Khoo Sees S&P 500 Rally Extending Past 7,800 on 30% Earnings Growth

Adam Khoo

Surging corporate earnings have compressed forward valuations even as the index hit records, positioning any late-summer seasonal pullback as a buying opportunity ahead of a fourth-quarter pre-election rally.

AI-assisted summary of The S&P 500 Just Hit 7,800. Can It Go Higher, or Is This the Top? — original source. Check the original for full context.

Source published: 2026-08-17

Key ideas

The S&P 500 reached a record 7,800 points, posting a 13.2% gain year-to-date while technical moving averages confirm a continued uptrend across short-, medium-, and long-term timeframes. (0:00)
Trading at 20× forward earnings versus a 5-year average of 19.9×, the S&P 500 remains fairly priced as corporate earnings growth outpaced index price gains, compressing valuation from 22× at the start of the year. (10:49)
Second-quarter 2026 earnings surged 50.4% year-over-year against expectations of 23%, lifting projected full-year earnings growth from an initial 15% to 30%. (12:38)
Midterm election year seasonality typically brings weakness in August and September before launching a sharp rally 22 trading days ahead of the November 3 election, followed by historically strong returns through October and November. (20:39)

Detailed notes

## Background Published on YouTube by professional investor and author Adam Khoo on August 17, 2026, this video examines whether the S&P 500 has peaked after breaching 7,800 points. According to the description, Khoo stacks technical trend analysis, fundamental valuations, and historical midterm election seasonality to assess if the market is in a bubble or poised for further gains in 2026.

## TL;DR Addressing concerns over record highs, Adam Khoo evaluates the S&P 500 using three analytical lenses to conclude that the broader bull market remains firmly intact. Technical moving averages confirm short-, medium-, and long-term uptrends, signaling that any near-term 5% to 10% retracements are standard corrective waves rather than secular reversals. Fundamentally, blowout corporate earnings growth of 30% has outpaced the index's 13% price advance, compressing the forward P/E multiple to a reasonable 20× and dismissing bubble warnings. Finally, midterm election cycle seasonality indicates that after potential chop in August and September, historical patterns overwhelmingly favor a strong Fourth-Quarter rally heading into year-end.

## Atmosphere & style The presentation is disciplined, pedagogical, and pragmatic, blending rigorous data-driven charting with Khoo's trademark conversational humor and grounded delivery. Rather than succumbing to emotional headlines or perma-bear panic, the video adopts an objective probabilistic mindset that systematically dismantles fear. Watching the breakdown feels steadying and empowering, turning anxieties about all-time highs into calculated, rule-based blueprints for buying dips.

## Bulletin - [00:00](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=0s) The S&P 500 reached a record 7,800 points, posting a 13.2% gain year-to-date while technical moving averages confirm a continued uptrend across short-, medium-, and long-term timeframes. - [10:49](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=649s) Trading at 20× forward earnings versus a 5-year average of 19.9×, the S&P 500 remains fairly priced as corporate earnings growth outpaced index price gains, compressing valuation from 22× at the start of the year. - [12:38](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=758s) Second-quarter 2026 earnings surged 50.4% year-over-year against expectations of 23%, lifting projected full-year earnings growth from an initial 15% to 30%. - [20:39](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1239s) Midterm election year seasonality typically brings weakness in August and September before launching a sharp rally 22 trading days ahead of the November 3 election, followed by historically strong returns through October and November.

## Key takeaways - [00:00](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=0s) Rather than attempting to forecast unpredictable market tops, investors should operate within a probabilistic framework combining technical and fundamental analysis. - [01:24](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=84s) Technical indicators on the daily chart remain bullish with the 20-day EMA above the 40-day EMA, the 50-day SMA above the 150-day SMA, and an upward-sloping 200-day SMA. - [03:20](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=200s) Routine pullbacks within an ongoing uptrend represent normal wave cycles rather than structural trend reversals, provided longer-term moving averages maintain upward slopes. - [05:27](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=327s) A standard corrective pullback of 5% to 10% is expected over the next one to two months, establishing potential technical accumulation zones near the weekly 20 EMA (7,380) and 50 SMA (7,000). - [10:49](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=649s) At 20× forward earnings, the broader market sits near historical valuation averages (19.9× 5-year average; 19.0× 10-year average), refuting claims of an overinflated market bubble. - [10:49](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=649s) Strong earnings expansion of 30% for full-year 2026 has outpaced the 13% price rise in the S&P 500, resulting in multiple compression despite record nominal index levels. - [12:38](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=758s) Second-quarter corporate performance demonstrated broad strength beyond mega-caps, with 86% of S&P 500 companies beating earnings estimates and non-megacap earnings growing 32%. - [14:50](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=890s) Index constituent valuations show wide dispersion, with 27% of companies trading at a discount of 10% or more below intrinsic value, including wide-moat compounders like Meta and Microsoft. - [17:33](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1053s) International compounders such as MercadoLibre offer attractive risk-reward profiles, combining high annualized earnings projections with discounts to intrinsic value. - [20:39](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1239s) Midterm election years historically produce a seasonal slump during August and September before bottoming out ahead of the vote. - [22:05](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1325s) The fourth-quarter seasonal rally typically begins approximately 22 trading days before Election Day, with October historically serving as the strongest month of the midterm cycle. - [23:08](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1388s) Historical data shows positive S&P 500 returns across all midterm election scenarios, averaging a 10.4% 6-month gain if the president loses the trifecta and a 16.1% gain if the trifecta is retained.

## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=0s) All-Time Highs at 7,800 and the Probabilistic Framework

The US stock market reached fresh record territory as the S&P 500 breached 7,800 points. The broader benchmark is up 13.2% year-to-date, while the tech-heavy Nasdaq 100 has gained 19.2%. Adam Khoo notes that an investor concentrating strictly on the top 1% highest-quality companies should be outpacing both indexes; his own portfolio is up 25.66% over the same stretch. With these milestone highs, market participants are asking whether this signals the ultimate top of the year—and whether they should take their profits and run—or if the market still has substantial runway left.

Khoo cautions that nobody can predict short-term stock market moves with absolute certainty due to countless unpredictable variables, joking that this remains true "unless you sleep next to Trump every night and you can hear him talking in his sleep." Because exact foresight is impossible, investors must abandon guesswork and analyze probabilities: is the market statistically more likely to continue advancing or to roll over? Khoo approaches this question through two primary disciplines: technical analysis and fundamental analysis.

- **S&P 500 Year-to-Date Performance**: +13.2% (reaching 7,800 points) - **Nasdaq 100 Year-to-Date Performance**: +19.2% - **Adam Khoo Portfolio Performance**: +25.66% year-to-date - **Analytical Core**: Shifting focus away from impossible certainty toward probabilistic technical and fundamental realities

---

[01:24](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=84s) Technical Analysis: Trend Alignment and Moving Average Rules

Consulting the price charts begins with a simple question: is the market in an uptrend, a downtrend, or consolidation? Operating under the classic market maxim that "the trend is your friend until the end of the trend," an established uptrend establishes an asymmetric probability that prices will continue higher. On the daily chart of the S&P 500, a clear uptrend is underway across all time frames based on moving average alignments:

1. **Short-Term Trend**: Tracked by the relationship between the 20-day exponential moving average (EMA) and the 40-day EMA. As long as the red 20 EMA stays above the blue 40 EMA, the short-term trend remains upward. Even during brief pullbacks, as long as the 20 EMA holds above the 40 EMA, downward moves are merely temporary dips inside a larger upward drift. 2. **Medium-Term Trend**: Measured using the 50-day simple moving average (SMA) relative to the 150-day SMA. A thick blue 50 SMA positioned above the green 150 SMA confirms an active medium-term uptrend. 3. **Long-Term Trend**: Monitored by the 200-day moving average—which Khoo refers to as the "grandfather line." If the 200 SMA is sloping upward, the broader secular trend is positive.

