Transcription
Well, we wanted information and we certainly got it today. They made it very clear what's going on. I'm going to walk you through exactly what transpired intraday to add to this pressure and then we're going to talk about what to look forward to tomorrow with Oracle's earnings and the PPI and the hot CPI. I want to get really into the nitty-gritty of this.
So, if we take a look at these two dogeis that are right here, that's that 731 level. Now, with this wick, as we all know, wicks are price rejection. And that's really important for us to remember because we have a lot to go through, but I want to get through the micros so you know the levels to watch tomorrow. It's really important. Also, we had a movement in the RSI. Those traders are reacting to the institutional levels. What we're trying to get you to do here is to know what they're doing ahead of time. Subscribe. Click all notifications. What we go over here is timely by hitting the bell. You don't get it after retail's already in. The important thing is you get the information, education that you need. Subscribe. Let's get to it.
Now the most important part of this is the RSI break that took place here and also this wick. So let's just focus on this before we get into the minutia. Wicks are price rejection. That means that during this period in time they said we do not want to sell here. So when we fill in these areas that means that they are now willing to sell at those prices. And of course we saw a lot of the deterioration today. But most importantly when you see that wicks are price rejection. They are rejecting closing into that area. And now you have a wick that is to the upside, meaning all these buys are now rejected and now to the downside and you're closing at the low. This is really a problem because what it's saying is where we weren't willing to sell yesterday, we're now willing to sell today. And that's the kind of thing you're always looking for because it tells you a story. It's no different than in here where you have wicks or price rejection and then we get this green bar that fits in that area and it says, "Okay, we're now accepting to buy there." So we're always looking at where are they accepting to buy or where are they accepting to sell. No different than when you get you know a dogee like this that pops over and then you go higher and then you get it. So when we see these especially this the size of this magnitude it becomes an issue.
Now yesterday was enormous volume absolutely enormous on semiconductors and we're going to get to that. So we have two things that are not going for the bulls right now. Number one we are now in here and we are filling and we are down. And there's a couple things about this. First, it means that anybody that bought the close yesterday came in, got out of that close, and we're going to zoom in on that in a sec. And then all of a sudden, they're now out. And that's very important when we watch that. We're going to talk about that behavior today. And then the way that we played this, and then how I'm probably going to do the same exact thing tomorrow. But if we start seeing here, there's ways that I look at the RSI, and I'm just going to blow this up real quick so that I can just have you do the same thing if you want. If not, then don't. But anything that's above this 70 is overbought, right? And that to me does not mean that I need to get out. Matter of fact, if I'm overbought, I want to buy. And the reason for that is because that's where the majority of these moves tend to happen in those overbought areas. You know, you everyone's like, "Oh, I want to buy when it's oversold." That's fine if you have patience and there's ways to do that. But you have neutral areas where in here everything's kind of okay until you break that 70. When you break 70 into here, you're going from overbought to positive, right? But you're getting out of the overbought which means the magnitude is slowing down. RSI is calculated I'll just get into this part of it by positive and negative movement. That's how it's calculated. So when we break down like this, that's a problem. 50 is your neutral line and that becomes another demarcation line. And I'm going to do a whole video on RSI just on that. So we're just going to circle this area in because this is one area above 70. This is another area in here between 50 to 70. This is how I look at it. You should do what you're comfortable with. Once I'm in here, I'm oversold. And oversold means that I have more negative directional movement now than I had in the past. A matter of fact, if you ever want to see any big moves down in anything, go and put RSI on your chart and go look when it breaks 50 because you're going from a neutral stance, meaning more to here. When you're down in here, more negative directional movement, then you're having positive directional movement. And that is done through the volume. Very simple way to look at this. There's actually even a tool to do this. It's called DMI and it's it's right in here in Trading View. I'm going through this for a reason because this happened today. And if we go back and look at this, this is when we broke it in April 7th. We go back and look here when we broke February 27th. And we go and take a look at that just to kind of get a sense of that. You can see it right here. February 27th is when we broke above below that. You can see these other breaks. And of course, you can pop right back over, right? You can see you broke it here and that kind of marked the high and then you tried to get above it and you couldn't. These are really important demarcation lines to me.
