Transcription
The American stock markets are at their all-time high. The market sentiment as a whole is extremely confident. And it even seems that investors have a little bit forgotten the fact that, well, markets can also go down. In short, in this video, I'm going to share an investment thesis that I developed for 2026. I've been working on it for weeks. I've spent hours doing a lot of very in-depth research to share my expectations for the stock market in 2026. And my goal with this video is to simplify all the somewhat complex concepts and principles so that you can understand them, even if you don't come from the world of finance. Last year, in 2025, I was able to share my research and my investment thesis for the year 2025 with you here on YouTube for free, where I explained to you, step by step, that for me, 2025 was going to be a positive year. And that's exactly what happened, and it notably allowed me to inject hundreds of thousands of dollars into the Nasdaq during the crash we saw in April because we saw the markets tank by -20%. As I had explained to you, for me, 2025 was going to be a positive year. So I took advantage of it, I injected a lot of money, and I was able to make monstrous profits based on the research I was able to share with you for free. By the way, if you don't know me, my name is Elliot Ewit. I have over 12 years of experience in trading. I studied finance. I worked as an institutional trader in London. I was able to financially profit from major movements like Brexit in 2016, like the Covid crisis in 2020 where I was able to more or less go all-in, and like the year 2022, which was a difficult year in the markets with extremely high inflation but which was my best year in trading. And the common thread of all these major events that I was able to profit from is that I was prepared for a scenario that the majority of people were not ready for. So in this video, which I even hesitated to share with you for free here on YouTube, but well, I'm doing it anyway. I'm going to share my research, my analyses, and my expectations for this year 2026. We're going to study macroeconomic cycles, the real estate market, valuations, the real economy, macroeconomic indicators, positioning, market sentiment, then technical analysis, and narrative analysis. Since 1930, we're going to study technical analysis on a yearly, monthly, and weekly basis. You'll see, it's extremely comprehensive, and finally, we'll end with more or less my action plan for this new year.
So, we'll start slowly and simply with, first, an analysis of what is called the Decennial Cycle. The Decennial Cycle is a statistical observation of decades where we'll see that statistically, some years tend to be better than others. So if we study, for example, the Decennial Cycle over the last two centuries, we can see that historically, statistically, again, it's not a law, it's just a matter of statistics. We notice that the 5th year of a decade tends to be the best, with an average return of 21.5%. And conversely, it's the 7th year that tends to be the worst, with a negative return of -4%. Now, 2026 obviously brings us to the 6th year of the decade, and this 6th year of the decade, statistically speaking, is among the worst years for stock markets. More precisely, it's the 3rd worst year of the decade, with an average of 56% of years ending in 6 being positive, 44% being negative, and an average return of only 3.75%. So statistically, the 6th year of a decade doesn't tend to be extremely strong. Again, you'll see it throughout this video, but each individual indicator, if we look at it, if we were to just look at that, it wouldn't help us at all. But here, the objective is to create, if you will, a treasure map or a treasure hunt, I don't know how you say it, with lots of clues, and let's put all these clues side by side to try to draw a conclusion. Okay, that's my first point.
Now, let's look at the Benner Cycle. The Benner Cycle is a very long-term cycle model that was developed by Samuel Benner in 1875. And so, as you can see, he was able to develop this graph, which is based on a central idea that markets alternate between periods of expansion, excess, then contraction, and return precisely with cyclical periods. And by doing this in 1875, we realize that he was able to, well, bizarrely identify very precise market top and bottom moments. So obviously, we have the major crisis of 1930, but otherwise, we also have the dot-com bubble in 1999, which he had identified as a market top. And that's exactly what we saw. We also saw this top in 2007, which was the subprime crisis. He was also able to identify 2019, which was obviously the Covid crisis. And as you can see, his next point, his next cycle top, would be 2026. Now, the goal here is not to believe in a prophecy, but rather to notice how market cyclicity is something that tends to repeat itself. And this Benner Cycle has historically often predicted market bottoms and tops. And I want to remind you, but this graph that you are looking at here, which predicts 2000, 2007, 2019, 2026, was developed and written in 1875. Now, again, this Benner Cycle alone means nothing. Now, when mixed with the slew of indicators and information that I'm about to share with you in this video, we can start to develop a thesis.
