So while everybody else is talking about the Coronavirus, what we do on this channel, we focus about the numbers and the charts, specifically the 13 market moves numbers that oftentimes precisely predict the move before it actually happens.
So I'm going to walk you through specifically how this particular sequence in the 13 market moves actually helped us nail the drop that has taken place today, guys.
And another thing that is even more important for you, depending on the time you're actually watching this video, is what will actually happen over the course of the next couple of days that could position you to know the specifics on how to trade this market in the next 72 hours.
Now this video is going to be highly valuable if you are an active trader.
So here it is.
I'm going to walk you through some charts. I'm going to walk you through some historical analogs to show you guys exactly what you should be expecting in the next 72 hours of trading.
So apparently 7-7-12-12-7 on first sight may appear like it's a nice cozy little bullish sequence going on here, but indeed it is highly bearish and you would have known that if you did two things.
Number one, if you would have taken the 13 Marks Move Formula course, and number two, if you were subscribed to our daily videos and alerts.
So this sequence was actually shared with our 13 marks of daily analysis video subscribers. And this particular sequence, guys, right here, as bullish as it looks, it actually points to a three-day lower in the market.
Now, this is not all you need to know, clearly, in order to trade this, so we're going to look at specific sectors.
I'm going to show you specific charts showing you detailed comparison, literally even describing the point move that certain stocks can make.
So pay very close attention.
So here's the deal, opposed to everyone talking about the drop today on February the 20th after it happened, we actually warn our paying members that get the alerts about this drop before it actually happened.
Here, specifically, two days in a row, we've been on it. February 19th, okay, yesterday, guys, we're talking about how this level of 3392, start buying puts.
Monitoring the VIX and all the behaviors, AAPL, LRCX, TSLA, BKNG, puts, puts. All that stuff was going on, giving plenty of opportunities for you to enter this situation right here.
That 3392, this is when the alerts were going out, and specifically, another alert went right here, 11 minutes before this drop happened.
So if you're a day trader, swing trader, guys, these were some phenomenal opportunities because the market looked highly, highly bullish.
It did only temporarily went a few points higher.
Now this happened after hours, so you know if you're trading options, and that's exactly what we're doing in this channel, we trade weekly options, guys, this would have had no impact whatsoever.
So we pretty much nailed the top again.
Now on February 19th, when we send out these alerts, guys, get very specific.
So specifically for AAPL price, where we come in at the alert, look at the timing of this. It was 11:33 AM when AAPL was trading at 324.20.
TSLA was trading at 941.8.
BKNG was trading at 1970.
LRCX was trading at 336.36.
And clearly when we made the attempt to break that 3392 the second time, we're paying attention to the VIX and VIX was saying, "Hell, no." So we said, "Add some more damn puts."
More alerts were sent out. "Hey, TSLA can't hold this double top at 940. Buy puts, buy puts."
And clearly there's no way you could have missed these trades if you were subscribing.
Now the only way you could have missed them, if you are maybe a subscriber to this channel, but you're not a subscriber to any of our services.
And if you'd like to know more about that, you can click the link below to take action and rock so you can have an awesome year trading.
But AAPL, so this is when the alert was sent out, right? Just a few cents off the top. This is the alert. This is what happens to AAPL after that. This is the alert in TSLA, alert right here. $3 within the top. Another alert, another alert. Boom. Okay, guys, you've got to understand. This drop right here in 900 strike puts, the guys have started buying them right here. I mean, they're up sixfold by the time the stock gets right here. So when we're sending the alert, these 900 strike puts, they were priced about eight, nine bucks and they were going five, six times of that by the time we... But then we got this move today.
LRCX, guys, this is the time of the alert. Yes. Sometimes the alerts, they're not going to be 100 precise. Check this out. After we sent the alert, yes, the stock still does move higher, another dollar and 20 cents. Jesus Christ, sure, I hope you had enough fucking patience to stay in this trade because this is what happened next. February 19th, more alerts about puts. Okay, a little lower [inaudible 00:05:52] 3394. Guys, February 20th when the market opens, guess what? Okay, we specifically say right when TSLA is actually going higher, "Buy some more TSLA puts," right before the drop comes in. Some other trades, Wix puts, guys, these were three, four hundred percenters right here.
