 Because there's no guarantee if you're an investor that your decline, your initial decline will last a month or two months and three months. Keep this in mind, I've traded several bear markets for less than three years. Welcome to Access a Trader, the number one community for those who are committed to taking control of their trading in order to achieve success, profitability, and longevity. Thank you for joining us. Here's Dan Shapiro to help you find your edge, master your process, and own your future. Hey guys, good morning everybody. Welcome to another edition of the AccessaTrader.com. We can update show hope everybody is well. It is eight o'clock in the morning, actually almost a little closer to 8.30. It is Sunday morning and I am doing this update crazy early because again, well, if you've been following these updates, you know how crazy my kids schedule is with basketball. I got two different basketball tournaments today in two different towns. So this is literally the only time I have a chance to kind of share my thoughts. So let's talk about the market. So there's an old saying and it says April showers brings May flowers. I think everybody's heard that before and if you apply that into what happened in the month of April, it's pretty significant, right? 2008, if you guys remember, that was the knee deep crosshairs of the financial crisis. We didn't know if our financial system was going to survive. You had companies going to zero, you know, Bear Stearns. They talked about pillars of Wall Street for years and years, Bear Stearns, Lehman Brothers, so and so, so forth and so on. And that was the worst month of April in historical history, right? In historical history. That even makes sense too early in the morning. And what we saw, what we saw for 2022 April was the worst April ever, basically, since 2008. And that shows you the historical significance of selling. We were basically in a historical mess almost Armageddon of our whole financial universe, right? And here we are, you know, here we are years later, 14 years later, and we trumped that. So just to give you kind of historical significance, how bad price action was on the NASDAQ for investors. But here was kind of, you know, here was kind of the more important part of where we are now is where all the warning signals were just three weeks ago. Again, if you've been watching these videos, even for the last three weeks, you saw how significant that 50 day moving average was. And as soon as we closed below the 50 day moving average, it started a pretty aggressive waterfall effect. And a lot of people, you know, there's an old age discussion, fundamental analysis versus technical analysis. And I get it, if a company's great, a company's great, right? Like, like Jeff Bezos always said, even during, even during the dot com crash, when the stock was just, you know, just imploding like everything else, he knew that his business model was strong, because he saw the metrics, right? He saw the metrics and how the business was growing. And ultimately, the metrics of the individual company kind of caught up to a rebound in the equities market. We'll get the Amazon obviously in a second as well. But the most important part is that discussion, fundamental analysis versus technical analysis. In my opinion is it's very, very important, obviously, to invest in great companies, if you are an investor, I'm a trader. I trade both sides of the market. I look at data, I look at sentiment. That's the most important thing for me. But if you are a longer term trader, excuse me, an investor in the market, I believe investing in great companies phenomenal, you know, your Microsofts, your Apples, your Googles of the world, your Amazons of the world. But there is a very, very important area called technical analysis that gives you a guide how to enter these trades safely. And remember, you know, we've been, this is just a four month decline. That's all it is, right? Four month decline and in between we had a really aggressive three week rally. And again, the significance, right, the common denominator, the 50 day moving average, once it reclaimed, it continued, once it lost, it started to implode again. But I do believe that if you are an investor, no matter how great a company is, for your stock to go higher, right, it's like somebody turning around and telling me, hey, I think Tesla goes to 1500, right? 1500, I believe, and I love Tesla. Tesla's been a phenomenal trader. And somebody turns around to me and says, hey, Dan, I believe in the next five years, Tesla's going to be at $1,500. Right? And I said, that's great. I believe in Tesla. I love Tesla. I think Tesla is a cold stock. But my biggest problem is, and my biggest counter kind of conversation to I'm just using Tesla as an example, is, well, this has only been four months of a decline, right? And now we're not talking about the war in the Ukraine. It's out there, but we're not talking about it, right? It was a big significant, a big catalyst of a lot of declines that we've seen. We're not talking about COVID anymore, realistically, right? We see the numbers and you're kind of glancing it from a distance, but nobody's really paying attention to COVID and the Ukraine like we did when they were really in the crosshairs, right? Right when they were right in front of us every single second of the day, because Wall Street and Main Street, we learned to live with it, okay? So when you get to technical analysis, it is a guide, right? And there was weakness before Ukraine, and now there's weakness after Ukraine. And now if your argument is Tesla will be at $1,500 one day, shouldn't it at least reclaim back the 50-day moving average? Right? Think about that. Because there's no guarantee if you're an investor that your decline, your initial decline will last a month or two months and three months. Keep this in mind. I've traded several bear markets that lasted for three years, right? For three years. This isn't, you know, this isn't, if you're having, you know, if you're having mental