Why I'm Going to be Fully Invested

Market volatility has created some of teh greatest trading opportunities seen in a decade. Gary Glover of Novus Capital explains how he's trading the markets in expectation of wild swings in the '0 Year Cycle'.

[00:00:00] We are looking at volatile markets with huge swings in the main, guiding us through the charts. Technical trades in picking up the top companies with great fundamentals. Is Gary Glover from Nervous Capital. Good morning, Gary. Who are you? [00:00:11][11.4]

[00:00:12] You know, Chris Hager. [00:00:13][1.0]

[00:00:14] Well, it's your show. But I think a lot of the market participants are. If we just take a quick look at your portfolio before we jump into the charts, that you've got some great research on it, see that you've got 78 percent invested in compared to the market, down 69 percent. Your portfolio is up about 6. [00:00:31][17.4]

[00:00:33] So keep just keeping the head above water. So here just kind of building up to what I aim to be actually 100 percent invested here quite shortly here. So on as we speak, I'm about eighty four. So put another couple of pauses there. So just keeping it pretty basic. But definitely adding you know, I just think we're pretty close here sort of to a low here. So I've got rid of my. So I just I mean, it's so much volatility here at the moment. It's so fantastic. I've never seen options, volatility like some of the awful premiums out there. Amazing. Amazing. Absolutely. Yes. So if you're options, try to hear if you use options with your portfolio. It's absolutely stunning. [00:01:16][43.1]

[00:01:16] This is the. Of Jubilees. How are you using those and probably covered calls in a minute. You were 70 percent in the north of 80, and you're looking to be fully invested very soon. If we jump on and have the outshot and we get we use the indices to get a good space for how you're looking at the overall markets and then we'll jump into the positions. You've got a chart here of the Dow Jones Industrial Average from 2000. So they take refuge or a tech rise into the tech wreck. What does that chart tell us? And what's it telling you specifically? [00:01:47][30.5]

[00:01:49] Isn't just trying to get. Am I really just trying to get a head around this market here? Obviously, we've had a 32 percent drop in, what, 15/16 trading day. So it's a pretty, pretty decent move, pretty short period of time there. You know, lots of uncertainty there. [00:02:04][14.4]

[00:02:05] And no one really knowing the full extent sort of, you know, yeah, there's going to be some companies get hurt. His ministers get hurt. It's going to be some winners as well. Some companies will be a little bit affected. Some some sectors will be a lot affected. But, you know, is this going to be short dated is going to be. Is it going to be longer? Hallums just going to last. It's just a lot of uncertainty about this period. I'm just kind of remind when I saw a sign, it looked through some charter of software and looking at the cycles as well for sort of like major peaks, I'm looking at ones that were pretty overvalued in my opinion. The market was over by that 70 200 on their 2000 really just sort of stood out as a really, really something quite similar. And so you get like 2000. That was the Internet top there. So at the time there. Yeah. I mean, I think Amazon and a biotech company based came to life in 95. [00:02:59][53.5]

[00:03:00] I think Google only started in 98 so that the Internet really I was willing to the business really took off in 2000. [00:03:08][8.0]

[00:03:08] So at the time there, we had always seen, you know, no one really understood what the Internet was going to going to mean. So I would say almost, you know, adding to their arsenal there. But now into the new, you know, a paper company is going to get us any more and that there's no one going to basically use property more. Who's going to anybody get on the most is who's, you know, all these some of these valuations. Are they are they thing based or are they are they thick based? Who's going to. There's just so much uncertainty in that period because no one really knew what it all meant. And so you had a high valuation market. You had a lot of uncertainty there. You had all of a sudden coming off here because obviously some of the some of the bells were a bit high at the time. But it just kind of kind of very similar in a way to this sort of period here to sort of no one sort of knew how it's going to last. And when you look at that 2000 period there, it had initial pretty nasty, dropped 17 percent, climb 36 trading days. Then we saw obviously a decent bounce. But what followed after that for the rest of the year was just we just saw this heightened volatility here and we saw the market again dropping by, you know, six to 10 percent there on multiple occasions. We saw, you know, we're talking about 17 percent rally in 23 days. You know, nine percent six days in a four day, six percent. You know, it's just up and down, up and down, up and down. And there's just so many of them. So it will take, you know, one, two, three, four, five, six, seven, eight, nine rallies. They hit that twelve month period of, you know, sort of and that sort of six to 17 percent. So that's that's sort of a sell off of F-off. This is what this is the way forward. This is what we're. We're going to go through something quite similar. It's going to be so much uncertainty here, so much unknown here. And we're going to go up and down, up and down here. It's going to be a very volatile. And we think that that was a volatile period that started with a 17 percent cut. We started with a 32 percent decline. This might under you know, this might be it this might be tempered until for what we've got ahead here. [00:05:17][128.8]

