hi this Adam Koo here and we had to week

five of the bear market the kovat 19

pandemic bear market and we actually hit

a law right here at the - 36 percent

mark which is 36 percent below the

all-time high of tree tree 9 tree on the

S&P 500 since we hit the all-time low we

have kind of like rarely up to this

level over here where we still remain

roughly about 20 roughly about 24

percent below the all-time high so the

question is have we seen the bottom and

can start only go up from here

let's export us in this video before I

begin important disclaimer no one can

predict the future and I'm not a

fortune-teller I can't predict for

certain all I can do is I can look at

probabilities is it more probable that

we have bought them and we are likely to

go up or is it less probable and B some

probabilities we can take intelligent

investment decisions that's the first

thing this of us disclaimer right the

second thing is when we attempt to time

the market bottom we can always time it

to the exact day or minute or hour I

love to but it's almost impossible

unless you're lucky all the time but

what I found is in the past I've been

able to time the bottom of bear markets

as close as possible but sometimes I'm

off by about a month or two and I'm

going to show you that it doesn't matter

whether you're off by a month or two but

as long as you are close enough to the

bottom you can make great decisions to

build your fortune once the bull market

arrives alright so with that let me show

you how I determine the probability that

we have actually reached the bottom of

this bear market what things I do is I

look at matric of indicators and one of

the most effective indicators I found in

calling bottoms of bear markets our

combination of two indicators the first

indicator is the Williams our indicator

and I'm using the 52 deep setting right

so again I'm looking

at the sp500 I'm looking at weekly

candles they work best when weekly

candles

so why 52 on the Williams our indicator

because 52 weeks is one year

okay now the Williams our indicator was

invented by Larry Williams one of the

you know best traders in the world

I respect him tremendously and he came

out this indicator to tell when markets

were overbought or when they are

oversold all right so obviously we were

looking for bottom we're looking for the

Williams are indicated to be over Seoul

so how do us all so so look at this

indicator you can see that we've got an

upper boundary which is the -20 boundary

this dotted line over here and we've got

the minus 80 boundary which is this

dotted line over there and of course

we've got all these squiggly lines so

we're looking for this line to go below

minus 80 so for example you see this

year that's all below minus 80 so this

tells you that the market is oversold on

a 52 week time frame and when it's over

Seoul it's like a rubber band stretching

it down what's likely to happen that's

right it's gonna bounce back up again

but I found that just looking at this is

not reliable why for example let's go

back 20 years this was the year 2000 to

2003 this was a bear market as you can

see over there this was about two and a

half year bear market now if you just

look at the Williams are you would have

gotten a buy signal over here right

because it was below minus eighty if you

bought over there guess what in went

lower you got another buy signal bother

when lower another by so you know it's

not really good at you know picking the

bottom because it gets over so but even

more over Seoul so we can't just use

that by itself so what I do as well is I

look at this other indicator that tells

me the average true range that has been

normalized

now what's average true

average range refers to the range of the

candles or the or the daily in this case

the weekly volatility I don't know if

you noticed that when the markets going

down the closer it gets to the bottom

the bigger the volatility the swings

during the day of the week I if you

notice for example about a week ago

right when the market was like you know

minus 36 percent of the all-time high

the market was swinging you know seven

percent one day seven percent of Nyx

days so the Rangers were very very wide

we call it really high range days where

ATR exploded average true range exploded

okay so this indicator tells us when the

range is AB nominally abnormally big

abnormally big alright that's right okay

so you see this dotted line over here

this orange dotted line okay that's the

ad line so anytime the ATR is above 80

the ranges are abnormal okay so when is

it above 80 then there there can you see

that okay great so we've got two

indicators now we have got the we lips

are and for rhythms are we are looking

at it to be below minus 80 correct for

the ATR monoeyes we're looking at it to

