Tariffs: A Bump Road

Daren:
[0:02] Well, this is a special episode of, well, On the Markets, I guess, because there's a lot to say about the markets, don't you think, Dan?

Dano:
[0:10] Yes, definitely. Welcome to On the Markets from Sonoma Wealth Advisors. There's one word that defines this week, this year so far, and it's tariffs. And this week, tariffs hit the market, so we're actually going to jump right in here. I'm joined by my co-host, Daren Blonski, CFP, Chris Sipes, CFP. They're the managing principals of our firm, Sonoma Wealth Advisors. Daren loves to look at graphs, but I'm not sure you're loving looking at this graph, Daren.

Daren:
[0:38] Yeah, this is a brutal one. And I'm going to explain what's going on right after this.

Music:
[0:43] Music

Daren:
[0:45] We'll.

Daren:
[1:14] See you next time. All right so what we're going to start off today is with the spy this is a special episode of watch the market close into a train wreck. So it's 12.56 p.m. Pacific. The market closes at 1 p.m. here in four minutes. And what we usually like to see on a Friday is a bounce in the market before the close. So we obviously had the surprise announcement that everybody gets tariffs on Thursday. And then, or I guess that was Wednesday. And then Thursday... I think the world was trying to recalibrate into Friday. China came out this morning and said, oh, we're going to slap 35% tariffs on the U.S. And all their goods coming into China. And that sent the market even lower into a spiral. So now there's a couple of lots going on here, but I think it's important to understand that typically.

Daren:
[2:16] Before any wars break out in history, when you look at wars, it always starts with the financial markets and they're spitting and spatting back and forth financially. And so we're going to all hope for cooler heads, but this is not the good look we're looking for. And what that's going to mean is that there's going to be some uncertainty for a while. And that uncertainty is going to create turmoil in the markets. That doesn't mean you should freak out. That doesn't mean that you should do anything with your portfolio. What it does mean is that it's probably in your best interest to find ways to minimize the stress in your life and looking at your portfolio every day is not one of them. So, What we're looking at here is the S&P 500.

Daren:
[3:02] Each one of these bars here represents 10 minutes in the market. We'll go down to the five-minute market. Every one of these little bars here represents five minutes in the market right now. It looked like we were going to get a ramp into the close at the 12 o'clock hour. Then in the last 20 minutes, that is getting dumped off. Why is that important? Why do I care? It's important to see what the general feeling of the market is going into the close. So typically big institutions, the traders that are generally running Wall Street per se, they're going to put their positions on where they want to be going into the weekend. So the close is always really important to watch as a signal of, okay, this is just a quick bounce or we're going in for a longer low and then maybe a bounce at that. So now we're switching into the phase of the market where we're entering into a bear market and an area where now we're looking for the low to happen. What I will say about this is whenever you have this kind of like just panic sell-off that's happening, everything's getting washed out the last couple of days, those moments tend not to last. Just like they tend not to last when they go straight up, they tend not to last when they go straight down.

Daren:
[4:17] And it's an opportunity for cooler heads to prevail, for people to relax in some degree, turn it off and wait for things to settle down. Because I think we will see a settling it down. At some point, all the politicians and all the power players in this world we live in, they don't want their portfolios getting blown up either. So they try to make peace with each other. But we're definitely in a moment of sell-off and significant sell-off. Reminiscent, Chris, unfortunately, of those COVID days, which is also making me feel very skeptical about this sell-off, right? Because like, yeah, I think tariffs are a big deal, but it's not like the world ended, right? Like you go out and drive on the roads and there's people moving and doing and growing, building and doing things all over the place. Yeah, there's some new realities possibly coming in, but it's not like the world just shut down like it did in COVID when there was literally nobody on the road. Remember those days when you could drive down Los Angeles and get through Los Angeles in 20 minutes because there was zero traffic? Yeah, I do. And that was COVID. This is not that moment.

Daren:
[5:23] And yet the market's behaving very much like it's the end of the world, which to me, when you get these kind of sell-offs like this, I get really skeptical that it's going to last.

Chris:
[5:33] Yeah, I agree. But or and, you know, for for any of those of you who have ever been in an argument with your spouse and things are heated, what's the worst possible thing that you can say to somebody in that situation? Why don't you just relax? Right. And so it's even though

Daren:
[5:53] That sounds like you've done that before.

Dano:
[5:56] Never yes never right

Chris:
[5:58] Well i mean it it's i know it's um it's advice that nobody wants to hear at a time like this right but i think you're right that you want to understand that usually the initial reaction of the market to things like this is usually the wrong it's an overreaction in general the market tends to overreact to these things um and you're right just like during covid what we're experiencing now is a panic sell-off. And I think the slides are going to, uh, to show you that. And historically this time could be different guys. You know, we, we, I mean, this could really be the end, but historically, when you look back, panic sell-offs, those were the, those were the times to be keeping your head to be real, to, to stay relaxed, to not make any rash decisions, not make any big decisions when you're under that kind of stress. And I think it's very important to understand from an investment standpoint, when you react under two different environments, I believe is going to show you whether you're going to be successful as an investor or not. Those two different environments are FOMO, which we saw a lot of last year, right? When your neighbor's getting rich off their tech stock or their good pick, right? That is a very difficult emotion to overcome.

Chris:
[7:27] But right behind it, or maybe even some cases, a harder emotion to overcome is fear and panic in days like this. But those two sides to the same coin, you can really mess up your investment portfolio by making decisions when you're under one of those two emotional states.

Dano:
[7:52] And Chris, I want to jump in here, too. We jumped right into the charts here to begin the show. But I wanted to clarify up front. First of all, it is April 4th, 2025. We need to say it's not April Fool's,

Daren:
[8:04] Right?

Dano:
[8:06] A lot of people were wondering if it was. But we need to say that up front as we're recording this. And the tone and the idea, the goal of today's episode is to talk through what we're seeing, try to keep things grounded and try to talk about, you know, probabilities, potential, what could be happening when nobody knows.

Dano:
[8:30] But it is not a horror show today. We're trying to provide information. That's the goal we're going for.

Daren:
[8:37] Not a horror show. That's great. All right. So let me just kind of break it down. So when we have big sell-offs like this, this is the SPY. So this is the S&P 500. It's generally what people think of when they think the market. You all often hear financial media talk about the Dow Jones as well. This is that part of when people say the market, that this is what they mean generally speaking or what they are thinking they mean. I'm not sure people always know what they mean when they say the market, and I think that's point one.