issues after month three, after month four, think about what a lot of people, a lot of us went through and, you know, for three, two, three years of non-stop selling, right? And you're going to have it again, like we spoke about in every single video, you're going to have pockets of strength, okay? That's always the case. But if you're an investor, shouldn't you at least wait till your stock gets above the 50-day moving average? So for example, Tesla got rejected at 935 on Friday, right? That's the 50-day moving average. And you can see here what the significance of the 50-day moving average, when it reclaimed the 50-day moving average, it went on a really, really big run. So Friday, it got rejected off the 50-day moving average. And again, there is no guarantee that Tesla will reclaim the 50-day moving average again anytime in your term. Again, I'm just using Tesla as an example. So my point is, if you are a fundamental trader, shouldn't you at least wait till the technicals are giving you a go? It's still the same company, right? So if you believe Tesla is going to be at 1500 one day, shouldn't it get above the 50-day moving average first, right? It only makes sense because there's no guarantee. And if this market continues to pull, and we'll get to the significance of where we are right now, you could see Tesla, and again, I'm just using Tesla as an example. I know somebody's out there, shut up, dad, it's going to 2,000. Okay, relax, right? Everything's getting pulled, right? Why does Tesla have to be above the 50-day tomorrow? Why can it be a year from now? But a year from now, why can't the stock go to 400? These are just honest conversations that every single investor and trader always have to have with themselves, okay? There's no guarantee your stock, when you want to, your stock, when you need to, is going to reclaim macro levels. And for a stock to go higher, and it doesn't make a difference what stock you're talking about, for it to get to where you think it's going to go, it has to reclaim technical levels. So yes, do I believe fundamental analysis, investing in great companies is phenomenal? Absolutely, okay? But I do believe, and I believe strongly, that for them to go where you need them to go, or want them to go, or need them to go, or want them to go, or need them to go, want them to go, they have to. There's no debate. They have to reclaim back daily supply, and if they don't, they continue to go lower. Don't believe me? Well, again, let's look at the cues, and this is exactly what we're talking about. So here's the last four months, we've been talking about this nonstop, we've been sell bias nonstop, we've been talking about the aggressive nature of even the worst markets will always have sequences, or multiple sequences of days that there is representing strength, but the common denominator is still the same. We're below, right? We're below the 50-day moving average. We've been below the 50-day moving average. And this week, when you look at some of the really stagnant losses, I mean, really, really eye-popping losses in the names that are bull market darlings, right? Cult stocks, your Amazons in the world, right? They missed their earnings, the Googles of the world, right? They missed their earnings. Microsoft had a pretty good quarter, right? Pretty good quarter, and everything was great. But guess what? Friday's candle took out the whole quarter, and you could turn around, you know, Apple, you know, nothing great, right? Apple, nothing great as well. And you could turn around and say, well, Facebook did great, right? Facebook had a great quarter. There was absolute, guys, when I'm telling you, there was absolutely, the bar for Tesla was, I mean, the bar for Facebook was so low. Look where Facebook was, right? Look where Facebook was. This is just going back to, you know, going back to what, July, right? July of 2021, the stock is cut in half. So the bar for earnings have been very, very low. Even Netflix, they had the worst, the lowest bar of all, right? The lowest bar of all. Like everybody knew they were going to have a bad quarter, and they still couldn't, you know, outperform. So, you know, listen, there's obviously nothing has changed, right? Nothing materialistically has changed. If you go back to the first time we lost the 50-day moving average, you'll notice the same thing, right? Big declines, short squeeze into supply, rejection, big declines, short squeeze into supply, new lows, big declines, finally reclaim the 50-day moving average, got rejected at supply again, lost the 50-day moving average, and here we are, right? Here we are, and this is the lowest close, the absolute lowest close in this whole formation. And again, a lot of people, I get it, a lot of people are new to trading, are new to the market, they're very emotional right now. There's nothing you can do, right? The faster you get your emotional levels under control, the faster you start looking at the market from kind of where it is versus where you want it to be, the faster you'll start, you know, kind of let go emotionally, letting everything kind of play out organically. And it sucks if you're a long-bias trader. It really does, okay? And you feel helpless, and it feels like the end of the world and all. But again, this is nothing new. If you've been trading, even if you've been trading, forget about going back to 9-11, right? Even if you've been trading since 2007, 2009, you know what I'm saying, right? Again, there is no guarantees that this market will wake up at any given time. So you have to trade on both sides of the market. Again, I'm a bull by nature, okay? But I'm a realist at heart, okay? And as much as I love a bull market and I love and enjoy this mood, I have no problem with this move down as well. We've seen some phenomenal opportunities. We've seen stocks blow up on earnings, and two, three days later, they confirm their earnings lows and they go lower. And this is kind of how I want to segue into this up and coming week. So look at that. I just want to give you