Okay. EPAM, guys, three, four... Actually this one, closer to 500%. Okay, Domino's, when we were trading, moved 11 bucks in just three seconds. Lower, quick. I mean, can you imagine getting into the trade two minutes later? You double your money. I mean guys, this is freaking insane. So this is what specifically went out today on February 20th, early in the day. Look at the time of this, right? 10:21 we say, "$50 move lower in TSLA could happen at any moment." And then we follow up at 10:49 AM we said specifically, "This move lower can happen in the next 11 minutes." By 11:02 AM we send that out. When? At 10:49 AM. 10:49 AM is when we said buy more puts. Look, we said SPY puts, QQQ puts, AAPL, 225, 220 puts. Right before what? We gave you a warning. Exactly. 13 minutes. 13 minutes before what? Before this happens. Today.
Now, notice nobody was telling you about this in the news. If you're watching CNBC on Bloomberg, nobody was going out there and saying, "Hey guys, in about 13 minutes, get ready. The market is going to drop off by a few hundred points." No. What were they saying? They were saying about this, they were talking about this, only after this move happened. All of a sudden you have headlines surfacing, "Oh man, what's going on with the market? Nobody can figure this shit out." So the question is how did we figure it out and how do we keep figuring stuff like this out before it actually happens? I'm going to give you a very specific answer.
So it's using our proprietary historic analog and no, in some prior videos I've shown you some historic analogs, guys, where I look at certain instances where the market crashed in the past and we analyze this and we try to overlay it to the current market conditions. The historic analog I'm talking about right here is our own proprietary analog of 13 market moves, which you cannot get anywhere else. You can only get it here. And in order to really utilize it, you got to understand the 13 marks formula. So with that said, how did you nail this? Tell us the real deal. What's going on here?
So here's the real deal, guys. Look at this sequence. In June 2018 it was a sequence 7-12-12-12-7. Now for those of you that know the 13 market moves formula, guys, you should go review this chapter where we go in detail about these 12 moves and sevens and stuff. But even if you don't know nothing about the 13 marks move formula, just for the purpose of this video, trying to make the most of it, you should understand that 13 marks move formula gives you 13 probabilities and variations on certain chart patterns that a market is going to create each day. Understanding the sequences and how they fall in together over a number of days, two, three, five days, could actually give you a higher probability of the next outcome.
So understanding this sequence, actually we've had a number of instances where the sequence resulted in a bearish move lower. So basically you got these green moves that result in a red move, red move, red move. So basically the sequence we noticed when the sequence was completed. Now understand this is not the dates for this month. This is not February we're looking at, right? This is the historic data from 13 market moves in June 2018. So when you're looking at this, you've got 7-12-12-12-7 points to a potential three-day move lower, in other words, red days where the markets are losing some traction.
Now, this is not just everything, right? Besides the numbers, actually you got to pay attention to the VIX and a few other factors. So notice where the VIX is. We match the VIX environment, right? VIX back in June was trending between 12.1-15.2, 13-14 area, right? These numbers on the VIX also matched the current conditions in the current market environment. So when we put all this stuff together and we analyze these days and we're taking a closer look at the chart, which I'm going to show you some powerful stuff here in just a second, guys. So when we combine all that stuff, this is how we nailed that move yesterday. And surprisingly, even the dates almost match in this, which is freaking insane, right? So this is the sequence we've go.t. Now, in February 2020, basically got 7-7-12-12-7. So almost identical sequence, right? So instead of a move 12 right here, we're actually getting a 7.
So 7-7-12-12-7 and resulting in a move 3 today, guys, and look at where the VIX, 14.84-17.21-15.33. Guys, this is freaking insane. It matches. Almost every little detail is matched here. And this is actually scary because this is insanely accurate. This is how we're able to predict this drop 11 minutes before it freaking happens. Understand what a move three is, okay, and when to actually come in and to add to your position or to really pull the trigger is what's really going to make your money with trading weekly options. So understand this, we analyze the historic data from 13 market moves, find the same VIX environment, laid it over onto current condition, mashed it with the current move. This is how we're able to basically nail that move 100%.