Daren:
[9:15] So what do you see on the chart, right? So you have this. This is the 2002, right before we had the 2002 market sell-off. Here, this started right in this moment on January. 2022. 2022. January 2022 was also bad for stocks, and it was a bad moment for bonds and started the worst bond market in history. And that's because interest rates really started moving up significantly. That was right after the Fed all of a sudden came clean and said, oh, we're going to actually have blind trust for all our stock portfolios now. We should have known that was the end of that market. And so for those who don't know what a blind stock portfolio is, there was one of the Federal Reserve presidents that got caught trading the markets. And then they all got out in December of that year and made some rule and then said, OK, and then the market sold. Sometimes you just got to laugh at the serendipity of it, right? And then so this was 2002. And then we found a bottom here. And then it ramped up to where we were. and our high was in February 19th of 2025.

Daren:
[10:27] If you go back and when you see these moments where you have a high and then it starts selling off significantly, you start looking for structure in the market that would suggest support. What do I mean by support? Where buyers would likely say, hey, I'm sitting on a lot of cash, but I'm willing to buy these at these prices. This just got cheaper. For smart investors in this moment, they're like, do I have extra cash available? What can I buy? Because everything I like just went on sale big time. And when it goes on sale that quickly, that can often mean it's going to bounce that quickly. And so if you go look, when you're looking at the market, what I'm starting to see here, where's the structure that's going to create support? And you can see, for example, when we had our 2022 low, this was the low right here. And that, hold on, let me mark that. So that's the low happened on October 14th, 2022. That was the low, right? It's incredibly hard to mark the low, but in retrospect, you can go back and say, oh, that makes sense. That was a low because look at all this structure way back in 2020 right here of a lot of back and forth. That means a lot of buyers are stepping in to support the market. And then when we traded down in 2022 here, that same area became support.

Daren:
[11:53] So something that can help us in these sell-offs, instead of just saying, oh my gosh, this is crazy, the world's going to end, taking that narrative and pushing it to the side and saying, okay, this is a market correction. This is very, very historically normal for markets. Our politicians have just been manufacturing markets so that they are not volatile.

Daren:
[12:14] And they've been doing that by pumping a ton of fiscal and monetary stimulus into the economic environment. So now we say, okay, we have sell-offs now. We have a big change in things happening with the economy. We have very powerful political parties fighting amongst each other, trying to figure out who's going to be in power, vying for power. There's a massive trade shift happening throughout the world. What happened on Wednesday is Trump came out and basically said, we're going to put tariffs on every country that has tariffs on us, at least 50% of what they are tariffing us. And that basically, in one false swoop, what it'll do is it'll bring a lot of countries that can't afford to to the table that will remove all our tariffs immediately. And we're already starting to see that with like Vietnam came in today.

Daren:
[13:10] And then you'll have other countries like China who say, fine, we'll fight back. And we're going to add 35% tariffs back at any U.S. goods. And then I guess it becomes a game of chicken. Who's going to capitulate first and what's the off-ramp becomes the question. So at some point there's an off-ramp, but the market magically, and it will happen this time, mark my words, I just don't know exactly where it will happen. But there'll be areas of support in the market. And so the first area I'm really starting to target, this area looks like there's going to be support here. For those not watching the visual, at 5.05 on the SPY, there's quite a bit of support. And we're just above it. So we could see some trading down into this area, into the 505, and that becomes a bottom.

Daren:
[13:59] If we don't get that and we don't get the support, the buyer stepping back in there, 458 is a very important support area in the market. If we get below 458, then I think we have to start talking about something different happening. A more prolonged sell-off, bat in the hatches kind of a moment for the economy and the market. And the reason is, you can see back in January of 2022, that was the high. So if this current low goes below that high, that becomes something more significant where we're talking about perhaps a long-term downturn in stocks versus just some kind of bounce, correction, resumption upward. So I would expect there to be support around the 500 mark for the SPY. And so right into the range we're in right now.

Daren:
[14:54] Maybe a little bit lower and if we miss that and we have more selling off, more gapping below next week, then I'm really looking at 450, 460 on the SPY. That's going to be an important area for support to hold. What that looks like from a zone standpoint if we were looking at this, you're really this whole area between kind of 440 to 460. I could see the market trading into there very easily and then moving up from there. But that sort of helps at least me when I'm thinking about the market. Okay, like what are we dealing with now? And where's that bottom going to be?

Daren:
[15:34] Those who have followed the show for a long time know that I talk about the rubber band idea and this idea that the market, when it moves really fast,

Daren:
[15:44] it snaps back really fast. And this market is moving way too fast right now and that makes me extremely skeptical, that this is going to hold for the long term um i think right now i'm in the camp personally that it's a buying opportunity that it's not a long-term downturn that doesn't mean that opinion won't change um but it's just happening too quickly it doesn't it doesn't pass the sniff test, All right, Chris, Chris.

Dano:
[16:14] I have something I want to, uh, Daren, I have, when we talk about a buying opportunity, I had something I wanted to throw in there to help conceptualize it because I think it's hard.

Daren:
[16:22] Is this the car you just put on? Yeah. And if you want me out of a car.

Dano:
[16:28] I think that it's hard to conceptualize when you're looking at SPOI, when you look at the S and B 500 to conceptualize someone stepping in and go, Ooh, I like it at that price. Cause it doesn't exist you're buying something that you can't put your hands on but chris who is a car guy if i showed you this honda civic type r which is 47 000 new if i said chris would you like to buy this car what would your answer be do you need a car do you want this car at 47 probably not

Chris:
[16:59] I don't think there's any moment

Daren:
[17:01] Where i'm buying that car with a spoiler like that.

Chris:
[17:04] Dan well it's just not my image i get your point but

Dano:
[17:09] Listen listen so what if i drop it to 15 000 would you want it no what if i dropped it to 4 000 would you want it

Chris:
[17:17] Right yes what of course if

Dano:
[17:20] This was 500 i

Daren:
[17:21] Don't know chris i don't see you driving that car either man.

Chris:
[17:23] No i would flip it i would sell it to somebody else or i get what dan's saying

Dano:
[17:28] Correct so how

Chris:
[17:30] Or how can you lose?

Daren:
[17:31] Okay, got it.

Dano:
[17:32] So, I mean, is it at 500 bucks, Daren, would you pick this up for 500 bucks if it was a new car? Right. So at a certain point, that price does hit a point where like, even if you didn't really want it, you're like, well, I mean, I could probably do this, this and this and this and this with it. I mean, if you can put it into a tangible mindset, that's essentially what's happening with when you're talking about support with S&P 500, right?

Daren:
[17:56] Yeah, I think that's a really good way to look at it, Dan.

