Stock Market Crash of 2022 | Podcast Episode #246

0:07
Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex ever-changing, world of Finance, learn what it means to trade, profitably and consistently managing risk, avoiding the pitfalls of trading. And most importantly, to let those winners run wild, you can succeed at the stock market and I’m ready to show you.

0:28
How, hey, everybody, this is Ryan Mallory with Swing Trading the Stock Market and today, we’re going to talk about about the stock market crash of 2022, with the S&P 500 being down, 16 percent. The NASDAQ being down, 25%.

0:44
And the Russell band down 21%. I felt like it was important to deviate from the episodes that come from you with a typical email asking questions and me answering them. And instead speaking heart to heart with you guys, about what’s really on your mind and that is how to survive a stock market crash.

1:05
And we’re in Bear Market territory now in the NASDAQ and the Russell 2000. The S&P 500 is not too far behind it and for those who need a refresher, remember five percents about a pullback, 10% a correction 20% or more you’re talking about a bear market.

1:23
Now before I get into all of the material that I have for today, what am I drinking? I’m drinking one of my good old old Fashions and if you’ve been listening to me for any Amount of time, you know that I love my old Fashions and I hold them in very high regard.

1:39
But this time around, I am using old Granddad 114 for this old-fashioned. So it’s a pretty strong old-fashioned. I, if you remember, I don’t make old Fashions with less than 100 Proof. This one’s 114 proof which makes it about 57% alcohol.

1:55
Now it comes across as really good. I mean it is a really, really tasty old-fashioned and for those who don’t know how Oh, I make my old fashioned. I use six of those anger ristic bitters. I think that’s what it’s called. Anguirus dick bidders. I’m not sure if I’m even saying that right, but that’s what I use.

2:12
Two dashes of orange bitters. Three eighth of an ounce of simple syrup plus 2 ounces of my bourbon of choice. Usually it’s like a Knob Creek. Nine years. That’s what it was for most of the time anyways and now I have because I can’t hardly find it anywhere or at least the big handle of it.

2:28
I’ve moved to the Evans bottled and bond which is just as good really. Lee solid bourbon for the old-fashioned only, but this time around I’m using old Granddad and it comes across super, super strong. Like you can’t handle like the 100 Proof, you’re definitely not gonna be able to handle the 114 proof.

2:47
I like it but it’s not something that I would drink a couple of because it’ll leave you three sheets to the wind. So scale of 1 to 10 I’m going to give it like a nine point four. And again I don’t go very low on my old Fashions and most of those burdens that come in really hot.

3:03
Not will. Usually perform very well with my old Fashions. Now old granddad as a standalone is like a 4.3. I did this one a long time ago, almost, like a hundred episodes ago. 4.3 not big on it as a standalone, but am I old fashioned?

3:19
It works. So old. Granddad old-fashioned 9.4. Okay, so about the stock market. Why do I want to talk about this in a podcast episode? Because usually most of my episodes are evergreen, right?

3:40
But if it’s a stock market crash, it’s not really relevant, except for the time period in which we’re trading it not so because oftentimes, we want to go back in times. Like what was it like, trading during the Great Recession of 2008? What was it? Like trading through the.com, bubble of 2004 gently. Nobody was really talking about those and recording their thoughts on it.

3:59
Like, what I’m doing right now with this podcast, So, I want to be able to go back in time, not only for your benefit, but for my benefit to and be able to say, okay, this is what it was like this in my own words. This was what it was like trading the stock market crash in 2022.

4:15
So it provides a historical reference into, it’s going to help guide you as the trader. And he’ll give me a little bit of guidance in the future to, when I likely need it during a market downturn down the road and like I said, it’s what people want the most. They want to hear from someone who knows what it’s like to trade through a recession.