So I'm going to show you again in just a second some of the things that you should really know, based off this historic match right here, of what could be actually taking place tomorrow on Friday, which is going to be the 21st, and the 24th, which is going to be Monday. Okay. And you may be shocked to find out what could actually happen Monday. So pay very close attention.
But first, guys, in the last video, I promise I was going to give you an answer to this question at the end of the video. Guys, if you're really trying to learn, make sure you finish these videos till the end, because I don't know, if you're a trader and you really want to make some money in the market, I mean you wouldn't do some stupid... Like if you're a doctor and you're doing a surgery and you're trying to learn how to learn, let's say, a new surgery, you wouldn't just learn how to do half of the surgery, right? I mean that wouldn't be an effective strategy. So to me, that would be the equivalent of somebody starting the video, not finishing until the end, and missing some crucial details that could prevent you from actually taking a really awesome trait.
So make sure you finish these videos till the end if you're really trying to learn, or if this stuff is boring, guys, hey, no problem. Just find another channel to watch. Unsubscribe. We're actually trying to decrease the number of the subscribers we've got so we can only pop to the ones that are really trying to learn and make something out of this information. So basically the question that was proposed last time in the last video, we noticed that some stocks that are reporting poor earnings, they create these black candles and reversals.
The more interesting observation was, okay, not only do we have bad companies reversion on bad earnings, but we're also noticing a trait recently where good companies are reversion on good earnings such as Shopify. And this is why even the company ends up positive that day of the earnings announcement. There was a lot more money made on the put side rather than the call side, and understanding that is critical if you're a day trader and you're trading options. Okay? So the answer to this question, what does this really mean? So it's not just bad companies that are reversion. Notice that typical reaction to a bad company would be just a straight drop, but first on bad reports, the companies actually go higher stock-price-wise and then they reverse, and then the good reports are doing the same thing.
Basically guys, the simple answer, put it in a nutshell, it's a freaking market top. That's what that means. So when you see... And I didn't have a ton of time to insert a ton of charts here because I was trying to explain something else, but when you see good companies reporting good earnings and you put them on a daily chart and they look like this, that signifies a market top, guys. And just some few questions for your thought and analysis is why is gold at eight-year highs while stock market is at all-time highs?
Basically we got a solid case of a divergence here. Gold shouldn't be trading at eight-year highs while the market is rocketing to the moon practically, right? So considering that gold is breaking out daily, setting new highs, while the market is pretty much doing the same, this divergence is not going to last and we believe it's going to resolve into the market, actually come to reality in stock prices adjusting lower, and not the other way around. So this is a worthy observation that we're probably going to discuss in greater detail in some of the upcoming videos.
Now contrary to the current belief in the markets that more stimulus actually equals to higher stock prices, we believe exactly the opposite because of the law of diminishing marginal utility. So this stimulus now is not an old thing, and it's been utilized and over-utilized, and at this point it's abused and it's going to have less and less impact on the market in. And I think that's exactly what the market is going to do. It's going to come to a realization that it doesn't matter how big a stimulus channel is putting on, the results of this stimulus, oftentimes, number one, they're not seen immediately. There is always a lag in the stimulus and the positive impact it's supposed to have on the economy. But this time, stimulus... When stimulus was used for the first time, it was effective. Multiple times worldwide, it's been effective.
But now that everybody's using it and abusing it, it's going to have less and less impact on the economy. We're to the point where we can't lower rates. And this could be the reason why, by the way, some of the banking stocks could literally see some strong, strong headwinds going on in the next few months here. So don't expect Goldman Sachs to be trading at this level of 230s. I mean, it could drop back below 200-level because there's some crazy stuff that could be going on. So more on that in some new videos, guys.
