April and yeah this

was the 5th and 6th of April look at the

news in the media us reports highest

single day death since the outbreak so

that's terrible news but what happens

the market goes up us we leave jobless

claims double to 6

six million people bad news market goes

up so when the market starts going up on

bad news it means it's over

right nothing else can make the market

go down because the worst news has been

priced into the market fourth condition

I'm looking at is when the SMP 500

dividend yield exceeds the yield of 30th

Treasury bonds

you see historically when you buy

government bonds they are safer so they

should give you higher yields on

interest interest rate yields higher

than a stock market which is the S&P 500

that should happen logically right now

whenever the S&P 500 the stock market

gives you higher dividend yields

compared to bond yields that signals

that a market is bothered because that

means that stocks are cheaper than bonds

stocks are under them and bonds are over

them so this triggers a flow of funds

from big institutions from bonds to

stops hence creating the next bull

market so we take take a look at this

chart you can see from 1977 to 2019

there's only been two times when the

30th Treasury year which is the red line

has gone below the S&P 500 dividend

yield it happened here at the bottom of

the financial crisis that triggered the

bull run after the financial crisis and

it also happened briefly during the

breads in you know when breaks it was

announced and now it is happening again

let's check it out you can see right now

that the u.s. 30th Treasury rate is one

point three five percent so by third

year government bonds you're getting one

point three five percent return on your

money but the SMP 500 is offering a

yield of two point three one percent so

this exceeds this signals that spots are

really cheap they are the border and the

triggering the next boom market easy as

pie

now whenever I tell people that the

stock markets in a new bull market you

know a lot of people say how can it be

the economy is in a recession or going

into recession or going to in fact the

depression where it's gonna be more job

losses more business losses things are

gonna get worse

you know what I completely agree the

economy is going to get worse we are

going to go into a depression I agree

that but understand that the stock

market is not the economy that's the

mistake people make see the stock market

is a leading indicator of the economy

the stock market moves six to nine

months ahead of the economy because the

stock market doesn't care what's

happening now or what's happening next

week or next month the stock market

cares was happening in six to nine

months so even though we're in a

recession right now but the stock market

is already pricing in the recovery take

a look at is really nice chart by sense

- well and you can see for example this

red line represents the stock market

right so that's the one in red the one

in green represents the economy so you

can see that when the stock market is at

the bottom right the markets that a

bottom what's happening to the economy

that's why the economy is in a recession

so the time to buy stocks at the bottom

of the market is when we are in a

recession which is now in a recession

right now the trouble is a lot of people

say hey I'm gonna buy stocks when the

economy recovers when the pendulum is

over now what happens once the economy

fully recovers when the economy recovers

what is happening you are actually

buying at the top of the market and

that's why most retail investors when

they see the economy doing well they buy

stocks what happens

stocks go down but professional

investors we buy when the economy is in

recession because when you Kaunas the

recession and we buy a bind

bottom so we catch the best price and

write the bull market all the way up now

you take a look at the news headlines of

the past week what do you see right on

the 26th of March it says you know

jobless claims saw to 3 million a record

high 30 of a march coronavirus job

losses could total 47 million pushing

unemployment rate to 32% 6th of April

Janet Yellen the last fetch and person

she said second quarter GDP could

decline by 30 percent with unemployment

already at 12 to 13 percent so these are

all very bad economic news what do you

think the typical retail investor does

we need we call these news that's right

they will sell they will sell their

stock which is the most stupid thing you

can ever do what do professional

investors do professional investors when

we see all these bad economic news we

buy because it is a sign that the market

has bottomed I told you you buy on bad

news check this out look at this chart

over here again look at the numbers 26

March 30th March and 6 of April if you

look at the SMP 500 you can see all the

26 of March bad economic news market

goes up 30 up of much bad economic news

market goes up 6 of April their

increment news market goes up market

goes up where the economy is bad why

because the stock market moves 6 to 9

months a hit on the economy thus pocket

is not the economy and that's why you

can see that you know in my telegram

chat rooms whenever I buy stocks I tell

my students right for example to get

25th of March I said I just added

MasterCard at 236 dollars and 40 cents

and I never st lauda at 1:58 and this

was on a 25th of March over here I

started to buy stocks the moment I saw a

change in the market trend on the 26th

of March editing uninsurance

at 75

is a Hong Kong spot which I bought as

well on the federal match ed at Facebook

at 1:59 so you can see over here I

started buying more Facebook shares on

the 30th of March I said adding Bank of

America at 22 $21 right on the 30th of

March again I'm adding a SHR that's a

Chinese ETF at 25 cent entry so you can

see well because reading all the bad

news and the selling professional

invests like me I'm buying like crazy

and that is the difference between a

retail investor and a professional

investor and sure enough what happens

after I buy then you read this news in

the media hey stock market life updates

Dow jumps 5 her points up 30 percent on

the week 9 of April Nasdaq says blue

market begins start a new bamboo market

right so that's why the retail investor

always can always get screwed because

they read the bad news they sell stocks

and the moment itself stops the media

that tells you is a bull market and

you're screwed so never never make

decisions based on reading the

mainstream news blindly always take a

look at the price action of the market

and the intrinsic value of the stocks

you buy and learn how to use the

indicators which have been talking about

in my videos so by being able to add

more shares and very undervalued prices

in a bottom I'm able to cushion the blow

to my portfolio so you can see this one

of the portfolios that I have and yeah

my portfolio is still down for the year

there are in fact my portfolio started

at about $900,000 and big earlier and

right now is at eight hundred forty-one

thousand so it's still below the top of

the year right because as you can see

that we have not fully recovered back to

the high okay and and that is why like I

said because of that my

folio is still you know down from

$900,000 right now is when he beat her

at 41,000 dogs but when the market

eventually recovers back to the high and

beyond the high then you know this

economy way more than a million dollars

right but despite that you can see that

most of the stocks that I have my

portfolio

they have unrealized profits they are

profitable they are but what they're

green right because I added more shares

and very very discounted price that's

the key to it now let me just say also

that important disclaimer

just because we're at the beginning of a

new bull market doesn't guarantee that

we're going to go all the way to the top

right away or beyond that right away

because no one can predict how long this

ballpark is gonna last

is it possible that the bed could come

back for a rematch and get another bear

market really fast sure anything's

possible that's why it's an investor you

always buy in stages your is average

into the markets never buy at one time

so I don't buy at one time i buy shares

consistently so that even if the market

goes down again and becomes more

undervalued again I'll just buy more

shares because I know in the long run if

I might great companies at huge

discounts it will always go higher and

I'm settled in six months and a year or

two years my wealth of multiplying many

many fool

just like you and many of my students

who are following the principles of

smart investing now I know that this

pandemic and this shutdown is locked

down it's taking a toll on many many

people you know financially in terms of

our health in terms of careers of

business so I really appreciate you

watching this video and I do hope you're

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