Transcription
Today's escalation in the straight throws us off course. We're going to get to it. We have to go through that. We have a bunch of earnings that are moving after hours. One name that's down about 15% right now and the other one, it's up about 20. Absolutely crushed it. I want to get to that, but I do just want to show that you do have a dogee sitting right here and then that dogee has made a decision and that decision is down. Does that mean that that's the blowoff? No. But there, but there's more to it. Let's get to it.
Subscribe and click all notifications. These videos are linked together and you do not want to miss it. Also, I put out a bunch of stuff through community posts and it does help me greatly with the algo since I don't run ads in the middle of these. Let's do it.
So, I want to start with the basics. It really depends on your time frame. Long-term, you can't possibly think anything is wrong here. So, that is the very first thing that we have to look at. But, we have come very far, very fast. And when you start to see cracks in the underlying reason why we're rallying, then we have to start looking at that and saying to ourselves, okay, what are those cracks? And then what do we do about it?
So the very first thing is we have this dogee which could be construed as a blowoff and then we crack and we close below that for the first time. And I think it's very important to just note that you have dogeis all over the place. And not once have we ever found ourselves in this position on this entire run. You might not think it's much, but it's enough to give you a little bit of concern. And we're going to go through some of these issues, but I just want to look at this on a macro.
So, if we look from April over and then we just look for congestion. And by congestion, I mean, where do we see the majority of red since this whole thing began? And it's simple. Like, don't overthink what I'm doing. I'm looking at the market and I'm just looking and saying, where do we see the most congestion of red? Okay. Well, two, four hours in here, green, red, super tight. And then it just starts getting red, pops up, and then look at the amount of red that you have in this area. And again, I'm not trying to get super technical with you. I'm just simply saying that if you start to see something like this, we're like, "Hey, Friday over." So, in other words, every bar, if we go and take a look at the ES and just do the simple stuff. Let's not get it over convoluted, but we get to Friday, that 6 a.m., how many 4-hour green bars did you have after that bar? You had one dogee. We broke below that dogee, and that was it. This is what you have. It doesn't mean that it's the end of the world, but it does mean like, hey, maybe we want to just watch this a little bit and see how it acts. We do have this divergence that got a little more protruded today by its actions. So, we do want to watch that. And that divergence is just here. It doesn't mean, oh, we're going to roll over. The sky is falling. We're going to zero. It's the Great Depression. It just means like we moved a lot and maybe to develop some of that. And some of these moves, not all the moves are equal. We know that.
So, where does that put you? Maybe it gets you back down to retest 7100, which would not be the worst thing in the world, and that's going to get you to a drop of a whopping 1% from here before you even note if you have a problem or don't have a problem. So, I I don't really see this as the end of the world, but of people that'll say, "I watched your Saturday video and you were bullish and now you're bearish." And then they need a watch and a concept of time.
So, if we look here, we can see the divergence as well and we can see how we're rallying up. Do I think you're more at risk here or less at risk here? I think you're more at risk to some extent solely because of the profits that are here. People looking at this and maybe wanting to lock profit in. Whether they do or whether they don't remains to be seen, but there's some cracks that we didn't have on Friday that we have today. We're going to talk about that. We're going to have to uh and there's just some really interesting strategies that are starting to work again that weren't working, but they now are. Uh and when I start to see that, I kind of have to put the brakes on. We can see the divergence here. So, we don't want to pretend that it's not there. We're not an ostrich. We have to note that it's there and just say, "Okay, well, where does that put us?" And if we look at this area down here, we'd say, "All right, well, that could get us to retest major support." And what does that do? Get you down a whopping 2 1/2, 3%. Which is actually a blessing if you want to be long-term.
One of the concerns I had about the stocks wasn't so much the move, but if we take a look here, and now it's developed. It really wasn't developed on Friday. This is the 4-hour. Now it's developing and you're having your peak here, another peak here, and then we're up here and then we have this lower peak right in here. So when we look at that, we have a massive negative divergence, meaning from here over to here. And I know people will say they don't believe in negative divergences. You don't have to believe in gravity either, but it's there. And what do I think? Do I think you're going to come all the way back down to here? No. But I think there's some names out there that have absolutely moved. And I do think that some of them are warranted and others could really got ahead of themselves. So let's get into that a little bit and then we'll be able to really dig into what happened today and what the real issue is and then how you should kind of prepare for that issue. Not kind of, how you're going to prepare for it. Let's do it.