I didn't have this yesterday and again I can only play the hand that I'm dealt and this is the hand I'm dealt right now. So I have to play it and it's not really what I expected. It's certainly not what I wanted but it is what it is and that's the game. So what we do now is we understand that we have this going for us which is not great. We're going to clean all this off and what we're going to do is we're going to go to a bear chart again and then we're just going to drop it like it's hot and I know the kids still say that. And we're going to drop the 55 and we're going to drop the 22. And why we're doing this is so that we can just see exactly what happened here. We're at rejection of the 22, rejection of the 22, and then we're here. Now, we have some big names that are actually moving today, and we had some really big names that broke out today that are low beta. And we'll get to that in a moment because I do see some some opportunity here. But when we see something like this, it's unrealistic to now assume that we can't get down to this 55 and test it. And also, we're breaking some pretty key levels. We did that on the NASDAQ. So, what we're going to do now is flip to the NASDAQ. And you can see, same thing here, filling in here. And here we have a put wall. A put wall, for those that don't know, it's where you have a huge amount of open interest in options on varying strikes. People calculate it differently, but 700 was enormous. And we went through that 700. Now, I'm going to bring this down for a sec into this area because I want that whole area there. And you'll see why in a minute. But let's go back to the spy for a second so that we can show you what I wanted to show you before we go further so that when you see this behavior, it's something that you can watch for yourself and it's something that you can take advantage of yourself.
So, what we're going to do here is you can see it on the ninth and there's your previous close. So, here we're going to do is we're just going to mark this off right here. And you can see we pop out over, everyone's groovy. Yay, we're winning. And then all of a sudden, we test the previous close. And that's the price point where everyone has to make a decision and say, "Hey, am I going to hold or not?" And what did they do? They chose violence. We sold down and then we had this huge rally at the end of the day and people thought that that's what they were going to get here. How'd that work out? We got the exact opposite today, which is actually even more troubling, but not without expectation after what we saw happen. So, and we'll talk about that. But, so then what we do is we have this level right here now. So, we we understand that we always have to watch the previous close. There's no more previous close that's more important than Fridays, by the way. So, if we take a look here, we try, we fail, we fail, we fail. We can go to a one and and zoom in on this for a second and just say it. All right. Bonk, bonk, bonk, bonk. Over. Yay. Huzzah. And then we break down. Boom. And you see your little left head, right shoulder, and there's your neckline. And then that's pretty much all they wrote. Right, left, head, right neckline breaks, tries to retest, and it just can't get through. Once we saw this, we understood that we had issues to what you tend to do in these types of environments. What works best for me is to understand where I am in the food chain. So, no one can look at this and think they're still in an uptrend, right? We would all agree and we all can do the basics hopefully where we would just look at this and say there's my uptrend and we can all argue how tight it should be and all that, but the bottom line is no one's going to tell you you're an uptrend. So, it doesn't mean that you're in a downtrend. You could just be, hey, we're going to form the new base. Depends on your time frame, but hey, we're going to form the new base. So, I don't know that we're going to break down. So, this means and this is why swing trades do not work very well here. And you're basically playing hot potato in market like this. So understand that, right? We have the 12. When that breaks, swing trades tend not to work. We use the 22 to tell us if the bulls are the bears are in charge. Above the bulls are in charge. Below, bears are in charge. 55 tells us if we have institutional support.
