Surviving a Stock Market Crash | Podcast Episode #478

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Hey everybody, this is Ryan Mallory with shareplanner.com’s Swing Trading the Stock Market.

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In today’s episode, we were talking about surviving a stock market crash. Now often times what I will do when we’re in one of these special moments in the market per se, like a historical moment. And when I think of historical moments in the stock market, it usually has a negative connotation with it because there’s so much of stock market history that surrounds crashes and major sell offs.

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The rest of the time, the market’s typically moving in unison to the upside. But you take times like 2000 and 1987 and the Asian financial crisis and the Great Recession and the big sell off that we had in 2018 when we had the taper tantrum, 2020 with COVID, the 2022 sell off. Those are all historical moments in the market and they’re all associated with major sell offs, if not downright crashes.

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So in this podcast episode, we’re talking about another crash, and that’s the one in 2025 that is currently underway. And this is like all crashes there.

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There’s a lot of similarities to previous crashes, but there’s also a lot of uniqueness in each one. So what I’d like to do for the sake of austerity, because I, you know, I’m hoping that one day this podcast is going to be out there, you know, 50 to 100 years from now, still educating people on the way of the stock market, even though I might be long—well, 100 years from now, I guess I’d be long gone. But 50 years, hopefully I’m still around.

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Maybe I’m still doing a podcast at that point in time, but what I wanted to do is I wanted to still be educating people.

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So when people, you know, look at the stock market crash that’s taking place in 2065, they’ll say, hey, you know what there is, there’s a lot of good antidotes of past market crashes where this guy Ryan Mallory was talking about the stock market crashes as they were happening. So that’s really one of the goals here and also to help you in the real time.

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I want it to be educational. I want it to be something to learn from because so many traders have entered the stock market over the last 2-3 years and they really haven’t experienced a significant bear market. If you got in after 2022’s October bottom, you’ve never really experienced anything like this.

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And even 2022 didn’t necessarily have the velocity to the downside on a day-to-day basis that you’re seeing right now. This feels more like what we saw in 2020 and what I want to do is to be able to help you and to and to and to provide some perspective from somebody who has gone through the .com bubble.

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And that was pretty, pretty significant sell off also went through the Great Recession. I’ve traded through those.

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I’ve survived the Asian financial crisis and the May, what was that? May 2010, the flash crash back then that was that was significant.

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Survived that one as well. I’ve gone through a lot of 2020, 2022, 2018 I’ve survived them and, and most of the time I’ve profited from them.

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So I’d like to provide some perspective in that regard.

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So we got this double top. It was around the 610 area on the charts.

3:03
It sold off initially pretty hard, pretty quick, scared a lot of people. And of course it happened because of the the talks of potential tariffs.

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And then we started the bear flag in early March and it looked like that perhaps we were going to have a little bit of a relief rally.

3:17
And we did get a little bit of a relief rally. But then eventually that bear flag confirmed to the downside and made a huge statement in doing so,

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going from 570 on SPY all the way down to 480. So huge move and not quite 480, but pretty close to 480.

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Huge move. And again, I’m not trying to talk about charts here where you have to pull up a chart.

3:39
They even understand what I’m, I’m talking about. I’m not doing that at all.

3:44
But what we ended up getting today, and this, I think this just takes the cake on almost any kind of dead cat bounce you’ll ever see, is we had a 10% rally off the news that while the, the Chinese tariffs were going to stick, the, the reciprocal tariffs with other countries that didn’t retaliate, they were going to be scaled back and they were going to be paused for 90 days.

4:06
So as a result, the market loved it. And, and at this point, I think the market’s looking for anything to rally on it.

4:12
It really wasn’t even the, the greatest of news. You know, I mean, obviously the greatest of news would have been, you know, all tariffs are canceled and then the market would have really have taken off.

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But it was still a good enough news piece to get this market to finally bounce because for a while there, it was getting extremely, extremely bearish.

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And not only that, but oversold to no end.

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And so what have I done during this period, I, I did short the market following that bear flag and that turned out to be like a, a 1% profit or so.

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I got stopped out during a three day rally right before that leg took place. And sometimes that’s going to happen.

4:50
You’re going to miss moves. That’s just a, a fact of trading.

