Transcription
Very productive day, to say the least. Best place for us to start is going to be to get rid of everything, and then from there, what we're going to do is drill into it. I've got two double-digit earnings moves we have to go over. But the important thing I want to focus on is where we close before I drop anything down. You have a doji on the cash market. We're just going to use the SPY, not the futures. But I just want to show you this. This is the cash market. You can see that you're between that 60, what is this called, 84 all the way to that 79. And you're in this range. Now, this is going to get really important. So, I'm going to drop everything back in, and then we're going to get to it. Let's do it.
So, let's go through what these levels are. Now, if you watch us pre-market, and we do this publicly, you can already know what this level is because we walk through it with you at nauseam today. I spent 10 minutes on it. And really, what it is is from here, I just go down to my little trusty bar, and I'm just dropping an anchored volume profile. And all it's going to do is drop the volume profile from here. Anybody can do that. And what you're going to see coming across is that that is point of control. Point of control is where the majority, the majority of trades are taking place. Not the average, that's your VWAP, but this is the majority. That's what point of control is. Then you have the value high of this entire move and the value low of this entire move. But we can see something very clearly that value high since this began and point of control has been resistance. It's very simple. Don't overthink it. It just is.
Now, why is that happening? There could be a myriad of reasons for it, but let's not overthink it. Let's just understand that we hit there Monday, December 1st. We rejected complete matumbo. Then we would come here and realize that we've done it again Tuesday, and then we did it again on Tuesday. And guess what? We did it again at 3:45 on Tuesday. The other thing to take away from this more than anything is if we go here and look at this close on Friday, the aftermarket close that takes you right to that SPY level. You are not able to get above that. So, it's very clearly telling you that everything from here up, anything between this 83 and this 85, let's call it, is going to be a sticking point. So, it doesn't really matter to us what else happens in here. Until we're through here, it's a trader market. And looking at this and suggesting that, oh, we're definitely going to roll or we're definitely going to break out. You almost have to give it to the people that think that you're going to roll to an extent because you keep banging your head on it. The only reason why I, I, I'm hesitant to give it to those to the bears is because here's your low, and then you take out a low, which is a higher low. You make a higher high and you still don't break that low. So maybe if we got through that 7934, I might feel a little differently and give more to the bears on that side.
Drop this to an hourly before we get into it. And you can see that we're rolling over. We can see that pretty clearly. Let's get rid of this, and we're going to just drop it to the pre and the post. And we can see that rolling over, right? So, it's not great. We are now at this point, we now are overbought. And now, if we go here, we're just leveling off, but we're not in any real harm's way here. We're actually making a higher high on the RSI. And if we look at this on the 4-hour, and I'll clean off all my nonsense for a second. We just talk about it for a second and just look because I do think it's important. If we really just looked at that breakout from Wednesday, the 26th, and again, from when you know, you gap over this control bar over this into that close on Wednesday, that's really all you've done. That's it. And we've done the perfect undercut here, and all we are is in this base trying to figure out, are we going to break out? Are we going to come back and pull back? And we don't have anything definitive. I will say earnings overall are fairly good. But you are rudderless right now, and we're seeing that. Now, I think there's a couple reasons for that. We've gone over those. We're going to address a couple more tonight, but I'm going to give you some technicals to look at that I think will shape things up for you. I don't think that you want to think of anything more than this range that we're talking about. If you're looking at the SPY, I think anything else candidly is going to be a waste of your time.
