As the Market Drops, Here is MY GAME PLAN

If you've been watching the markets lately, you've probably noticed something feels different. Technology stocks have been rolling over, software names are getting hit hard, there's a rotation happening under the surface, and headlines are starting to get louder and louder. But instead of reacting emotionally, it's important for investors like yourself to have a plan. And in today's video, that's exactly what we're going to be focusing on. Going through what's happening in the market right now, my take, the turbulence we're seeing, volatility, but also what is my game plan? What are a few stocks that I have on my watchlist, and what areas am I looking to buy them? I'm not looking to predict anything. I'm not panicking by any means. I'm taking a long-term focus. So let's dive right into it, beginning with the rotation that we have started to see, particularly out of technology. A lot of high-growth popular names have seen big pullbacks in the market. You have the likes of Microsoft down 25%, Broadcom down 25%, Nvidia off of its highs by roughly 20%. You have CrowdStrike and Zscaler, two cybersecurity names, with CrowdStrike down 25% and Zscaler even worse, down 40% from its recent highs. However, not all technology stocks are down. The likes of AMD is off to a good start, and particularly memory stocks are continuing the momentum they saw in 2025. To start the year, you have the likes of Micron up 45% already, but to best them, SanDisk is up over 180% year-to-date. Yeah, we're only roughly a month and a few days into the new year. In fact, SanDisk is the number one performing stock in the S&P 500 to start 2026. And just look at this chart for the past 12 months, in which the stock has climbed an insane 1700% plus. However, the biggest issue for many investors is knowing when to sell. And this is something we talk about within my six-week investing accelerator program, is we don't let feelings and market performance dictate what we're going to do for our positions. We look at valuations, we look at charts, we analyze to make a well-informed decision before hitting that sell button. So there we just focused on technology, but in the subsector of AI, now we're going to go to another subsector, which has been one of the worst performing sectors in all of the stock market, and that's software. Looking at this chart here, you can see the IGV, which is the iShares software ETF. It is down at nearly 20% over the past 12 months. And the crazy part is the fact that all of that has come in the first month plus of 2026. As you can see here, this year-to-date chart, the ETF is down nearly 20% in 2026 alone. AI is having a big impact on pretty much every software company out there. Even the big dogs like Microsoft, Intuit, Salesforce is getting hit hard, and even SPGI with the latest report from Anthropic, who released a new legal form feature. One of the things we've been talking a lot about within my Discord community, the Stock Investor's Edge, and again, if you're not yet part of it, you can join for free using that link in the description below. But the focus has been on rotation. We have seen the rotation out of technology. It continues to happen, very much so in the sub-sector of software like we saw. That money is moving, and it's not going uninvested, it's moving into other sectors that maybe haven't been working as much in the past 12 months, where valuations look much more compelling, and maybe they have a defensive nature to them. Looking here, you can see all 11 S&P 500 sectors, aligned by year-to-date performance. Down towards the bottom, the second worst so far, is technology, down 1.2% to start the year. But at the top, is energy, materials, staples, and industrials. Over the past few years, the S&P 500 has had very strong returns. Few years, over 20% gains. Last year, over 15% gains, in the index as a whole. But had you looked at that chart we just saw a second ago, breaking out the 11 different S&P 500 sectors, there was only 2 or 3 sectors that were outperforming the greater index. Now we look at it, and we have 6 different sectors. That's the broadening we're seeing, and one of them isn't even technology. So to say the least, we have seen a lot more choppy trading to start 2026, and we have seen the levels of volatility climb higher as well. Looking here, you can see the popular fear and greed index, which is currently showing a state of fear in the market, with a score of roughly 40 and going lower. Over to the right though, you can see just a week ago, we were in the greed stage, with a score of 65. In the world of investing, a lot can change in a quick period of time. So what we have seen so far and discussed is we have seen a rotation out of technology, we have seen volatility increase, which has also heightened the level of fear in the market, and there's a lot more information that investors are digesting. From interest rates, we have a new Fed share that's coming in. Geopolitical concerns, those tensions have been rising with the likes of Iran. Still, we have what's going on in Russia and Ukraine. We're talks of Greenland, Canada, US. There's trade deals that still need to be worked out. A lot that can impact the stock market. So yes, when you stack it all together, there's a lot going on, hence the volatility that we're seeing. However, volatility doesn't necessarily mean risk. It could mean repricing, and that could create opportunities for us long term investors. So before we jump into my latest game plan right now, I want to take a second to see where we're at in terms of valuation when it comes to the S&P 500, because this is always something that should be at top of mind. Looking here, you can see the FaxSet report showing EPS estimate for the S&P 500, roughly 12 months out from now, sitting around $315 per share. As of this video, the S&P 500 currently trades around $6,900, which gives the index a forward PE multiple of 21.9 times, which is above the index's 10-year historical average, closer to 18.5 times. So looking at that, we know we're looking at a 10-year average, and a