Now, the other point I looked at is the volatility of the S&P 500 compared to its long-term average. When you try to find a certain valuation, to say if a market is too high or too low, etc., what do you base it on? Simply, what I did was I took an average over the last 100 years, and over the last 100 years, the average of the S&P 500 is more or less between 8% and 9%. So what do you do? You draw a linear average of what the market should look like if we made 8% to 9% every year. And what can we see? Well, we can see that the S&P oscillates around this long-term average, which is completely normal. And we go from moments of complete euphoria, which would be, for example, the dot-com bubble in the 2000s, which was right here. Here, you can see we moved away from this long-term average, only to crash and return to this average. Okay? So we alternate between moments of euphoria, I would say unjustified, and moments of extreme pessimism, unjustified, like the 2008 crisis, where you can see afterwards, it took us a long time to return to this average. But what I find very interesting is that this long-term average can give us something concrete to know if the market is currently above or below this long-term average. And as you can see, we are currently above this long-term average. Now, what I was able to do is take this long-term average and flatten it out right here to be able to see this oscillation of the S&P 500 around this long-term average. And as you can see, the market is currently about +25% above its long-term average. Similar levels to what we saw just before the crash in 2022, at about 25% above its long-term average. These are levels we saw last time just before the Covid crisis. And so historically, the further we move away from this long-term average of the S&P, the higher the chances of seeing a correction to return to normal, so to speak, are. So the conclusion of this cycle analysis does not confirm an immediate crash, but it tells us that 2026 is within a window where, statistically and cyclically, the risk increases.
Let's now move on to the second category. This second category I looked into is the real estate market. Why? The real estate market is not just a separate market in the United States. The real estate market is literally at the heart of household wealth and the banking system. So, when real estate goes up, households tend to feel richer, they tend to borrow more, consume more, and thus the economy accelerates. Conversely, when real estate slows down, consumption also slows down. Banks tend to tighten credit, and the entire ecosystem tends to become strained. And if we study this real estate market, we realize that many recessions have been preceded by a cooling of this real estate market. So real estate is very often a signal of the end of an economic cycle. And for those who follow me, this is why I always say: if you are a trader or an investor and you specialize in one asset class, it doesn't mean you should bury your head in the sand and not look at all other asset classes. No, everything is correlated. That's why it's important to have a global view of what's happening, even if you specialize in one market. In short, now that I've explained the importance of the real estate market in our analysis of US stock indices, let's immediately study what is called the 18-year cycle in the real estate market. The logic behind this 18-year cycle in the real estate market, which we tend to see repeat, repeat, repeat, repeat, comes mainly from credit lines. The easier credit is, the more real estate tends to rise, and the tighter credit becomes, the more real estate tends to slow down. Now, the last major real estate contraction in the United States was obviously the subprime crisis in 2008, which lasted for some time, and the real estate market took time to recover, so to speak. But so, this 18-year cycle would start more or less around here, between 2009 and 2011. Okay? We had this first expansion that lasted between 2011 and 2020, and that's what we tend to see, this first expansion of about 7 years. Then we had a small crisis, what is called a mid-cycle recession, which was precisely this Covid crisis. Then we saw this second expansion, which also tends to last 7 years and which brings us today towards a date that would be more or less 2026 for a top, and several models indeed place a contraction zone in 2026. You can see that these tops, if we study the 18-year cycle, occurred in 1954, 1972, 1990, 2008, and potentially 2026. Now, I want to point out that real estate is a very slow market. So, we tend to see leading signs even before the real estate market collapses. And one of these leading indicators, so to speak, is the average price of homes sold in the United States. So, you can see that the average price of homes sold in the United States is currently above $400,000. Okay, very good. You can see that this price has been increasing since 1965. But what we tend to see historically is that the periods of recession, which I've highlighted in gray here, are mostly preceded by a drop in the average home sale prices in the United States. We saw it here. We saw it here. We especially saw it before the subprime crisis, with the price of houses that was falling. We saw it before the Covid crisis, and currently, since 2022-2023, we are seeing a decrease in the median price of homes sold in the United States. Now, again, this indicator alone is not a trigger for recessions, but it is a typical symptom of the end of a cycle.