4:33
Not just the one here in 2022 but I’ve gone through the 20/20 sell-off. I’ve gone through the 2018 saw five gone through the 2008 and I’ve gone through the 2000, I’ve gone through the European financial crisis of what 2011 that was gone through a lot and I want to provide an unfiltered voice something that you’re not going to find on CNBC, or Fox Business or some of these other channels where they just put a whole bunch of blowhards up there and they just are either pumping their own portfolios or they’re just, you know, pumping a stock that they want you to buy on.

5:03
I’m here to provide a voice of reason and to give you my thoughts and my analysis on what it’s like to trade during these times, and how you can best approach this market during some of the most stressful times of trading that you’ll ever experience and most of the sources out there, too, that you may have gone to over the last 13 years, or, you know, over the last couple of years, when trading became commission-free, they’re not good sources.

5:27
A lot of these people they pump stocks, they’re trying to dump their shares on you and you don’t even In realize their success is derived from 13 years of relatively calm markets. I mean 2018 it lasted a couple months sold off in October.

5:44
Rallied in November sold off in a December. Then it found its bottom and rallied in January and there after 2020, that sell off, lasted like a solid. What 34 weeks while the self is pretty significant. It didn’t last. As soon as it was over, it was almost right back up at all-time highs.

6:03
So most people have not traded through one of these incredible periods of time and I’m approaching my 250th episode and I would reckon to say that almost every episode I’ve ever done. I’ve mentioned risk management, managing the risk on every trade. And why do I say that?

6:18
Is because of times, like, right now, these are the times were being steadfast in your risk management. Pays huge, huge dividends. I’ve mentioned a few times now that My first traded the year was PayPal. I got for, like a three or four percent loss wasn’t that big of a deal, but it had I not used risk management.

6:38
Oh, it would have been a big deal. I’d be down over. What 50% this is the times that risk management pays off the most. A lot of people have found forgiveness, from the stock market, particularly over the last two years leading into 2022, where if they didn’t use a stop loss, they got away with it, but are they getting away with it now?

6:57
No, they’re seeing their original capital erode. They’re seeing all the profits that they spent the last two years, recklessly accruing go by the wayside. And now what a lot of people are going to do is they’re going to try and find the bottom. You’re going to say, man, the market has two bottom here, I’ve got to make sure I bought them, take this Market, I don’t want to let it get away from me because I’ll miss the boat in.

7:18
It’ll sail away without me. No, but I’m taking the market. One of the worst things that you can do in this trading environment because you will attempt multiple times to get it, right? And if you happen to bottom, take the Pocket, it wasn’t out of skill, it was out of luck. Let me tell you, if I go out there tomorrow trying to find the bottom of this market and let’s say I get it right, it wasn’t because of skill wasn’t even because I have 30 years of trading experience, not at all.

7:44
It would be because of luck because nobody can time that market perfectly. You go after the meat and potatoes of the tree, he’s try to stay away from the appetizer and dessert. You want that middle portion of a rally. You don’t care about getting it in the bottom and you don’t care about getting out at the top.

8:00
You just want that middle section, where you get some of the nicest chunks of that rally. But with meme stocks, so many people have taken on the mindset that their trades in, their investment, should go up like a hundredfold. You got this crazy Phenomenon with like GameStop back in January of twenty Twenty-One where it went from like, you know, the teens all the way up to 480, something dollars, a share.

8:23
And now all these people thinking, all of this is going to be the next Game Stop. Oh, this is going to be the next AMC and their left sorely disappointed. Disappointed and now they’re going to Margin Call. They’re just getting completely destroyed, believe it or not. I did a video when the Jake GameStop announced their stupid stock split about a month or so ago.

8:42
Maybe I said, hey, I would not be buying this sucker at the highs. That was my personal opinion. Like, guys, this is why I wouldn’t be buying it. I got more dislikes on that video that all of my videos I’ve ever done on YouTube combined. I have never seen such a cult following over such a stupid stock.

9:00
And you want to know what’s happened. Since I did that video, it’s dropped 50%. It basically gave you a stock split without the extra shares and most of the traders that are trading GameStop, they’re completely incompetent, they’re trying to tell me that it’s not a stock split that. It’s a stock split dividend like they’re getting extra.