4:53
You’re not going to catch every move. And so I didn’t catch that move that happened from Thursday of last week when Trump did the big Liberation Day press conference and the ensuing sell off thereafter. I didn’t get a big part of that move. I didn’t get any of that move actually. And so I haven’t even traded until today.

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And so what we started getting was this crazy over extension. One of the, the indicators that I like to follow is the T2108 and that’s the one through TC2000.

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There’s a link to it in my bio or in the podcast notes and it says it measures the percentage of stocks trading above their 40-day moving average.

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So this gets historically extended when you start to drop down into single digits. Some people will use the 50-day moving average and that’s fine too.

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For me, I’ve always just preferred the 40-day moving average in this particular indicator. But this indicator got down to like 3%.

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That doesn’t happen. In fact, we hadn’t even had a reading into the single digits since 2022.

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So getting down this low and really this fast into the sell off was was pretty impressive nonetheless.

6:00
And so we get there and there’s no way I’m going to short the market. In fact, yesterday there was a really good short setup.

6:06
I passed on it because I’m not going to short when we’re sitting at historic oversold levels because you set yourself up for a nasty, nasty short squeeze.

6:13
And in the case of what we saw with SPY today, that’s exactly what happened. 10% move on SPY. That was an equivalent of looking at it right now, 474 points on the S&P 500.

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My gosh, you’re happy if you get that in a year and we got that in an afternoon. So with that, is it actually to give you some perspective on that move, I think the lows from 2008 that was reached was 666.

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I know that’s a very eerie number for a market bottom, but the 2009 lows was that number.

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We did about what, 80% of that move today, more than 80% of the move that we got from the entire bottom in 2009.

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That’s how much the S&P 500 moved today. So what I started seeing happening on the charts, I started seeing this like consolidation pattern that was forming.

7:14
The market was really quiet. The VIX was looking like it was on the cusp of falling and it just looked like there was an opportunity to potentially play the bounce.

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We were extremely oversold. So I start to see that consolidation.

7:29
It breaks out of consolidation. I get long on it at 499 and change. I don’t know what the exact number was and it starts to move, but it wasn’t that much.

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And then all of a sudden the news comes out about the tariffs and it shoots up to like 520, then to 530.

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And I got out at 530 and it still keeps going to 545.

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I mean, if you’re telling me to get out at 530, a 300 point move on the S&P 500 on a day trade I was doing, SPY made 6% off of it.

7:58
So that has been the essence of what I’ve been doing going back to Liberation Day when the market started to heavily sell off in response to the tariffs.

8:09
It’s been quiet for me. This was the first trade that I’ve made this month.

8:12
But what does that prove? It proves that less is more in a stock market sell off.

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You have volatility that’s shooting up to 50. You can’t afford to go ultra long on your swing trades because the volatility is such that if you’re wrong, you’re going to be grossly wrong in your account.

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You’re risking potentially seeing a 200 point move to the downside on the S&P 500.

8:36
That’s not something that I want to be 100% long on. Now, in hindsight, would it have made sense to have been long on a day where the market moved up 10%?

8:44
Yes, in hindsight. But that’s because you’re using hindsight.

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When you don’t know, you have to manage the risk. I would never have to manage the risk if I could trade in hindsight, risk wouldn’t even be part of the equation because I would know.

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But when you’re in the midst of what’s going on, you have to manage the risk.

9:01
And remember, prior to this move, the S&P 500 was already down 2% in futures overnight. So this was a huge move.

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But if you were short, you probably had a false sense of security going into today, thinking that this market was going to be incredibly in your favor and that you were going to get another leg down.

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Instead, what you got is the mother of all short squeezes today.

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One thing though, that isn’t a false sense of security is swingtradingthestockmarket.com. This is my part of my SharePlanner website.

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This is going to give you all of my stock market research each and every day. If you want to be part of the trading block, that’s another upgraded feature you can do, but I would definitely recommend checking out at the very least swingtradingthestockmarket.com.

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Daily watch lists, review of those watch lists. I’m also going to send out a master watch list of my favorite bullish and bearish stocks at the beginning of each week.

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Plus I’m going to be doing updates throughout the week of the entire stock market and of the mega cap stocks.

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So check that out. swingtradingthestockmarket.com and you are supporting this podcast in the process, which by the way, going from 2017, this is like almost an 8 year old podcast, I think.

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I don’t know what the exact date was but I’m pretty sure it’s 2017 when I started. So kind of cool approaching my 500th episode here and I don’t do this everyday.