Now, you'll ask me why the median home price is decreasing. Quite simply, if we look at the data again, it's because since 2023, we've seen an explosion in the number of sellers in the United States, so real estate sellers, and a continuation of the decrease in buyers. You know, any market is driven by the law of supply and demand. That is to say, if there is more supply on the market, so there are more houses for sale, and there is less demand, fewer people want to buy houses, indirectly the price will have to be lowered to attract buyers. So here again, what we are seeing is consistent with a real estate market that is cooling down and could potentially drag the entire economy with it. So I repeat that by analyzing the real estate market, we have a long cycle reaching a critical zone, a global cooling, and an imbalance of supply and demand.
I will now share my third category of research, which is research on the valuation of US stock indices. The first thing I want to share with you is what is called the Shiller PE ratio. It is also called CAPE. And the Shiller PE ratio allows us to value the market by taking the smoothed earnings over the last 10 years. I won't go into too much detail, but if you're interested, you can look up Shiller PE ratio to understand exactly what it is. But in short, currently, the Shiller PE ratio is at a ratio of 40, meaning that the current market is trading at about 40 times its normalized average earnings over a decade. And we can clearly see that the last time the Shiller PE ratio was this high, well, it was during the dot-com bubble in 2000, just before a stock market crash. We can now also study the classic PE ratio of the S&P 500, which would be the price divided by annual earnings. The current PE ratio at the time I'm making this video is 27.92. This means that the market is paying $27, almost $28, for every dollar of annual earnings generated by the S&P 500. So, to put it simply, if it were a single company, it would mean that this company generates $1 million in profit per year, and its valuation is $27.9 million. So the question you should ask yourself is, would you buy a company that makes $1 million a year? Would you buy it for $28 million, or do you think it's too expensive? I want to remind you that if you buy it for $28 million and it generates $1 million a year, it will take you 28 years to recover the price paid. So here, I hope you understand that the higher the PE ratio, the more expensive the price you pay for the company, the index, the stock, the market. And therefore, inevitably, we see a correlation between the PE ratio and future 10-year returns. And this is where I want to share this with you. So, the PE ratio versus the forward 10-year return. What this graph tells us, okay, is that here we have the annual returns for the next 10 years, and here we have the PE ratio at which we buy, and we can see, so there are several points, and if we more or less take an average, it would be something like this. So we can see that if we buy the S&P 500 with a PE ratio between 10 and 12, okay, which would be right here, well, the next 10 years tend to offer us an annual return of more than 10%. So between 10% and 17% per year for 10 years. Obviously, the lower we buy with a PE ratio, the better price we buy at, and therefore the higher returns we should have. Now, obviously, if we move up this line, we can see that if we buy, for example, with a PE ratio between 20 and 22, which would be right here, well, here we can see that everything is concentrated between 0 and 5%. So right away, our annual returns for the next 10 years have gone from over 10% to between 0% and 5%. So, well, we should still be profitable, but the annual return shouldn't be amazing. Now, what do we see if we buy the S&P 500 with a PE ratio above 22? Well, historically, if we buy the S&P 500 with a PE ratio above 22, the average annual return over the next 10 years is negative. That is to say, it's below zero. Okay? And currently, well, we are at 27.92. So we are right here. So if we continue this line, we can see that right here, we would probably have returns of -10% over the next 10 years. So this PE ratio analysis alone would make us think that potentially buying at the current level would lead us into a new lost decade. By the way, watch the video carefully until the end because we'll talk about this lost decade a bit later in the video.
Now, the third valuation point I looked at is what is called the US Equity Risk Premium. This is a calculation where we compare the implied return of stocks, which is based on what I showed you just now. And so the calculation behind it is 1 divided by the PE ratio. So with a PE ratio of 28, we simply do 1 divided by 28, and that will give us 0.03. So, in short, we multiply that by 100, which gives us 3.6%. And in short, this is compared to the yield of US 10-year bonds, which in finance is called a risk-free rate, meaning that the yield of 10-year bonds in the United States gives us a safe, guaranteed return. So if the 10-year bond yields more than the earnings yield of stocks, which is 1 divided by PE, then the risk premium for investing in stocks becomes zero. And that's exactly what we're seeing now. As I explained, the PE is at 28. So we do 1/28. We saw that it gave us 3.6%. But currently, US 10-year bonds are yielding 4.25%. Okay? So we have a guaranteed return of 4.25% and an uncertain return of about 3.6%. So today, we have a negative US equity risk premium. So that simply means that today, the market, investors are paying so much for stocks that, on paper, the base return is lower than that of bonds. So again, here, a negative US Equity Risk Premium doesn't mean we're going to see an imminent crash, but it tells us that currently we have safer options that would potentially be just as profitable, if not more profitable, than stocks.