So here we are and we can see another divergence here on AMD and that is a negative divergence and then you have earnings. You had some downgrades today on the stock and you can't really blame people for the downgrades. So, I just kind of want to point out the obvious. Before earnings last time, you were at 239. After earnings last time, if we took that trough value from we are looking at AMD, which is up 80%. 80% and we're assuming that it's going to be like Intel even though it doesn't have Intel's products and services, right? That's why we're moving the way that we did with these jumps and why people are chasing them.
If we look from April over, we'd have to ask ourselves, how many times have we seen a bar this red followed by another bar that's red? Well, and the answer is you really haven't. Except in here where we gapped down, we tried to take that out. We did take that out and then now here we are again and that divergence is sitting there. And that's pretty much as clean of a sell signal as you're going to get. Now, it's really on earnings. So, let's be really clear about this. When we start talking about the stool and what's out there on the macro, what are we going to deal with on the fundamental side? What are we going to deal with on the technical side? Before we get into all that, you have to look at it and say, if earnings blow out, and I don't know that they are, well, that thing's crooked. If earnings blow out, then what do I have? And I think that that's really what we want to focus on here. In other words, what do we really have? Like, do we have blowout earnings? Because blowout earnings are a reflex move, right? That's when we start getting in the reflexivity and everybody's on one side. I would argue that the reflexivity has kicked in and everyone's just assuming it's going to be like another Intel and go up 100%. I don't know that. I I I really don't know that it's going to do that. And we're already seeing cracks on some of these names that had those expectations. And I'll give you an example. If you look at something like O, which was supposed to move like NXPI, you can see that you have fairly decent earnings and revenue, decent guidance, yet the stock's down 5% after hours tonight. Are these getting baked in? And then what are we dealing with when they come out? You know, it's a really good question because when you realize that last Tuesday, meaning a week ago, we were at 310. We're at 340. And if earnings are bad, you're flopping away out here. Like, there's nothing down here. So, you would have to realize that your pull ball is 340. So, you might want to jot that down. And then after that, you would just kind of watch this area. You know, I think it's like 310. What do we have? 310 is where it is. You know, it's crazy with this magnet. It's on when you don't want it. When you want it, it's not on. So, if we look at that, yep, maybe you hold, maybe you don't. But if if it's bad, you're going to get smoked here. And it it'll take them all down. Just so we're clear, like nothing will be safe. They'll come after Intel. They'll come after ARM. And I think they're the two that are most at risk. ARM and AMD. We're expecting this movement over. But if we look at these divergences that are going on in the 4-hour, you can't be doing cartwheels right now if you're long semis of the CPU.
And so then this is really important to get. It depends on your time frame. Like if your time frame is out a year, this is one quarter and then that 10 to 20% drop that you might get on these names and people are like, "Oh my gosh, they can go down." Yeah, they can go down. You actually want to buy them. Like that's where you'd be looking at them. So if you really were that interested, you know, you want them to fall apart so that you can buy them. So I think those names are at risk. The names that I don't think are fully at risk are something like your micron. When we look at something like this and we can see how this is acting, you know, all they did was just buy it. They just had to get into it. If we take a look at something like SanDisk, all they did was just buy it. I mean, that's literally all they did today. They had to get in that name. They had to own it. They did an excellent job of that. You don't even have any of the red on today. If this gets excessive, do you start to sell there? Yeah, I think that you do. But when we start looking at the SO XL, you have the same kind of pattern here. And it's not really a kind of pattern that you want to be involved with. And when shorting gets easy, like today, this was a super easy short. We knew where the put wall was. We knew that you had that divergence. We also knew that you had that sellout there. And when you put all that together, it just presented like a really good spot for us to put a short on this. And then just really ride it down here. Let's take a look at that. I'm going to short AMD. That 35324 is going to be my stop. I want to have some short on here just in case something comes up and that one makes the most sense. Up three trimmed. Usually this where I trim some. So I'm just watching for a minute. Seeing how ugly it gets. They push it all the way through. Do they not? What do they do with it? trend well up five. We're taking the measured move and now that becomes our target, but at the same time, we don't want to go past break even. All we did there was watch that 15 form and then we dropped to a five. We watch it come over and then back down. That's not really rocket science, is it? I trimmed more. I think I'm going to regret it, but I did. It popped over that 45 and I told myself if it did that and I had something like this, I was going to do it. I'm just honoring it. Just making me more money. Up seven trim. The stop on the whole trade now is going to be 46.50 right here. and all we've done is just walk it down. That's all we've done.