I'm going to show you this on a 5-minute. So the GL, that's your gamma level, and that's at 680. And you can see how we've been playing with that over and over again. My hope with this level, this where we're at right now. My hope is that this level drops down, point of control drops down, and it starts acting as a buoy underneath of us instead of or a ball, I should say, since I can't pronounce buoy correctly. A ball underneath of us instead of a weight above us pushing us under the water. I'd rather be pushed up through the water, right? Hope that makes sense. And you can see our levels here. It's not really rocket science when we zoom in on it, but I just think it helps to note, and this is exactly what we talked about on Monday, like, hey, this is our area. This is where we'd want to get out of this. And this is certainly an area where we would want to, what, you know, watch that hard reject. Hard reject. Hard reject. Hard reject. Say it with me. Hard reject. So until you're through that, until you start closing over that emphatically, and maybe, just maybe, that's not going to be enough because we've already done it. Maybe we need to start seeing something like this where we are popping over, popping like it's hot, back down, retest, and then goes. Maybe we need some of that action because right now we definitely have to focus on this and try to figure out what is the real thing here. Like, what is the real thing? Are we going to break through? Are we going to roll over? And I don't think it's as clear. I, I don't think we're taking out the lows. I'll be real clear about that right now. Barring news, I don't think we're taking out the lows.
But let's look at this on the Qs before we get into some of the technicals and then some of these other charts about some of these names that are rocking after hours because there's a couple here you're definitely going to want to be aware of before tomorrow. So, if we look at the Qs, very similar setup. Let's turn this off, and we're going to click on this little eye, and that's going to take everything off for us. Yay. And then we're going to see the long down bar, the undercut from October 10th. And we're just going to look at it for a minute, and you'll see it. You broke down, you closed from that day, Wednesday, November 12th, and you're over that today. Now, you can say anything you want about today. You have a higher high. So, I can say anything I want about this gap. I get it. It didn't do as much as people wanted it to do today. I get it. But there's your gap. And everyone's on the on the side of fear right now. So, if we are to really look at what the Qs are doing, and I think this is very important, even if you have these lows here where this would be a distribution day, clearly you made a higher high, so it's not. But if you were to look at this and say, "All right, what's transpired since this control bar on Thursday when we had what was referred to as capitulation, right? We talked about this. We have to undercut and then see what happens from there." And there's your undercut. Let's see what happens from there. Doji flipped, the doji flipped right back into that volume low. And then we are sitting on point of control and that obviously value high.
So why is this important? Let's go back to this for a second and clear it off. Every open and close has been green on the Qs. Every open and close has been green on the Qs. As people are sitting there going for the end of the world every single day, buy the open, sell the close. Buy the open, sell the close. Every day it's worked. And when you start to see that, it's just consistent buying because if it wasn't consistent, even if it just means it's getting tired. No matter how you look at it, it's still consistent buying. So you, we can all talk about this. You guys love talking about your low volume. I don't know what they're going to say today now that the volume's starting to pick up, but they'll come out with something, another reason why it's going to go down. But when you start to look at this, like your volume's there, you, it's all green. It's there. And all people keep talking about is it's low volume. Up is up. Price is price. You might not like it, but you also have to understand that when you have exhaustive selling and you have an exhaustive selling bar and you put a bottom in, you don't get a lot of volume after that. I don't know who told these people to expect huge volume a, you know, huge buying. Oh, you, you know, you get huge buying after. Why would you get huge buying after all the sellers are exhausted because they all think they made a mistake? Now, if you look at any real correction, right? Any real correction where you've dropped, you always have below average buying when you're putting a bottom in. Like, I, I, I, unless it's news, unless it's a news event, like, like back here when we had, oops, I'm just kidding about tariffs, right? Besides like the oopsie. You, we had too much winning, too much liberation. We got to put a halt to it. Something like that. But if you go back and just take a look at, I don't know. Let me find one. So if you go here, here we are, August 1st, right? Sky is falling. We got to get out. Got to get out. Everybody's out. Where's your volume? It's below average. But that's, but that's not what they're saying on Twitter. Okay. They also told you that Micro Strategies was going to miss payments and had to sell Bitcoin. And now it's $30 in everyone's face. Anyway, so you could see here how that marked off. Look, below average volume. Oh, look how that marked off. Oh, look, below average volume. But I guess this time it's going to be different. God, I sound cranky. But so what you tend to see after a bottom is the sellers are exhausted. Institutional sellers do not think they're wrong when they sell. They don't think they're wrong. They think they have to sell. That's why you get light buying. Unless you have some kind of news that changes things here where, you know, mission accomplished and then we're going to reverse course and for 90-day pause, you're going to get a change in trend and you're going to see massive amounts of volume. But if you're just a regular, like meltdown, look at the meltdown here, August 5th, 2024. Look at the volume, how it's not anywhere near our line after that. It's consistently like that. And it's really important for people to get that. So, if you learn nothing from tonight, now you know that. And you guys can all just drop it in the comments and just, you know, you can disagree with me. That's fine. But I'm right.
