Transcription
This is the question on everybody's mind. If the NASDAQ's not going to break now, what's going to break? And in other words, we have everything going on with the private credit side. We have everything going on with the straight and energy instability globally, and we still cannot break and close below this level. So, what's going on and what's it going to take?
We all saw Sandis close at all-time highs today. Micron is literally doing the same exact thing before earnings. Nvidia had a great conference today, but we obviously sold off. And the reason for that obviously is because what's going on? Well, oil did come down as we're in day 14 of Epic Fury, but there are some signs that this may actually be a top. There's a lot to go over, so let's just jump right into it.
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All right, everybody. Let's start with the basics. In front of us, we're going to do the breath of the market. This is stocks. Stocks that are below or above the 200 day moving average. As it drops, it is stocks that are above and we want to be aware of that. So that is the 200 that is below 50%. We are here. We are at 31% and we're going to show this all out and we'll show you what happened today on the 5-day and we pretty much talked about this on Saturday. That's why it's important to watch these because they're linked together. Starts on Saturday and then we follow through.
When you're in the low teens, you're due for a bounce. Now the 20s curling up too, which is good. You start to see the others follow suit. Trough valuation here, really on the 20-day, is right around that nine or 10. That's usually a trough level. We got down to an 18. Is that enough on that trough valuation? Well, we'll get to that in a second. But the one I really want to focus on here is just the five. So, we're going to start there and then drill into this. But that's a pretty healthy bounce. And that got us back to neutral.
Now, this is how it always starts. The five will bounce first and then you want to see if you have follow-through over the next couple days based upon what the VIX is doing and oil is doing that we're about to get to in a moment here. There are some really good signs here that we're seeing technically and we're going to go review that. What I do want to say is you do need to see the 20 continue. So, what you don't want to do is go to that 20 right here and I put an alert there. I don't want to see the 20 roll back over and take out a lower low. If we take out a lower low, this is not over and it means we're probably going a lot lower. But you're in a perfect, perfect bounce spot. Five, then the 20, and then what starts to happen is we'll start seeing the 50 move.
Is 30 a trough valuation? If you look at previous trough valuations, not really. We were at a four back here, it's gotten worse. And we can see in here where you were at the 30. Can this be an area that holds? Is that a possibility? The answer is yes, it can. It can be an area that holds. I'm just not so sure we're there yet. And that's something that we're going to have to watch and we're certainly going to have to pay attention to. But that's definitely on the agenda. It most certainly could be this band that's held us in the past despite what you had here in December. Of course, when you go through a changing of the guard, you're going to get that. And then, of course, we had the period of liberation and winning. And then, of course, after that, we came back in November. So, it's possible. And you know, this was pretty fast and furious.
So, then we go to the 200. And what you always want to do here is get back above 50% as fast as humanly possible. Now, if we go and take a look there, every great fall that we've ever had is when you stay below the 50 for a period of time. So, you really don't want to do that because when you do that, that's when things tend to get a little nasty. So, we're hopeful. We'll see how it goes. But today was the first day.
Let's get into some of the things that we're seeing out there. But, I just want to pose the question that I started this with. And I'm going to drop this to here and go over two things that I think are very important. We might as well do the NQ while we're here, too. If we look at the ENQ and we look at the anchored VWAP from the ENQ, we hit that anchored VWAP and we held it. Are we breaking out? Are we lighting the world on fire? Far from it. Did we smash to the ground as the straight didn't open? No. And this really becomes the question. And this becomes the question that we really have to ask ourselves. And it doesn't have to happen in a day, but if we're in a position here, and let's just drop the 200 in for a second. If we're in a position here where the 200's right at the 658 here on the spy, and we're not breaking down. Now, you could say it's because we're oversold and then we're going to roll over and then we hit here on the cues and we don't break again. Then the question that you really have to ask yourself is if the all the redemptions from these software funds are not going to crack us, if they're not going to crack us and the Black Rocks and the Blackstones and that's not going to do it, right? And then we have what's going on there with the straight and us losing access to the straight which is 20% of oil. What's going to crack us? Like, what, what is the thing? And it starts getting to that point where you're at this 200 day moving average, your put walls here, the value lows here from this peak. What's really going to do it? And that's really the question because it's certainly not going to be earnings because the earnings are there. We're going to get to that.