[00:05:17] So but good thing, Chris, is I mean, this this is you know, it's good for folks like you and I. Yeah. You know, if you know what you're doing here, you can prosper, make some pretty nice money here. I think investors are going to sit back here in twelve months time and get a man's stamp. You know, the market's barely moved. But but we're going to see up and down, up and down, going to opportune these volatility. [00:05:40][22.3]

[00:05:41] It's going to be a hard thing. Think it's actually going to be a beautiful options market if you're buying top quality stocks with sort of a bit of dividend yield and then writing, if you cover calls in time, your rally, the premiums at the moment. And just out of this. Well, some of the I mean, you can basically pick up 7 or 8 percent for something, which is 7 percent out of the money. So it's some let's take that. [00:06:04][22.8]

[00:06:05] I think that every every month, year through. [00:06:06][1.8]

[00:06:07] So. But, yes, it's nothing or big Saudi moving forward here. So but one thing is of clear to me is this is going to be a very volatile period. I think it could last. You know, we could see something quite similar to that move the whole year. [00:06:20][12.6]

[00:06:21] And this is that's 2000. If we jump ahead 10 years or back 10 years from where we are today, the year 2010 on the Dow Jones, you've highlighted a couple of other similarities there. Each market sell off or we should not say massive compared to what we've had reasonable market sell off. What do you hope, 2010? What does that tell us? [00:06:41][20.2]

[00:06:42] It's just another story. We talked about the zero year. So if you think about the 10 year calendar, so you know, from zero to 0, 1 and 2, you say your 2010, your 2000s and 1990s, your 1966 dot com look at all year zero. Is that the predominant bearish years? So you 0 1 to sort of when you get your corrected periods. So but they're volatile periods as well. They go up and down, up and down. They're typically bearish. Most, most 0 years are actually negative years on the economy. I think they might only be one positive 0 year in the last hundred years. So we're just going to get, you know, typical sort of corrective sort of pattern there. So 2010 was a mild one that you still sort of saw. We'll hang out for days and bounces in that period, then a few more later on. But so plenty of volatility there. You know, if you look at 1990, similar 1960, so much. So it's just just telling us here that year. So I think here now this this is a start of the bearish phase, which probably rolls out to thousand twenty 22. So it's going to last another probably two two and a bit using. So but feel like we've probably we've probably done sort of two thirds or three quarters of the damage straight up here so often. Eight up and down. Big, big. So we're just going to see lots of movement up and down here. So, yeah. [00:08:11][88.5]

[00:08:11] So let's jump onto these Joline markets. So you've got a chart for the S&P. Two hundred days de-stock. Two hundred. And you had a target. And we talked about this last week in a couple of weeks ago when you thought that might go if we hit that target yet, Gary. [00:08:27][16.0]

[00:08:28] Yeah. Yeah. So before so we were looking for that sort of five thousand fifty four hundred as the that's where we sort of thought market might get back to. I think sort of forty nine might have been. So the kind of worst case scenario if we get sort of something a bit deeper there, just because that's sort of some big technical levels around those marks. And so I think the forty nine to sort of five thousand market sort of 50 percent of the old range and just below the current range and it's just just it's just a big sort of convergence there sort of phone the kind of weekly monthly sort of set up set. So there's always a bit of a level you know, to watch out for. Look, I could be wrong. Chris could go lower here. This is still a bit of panic and stuff there. But to me, this is sort of petroleum sort of reached you monster. A target zone here. It's a little bit of volume coming last Friday off that low. I really like that. I like, you know, basically they're just showing sort of you know, they're definitely participants sort of stepped in and bought those sort of heavy lows there. [00:09:33][64.5]

[00:09:33] So they're shy of 19 billion on these Chilean sharemarket, which was the highest level on these Chilean sharemarket by five billion or 30 percent more than the second place. Yeah, that true characteristic of lows where you'd see that bull less cement, money, money talks. [00:09:53][19.9]