Now, the other thing I looked at is the US Total Market Cap Divided by M2 Money Supply. What you see here is the evolution of the US stock market, but not just in dollars as we generally see it, but divided by the M2 Money Supply. M2 is a measure of the money supply. So it includes all cash, all bank deposits, all savings, and basically, it shows you the money in circulation. And as we all know, every year there tends to be more and more money in circulation. So this allows us to compare the stock market relative to the money supply, to all the money in circulation. So for you to understand this ratio, the faster this ratio rises, the more it means that stock valuations are increasing rapidly relative to the available liquidity in the world. And today, if we look at this ratio, well, we can see that we are at levels that surpass, for the first time historically, the levels we saw before the dot-com bubble crisis.
The other valuation point I looked at and will share with you is the S&P Price to Book Value, which is currently at 5.63. Now, the price-to-book value studies the value of an asset relative to its book value. So what we call book value is assets minus debts of a company. So if you have a restaurant, for example, and the restaurant has, in terms of oven, tables, appliances, etc., a total value of €80,000 on its balance sheet, but you have €20,000 in debt that you used to buy certain things, then your net book value, your book value, is €80,000 - €20,000, which is €60,000. Now, when we look at the price-to-book value, which is currently at 5.63, it means that the market is currently paying 5.63 times the net book value of the company or the market. So again, if we take a company that has, among all its factories, all its real estate, all its machines, etc., a net book value of 1 billion dollars on its balance sheet, then a price-to-book value of 5.6 means we are paying this company 5.6 billion dollars when it only has 1 billion dollars in net assets. So it simply means that the market is paying a huge premium on existing assets, generally based on an expectation of future profitability for the company. And, well, I think you can imagine, but the lower you buy a certain company or whatever with a low price-to-book value, if you manage to buy a stock or the market when the price-to-book value is at 1, it simply means that you are investing $1,000 to have $1,000 worth of value in that company. So obviously, the lower the price-to-book value, the better. The higher it is, the more expensive it is relative to what the companies have on their balance sheets. Okay? So if we total the Shiller PE ratio, the PE ratio by comparing it with the forward 10-year return, if we study the US premium, we study the market cap divided by M2, so the global liquidity in the markets, as well as the S&P price-to-book value, we again arrive at a conclusion that we saw in the real estate market and macroeconomic cycles, which is that currently, US stock indices are honestly extremely expensive. And if your starting point for your investments begins with these extremely high valuations, the future is generally quite complicated.
We will now move on to my next category of research and analysis, which is the real economy and macroeconomic indicators. Again, I will try to get straight to the point. The first thing I looked at is what is called the yield curve, also called the curve of returns in French. So, to make it simple, here you can see the yield of US 10-year bonds minus that of 3-month bonds. What is the logic behind it? The logic is that the premium, the interest you will be paid for lending your money with a maturity of 10 years, we agree that it tends to be higher. You will be paid a higher interest if you lend your money for 10 years than if you lend it for only 3 months. Which is logical, if you lend your money for 10 years, there will generally be more risk associated with this investment. Whereas if you lend it for only 3 months, there is less chance of something crazy happening in 3 months. However, when the yield curve inverts, it simply means that this time 3 months pays you more than 10 years. In short, again, the objective of this video is not to give you an economics lesson. If the yield curve interests you, there is a video I created that is displayed right here. But all I want to share with you is that historically, the yield curve has been one of the best indicators for predicting recessions, and every time we have seen an inversion of the yield curve, going from a ratio, you see here we have zero, to a negative ratio and then back to positive, boom, recession. Negative then back to positive, boom, recession. Negative then back to positive, boom, recession. Here, we have Covid. Negative then back to positive. Boom, recession, and then we arrive at 2026. As you can see, we went into extreme negative territory and are currently returning to positive. I'll let you draw your own conclusion from the yield curve analysis. I also want us to look at the unemployment rate in the United States. Here again, you should see a pattern repeating itself. This pattern is that recessions don't happen when the unemployment rate is extremely high, when things are bad. Recessions tend to happen precisely when the unemployment rate is quite low and it reverses, meaning it starts to rise again. Okay? That's what we saw in the early 90s. We saw an unemployment rate that kept falling between the early 80s and the 90s. Then, boom, it starts to rise again. Boom, recession. Okay, very good. Then we had the 2000s with from 1992 to the 2000s, we saw a decrease in the unemployment rate. Then it stabilized, rose again, and boom, financial crisis. Okay, very good. We saw the same thing in 2008 with a decrease, it rose again, and then boom, a financial crisis. Okay, very good. We had, well, 2020, I'd say it's a bit of an exception because we had such a strong spike because everyone lost their jobs during Covid. But, well, currently, you can see that we saw a decrease in the unemployment rate afterwards, and currently the unemployment rate is gradually rising again. Again, generally a sign that tends to be a leading indicator for recessions.