For investors who prefer not to chart moving averages manually, tools like StockOracle provide this status instantly: currently, both the short-term and medium-term trends are flagged as confirmed uptrends. However, an uptrend does not mean prices march upward in an unbroken straight line every day, week, or month. Markets naturally move in wave patterns: wave up, wave down, wave up, wave down.

During the pullback earlier in the year in March, the 20 EMA crossed below the 40 EMA, signaling a temporary short-term downtrend. Although the 50 SMA also dipped toward the 150 SMA, the medium-term trend never reversed because the green 150 SMA continued to slope upward. For a true medium-term trend reversal to confirm, both the 50 SMA and 150 SMA must actively slope downward together. The March dip did not meet this criteria, meaning the macro trend stayed intact and the correction was simply a buying opportunity.

- **Short-Term Gauge**: 20 EMA above 40 EMA confirms upward momentum - **Medium-Term Gauge**: 50 SMA above 150 SMA; both must turn downward to signal a trend reversal - **Long-Term Gauge**: Upward-sloping 200 SMA ("grandfather line") - **Wave Dynamic**: Pullbacks are normal wave patterns within a prevailing uptrend rather than structural breakdowns

---

[05:27](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=327s) Buying the Dips and Mapping Weekly Support Levels

Even though the technical probability points to the S&P 500 finishing the year higher, Khoo refuses to buy shares right after an aggressive wave up. His cardinal rule is to add capital exclusively after a wave down: "Don't chase the girl. Wait for the girl to run to you to add." Anticipating that the index could experience a corrective wave down over the next one to two months before mounting a late-year rally, the critical question becomes how deep that pullback might go.

While market bottoms cannot be called with pinpoint precision, moving averages act as reliable support zones. Shifting from the daily chart to the weekly chart gives a cleaner, smoother perspective to locate where buyers are likely to step in:

```mermaid flowchart TD accTitle: Weekly Chart Pullback Scenarios and Support Levels accDescr: Flowchart illustrating the three technical support levels on the weekly S&P 500 chart and their associated pullback depths. A["S&P 500 Record High (~7,800)"] --> B{"Pullback Depth Scenarios"} B -->|"Shallow Pullback (~5%)"| C["Support 1: 20-week EMA (7,380)"] B -->|"Medium Correction (~10%)"| D["Support 2: 50-week SMA (7,000)"] B -->|"Deep Correction (~17%)"| E["Support 3: 100-week SMA (6,461)"] C --> F["Base Case Expectation: 5% to 10% Retracement"] D --> F F --> G["Eventual Wave Up / Year-End Rally"] ```

These support zones define potential accumulation zones for purchasing the index or selling options structures such as cash-secured puts and bull put spreads:

- **First Support (Shallow Pullback)**: The weekly 20 EMA sitting at approximately **7,380**, which represents a mild dip of about **5%**. Historically, short-lived pullbacks bounce reliably directly off this moving average. - **Second Support (Medium Pullback / Correction)**: The weekly 50 SMA sitting near **7,000**, representing a **10%** drop from the highs, fitting the formal definition of a market correction. - **Third Support (Deep Correction)**: The weekly 100 SMA at **6,461**, marking a severe **17%** drawdown.

Khoo stresses that a 17% drop is not his base case. His baseline projection for any near-term consolidation over the coming two months is a healthy, routine pullback between 5% and 10% before the market catches support and pushes upward into the end of the year.

---

[09:47](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=587s) Pivoting to Fundamentals: Facts Over Wall Street Doom

Having concluded that the technicals are undeniably bullish, Khoo turns to the fundamental picture: valuation. He points out the stark division among media commentators and prominent Wall Street figures. On one side are prominent perma-bears such as Michael Burry—who actively bets against and shorts the market—and Ray Dalio, both warning that the current market is an unsustainable bubble teetering on collapse. On the other side, an equally vocal contingent insists the market has plenty of upside left.

Khoo cautions investors never to trade off subjective opinions, as nobody possesses a crystal ball. Attempting to short a confirmed, robust uptrend based purely on a guru's warning is an exercise in futility. Instead, investors must assess objective valuation metrics: with the market having climbed 13% to record highs, is the S&P 500 actually overpriced, or are earnings expanding rapidly enough to justify the price action?

[10:49](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=649s) S&P 500 Valuation: Why 20× Forward PE Is Fairly Priced, Not a Bubble

When evaluating overall stock market valuation, there are several methods investors commonly rely on, ranging from trailing historical price-to-earnings (PE) ratios to the cyclically adjusted Shiller PE ratio. However, the most informative metric is the forward PE ratio—the current market capitalization of the S&P 500 divided by projected future earnings. Because markets are forward-looking, pricing assets based on expected earnings provides the clearest operational view of fundamental value.

Currently, the S&P 500 trades at roughly 20× forward earnings. Comparing this to historical benchmarks, the 5-year average sits at 19.9×, while the 10-year average rests at 19.0×. Trading at 20× means the market is only slightly above historical norms, putting it squarely in "fairly priced" territory rather than in an overinflated bubble.

```mermaid flowchart LR accTitle: S&P 500 Valuation vs Earnings Growth Dynamic accDescr: Visualizing how 30 percent corporate earnings growth outpaced 13 percent price gains, compressing forward PE from 22x to 20x. subgraph MarketDynamics["2026 Index Performance"] P["Market Price Gain: +13%"] E["Earnings Growth: +30%"] end subgraph MultipleCompression["Forward P/E Multiple"] PEStart["Start of Year: 22× Forward P/E"] PENow["Current Level: 20× Forward P/E"] PEStart -->|"Earnings Outpace Price"| PENow end P --> MultipleCompression E --> MultipleCompression ```

More remarkably, the market has actually grown cheaper over the course of the year. At the close of last year and into early 2026, the S&P 500 traded around 22× forward earnings. Even after the index advanced by 13%, the multiple compressed down to 20×. A market can rise in absolute price while getting fundamentally cheaper if corporate earnings expand at a significantly faster clip than equity prices.

- **Forward P/E comparison**: Current level is 20.0× forward earnings vs. the 5-year average of 19.9× and the 10-year average of 19.0×. - **Multiple compression**: Compressed from 22× at the start of the year down to 20×, despite a 13% price rally in the S&P 500.