[00:09:53] So but yeah, you're looking for volume there. So basically you're looking for an exhaustion that you're looking to basically. When you sort of say a low come in and then a rally the big by May. So that's that's when the is finally stepped in. So that that should give you a bit of a marker as to where the market's going to get interesting here. So, yes, I definitely think in that sort of forty nine to five thousand range, I just think that is a good territory here. I think it's you know, for firstly, Danny, has this been a massive base? So, yes, I think, you know, once yeah. [00:10:26][32.5]

[00:10:26] Well, once we sort of both here, we still probably, you know, nine, 18, 24 months is false photo bear market activity. Is that still for the Aussie as well as the US? [00:10:37][10.4]

[00:10:38] So, look, I just I guess I just sort of put that the US market, they would have liked to have shown probably six more ups and downs. But it had to sort of draw them in there on the monthly chart there. But Justin, sort of summary that we're gonna get, you know, lots of ups and downs in here and come back. I mean, ultimately, the I guess that the level that was sort of watching on the US market is that old high around that 19 might have been just around the nineteen thousand. I think if you project the first leg down and then and then I think that first little leg and I had a bit of bounce back that 50 percent mark, if you project that down to I think one point six one eight times, that's around about nineteen to sign. Yes. So that can be sort of something then that sort of puts the US in sort of similar territory to us and obviously we've come a bit deeper. So that's you know, I don't think we're not too far away from that. So maybe we've got a couple more days of downside here. I just think we're getting getting interesting down here anyway at the moment. So I think, you know, we just I think we're going to see a sort of flat year here. But the good news is it should go up and down, up and down, up and down multiple times and have some decent moves. And it's not going to be for the for the for the buy and hold investor that they're not going to win in this market. You're going to have to be to be sort of trading the range. Is he going to have to be active, in my opinion? So is this gonna get us going to. So traders like you and Chris says this should be you know, we should be a much as we're not happy about the, you know, the big decline here. This, you know, the market head, he should just this. This is the ideal market for people like us. So we should be on should do well. [00:12:23][104.1]

[00:12:23] Here are the opportunities for. [00:12:25][2.5]

[00:12:26] And one of them is not going to be it's going to be boring. So basically sometimes is sort of you know, if you think about that 2002, 2003 bear market, it was just just a slight this this this is not going be so this is going to be up and then it's going to be quick. So you're going to be get an early on, your tonneau is going to trade the ride up and down, up and down. It's going to be nice. Could be too exciting for you. [00:12:47][20.3]

[00:12:49] It's already been extremely exciting if you get a little white knuckles and white hair growing a bit volatile. What we've seen already is Wesfarmers. You've got in the weekly shop and he sees a huge drop with massive reversal. Can you two in three what you're looking at? [00:13:07][18.6]

[00:13:09] Yeah. So just because this sort of gap, quite quite a common sort of looking chart is sort of you know, this is this is a bellwether sort of, you know, much defensive, you know, sort of safe company. [00:13:23][14.5]

[00:13:24] But it just shows you the sort of the scale of the movie. So literally, you know, from those sort of December 2008 lows, they were basically with almost came back like nonexempt fall. And, you know, you've almost bounced clean a lot of the volume for the last week. They just how big the volume was competitive and everything else. And so and their recovery. Well. So just seeing this massive range, massive heart rate, just just sort of highlighting the current volatility, the deepness of the sell down here and a quick amount of time. And also just shows you how quickly the bounce has come back with literally gone from 32 back to thirty seven fifty and that's probably in a dial. So, you know. Yeah, it's just that's the toughest environment we're in at moments. So but yeah, I think you'll see you'll kind of you know, oftentimes when you see big ranges like that, I'm looking for reentries and stuff like that. The one thing I also notice the thing about bullish engulfing patterns or bearish, no one comes sort of those big wide ranging. They're typically the week following you'll come back to at least half of that range. So I like that the market had a massive range, like a similar point range last week. So normally they sort of big wakes. You'd come back, you know, you should draw a line in the middle. So I think say so. So it was sort of the point range. They drew a line at the 350 mark. The market should come back, at least retest the 50 percent before it wants to go in that direction. So often times are sort of big moves. You just you look for the midpoint, some display. There is sort of, you know, where they should always come back to. Probably the mine is probably it. That's kind of where it been looking for entries. [00:15:02][98.3]