Now, the next macroeconomic indicator I looked at is what is called the LEI and CEI. So, Leading Economic Index and Coincident Economic Index. So here, the leading tends to precede the real economy, and the coincident tends to occur at the same time as the real economy. And so, the LEI and CEI incorporate various economic data that tend to either precede the real economy, occur at the same time as the real economy, or we would have lagging indicators, which would be after the real economy. But here, what interests us is the Leading Economic Index, which will group together macroeconomic indicators such as new orders, building permits, initial jobless claims, credit conditions, hours worked, and all that. These are indicators that tend to precede the real economy and therefore precede recessions. So, in short, if you will, the LEI warns, the CEI confirms. Okay? So here, you can see these two indicators since 1960. You see their evolution here. So in blue, we have the leading indicator, and in orange, we have the coincident indicator. But here, what we will study is finally the drawdown. Okay, right here, of these two indicators. And what can we see? Again, here in gray, you have the recessions, and we can see that before each recession, we tend to see the drawdown of the economic index fall before a recession. So here, you can see, we have a fall, then we have a recession. A fall, then a recession. A fall, recession, a fall, recession, a fall, recession, a fall, recession, a fall, recession. And currently, we can see that the Leading Economic Index has been in free fall since about 2022, which again tends to precede recessions. So right here, you see it in a slightly different way, where we have the coincident economic index in black and the leading economic index in blue. And then we can see that this leading indicator tends to fall before the coincident one. And here, we see this fall in 2022, while the market doesn't show it to us yet. But so, again, the conclusion here is that macroeconomic data are pointing and showing signs of a potential end of cycle.
Let's now move on to the analysis of positioning, and notably Warren Buffett's. Why am I talking about Warren Buffett? Because Warren Buffett is probably one of the most disciplined investors we've seen in the last 100 years. And historically, Warren Buffett doesn't buy when he wants to buy or when he's in a good mood. No, Warren Buffett buys when the market is undervalued. And if we look at his fund, called Berkshire Hathaway, we realize that its cash allocation is at a record. That is to say, 56% of his fund is currently in cash. The last time Warren Buffett accumulated so much cash was before the subprime crisis. Why? Because for him, the market was too expensive. So there was nothing to buy, and on the contrary, much more to sell. And so, obviously, this translated into an increase in his cash reserves. But so, currently, this increase in cash reserves and the decrease in the volume of stocks he holds shows us that Warren Buffett clearly sees a risk-reward ratio currently that just isn't worth it. And often in finance, we hear this phrase: "cash is trash." So cash is like something to throw away. But in pre-recession times, cash allows you to have what is called dry powder, so dry gunpowder, ready to use to invest, to buy when there is blood in the markets while the markets are collapsing. And if you've been following my videos for a while, you should also know that this year 2025 has been a year of selling. That is to say, I sold a lot of Bitcoin, I sold positions in commodities, so notably in gold and silver that I had. On October 27th, I was able to share that, as expected, we saw a return to $116,000, and I was able to share my positions on Kraken. You can see right here where I had executed my two sell orders as planned to remove some risk from the table. And so, obviously, this increased my cash reserves in my fund. And so my cash reserves are also at a historic record for my situation. That is to say, I am currently holding a lot of cash, a lot of dry powder to potentially use in the future.
