Crash Is Coming But It Can Make You a Millionaire

The stock market bubble is about to burst. A stock market crash is coming, but it can make you a millionaire if you position yourself correctly. The stock market crash of 2024 could be worse than the bear market of 2022. The latest stock market news and US economic news shows the economy is slowing down, the unemployment rate is rising, and inflation is no longer falling. This means the Federal Reserves interest rate hikes are here to stay, and historically this always causes a stock market correction. The latest stock market analysis shows the SP500 crash could be much worse than the DOW crash, and the Nasdaq crash could top them all.

As the S&P 500 and Nasdaq reaches new all time highs, most investors are oblivious to the fact that most stocks in the stock market are actually going down, and the majority of investors are now fearful that a stock market crash is starting soon. But even if a stock market crash comes, it could make you a millionaire. This is the opportunity of a lifetime. We have not had an opportunity like this in over 20 years. And if you position yourself correctly, you could become a millionaire by the time this is all said and done. Now for those of you who are new to this channel, my name is Stock Curry. I’m a former Merrill Lynch and Morgan Stanley investment banker, and I have over 25 years of trading experience.

I traded during the dot-com bubble, I traded during the downfall in 2001 and 2002, and I saw people become multimillionaires seemingly overnight. I also saw a lot of people get wiped out and never return to the stock market. Of course, I saw the same thing in 2021 also. I saw a lot of people make a lot of money, and I saw a lot of people get wiped out, never to return. How you position yourself right now, today, as you watch this video, is going to make the difference between whether your portfolio gets wiped out over the next few months, or if your portfolio grows at the fastest pace you’ve ever seen over the next few months. So pay attention. I’m about to show you what’s happening, and how you can position your portfolio to profit off of this in a way you’ve never profited before.

The reason the S&P 500 and Nasdaq are rallying to new all time highs, despite most stocks in the stock market going down, is because of stocks like Nvidia, which was up 9% last week. And it’s not just Nvidia. Microsoft was up 4% last week. And Apple was up 8% last week. Collectively, these three stocks make up 25% of the weighting in the Nasdaq 100. Meaning that if Nvidia, Apple, and Microsoft collectively go up enough, they can singlehandedly bring the entire Nasdaq index up, even if the other 97 stocks in the index go down. That is the importance of having 25% of the weight in the index, especially when those three stocks are going up between 4% and 9% in a single week.

And because those three stocks are so heavily weighted, it has caused the overall stock market indexes and the S&P 500 and Nasdaq to rise, even though most stocks are going down. We can see this in market momentum, as the market momentum of the S&P 500 continues to go higher, as the S&P 500 index continues to reach new all time highs. But if you take out the weightings and you just look at the number of stocks reaching new 52 week highs versus the number of stocks reaching new 52 week lows, this has been dropping for the past couple of weeks. And it shows that the overall stock market is actually in extreme fear. The same is true when you look at stock price breadth, which looks at the number of stocks rising versus the number of stocks falling. That has been going down over the past few weeks, again, showing that the overall stock market is dropping and is in extreme fear. And with most stocks in the stock market falling, this has caused a lot of fear among investors that the rally in stocks might be coming to an end.

Nvidia rallied another 9% last week, and with so much bullish momentum on Nvidia stock, you might be shocked to learn that the short volume has absolutely spiked over the past five weeks. Why is there so much short interest betting that Nvidia stock is going to go down if Nvidia stock is continuing to rise and reach new all time highs? Well, it has everything to do with valuations. The valuation on Nvidia is straight up terrible. In fact, the forward PE ratio currently sits at 54. The number 54 doesn’t really mean anything to you unless you understand how stocks historically trade. Looking at the forward PE ratio, the S&P 500 five year average is 18.9. Now that’s due in large part to tech stocks rallying so much over the past five years. And same with the ten year average at 17.7. Again, as interest rates were near zero, this caused tech stocks to rise and it caused that forward PE ratio to rise as well. But if you look at the 15, 20, and 25 year averages, they run at 16.1, 15.6 and 16.4, again all around 16. So when you consider that the average forward PE ratio on the S&P 500 is 16, and Nvidia is currently trading at a forward PE ratio of 54, you immediately see just how overvalued Nvidia has become, with Nvidia now trading at more than three times its historical fair valuation. Meaning Nvidia the stock is currently sitting at about three times the fair value of Nvidia the company.

And it’s not just Nvidia that has this problem, it’s all of the mega-cap tech stocks. Microsoft has a forward PE ratio of 37, more than double its historical fair valuation. Same with Apple with a forward PE ratio of 32. And you know the market is in a bubble when these valuations become extremely high. And in fact we can see that today with stocks like AMD trading at a forward PE ratio of 109, not to be outdone by Arm trading at a forward PE ratio of 182. Of course, bubbles like this never last. They always pop eventually. Now timing when they’re going to top out and the market’s going to start going back down is, quite frankly, impossible. But we know that it will happen eventually. It happened in 2001 during the dot-com bubble, it happened in 2008, it happened in 2021 with all of the small cap story stocks, and it will happen again with the AI hype.

Now this is very similarly compared to 2001, because in the year 1999, in the year 2000, everybody was buying up these internet technology stocks because they said, “The internet is the future, the internet is where everything is going. The internet is going to change your lives and everything’s going to be online, and the internet is going to be the future.” And all of that was absolutely 100% true. But that does not mean that the stock valuations at that time were worth what the companies were actually worth. And that is why we saw stocks like Apple and Amazon fall by over 90% when the dot-com bubble eventually burst. And of course, it wasn’t just those internet stocks that fell. A lot of stocks fell. In fact, the entire S&P 500 fell by more than 50%, while the Nasdaq dropped an incredible 75%. It happened again during the 2008 bubble, when the S&P 500 fell by 56%. We see this time and time again where these bubbles cause these extremely elevated valuations in select stocks, and eventually, we don’t know when, but eventually, those bubbles pop and the stocks fall tremendously.