Chris:
[17:58] And part of the reason I was so depressed at the end of last quarter, and we talked over and over about how overvalued a lot of the market was compared to where it's been historically. It's like you take that same Civic and try to sell it for $120,000, and people were buying it right and left. So I like your analogy, Dan. Yes, I would definitely buy that for $4,000. And find a way to get a honda odyssey so i can load all my children in there very old honda odyssey so that when smoothies get spilled etc i am not getting upset thanks

Dano:
[18:39] Daren sorry that just popped in my head

Daren:
[18:40] I i think that's a great analogy though and i think that's when we're talking about support and resistance um when it comes to um i have to remove your car before I can put Chris's very funny meme back up. Okay, so when we're talking about support and resistance, that's all that's really happening, right? At some point, something becomes so low. And I don't know why you picked this really ugly Honda Civic that's tricked out like a.

Dano:
[19:09] Street race car. Because it's something that neither of you would really want normally.

Daren:
[19:13] That's true. Are you saying that Chris and I are boring?

Dano:
[19:20] What do I say to my bosses? What do I say to my bosses? No, never, never, never.

Chris:
[19:27] Right. You're right. They say this in a lot of different investing areas, but most famously in the bond world, there's no bad bonds, only bad prices. I've heard Howard Marks say that a few times. And so that is very true. It's a very difficult concept for most investors to get because you look at a company. A lot of times these companies are great companies. They have a great story. You're using all of their products. So what is the price that you would pay for it? For a lot of people, it's like there's no price too high, right?

Dano:
[20:05] Because you have no concept of what a good price on a stock even means. Correct. Because it's not something you can hold. You don't know. I mean, you know the price of an Apple. You don't know the price of an Apple stock. Yes.

Chris:
[20:17] Yes. And that's where the fundamentals can matter sometimes. The technicals matter sometimes. Sometimes they both matter. Days like today where the fundamentals don't matter at all. Everybody's sold no matter what. The good stocks, the bad stocks. Yeah, that's a good point, Dan.

Daren:
[20:35] I'm i'm gonna put this back up but just just so i can prove how completely stupid today was, like you know i mean let's be real like it's just a total bloodbath and everything's selling look at what gold did today right yeah so like if you're really fearful of the world and how awful the world is and and gold are just selling their gold even gold is scared.

Chris:
[20:59] Yeah yeah the same thing happened during covid when people just sold everything right it was indiscriminate selling and that's how you know in my opinion like we've mentioned the word panic a few times um this feels panicky uh this this feels panicky so just be careful making big big decisions right now

Daren:
[21:19] Don't make big decisions now how's that don't even be careful just don't make them um all right but i will say chris bitcoin is up today bitcoin is up so finally maybe bitcoin is the new reserve currency after all.

Chris:
[21:36] Yeah so this meme put this in there this morning when you when i looked at the futures price um you see the futures gapping down again it's like just like during covet it's like wow Now, as soon as they made that announcement on the China tariffs, boom, market just exploded to the downside. And we've got the office memes, no question about it. I'm ready to get hurt again. Maybe this is going to apply again on Monday. We'll see.

Chris:
[22:05] Hopefully not, but we'll see. So this is from Bob Elliott at Unlimited Funds. And Bob here is showing, why is this a big deal? It's like, you know, part of me says, gosh, the market knew these tariffs were coming. We even called it Liberation Day. You know, everybody was expecting it. How is the market selling off so much?

Chris:
[22:30] Uh, in light of this, we knew it was coming. We knew what day it was coming and everything. The only possible explanation is the fact that it was way more and on way more countries than what the market expected. Um, and if you look at, uh, you know, this is probably the reason why this is the history of the, of the tariffs. So we've gone through periods of time when tariffs were much, much higher. Granted, most of those times when our tariffs were higher, We were basically an emerging market prior to becoming the world's superpower. And then you get Liberation Day announcements, which takes us back to basically around the Smoot-Hawley time period. So Bob says, Bob Elliott's quick take here, he says, Liberation Day announcement brings U.S. Tariffs to levels not seen since the Smoot-Hawley era. Rough estimate of about 1.2% drag to U.S. Growth if they persist before any retaliatory tariffs. So he had this chart posted before China announced their tariffs. He says approximately $300 billion a year revenue raise. So that would be a revenue raise to the U.S. government. He says Canada and Mexico outcome better than expected, Europe and Japan worse. Um so so in a lot of ways the market was caught off guard which is all the only way you can kind of explain the fact that we saw the plunge that we have over the last couple days and

Dano:
[23:59] In this graph the liberation day announcement that red dot is showing where it is now because the line doesn't actually go up there so yes that's showing where it is now and it's that the other line is pointing back to this is basically the same tariff level as 1930 or whatever

Chris:
[24:13] Yes exactly and so prior to that you can see where the tariffs were in 21 yeah so even the tariffs that he put in place back in trump 1.0 and then biden kept in place uh etc with just that little tiny bump right there around 2021 so at least what's been announced is is shock and awe for sure can

Daren:
[24:37] I just show you guys because maybe some of our viewers just stop watching this at this point right because what's our average watch time, like five minutes.

Dano:
[24:45] Hundreds.

Chris:
[24:46] So you're saying they were gone 20 minutes ago? Yeah.

Daren:
[24:52] Can I just show you both? Like, forget everything else we say today. And every other chart I'm going to show you, and this is the most important chart that literally nobody in the financial media is talking about that I've seen, except for like a few random Twitter people. And that is the total assets of the Federal Reserve. So Chris, for those who don't understand what this is, what do I mean by the total assets of the Federal Reserve? Sorry to put you on the spot. But so this is.

Chris:
[25:25] Well, you can, it's most powerfully illustrated by what happened during COVID. And I don't know if you saw this from Kyle Bass, but that's who I saw say, hey, what about the fact that the Fed is like pulling money out of the system, right? But when you look at the ramp- Yes,

Daren:
[25:41] It was Kyle Bass. He's the only one I saw talking about this.

Chris:
[25:44] Yeah, yeah. So we must have saw the same one. The Twitter gods fed us the same information.

Daren:
[25:51] They know what we like, Chris. They know what we like.

Chris:
[25:54] When the balance sheet jumped in COVID and-

Daren:
[25:58] Which is right where my cursor is right now. That was COVID. Look what happened.

Chris:
[26:02] And this is what makes, I think, this even trickier investing these days is you never know what the policy response is going to be from the Fed or the government. And so that level of uncertainty, because you know, there's a lot of people saying, I'm not going to worry because I know the Fed's going to come and bail us out. So they were putting money into the system in a massive way, in a way that's never been done before during COVID. That followed through all the way through 2024. and then they've been pulling money out of the system since then. And I agree with you. I think that has an impact on it. Obviously, the tariff announcement was the trigger. I mean, the next day is when everything started just absolutely collapsing. So you can have a multitude of reasons for the sell-off, but one catalyst that shoots things getting started. But I agree. This chart is still the most important chart. What is the Fed going to do? What are global central banks going to do? Why is it the most important?