9:19
Shares is a dividend at no cost to them even if it’s your traditional dividend, let’s say stock ABC trades at $100 and they issue a dollar dividend, guess what else Comes out of the stock price. So when they say they’re issuing a stock split as a dividend, all they’re doing is cutting the price in half or whatever.

9:37
They’re going to split it by and then times it by that many shares. It’s no different. It’s just another stock split but I don’t want to get too sidetracked about game stuff and everything I just had to say that.

9:53
But going back to the whole trying to find the bottom in the stock market. Most of your intraday rallies will suck in a lot of Traders. They will see these massive reversals, like, for instance today and it doesn’t even matter what day on talking about. But when Vanessa, laughs, you’ll see multiple attempts at it entered a reversal, most of them will fail. I saw two of them have about what 50 points today alone, and both of them failed close that the lows of the day, but it’ll suck in a lot of Traders.

10:14
They can. This is it? I’m going long, you PR 0 which is like a bullish, 3 to 1 leverage DTF on the S&P 500, or ongoing tqq, which is a three to one of the NASDAQ or tea, and a, which is three to one of the Russell 2000. And then within five 10, 15 minutes.

10:31
They’re already stopped out if they’re using risk management, most of them don’t. So then they’re just bleeding, even more money. And today reversals, I won’t even try to bother. Trying to find the entry Dave reversals because most of them are head fakes. And if you get it right, you just got lucky and I don’t aim to be lucky in the market, though.

10:47
It’s nice when it happens. I aimed to make good trading decisions and trying to time, every one of these intraday reversal doesn’t work. Trust me. I know. There was a time where I could get sucked into every one of those intraday reversals and most of the time actually, every time I was wrong and oftentimes when you are ultimately right?

11:07
You don’t hardly have any Capital left to work with in order to profit off of being, right? So when it comes to playing Counter rallies, or even when the market eventually does bottom, give it some time, let’s see if it can put in a nice solid Green Day with some follow through, maybe then you can start considering some long positions.

11:25
And if it’s wrong, then you have a Lost, that will take you out of the tree, but let it start to develop on the daily chart as well. Remember this going back to whole GameStop phenomenon where we think that everything’s supposed to go up by a hundred X or go to the moon and colonize Mars.

11:42
Look for rallies to be eventually sold. So, in order to profit from that kind of a scenario, you got to be aggressive on the profit-taking start taking a third or a half off the table after your up two or three percent. Went on the bounce and then look to start taking more gains off the table as it goes up to 45 percent but you have to be aggressive on the profit-taking.

12:05
You’re not trying to change your life with one single trade. And so many people are trying to do that out there and all they’re doing is just blowing up their account. No counter rallies in a bear Market. They’re very ferocious, they’re very fast and they can offer some really nice returns but take the profits aggressively.

12:21
Don’t try to ride that hand for too long. And remember what? We said don’t fight the FED back when the markets been rallying. The last 13 years pretty much. Oh don’t fight the fed. You know. The feds been very dovish. They have interest rates at zero percent. They’re doing quantitative easing. Why would you short the market don’t fight the fed?

12:37
Well, goes both ways. Don’t fight the FED on the downside either. When they’re hiking the rates, and they’re doing quantitative tapering or quantitative tightening, whatever you want to call it. Look, the FED is created, perhaps the biggest bubble that will ever see In Our Lifetime.

12:53
And for years, they’ve been getting away with kicking the can down the road. Oh, the market, Drops 15-20 percent, we can reverse interest rate policy, and start cutting rates. Again, that’s what they did in 2018 2020. The market sells off because the whole economy shuts down, what do they do?

13:08
They swooped in like the hero and the most completely unnecessary fashion and they do another emergency rate cut. They increase the money supply and they kicked the can down the road again, that’s all they do. But guess what? Now we have inflation so you kick the can down the road again you lighten up on the interest rate hike Inflation takes off again.