lot has changed over the course of the past 10 years. We have a lot more technology exposure, a lot more growth companies at the top of the S&P 500, higher weightings that command higher multiples. So yes, of course we have a higher multiple. If you look at the history of the S&P 500, that multiple has climbed slowly but surely over time. Where do I think it should land? Probably closer to around 21 times even. So we're not crazy overvalued right now at 21.9 times. There's still areas of the market that are very overvalued, but there's still plenty of deals to have. Again, just because a stock index, a stock price, an ETF price goes up doesn't necessarily make the stock valuation more expensive. I talked a lot about this with students within my 6-week investing accelerator program that got out of NVIDIA way too early. However, the stock price was going up exponentially, but the earnings was growing even faster, which even with that stock growing 200 plus percent at one point in time, the EPS was growing even faster, making the valuation at that point in time, after stock growth of over 200 percent, actually cheaper than it was the prior 12 months. So now let's change gears and talk a little bit more about my game plan. And again, I'm not doing anything drastic. I'm not making any emotional or irrational moves or anything like that. I'm continuing to focus on my strategy of investing in high quality companies at great valuation. I'm looking for companies with strong revenue growth, margin expansion, and strong cash flowing businesses. If you saw my recent video, then you know exactly three of the stocks that I actually put money to work into. But in this video here, we're going to talk about five top watchlist stocks that I am focusing on right now. A few of them are already in my portfolio, so I would be adding to those positions, but a couple of them I have no position in and I'll call those out. But the five stocks that we're going to focus on is going to be an industrial play with Boeing that continues to be a major focus for me in 2026. We're going to talk about Amazon, which is again, one of my favorite stocks to own that I believe, again, hasn't had a tremendous past 12 months, but looking out to the future, it's quite bright. And then moving on to a few stocks I don't own, which is going to be the likes of McDonald's, Capital One, as well as Spotify. So let's take a look at the chart for each of these, beginning with Boeing, which is a stock that reached new heights of late topping out at $250 per share, but has since pulled back, which makes sense given the RSI, which you could see at the top of the chart was well over 70, indicating a near-term pullback was likely. But what I like in the chart is the crossover we're seeing between the 50-day moving above the 100-day moving and also crossing over the green line, which is the 150-day moving average. Both very bullish moves. I'm focusing on that $215-$220 range to look for a bounce in the stock. Now we're going to move on to Amazon, who recently reported earnings which I thought were rather good. We continue to see growth in AWS, we continue to see advertising growth, which are all high margin dollars, but the stock is falling the next trading day and now sitting in the low $200 range. I think anywhere around that level, especially if you do not yet have a position, is a great entry point, especially with the stock sitting, as you can see at the top of this screen, with an RSI now below 30. Next is going to be McDonald's, which is one that I've been waiting on, not currently in the portfolio, but trading in a tight wedge pattern and briefly peaking out above the upper band, but closing right on it. I would like to see a breakout before jumping in as the stock could be poised to jump to new heights. Fourth on our list is going to be Capital One, which is a financial name that I've been talking about, which fell 17% after earnings, but appears to be finding some footing around that $215 level, consolidating there now for about a week, which is a positive sign. This is a name I like long term, but I would like to see it retake its 150-day moving average before I initiate a new position. The last name I want to look at right here is Spotify, which is another stock that's not currently in the portfolio at all, but one that I believe is on a similar path to the early days of Netflix, where it had great momentum, and then the stock was kind of left for dead. And stock momentum is key, but of late, the stock has fallen out of favor. As you can see on this chart here, it has fallen nearly 50%, and RSI is sitting at a very low level, close to 20. So as you can see, I'm looking at an array of different types of stocks, some growth, cyclical, some defensive, and dividends. I'm not focusing on one particular sector, because during different periods of time, the S&P 500 is always going to go through different cycles, and during those cycles, there'll be different winners from a sector performance. The key thing for you as an investor moving forward as we continue on through this period of heightened volatility, is to remain steadfast to your strategy, your specific strategy. Don't get emotional, because emotional investing is a losing mindset every single day of the week. The market likes to reward discipline, not reaction. So that's my take on the market right now, where we're at in terms of volatility, what's working, what's not. But also in particular, my game plan. What are the stocks that I'm looking at right now? Whether it's Boeing, or Amazon, or whether it's Capital One, McDonald's, or whether it's Spotify. A few names already in the portfolio, and a few not yet in the portfolio right now. So let me know in the comment section below, if you had to choose one of those stocks to buy right now, which one would it be, and why? And if there's another one not on this list, also let me know down in the comments. And if you found any value, and you like these market updates, let me know by hitting that like button down below. Subscribe to the channel, and we'll see you in the next one. Take care.