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So right now I’m doing 1 episode a week.

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I’d like to get back to two at some point but right now that’s about all I can do.

10:37
And a lot of people I’ve noticed is are getting emotional in this market a lot. And one of the things that I’ve noticed creeping into this market is the emotions that come with talking about politics or associating your trading with politics.

10:46
I can’t begin to express enough how problematic it is to formulate a political opinion and then put that into your trading.

10:57
The politics doesn’t work. Your personal opinions about if you like Trump or you don’t like Trump, if you like, you know, President XYZ or ABC, the market doesn’t care.

11:03
OK, you can’t let your political beliefs guide you in trading because if you do, then you’re going to be the person that’s buying Newsmax at $200 a share, watching it come right back down to $40.

11:20
That’s what happens when you let your political beliefs enter into the fray. But yet that’s what I’m seeing a lot of.

11:27
I’m seeing a lot of that and a lot of people making decisions based on their political beliefs. I get that whether you like the current president that we have or you don’t like him, that’s not for this podcast. It’s not up for discussion.

11:41
Please leave it out of the comments. I could care less.

11:43
But whatever your opinion in US is of him shouldn’t be filtering into your trading decisions. But I’m seeing a lot of people that are doing that.

11:54
So another thing that I would tell you too is that in these bear markets, bounce backs are extreme. We saw probably one of the greatest bounce backs of all time and it’s like a rubber band.

12:06
I always talk about the rubber band theory that if you keep stretching in a rubber band, you know, it’s either going to break or, and, and then the feds going to have to intervene and tape it back together.

12:15
But now it’s either going to you, you, you keep stretching it far enough, it’s going to snap back and, and the further you stretch it, the snap back’s going to be far worse.

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You know, if when you were a kid and somebody like aimed a rubber band at you, you know, if they were only pulling it back a little bit, you weren’t too worried.

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But if man, if they pull it way back, you’re like, hey, hey, hey, whoa, whoa, whoa, whoa, don’t hit me with that. I know I’ve done that with my kids, you know, aiming their rubber bands at me before when they were younger.

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But that’s, that’s kind of what takes place. You know, the further you pull it back, that snap back when you let go, it’s going to be ferocious.

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And we got that finally today.

12:53
And what a bounce back it was. Now whether it continues or not, I don’t know.

12:56
But I don’t usually take a lot of confidence in these extreme bounces like this, especially when we still remain in a downtrend.

13:01
It’s just more of a natural occurrence that you’re going to get extreme moves in it. And this was even like it was, it was big news, but probably not enough to warrant a 10% move.

13:12
But when you’ve dropped as much as we have going from, you know, 610 all the way down to 480, you’re going to get a 10% move.

13:20
So I made my first trade today, first trade of the month went, went, you know, beautifully to plan. Made three to one.

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I risked about 2% on the trade. If it broke below the previous day’s lows, I was going to jump out.

13:30
That would have been for like a 2% loss. Ended up making 6%.

13:33
So about three to one. Can’t complain.

13:38
This is the kind of position that you want to be in and it’s not the fun position because it’s more of a boring position.

13:45
The month for me, even though the market’s been fairly excited with all the volatility has been boring for me because I haven’t made a trade until today.

13:52
I got, you know, knocked out of my short positions for a small profit right before the whole market sold off.

13:58
That would have been wonderful to still have been in those, but I, you know, that wasn’t to be had. So huge sell off.

14:08
I don’t get in and I don’t have any exposure during that, that four day sell off that took place. And then when we finally got that bounce back today, I mean, obviously it went way better than what I was expecting.

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I was just hoping to get maybe like 1 or 2% out of it.

14:21
But nonetheless, I was in the position to be able to capture those, those big profits there.

14:34
So what makes this so ideal is that right now people who made more profits than me today, people who made a better return than me today, there’s still most of them are trying to dig themselves out of a hole that they put themselves in.

14:40
Yes, the market’s in bear market territory, we’re down like 22% at one point off of the highs, all time highs.

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And for some, that’s just the S&P 500, but for others, especially if you were leveraged or if you had a lot of high beta stocks, like if you had NVIDIA or if you had some of these other names, you may be down 30 or 40 or 50%.

15:00
And we know that, you know, if you take a 50% loss in the market, you got to make 100% back just to break even again.

