So, is it finally time to short the S&P

500 and to bet on a bigger decline from

current levels? Well, Bank of America

seems to think so. So, in this article

that came out on the 11th of April, it

says Bank of America is advising that

investors short the S&P 500. Now, for

those of you who don't know, to short is

to short sell, which to is to bet

against the market. So, if the market

goes down, you make a lot of money. If

the market goes up, you lose a lot of

money. So, their chief investment

strategist, Michael Harnett, said the US

is moving away from the world's main buy

of goods and the go-to place for global

investments. And he called this shift

the end of US exceptionalism and the

start of a US rejection period. So, get

out, sell everything. So, should we

listen to this advice? Let's find out in

this video.

[Music]

Now, before I analyze the markets and to

see if it's a good time to short the

markets, always remember that in the

long run, the market, the stock market

will always go up in the long run.

Because in the long run, corporate

earnings will always grow at about 8%,

you add in share buybacks and dividends

and money supply, you get about 10%

return a year over the long run. But in

the short term, remember that no one can

predict the direction of the market with

100% certainty because anything can

happen and there are too many moving

parts. So any kind of short-term

prediction is really based on

probability and there's no 100%. So if

you do want to short the markets after

this video, uh remember to always have a

stop-loss because if you don't short

with a stop loss, your loss is

unlimited. Okay, so let's get down to

it. So let's take a look at a few

things. The first thing is let's take a

look at the technical chart patterns.

And uh by the way, for those of you who

think that the S&P 500 is in a bare

market, it is not in a bare market.

Well, at least not yet. Now, remember

the definition of a bare market is when

the price closes, drops, and closes 20%

from the high of the market. So, what

happened to the S&P 500 was it got very

close to a bare market. So on this day

it actually dropped over 20%. But by the

end of the day it closed above 20%. So

since then uh it's not closed below 20%.

So technically the S&P 500 is still in a

bull market. Now having said that the

technical pattern show that the market

is in a confirmed downtrend both in the

shortterm frame and the medium-term

frame. So you can see over here the 20

EMA which is the red thin line is below

the 40 EMA the blue thin line. So that

signals that yeah we are in a downtrend

as you can see a wave up a wave down

wave up wave down and now wave up. So it

is making lower highs and making lower

lows. So we are in a downtrend. Now, at

the same time, you can see the 50 moving

average in blue, the thick blue line,

has crossed below the 150 moving

average, signaling a medium-term

downtrend. And some of you would know

that when the 50 crosses below the 200,

they say that, oh, that is a death

cross. So, technically, yeah, we are in

a downtrend. And remember that in a

downtrend, prices don't drop in a

straight line. They still move in wave

patterns. Wave again, wave down, wave

up, wave down, wave up, wave down. So

you can see that it has formed that

pattern, right? We've got a first wave

down and then we've got a wave up that

found resistance at the 200 day moving

average, wave down again, then wave up,

found resistance at the 20 EMA, then

wave down, and now wave up. And right

now, you can see that uh the candle that

just closed yesterday closed below the

20 EMA. So based on technical patterns

you can see that there is a level of

resistance at the 20 EMA. So that's the

first level of resistance. So for people

who think that you know the downtrend is

in force then yeah this could be a good

place to short the market where you

could place an order to short the market

if the price breaks below the low of

this candle but to put a stop loss above

that swing high. So this could be a

possible short entry. And again,

whenever you want to short a stock or

short the market, you place a stop loss,

you calculate your risk-to-reward

ratios. So that if the market goes up,

hits the stop loss, you lose, you know,

1 hour, but if it goes down, you can

make 2 hour, 3 hour. All right? So I

wouldn't say that uh this is completely

a bad trade. It is a reasonable uh short

trade if you are thinking the downtrend

is going to continue. Now at the same

time you also notice that if you connect

this swing high to this swing high this

is also a level of resistance. So if it

breaks above this level which is the 20

EMA then could find this uh trend line

resistance before it comes down again if

you think the downtrend is going to

continue. All right. So I think

basically that is the short thesis from

a technical

perspective. But as you know when you

analyze the markets you have to look at

two sides of the coin. Okay. So that's

the bearish thesis technically. How

about the more bullish thesis? And at

the end you judge which is stronger.