And another food for thought here, guys, is why is Warren Buffett not buying anything? Okay, so these investors that complaining, "Why isn't he buying more deals?" And he's sitting on the biggest cash pile that just continues to grow. So why is Warren Buffett not buying? Well, the answer is quite simple. He's not buying because he doesn't buy high and sell low. So I mean, as you noticed, Warren Buffett is not the one out there doing the cheerleading part saying, "Hey, TSLA, 7,000. I'm buying right here at eight, nine hundred dollars. Heck yeah, put me in." Okay, you don't see him do stupid shit like that. Okay? But all the other cheerleaders on Wall Street, they're the ones that are doing that, ignoring the man who knows better what the fuck needs to be done. So if he's not buying, that tells you, maybe it's not a good time to buy, because maybe he's collecting the cash in the expectation of a drop. So then he can really utilize this cash pile that he's been growing. Instead of buying companies now, he can buy them at a much better price here in not-so-distant future.
Okay. So what does the current formula sequence and historic analog of the 13 market moves can tell us about the market action on Friday and Monday? So just to refresh this again, so five bullish days, bullish sequence resolves in three bearish days. Okay, here's what we got. If we go back into history and study specifically what happened, right? I'm just showing you this slide, guys, so you can understand that... A couple of charts, I'm going to show you the historic chart, so when we're looking at dates of 21st, 22nd they pertained to June 2018. So 21st was a Thursday, 22nd was a Friday, 25th was a Monday on June 2018. This 25th date in June 2018 would be an equivalent of current Monday, February 24th. So I'm about to show you some charts and try to overlay them and make some comparisons. Make sure you understand that the 25th is this day that we're trying to compare to the 24th, which is coming up on Monday, February the 24th 2020.
Okay, so here's what happened on these dates. Basically, June 21st, June 22nd, June 25th, okay. So if we were to lay it over, okay, so this is today, February 20th would be the equivalent of June 21st. As you can see, on Friday, which was at the time June 22nd, the market didn't drop a whole lot, so the move on Thursday in the market, this red candle represents daily action in the market, was a greater move then on Friday. So don't expect a huge move Friday, February the 21st. Do expect a bearish move, meaning that at some point something can go lower, bounce, possibly intraday, and move lower, but don't expect a huge, huge crash. Now the crash comes in on Monday where the market gap's down, which would be the equivalent of June 25th 2018 that would coincide with February 24th, 2020, where you actually get a 50 point drop in S&P representing easily about a 2% move.
So this is how it looked exactly on Monday 25th 2018, S&P minus 56 points. Now that represented 2%. So if we go based off the percentage points, now that S&P is actually trading at 3380, roughly, 3370, we can actually see even a larger numerical value. I mean we could see maybe a 60 or 70 point move in S&P. And so when this particular move right here guys. This was just the intraday move on Monday, June the 25th. So this was one day. This does not include what we can get on the 21st of February, Friday. Okay? So here's another situation comparing the VIX that was developing. As you can see the VIX was between 14 and 17. Take a look at where the VIX is today, tomorrow. Guys, check out the VIX environment. It's going to match these numbers. It's going to be right around this range. So we've got a match on the VIX.
Microsoft. You guys know we don't trade Microsoft, we've got better stocks for trading options on. So the reason I've got the Microsoft chart here is because this is what Microsoft was doing on June 25th 2018. Basically this would be the equivalent of me saying, "Hey, this is a representation of a tech sector, and tech sector is about to do this." So as you can see, at the time, the numbers are different with Microsoft, right? $100, $102 was the all-time high at the time. So the numbers actually change. But what I want you to focus on is that the chart does not change. So what we really want to follow is just the pattern of the chart. So Microsoft at that point tops out at 102. This is your move on Friday June 22nd. This is your move on Monday June 25th. Okay, keep this in mind and try to lay it over this... Man, I forgot to insert this slide. Basically, if you pull up the chart of Microsoft for today, you will see identical match on that chart.
Amazon, guys, at the time on June 25th, this is what it did. From 1,744 bucks, which was the high, it basically made this $100 move lower. Here's basically how it looks on a daily chart. So this hundred-point move lower. So this is the 21st, 22nd, 25th. Boom, boom, boom. You got a drop from 1760 all the way to 1640, so about $100, $120 move lower within that timeframe. And if we were to lay it over right now, we can easily still have another 83-point drop in Amazon between February 21st and February 24th. So from here is where we closed today, February 20th, guys, there's plenty more room for Amazon to actually go lower.
