FUBO - Why The Fed Has Created An Amazing Buying Opportunity

• The stock market has been under unimaginable selling pressure for the last several quarters.
• The stock market sell-off has been exasperated by the Fed's actions to reduce inflation.
• This lays out a vast buying opportunity that only the most skilled investors/traders will take advantage of. The majority will be too scared or stuck in perma-bear mode.

The Stock Market has taken a beating this last year, absolutely everything has been crushed. Most new traders have quit, old ones stopped trading and hedge funds are closing down faster than new ones are opening.

As a trader who's been trading for the last 12 years, this cyclic behavior comes to the stock market every so often. But each time the "correction" occurs, it's always a bit different. Right now growth stocks are decimated, and many cryptocurrency speculative currencies are wiped out.

One of the last times this happened was around 2015, when the correction hit so hard it brought a wave of bankruptcy to small/mid-capped oil companies. This time is different, as the cryptocurrency field is feeling it as coins such as TerraUSD (UST-USD) crashed, along with exchanges such as Celsius which are in dire health . It seems during this correction Cryptocurrency is taking a beating .

Here's the bad news and good news depends on what you are invested in: Cryptocurrency will likely mark the bottom of the market. Once a certain amount of coins and a certain amount of exchanges go bankrupt (taking billions of dollars down with them), the market will bounce hard with growth stocks likely giving the best returns compared to value stocks and other asset classes.

In this article, I will explain why the market crashed, as well as when my best guess as to when we will bounce, as well as what stocks will make a killing on the upturn.

What Caused The Crash?

Let's take a step back and analyze what exactly caused the crash as this will provide clues as to when we will turn around again. The cause of the crash is a bit long and complicated, but I will simplify it in a few paragraphs.

In 2020/2021 the Market became "easy" as the government pumped a ton of money (and lowered interest rates) into the Stock Market due to the Pandemic . This was the start of the stock market gold rush. Where inexperienced traders turned into cocky traders, making money hands over fist . This was not sustainable, underneath the gold rush there were cracks in how the world worked that will never be the same. Supply chain issues and oil going negative at one point were going to haunt the world as we know it.

On top of supply chain issues, something unexpected happened: Russia decided to attack Ukraine, making the world supply chain even tighter and sending energy prices soaring. Thus making inflation out of control, where inflation was already becoming problematic, and exacerbated by the global chip shortage , where anything with technology in it has become in short supply.

This caught many governments by surprise, the USA was not the only country trying to mitigate the damages of the pandemic. As a result, inflation has become very dangerous, where the only weapon most governments have is to crush the market and raise interest rates forcefully . Raising rates will cut down consumer spending power.

That is what we are seeing right now, with the Fed actively trying to slow down wealth creation, as a byproduct the market is taking a beating. The good news is, that this won't be forever, but the bad news is as seen there are casualties right now it's in the form of cryptocurrency, and a lot of fraudulent SPACs will be hit hard .

So when you see your stocks make a new low every day, and you are trying to scramble for news to justify the lower price, and you can't find it... understand it is likely the Fed's actions that are leading to the markets getting crushed, and sending the US economy into a recession for the sake of reducing inflation.

What's Next For The Market in 2022?

The all-time highs you saw in speculative growth stocks will likely never return in many companies. I'm sure we have seen the highs in Peloton ( PTON ), much like ( GPRO ) and ( FIT ) ( bought out by (GOOGL) (GOOG) ) came tumbling down and never recovered.

Many SPACs will eventually go to zero, be bought out, or never make a noise in the market again.

What is clear however is the MEME stock movement is still alive , which means you can never count a stock out, we have seen it in ( GME ) ( AMC ) and now ( REV ) and (RDBX) , these types of movements are game-changers, and do provide lifelines for companies (able to raise off the crazy stock gains).

There will be many stocks out there that will gain 10-20x from where they are right now. It will happen, it's just a matter of picking the right stocks. Make sure to diversify if you plan on buying, and find stocks that don't have any controversy (fraudulent behavior), as well as have decent cash for a few years.

I believe stocks like ( PLTR ) ( FUBO ) ( GLSI ) ( LCID ) ( RIVN ) ( SPCE ) are in for huge returns when the market recovers.

PLTR is essentially funded by governments, and that usually means reliability and consistency. You can always count on a government check not bouncing. Also, check out the bullish news by reputable analysts upgrading the stock recently .

FUBO is trading like it's near bankruptcy. It has at least two major catalysts on the horizon: English Premier exclusivity in Canada for the 2022-2023 season, as well as the World Cup coming in November. On top of that, their cash burn is expected to reduce as they synergize all their services to reduce costs.

GLSI - Always follow the money, crazy insider buying, and stock buyback announced . This biotech company has just started Phase 3 trials, with perfect Phase 2 results.

LCID - A real competitor to ( TSLA ), they are now leading the EV market in battery technology . This stock has held up relatively well compared to other SPACs, its strength in this nasty market is likely a hint of bigger things to come once the Market gets its mojo back.

RIVN - Another electric company that took a beating, as it seems like (AMZN) has given up on its stake. Sure that makes things a little difficult, but don't count them out, as they surprised many lately .

SPCE - Plagued by delays, they already accomplished the hardest part which is clearing space tourism with customers. They just recently announced a partnership with Boeing to build several new spaceships . Check out my article on why we will see a very strong inevitable bounce in Virgin Galactic .

How To Play The Comeback

The question is, have we reached the bottom? As I discussed above, one of the key criteria' is bankruptcies which we have seen in the Cryptocurrency and SPAC realm. But the real question is have we seen enough? I think there is a possibility we may have seen just enough, at the very least we are halfway there.

The real metric in this scenario is inflation, and whether the world has seen the worst of it. This is much more difficult to predict because another black swan event can always pop out of nowhere, this is the risk we always take (i.e. COVID, Russia's Invasion of Ukraine).

However, there are signs we are reaching peak inflation, as Gas prices in the USA have dropped 21 days in a row . Which could lead to a chain reaction of a drop in prices of all sorts of products.

With the difficulty of timing such a bottom, I do recommend people do their due diligence and at least consider buying half a position in the Stock Market (whatever your favorites are).

Conclusion

The question everyone has in mind is when will we finally recover? I believe we are at least halfway there, if not there already. As more cryptocurrency firms tumble, more bankruptcy occurs, and as the housing market bubble starts to burst, we are closer to a turnaround. Hold on tight, research, and be prepared to make a lot of money if you play your cards right. When the market is ready, you won't have time to buy, most will be confused in awe and the sheer power of the bounce, as they always are (where the stubborn traders always end up buying at the top).

This will be the time when the most skilled will make money. P.S. I look forward to all the perma-bears commenting below.

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