Now, if you take a look on the other

hand at the higher time frame, which are

the weekly candles, it tells you a

slightly more bullish picture. On the

weekly time frame, you can see that this

was a major swing low that was made

somewhere in August. And right now, we

have got the market going down and um

going below this recent swing low and

closing back above that swing low with a

strong bullish candle. This is what we

call a bear trap. Uh it's also called a

force bottom as my buddy Elson True

likes to call it or simply a force

double bottom pattern. So this is

actually quite a bullish signal on the

uh weekly candles, right? So based on

this, we may see a uh rebound back up

there based on the weekly candle. So

sometimes the daily time frame could be

bearish but the weekly time frame could

be bullish and say which one do I listen

to? Okay. Well, generally the higher

time frame patterns are stronger than

the lower time frame patterns. Reason to

be bearish one, reason to be bullish

one. So from a technical perspective, I

would say that uh it's still a 50/50 of

where the market's going to go in the

short term. However, let's take a look

at something which I think is more

powerful. If you listen to the interview

by Treasury Secretary Scott Bessent in

the last I think it was yesterday or day

before, he gave a very interesting clue

about where he thinks the market is

going to go in the short term. Now, say

why should I listen to him? Well, first

of all, he's a Treasury Secretary, which

is no big deal, right? But I think

what's a bigger deal that Scott Bessant

is probably one of the smartest guys in

finance in the administration. So for

those of you who don't know, he used to

be a hedge fund manager who worked

together with George Soros and they made

billions of dollars shorting the British

pound back in the 1980s. So he's one of

the uh few treasury secretaries that's

not more of an not really an academic

but he's a practitioner in terms of the

market. So it is worth at least

listening to what he says. So this is

what he said in a recent interview. He

said if we measure the uncertainty of

the market by the VIX, the VIX is the

volatility index. I don't want to make

market calls. That's what he says. But

it seems the VIX has spiked and likely

peaked. So what he's saying is that I

don't want to make a market call, but

he's making a market call. Okay. Now, if

you read between the lines, what he's

trying to tell you is that the market

has already bottomed. Now again, can we

completely trust them? Of course not.

They may have an agenda, right? But let

me talk a bit about why I find this very

interesting. Now if you don't know the

VIX is known as a volatility index and

it's also known as a fear index. So when

people are scared when there's a lot of

fear the VIX goes up. So when the VIX is

very high it's a measure of extreme

fear. When the VIX goes down it means

people are no longer fearful. Now you

will notice a very interesting pattern

in the markets of how the market bottoms

correlate with VIX movements. Let's take

a look. Now last week the VIX went above

60. Now let me show you this chart. This

chart that you see over here this is the

VIX the volatility index and you can see

this is the 60 level. Watch this level

very important the 60 level and watch

the 35 level and I'll explain why in a

short while. So like I said last week

the VIX went above 60 and that signifies

extreme fear. People were scared

shitless. Now, it's very rare that the

VIX goes above 60. In fact, in the last

35 years since 1990, the VIX has only

gone above 60 uh three times uh

excluding this time. So, total four

times, right? So, you can see that the

one time it went above 60 just before

this was last year, August 2024 during

the Japanese uh stock market crash went

above 60 during COVID the COVID

pandemic. People were scared shitless.

it went above 60 during the great

financial crisis of 2008 2009 it went

above 60. Now what's interesting is

during the dotcom crash in 2000 the VIX

did not go above 60. In fact they even

come close to going above 60 but it did

go above 45. Right? So that tells you

that in the old days people had bigger

balls than they do have today. We a

bunch of today. Okay. Now you

may say so why is this important?

because I found an interesting pattern

that whenever the VIX goes above 60 and

then drops below 35, it usually signals

the bottom of the crash. Let me show you

what I'm talking about. So, first of

all, you can see that the chart below,

this is the S&P 500 and the chart above

that is the VIX. So, let's go back to uh

the great financial crisis of 2008 2009.

So, you can see that this was the

financial crisis. The market went into a

bare market over here and then it

bottomed here. There was a bottom and

then the bull market started. So you can

see that when the market was going down,

people were losing their Ah,

right. They all scared shitless, right?

And what happened to the VIX? You can

see that the

VIX uh went above 60 right there. Okay,

went above 60. People like scared

shitless. Now again, what's important is

to watch when it drops below 35. 35 is a

magic number. So you can see that right

it d and then it dropped below 35 right

here. Can you see that? Okay. And if you

bought there that would have been buying

right near the bottom. Okay. Now and

then it dropped below 35 again here. And

by that by that time the market would

have already gone up uh quite a bit but

you would still have gotten in early in

the bull market. So that was the GFC of

2009.

Now the next instance when the VIX uh

went above 60 was COVID that happened 5

years ago if you recall. So again we

have COVID crash. Ah right people losing

their again. And then we got the

VIX the fear index measuring fear and

panic went above 60. Again very rare

happened only four times in the last 35

years including this time. But again

what's the magic number? magic number is

drops below 35. So when did it drop

below 35? It dropped below 35 actually

right there this week. All right. And if

you entered there, you would have

entered here. Not exactly at the bottom,

but you would have gotten in again early

enough to write the new bull market over

there. So that was 2020.

And then let's look at 2024 moving

closer to where we are today which was

the Japanese uh black market crash uh

caused by the unwinding of the yen carry

trade. This happened August last year.