>> So, I think it's worth noting that. Do I think again that they are going to get out of semis? No. I think that there's a time and a place for it. Like when we start looking at the value of some of these things, they're insanely cheap and people are realizing that there's a difference between that and there's a difference between what deserves to be there and what doesn't. Now, if these names really step it up, well, that could be something. And we're starting to see that a little bit. Like one of the names that we we bought today that we did very well with was NBIS. And that's because you're starting to see huge demand in the space. And this is actually like a textbook down test, retest that level, flips, and then breakout. I mean, it doesn't really get much cleaner than that from a movement standpoint. But the point that I'm getting at here is you're going to get these moves even with the market pulling back. So, when we're talking about the possibility of a pullback, we're not talking, and this is where your call wall is, we're not talking about uh, you know, the sky is falling and you you got to get out and you got to get out. That's it. It's all over. Market's never going higher. No, what you're seeing is, hey, on the cues, where's that base? All right, it's 5%. I I don't even think you're getting to the 2% one without something really significant happening. But that doesn't mean that you can't rotate and start getting selective about the names that are out there. And I think that that if you want to take one thing from this video, that would be the thing that I would take. In the community, I always talk about this like there's times where it's everything. There's times where it's stock pickers market. I think that's where you're g you're going.
So, everyone was just like, "Oh, what's the next one?" So, they were buying Oen, not even looking at what these companies do versus the people that are actually doing the work. And and that leads us to, you know, it happens on both sides. So like if you take a look at something like IGB, what you're seeing is people that want to stay in the market and I actually think they're value shopping. And if you look at something like this today, you'll see that kind of left head right and it's not fully developed. It's kind of like malformed uh like weak and trout like nobody wants that coming at them. But if at the end of it, if you click on this and you see where the 55 is, right? I use a 12, a 22, and a 55. You should use what you're comfortable with. You start looking at this going, "Okay, well this kind of makes sense. They're they're bottom fishing some of these names." And then you look at Microsoft today. Ah, well, you're trying to hang in there. How about Oracle? Okay, well, Oracle's trying to hang in there, too. And you start going through some of them. Oh, look, there's crowd. I mean, this is pretty textbook what you're looking for. If you're trying to get involved there and whether it works or doesn't because your volume's disgusting. It's actually gross. It sickens me. But if you were trying to really get through this and you had huge volume, you'd be of interest, right? PW. If you had volume and you were making these higher highs, you'd be of interest. But you're not doing that. So then that's going to take us into software tonight. And I think that this is a great segue. You see how I did that? Segueed right into it. Bam.
So if we look at something like PLTR, and there's really no way to say this. PLTR beat, PLTR crushed, and then they raised guidance. The problem you have is the valuation versus its growth rate. So I always look at PEG, which is your the price earnings to growth, right? And this one's still way way above that one level. So, I'm not going to get into it, but it's it's up there. And there's a reason why guys like Barry are shorting it. And it makes sense from a valuation standpoint. And I don't think he's shorting it for any reason except like, hey, it's a great company, but the valuation's insane. And he's he's got a valid point, but that's not a catalyst. So, from my standpoint looking at this, let's go to a five on this. Let's go to the bare chart for a moment. And you can see the the wick game that they've been playing. The only thing you really need to watch here would just be watching the 355 close and can you stay above that? And the answer so far is you've been able to. Now, I've not listened to the conference call, but that's holding. I think that that can hold. Um, you know, beat of the evening is going to go to STRL stocks up about $100. I mean, absolutely crush it. A couple guys in the room own this and they own a fair decent amount of it and creds to them. Um, it's just been an absolute monster trade. The one the one thing that I would point out about all of this is you're getting your winners and losers, which is good. If the market comes back down and retest a level, that's good, too.
Now, we have to talk about the elephant in the room. And I think that there's really no way to avoid it. If you're interested in joining the community, make sure that you are on the wait list because their invitations are going out and they're going out sparingly. So, just be aware of that. I talk to everybody that joins or give them the opportunity. They are not forced to communicate with me. Uh, but I like talking to people that join. Uh, I like doing the onboarding calls myself, so it takes some time. Anyway, uh, we try to keep it close-knit. But if you see our level here, and this is when we had all that, uh, it's going to be fine. It'll be over in a week or two. Uh, they don't have a Navy anymore. All that. Okay.