Daren:
[27:12] Let's get to the root of the matter.

Chris:
[27:14] Because this is like the liquidity in the system.

Chris:
[27:18] This is the rivers of money that are flowing throughout the world and how much money is floating. Because if they float enough money, it can cover up a lot of issues. COVID is the perfect example. How did the stock market go up during COVID?

Daren:
[27:33] I don't know. Maybe it was the liquidity into the system.

Chris:
[27:35] Because they injected so much liquidity into the system that everything got more expensive. Now, the downside of that is inflation. And we saw that. So it's not without consequences. That energy that gets put in the system, it doesn't get destroyed. It gets conserved in some part. It has to come out somewhere.

Dano:
[27:57] It's not one-to-one, Chris. So can either of you explain to me how when the Fed in 2020... This is showing the printing of money, and we know from prior interviews that they do that.

Daren:
[28:09] So let me just talk about the mechanism of it, right? So yes, it's a printing of money, but total assets, right? So if the Fed goes out and buys the treasury or buys assets, which they actually bought ETFs during 2020, but that's another story, they go out and buy something, what happens? More cash comes into the economy. That's called liquidity. There's more money moving around, right? So when they start selling things, they're also selling things and taking money out of the economy, right? So what you're seeing here is that getting this huge injection of liquidity during COVID, and then it builds, builds, builds, builds, peaked. And it peaked in, let's call that April 13th of 2022. Funny that was two years ago and liquidity has been going down down down down down and then we had a pop in liquidity in march of 2023 right here and then it's basically just been getting sucked out of the system ever since how.

Dano:
[29:15] Is that happening so what what did they buy and what are they selling

Daren:
[29:19] If i let's just take that really ugly car you had up a few minutes ago if i sell you that car you take that car what do you give me in return cash cash and if i'm the federal reserve i take that cash and it's not in the system anymore right so you're taking assets out of this is taking cash out of the system right you're sucking it down is a very simplistic way it's much more complex than that but to think about it that way um if i'm pulling cash out of the system, there's less money for banks to do loans, right? If lending has gotten extremely tight, lots of people trying to buy homes are having a real difficult time buying homes, even right now at high rates. And the amount of inspection you get just to see if you're a qualified buyer, right? So that's, it's very tight lending. And when they do that, they do that on purpose so that inflation comes down. They've been trying to curb inflation. Well, the way to do that is not make money flow.

Daren:
[30:17] So amidst all these tariff discussions going on, they've been sucking liquidity out of the system. And so now the market, you could also argue, is just saying, oh, wait, just kidding. There's not as much liquidity in this system. And liquidity is king when it comes to the markets. And what liquidity is doing, so too will the market eventually. Now, it's not one-to-one, and then there is a delay. And that's the challenge with this. So if the Fed pumps all this money into the system, look how much they pumped in between March of 2020 and June of 2020. And it took years for it to come into the system, out of the system. And we could argue about the socioeconomic aspects of that because a lot of that money got deposited in people who had really big bank accounts to begin with. But that's near here and there. But this was the era of helicopter money where money just magically showed up in our bank accounts. I'm like, oh my gosh, the government actually knows where my bank account is and they can just put money in it. Shocker. I wonder if they could just pull it out too.

Chris:
[31:22] But that is, that is what else is interesting. You said it peaked in April of 22, right? The yield curve, the yield curve inverted in October. So that was also like a short-term peak in the spreads on the yield curve. And so just six months later, that's when the fixed income market started saying, okay, there's money coming out of the system, which usually leads to recession, which everybody thought was going to happen in 2022, but didn't, at least not on an official level.

Daren:
[31:59] Yeah. And I think, so that's, I think that's just so important, right? So all of the jibber jabbering in the news and, um, you know, getting our feelings hurt about politics and politicians going on out there. And I don't mean that to be dismissive in any way, but just the reality is like the media is just whooping everybody up right now on both sides of the fence.

Daren:
[32:25] And it's good business for the media right if they can get everybody excited but at the end of the day is liquidity in or is liquidity out and right now it's out so what's going to happen to the market and that's what you're seeing play out so this is the most important chart to watch so when you hear chris and i refer well at a certain point the politician's political will is going to step in, this is when that political will steps in, right? When this changes course, when the pressure on DC becomes so intense that both sides of the aisle go, hmm, we need to put liquidity back into the system. So I go back to the charts and I say, well, when do we think the politicians get upset enough to put liquidity back into the system.

Daren:
[33:23] Well, that's when we start looking at these areas of support. And mark my words so we can chapterize this, Dano, all of a sudden the politicians are going to start getting along somewhere. My guess right now, just looking at the chart, they're about there or it's going to start somewhere around $4.60 on the SPY. If it goes below that, then we were probably looking for a longer downturned true bear market that we haven't seen in almost a generation.

Daren:
[33:58] So that's possible. But the way this is selling off right now, I would be more in that camp of, this is generationally something different. If you saw a more constructive selling off, like just this kind of stuff, and it was just this slow bleed. But when things just gap down, they usually gap up and all of a sudden, come Monday, China will be like, just kidding, we're not throwing 35% tariffs on it. We're all going to get along and sell each other goods again because, well, they all want to get reelected to their position. See, China only has so far, they can push a little bit further because they're a dictatorship and they can basically kill anyone that disagrees with them.

Dano:
[34:42] Whoa, hot take, hot take.

Daren:
[34:44] I know, hot take, right? Be careful with that. I might get exiled. But they have a little bit different threshold of pain than, say, perhaps we do in the United States because the politicians have to get reelected in 16 months. Chris, I completely diverged your slide deck there, but I just had to show that.

Chris:
[35:06] All good. Well, yeah, let's go live to the Fed, which Powell spoke today. And he basically said, hey, things are moving quickly, but we were not ready to do anything yet. And I am less in the conspiracy camp about the money coming out of the system and more, they're doing that to fight inflation, which is what they've said they've been doing for the last couple of years. Given that inflation got so high because they put so much liquidity into the system, they've been trying to let that run off through QT and other means to try to fight inflation. And now Powell's really stuck. And I think this picture, his body language in this picture just says to me, oh boy, what am I going to do next? Because you've got turmoil in the markets, you've got panic in the markets, and yet these tariffs could be inflationary. And so if he comes in and bails things out, that's going to increase inflation. People are going to want his head if that happens.

Chris:
[36:14] If he doesn't bail out the market, then what? right then then the politicians are going to want his head um so this you know it's a really tight spot for the fed um to be in and uh you know given given that inflation is a moving target um and probably one of the most important things for them to deal with i do i do not envy his position so but not to mention that you have a current administration

Daren:
[36:42] Literally with one of the things that they're calling for is to end the fed, right? Like literally get rid of the fed. So like, imagine being in that tight of a position, you better get it right. Cause there's one half of the aisle calling for the end of your existence.