All right, let's keep going because we have a ton to get through and I want to make sure we hit Oracle's earnings. Uh the CPI came in better than expected on the core side. We don't have to spend a lot of time on that. Just understand it came in better on the core side and we moved off of that. So, what we're going to do now is leave that 700 in and we're going to go here and we're going to put an extended hours in and then go back to a bare chart. And what this is going to show us is a couple things. First thing we're going to do is just grab an arrow and go to that 830 level. So, there's the arrow in 8:30 and we can see how we acted right when CPI came out. We exploded to the upside. And then you always want to mark those bars off because that tells you exactly where the algorithms were and what they're doing, right? So, we can all see those algorithmic levels because people don't like highfrequency traders. Uh, I love the algorithms because they tell you exactly where they are and they become areas of interest. You can see 11:00 how they rejected. You can see right here at 10:00 how that became a level of a support and then that level of support later changed to what? Resistance. Yay. So, we always want to mark off those CPI bars. You'd want to mark off PPI tomorrow as well. Rally up, down, retest, and then we try to go. This is of course where you also could use your RSI and you could just see here and then you have divergence and so now you have a negative divergence. So when we have trades on like this and we're doing this like for example we did this so XL trade today and we did exceptionally well with it. But when you start rallying up and then you start seeing these negative divergences you have decisions to make. So I tend in these kinds of environments where it's non-trending is to trim on these pops small large dependent upon the person. And then what I do is I just move the stop up constantly. And the reason that I do that and the reason I do it that way is very specific because I don't know if I'm am I going to go all the way back up. You don't know how much they're going to squeeze when the trend's going to end, right? You really don't know in environments like this when we're this kind of this wild. But this does help you stay in those trades for long periods of time. Another thing I tend to do in these kinds of environments is after I start pulling enough out, I just move the stop to break even. I find that extremely helpful. you get stopped out and then you're not sitting, you know, watching this thing just completely melt down. It's very helpful that there's different styles of trading for different times.
So, let's go take a look at the SO XL today and what we got. So, we have a very similar pattern. We haven't broken yet. We're going to go to the socks and we're going to see something very similar here. But, we're not breaking here yet, but we are in that area. And that's very important for us to remember now. And most of you are looking at this and saying to themselves, I understand all this, but I'm a swing trader. You need to know this stuff now because if you're in swing trades and you expect them to hold, you need to know what's going on under the hood. If you're not top down and you're just bottom up, meaning index, sector, stock, remember, everything I do is index and then I look at the sector and then I look at the stock, right? So everything I do is top down. If you're just out there trading stock and you don't care about any of that stuff, then you are a bottom up trader, which there's nothing wrong with, but it doesn't take into account how we look at the stool and everything else. you're not taking into account the macroeconomics that are going on, which considering the tweets is probably not the worst idea. And then you're not taking into account the fundamentals on what's going on. And then of course, you're also not taking in the technicals on what's going on, which gets us our fancy stool. Right? So everything is predicated upon index, sector, stock, and then macro, fundamental, technical for me. All right, cool. So then we have our moves and we can see that very clearly once again we are rejecting that level. So what's happening here? people that are getting in the night the day before when they're getting the probability of being able to get out and they're not getting what they want. They're getting out. They're emityville horror. They're gone. So, what do we do with that? And how do we want to pay attention to that? Right? Get out.
Anyway, what we were looking for today was the 10-year bond auction. And so, we'll just we'll do it this way because this one's bigger. Uh, and we're going to go to that 1:00. And at 1:00, we sit right there. And that's what we were waiting for to watch the bond auction. And the bond auction started out like, okay, we're going to rally. And things started to look fairly decent like it was going to go. And you can always watch the bond auction and how you're going to go by watching just very simply the dollar. And you can also just, of course, just watch TNX or you can watch TLT and they'll tell you very clearly what's going on. So, let's just take TLT because most of you are going to watch that, right? So, we watch here at 1:00 and we'll just mark off that 1:00 area. If you mark that area off from 1:00 on the 10-year bond and then if we took that area where it broke and rolled over, it's roughly 109. If we come here and we take a look at our level here and we marked off 109, you will note that that's where we started to break down when they started selling the 20. Tries to get over that area, fights it, goes from there, broke down there around 230, dentist favorite time of day, and then we just broke down, right? So the bomb market was the secondary trigger that got us today. So when the bond market yields go higher, the dollar goes up and then the whole cycle is complete. Whether you want to say it's because of what's going on overseas or not, at this stage in the game, the tweets aren't doing it. You know, you can say we're in a ceasefire, it's an issue. And what that's doing is it's it's weighing on the market. Obviously, the uncertainty, but also SpaceX, as we went over in Saturday's video, is looming. And a lot of people are thinking that we're done with the selling. I have to be blunt. When I see a wick like that and I see this, and I've been doing this a long time, uh, when I see a wick like this, that to me means that we're done. When I see volume like that, that means we're done. Here's the part that really bothered me about today more than anything. And again, we never know what's going to happen. I don't know what PPI will do tomorrow. I know what Oracle's doing right now, and we're going to get to that. But when I see something like this, and that amount of volume gets me into this wick, I don't get a dogee. I don't have a green day or something, that means that that I don't have the buyers that I thought I did. If if I can't even get over that, it becomes a little bit of a concern of mine. So, we really have to watch this tomorrow and that socks really has to start making some moves here and reclaim a higher high. It's my sense of this at this point that they might just be waiting until they get through Friday at this point. I thought that might be it, but to me, they really want to see what's going on here. There's some other signs before we get to Oracle and some of these names that are that are really flying that I think you want to pay attention to.