---

[12:38](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=758s) Monster Corporate Earnings Growth Crushing Expectations

The primary catalyst anchoring market resilience—despite headwinds like the war involving Iran and an otherwise sluggish labor market—is blowout corporate earnings. In the recently concluded Q2 2026 earnings season, consensus forecasts anticipated 23% earnings growth across S&P 500 constituents. Instead, corporate earnings exploded by 50.4% year-over-year. Even excluding massive megacap contributions from Alphabet and Amazon, quarterly earnings still expanded by 32%, a pace rarely witnessed outside of sharp post-recession rebounds. A striking 86% of companies beat Wall Street earnings estimates.

Looking at the full calendar year 2026, original projections entered January calling for modest 15% earnings expansion. Current forecasts now project 30% full-year earnings growth. Because the 13% index gain is well exceeded by 30% projected bottom-line growth, the rally is fundamentally supported by real cash flows. This stands in stark contrast to the speculative mania of the dot-com bubble, where stock prices surged detached from actual business profitability.

- **Q2 2026 earnings growth**: 50.4% reported vs. 23% projected expectation. - **Broad-market breadth**: 86% of S&P 500 companies beat quarterly earnings estimates; non-megacap earnings growth still logged 32% (ex-Alphabet and Amazon). - **Full-year 2026 earnings outlook**: Upgraded from 15% at year-start to 30% full calendar year earnings growth.

---

[14:50](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=890s) Drilling Down into S&P 500 Components and Stock Oracle Valuations

Although the overall index is fairly priced at 20× forward earnings, wide dispersion exists beneath the surface between deeply discounted and heavily overextended equities. Using the Stock Oracle platform to categorize S&P 500 constituents by their relationship to intrinsic value reveals distinct valuation tiers across the index:

When sorting for deeply discounted equities, economic moats matter. While "no-moat" businesses can produce rapid short-term stock gains, they lack defensibility over full market cycles. Long-term capital belongs primarily in "wide-moat" compounders that possess sustainable competitive advantages, such as Meta, ServiceNow, or Microsoft, which combine steep valuation discounts with exceptional economic moats.

---

[17:33](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1053s) Finding High-Growth Opportunities Outside the Index: MercadoLibre

Profitable investing is not confined solely to the constituents of the S&P 500. Substantial upside often resides in international compounders. A prime example is Latin American e-commerce and fintech giant MercadoLibre (ticker: MELI), often referred to as the "Amazon of Latin America."

To pinpoint these opportunities, custom screening filters sort across dozens of fundamental data points, focusing specifically on 3- to 5-year projected annual earnings growth paired with a discount to intrinsic value (Price to Oracle Value). Sorting by highest projected annualized growth identifies market leaders: - **Palantir**: ~80% projected annual earnings growth over the next 5 years. - **Nvidia**: 43% projected annual growth. - **Broadcom**: 38% projected annual growth. - **MercadoLibre**: 34% projected annual growth.

High growth alone is insufficient if the entry price is excessive. Comparing price against intrinsic Oracle Value (where 1.0 represents fair value, below 1.0 represents an undervaluation, and above 1.0 is overvalued) reveals that MercadoLibre trades at a Price-to-Oracle ratio of 0.81—representing a 19% discount to intrinsic value. Paired with a 35% Return on Equity (ROE), an 18% Return on Invested Capital (ROIC), and 34% annual growth, it represents a high-quality, wide-moat compounder trading at an attractive margin of safety.

- **MercadoLibre (MELI) fundamental snapshot**: - Projected 3- to 5-year growth: 34% annualized. - Valuation: 0.81 Price to Oracle Value (19% undervalued). - Profitability metrics: 35% ROE, 18% ROIC.

---

[20:39](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1239s) Midterm Election Seasonality: The Historical August–September Slump

While the underlying fundamentals remain exceptionally robust—driven by double-digit profit growth and reasonable valuations—short-term price action is heavily dictated by election cycles and seasonal tendencies. Historical research from Carson Research demonstrates that during U.S. midterm election years (with the midterm elections taking place on November 3), August and September are historically the most bearish, challenging months of the entire year, frequently finishing with negative monthly returns.

August started on strong footing because shifting macroeconomic factors altered interest rate expectations. With inflation cooling faster than anticipated and the labor market softening, market odds that the Federal Reserve would hike interest rates in September dropped to only 30%, shifting expectations toward a rate hold. That monetary relief, coupled with blowout Q2 earnings, ignited a strong early-August rally. Nevertheless, investors should not get complacent or panic if seasonal turbulence triggers an abrupt pullback before the quarter ends:

> "Be aware that in August historically it tends to end up negative. So if it does end up negative, don't freak out, don't be surprised, it's part of the grand plan... and September tends to end up negative as well."

[22:05](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1325s) Midterm Seasonality and the Fourth-Quarter Rally

While August and September are historically negative months during midterm election years, the seasonal picture flips dramatically once autumn arrives. October—"hallelujah," as Adam puts it—has historically been the single strongest month of the year in midterm cycles. November follows as another very strong month, and December finishes in positive territory as well, though its gains are typically not quite as strong as those seen in October and November. Based on these historical seasonal patterns, the strongest rally of the year is still ahead.

