 Hey everyone, this is Dan with another episode of my crash protection videos. In the last few days, a lot of things happened related to Ukraine. The president of Russia, Vladimir Putin, announced on February 22 that Russia would recognize the two breakaway regions in Ukraine as independent states. And then the following day, he authorized military operations in eastern Ukraine. In response to that, the US, Germany and UK have imposed economic sanctions against Russia. More sanctions will likely be added. S&P already dropped 12% from its January peak. On top of all that, the US Federal Reserve Banks have been tapering QE. How much will the market drop in the next few weeks? And what should we do to protect our stock investments? I have lived through the 2000.com crash and every single market crash after that. And I posted a few YouTube videos in the last few months about crash protection. This is definitely the right time for me to talk about crash protection again, especially as related to the latest development in Ukraine and with regard to QE tapering. Let's get into the details. First, let's look at how the broad market has moved in the last couple of months. This is the chart showing SPY, which is the candlestick chart, and QQQ, which is the blue line. As you can see, SPY has dropped from its peak reach on January 4th. It has dropped almost 12%. Whereas QQQ has dropped more than 18%. And if you look at the latest trends of the two lines, they are definitely very bearish. The question is, how far will it drop before they recover? If you see the latest price as of February 23rd, the closing price for SPY is right at the previous low on January 24th. And actually, as of this morning, the market opened even lower. And therefore, QQQ has already dropped below the previous low that was reached around January 27th, 28th. Definitely a very bearish situation here. The situation in Ukraine started brewing in January with Russia deploying troops surrounding the eastern part of Ukraine. And then as of February 21st, Putin announced that Russia would recognize the two breakaway regions as independent states. As of yesterday, February 23rd, Putin announced special military operations in Ukraine. Definitely, the tension has been building and building. As of today, fighting already started. In response to all these, there have been sanctions imposed against Russia. Actually, even before the last few days, there had already been sanctions against Russia because of Russia's annexation of Crimea back in 2014. Although the sanctions up until a few days ago were limited to the Crimea region. As of a few days ago, the US issued sanctions on two major Russian banks and on the country's sovereign debt as well as several oligarchs close to Putin. Then Germany halted the Nord Stream 2 pipeline, which brings natural gas from Russia to Germany. In the meanwhile, the UK has announced the sanction of five Russian banks and three wealthy individuals linked to Moscow. I'm pretty sure there will be more sanctions announced in the next few days, which will definitely affect the stock market. That's why we need to look into protecting our stock investments. In the meanwhile, the Federal Reserve Banks, after their January 26 FOMC meeting, said that because of high inflation and low unemployment, now they want to reduce quantitative easing and bring the monthly increase of Fed assets eventually to zero in the next few months. Thus for February, they aim to increase the holdings of Treasury securities by $20 billion and the mortgage back securities by $10 billion a month. So the total is $30 billion of increase per month and that's still a big number, but compared to the number in less than six months ago, which was $120 billion a month, that is definitely a very significant reduction. And I mentioned more details in the video that I published on January 30. You can look it up in my YouTube channel. Eventually, the asset increase will be reduced to zero, which will be probably around April, May timeframe. And after that, the Fed might even start reducing the Fed assets. That means the Fed will be using liquidity in the marketplace, which will most likely bring down the stock market. In the market crash video I posted on January 30th, I did a deep dive analysis of what transpired between 1978 and 1984 when the Fed was aggressively trying to control inflation. Back then, the Fed allowed S&P to drop as much as 21% before they were able to bring the inflation rate from 5% to about 2.5%. In the meanwhile, the inflation rate did rise from 5% to 15% and the unemployment rate went from 5% up to 11%. Basically, there was a full-on recession. The Fed started to lower the interest rate after they achieved the inflation rate target and the economy covered. And the unemployment rate dropped down to about 7% as of 1984. The same thing could happen now, especially if the situation in Ukraine doesn't get any better. Then we have a combination of two major factors affecting the market. Number one, QE tapering and tightening of liquidity in the market. And number two, the buildup of tension in Ukraine and probably in the neighboring