Anyway, let's get back to it. So, if we go back here and look at our key levels, there's one thing that I definitely want to point out that I think that you guys don't know, or maybe some of you do, but up in here, your call wall kept moving up. So, if they're moving the call wall up, they're not worried. They don't feel the need to come down and hedge themselves. They're moving it up and up and up, which gives you a wider birth into here. So, I think that's super important for us to get. And then, if we start looking at it from this perspective, let's clean all this off for a sec. We start looking at it from this perspective, we're going to have to start thinking about where we're going to go next. And obviously, the key is to get back up to this 626 as soon as humanly possible. Whether we do or we don't this week remains to be seen. I have some things out there that are somewhat concerning. Uh, I'll review some of them now. Um, hopefully I can review all of them, but I have some things that are concerning and some things that I think are, I think they're okay.
So here's the F5D. And everybody wants to remember this, and I'll tell you why. Because I got asked about education, so I'm going to drop it again. I see all these people talking about, "Oh, if your stock's above the 5-day moving average, you're great. It's got strong relative strength." Not if every other stock's above the 5-day moving average, then you just have a plain old stock that's above its 5-day moving average. What has value is rare, right? So, if everything's breaking its 50-day moving average and your stock's going above it, or every stock's breaking its 5, and your stock's going above it, then you have high relative strength. For example, we have worked off the 96 and we're back into the 40s. Now, if we are to look at this, usually after you hit something like these 90s, you tend to go the other way because that's just the way people are. So, usually you have to have like one more like kind of flush on this to get down into the 20s, something like that. So, maybe there's more pain tomorrow. But really, what you've done here is just eliminate 60% of all stocks that were above their 5-day moving average, and then everyone's going to go out there and not buy them because they're below their 5-day moving average. Get it? See the problem with that strategy? All right. So, what do you do about it? You understand that you are short-term overbought anytime you see a nine handle on this. So, if you were to take another thing from tonight besides that low volume thing that everyone's going to argue with me about, if you come here and take a look at this, anytime that you were up here on a nine handle, any single time that you were up here on a nine handle, if you just go back and look at that and you just said to yourself, you know what, I need to lighten up. You'd be really surprised how that's worked out for you over time on marking off highs. Anytime this is over 90%. You certainly don't want to be buying stocks over and think that you have the cat's pajamas because you certainly don't. So, just keep that in mind.
Now, with this working its way down, that's exactly what we want to see. Now, is good is that the VIX dropped. So, the VIX kept dropping today. That's a good sign. It didn't take out a lower low. And this is kind of bothering me. So, I'm trying to be positive, but it's bothering me. Um, we did go higher on the Qs, and we do have straight buying off the open every day since you know you have the uh, that drop under the October 10th. But if we look at this straight out, meaning the second undercut is what I'm referring to. If I look here, that's Friday, and then we rallied up, and then we're supposed to undercut it, and then we closed. But you notice that we didn't close under it. So, we actually stopped there. So, I don't know how I feel about that. Not great, honestly. I wish we undercut it. At least undercut it and got back to 15. It is what it is. It comes right back to this level, and we're not breaking that breakout from October 10th. So, why does that bother me? Because that's the October 10th that started this whole thing. And for whatever reason, whatever triggered us there was whether it was double secret, tariff, probation, or whatever it was from that level. You can see when we get down to here, what happened last time, the flim flam, and they rolled us right back down.