BKNG, if we were to analyze that, 625 was a big move. About a hundred dollar move in BKNG just that day alone. 627, interesting, it continued dropping off. So that is easily about a $130 move. Considering where BKNG is right now, guys, we can still get from current level of 1970, okay, 1970, 1980, we can easily get another $100, $130 move lower in BKNG in the next couple of days here.
And if we take a look at Goldman Sachs, I know $9 drop is not impressive, but of course you got to look at this on percentage basis. You also got to look at what it represents, which to us it represents, if these financial stocks begin to sell off along with the technology sector, I mean, the market could easily drop by 10%. That's what we've been talking about, right? So this chart highly resembles the chart that Goldman Sachs... And even the trading levels. And so this $9 drop basically happens from where? From 231 to 221. Is it a coincidence or what? This is Goldman Sachs today, February 20th. It trades at 232, 231. Okay, so we think it can easily drop to 225, 221. Okay. This is insane that we even got the same price points. Okay?
Now BABA, guys, same thing. Okay. Within those two days it's got a 15-point drop, so we can get an the equivalent of that. I didn't have time to insert the BABA chart here, but you understand how to do this now, so you can use this strategy and calculate some of the other stock. Take that older time-frame, overlay it to the current one, look at the percentage drop, target about the same percentage drop.
So the importance of this analysis is we've seen too many similarities, right? So the technology sector that we have been talking about, that can easily drop by a much larger amount than the rest of the market. Okay? That is confirmed on this timeframe. The financials are confirmed on this timeframe. Gold is also confirmed in this timeframe and VIX. In other words, there's just too much evidence here. It's really overwhelming. And the matches are almost precise and almost perfect. So I don't think as a trader anybody should be ignoring this. This is why I'm taking my time to record this for you guys.
So a big move in gold. As you can see, gold had very bullish momentum going on in June. So that's what this chart is showing you right here. And clearly gold recently had a very bullish momentum as well. So when we compare all these charts and look at some other market characteristics... So we've got similar characteristics in gold, guys, right here, breaking 1620 today on February 20th. Awesome stuff. Okay? And again, it shouldn't be happening if the market is trading all-time highs.
VIX environment... One point from this chart to take is this is where VIX was then in June 2018, so between 13 and 20. A similar thing here, between 13 and 20, but don't rule out the fact that we're going to actually revisit that 20 level on the VIX by Monday, February the 24th.
Okay. Actually here I've got some really cool stuff coming up for you. So what caused the crash, the crash that no one remembers on Black Monday? And it's not the Black Monday you're thinking about, but August 31st, 1998. If you're interested to know how this Black Monday on August 31st 1998 was forgotten, what has caused it, I'm putting an entire video together for you. It's going to be a lengthy one showing you a ton of charts, a ton of historic comparisons, and more importantly the video is going to show you what are some of the similarities we're observing now that could cause the market to do certain things here in the next 30 days to 60 days. So a very important video if you're trying to learn charts and understand things, guys, so make sure if you're new here you subscribe so you wouldn't miss out on this.
Hey guys, if you are trying to learn more, if you have any questions about anything that was just discussed, if you have any questions about the courses, our services, programs, make sure you go to this website right here, tradingoptionslive.com. Now we've got two locations where you can click to schedule a call. Okay? It's a 100% free call. You can ask any questions about stock market, trading, whatever questions you have. We're here to answer them for you. So schedule this free call by clicking right here, or you can also schedule a call right here, guys. So very simple. Take advantage of this.
Guys, you got to get clarity before you go live putting these trades on so if there's still some concerns or questions or whatnot, this is your chance to do it this weekend. Make sure you schedule a call. We will get a live person on the phone with you. So take advantage of this, because at times we simply have not been able to answer the amount of phone calls that have been scheduled, but now we've got a few extra people that are helping us out with this. So I will guarantee that your questions will be answered. So take action, schedule a call, get your questions answered so you can become a better trader this year. Let's roll. I'll catch you guys on the next trade soon.