At first, Adam remarks that this surge tends to happen right after the midterm elections on November 3rd, before immediately catching and correcting himself: "Sorry, I'm wrong. The rally normally starts not after the elections. The rally normally starts 22 trading days before the elections." Rather than waiting for the ballots to be counted, the market historically begins its upward move roughly a month of trading days ahead of Election Day. Looking at the visual seasonality chart for an average midterm election year, the trajectory is unmistakable: weakness across August and September gives way to a powerful, sustained fourth-quarter rally running from October through December.

```mermaid flowchart LR accTitle: Average Midterm Election Year Seasonal Trajectory (Q3 to Q4) accDescr: Timeline showing historical market weakness in August and September followed by a pre-election rally starting 22 trading days before November 3 and continuing through December.

A["Aug – Sep: Historical Seasonal Weakness"] --> B["22 Trading Days Before Nov 3: Rally Begins"] B --> C["Oct – Nov: Strongest Months of the Year"] C --> D["Dec: Continued Positive Finish"] ```

- **August & September:** Historically negative months during average midterm election years. - **October:** Historically the strongest month of the year based on midterm seasonality. - **November & December:** November is also very strong, followed by a positive (though more moderate) December. - **Rally Catalyst Timing:** The uptrend typically ignites **22 trading days before** the November 3rd midterm elections.

[23:08](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1388s) Election Outcome Scenarios and Buying the Pullbacks

Does it actually matter to the stock market who wins the midterm elections? According to Adam, the answer is "slightly." Citing long-term historical research compiled by BlackRock and Bloomberg, he outlines three post-election scenarios based on whether the sitting president's party maintains its "trifecta." Currently, the Republicans hold all three levers of federal power—the White House, the Senate, and the House of Representatives (Congress).

If the Democrats win the House, or win both the House and the Senate, they break the president's trifecta. Under this broken-trifecta scenario, the S&P 500 has historically gained **10.4%** in the six months following the election. Adam notes that this is the most probable outcome at the moment: based on Polymarket betting odds, the Democrats are favored to flip the House, while the Senate remains a 50/50 toss-up. Conversely, if the Democrats fail to flip either chamber and the Republicans retain control of all three branches, the market enjoys its most bullish historical outcome, surging **16.1%** in the six months after the election. Averaging the outcomes across all historical midterm elections yields a **14%** six-month post-election gain.

Ultimately, no one can know or guess with certainty how the midterms will play out, "but bear in mind that whatever happens, whoever wins, the market usually will end up very positive by the end of the year." With that statistical tailwind in mind, Adam concludes by sharing his personal game plan: he welcomes any near-term market weakness, pullbacks, or corrections as buying opportunities to accumulate more shares of high-quality companies during this ongoing bull run, signing off with his trademark farewell, "may the markets be with [you]."

## Notable quotes > [00:00](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=0s) unless you sleep next to Trump every night and you can hear him talking in his sleep. — Adam Khoo

> [01:24](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=84s) the trend is your friend until the end of the trend — Adam Khoo

> [01:24](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=84s) grandfather line — Adam Khoo

> [05:27](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=327s) Don't chase the girl. Wait for the girl to run to you to add. — Adam Khoo

> [20:39](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1239s) Be aware that in August historically it tends to end up negative. So if it does end up negative, don't freak out, don't be surprised, it's part of the grand plan... and September tends to end up negative as well. — Adam Khoo

> [22:05](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1325s) hallelujah — Adam Khoo

> [22:05](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1325s) Sorry, I'm wrong. The rally normally starts not after the elections. The rally normally starts 22 trading days before the elections. — Adam Khoo

> [23:08](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1388s) but bear in mind that whatever happens, whoever wins, the market usually will end up very positive by the end of the year. — Adam Khoo

> [23:08](https://www.youtube.com/watch?v=EQnmtPEcOMg&t=1388s) may the markets be with [you]. — Adam Khoo

## Mentioned S&P 500, Nasdaq 100, Adam Khoo, Donald Trump, StockOracle, Michael Burry, Ray Dalio, Alphabet, Amazon, Copart, Meta, Zoetis, ServiceNow, FICO, Honeywell, DexCom, Eli Lilly, Qualcomm, Veeva Systems, S&P Global, Domino's Pizza, Microsoft, Berkshire Hathaway, Thermo Fisher Scientific, Nvidia, McDonald's, Intercontinental Exchange, Charles Schwab, MercadoLibre, Palantir, Broadcom, Carson Research, Federal Reserve, BlackRock, Bloomberg, Polymarket

## Video description Record highs, stretched valuations, and a midterm election year. Has the S&P 500 topped out, or is there still room to run in 2026?

In this video, I stack three independent lenses to find out. First, the technicals: is the market in a confirmed uptrend or rolling over? Second, the fundamentals: with the S&P 500 near 7,800 at 20× forward earnings and earnings growing 30% this year, is it a bubble or fairly priced? Third, seasonality: what midterm election years usually deliver in the back half.

I combine all three to show what the data really says. No hype, just the facts.

======================== Stock Investing & Trading insights by Adam Khoo will show you profitable trading and investment opportunities in today's stock markets.

These are essential strategies for stock traders and investors who want to improve their investment and trading performance.

Adam Khoo is a professional stock investor and options trader and the best-selling author of 16 books including 'Winning the Game of Stocks" and "Profit from the Panic". Thousands of students have profited from his sharp investment insights into the world of stock market investing and trading. ===================== Sign up for our courses/mentorship programs 📗 Value Momentum Investing: http://bit.ly/4mqrEVP 📙 Options Waverider™: http://bit.ly/4c5xyrR 📘 Price Action Manipulation™ (Trading): http://bit.ly/48FUAmQ 📕 Income Investing™ (Dividends): http://bit.ly/3Ow8CRj

Grab our Playbook Subscriptions Ultimate Investors Playbook™: http://bit.ly/3QiN6zT Options Tactics Playbook™: http://bit.ly/4tCQFPL PAM™ Trader Playbook: http://bit.ly/4mmYnv0 ===================== 💻 Join Our Wealth Academy Live Seminars https://www.wealthacademyglobal.com ===================== 🧑‍🏫 Visit Adam Khoo Learning Technologies Group https://www.akltg.com ===================== Follow Me On Social Media 🌟 Facebook: https://facebook.com/adamkhoosuccess 🌟 Instagram: https://www.instagram.com/adamkhoosuccess/ ===================== Follow Piranha Profits On Social Media 🐟 Facebook: https://www.facebook.com/piranhaprofits 🐟 Instagram: https://www.instagram.com/piranhaprofits 🐟 Telegram: https://t.me/piranhaprofits 🐟 Discord: https://discord.gg/piranhaprofits ===================== 👉 If you've found this video helpful, please LIKE, SHARE, & COMMENT 👉 SUBSCRIBE to my Channel for more Market Analyses & Investing Strategies 👉 Click on the NOTIFICATION BELL to get notified whenever I upload a new video ===================== 💸 MAY THE MARKETS BE WITH YOU! 💸

[Source](https://www.youtube.com/watch?v=EQnmtPEcOMg)

中文简报

