Stock Talk - V-ictory Formation: “The” Bottom looks behind us, Here’s What We Think is Next for Stocks

Episode Date: June 13, 2025

In this quick, data‑packed update, I walk you through why our team called the April 7 market bottom in real time, how the ensuing “V‑bottom” has already delivered a 1,000‑point surge, and most importantly, what history says usually follows moves like these. You’ll see the hard numbers behind my “Victory formation” thesis, learn why a slow grind to new highs (and a summer pullback worth buying) is the most likely path, and discover how the presidential cycle, breadth thrusts, and past 20 % rebounds all point to double‑digit gains over the next 12–18 months. By the end, you’ll know why I’m staying bullish, where I’m setting my sights for year‑end 2025, and how to position to ride the next leg higher with confidence.   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.

Investors, what if I told you the market just pulled off one of the most bullish patterns we've seen in decades and almost no one saw it coming. Not the headlines, not the Federal Reserve, and certainly not the financial media. But we did. And in this video, we're going to break it all down. Back in early April, while most were calling for more pain ahead, we anticipated a sharp reversal, not a recessionary-induced collapse, but a textbook v-bottom. And, believe it or not, whether we were good or just lucky, that's what happened. Over our points up in two months, and the data now backs it up. This isn't speculation, it's history repeating itself. In fact, previous V-bottoms like this have often followed by strong forward

returns. According to data from the Carson's group, Ryan Dietrich, in 16 out of 17 similar bare market recoveries, the market was higher 12 months later by an average of nearly 19%. And that's with a 94% win rate. And this one, it's unfolding without the intervention from the Federal Reserve. So what should you expect from here? Could we be looking at a grind higher through summer, a temporary pullback in fall, and then new all-time highs in 2006? Stay with us. We're going to walk you through the market signals historical context and what this means for long-term investors, because if history is any guide, this rally could be far from over. For the next few weeks, starting about a week after April 7th bottom in stocks, our videos all highlighted the same opinion

and thought. Our team message that we thought this would be the low for the market and stocks would subsequently move sharply higher. There was no lower low in the S&P 500, no retested the April 7th bottom, and no new breakdown despite the loud warnings from several retired billionaire hedge fund managers at the time. Instead, the markets climbed steadily, climbing back above the 200-day moving average, and returning to the levels where it first broke below the 50-day moving average in late February through early March. We hypothesized that the second leg of the move down to minus 20% was an invent-induced bare market correction and not a recessionary economically induced sell-off that lasts for quarters and sometimes years. Investors X the great financial crisis in 2007-8 and the

bursting of the speculative dot-com bubble frenzy in 2000 and 2001, which did proceed much longer and deeper recessions. History suggests that enough damage had been done and we would form a V-Bronzy, bottom in a near exact similar fashion to the V bottoms of the last 20 to 30 years. And so it now appears after nearly a thousand points gained in two months, others are finally seeing what we did, a V bottom in stocks. Let's call it the victory formation and take a knee given our comeback prediction being met. Okay, investors, looking backwards in the rearview mirror. The explanations were initial dovish tariff talk, the better than expected first quarter earnings reports in April and the May 9th China tariff deal, and then stable to better economic data

all throughout April and March. There were only rumors of lighter tariffs coming before the April 24th Zweig breath thrusts, creating the first what many charges call a bullish island reversal pattern. And investors, the good news here, this V-bottom looks to have happened without the Federal Reserve intervention and interest rate cutting. So after we're gaining $6,000 almost to the day, the market would be expected to in a V-bottom, Friday, June 6th, what should we expect in the SP-500 from here? In our May 31st video titled Stock Markets, V-Bottoms, we laid out what investors might expect throughout the summer months. Here's a brief recap. It would be a lurching grind higher to $6,200 plus than taking the better part of two to three months.