Chris:
[37:00] Absolutely. Yeah. I mean, there's a great odd lots podcast this, this last week, and I forget the name is his first name is Lev. Um, and I cannot remember the last name. I apologize, but if you catch that Odd Lots podcast on the removal of the heads of the CFTC and how that is going to set the stage for a battle over whether Trump can remove Powell or not is fascinating. Look, when you're in a storm like this, I think it's instructive to look at successful investors. What do they counsel? And not only what do they counsel, but what have they done in the past, right? And think to yourself like about prior crises. When have you ever heard somebody say, yeah, I was successful by going to cash in a panic. And then I happened to time it perfectly to get back in. You never hear that, right? You hear a lot of people say, yeah, I got out and then unfortunately I've been sitting in cash for the last 10 years while the market's been going up and such. So look to people like Buffett that have been through many of these crises and he's not only survived them, but he's actually thrived in them. And what does he do? What does he push for? And this headline from CNBC says, keep your head if you're spooked about tariffs. Now, he's talking about the first generation of tariffs.

Chris:
[38:25] Warren Buffett once suggested reading a 19th century poem, When Stocks Fall. So this is from Rudyard Kipling. He says, in his 2017 letter to shareholders, Buffett wrote, there is simply no telling how far stocks can fall in a short period. But should a major decline occur, he continued, heed these lines from Rudolf Kippling's classic poem, If, which was written in 1895, says, if you can keep your head when all about you are losing theirs, if you can wait and not be tired by waiting, if you can think and not make thoughts your aim, if you can trust yourself when all men doubt you, yours is the earth and everything that's in it. That may be a bit over the top, but I think it's instructive to see what did Buffett do in these situations in the past and how are you likely to thrive in this situation? Sorry, Daniel, let me get my do not disturb on here. Team's dinging coming on.

Dano:
[39:38] Anybody hear that?

Chris:
[39:39] So it's early in this crisis, but so far, Buffett is the only one of the big

Chris:
[39:47] billionaires thriving in this situation. So yet again, it looks like he's going to come out on top with this crisis as well.

Daren:
[40:00] Yeah but you gotta also think about like let me just actually let me go back to that because i cannot emphasize how important that point is buffett has been for i don't know at least a year that i can recall i'd have to look up the exact date sitting on like one point 130 billion dollars plus in money something crazy like that right um and everybody including me at times like this guy's crazy he's not getting any of this money to work and if this thing sells off and keeps selling off like it is he's gonna make an absolute killing because all that money is gonna get redeployed back in right and what chris you and i have been saying pretty pretty boldly for a while now Now, these MAG stocks, this doesn't make sense, this doesn't make sense, this doesn't make sense. And as of today, the MAG stocks, let me just update this down for the close because they sold into the close. The MAG stocks are down 29.7% from the high.

Daren:
[41:07] And that is in 107 days, the MAGs have sold down and they're almost 30% down. And so for everyone who celebrates high rises, they must celebrate low lows and going down quickly because that's the reality of investing. And I think that's just an important moment to memorialize because all too often when we have moments where the mags were going up through the roof, people were jumping and doing somersaults and excited. And then there were the other individuals who were well diversified and not seeing their portfolios do much at all because it was only the mags going up. And now all of that literally is getting given back in a matter of days. And that speaks to the power of diversification. That speaks why you want to be diversified. That speaks even when everyone at the barbecue is bragging about their fantastic stocks or whatever it is, being diversified is the king in the end of the day. It's just a matter of time. And you're seeing that play out in real time right now. People who are diversified, their portfolios are not down 30% or even close to that.

Chris:
[42:19] Yeah, finally a good time to hold those bonds, right?

Daren:
[42:23] Yeah.

Chris:
[42:23] It's like, what is this green next to my bond funds? I'm not familiar with this. This is amazing.

Dano:
[42:31] Daren, that needs to be an extra checkbox on the invite. You have the time, you have the date, you have the menu for the barbecue. And the last checkbox is, are you diversified? And if you're not, you can't come to the barbecue.

Daren:
[42:44] Yeah.

Dano:
[42:44] I want to hear about your YOLO fart coin.

Daren:
[42:48] Yeah.

Chris:
[42:50] So if there's any question of whether or not we are in somewhat of a panic, this is the investor survey this week from AAII. And do you guys remember the last time we were above 60%? I don't. I mean, it's been a while since we've been over 60% negative. So get this. The CNN fear and greed index this week is at a four. Zero four um i i and that's down from 21 so i've i've i haven't seen it that low before and that's a positioning sentiment uh based on seven different positioning indicators that they look at and bitcoin hanging in there at 28 um which is down from 44 fear last week but um you Maybe that's because Bitcoiners being down 20% in a couple of days, that's just a random Tuesday. No big deal, right?

Chris:
[43:53] I've seen that before. Maybe that's why they're not quite feeling so fearful. But that's the only one of our three indicators that doesn't show extreme fear.

Daren:
[44:02] For Bitcoiners, this is just another day in the park, my friend.

Chris:
[44:06] Just another day. Just another day. Yeah. Now, one area we've been watching is the spread between junk credit versus treasuries. And we are starting to see some movement there. Now, I would not say that we have peaked in this area, most likely, if there continues to be more panic and confidence continues to fall. But we're definitely seeing that move in that direction which is what we've been talking about all this time where people were negative, the sentiment was poor but in terms of positioning, nothing had changed up until about a week ago and that is starting to change. Now this next chart from the JP Morgan Guide to the Markets which is excellent, anybody can check it out I would encourage you to go to the website and look at their Guide to the Markets.

Chris:
[45:05] This shows times when sentiment peaks versus when sentiment is at a trough. And you can see the summation of it up there in the top left, where it says the average 12-month returns in the S&P after we see peaks or troughs. And obviously when people feel worse there's a lot more people selling those civics dan for four thousand dollars when people feel bad uh than when they feel good and they're selling those civics for 120 000 right and so your expected returns are much higher i know it doesn't feel like it right now but your expected returns are higher when everybody is running for the exits um so keep that in mind as well what's

Daren:
[45:53] Also interesting if you look at like historically when presidents take over and go into office with a down market they get a lot more favorability ratings right just because the markets went up and everybody's making more money and then with it you know doesn't matter what side it's on they'll be like oh that's because of me you know i was grade, but no, you just took over like a really crappy market and it just happened to bounce and go up during your presidency. Um, one could argue that like, this is kind of weird, but like the economy, like sending the economy into a recession or sorts of a recession and then bringing it out to a more positive future. Like if you orchestrate that, like psychologically, how that impacts voters um i think would be positive right like they went down and then look we made it go up and it's so great like now what do they.