So, that takes us to here. And this is the longer that this drags on, the longer that this drags on, the higher that gas prices are going to go, right? So, the longer this drags on, the higher gas prices are going to go. And then when they get to a level, the longer they're going to stay there, that is going to lead to a weaker consumer. And it's also going to lead to a lot of people really annoyed. And it's if they're not already, and it's going to lead to a lot of people pulling back on the purse strings. It's also going to lead to higher inflation. It's also going to lead to them not having any chance whatsoever in God's green earth to cut rates. A matter of fact, the speeches this week are the wild card to me. Non-farm payrolls on Friday and the speeches by the Fed chairs this week or the Fed members this week. They there's just as much chance of a rate hike as a rate cut right now. Just think about that for a second. That's where we are with this. That's what's changed in about 6 weeks, 8 weeks. And everybody knows why it happened. So I would think that they would try to remedy it. But the information that's coming out today and maybe they're not able to remedy it. That's the other thing. Sometimes you, you know, take a can off of the worms, you can't put the can back on, right?
So, if you look at something like this, the larger issue for me, we're all on the weekend. We're all waiting for this to come to some kind of fruition. They're going to open. Instead, we're getting open, close, open, close. This happened. Someone Someone's in a sailboat. Someone's not in a sailboat. Someone got near this warship. No, they didn't. Yes, they did. This it's exhausting. And the market's looking at this and saying, "Oil's going higher. We're not getting our oil delivery, and this is becoming a problem." And then what we're going to start seeing is stuff like this. And just disclosure, I own it, but oh, a ship, a Korean ship was attacked in uh the street. Okay. Well, for what reason? We don't know. But you're getting these drips. So, all of a sudden, this is up to, you know, 168. It's rocking. Everyone's all over memory. Yay, memory stocks. And then the next thing you know, we're back to here and we're talking about crude oil again. And what I'm getting at here is this has not stopped. And so, this is really our wild card. And what's starting to happen is that you're starting to see the deterioration. You're finally starting to see it.
So, one thing that broke out today, and a lot of people don't look at it this way. People say, "Don't chart yield. If it moves, I'll chart it." But this is the highest close that we've had. Now, if we go through that and you say, "Well, what do you mean by that?" Well, you haven't closed this high in 26 on a 10-year bond. If you go and take a look at TLT, which is probably like the worst thing that you can go out there and actually get right now because not only the the GDP, the debt of the US, but the fact of that rates are probably a coin toss to going higher or lower. Well, what does that mean? Like, why do you care about this as as a trader? We're getting there, but I want you to understand the pieces so that you can do this yourself so you don't have to rely on anybody. So, if you if you look at that and go, "Okay, well, they're selling the 20-year. Well, why are they doing that?" Well, if they're not going to cut rates, what's my hurry to own the long the long end? Like, there's no hurry to own it, right? Okay. So, if they're not going to cut rates, what else happens? Well, we don't need mortgages because they're not going to go out there and get a mortgage, right? Because no one's going to go get a mortgage on a McMansion right now. Okay. So, if they're not going to get a mortgage on a McMansion, are they going to go get a car? Well, they might not get a car. All right. So, they might not get a car. They might not get the handbag, but they're definitely not getting a house. That much we know. So then you start looking at the toll brothers of the world and you start looking at that sucks salad and seeing how that's going. And then you start looking at ITB and you start seeing how that's going. That's a white marbusu. Like that is just about as nasty as you can get near the bottom of a chart. And when we start looking at this from a volume standpoint, no, it's not exhaustive selling like you had here where it's over. It's like no, no, we're just starting. So what's starting to happen here is people are starting to realize that this is going to go on for longer. you're probably going to hike rates. And if you hike rates, the home builders are really going to come in. If you look at something like Nail, for example, and we see that today, which is the two or 3x home builder, you're going to start seeing these home builders really come in on this. And the other side of this we have to start really paying attention to is going to be the consumers and what starts happening with the consumer names. If we start to see that deterioration, that side of it, because this is taking longer, because crude oil is staying higher, that's our wild card. Now, people will say, "Well, we knew this blah blah." We don't know this. We assume that they're going to get it fixed. And some people are assuming that they're not going to get it fixed. What we know today is that it escalated. That's all we know. It escalated. We know that it escalated. We know that UAE was threatened again. We know that they had bombs that were lobbed at them or missiles. And we know it's escalating. So, we have to change when things happen, right? We can't just predict and say, "Oh, well, the market's wrong." No, we have to look at it and say, "This is what's happening."
So, for me, looking at this, I think that you're in a heck of a week here for earnings, and it should be a lot of fun. But, I do think some of these names that we just went over are at risk. And I do think there's more risk now with the way the oil looks. Not even from the upside. Not even saying like, oh, we need to be in USO. And I don't think it's that. I just think it's going to hang here longer. And then we're going to really have to see how that ties in with Friday with non-farm payrolls. That's it.