Now, we arrive at a more visual part that many will enjoy. Now that we have studied macroeconomic cycles, real estate, valuations, the real economy, macroeconomic indicators, and positioning, we will study, let's say, the narrative and technical analysis of the S&P 500. So, what I did was I studied the S&P 500 on a yearly chart. That is to say, each candle equals one year. I studied it on a monthly basis, and I studied it on a weekly basis. I will share all of that with you. So, what I first did was an analysis of the S&P 500 from today, so 2026, back to the 1930s. The Great Depression. And what can we see? First, here, I'm looking at it on a logarithmic chart. So obviously, what we've seen since 1930 is an upward trend. So we know that in the long term, stocks offer one of the best returns, but above all, we can see certain cycles emerging. And that's what I'm going to share with you. It all starts, well, from 1929 to 1942, we have what I call a lost decade. Okay? That is to say, during these 12 years, the S&P 500 had a return of -63% in 12 years. Okay? Imagine, you're invested for 10 years, well, 12 years in the market. All you've done is lose -63%. And all of this started, obviously, from the Great Depression. So for me, this is the first lost decade caused by the Great Depression. This is followed by a very good period of expansion that lasted 23 years, from 1942, just after World War II, to 1965. This long period gave us a return of 950%, and you can see that this period was a post-war period. We had a productivity boom, strong demographic expansion. We had strong and stable growth. We had low inflation and mass industrialization after this World War II, which caused this economic boom in the markets for 23 years until 1965. Very good. So, here we have our first
10 lost years followed by about twenty positive years. Very good. We now arrive at the second lost decade, which for me took place between 1965 and 1975. Okay. Which lasted for 10 years. For 10 years, the return of the S&P 500 was -25%. This period was notably marked by a period of stagflation, okay? So that's when you have no growth and on top of that, you have high inflation. All of this was fundamentally caused by an oil crisis. We had a supply shock, we had rising unemployment, and above all, we had the end of the Bretton Woods agreement where the dollar was backed by gold. That ended towards the end. Again, lost decades are followed by guess what? Once again, a period of expansion where we gained a total of 2000% between 1975 and 1999. Okay? So this period of expansion, which lasted 25 years, was characterized by structural disinflation, globalization, a productivity boom, enormous technological innovation between the years 75 and 2000, and especially credit expansion. Again, a very good period for investors. However, as you know, history tends to repeat itself. [music] History rhymes, and guess what follows? Another decade that lasted us 10 years between 1999 and 2009. Okay? During this period, so again, if you had invested in 1999 and sold in 2009, you would have invested for 10 years in the S&P 500, and you would have had a return of -38%. That hurts. Okay. This period was characterized by, as you should know, the dot-com bubble, followed by the subprime crisis, the housing crisis, very low growth, and overall financial instability. Now, what do you think follows this lost decade? The cycle tends to repeat itself. Okay? And this is exactly the cycle we are currently in. So it follows a bullish cycle of about 20, 25 years, something around there. Okay? We are currently here, so since this low, we have had a return of 670% on the SP, which is a period that has been [music] characterized from 2009 to today by an ultra-accommodative monetary policy. Okay? Quantitative easing, so if you like, they print money galore, fiscal expansion, asset inflation, I'm not talking about chicken inflation and so on, no. Real estate inflation, gold inflation, stock inflation, so asset inflation, artificial full employment, and obviously tech companies, all tech companies that are ultra-valued, as well as the potential AI boom that we are currently seeing. And I think again that history should repeat itself and that after this period of about 20 years, so if we do 20 years, that would push us towards 2030, we could very well see a lost decade. Remember, okay, remember, we looked at the price, uh, the P/E ratio of the S&P 500, and currently, okay, by taking this curve, we concluded that the annual return for the next 10 years should potentially be negative. There is our lost decade. And this lost decade, uh, this period that should be negative, as we saw between 1929 and 1942, between 1965 and 1975, between 1999 and 2009, could perhaps be between 2030 and 2040. Okay. Which would be a potential end of cycle, a bursting of the AI bubble, potentially a new monetary system, who knows, maybe we will all use Bitcoin, potentially a new geopolitical crisis, it could be a new world war or a Terminator scenario. Let me know in the comments which one it would be for you. But so my vision on an extremely long time horizon, by studying the narrative and technical analysis, for me, I don't see an immediate end of cycle on a very large timeframe, again, but we are approaching an end of cycle. Okay, we are not at the beginning of a cycle, I think we agree on that. So this is the study in yearly. Okay. So now that we have studied the cycles since 1930, we will go to a slightly shorter timeframe and study it from the 2000s. Okay? So we have the 2000 crisis, the 2008 crisis, and since