Now you don’t have to lose money. Obviously if you’re currently holding stocks like Nvidia, Microsoft, Apple in your portfolio, and you continue to hold after the bubble pops, and those stocks all fall by 50% to 70%, then yeah you will lose money. But there are ways to make money during the downfall. And let’s start by looking at what Warren Buffett is doing.

Warren Buffett is generally considered to be one of the best investors of all time. What is Warren Buffett doing right now? Well, he’s selling his mega-cap tech stocks. Warren Buffett just sold $21 billion worth of Apple stock back in May. So we can see Warren Buffett taking profits on his mega-cap tech stocks and moving that money into cash. Now, what is Warren Buffett doing with that cash? Well, back in 2001, Warren Buffett loaded up on cash. He didn’t buy any stocks. He just sold, took profits, and held cash. Then over the next two years, as the stock market crashed, he started using that cash to buy stocks. You can see his cash stockpile spike here in 2001, and then fall significantly in 2003 as the stock market fell and bottomed out. And what is he doing today? Well, once again today, Warren Buffett is loading up on cash. He is selling his stocks and putting his money into cash. Warren Buffett said that stock valuations are “frothy”, and he’s waiting for stock valuations to go down before he starts buying stocks again. In other words, Warren Buffett is currently waiting for a stock market crash before he starts buying again. He’s just holding cash.

Now one of two things is going to happen here. Either Warren Buffett, largely regarded as one of the most successful investors in the world, is correct, and stock market valuations are too high and the market’s about to crash. Or he’s an idiot, and retail investors are correct, and stocks are going to keep going up.

But why is it that retail investors believe that stocks are going to continue to rise? Well, it all has to do ultimately with the economy and the Federal Reserve. US equity funds are drawing record inflows as investors bet on a soft landing. What is a soft landing? Well, as you know, inflation has been extremely high. And a soft landing is the bet that the Federal Reserve is going to be able to get inflation back down to 2% without causing a recession. Now, let’s be clear, that has never happened before in the history of the United States. If the Federal Reserve is able to pull off a soft landing, it will be the first time in the history of the United States that this has ever happened. Every single time in history that the Federal Reserve has raised interest rates, it is always, 100% of the time, caused a recession. But investors are currently betting that this time is different.

Now it’s true that the rate of inflation is slowing down. Consumer prices, or CPI, was only up 3.3% year-over-year back in May. But if you look at a chart of the rate of inflation, while it did slow down through about mid 2023, since then all it has done for the past year has been to go flat. Meaning inflation is no longer falling. Even the Federal Reserve’s 5% interest rates are not high enough to get inflation lower than 3.3%. So the market is betting that inflation is going to get below 3%, all the way down to 2%, but the data is just not showing that.

What about the economy avoiding a recession? Well, it’s true that the US added a much better than expected 272,000 jobs in May, but it’s important to understand that most of those jobs were part time jobs, not full time jobs. And we have seen the number of full time jobs continue to decline over the past few months. That is why, despite the US adding 272,000 jobs in May, the unemployment rate rose to 4%. The unemployment rate is rising as more and more people get laid off from their full time jobs. But the number of jobs created is going up as people who had full time jobs are now going out and getting 2 or 3 part time jobs to try to make up for their lost income from their lost full time job. This is why the unemployment rate is rising, even as the labor market appears to be strong.

In other words, this is a very early sign that a recession is on the horizon. We saw this exact same thing, with the number of part time jobs going up and the number of full time jobs going down, right before the 2008 financial crisis. Another sign that the economy is slowing down and approaching a recession is the fact that Q1 GDP slowed to just 1.3% as consumer spending slowed down significantly. So all signs are that the economy is slowing down and we are in fact about to enter a recession. Now, this is showing up in the stock market, despite the fact that the Nasdaq has reached a new all time high. As FOMO sets in around the mega-cap tech stocks, other stock market indexes like the Dow have flattened out and are no longer going up. It shows a crash is coming soon.

So how can a stock market crash make you a millionaire? Well, one thing you can do is to do what Warren Buffett is doing and to sell your mega-cap tech stocks that are up tremendously, take profits on those, and put your money into cash. But if you really want to make money as the market crashes, you need to buy ETFs that will go up as the market goes down. Of course, you can also make money with options as well. You could buy put options on the market, you could sell covered calls, or you could even get a little bit more complicated and sell credit call spreads. There’s a lot of ways to make money with options that can actually make you even more money than an inverse ETF can make you.

And one of the most successful option traders in the world, Ace of Trades, who has a 75% win rate and an average profit per trade of 84%, is starting a new Small Account Challenge on Monday, where he plans to turn $2,000 into $10,000 within the next 1 to 3 months. Ace has a 90% success rate on his Small Account Challenges. If you want to join Ace of Trades and get all of his trade alerts and copy his trades for the Small Account Challenge, I encourage you to join him in the Stock Dads discord. It’s not too late. All you have to do is join the Stock Dads discord by Monday. You can join that discord here. For those of you who are wondering, Ace is a day trader. He makes the majority of his trades between 8:30 a.m. and 10:00 a.m., Monday through Friday, Eastern time, as the market is open. He generally trades for the first hour and a half to two hours, and then he’s done for the day. If that’s something that you want to follow along, copy with, make sure you jump into the Stock Dads discord before he starts the Small Account Challenge on Monday.

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