Khoo预计在30%盈利增长推动下标普500指数涨势将突破7800点即使该指数创下历史新高，企业盈利激增仍压缩了远期估值，使夏末的任何季节性回调都成为第四季度大选前反弹的买入良机。针对市场对历史新高的担忧，Adam Khoo通过三个分析维度对标普500指数进行了评估，得出大级别牛市依然完好无损的结论。技术面均线确认了短、中、长期上升趋势，表明近期任何5%至10%的回调均属于标准调整浪，而非长期趋势反转。基本面上，30%的爆炸性企业盈利增长超过了该指数13%的价格涨幅，将远期市盈率压缩至合理的20倍，打破了泡沫警报。最后，中期选举周期季节性表明，在8月和9月可能出现震荡之后，历史规律压倒性地倾向于年底前第四季度将迎来强劲反弹。标普500指数触及7800点的创纪录高位，年内累计上涨13.2%，同时技术面均线确认了短、中、长期时间维度的持续上升趋势。 (0:00) 标普500指数目前的远期市盈率为20倍，而5年平均值为19.9倍，由于企业盈利增长跑赢指数价格涨幅，估值从年初的22倍受到压缩，定价仍处于合理水平。 (10:49) 2026年第二季度盈利同比增长50.4%，高于预期的23%，将预期的全年盈利增速从最初的15%推升至30%。 (12:38) 中期选举年份的季节性通常会在8月和9月带来疲软，随后在11月3日大选前22个交易日展开强劲反弹，并在10月和11月期间录得历史上强劲的回报。 (20:39)

Reading summary

Adam Khoo argues that the S&P 500's rise to 7,800 is anchored by strong technical trends and accelerating corporate earnings rather than speculative bubble dynamics. Consequently, he views anticipated late-summer pullbacks as routine accumulation opportunities within a broader bull market. Technical Uptrends and Expected Retracement Levels (1:24) Daily moving average alignments confirm an ongoing technical uptrend across multiple time horizons: the 20-day exponential moving average (EMA) remains above the 40-day EMA for the short term, the 50-day simple moving average (SMA) stays above the 150-day SMA for the medium term, and the 200-day SMA continues sloping upward. While Khoo considers the probability of higher index prices by year-end to be asymmetric, he cautions against buying directly after aggressive advances, opting instead to deploy capital during corrective pullbacks. On the weekly chart, Khoo identifies three primary moving average support levels for potential retracements over the subsequent one to two months: the 20-week EMA at 7,380 (a mild 5% dip), the 50-week SMA at 7,000 (a standard 10% correction), and the 100-week SMA at 6,461 (a severe 17% drop). His baseline expectation projects a routine consolidation of 5% to 10% before the index resumes its upward trajectory. Fundamental Valuation and Earnings Expansion (10:49) Addressing warnings from bears such as Michael Burry and Ray Dalio, Khoo maintains that current market pricing is supported by underlying fundamentals. The S&P 500 trades at roughly 20× forward earnings, only slightly above its 5-year average of 19.9× and 10-year average of 19.0×. Despite a 13.2% year-to-date advance in the index, the forward multiple compressed from 22× at the start of 2026, as corporate earnings growth outpaced price increases. This multiple compression has been driven by strong earnings results. In Q2 2026, constituents reported 50.4% year-over-year earnings growth versus the 23% expected, with 86% of companies beating forecasts; earnings outside of Alphabet and Amazon still expanded by 32%. Full-year 2026 earnings forecasts have consequently been revised from 15% to 30%, which Khoo cites as evidence that the advance is rooted in cash flows rather than dot-com-era speculation. Valuation Dispersion and Intrinsic Value Selection (14:50) Beneath index-level multiples, Khoo notes substantial valuation dispersion across equities using Stock Oracle data. Within the S&P 500, 10% of constituents trade at deep discounts greater than 30% below intrinsic value, 17% trade 10% to 30% below intrinsic value, 25% are fairly priced, and roughly 47% are overvalued. For long-term allocations, Khoo prioritizes companies with sustainable competitive advantages, citing wide-moat compounders like Meta, ServiceNow, and Microsoft as examples trading at notable discounts. Beyond the benchmark index, Khoo applies screens combining projected three- to five-year earnings growth with intrinsic value discounts. He highlights international retailer MercadoLibre (MELI) as a case study: the firm combines a 34% annualized projected earnings growth rate, a 35% return on equity, and an 18% return on invested capital with a 0.81 Price-to-Oracle valuation ratio, equating to a 19% discount to intrinsic value. Midterm Seasonality and Post-Election Returns (20:39) Seasonal tendencies in U.S. midterm election years frequently generate short-term market turbulence. Carson Research historical data shows August and September are typically the most challenging months of the cycle. Although easing inflation and a drop in the projected probability of a September Federal Reserve rate hike to 30% helped lift early-August returns, Khoo expects late-summer chop to persist. Historically, this dynamic reverses roughly 22 trading days before the November 3 midterm election, leading into strong performance in October, November, and December. Citing BlackRock and Bloomberg data, Khoo notes the S&P 500 has averaged a 14.0% gain in the six months following midterm elections: rising 10.4% when a sitting president loses a legislative trifecta (which current Polymarket odds favor via a Democratic House flip) and 16.1% when a party maintains full control of the White House and Congress. Khoo concludes that prevailing technical momentum, reasonable valuation multiples, and historical fourth-quarter midterm seasonality favor higher prices into year-end. He views potential short-term pullbacks of 5% to 10% not as systemic trend reversals, but as statistically favorable buying opportunities in wide-moat companies trading below intrinsic value.

Source quotes

[0:00] Adam Khoo: unless you sleep next to Trump every night and you can hear him talking in his sleep. [1:24] Adam Khoo: the trend is your friend until the end of the trend [1:24] Adam Khoo: grandfather line [5:27] Adam Khoo: Don't chase the girl. Wait for the girl to run to you to add. [20:39] Adam Khoo: Be aware that in August historically it tends to end up negative. So if it does end up negative, don't freak out, don't be surprised, it's part of the grand plan... and September tends to end up negative as well. [22:05] Adam Khoo: hallelujah [22:05] Adam Khoo: Sorry, I'm wrong. The rally normally starts not after the elections. The rally normally starts 22 trading days before the elections. [23:08] Adam Khoo: but bear in mind that whatever happens, whoever wins, the market usually will end up very positive by the end of the year. [23:08] Adam Khoo: may the markets be with [you].

Original transcript

[0:00] US markets, specifically the S&P 500, [0:02] just made new all-time highs again last [0:05] week, reaching 7,800 points. The market [0:08] is up 13% for the year. The NASDAQ is up [0:11] 19% for the year. So, is this the top of [0:14] the market this year, or can it go a [0:16] whole lot higher? Well, let's look at [0:18] the facts in this video. It's been a [0:20] pretty bullish year so far. So, as you [0:23] can see, the S&P 500 S&P is up 13.2% 2% [0:27] year to date. And the NASDAQ 100 is up [0:30] 19.2% year to date. Of course, for those [0:33] of you who are only investing in the [0:35] highest quality companies, the top 1% [0:38] like me, you should be outperforming the [0:39] market. My portfolio so far this year is [0:42] up 25.66% [0:44] year to date, outperforming both the S&P [0:46] 500 and the NASDAQ 100. Now, of course, [0:49] the question on most people's minds is [0:51] that, can it still go higher for the [0:53] rest of the year, or is this the market [0:54] top? Should I take profits and run away? [0:57] Now, of course, no one can predict the [0:59] stock market with absolute certainty in [1:02] the short term because there are too [1:03] many variables that we can't control [1:05] unless you sleep next to Trump every [1:06] night and you can hear him talking in [1:08] his sleep. All we can do is we can just [1:10] look at probability. Is the market more [1:12] likely to keep going up this year or [1:15] more likely to go down? So, in looking [1:17] at probabilities, I look at two things. [1:19] Technical analysis and fundamental [1:22] analysis. So let's first look at [1:24] technical analysis. What do the charts [1:26] tell us? Let's consult the charts. All [1:28] right. So first of all the question is [1:30] is the market on an uptrend, on a [1:33] downtrend or consolidation? And if it's [1:35] on an uptrend, the probability on an [1:37] uptrend is prices tend to move higher [1:40] because the trend is your friend until [1:42] the end of the trend. So so far you can [1:44] see the market is on a very clear [1:46] uptrend. How do you read an uptrend? [1:49] Very simple. Look at the moving [1:50] averages. Let's look at the S&P 500 and [1:53] look at this red line and this blue [1:56] line. So this is the 20 EMA and the 40 [2:00] EMA. So as long as the 20 EMA is above [2:04] the 40 EMA, what does that mean? That [2:06] means the shortterm trend is up. All [2:09] right. So you can see even though we had [2:11] a drop here, oops, sorry, wrong color. [2:14] Even though we had a bit of a pullback [2:15] here, pull back here, pull back here, [2:17] but notice what happened. the 20 remain [2:20] above the 40. The red line remain above [2:23] the blue line, which means the [2:24] short-term trend is still up and it's [2:26] merely a short-term up and down on the [2:30] short-term uptrend. So short-term trend, [2:32] we are still up. And we then look at the [2:36] blue line here, the thick blue line, [2:38] that's the 50 simple moving average [2:40] versus the 150 simple moving average [2:43] green line. And if the blue line, the [2:46] thick one is above this green line, that [2:48] means the medium-term trend is up. And [2:52] of course, the red line is the [2:54] grandfather line, the 200 moving [2:56] average. If that is sloping up, that [2:58] means the longerterm trend is up. So [3:00] what you see now is you see an alignment [3:03] of all trends, right? So short-term [3:06] trend up and the medium-term trend is [3:09] also up. And for those of you who are [3:12] too lazy to look at the moving averages, [3:15] okay, just look at it at Stock oracle at [3:17] the homepage of Stock oracle, just check [3:19] it out. Short-term trend, uptrend, [3:22] medium-term trend, uptrend. That's it. [3:24] Very simple. That's how you tell the [3:25] trend. Once again, an uptrend tells us [3:28] the market momentum is going up. So, [3:31] likely the market will keep going [3:32] higher. But remember that an uptrend [3:34] doesn't mean that prices will go up [3:37] every day, every week, and every month. [3:40] Because on an uptrend, prices will still [3:42] go through wave patterns. They will [3:44] still go through uh wave up, wave down, [3:48] wave up, wave down, wave up, wave down, [3:50] wave up. All right? We could still have [3:52] a wave down on the uptrend, but after [3:56] the wave down, it will wave up higher as [3:59] long as the trend holds. Okay? And for [4:01] those of you who are new to reading [4:03] trends, check it out. So if you look at [4:05] this area here during the March period [4:08] this year, when the market dropped, did [4:10] the trend change? H So you can see that [4:13] in this period when it dropped the 20 [4:16] EMA [4:18] crossed below the 40 EMA, which means [4:20] the 20 or rather the red line crossed [4:22] below the blue line. So this was an [4:24] indication that the short-term trend was [4:28] down. This was a short-term downtrend. [4:30] But here when the 20 crossed above the [4:32] 40 the short-term trend went back up. So [4:34] short-term trends are very short-term [4:36] downtrend uptrend downtrend uptrend. But [4:38] you can see that over here [4:41] um although the blue line crossed below [4:43] the green line, it was not a change in [4:46] the medium-term trend. Why? Because the [4:49] green line was still sloping upwards. [4:52] When the 50 blue line crosses below the [4:55] 150 green line, both have to slope down [4:58] to confirm the medium-term downtrend. So [5:01] again, if you don't like to look at [5:03] moving averages, if you check out stock [5:05] oracle, stock oracle would have told you [5:07] that in the month of March, short-term [5:09] trend went down, but the medium-term [5:11] trend was still up, which tells you that [5:13] that was a great buying opportunity [5:16] here. The trend, the longerterm trend [5:19] did not change. And again, if it waves [5:21] down here again, that's another great [5:23] buying opportunity. Buying opportunity, [5:25] buying opportunity, buying opportunity. [5:27] Why? Because you're buying the dip on [5:29] the uptrend. Although the market's on an [5:31] uptrend and based on technical analysis, [5:34] the probability is that the market will [5:36] end up higher by the end of the year. [5:38] Does it mean that if I wanted to buy the [5:41] S&P, would I buy now? No. Why? Because I [5:45] never buy after a wave up. No. I always [5:48] buy after wave down. I add. Wave down. I [5:51] add. Wave down. I add. Now wave up. [5:53] Don't add. Don't chase the girl. Wait [5:56] the wait for the girl to run to you to [5:58] add. So again, the question is uh if the [6:02] market drops or waves down in the next [6:05] one or two months, which I think it may, [6:07] again, no guarantees, but we'll look at [6:09] that more in a while. Right? If the [6:11] market has a wave down for the next one, [6:14] two months before eventually rallying [6:16] towards the end of the year, how low [6:18] will it go? Again, that's the [6:20] million-dollar question. And we we [6:22] cannot always predict the bottom of a [6:24] wave down. We can never predict the [6:26] absolute bottom of a pullback or [6:29] correction, but we can guess. We can [6:31] make educated guesses based on [6:34] historical support levels. And moving [6:37] averages are very, very reliable support [6:40] levels. So, how do I identify these [6:41] support levels which are areas where I [6:43] could buy the S&P 500 if I wanted to or [6:46] I could trade options by selling uh cash [6:48] secured puts or selling you know bull [6:50] put spreads for example. So to identify [6:53] a support level uh again you can look at [6:55] different time frames yeah but I'm going [6:57] to look at the weekly time frame. So [6:59] from the daily time frame I'm going to [7:02] shift to the weekly time frame. That [7:04] gives you a uh better cleaner smoother [7:07] perspective. So check it out. Notice uh [7:11] that the 20 EMA, which again is this red [7:14] dot, this red line, right? You can see [7:17] uh wave up, wave down, bounce, wave up, [7:20] wave down, right? Wave up, bounce, [7:24] bounce, bounce, bounce, bounce. So [7:26] notice that during short pullbacks, [7:29] the 20, which is the red line, acts as a [7:32] support level. Can you see that? So [7:34] again, it hits there, bounce up. So the [7:38] first level of support I would draw [7:41] would be at the red line at the 20 EMA [7:45] which is at 7380. [7:48] Can you see how I identify it now? So in [7:50] other words, if the market pulls back [7:52] again, you can expect the first support [7:55] to be at the red line where it could [7:57] potentially bounce if it's a short-term [8:00] pullback. Now if it's a bigger pullback [8:04] like let's say it drops here oh it [8:05] breaks this support where's the next [8:07] support the next support will be the [8:10] blue line the 50 simple moving average [8:12] why you can see here it bounced to right [8:16] so the 50 is a strong support so the [8:19] second support level would be at 7,000 [8:22] and the third support level would be at [8:25] the um at the 100 moving average here [8:28] you can see if it's a really bigger drop [8:31] it will bounce. [8:33] All right. And it will bounce here at [8:35] the 100 moving average. So that's at [8:37] 6461. [8:39] So three major support levels where it [8:42] would bottom likely bottom before uh [8:46] waving up higher. Now if the market does [8:48] wave down in the next 1 to two months, [8:50] how low can it go or how much uh draw [8:53] down should we expect? Very simple. Just [8:55] uh use a drawing tool over here. And you [8:57] can see that if it's a shallow pullback, [8:59] it will drop to the first support level, [9:01] which is about 5% drop. If it's a [9:04] medium-term pullback, you can see it [9:08] will be a 10% drop. In fact, 10% will be [9:10] known as a correction. All right? And if [9:13] it's a deeper correction, then of [9:16] course, uh we could drop as much as [9:21] 17%. But that's not my base case. My [9:24] base case is that even if we wave down [9:27] uh during the next two months, you know, [9:29] for me, my guess would be probably at [9:32] the very most a 5% [9:35] to at the very most a 10% [9:38] uh wave down, which is again a very [9:40] healthy pullback uh in this very strong [9:43] uptrend. That's from a technical [9:45] perspective. Technically, market is [9:47] bullish. Now, let's look at it from a [9:49] fundamental perspective. So, [9:51] fundamentals means valuation. So some of [9:53] the people if you um you know listen to [9:57] all these gurus you've got half of them [9:59] saying that oh the market's a bubble [10:00] it's expensive it's the top it's going [10:02] to collapse people like Michael Bur [10:05] they're shorting the market people like [10:07] like Ray Dalio also saying the market is [10:09] going to collapse it's unsustainable [10:11] then another group says no the market [10:13] still can go up so who the heck do you [10:15] listen to I always say don't listen to [10:17] opinions because no one can predict the [10:19] market neither can I all we can do is [10:22] look at facts and just look at [10:24] probabilities. Yeah. So based on the [10:26] technical facts, markets on an uptrend [10:29] and you are always insane if you want to [10:32] go against the trend. If you want to [10:33] short the uptrend, good luck to you. But [10:36] let's look at it from a fundamental [10:38] perspective. Is the market now [10:40] expensive? Since it's gone up 13% for [10:42] the year, it's made new highs after new [10:45] highs. Is it expensive or is it not [10:47] expensive? So let's look at a few ways [10:49] to value the market. Of course, the [10:52] simplest way is to look at the PE ratio. [10:54] There are many types of PE ratio. Some [10:56] people look at historical PE ratio. Some [10:58] people look at the Schiller PE ratio. I [11:01] like to look at the forward PE ratio. [11:03] The fourth PE is the market price of the [11:06] companies of the S&P, the market value [11:08] divided by the projected earnings. Now, [11:11] why do I look at this? Because this is a [11:13] forwardlooking metric. You're looking at [11:15] what the market is worth based on what [11:17] earnings are expected to be projected, [11:20] right? And if you look at the forward PE [11:23] ratio now, the Ford PE ratio of the S&P [11:27] 500 is 20 times earnings. Right here, 20 [11:31] times earnings. So, is that high or low? [11:33] Now, the 5-year average is at 19.9 times [11:37] and the 10-year average is at 19 times. [11:39] So, at 20 times, it is just slightly [11:42] above the historical average. So, is the [11:45] market very expensive? Is a bubble? No. [11:47] It is fairly priced. It is fairly [11:50] priced. Now what's interesting is that [11:52] at the start of this year and at the end [11:54] of last year which is somewhere around [11:57] here you can see that the PE ratio the [11:59] Ford PE was 22 times earnings at the end [12:04] of the year uh end of last year start of [12:07] this year right and now it is 20 times [12:10] earnings so what does it mean so that [12:13] means that even though the S&P [12:15] went up by 13% this year but the market [12:18] has become cheaper it is cheaper today [12:22] than it was at the start of the year. [12:24] From 22 times earnings is now 20 times [12:28] earnings. So how can it be? How can the [12:30] market go up and it's cheaper? Because [12:32] although the market price went up, the [12:35] earnings went up even more than the [12:38] market price. In fact, one of the [12:39] reasons why the market is so strong [12:41] despite the ongoing Iran war, despite uh [12:44] the weak labor market, the weak jobs [12:46] market is because the recent earnings [12:49] results have been much higher than [12:50] expected. How high? Check it out. So, [12:53] you can see that um in the last earnings [12:57] season, which just ended quarter 2, [12:59] 2026, [13:01] um the market was expecting the earnings [13:04] of the companies in the S&P to grow to [13:07] grow 23%. That was the expectation. [13:10] But the result was that the corporate [13:12] earnings of the S&P grew 50.4%. [13:17] In the last quarter, that is freaking [13:19] insane. 50% earnings growth. Now, if you [13:23] take away the Alphabet, if you take away [13:27] Amazon, you can see that it goes down, [13:30] but it's still 32% earnings growth, [13:32] which is uh insane growth outside of [13:35] rebounds from recessions. and 86% of [13:38] companies beat their earnings estimates. [13:41] In this chart, you can see that uh at [13:44] the start of the year, the market [13:46] expected that the S&P company's earnings [13:50] would grow 15%. [13:52] For the entire year, not for the [13:54] quarter, for the entire year of 2026. [13:57] But so far, you can see that uh the [14:00] earnings are now expected to grow 30% [14:03] for the entire calendar year. And that's [14:05] the reason why the market is so strong [14:07] because of corporate earnings driving [14:09] the market higher despite the war, [14:11] despite a weak labor market. This other [14:14] chart you can see again the dotted line [14:16] is the stock market, the S&P 500. And [14:19] the blue line is the actual earnings per [14:21] share of the S&P 500 company. And you [14:24] can see it's a 30% growth expected for [14:28] this entire calendar year. Stock market [14:30] is up 13% but earnings projected growth [14:33] 30%. So this is not a bubble because the [14:37] market price is more than well supported [14:39] by the actual earnings of the company. [14:41] This is very different from the dotcom [14:44] bubble where the market went up but the [14:46] profits was nowhere near the market [14:48] price increase. As you know I like to [14:50] drill down to the individual components [14:52] of the S&P 500. So although the overall [14:55] index is fairly priced but within the [14:57] index you've got companies that are very [14:59] overvalued and companies that are very [15:01] undervalued. And again, you can check it [15:03] out right over here on stock oracle. If [15:05] you scroll down, you can see that [15:07] currently um you have got 10% of stocks [15:12] in the S&P which are very undervalued, [15:14] more than 30% below their intrinsic [15:16] value. You've got 17% of stocks that are [15:20] undervalued, which means they're 10 to [15:23] 30% undervalued. You've got 25% of [15:27] stocks that are fairly priced which are [15:29] plus minus 10% of their intrinsic value. [15:32] You've got 23% of stocks that are [15:35] overvalued and 23% well 24 close 24 [15:39] which are very overvalued. So this helps [15:42] you to zoom in on the very expensive and [15:45] the the very cheap stocks in the S&P [15:49] 500. So uh let me show you what they [15:52] are. So which are the stocks that are [15:53] very undervalued right now? If I click [15:55] on this, you can see these are the [15:58] stocks that are very undervalued. And [16:00] again, you can see the ones in green are [16:02] the white mode companies which are very [16:04] strong sustainable competitive [16:06] advantage. Uh the ones in yellow are the [16:08] narrow mode and the ones in red are no [16:11] mode. Now again I would say that no mode [16:13] companies price can go up a lot in the [16:15] short term. No mode companies can make a [16:17] lot of money in the short term but are [16:19] they sustainable in the long run? um [16:22] we're not too sure because their mode is [16:24] not as strong as something of a of a [16:26] white mode, right? So for long-term [16:28] investments, I prefer white mode [16:31] companies more often than not. So which [16:33] are the white mode companies? You can [16:35] see you've got, you know, companies like [16:36] Copart, you've got Meta, you've got [16:38] Zotus, you know, you've got Service Now, [16:41] you've got, you know, FICO, you got [16:43] Honeywell. These are very very [16:45] undervalued right now. um [16:48] stocks that are undervalued by 10 to [16:50] 30%. White mode, you've got uh like [16:53] Tesco, you've got like Eli Liy, you got [16:56] Qualcomm, you got Viva Systems, you've [16:58] got S&P Global, you got, you know, [17:00] Dominoes and and Microsoft and stocks [17:03] that are fairly priced, uh not too hot, [17:06] not too cold, you know, just nice. [17:08] You've got quite a number. You've got [17:10] like uh you know you got Berkshire, you [17:11] got you got Alphabet, you got the NASDAQ [17:14] exchange, you got thermofisher, you got [17:16] Nvidia, you got McDonald's, you