then, from 2009, we have this bull market that we are in, which, as I explained, is largely driven by a super flexible monetary policy and the tech market. Okay. This bull market, [music] it clearly evolves within what is called a bullish channel, okay? Two parallel lines with [music] minimum points and maximum points which are right here. Okay? And then median points which will be here, here, here, here, here, and here. This little drop we saw there was precisely my big Nasdaq purchases in April 2025 in this nice zone. Now, today, at the moment I am making this video in [music] 2026, we are currently right here, which is therefore clearly a resistance of this bullish channel. And so again, if we study the bull market, we are precisely in this somewhat extreme zone which tends to be generally followed by a correction, a correction, a correction, a correction. 2026 potential correction. Now, I went even closer. That is to say, to really study this part, let's do it together. So here you can see that I am studying from Covid in 2020. And here again, if we study from Covid in 2020, so this entire part, we can see that here too we are precisely on a kind of channel. So here I'm not showing it on a logarithmic graph because we are on a timeframe that is too short to look at it on an exponential graph. But here again, we have this clear channel with the low points. Okay? And this channel with the high points. And currently, what can you see? I see exactly the same thing as you, that is to say this high point which from a purely technical point of view would be a resistance for a potential bearish correction in 2026. [music] I remind you that here we had Covid, which was followed by monumental economic stimulus, which caused this enormous increase. This was followed by 2022, okay, which was this correction in 2022, which was caused by too much inflation. So the Fed raised its rates, which calmed the market. So in 2022, we had a negative year, and this was followed by the period of 2023, 2024-2025, which was a period of disinflation and an AI boom with a boom, an explosion in the valuations of tech-related stocks and assets. And so what I think we could potentially see, so as I explained from a technical point of view, we could see a correction in 2026, but it might be a mini bursting of an AI bubble, but not the general AI bubble, the AI infrastructure bubble. Because in fact, what we have seen since again 2022, uh, 2022 is when ChatGPT was introduced. All this investment that we see, basically since 2022/2023, this meteoric expansion, is mainly caused because tech companies are investing billions of dollars in AI systems, in AI infrastructure. However, these investments of hundreds of billions of dollars have not yet yielded a return on investment. [music] And so you have all the investors who are throwing money at these companies saying "Oh [ __ ] they are investing in infrastructure, it's going to be crazy, it's going to be crazy, it's going to be crazy." But perhaps a moment will come, perhaps this year 2026, when investors will say, actually, yes, it will improve productivity, yes, it will improve returns, but it will take some time, it won't happen right away. And so people become disillusioned and people say "Oh shit!" And then we have this correction. So after all the research I've just shared with you in this video, by the way, give me a like, subscribe to my YouTube channel if you haven't already. I know there are a lot of people who follow me, [music] who watch my videos and are not subscribed. Doing this kind of work takes me time. So I would be really happy if you let me know if you like this kind of video. And so as I explained at the beginning of 2025, I shared all my research and explained to you again for free why for me 2025 was a positive year, and it was [music] the case. And in this video, I've shared all the reasons why I think 2026 might not be such a good [music] year for the US stock markets. By the way, a small disclaimer, but it's always much easier to time a market bottom, so to be able to inject capital at low prices, than to time a market top. So with this research, this analysis that I'm sharing with you, in no way am I telling you, so that you understand it well, anyway, we will see more or less my plan, but in no way am I telling you to sell everything you have, the crash is coming now. Okay? The crash could very well happen in 2026, as it could very well happen in 2027. Timing a top is extremely dangerous. And again, here, I'm talking about a market correction. I'm not talking about the beginning of the lost decade. For me, we are not yet at the beginning of this lost decade. However, we are due for a small correction. So, now that I've shared all this information with you and we've seen together that the valuation of US stock indices is potentially quite high, the real question is how to take advantage of it? So personally, there will be two ways to take advantage of it. Two ways I will take advantage of it. The first is through active trading, that is to say, I actively trade the market to hedge myself. The example of 2022 is perfect. 