be above 80 now here's the thing to call

a market bottom both of them should show

us their signal at the same time in

other words we want to see that the

Williams R is below minus 80 and the ATR

normalized is above 80 when they both

happen at the same time we are very

close to a market bottom okay

so let's go back 20 years and look at

all the bear markets and see how

reliable this indicator was again going

back to the year 2000 that's when

bear market started the dot-com bust

right calm crash and you can see the

market bottom here the market bottomed

in mid of 2002 right now look at

something interesting when the both

indicators coincide that's right at that

point can you see that the Williams are

was below minus eighty over here but it

wasn't a bottom signal because the ATR

was not above eighty okay now over here

check it out the Williams are went below

minus 80 and the ATR went above 80 so we

have got those two indicators coinciding

and that called the market bottomed to

the exact week all right so it once you

get these two signals and you start to

accumulate shares will you be pretty

happy does make sense right pretty cool

right now of course this could be a

one-off fluke so we got to see did it

work in other bear markets as well so

what happened after that so after that

bear market of 2000 or 2000 2002 the

market then went on right market went on

went on so where was the next bear

market there we are so the next bear

market was this boom okay and that was

the financial crisis that started in

October or seven and where did it bottom

okay let's see wet bottom let's just

move the yeah okay so it actually bottom

here it bought them in February of oh

nine so did our indicator work this time

okay let me just zoom it in and you can

take a look for yourself

let's just stretch it a little bit over

there okay so once again market bottomed

was here February over nine

so where did our indicator indicate the

bottom all right

so again you can see Williams are when

below minus eighty starting from here

and we know that it's not accurate

because you thought they would have died

as well right but you can see that at

this point the ATR did not go above

eighty okay now that the ATR went above

eighty here but this wouldn't have been

a buy why because the Williams are was

not below minus eighty so they're not

they are not coinciding they got a

coincide got it

all right so where do they start to

coincide they started to coincide here

at this point so there you have it we

have got the Williams are below minus

eighty and we have got the normalized

eighty are above eighty so the market

bottom was called actually here at this

point right so if you started to

accumulate shares and say okay that's

the bottom over here and you started a

cubic shares over there would you have

caught the exact bottom no you wouldn't

have because you went up a bit and came

down again to make a second bottom can

you see that so like I said this

technique you can't call the exact

bottom and the exact week at the exact

day or hour you may be off by a month or

two but question does it really matter

it doesn't matter why because if you

start up buying shares here what would

have happened okay let's let's move our

charts over there okay so if you started

to buy shares over here yes it went

lower slightly okay but within the next

two months or so would you have been

very happy yes you have caught the next

bull market

remember after every bear market is the

next bull market and you can always

catch the bottom you don't have to as

long as you are near the bottom and this

way I tell people that once this

indicate that shows us where near the

bottom please don't buy all in one day

for goodness sakes you know just buy a

bit first and it's average in

so every week you just buy more buy more

every week so even if you're off by one

or two months it doesn't matter but you

get in near the bottom instead of

getting in here and getting this big

crash you get in there and you're really

happy got it okay when does the next

bear market okay now this was not really

a bear market well it was but it was a

baby bear market like this one over here

right so you can see that this was the a

drop over here MA well it was a very

small bear market and sure enough did we

get the signal again yes we had we limbs

are going below 80 - 80 sorry we had 80

are going above 80 so we had that buy

signal get over here so could have again

bought over there so if you bought over

them would you have been happy buying

over here let's see well yep pretty

happy okay because he's getting in over

there you'd have again caught the next

really strong bull market very very

powerful right okay so let's move on

when was the next bear market so again

going to the right going to right and

[Music]