[00:15:03] I think things like that's possibly why you can pick up the options with the heightened volatility as well. Yeah. Correct, Neal. Another one that's been hit really hard is ANZ. That's possibly been hit the hardest as the big four banks and they fall off a cliff jump through those lows. You've got nothing on the chart significantly. Just jump straight through it. Wesfarmers had a decent rally off the bottom and you've highlighted some significant volume from last week as well. What's ANZ got for us? [00:15:32][29.5]

[00:15:33] Yes, we're going to get Emily a massive ride right into the massive volume. So just when you say you do see sort of volume spikes that are probably like double or triple the average there, but those kind of more exhaustive sort of type moves. So it's sort of a wash out type of sort of fell down. So obviously, Dubai's finally step in sellers basically given up. That's when you see those extremes. But if you look at the sort of weekly chart, there was sort of the A-League bounce, a big league, and I'm going to C-Leg league down there. Often times you're looking for work. I can see that. And that's what we sort of measure that move off there. But. But I've done some projections and we've sort of put them, I guess, in terms of that at first, like they were sort of projected then 150 percent of that that B league. So just oftentimes they're always in ratio. Is these moves here? I think if we measure the adequacy, we've only just gone just beyond that sort of the red line there. [00:16:29][55.4]

[00:16:29] But, you know, there's that $16 mark. Looks like a pretty good level to ninety four Frein's and he went a week yielding close to 10 percent down here. So I know there's probably gonna be a haircut here coming Heywood's but but you're still still going to be some pretty decent yields and multiples. Great low. It's quite unique. It really meant CBA to get ninety two dollars. It was probably on the on the highest multiple etc.the traded on in fifteen years. So normally I think it trades on between what twelve and a half to sixteen point eight times to sort of where it is so high it's sort of roughly set in that range there for 10 or 15 years. So like a toaster roughly almost 19 times at only $2. And now we've gone the other way and fall and probably the biggest decline ever for that stock. Now it's trading on one multiples of it traded on the last. And that's all happened in three weeks. That's just extraordinary. How we've gone from one year has just gone from one sort of extreme to the other. [00:17:32][63.1]

[00:17:33] And I've sort of followed those sort of can sort of moves starkly there. And you don't only like you move so that two or three quartiles in one move, that's that's big to move actually outside the floor, quartiles on both in three weeks. That's that's unheard of. I've never seen that. So one day but. But yeah, I guess if you if you thought you were at $92, you'd be you know, you're basically paying the most expensive multiple of all time to the stock, whereas at the moment it's probably like buying on the cheapest multiple of all time as well. So that's that sometimes you discover put that in the ahead, I guess what you're what you're doing. That's well. [00:18:11][38.2]

[00:18:12] Final question to wrap this up on ANZ, you can see the peaks that you've got at ANZ for the A-League started well and surely before this market drop. So would you think that this could be a five leg fourth wife or do you think is it sort of running independent of the overall market? [00:18:30][17.8]

[00:18:32] Yes, I just sort of view that as a large, obviously correction, which is obviously, you know, like an ending top of Pattni. So and then then we just sort of start again and build here. You know, obviously in the early stages, it's sort of building there. You're going to get you know, you're going to get some some up and downs here. So, you know, if you look at the A-League down here to that low, it went down to $22. They can sort of say that that bounced up to 26, can back down to just above 22, went straight back to twenty six again, came back down to twenty three bennink. So they've got going. So there's a period of building here. [00:19:05][32.8]

[00:19:05] So you're probably going to get a period building here ofthis low here. You know, you can't rule out a possible. Sometimes when you sort of get the low in place like that, we can go a margin or lower. So that's you know, that's possible. We could go slightly lower. I just don't think we're gonna go a lot lower start than you see moves like this and that sort of volume extreme that wash out. [00:19:26][21.5]

[00:19:27] You normally see normally that's the low. But if it's not below, then it's usually only marginally exceeded. Not not not well exceeded. That makes sense. [00:19:37][9.8]

[00:19:38] Yes. So let's let's grading sites based on the volatility indices, the trading shares, how to try them looking at options. And you definitely man in great demand and this type of volatility. Thank you very much, Gary Glover from NOBIS Capital. Thanks, Chris. [00:19:53][14.6]

[00:19:55] So. There you go. Cool. Thank you. [00:19:55][0.0]

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