2022, as we see right here, was a negative year, and for me, in terms of my trading returns, it was an absolutely great year because in trading, you can benefit from a bullish market as well as a bearish market. And when a market falls sharply, you are able to short sell and thus cover yourself first. But above all, otherwise, to benefit from financial crises. And for that, I created the Macro Trader Accelerator, which is a performance accelerator that allows completely beginner or even advanced people to reach a professional level in trading [music] by using fundamental analysis, macroeconomic analysis, what professional traders use, and to be able to take advantage of these kinds of situations. In short, I'll put the link in the description. That's the first way. The second way is through strengthening your long-term investments. And so here, we are going for a much more passive strategy, which is a deployment of what I call your [music] cash for the crash in periods of depression in order to structure your wealth and deploy your cash intelligently. And here again, I created Smart Finance Pro, I'll put the link in the description, which this time is a program that is aimed not at people who want to become traders, real professional traders, which again, I repeat, is a profession, but more for entrepreneurs, employees, or investors who genuinely want to build long-term wealth, build a portfolio based on passive income and passivity in managing your funds. We cover, among other things, the management of your different accounts, investment, but also all the banking aspects, different jurisdictions, and again, this program is aimed at all people who have money set aside, [music] who perhaps have a good salary and who wish to take advantage of the stock markets in the long term to build generational wealth. Here too, you will find the link in the description, or you can simply send me the word 2026 by DM on Instagram so that we can talk a little more about your situation and see which of the two options is most suitable for your situation. So now, how to prepare for this potential market correction? So to do this, I've visualized it all with these two images. Okay? For me, 2026 is this. [music] Okay? That is to say, I see myself, I see you as a lion in the tall grass, and there is literally a [ __ ] of gazelle. There is a gazelle, meaning there is no food, there is almost nothing to hunt. Yes, there is always a gazelle. So basically, you're taking the risk that if you go out, you'll be attacked, basically, there's nothing to eat. And for me, it's exactly the same situation that Warren Buffett is in. That is to say, currently, he remains patient because there isn't much to sink your teeth into. So again, yes, you can attack and maybe you'll catch the gazelle, or you can rather stay hidden in the tall grass and patiently wait for a gazelle migration. And that's when you come out. And then, you'll catch three gazelles, you'll catch four, and you'll have enough to eat for the next two or three years. Okay? And often the best decisions are made [music] after periods of patience. So if personally I had to visualize 2026, this is it. Opportunities will come, and for me, the opportunities are not here right now. But so rule number 1 for this preparation for a potential correction is not to FOMO. We see markets at all-time highs. Don't get excited about wanting to buy at the tops because you don't want to be late to the party. The second point to prepare for a potential correction is to get rid of the idea that cash is useless. That is to say, cash is not trash. Cash has enormous power and impact in times of overvaluation because it is this cash that will allow you to inject when the market is crashing and everyone is already invested and [music] so no one has cash to inject. You will. Now, thirdly, to do this, you need to [music] increase your cash reserves. As I explained, this is something I've been doing throughout this year 2025. That is to say, I am investing less and less every month in US stock indices, and so my pile of cash for the crash is increasing. So I recommend you do the same, that is to say, increase your cash position. This also means being careful with your expenses. Don't go buy a house, don't go buy a big car, don't go buy a big watch. Put your money aside. That's what will allow you to inject it. The fourth piece of advice I would give you to prepare for this potential correction is to prepare your buying zones in advance where you will be able to deploy your cash. Why not wait for the crash to do it? Because believe me, when the crash comes, when the markets start to crash, you will be in panic mode, you will listen to what Donald Trump says, you will listen to what BFM TV says, you will listen to what your favorite gurus say, and you will be completely biased and you will not follow your initial plan. So make an initial plan with your buying zones where you intend to deploy your cash even before this correction arrives. Again, if you want to see my complete strategy on deploying my cash, what are the price zones where I will inject, I share all of that in Smart Finance Pro. The link is in the description. And to finish, my last piece of advice would be to remind you of this image with the lion, so waiting for the migration, but above all to remember that one single good opportunity seized can literally change your life. Again, if we look at my year 2025, we had this market drop in April 2025 with Donald Trump's tariffs. I was able to get in like a pig, okay, on the Nasdaq. This position alone allowed me to make a lot of money. So again, you don't need to have an opportunity every morning to make money. One big opportunity in the year, you're good. Anyway, that was El Iiot. Don't forget to give this video a like if you enjoyed it, leave a comment if you have any questions or your own opinion, your own vision of things. I also invite you to check out all the other videos I have here on YouTube. There is a lot of completely free value. So, that was Elliot. Ciao!