So, if we were to look at this for a second and then just do something simple like just compare them to one another. And what we'll do is we'll just take the S&P right here. We'll throw the S&P in, and we'll bring this back, and we'll go, all right, well, let's look at this October 10th. Great. That puts me here. Then we can see the moves, and that's going to take it to the 17th. And then if we go and take a look at the 17th, we can see that right here. Okay. So, all this was that spike. And then we came all the way back down to October 28th. And then we'd go, "Well, where's October 28th?" And I go, "Well, I'm glad you asked. October 28th is right here, and that is the high." Okay. So, that was the high in there. Okay. And then what happened? Well, then we fell apart, and we have to November 20th, which is right here. Okay. The good thing is the undercut here is not higher than this, which is actually good because that means we have a divergence. Meaning the undercut did not give as much panic and fear as the first time, which is good. That's a divergence. Lower high, lower low. So that's a positive divergence. I'll take it. If you had more fear on it, it could be an issue. But that is positive. But then we walk our way all the way back down, and we come back to that October 10th level. We do the undercut. And then from there, what do we do? We start selling off. And we're selling off right to the same level as when we peaked before.
So then this begs the question, when we look at this, we'll go back to a 1-hour for a second. And I'm going to get off the VIX now and just drop it down to this. Stay with me. And now I'm going to clean all this off. And let's just do something simplistic. And let's take the top of this bar right here. Get rid of the magnet. And we're just going to take the top of that bar, and we're just going to drop a simple line down. And we're just going to watch that line. Now, this could be an issue. And this is the issue that I think we have to watch. Bonk, bonk, bonk, over. And then we're fighting that. We need to get above this. How do you negate that? You have to get above this level right here. You need to make the higher high. Once we do that, we're in good shape. That's what we need to do. So, that's something to watch tomorrow. And I think that you do really want to pay attention to that tomorrow. Also today was on the S&P. If you have a doji yesterday and you have another one today, two dojis, like that's not great, guys. And on top of that, you have your first red close. You haven't had a red close. People like, "Oh, but it's a doji." It's a, it's, it's still red. Red is red, right? Very different than what you're seeing here. Okay. Okay. But it's still red, and it's still something that we have to pay attention to.
So, if we go to the next, we're going to have move. Now, what I like about move is that it fell down and it's going to mimic that same exact pattern from the 10th over where it peaked and then rolled over all the way back down. So, you have the same exact level, and this one actually hit a higher high, which does is not great, but nevertheless, you made a lower low, and now you're still not undercutting. I would like to have undercut there a little bit, and we just did not do that. So, that's definitely on my radar and certainly something I want to pay attention to. Apologies for the little beeps.
Now, before I get into this thing, because it is telling me something that I think is pretty important, I just want to point out that the S5FI, which is stocks above the 50-day. If you take a look at this, you can see that you were up in the 60s, and all you've done is come back down to 50. This is really important to get, and I'm going to explain why. And this is something else I think you should take with you. If we were dropping like a stone on the 5-day, which we are, and you were watching the 50-day, and the 50-day was cutting through everything like a hot knife through butter, you have a problem. But what's happening is as the 5s are working their ways off from the 96 all the way down to like the 30s, let's call it 31 today. Yay. If we look at that from that level, and we, we're still at 50, which is good. Now, we'll see where we are tonight. Uh, you're probably going to be above it considering the market was up, but you should be above it. We'll have to see that tomorrow. What you want to take from this in my opinion is that you're not falling like a stone. So before when you were here on Wednesday the 12th, and then when we rolled over, everything imploded, right? Look how fast you got back over those 50s, and look how fast it's stopped. That shows institutional support. So I think that you're still on that crux of we have a decision to make, and I've given you several levels to look at. So when you're out there going, well, tell me what to do. It's not my job. Your job is to, you know, get the information, education to make the best decision. Nobody knows what's going to happen. It's like reading, you know, tea leaves. You, you make the best educated guess that you possibly can, and you go forward. If anyone tells you they knows exactly what's going to happen, run away screaming.