Now bear in mind I'm looking at weekly

candles. These are weekly candles and

you can see that for a very brief moment

what happened? Yep. The VIX spiked up

went above 60 extreme fear and then

within that same week it dropped back

below 35. And that again signal the

bottom of the S&P 500. If you got in

right there, uh you would have rode the

bull market all the way back up. So

where are we now? So right now we are

here right the market has dropped ah

this year 2025 and the VIX has spiked up

to just above 60. And guess what? Have

we gone below 35? Yes we have. We have

just dropped below 35. And this is what

Scott Bessant was probably talking about

that he says the VIX has peaked and his

hint is the market has

bottom. So again, is this a guarantee

100% go all in? No, there are no

guarantees in the market. In the short

term, anything can happen. This is just

a probability. But I think it's a pretty

good probability. Okay. So if you ask me

to short the market, I'll think twice.

Okay. Now uh how about let me show you

the uh.com crash in uh 2001. Now like I

said during the com crash that was a

bare market but the VIX never went above

60. And don't ask me why. I guess people

were not as scared that time. They were

like you know don't worry we're okay

right? So let's look take a look at

that. So this was again the bare market

of 2001 2002 and again if you look at a

VIX it did not uh go above 60 but it did

go above 45 which is quite scared still.

All right 60 is scared shitless. 45 is

scared with a bit of left. Right.

So you can see that uh it went above 45

right there. Can you see that right

there? It went above 45. And again, same

rule. We want to get in when it drops

below 35. So went above 45 and it

dropped below 35 right here. Okay? And

lo and

behold, that was somewhere here. Now,

was it exactly at the bottom of the

market? No. We can't always buy right at

the bottom, but as long as we buy, you

know, near the bottom, you know, plus or

minus a few, five, 10% is pretty good,

right? So if you got in there, you may

have seen like a bit of a double bottom

pattern, but then you have gotten in

uh way before the huge bull run took the

market higher. So once again, in in the

short term, no one can predict for sure

where the market is going. There are too

many uh unknown variables. You don't

know what C or Trump's going to say the

next day. But we look at probabilities.

We look at technical patterns. We look

at the VIX. We look at all kinds of

stuff. And by looking at all kinds of

stuff, am I 100% convinced that I'm

going to short the market? Not really.

Right. So, in fact, if anything, I'm

still leaning slightly bullish in the

short term, but of course, in the long

run, I'm always bullish. People say,

"Edom, you're permable." Yes, thank you.

I am a permable because I know in the

long run, the market always goes up. And

remember that if you're not too

interested in, you know, trading the

short term, you can ignore everything I

just said and just buy good companies

that are at a discount. And that's what

I did, you know, the last couple of uh

uh days. In fact, last week, you know,

added to my Nvidia, I added to Meta, I

added to Microsoft, I bought more

Mastercard, I bought more S&P Global,

and I added some new stocks like Idex

Laboratory. So, I use this opportunity

to add more shares of high quality

companies. And even if it does go down a

bit more, I mean, who the hell cares,

right? Long run, it always goes up. So

you know people always tell me Adam I

will only buy

stocks when there are no problems in the

world when all the crisis are resolved.

Now will that ever happen? Okay. Will

your life ever have no problems? Yes.

It's called death. The day you're in the

graveyard you got no more problems. As

long as you're alive you will always

have problems. Same thing in the stock

market. The stock market will always

have a crisis it's worried about.

There's always something to worry about

about and there's always a smart reason

people tell you to sell or short the

market. But as I always say,

macroeconomic or geopolitical factors

should never be a reason to sell the

market. And in the words of the great

Peter Lynch, he said, "Your ultimate

success or failure to build wealth will

depend on your ability to ignore the

worries of the world long enough to

allow your investments to succeed. If

you take a look at this 15-year period

when the S&P 500 gained

830%.

830%. But most people would not have

been able to compound their wealth at

800%. Why? Because there was so many

reasons to sell. It was so many things

to be scared of. If you take a look at

all these you know crisis that happen

whether S&P downgrades US debt or Ebola

virus or US government shutdown or there

was an earnings recession or you have

got the uh yield curve inversion over

there. You got the COVID pandemic. You

have the storming of the US capital.

You've got a delta variant. You've got

Omicron variant. Russian invasion of

Ukraine. S&P enters a bare market here.

US inflation hits a 40-year high.

collapse of Silicon Valley Bank. You've

got China ever ever grand group

collapsing. US national debt tops 35

trillion. You've got a Sam rule

recession indicator trigger. If you read

all this news, you'll be scared out of

the markets and you'll never have the

chance to compound your wealth. All

right? So, think long term, but in a

short term, again, if you want to trade,

that's great. Have a stop-loss in place,

have profit targets in place, but only

take high probability trades. Thank you

for listening and I'll see you guys in

the next video. May the markets be with

you. If you want to catch my latest

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is Adam Coup and may the markets be with