got [17:18] intercontinental intercontinental [17:20] exchange, you got Charles Schwe got [17:22] quite a number of them, right? And of [17:24] course you can see those that are [17:25] overvalued over here and those that are [17:28] very very overvalued over here. So this [17:30] gives you a very nice uh breakdown of [17:33] the companies in the S&P. Of course, you [17:35] don't just have to look at stocks in the [17:37] S&P 500. I buy a lot of stocks outside [17:40] the S&P 500. These are especially [17:42] foreign companies like one of the stocks [17:44] I just added recently. I added more [17:47] shares is Macado Libé, ticker symbol Mi. [17:51] So Macado Libé is known as the Amazon of [17:53] Latin America and they're not just in [17:56] e-commerce, they in fintech and so [17:58] forth. So why did I add more shares of [18:01] of Macado Libé? because it's one of the [18:03] companies that has got both high [18:05] projected growth and at the same time it [18:08] is undervalued and that's where this [18:11] watch list comes in handy because with [18:14] this watch list I can sort my stocks by [18:18] over 400 metrics. You can see over here [18:22] uh for example if I click on this you [18:24] can see I can add in up to sorry 59 [18:29] metrics all kinds of metrics I can look [18:32] at but these are my favorites. So I sort [18:36] them by projected 3 to 5 year earning [18:40] growth. So out of all the stocks I look [18:43] at which are the ones with the highest [18:45] growth projection. I sort highest growth [18:48] Palanteer 80% growth projection for the [18:52] next 5 years. By the way, it's 80% per [18:54] year for the next 5 years. Right? Nvidia [18:58] 43% growth. Broadcom 38% growth. Macardo [19:02] Libre 34% growth. So these are the [19:05] highest growing companies, but I don't [19:07] want to overpay [19:09] for them. I want to buy them when they [19:11] are undervalued. So how do I know [19:12] they're undervalued? I look at price to [19:15] oracle value. [19:17] Now oracle value is so-called the [19:19] intrinsic value calculated by stock [19:22] oracle. So price divided by the oracle [19:26] value. If it is one what does it mean? [19:29] It means it is fairly valued. If it's [19:31] more than one overvalued less than one [19:35] undervalued. So if you look at macado [19:37] libé you can see that it is projected to [19:41] grow at 34% a year and it is selling [19:44] at.8 81 [19:47] price to oracle value. So what does it [19:49] mean? It means that this stock is 19% [19:53] undervalued. So 19% undervalued plus [19:56] grow at 34% a year plus return on equity [20:00] 35% return on invested capital 18%. Well [20:05] to me that's a high quality company [20:07] selling at a pretty good deal and that's [20:09] why I added shares. Again it's not [20:11] recommendation for you to add shares. [20:12] This is just how I use the tool to look [20:15] for opportunities. So the bottom line is [20:17] that the fundamentals of the S&P are [20:20] very strong. Earnings are growing double [20:22] digit higher than expected and the [20:24] market itself is not expensive. It is [20:26] fairly priced and certain individual [20:28] companies like again Macado Libé which [20:31] is not in the S&P they are actually [20:32] undervalued and stocks [clears throat] [20:34] like Meta, Microsoft are undervalued as [20:37] well. So next question is um where do I [20:40] see the market for the rest of the year? [20:42] Again I'm not a prophet. I can't predict [20:45] for sure. I you know I'm not I don't [20:47] have a crystal ball but based on history [20:51] based on historical patterns let's take [20:53] a look. So based on historical patterns [20:56] and this chart comes from uh Carson [20:58] research can see that historically [21:00] during midterm election years which is [21:02] this year the US midterm elections are [21:04] on the 3rd of November coming very soon [21:08] August and September tend to be the most [21:10] bearish months of the year. So you can [21:12] see that historically August tends to [21:14] end up negative for midterm election [21:17] year and September tends to end up [21:19] negative. So if history were to repeat [21:22] then we expect this month could end up [21:25] negative. Now so far this month has been [21:26] very strong because uh initially they [21:29] expected the Fed to raise interest rates [21:31] in September but now the odds have gone [21:34] down to only 30%. they're going to hold [21:36] interest rates because of a weak labor [21:38] market and because of inflation coming [21:41] in lower than expected and of course [21:43] because of the very strong earnings [21:44] result uh that has caused the market to [21:48] uh start August very strong but again be [21:51] aware that in in August historically it [21:54] tends to end up negative so if it does [21:56] end up negative don't freak out don't be [21:58] surprised it's part of the grand plan [22:00] okay if it does right and September [22:03] tends to end up negative as well so two [22:05] negative months historically for midterm [22:07] election years. But then October, [22:10] hallelujah, will be the strongest month [22:13] of the year historically based on [22:15] seasons, right? And November very strong [22:18] as well and December positive as well, [22:21] but not as strong as October, November. [22:23] So we expect that for the year the [22:25] strongest rally is yet to come, right? [22:28] It will tend to come uh right uh after [22:32] the elections which are the 3rd of [22:34] November. Sorry, I'm wrong. The rally [22:37] normally starts not after the elections. [22:38] The rally normally starts 22 days [22:43] uh 22 trading days before the elections. [22:46] The market already already begins to [22:48] rally. This is based on historical [22:49] patterns. Uh this is a a chart you can [22:52] see visually. As you can see again [22:54] during midterm election years what [22:56] happens it tends to be again negative in [23:00] August September and then October to [23:03] December you get a very strong rally [23:06] during the uh average midterm election [23:08] year. Now does it matter who wins the [23:11] elections? Uh slightly. So if we take a [23:14] look you can see over here that uh there [23:16] are three scenarios. Scenario number one [23:18] is the president's party loses the [23:21] trifecta. [23:23] What is the trifecta? So currently the [23:25] Republicans hold the White House, they [23:28] hold the um the Senate and they hold the [23:32] Congress. They hold all three parts. [23:35] That's called trifecta. Okay. Now, if [23:37] the Democrats [23:39] win the House or they win the House and [23:43] the Senate, it breaks the president's [23:45] trifecta. And if that happens, then the [23:49] market will tend to gain 10.4%. 4% [23:54] 6 months after the election. This is [23:56] based on historical research from uh [24:01] Black Rockck and Bloomberg. Yeah. Going [24:03] back, you know, many many years. Okay. [24:05] So that is this is the likely scenario [24:08] because based on poly market odds, it [24:10] seems the Democrats would likely flip [24:12] the house, the Senate 50/50. Okay. Now, [24:17] however, if the uh Democrats don't flip [24:21] the House, they don't flip the Senate, [24:23] and the and the Republicans retain [24:25] control of all three, right? Then the [24:29] market will have the most bullish [24:30] scenario and gain 16.1% [24:34] uh 6 months after the election, right? [24:38] And if you take an average of this and [24:39] this, you get 14%. This is basically the [24:41] average of all midterm elections. So, [24:44] what will happen in the midterms? No one [24:45] will know, no one can guess, but bear in [24:47] mind that whatever happens, whoever [24:48] wins, the market usually will end up [24:51] very positive by the end of the year. [24:53] So, as always, I look forward to any [24:55] weakness in the market. I look forward [24:56] to any pullbacks, any corrections as a [24:59] chance to add more shares of the high [25:00] quality companies within this bull run. [25:03] Thank you for watching and as always, [25:05] may the markets be with