an example of what I'm talking about. And this is kind of like my focus this week. So one of the most, one of the better plays for generation to generation to generation of traders has been that stock that misses earnings and blows up. And we're just using Netflix, an example, it kind of rallies for a couple of days or maybe even goes sideways for a couple of days. And a lot of the new traders will turn around and be like, that's bullish. All the bad news is out, right? It's about to squeeze back. They're not buying time for the bulls. They're buying time for the bears. The longer a stock goes sideways, goes sideways or up a little bit. After an earnings blow up, there's a high probability eventually in the next few days, it's going to lose its earnings low and start its next leg down. And that's exactly what happened with Netflix, right? It put in its earnings low of 212. Once it lost that 212 on the close went all the way down to 185. Again, the bulls weren't buying time. The bears were buying time. They were slow playing the bull. So this is not a bullish setup. This is a bearish setup. Again, a company that loses their its earnings eventually will start losing its earnings low and starting this next leg up. ISRG turned out to be a pretty good trade for us. I was in this thing for four days or so. Again, here's a perfect example of a stock blowing up on earnings. It lost its earnings lows and it went from 251 all the way down to 235. Again, there's a next leg down starting. But again, it's the same thing over and over again. Bulls were sitting there and saying, well, that's it. The bad news is out. The bad news is not out. They're just resting, right? The bears are slow playing you. They're resting. That's exactly what's happening. So when you look at the next round of possible contenders, right, going into this week, you got Amazon, right? Maybe there'll be a dead cat bounce on Amazon at the end of the day. It's still Amazon. But once Amazon starts losing its earnings low in the next three, four days, this is going to start the next leg down. Look at Google. Same thing. These are the stocks I'm watching, right? Here's the earnings low. I'm actually watching this thing. You see these two lows back to back days? I'm not going to be waiting for the earnings low. This thing starts building below this bottom channel on Monday or Tuesday. I'm going to start shorting Google below the earnings low. But once it closes below the earnings lows, it's going to start its next leg down. Look at TDOC, right? You could take the whole Cathie wood thing out of it. Again, it doesn't really make a difference to me who's long, who's not long, whatever the case may be. It's the same thing. The stock blow up, right? Put it in the low. It had a little dead cat bounce, right? Cathie came on CMBC, compared it to the next Amazon, okay, whatever. More important is once it starts putting in its earnings low, right, it's going to start its next leg down. This thing shouldn't be trading in the 20s in the next several weeks. And also a name, new contenders, right? You could go through the whole list. Look at names, for example, like team, right? Look at team, right? Team is ready to go, right? Look at team. Look at a name like Verisign, right? Look at a name like Verisign. Verisign just blew up on earnings. What do you think? This is a bullish pattern? The bad news is out of the stock. It's ready to go. We're below the 50-day moving average on the Qs. The longest we stay below the 50-day moving average. None of these stocks are buying time to go up. They're buying time to go lower. So that's kind of the sequence that I'm kind of watching going into this week. Again, from the technical point of view, look, this is the lowest close in this whole formation. There's nothing bullish about it. At any time, can the market rally? And we see this, right? We see this every single week. You know, markets do rally. Again, the worst markets that I've ever traded always have dead cat bounces. It's not a question of one or two days of rallying. It's the whole big picture. If you look at the weekly view, right? If you look at the week, this is the weekly view. This is after a massive, massive rally. Look where we are visually. Is this bullish to you? Right? Again, this is not a question that I could answer for you. If you're looking at the market a little bit differently from the reality of the market, right? That's on you. But that's the whole point of being a trader versus being an investor. But if you saw this chart pattern, right? Well, we are seeing this chart pattern. You could say whatever you want to somebody else, your opinion, again, price action is price action. My opinion doesn't matter. Your opinion doesn't matter. The scoreboard is a scoreboard. And this is where the scoreboard is starting going into the new week. So obviously guys, look at where to sell by this environment. We have been for a very, very long time. It's super important. If you're an investor, again, maybe start to learn how to trade. Maybe start to learn how to utilize the downside of the market. There's some good opportunities. Or at least, what we've been talking about for weeks and weeks and weeks, that first close below the 50, you should have been hedging your portfolio. There's a video I made three weeks ago to say, hey, this is what's going to happen if we close below the 50 day moving average. This is not something we just woke up Sunday morning and said, hey, by the way, I can't believe it. Who could have seen this coming? That's why technical analysis versus fundamental analysis is apples to hand grenades. They're both important. But if you don't use technical analysis to support your fundamental view, you're always going to be upside down. So guys, I want to wish everybody a wonderful Sunday. I want you to stay blessed. I want you to stay healthy. And the most important thing is I want you to stay happy. Guys, God bless. Have an amazing Sunday. Have a great trading week. And with God's help, I'll see you all tomorrow. Take care.