So, if we take a look at the NDFI on the 50, I think it's super interesting that you're not even moving. Like, you're just, you've parked. And I think that's really important to note the difference between this coming in and this parking. Now, why would that happen? Well, if you start looking and realize that defensive names, which came down today, right? Healthcare names, which came down today, are defensive trades, okay? And they are in the S&P. They are not in the NASDAQ. So, we're losing the defensive names. Stay with me. We're losing the defensive names, which means they're rotating out of defense and they're going into offense. All right, there you go. Now, how can we determine this? I'm glad you asked. So, what we do is that's why I take this. I'm only going to go to 24 with it for time's sake because I do want to go through some things with you just for 30 seconds here. Give me 30 more seconds. But if you take a look here, S5FI, NDFI, if you go and take a look at these peaks, you will note that when NDFI starts going sideways or pulling down that you've bottomed. And you can go look at a chart and go look at April 19th, 2024. You can go look at this July 25th out to that August 5th level. Remember that's when we were Japanese yen trade. This is when we had all that winning and liberation. This is what happened on the 5th. And you can see us leveling off, and that's what's happening there. All right. Got it. Get it. Good.
Um, as always, I like when you guys share this video. It helps me out greatly. I'm trying to get in front of as many people as humanly possible to show them what they should really be focused on. Um, if you look at AEO, they absolutely crushed. Absolutely crushed. They're selling the heck out of Sydney Sweeney and uh, you know, Mrs. Taylor Swift. Like, they're really selling all that stuff. Go birds. So, what you want to focus on here is can you get above that VWAP? And I don't know that you're going to be able to get above that. I, I really don't. So, you're still fighting the tape in here, and we're going to have to see how that goes. I like it. I will say this, tariffs were an issue. I'm long this. Tariffs were an issue. It is what it is. Every $20 million is equating to 150 basis points in gross margins. Now, they're not going to be the only company that's saying this. So, but overall, very good quarter, absolutely crushed, raised guidance. The only reason I think it's not up more is because they had gross margin problems. If the gross margins were just in line, but they weren't because of tariffs. I think we were looking at a $27, $28 stock.
After hours, Marvel bought a company. The conference call must be going exceptionally well because when they started, it was not going well. So, that looks like they've gotten it together. A couple other key things here that I know of. I'm not going to go through the things that I don't know of. Um, PSTG, you know, this really sold down hard, and it was because their gross margins were off, but they guided everything in line. Everything for next quarter and next year in line, and even up in some areas. So, this might be your sleeper. You might want to watch that one tomorrow for sure. Um, the Marvel's surprising that usually fades. It's a great fade. Uh, this one is eerily quiet, and, and if I was long or short, I probably wouldn't sleep. Uh, I have never seen CrowdStrike just have good earnings, fairly decent. I, I'm not on the conference call. I can't speak to it, and then just go sideways. I've not seen this before. So, we're going to have to take this one from with a grain of salt and go from there.
Um, this is just going to be my last thing on this before we wrap it up. I really think you guys need to do your own due diligence even with, with this. I always say call your feed, uh, where you get your value, where you don't get your value. But, you know, I was watching Twitter yesterday, and everybody was out there talking about, oh, Micro Strategies, he's going to have to sell a stock. Uh, the guy was literally on camera like laughing at people. And, um, you know, when these guys are out there like, no, these are the facts. Institutions paid attention. You know, we bought this yesterday. If you go watch yesterday's video, I'll link it at the end. At like 160. We're up $22 on the trade. It's been a day. So, it's really important for you guys to dig into this stuff on your own and do your own research. And it takes time to develop that skill. So, don't expect to get it the first time. You know, give yourself some grace with it. That's a