Stock Talk - V-Bottoms: No One Get's In, Bears left Behind

Episode Date: May 16, 2025

There was a sharp market rally that followed the early April lows—what many are calling a “V-bottom”—and most investors missed the rebound. Today let's talk about how real-time market data, not media narratives, pointed to improving conditions well before the news of tariff reductions between the U.S. and China hit. I also compare today’s market setup to the mid-1998 Dot-Com period, not the bubble peak, highlighting what historical patterns and investor sentiment are signaling now. If you’re wondering whether it’s too late to get back in—or if the rally is real—this video gives you my honest perspective, backed by data, charts, and the research we’re doing daily at Oak Harvest.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy — with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free consultation: https://click2retire.com/Connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, V bottoms in stocks, no one gets in. I'm confessing that I waited until Monday afternoon to write this one, so I wanted to see if there was a weekend China trade deal and if President's Trump third call over the last four weeks to buy stocks would prove to be as good as his first two calls. Of course, now we know over the weekend there was a big reduction in tariffs and from China and what looks like a big walkback of verbal hostilities between the two countries. And on Monday, stocks exploded higher, led by higher growth. with technology stocks and semiconductors up four and a half to almost 10 percent many semiconductor equipment names. The S&P 500 gained over three and a quarter percent, and the laggard was the

slower growth Dow Jones 30. As we had previously postulated for weeks in our videos, looking back April 7th was the low for the overall S&P 500 index and U.S. stocks, much to the dismay of those calling for crashes, retests of the lows, trading ranges lower, or worse yet, those blown out on margins at the lows were investors who panicked and went to cash late in the move down. As we discussed in our prior three episodes, X few periods like the Great Financial Crisis in 0708, and the popping of the speculative dot-com bubble frenzy in 2000-2001, which did proceed longer and deeper recessions, history says that enough damage had been done and many hedge funds got zeroed out on the lows and many retail investors have been buying their correction.

Zweig breath thrust on April 24th created the first of what many charts call a bullish island reversal pattern, and the tariff deal over the weekend created a second island reversal higher, leaving those longing for lower prices to get back in, desperate to buy or cover their shorts. On Monday the 12th, just yesterday, we blew right back through the 200-day moving average, which many have predicted would stop us. History being on the side of the bulls said calls for the retest would be wrong. We've given you the data on the Zweigbreath thrusts, investor sentiment data, invict spikes and retracements over the last three weeks. You can rationalize why markets have V-bottomed since early April on the walking back of tariff extremism, better jobs, and slower wage inflation data.

But viewers who know me know, I like real-time market data. The bond market data since early April was saying real growth was okay, and inflation peaked in early April, not the stagflationary doom bias calls many of you. have suggested. Investors, like it or not, this is what Goldilocks for stocks looks like in the bond market. The components inside the treasury market were saying, it's better to buy gross stocks than hide in boring stable names. And boom, a new story hits that corroborates what the real-time market data has been saying if we're watching closely. Investors, once again, I'll leave you with an update on how the charts look versus similar period. That was mid.com in 1998, not peak.com. Feel compelled to do this showing this chart because Charles and I listened to dozens of technology conference calls

the last three weeks that were positive on the continued AI buildout growth for the next 12 to 18 months. And most of the stories I read in the financial media are pending an AI doom collapse, which isn't happening yet. Secondly, investors, I haven't been able to find anyone who believes this analogy or will spend any time researching it. Remember, the late third quarter, 1998 long-term capital market hedge fund blowup period, which was mid.com buildout, what we previously referenced when the S&P 500 dropped over 21 percent. Tech tanked, semiconductors dropped, and the dollar fell minus 10 percent was also one of these periods of a death cross. Take a look at the overlays of the SMP 500 and a very cyclical SOX semiconductor index back then and

now. It'll be fun to see how this plays out over the next nine to 15 months. investors have rarely been this fearful and sentiment rarely this negative. And historically, when it's been at these levels, you've been better off buying, particularly as we've mentioned gross stocks and walking away for 12 to 18 months than selling. I titled this video, V bottoms, no one gets in because historically speaking, if you didn't buy the first 10 days after the lows in April 7th or 8, you missed your best chance during the sell-off. The market has behaved almost exactly as it has the last 15 years during event-driven

sell-offs that reach bare market levels without the likelihood of an earnings or economic recession like we got in 2022. What's that? We spent exactly two months to the day breaking the 200-day moving average, then regaining it. Count the days. And go back to our previous comparison in late 1998 with long-term capital in October 1998 blow-up event and count the days. Two months to the day. While it would be normal to digest these gains next week or pull back in a minor way,

I wouldn't expect a large percentage decline, hoping to buy lower in the second quarter. Historically, these moves have led to frustratingly bullish, lurches and grinds higher for about three months before the market finally sees any significant sellers. Investors, you most likely won't see those low levels again in April for quite some time, if at all, this year. Many institutions got too bearish near the lows in April and de-risk and are already way behind the performance curve in the second quarter. So does that mean that you shouldn't add to stocks? No, because rarely can you pick the absolute level in both price and time, particularly in gross stocks. Here's some great data on the XLK technology ETF returns over forward periods when momentum turns in its favor like it has recently. It says that the tide has finally turned positive for technology growth stocks.

Regardless of the path of the economy and the financial markets over the next few months, the investment team at Oak Harvest will be here, brewing the ship and adjusting our models where we can. Until next week, have a blessed weekend, and know that our Oak Harvest team is doing what we can to plan for you and your family's future, regardless of what stage you are at in your career or in your retirement. All content contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators,

statistics, or other sources are not guaranteed. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.