Number one, we can go look at the IGV and we have a gravestone there. And of course, that's not great. But let's go take a look at Apple. Apple's sitting right on a core level. And so we are getting some Let's clean this off for a minute. And then what we'll do is we'll drop it back in like it's hot. Right there. It's uh 87. And you are getting there, right? So you are getting to a point here. I'm going to look at that later. uh you are getting to a point there where hey maybe that's done now if we need something like Apple to hold the market right because it's such a huge portion same thing with Nvidia like if Nvidia looks like this it's a problem well why is that a problem let me show you something so here's the 55 and we hit it so we are below the 55 again on Nvidia right and that's how it's pronounced nvidia in case people were curious about how to pronounce it that's an issue but but wait there's more so then we start looking at Microsoft I'm going to clean all this off. And Microsoft was on there and then it broke today as well. So then we can go take a look at something like Meta and Meta is hitting a new low. All right, so Meta is breaking out of a bare flag to the downside. Microsoft broke the 55. Apple, thank God, stopped going down, but Nvidia is where it is. Let's take a look at Google sitting right there at 535. Hopefully it holds here, but I wouldn't hold my breath right now over that holding considering what I had just shown you. And then we're going to go to this. And this is really very troubling to me and I'll explain why. And just FYI, at the time of recording this, I do have a short on here. So I have a bias, but when Tesla breaks, so if I if you look at the 55 for Tesla, it usually does like major fake outs. In other words, it makes you think it's going to break and then it bounces back over and then that's it. And then you will find that if you get this kind of, let me show it to you. So you're down, you close over like everything's fine, and then it looks like, oh, everything's fine, everything's not fine in my best Morgan Freeman voice. What which ones tend to do this the most is when it does it, can't take out that low, can't take out the previous low after it breaks. That tends to mark and then you tend to go higher. It's got a really good fake out pattern of breaking it, right, and then going, breaking it and then going. It has a really good pattern to that until it doesn't. And that's what you have to watch here. So what happened? And this is really troubling to me because not only could you not hold it, but you couldn't hold it on very light volume. So you have lower selling here now and you have more pronounced lower prices than you've had than when you've had higher volume. That's important. So we're sitting right here 380s the put wall and I do think they move it tomorrow. But you broke it, closed over it, hit a higher high and then you broke down again. When you start to see stuff like that, my antenna goes up. Now, it reminds me a lot of this, and I'm not saying Tesla's going to zero or anything like that, but to think that you can't come in and have a day where you're getting down to 362 or retesting something in here very, very quickly. I think it's there. And I think it might be there going into what we see happening with, you know, the market as a whole. And I'll explain where I'm going with this.
