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 Look Out Below the stock market is falling and there's no bottom in sight all three major indices are breaking records to the downside and it is an absolute bloodbath in this video I going to tell you just how bad it is why it might be happening and what you can do to protect yourself from the Carnage so let's get started a headline from yesterday stocks get clobbered as the NASDAQ plunges 4% the NASDAQ fell 4% in its worst day since 20 22 while The Benchmark S&P fell almost 3% the mag 7 are down over 800 billion

in market cap today this was yesterday during trading can we make it a cool trillion dollars a trillion dollars so I'm not sure if the mag 7 actually ended up off a full trillion dollars but it was pretty bad either way another headline the Trump base Euphoria has evaporated from the stock market so why is all of this happening just how bad is it well if you remember back on Election Day the stock market actually had the best single day following an election that it ever had look at this the post

elction day for history books the S&P 500 post it best postelection session ever look at this it was up over 2% it's never been that good ever of course plenty of down days following an election but the markets were really excited about Trump initially however if we look at what has happened all those gains have been erased so if we look at the S&P 500 go back to election day closed around 5782 you can see now we are significantly below that so in the four months since the election stocks

are down why such a dramatic turnaround everyone was excited about Trump stocks boomed now they're tanking it's not just the S&P we can take a look at the NASDAQ it's the same story we go to election day we were around 18,4 39 now we're down in the 17s significant significant decline same with the Dow again we go to election day 42 221 we're down in the 41s got a 41 handle there it's not looking good but there is one asset that is up I think you know what that is gold gold is up

since election day it was 2740 now we're up at 2893 so a significant gain about 5 a half% in four months so gold is on Pace to do about 177% in a year whereas all the major stock indices are on Pace to do zero or negative so not looking good uh the difference is night and day and also what happened in the markets yesterday a critical break the NASDAQ is already well below its 200 day moving average this is a huge huge shift the tech and consumer discretionary sectors appear to be driving the decline but I

expect the other parts of the market to follow suit just look how bad this chart is this is the S&P 500 you can see that it has been above its 200 day moving average pretty comfortably boom until yesterday we're below it we're breaking through this is not a good sign for a long-term shift in the stock market and yes after the markets closed yesterday we got this headline stocks tumble the most this year with recession warnings blaring the S&P 500 officially snaps its 200 day moving average streak that

started in 2023 it went 336 trading sessions above its support line until yesterday so look at this a pretty nice increase one of the largest on record and now we're back to zero right this is like we've gone this many days without a workplace accident well erase the board start over at zero we just had a major accident things are not looking good so why is this happening we have recession warnings blaring well there are a lot of rumors floating around that Trump might be trying to push the us into a

recession this sounds weird but there's some logic to it if you see things through his eyes so on Zero Hedge one month ago when we first realized just how much fat Elon musk's Doge was slashing from the government money laundering apparatus we made a controversial observation so much deep State laundered money was about to come out of the economy the US would enter a recession first in Washington DC and then across the US so a tweet here here's the bigger play at hand and here's why there is only token push back

to Doge if you cut enough spending right even if it's all grift and fraud doesn't really matter what it is you eventually get a recession guaranteed that's just how it happens so effectively this is the economy healing it has to go through a period of pain in order to build back better as they say so this is a chart from that same article this is really when it got out of control we look at debt and we look at GDP what happened well GDP is the green line which was Rising faster than debt and then it all

changed in the co era and the red line surpassed the green line debt got out of control and the previous administration probably should have addressed this I mean this is absolutely an emergency level of uh uh of a nightmare and they didn't so I think Trump and his team are recognizing that this is absolutely unsustainable they have to address it and the sooner they do it the more likely they can blame it on the previous administration you know that's politics for you so the treasury secretary Scott bessent said look there

is going to be a natural adjustment as we move away from public spending to private spending the market and the economy have become hooked become addicted to excessive government spending and there's going to be a detox period so he sort of priming the markets to expect a recession uh some kind of Correction in the stock market possibly a bare Market obviously uh and I think Trump and his team want to blame it on the Biden Administration whether it's Justified or not I think it goes back

way before that and interestingly at this time stock market sentiment is at crisis levels of negativity negativity so you can see here this erratic blue line is Market sentiment in the stock market and when it's down sentiment on stocks is really low and historically that happens after the S&P has already had a period of bearish activity declining prices and then Market sent bottoms and the index bottoms it turns around into a bull market and that's normally what happens so after a little

bare Market sentiment is low and the index turns around and that happened again a third time over here after a bare Market sentiment bottomed and the index turned around however right now we're getting crisis levels of negative sentiment towards stocks but we haven't just endured a bare Market in stocks so we may have just lost a quote unquote depend bottoming signal that's what's going on here it seems like there's a a state change in the system right this is like boiling liquid water it turns into gas

your model for how that liquid used to behave has to be thrown out of the window and now you have to use a model for how gases behave things are completely different now things are boiling uh what else do we have here we have S&P 500 forward PE ratios and subsequent 10year return returns okay what we're looking at here is the forward PE ratios across the bottom here and the expected returns you would get over the next 10 years based on those PE ratios that's the vertical axis where we

are now is up near 23 so that's this gray bar here so what would we expect the S&P to return over the next 10 years based on this forward PE ratio that we have now something in this cluster right here and you can see that this cluster of points is right around zero zero So based on the current PE ratios we would expect the S&P to return about zero per year for the next 10 years is that something you want do you want to return zero per year for the next 10 years I don't think so and that is why people

are rotating out of stocks into a safe haven like gold we have seen this before the Dow gold ratio the Dow of course being a proxy for stocks if we did the S&P gold ratio it would look very similar we just have a longer history here and as you can see the Dow outperforms when this line goes up and then gold outperforms when the line comes down and this repeats the asset classes take turns over decades the Dow outperforms and then it's gold and then it's the Dow and then it's gold again

and then it's Dow and now it's gold again and actually this chart should be updated this line should be should be down here below this line uh down around 14 and a halfs well below the 15 line so it seems like stocks have had their day in the Sun the market is tanking gold is booming capital is rotating out of stocks into gold the longer you wait the uh the worst it's going to be for you I want to end here in the spirit of daylight savings time which we had over the weekend from rep Thomas Massie don't

forget to set your debt clocks ahead $200 million that's how we go into debt each hour ouch thank you guys for watching see you in the next video