regions. We've got to get ready for that. I've been using Google Trends as a leading indicator to spot any imminent market corrections or market crashes. As of today around noon time, you can see the fear indicator, the red line, which is the Google search phrase stock market crash that really spiked up last night. And then it finally came down a little bit today. The blue line here is a bullish indicator, which is represented by the search phrase best stocks to buy. It's most likely that when additional sanctions are imposed against Russia, that the fear indicator, the red line will spike up again. I'll be monitoring Google Trends very diligently in the next few days. What are my strategies in light of what's been happening? First of all, I already saw some shares to lock in profits or to cut losses. I saw BioNTech shares, Moderna shares, ASML, AMD and Media, Royal Caribbean and TQQ. And I've been trading SQQQ to hedge against downturns. I will be monitoring SPY in terms of the daily 150 and 200 period exponential moving averages and the weekly 50 period exponential moving average and other key support resistance levels. I'll be doing the same as far as monitoring QQQ. I will definitely continue to monitor the situation in Ukraine. I will sell more long positions if critical support levels are breached. I will continue to monitor the Fed actions, Google Trends and the technical indicators, RSI, DMI and MACD. I will keep shares of stocks with good fundamentals such as Google, ASML, AMD and I've been trading TMV as well, which is the ETF index to the yield of the 20-year U.S. Treasury bill. And I've been buying and holding shares of energy stocks and recovery stocks such as ConocoPhillips, UCO, the oil ETF, UNG, the natural gas ETF, RCL, Royal Caribbean and LUV Southwest Airlines. I will continue to update my Twitter subscribers almost on a daily basis with regard to the latest news development as well as some of my trades. In the last few days, my portfolio looks like this. About 50 to 60 percent of my liquid assets, which include stocks, ETFs and cash, are actually in cash. I'm holding a lot of cash at this point. And up to 20 percent of my portfolio is in stocks with strong fundamentals. And up to 15 percent of my portfolio is in UNG, UCO, ConocoPhillips, XLE. These are energy-related stocks or ETFs. And also I hold GLD to go ETF and TMV, the interest rate-related ETF. Up to 15 percent of my portfolio will be reserved for swing trading with SQQ or TQQ because the market has been dropping the last few days of being trading mostly with SQQ. When would the market recover? First of all, if the Ukraine situation is resolved and when Russia withdraws its troops, maybe because Ukraine might recognize the independence of the two breakaway regions. Or if the tension in Ukraine continues to build up, but if the conflicts are just limited to a small region, then the market will generally recover within two to three months based on historical experiences. But this time around, the market slump might last longer because the sanctions imposed on Russia will also hurt the economy of the European Union, which will drag down the market in Europe. And it will have the ripple effect to the US stock market as well. Or when S&P has dropped close to 20 percent from its all-time high, then the Federal Reserve Banks might get worried about a potential major market crash and recession. Then the Federal Reserve Banks might inject liquidity into the market, create rebound artificially. How will we know that the market is starting to rebound? For that, I will be monitoring two technical indicators, DMI and MACD. So when the daily DMI and MACD indicators start turning bullish, it will probably then be a sign of a rebound. And of course, when the daily SPY and QQQ start making higher highs and higher lows, that will be also a very strong indication that the market is starting to recover. At this point, I'd like to suggest that you also subscribe to my Twitter account, which is DanMarketL. For example, on February 11th, I tweeted that I bought SQQQ again because I've been trading that. And then on February 14th, I said I sold my SQQQ at average 1.5 percent gain because at that point, the market was going up a little bit. And in meanwhile, I bought TMV shares. And then four days later, I bought more SQQQ because the market started to drop again. And then on February 22nd, I tweeted that I bought UNG, the natural gas ETF because of the tightening of tension in Ukraine. Again, I'd like to encourage you to click the like, subscribe and notification button if you like what you've seen so far. As usual, I very much welcome your comments, questions, and suggestions. I'd like to remind you that I'm not a financial advisor. I share my analyses and stock trading strategies for educational purposes only. If you want to buy or sell stocks, you should make your own decisions and you should definitely consult with your financial advisors before you do so. This wraps up my video for now. I will chat with you again in the next few days. In the meanwhile, I'd like to wish you the very best of luck with your financial investments.