13:29
And if it takes off again, it makes the rate hikes that they’ve already done pretty much, no, avoid pointless, meaningless. This is unnecessary harm to the consumer that had to endure it and makes living paycheck to paycheck and off of people’s income that much harder because you never defeated the inflation.

13:47
So they have to defeat the inflation. They have to bring it back down. And only way they can do it is reducing their balance sheet, raising interest rates. They got to do that kind of stuff, get rid of some, of the money. Out of the system and that all goes back to don’t fight the fed and do on a day-to-day basis were seeing a lot of panic selling, you’re seeing less and less willingness to buy the dip.

14:07
Remember in the beginning of the sell-off, going back to January and February. You saw so many attempts to buy the dip March 14th had an incredible rally off the lows but now you’re seeing the dip buyers throwing in the towel, they’re just not buying it, Traders are scared and they should be I take the risk reward very very serious in a time like this.

14:26
I have even made a Will trade yet and may do I think I’ll go the whole month without making a trade in? No, I think I’ll make it trade sooner rather than later. But I had to trade last week that would have turned out to be incredibly profitable. Had I gotten into it, but at the time the market get down incredibly like over two and a half percent, it wasn’t worth it for me to get in from a risk-reward standpoint.

14:46
So I held off on the trade do I wish I would have gotten into the trade from a greedy standpoint yes but from a discipline standpoint know I made the right decision you have to respect this Market whether you’re shorting the market or Whether you’re going long Traders are scared of this market and they should be, it’s a really crazy time for trading.

15:03
Yes, you can still be profitable, but when the best things as Traders, we can do is reduce the number of Physicians that were trading. Maybe even reduce the position sizes. Most of the time for me, I’m trading like one or two positions. Max. I’ve gotten up to four during this whole sell off this year. That’s the most that I’ve held at any one time.

15:21
But I’m guarding myself against unnecessary risk. The volatility is so extreme, you’re seeing hundred Point moves on On a daily basis. Now, with the S&P 500, I don’t need eight or nine positions. In order to be profitable in this market. I can be profitable and very profitable with just one or two positions.

15:37
So the takeaway here, this is why risk management matters. This is why using stop losses matter. This is why planning out your trade before you ever get into the trade where you’re going to get out. If the stock does not work in your favor before you ever get in, why these things matter is because of the Here.

15:54
And Now what you’re seeing people are blowing up It’s people are not containing the risk in their portfolio, and it’s destroying lies. It’s destroying retirement. It’s destroying dreams. Also, don’t try to find the bottom in a market, but you should try to find is swingtradingthestockmarket.com, which has some of the best stock market research out there on the web for you to enjoy.

16:17
Okay, now that I got that out of the way, the last couple of points don’t fight the FED. We talked about it on the way up. We’re going to talk about it on the way down. And finally, yes, there’s Panic out there. Yes, there’s Out there people are losing their shirts in this market manage the risk so you don’t have to be one of them.

16:32
If you enjoyed this episode, I would encourage you to leave me a five star review and keep sending me your questions at ryan@shareplanner.com. I promise. I’m going to finish part 2 of my podcast from last week with this upcoming episode. So be on the lookout for that plus, check out swingtradingthestockmarket.com and Sport.

16:51
This podcast in the process. Thank you guys. And God bless you. Thanks for listening to my podcast. Swing trading the stock market, I like to encourage you to join me in this SharePlanner trading block, where I navigate the stock market. Each day with Traders from around the world with your membership, you will get a 7-Day trial and access to my trading room including alerts via text email and WhatsApp.

17:13
So go ahead, sign up by going to shareplanner.com trading block, that’s www.shareplanner.com/trading-block. And follow me on SharePlanner’s, Twitter, Instagram, and Facebook, where I provide unique market, and trading information. Every day you have any questions, please feel free to email me at ryan@shareplanner.com all the best to you and I look forward to trading with you soon.