Chris:
[46:52] Call that what do they what do they call that when you um yes

Daren:
[46:55] When it's like your abusive relationship and yes.

Chris:
[46:58] You get a fond feeling for your abuser um something syndrome stockholm is it stockholm syndrome yes

Daren:
[47:06] Like i feel like we're kind of going through like a Stockholm syndrome moment with the markets. Like we're manufacturing this. And now you could argue there's good reason why we have to manufacture this, right? So let me not just, I want to make sure I offend equally here. But there's good reason why we need to get the 10 year down. And there's good reason why we need to get inflation down. And a recession is the easiest way to do that if we can make it a slow bleed recession. But it also, the timing of it's other suspect in stockholm machine.

Chris:
[47:38] Yeah so so you mentioned this Daren diversification finally paying off now this is the key with the diversification you never really feel that good okay because you're still down you're just not down as much or maybe you're flat it's not like you know most diversification unless unless you have like tail risk hedging

Chris:
[48:00] You're not up in situations like this. You're just not down anywhere near as much. So on the flip side, when, when things are going up, you're also not up as much. So it's like, you know, you're never really all that happy because, because you're always lagging on one side or the other. But, but in the end, it ends up helping you keep your volatility down when you have a good diversification. So this is also from the guide to the markets. And it just shows that, um, Asset class returns during recessions and typically in the past, bonds have been a good buoy to portfolios, which they have so far during this crisis as well, except for 2022, of course, the famous one when the interest rates were going up at the fastest rate in a long time and that crushed bonds. So what did well? Alternatives, right? And so some people include alternatives in their portfolio

Chris:
[49:00] to help buoy their portfolio in times like this and diversification. So if you go to the next chart, one of them is something.

Dano:
[49:10] What are some alternatives that people would look at for people who don't know what alternatives are?

Chris:
[49:14] So gold is considered an alternative. Real estate, funny enough, is considered an alternative. Hedge funds, there's a lot of different types of hedge funds. The ones probably most people would be somewhat familiar with would be the trend following funds, which is what we're talking about here. Now, if you're looking at those trend following funds and going, hey, I thought those were supposed to be non-correlated to stocks and bonds. Why are they still not doing as well? Well, they are non-correlated, but there's kind of a buffer because as the name implies, there has to be a trend established before they change positioning. And typically, this is from Tyler Lovingood, and he posted this, which is awesome, showing that the first 10% of the S&P drawdown, typically your trend-following funds are not doing much. They're not helping much. And here's all the time periods where that's happened.

Chris:
[50:11] They're not usually down as much as the S&P, except for in 2018 when those positions reversed in a way that the SOCGEN CTA index was down just as much as the S&P at that point. Usually it's down less, but it's still down. And then if you go to the next slide, it's after that 10% drawdown, Okay, now you've got a trend established. And if that trend continues, not only in the S&P, but in other funds, because not all trend funds trade in equities, but usually you start to see better performance with 2022 being kind of one of its shining moments because we got such a sustained downtrend in bonds that CTAs really made all kinds of money on the fact that the bonds lost value. You all year long, which was very painful as a bond investor, but not as painful if you also own trend following. So some of the alternatives take a while to kick in.

Chris:
[51:16] They are not volatility funds or hedge funds that are meant to respond immediately. They typically take a little while to get warmed up, but once the trend is established, so if we start to see a continued trend in the S&P in the downward direction, you expect to see some help from the trend following funds moving forward.

Daren:
[51:42] Oh, let's start with the 10-year here. So here's another reason why I'm a little bit skeptical of this sell-off, if I haven't mentioned that yet today. It's just so quick, but you can see how fast the 10-year has moved to this support line right here. So this is a long-term trending support. And so the 10-years are really important, right? We've heard Secretary Besson say, hey, I need to get the 10-year down. We want to get the 10-year down. Real estate developers really don't like 10-year being this high. And we have this, so what we call a...

Chris:
[52:21] Well, real estate developers, but I think this is important because there is the possibility the U.S. Treasury has a ton of debt that they need to refinance coming up, right? And so, yeah, real estate developers, but even more importantly, if they're trying to get the 10-year down to be able to refinance some of the government debt and term it out longer term, right? That to me would be the only kind of possible benefit to looking into setting up a recession in order to do that, right? If that is the longer term goal, that would make more sense than really trying to help any certain segment of the economy, in my opinion. And so that may be why the best since trying to do that. And it did get under 4% briefly today. So it's flirting with that 4%.

Daren:
[53:12] Yeah. And you can see, and so from a trader's perspective, from a technical trader's perspective, this is, you can see this head and shoulders here. So left shoulder, head, right shoulder, neckline break. And we just moved. As soon as that pattern broke, we moved very quickly down into support right here, which is this long-term trend line. You can see it was important here, it was important here, it was important on the way up. Bits touched in for support, found support, and the fact that we moved that quickly into there.

Daren:
[53:48] That's pretty quick, move of rates. Sometimes we get a quick bounce. There's a lot of support in this whole 3.4 range, 3.5 range. So it'll take a lot more to get it below that but like I've talked to some of my mortgage buddies.

Daren:
[54:09] I'm like, Hey, we're a 30 year. And I check in with them on a regular basis. Like where's 30 year? Where's 30 year? Cause I like to see how the, the 10 year shape is in comparison to what the streets actually selling mortgages for. Right. And they actually were saying later today that earlier in the day was really down and then it started bouncing mortgage back securities were already starting to price this in and, um, see some changes. So, uh, the 10 year though, this is important support. We lose this area on the 10-year, then 3.2, 3.3, this range. There's going to be a lot of support here. So we'd have to have something constructively different than what we have today. Because really, yeah, we've got tariffs, but it's not like the world's changed economically overnight. Like I said earlier in the broadcast, it's not like we're driving down LA and there's no traffic left. We're not dealing with that. And I think a lot of investors have that panic in them. They have that fear in them. They have that recency bias in them. And it's just a great moment to take a deep breath, to walk away from your statement, to walk away from the charts and go on a walk. Because when you get moments like this where it's just real panicky, doing anything is usually stupid.

Chris:
[55:25] Well, if you're looking to take action, one thing you might want to keep an eye on is this rate if your mortgage rate, say, was sets or maybe towards the end of 2023 or so, or if you need to refinance for some reason. Because if this rate continues to come down and they're successful in getting rates down, if we get a recession, which is typically when rates come down, that's the time to start looking at, hey, maybe I should refinance my mortgage and save half a percent, full percentage point, something like that on your mortgage rate. So look for those opportunities, take what the market is giving you and see if you can turn it in your favor. That would be one area where you might have that opportunity coming up soon.