15:08
So there’s people who are in those boats that yeah, they might have made 20% today, but they still got to get back to 100% just to be able to say they’re even.

15:24
Where I’m at is I haven’t taken any. I haven’t even had a drawdown. I’m in good shape right here.

15:26
And so not only that, but then I’m making gains on the initial bounce. That’s what boring trading is about right there.

15:33
Not digging yourself into a hole, not, you know, jumping in after every single move and feeling like you have to be a part of every move.

15:39
Instead, it’s about managing the risk, being boring with your trading. When the volatility gets greater, you become a little bit lesser in your trading activities.

15:47
You become much more dormant in your trading because you don’t need as many positions open to be able to profit from a high volatile market.

15:56
What you’re trying to do is consistently put on good trades and continue to build your account over time.

16:04
So not digging myself a hole, that is huge. It’s almost like for the first 8 days of April, I was on vacation and I came back like, oh, look at this good trading opportunity.

16:12
Meanwhile, I was able to avoid that entire sell off. I wasn’t on vacation obviously, but that’s essentially like kind of the mindset you have to have.

16:16
You almost got to go mentally into a trading vacation knowing that, OK, this is not a good condition for me to go trade in.

16:25
After I missed that initial move, after I got knocked out of my short positions, I wasn’t going to go chase the market to the downside.

16:33
It just made zero sense. And again, less is more.

16:39
You go back to today’s trade, it was one trade, one trade that I’ve made this entire month.

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But what a difference it is because I’m actually up on the month as a result of just one trade.

16:47
I didn’t dig myself into a hole and most people are.

16:56
And so remember, fun versus boring. It’s better to be boring in your trading.

17:05
And the other thing too, I think a lot of people love to have the CNBC or Bloomberg or Cheddar or whatever, whatever financial news station that you want to listen to.

17:14
I got to tell you during this whole sell off, one of the things that has benefited me is not having any of those people on TV.

17:19
None of them are talking into my ears. It’s quiet. Sometimes I’ll have my Spotify music on.

17:22
I’ll be listening to some 80s or some 90s music. It’s great.

17:25
But I don’t have CNBC. I don’t have that wacko Jim Cramer, you know, freaking out in my ears.

17:31
I mean, the amount of hysteria that these people on these different channels create, I have no room for that.

17:38
I don’t have the bandwidth to be able to absorb that. I start hearing those people chirp and that’s all they do is chirp.

17:43
I’m going to make bad trading decisions. I’m going to start feeling like, oh, I got to do something.

17:48
I got to jump in. Like I’m going to feel like I’m missing out.

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And if I feel that way, and I’ve been doing this for 30 years, how much more is all these other traders out there listening to this stuff and getting dragged into the market with horrible timing?

17:58
So I keep it off, not because I find these people annoying. A lot of times they have interesting stuff or stocks that they’re talking about. I learn something from it.

18:08
But in the end, all I know that’s going to happen is I’m going to be manipulated. I’m going to get worked up into a frenzy.

18:15
And so I keep that stuff off. I don’t want it on.

18:17
I used to turn it on during the FOMC statements. Not anymore.

18:22
I have no desire to listen to Jerome Powell talk. And I definitely don’t want to listen to any of the analysts either because most of the analysts, they’re dumb as a box of rocks to begin with.

18:31
So reduce the noise. Stay away from the financial news channels.

18:34
I think you’ll be in good shape. If you enjoy this podcast, I would encourage you to leave me a five-star review on whatever platform you’re listening to me on, whether it be Apple or Spotify or Amazon or Google.

18:50
And if you’re listening to me on YouTube, I would encourage you to like and subscribe so you can be part of all these discussions here on future podcasts as well as some of the other videos that I do as well.

18:56
So if you haven’t checked out my YouTube channel, lots of good stuff there at youtube.com/sharePlanner.

19:01
And make sure to keep sending me your questions. I got some emails that I got to catch up with next week.

19:05
I will be doing that. I’ve already promised one person that I would definitely do that.

19:10
Send it to me ryan@shareplanner.com. I’m the only one that reads it.

19:12
I won’t be sharing your name with anybody, but I will make a really good podcast out of it. Thank you guys and God bless.

19:20
Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock market each day with traders from around the world.

19:27
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19:35
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19:53
You have any questions, please feel free to email me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.