So, then you have SpaceX that's coming out, right? And then I'm going to get to the names. So, you have SpaceX that's coming out. You look at UFO. What did UFO do today? It broke. So, if you're interested in UFO, to me, it's probably going to be next week. SpaceX comes out, everyone pukes these things because they know the valuations are garbage, right? And then all of a sudden, you start closing back over that. So, there might be something there. But yet again, look at the volume here. You have hardly anywhere near the volume you've had and you can't even hold the 55. We had a couple shorts on that I I walked through recently. And let's go through this so that you can see it. All they did was get you in to lure you down. This to me had the potential to be exhaustive selling. And then we had our little bounce and then we just started gapping down and now we're below the 55 and we're below the put walls. So where can these things get to? They can fall apart, guys. So you can get down to 63 64 fast on trades like this. They're super thin names and it can happen. And look at how they've reversed today. So to me filling these in going into Friday, it's not really what we wanted to see. And I wish it was, but it's just it's just not. So that's that's another issue. You're going to want to watch how they act today. And most troubling is that even the cheaper names they want to get out of. And that's a problem when I'm starting to break older put walls and levels that they're really trying to respect and they can't hold them. It becomes an issue. Our last hope really was Oracle. Now Oracle's got its conference call going on right now. And to save everybody a bunch of time, I'll go into it great detail on Saturday, but Oracle's earnings um, and you're probably going to come down at least to the 55. Uh, but Oracle's earnings they missed on the subscription service and they missed on the software side and they said they're going to do an at the money they're booking an at the money $20 billion but they're not going to do it now and then they're booking $40 billion in debt and equity sales. So this is not really what the market wanted to see and then of course you're selling down on that at the time of recording this. I have a short on in this and I put it on once I read the report. Now whether or not I break this level or don't break this level or you Larry saves the day after hours, I don't have a clue. But when I see dogeis like this, you always want to watch those levels for tomorrow and we'll go from there. This was not something uh that I expected to be that bad. And for them to miss on the subscription side and the service side, it's not great. But they're still building out. And so if they're still building out, do we still have the earnings? Do we still have to worry about that? I don't think you have an earnings problem still. I'm going to just go out with it. I don't think you have an earnings problem still. I think the problem that we're running into is that we have a supply problem and SpaceX is freaking everybody out and I really do believe that.
So, I want to show you a couple things today and I thought were really interesting. Casey's Casey's actually can they go out and buy their own gas. Um, very different than how Exxon Exon has to buy Exxon. >> Yes, after hours. >> Sorry about that. We're going to have to leave that in. Don't do these rolling unedited. I don't have a choice. Um, I got to get this out. So if we see what's going on here and we see the movement, what does this mean? Just an outright breakout. Like it's just they just crushed. Why? Because they go out and they can buy oil, buy gas, and they can they can go to any vendor that they want. They have agreements obviously, but they have a lot of leeway where an Exxon gas station has to buy Exxon gas, right? Very different. So this is definitely something that I want to pay attention to. Certainly want to pay attention to. And I think that's really important to watch tomorrow. the other one cuz you're hitting all-time highs on huge volume. People are going to start looking for stuff like this like they're looking for the XLV. I would have thought look what the XLV did today, right? So the XLV rejected but some of these names are actually holding. Do you start looking at them? It wasn't that bad until you go and say well it was Lily. All right stay with me. So if you look at this Casey's did this and then take a look at MUSA and MUSA which is Murphy's which they're in the very same boat. They had great earnings, absolutely exploded, and then from there, what are we doing? We're absolutely breaking out, and we're hitting new highs. Really important day, guys, for these kinds of names, and it's hard to not want to look at them tomorrow. Another subsector, and disclosure, I own this. Uh, but this cobe, a lot of these names fell down because of the perpetual market. Guys, I'm going to just tell you this. A lot of these institutions trade options. They are not going to the perpetual markets to put their money into an account to wire it in and and then try to figure out how to get their money out of Hyperlid like and pick a a VPN that shows that they're in Japan. Like real money is not doing that, right? They're going to do what they can do that provides liquidity for them whenever they want it and use their hedging strategies. So you're seeing a lot of this stuff with like the SIBO and the CME getting smoked there. You might want to just keep an eye on those names as well. As for tomorrow, we have PPI. We have to go from there. The biggest thing that we have to reclaim if you're like, "Hey, give me the one thing that I have to pay attention to." The Q's have to get over 700.