Daren:
[56:16] And this is, I said this earlier, and I'm going to repeat it because it's worth repeating. This is where I call BS on the current sell-off. You've got gold. So if you think about it, like the most like, let's call it the end of the world, Armageddon, guns and gold, right? And you're going to protect your enclave from the end of the world and gold's just getting destroyed today. Now it's gone up really fast and above that 3,000, it's going to be really interesting to see if it holds that 3,000 spot price. But look at silver. because if there was like something else, it would be like the current form of currency when the dollar is done and things are no more. And silver's getting absolutely just whacked, It's just a complete, complete whack out. So if we believe the markets are that mechanism which distills what's happening in the general psychology of humans out there, this isn't end of the world stuff we're dealing with. This is like jitters, uncertainty, and then things will recalibrate.

Dano:
[57:24] Can you zoom in on that red line there on today? Is that really a straight down red line?

Daren:
[57:32] Yeah, that's what I'm saying, man. Last two days silver's getting just whacked.

Dano:
[57:39] So it just wiped off pretty much the entire year

Daren:
[57:43] Oh yeah that's crazy we're back to where we were in the start of the year just gone, and silver does this now like silver what happens with silver is there's it's much easier to get out of the ground than gold and a lot of there's those that say that a lot of the mining companies sit on inventory for moments like this and then just dump it and then it creates this big wash out in silver it's happened many times before but um yeah you can see just a total dump of silver and like silver is one of those things that in the moment of the end of the world as we know it like people are all getting your silver coins and gold and exchanging value for and certainly not what the metals markets are saying right now they're getting sold too um egg on the other hand The egg, which is the aggregate bond index ETF.

Daren:
[58:36] Nice breakout here. But even that, it sold up to $100 and got rejected and closed under $100 today. You can see that. That's what we call a shooting star candle. And that shooting star usually is a topping. So I would say that's a short-term top. I think over the weekend, you'll see settling down and then a bounce into Monday, Tuesday, just because it's just too aggressive. It doesn't make sense. It doesn't feel right. We want to see more constructive sell-offs. When you look at the VIX, which is really interesting, I saw a note earlier yesterday where it was someone was citing that it was the first time ever that we had a 5% sell-off and the VIX still closed below 30. It was the first time that ever happened where the stock market sold off 5%, but the VIX stayed below 30. But then today you can see that huge move with the VIX. Huge just and.

Dano:
[59:43] This is what

Daren:
[59:44] This is like.

Chris:
[59:45] A freak out measurement yeah this is like a freak out measurement basically perfect

Daren:
[59:50] It's.

Dano:
[59:51] Just started here

Daren:
[59:51] Um this measures how complacent so there's something called futures and there's traders that trade futures and when this is really low it means the traders are really complacent um but we've been saying for weeks you can see this trend line up i'm like oh it trends up something's gonna happen something's gonna, break something's gonna go down you never know what it is but when you start seeing that trend up and then you get these huge breaks and then settle back down right um this is a more sustained this is what it looked like during covid you can see this huge breakup and and then it settles back down it and then.

Dano:
[1:00:32] There's that august flash crash

Daren:
[1:00:33] And then there's your august flash crash right here and then you've got right now so it's it's got all the hallmarks at the moment of not sustained uh volatility but you know that this is probably just a quick blow here what did it.

Dano:
[1:00:51] Look like during 2008

Daren:
[1:00:52] I don't know if this chart actually will go back that far and so much data we got to go back yeah yeah it does all right so here it is in 08 right here so.

Dano:
[1:01:04] A little bit more sustained yeah

Daren:
[1:01:06] So if we start seeing in the vix if we start seeing kind of this, then that's obviously going to be more sustained volatility more down coming um but right now this just looks like a breakup and a break back down really interesting you guys know how long i've been talking about oil like something's gonna happen oil something's gonna happen it's winding up. I don't know what it's going to be, but it's winding up. And then we've been talking about how it's by winding up, it's just the buyers and sellers are just getting tighter and tighter in their argument about price. And then you can see this area has been really important. And then we finally lost support there. Now, mind you, this is the fourth day of the month. So that doesn't mean that we just won't have a long wick and then it'll bounce up. When we look at it on the daily chart, you can see the last two days it fell through critical support. And so typically oil, when oil goes down, that's because things are expected to slow down, right? If you look at our, everything in our home is full of derivative materials from oil.

Daren:
[1:02:18] And that's what you're seeing. So you have, yes, like I said last week, I think it's more likely we see some type of recession right now. How prolonged it will be, I don't know. The way the market's selling off right now is way, way, way, way too volatile for it to make sense for the information. I think it's just an overreaction and people are freaking out. So I'm not saying it's wrong. I'm not saying it's not right to feel those things. Everybody feels those emotions. But now is the moment for cooler heads to prevail for to take a step back in the deep breath and realize that at the end of the day i only ask you to hold one thing to be true and the only thing i ask you to hold to be true is that is the rich want to get richer because guess who owns all the markets the rich and they're not going to let the markets continue to blow up for that long, eventually they're all going to come to the table settle it down so they can all make more money on their money. And that's just how it goes, man. That's economics 101. Oh, good.

Dano:
[1:03:25] I have a final question when you're done.

Daren:
[1:03:27] Go ahead.

Dano:
[1:03:28] What I wanted to ask before we wrap up today is it seems like if I'm an investor, if I'm one of your clients, something happens, something bad, and I come to you and you say, don't do anything. But then if something good happens or maybe something good is happening for someone else and I come to you, you probably are still going to say, don't do anything. So I feel like you two guys are the guys that always just say, don't do anything. So why are you saying that? And why is that right in this moment?

Daren:
[1:03:57] Well, so, so don't do anything is very specific to a person, right? So I'm only going to say that to certain people, right? So if you come to me and say, Daren, here's how much volatility I'm okay with in my portfolio. And I'm okay with, you know, potential downside of this, potential upside of this, I'm willing to stay with my strategy. Um, and we have a strategy, then I'm going to say, don't do anything. It's just normal to go up and down. Right. And there's not a lot of research that suggests that you can get back in. What do I mean by that? It's really easy to get out in markets when things are really bad. It's really hard to get back in and know when to get back in. That's a very, very difficult calculation. The reason for that is markets often bottom up. Long before your brain is done thinking the problems are over.

