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Moving forward here, stocks looking to recover today after those losses on Thursday, Friday, and Monday, that three-day route. But is it too early to declare that today is a turnaround Tuesday? Here to talk about why he may be staying on the sidelines for now, we've got Chris Watling. He's the CEO and Chief Market strategist of Long View Economics. Chris, thanks for coming in here. So, yeah, I mean turnaround Tuesdays, they can sometimes feel like we're off to a good start and then not last throughout the day. What do you think?

Well, it may well last throughout the day. I think what one has to remember is sell-offs tend to happen in waves. So it's not just a straight line down, then we're done. You know, there tend to be three waves or five waves, and in the middle of that you get these relief rallies. So, it's perfectly natural that you have a very aggressive downside, a little bit of short covering, which creates a rally, which is probably what we're in now. If I look at our sort of market timing fear and greed models, the market's pretty fearful, may get a tiny bit more in the short term. So, I wouldn't be surprised if we get a wave two relief rally or bounce, but don't get sucked in by it is the point. I think that's the key here.

What do you think this signals then about more so, not so much over the next several trading days, but the longer term? Should at all investors be a bit encouraged maybe by some of that buying action that we are seeing here at the open?

Well, what do we think? Well, I think, I think the most important thing that's happened in the last few months is not what's happened in the last few days. It's what happened on July the 11th, when we had US CPI out, and it came in softer than people expected. And you remember the market rotated aggressively, and the Nasdaq sold off hard, and the Russell 2000 and cyclical stuff around the world went up. That is a real marker day because that is telling you, I think we're in a phase of global sector rotation. So the leadership of the stock market globally is changing. So now we're in a liquidation event. Most global sector rotations turn into sell-offs. You never change global sector leadership without a big pullback. So we're doing that, and the trick is to use this next few weeks, couple of months, as an opportunity to get into the new sector leadership. So I would suggest A, the AI, the MAG 7 leadership is done, finished. I could be wrong.

Could be.

Bit cool, I accept that. Well, you know, I remember coming on here, I was last in New York in April, I came on, and I remember saying at the time, every man and his dog owned Nvidia. And there we go, we've just had the proof. You know, the quick selling. The point is markets have fashions, they last for a long time, and they end up with everyone owning the thing that's the fashion. And it's so it's all priced in. It was an expensive sector, overowned, etc, etc. Now the psychology is potentially changing. It's kind of interesting as well because if you, if you listen to people over the last month, they're sort of questioning AI. No one's saying it's not going to be great, but it might just take longer. It might just cost a bit more, etc, etc. So that's kind of interesting as well. So I kind of feel, and on top of that, I think the important thing about July the 11th is embedded in markets the idea that we're going to get a Fed rate cutting cycle. And this softer data last week in the US reinforces that. So yes, we're in a liquidation event. The Japan stuff is critical, but really we're in a global sector rotation, and over the next couple of months, that's, that's the way to play this thing, if you're looking out a couple of years, basically.

I got to do one more on the Nvidia of it all. We just had an Nvidia chart year to date up showing the gains over 100%, even with the recent sell-off that we have seen over the past couple of days. I believe it says up over 110% year to date. So Chris, particularly as we head into Nvidia earnings in a couple of weeks here, how big of a risk is that to your call?

Well, I have no idea what their earnings are going to say. I'm a macro guy and a strategist, but my guess is that a lot of the good news is in the price from the way the stock's trading, from all the psychology, from the over ownership. And, yeah, I wouldn't, I wouldn't, I don't know. I don't know what's going to happen on earnings.

Okay. So then, I think the question in all of our family group chats, right? I'm sure you're experiencing this as well, is just what do we do right now? What do we do with this pullback? What are you telling people in your family?

If you're, I wouldn't, my parents are too old to trade markets. I tell them to buy the bounce, trade them for a couple of weeks, go long if you're nimble, but really lighten up if you're a lot, if you're sort of multi-month investor. It all depends on your time frames. That's the, that's the challenge. So we, we think about markets on lots of different time frames, which generally confuses everyone.

All right. Well, great advice. Thanks so much for helping us out here, but it's a very confusing time for a lot of investors at home trying to figure out what moves to make in their portfolio. Chris Watling, always great to have you. Thanks so much for joining us here in studio. CEO and Chief Market Strategist at Long View Economics.