That would be normal before dropping back to near flat year-to-date. I'll drop a link to the video in the description below if you haven't seen it. And let me take a moment to ask you to subscribe to our channel if you aren't subscribed and hit the notification bell so you'll be notified when I upload new content. And if you know someone who might benefit from this information, please take a second to share this video with them. Beyond summer, looking into fall, what might investors expect from the markets in late 2005 and 2006? Or all the good times in the past, should you go to cash now given the markets regain most of their losses and sits about

two to three percent below their all-time highs near 6150. History says no. You should stay the course and actually hope for the normal late summer, early fall, sell-off to add to positions, as more major gains could lie ahead over the next 15 to 18 months. We've discussed the presidential cycle many time here at Ocarus over the last seven years. We'll get into the details of that again later in the year. But suffice it to say, we are inching closer to what is historically the best stock returns under a president. That is the fourth quarter first year and second full year of their term. Why? Probably because they focus on economic growth to help create a tailwind for their party into the midterm election late in year two. We'll cover that data later in the

year, so make sure you subscribe to our channel. Okay, back to data from chief market strategists and fellow data junkie Ryan Dietrich at the Carson Group, showing historically strong forward returns are possible from here despite the positive 20% move we've had off the recent lows. In fact, historically, moves like this, fast and furious, higher off the lows bodes well for returns over the next year. According to Dietrich, looking at the previous 17 bare market corrections or near minus 20% ones, after stocks then regained positive 20%, stocks were up a year later 16 out of 17 times for a 940 batting average. The one and only time the stocks were lower was during the sell-off during the COVID pandemic. Investors, this data isn't bearish. This data says V-bottoms are bullish for

future returns over the next year. Hence, I'm calling this episode the Victory Formation. Here's the data, let it sink in. An average return of near 19 percent and a median forward return near 18 percent with a 94 percent hit rate. There are only four 12-month return periods in this table that are lower than 13 percent, 1965, a birthday year, 1978, 87, and 2019. If we take the average of the median of these years from Ryan's data table, we'll get about the same triangulation for the summer of 2006, around 7,000 on the S&P 500, with no promises or guarantees, of course. Similar V-bottom data from my friends at Franklin Templeton, Lucas Kloak, and Chris Gallupo, 40-day S&P 500 turns was 19% mid the first week of June right

before 6,000. Since 1935, there have only been 13 such period a year after the one-year average forward a turn? 20%. No guarantees for all you compliance managers out there, but you can say wall of worry. You can rationalize why markets have V-bottoms since early April and walking back of tariff extremism, better jobs, and wage inflation data, but viewers who know me know I like real-time market data. The bottom market data since early April was saying real growth was okay and inflation peaked in early April, not the stagflationary doom bias calls many have suggested. Investors, even from here, after this rally, history is on the side of the bulls, not the bears, over the next 12 to 18 months.

The strategists who called for a retest have now been wrong for at least 1,000 S&P points. Okay, so from here, 6,000 when this was penned, there's not a really change in my outlook. Let's call it what it would be, a lurching grind higher about 1 to 1.5% per month, or about 100 points per month, into an August summer top, which is a very normal seasonal time for the markets to peak. After that, we would expect a normal summer pullback into the markets. Many institutions got too bearish near the April lows and de-risk and are way behind their performance curve in the second quarter. This plays out as normal. Then they will be even farther behind the indexes and the benchmarks by August, so any summer sell-off, say into early

October, would likely be a buying opportunity for a year-end rally and more new all-time highs next year in 2006, like the V-bottom and the presidential cycle histories suggest. This is why our team has stuck with our 2025-year-end target of around 6,600, even as stocks sold off into April and most strategists slash their targets from over this number to the low 5,000s and are now raising them back higher once again. Okay, with this positive outlook, does this mean you shouldn't add to stocks, particularly if you're younger and in saving and accumulation mode? No. Rarely can you pick the absolute level in both price and time on both the buy side,

the sell side, and the buy side once again, particularly in gross stocks. Regardless of the path for the economy and the financial markets over the next few months and throughout the rest of the summer, the investment team at Oak Carbis Group will be here, crewing the ship and adjusting our models where we can. Investors, until next week, I'm taking a knee in the victory formation. So have a blessed weekend and know because the Oak Carbis Financial Group team is doing what we can to playing for you and your family's future, regardless of what stage you're at in your career or in your retirement.

And if you're not a client yet, give us a call. We'd love the opportunity to help you navigate these times.