Daren:
[1:04:59] And for you to get back in with your portfolio into a better market requires you to be right on the out and right on the in. And it requires Chris and I to be right on the out and right on the in. And the reality of that happening is pretty limited because emotionally, the right time to get back in is when you don't feel good about the markets. And when you don't feel good about life if you look at the bottoms of every major recession we've ever gone through and then try to think back um chris and i we probably think back in our personal history about like um you know we look at the the i look at the at least i look at i'll speak for myself here i look at the candlesticks i'm like oh i remember that candlestick yeah i felt that one yeah yeah yeah like oh yeah yeah oh this this was the vaccine candle right here i can actually show you on the chart where the vaccine came out and what the what the chart did on the vaccine and how it behaved and this is it right here i'll show you the vaccine candle Oh my God.

Dano:
[1:06:11] We really is finding it.

Daren:
[1:06:12] I think I know this is when the vaccine candle, I'm pretty sure it was somewhere. Let's see. That was, it was.

Chris:
[1:06:20] Like a couple of days after the election. It was like November.

Daren:
[1:06:23] It's like right there. There it is. Right there. That was the election. Right.

Chris:
[1:06:28] Yeah, I want to say it was a six.

Daren:
[1:06:30] Yeah, that was so. But actually, I think this was the vaccine. I remember it was where I saw it really crazily, actually, is in the Dow Jones Transportation, not the Trump media. Let's see. Dow Jones Transportation. But like, it's weird. Like you associate these emotional feelings with the way the charts read and what they. There we go.

Chris:
[1:06:55] Well, I think it goes back to what Daren's getting at is what we started to show off.

Daren:
[1:07:01] Here's a vaccine candle right here, Chris.

Chris:
[1:07:02] Yeah, there you go.

Daren:
[1:07:03] Here's a vaccine candle.

Chris:
[1:07:05] Yes. I think what he's getting at, though, is when you're under those feelings of extreme emotions, and they affect us on both sides, we feel the pain of loss twice as much as a gain. So it's actually, you know, we feel it worse when it's going down. But the feeling when things are going up and you're not going up as much like like we had just last year everybody can relate to this because you know there were there were certain stocks that everybody was talking about related to ai and let's get on the train it can only go to the moon right um and when you're feeling those emotions you

Daren:
[1:07:46] See that with a bit of sarcasm i have to.

Chris:
[1:07:48] Admit well it's it's because you know we know enough about market history to know like shouldn't do anything in that situation because it's likely to end in tears, right? Which is what we're seeing now. And, um, and, and so, uh, good investing is boring investing. And, um, and so, you know, doing nothing sometimes is the best, uh, best thing that you can do.

Daren:
[1:08:16] So here it is. This is so, which is so interesting, right? Okay. Think about this. Remember early on in today I talked about support where did I talk about support right like the low of 2022 right here this low, actually was the vaccine candle, because this was this is C1028 right in that range right here we bottomed out right there when they were like oh we have the vaccine you.

Daren:
[1:08:50] And so this, all this structure right here was that low for 2022, that double bottom. And then we broke out from there and that became support in 22. And so I go back to where I started earlier today and say, okay, we're right here. We're into this structure here, which was early 24. We gave back a whole year of returns in a matter of days. And then we've got a lot of structure right here. And support. And then we've got a lot of structure here. But if we go down to this point here at 463 on the SPY, that's the top from 22 or 21. And then we had the sell off into 22.

Daren:
[1:09:34] So like, why, why damn, we say don't do anything is because it's usually an overreaction. It generally is that. And so what's really helpful is here's some information that we hope we've shared with you today to say, here's what we're looking at. Here's why we might or might not be super concerned. Here's the circumstances where our opinion is going to change and we'll adapt to new information at that time. And right now, point one, the sell-off has been too quick, too violent, too fast for it to make sense as something to hang around that long. Two, we're into structure already, right? We got a lot of support structure in the 500 range at SPY. And if we get below that, you're going to have a ton of structure here at 458. Yes, we could go lower, but it would probably be a quick bounce from there is my guess, unless we're dealing with something different. If we went down to that area, we're talking about 25% washout on the market. Chris, how uncommon is a 25% washout or how common is it?

Chris:
[1:10:37] I don't have the exact stats in front of me, but it's semi-uncommon. Like it's an extreme, it's an extreme drop, but, uh, but it has happened many, many times before. And, you know, the bottom line is that's, that's why you want to have your portfolio ranges picked out ahead of time. You don't want to be making these decisions when you're, when you're in a day like today, right? You want to have that picked ahead of time, knowing what's the good side, what's the bad side, know your financial plan. Does your portfolio fit into your financial plan or not? And don't be making those big decisions when the portfolio is reacting in an extreme way.

Daren:
[1:11:19] And just so, so it's, it's, it's fairly uncommon, but not crazy to get a 25%.

Chris:
[1:11:26] It's yeah, exactly. I forget the exact stats, but it's happened several times, uh, in the past. Um, 50% is very extreme. Like that doesn't happen very often at all. Um, 10% happens almost every year. So, uh, we're somewhere between, you know, absolutely normal and, uh, and maybe a little bit on on the uncomfortable side but we're not we're not anywhere near like an extreme yet

Daren:
[1:11:53] So we're 16 down right now as a close that's a pretty good healthy correction right and like historically you get over 10 we're into the correction zone if you're looking at the nasdaq already uh or we're into the bear market if you're in the nasdaq um but we're still not quite there in the S&P, I could very easily see this top getting tested though. Because notice just from a chartist perspective, see this point right here is what I'm identifying. We never tested that. We tested just a bit right there, but we never in a big way went down and took it as support. And markets love to go back to areas or big breakout areas where there was a breakout and see if there's support. And by support, I mean just buyers. So all that being said, I hope it's helpful. That was a long broadcast today. So anyone who's still with us, you're a trooper. But we threw a ton at you and hopefully that will help calm some nerves and help you make good choices with your investments as we go into a new level of uncertainty.

Daren:
[1:13:05] Um dan i think we're gonna wrap it up.

Dano:
[1:13:07] Thanks so much for checking out the show and Daren if you can believe it we're holding six viewers right now we actually went up throughout the broadcast so people are enjoying it just more and more and more wait six

Daren:
[1:13:18] That's more than just chris's dad and my mom's.

Dano:
[1:13:20] That's right my mom and my dad so uh that's why you had to make the show you wanted two more viewers so um hey if you've been enjoying this or if this is your first time checking us out. We are Sonoma Wealth Advisors. We're a financial advisor. We're based in Sonoma, but we serve clients all over the country. You can learn more about us at sonomowealth.com. And this show, this podcast can be subscribed to on the platform that you're on. And we really appreciate you listening to the end and checking out the show. We hope it was helpful. And we look forward to talking to you again next week. SonomaWealth.com. Daren, Chris, thanks for the show.

Daren:
[1:14:00] All right. Take care, everybody.

Music:
[1:14:01] Music