this was a bit of a sell-off not really

a bear market now the next big bear

market was actually there this was

December 2018 the correct yes December

of 2018 you can see that was minus 20%

drop bear market and did we get a buy

signal again yeah Williams are when

below minus 88 er when above 80 yeah

it's really small but it went just above

80 over there check it out just above 80

just touching it okay

so that would have been a buy over there

okay so would you have been happy buying

over there let's check it out ready oh

yeah pretty happy

you have caught that Knicks bull and of

course now we've got the Cobra 19 Black

Swan they just hit us like a ton of

bricks around again alright so again we

can't predict when the next bear market

will come but we kind of like can tell

where we've hit bottom so one week ago

again let me just zoom zoom this in a

bit right

I'm just make it bigger okay there we

are okay so a week ago we plunge to the

bottom here at 2000 tree on the S&P 500

right like I said from the top to the

bottom

it was a 36% drop guess what

Williams our when below minus 80 and 80

our when up above 82 a crazy 120 so this

signal a potential bottom of the market

at 2300 points now coincidentally if you

have watched my bear market survival die

you would have remembered that in the

last hundred years of 21 bear markets

the average bear market as you can see

average of all the bear markets was a

drop of minus 36 percent coincidence

I think yet I don't know maybe secure

incidence maybe it's not right but

that's something interesting interesting

now the other thing I find interesting

is that now let's zoom in a bit closer

right I've been showing you the weekly

charts now let me just zoom into the

daily chance over here let's go to the

daily charts alright so these are the

daily charts you can see that big plunge

all the way down again this is the minus

20% level and this is the minus 30%

level and again we reach the minus 36

percent level over here okay so the

moment we hit that level we started

rallying all the way up right this was

raised very strong rally now here's the

intro

same thing we did not rarely on good

news we rarely on bad news in fact we

read it on the worst possible

economic news that we could have gotten

in fact it was the worst news in the

history of the US markets was the news

the first major bad news that happened

over here was that jobless claims was

3.3 million and then just yesterday we

had the news reporting that jobless

claims was 6.6 million so imagine 6.6

million Americans are out of a job now

that's the worst economic news you could

ever think of and guess what the market

went up so what does it tell you see

bear markets don't die from good news

they die from bad news so once you see

bad news coming out and the market no

longer goes down it tells you that the

market has already expected the worst

case scenario and nothing more you say

can get it to go down another thing the

market is telling you is that everyone

who has needed to sell of desperation or

panic have already sold so there are

hardly any more sellers left and those

who have sold have so they're in cash

right now which means a lot of cash in

the sidelines which means that when a

cash comes back that would drive the

market higher now a lot of people be

thinking and how can the market possibly

go up from here how can it bottom the

economy is gonna get worse more people

are gonna get in fact that we're just at

the beginning of the infection curve

more people are gonna die in fact the

number of deaths is only gonna peak

somewhere in mid-april or mid-may

more people are gonna lose their jobs

now six point six million unemployed

they are now looking at possibly twenty

five percent unemployment rate in the

next few months more people are gonna go

out of business right yes I don't deny

the fact that the economy is gonna get

worse more people are gonna die more

people are gonna infect it I know that I

remember that the stock market is not

the economy the stock market moves six

to nine months ahead of the economy the

stock market is a leading in

kate of the economy in other words the

stock market doesn't care what's

happening now the stock market only

cares what's happening nine months or

six months from now make sense now a lot

of people always think hey i will only

start to invest when the economy

recovers i will start to invest when the

epidemic is over the trouble is the

stock market will tend to rarely and go

to all-time highs way before the economy

recovers the market will start to move

up way before the pandemic is over

because the market moves ahead of the

economy so that's one thing good I

understand now again remember mine is

different my disclaimer I'm not saying

that this is the absolute bottom it

could be but again we could be off by

one or two months which means that could

we in fact let me just go back to the

charts on the Wheaties again could we in

fact for example could this be a

short-term rally or we could have big

cat bounce where you bounce to you know

maybe two six three zero there's a

strong resistance and we go back down

again yes that's that's impossible in

fact if it goes down again I'm looking

at it to go to probably the two thousand

level in other words the first bottom

was two thousand three hundred if we do

go down again we could possibly hit the

two thousand level okay and that would

represent from the top to the bottom a

minus forty percent

bear market drawdown which by the way if

you look at my chance again over here

you can see that the average of all bear

market draw downs was minus thirty six

percent but with a recession coming it

could be 42 percent so again is you know

plus minus five to six percent so the

important thing again is an investor is

even if you start buying over here don't

buy all in just buy a big average in the

market so you just buy a few shares

right just get average in every

few weeks so we do come back down again

to another low hit as good news you get

to buy more and a cheaper price you just

average more in again now it doesn't

matter if it goes down at a five to six

percent you know why because once the

bear market is over the bear market is

dead the next bull market will begin and

the next boom market I can guarantee you

will not go up a hundred percent he's

gonna go up two three four five six

hundred eight hundred percent like all

previous bull markets why really simply

because of the Federal Reserve this is

the election year and the Fed and tram

will do whatever it takes to pop the

market sky-high and they've got the

means to do it

remember the Federal Reserve can do

whatever it takes to palm the market up

the market is rigged is rigged to go up

what can effect do where the Fed cut

interest rates to zero they could go

even go to negative interest rates they

have launched unlimited quantitative

easing which means they're printing

money like there's no tomorrow

and with all this money what does the

Fed do they buy ballsy by Treasury bonds

but now they're buying corporate bonds

and the Fed has even said they're gonna

even resort to buying stocks symmetry

the Federal Reserve stops to buy stocks

nothing can stop them they can push the

market to all-time highs so what does it

mean when interest rates go to zero and

the Fed prints money it means in the

long run the value of the dollar will

keep going down which means if you hold

cash is gonna be trash alright in the

long run as you print money what's going

to happen is gonna lead to the rise of

asset prices that's why we call it

inflation so property prices are gonna

rise stock prices gonna rise in a lot so

in a long run investors will get rich in

richer people who save cash under their

pillow will get poorer and poorer and

all the more that's why have to learn

how to invest but again remember when

the bull market comes back not all

stocks will rebound stocks of companies

that have been badly damaged by the

crisis may never

other so avoid stocks whose earnings and

sales and competitive advantage have

been damaged by the crisis for example I

avoid energy companies oil and gas I'm

going to avoid them avoid Airlines avoid

you know semiconductors avoid those

stuff that are really competitive that

had been hurt by the economy I invest in

recession-proof

virus proof stocks like Microsoft which

is benefiting from you know cloud

computing the in fact cloud services

increased 700 percent during the

lockdown the more people stay in the

more deeply online games look at gaming

coming online gaming comes at $0.10 look

at my previous videos on current virus

proof stocks those are the stocks are

gonna rebound faster than any other stop

all right so I hope you learn something

new today's I don't go like I said I'm

not a fortune-teller I can't predict the

future for the last 21 26 years I've

been in the markets I've made my

fortunes calling market bottoms but I

don't call the exact bottom the exact

date I don't have to as long as I'm

around there plus minus 5 6 % plus minus

1 or 2 months I'm making enough money to

build my next fortune and so can you

I hope this has helped you do subscribe

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