Let's look at the VIX. Let's look at crude and let's rock and roll. In front of you is VVIX and below is VIX. And the best way to think about this is really simple. Think about VVIX as the VIX's VIX associated with it. And there's a relationship here and there's a parity between these two. And when they get out of whack, that's when you can start seeing either an extreme move to the upside or you can start seeing a reversion back to the mean. And it's very simple and anybody can do this, but it's one of those things that you just want to remember that when you're in situations like this, when you see this imbalance, you want to take advantage of it.
So, if we take the top of this move right here, which is going to be July 24th, and it goes to August 5th, and that's when we had all the issues with Japan and the interest rates, and you can see that from peak to peak, it's 121 point difference. Meaning, from where our peak is here to where our peak here, it's 121 points. And all you have to do is just go there and measure it out. Whenever you get to something like that, no matter what, no matter where it is, you get out of what I've referred to as frog and boiling water. Meaning when you're working your way up into that, you just don't know where you're going to wind up. But when you get that pivotal moment where you get a point on it, you can start looking at it and saying, "All right, well, you need to do X or Y, and if not, we're going to get out of that frog and boiling water." And it usually starts to happen when you get into that 100 point move.
So, if you go and take a look here, and again, it doesn't matter where, but if we go and take a look here, and then we get up to here, you're going to see at 97. It's not there. Get to here and you're going to get one that's 104 and then you'll see something really interesting from that and that's February 25. It's one of those things you either go to the upside very, very strongly or you're going to revert back and that's exactly what we did here in AP or in February and then he wrote out more cardboard. And the important thing about this is it doesn't matter why it happens, like don't overthink it. It's just a reversion. So whether that reversion lasts or doesn't last doesn't matter. Here you had another event. We're winning and liberation. So it didn't really matter.
So if we go and mark that off right here and we come up to the top of this again, what matters is the spread between the two, not the height of them. So whenever you get to that 100 mark, and you'll just, you can play around with it yourself and just kind of go through it and notice it, but whenever you get to that 100 mark, you will get a reversion. It doesn't mean that you have to get to 100 to get a reversion, but when you have these extreme moves, you're looking for any kind of edge that you could get.
So, if we go back to here, which just was 29, and we go to the top of this, well, we can see that you were at 103. So, if you go and say, "All right, well, that's where we were, and that was last Friday." We come through these different dates, and then you start saying, "All right, well, when does it really change?" Well, take a look at today. You're at 23, and you're at 21. So, now you're at 97. So, you can see that from this move, it changed. And that change is exactly what you're looking for. Once it starts to break down, it has to do one of two things. It either is going to accelerate to the upside or it's going to revert. But what you're getting out of is that slow down downtrodden death march where everything just keeps selling off. You're either going to have an extreme move to the upside or the downside. You could just see the VIX kind of collapse. And that's really what we're getting right now. And I just want to go through it this way because you might want to watch that part again because it's a really good way to do this.
But if we go and take a look at the VIX, go to a bear chart. We'll drop this back to candlesticks. One of the things that I have constantly said is you need a follow-through bar. So, we rally up to the top and then everyone will say, "Oh, well, that was the peak." You really didn't have follow-through. Now, you gapped up. You got you wicked out because it was Friday, but you have a red bar and you could say that you have follow-through today. The one thing that I would say about this, and you can see it all the time when you have your red bar, that's usually with a follow-through red bar. That's not what happened here. Hence, we went back up. Red bar, follow-through red bar. So now you have two closing days, meaning you have this close is lower than that one. This close is lower than that one. It's the first time we had this since this really started. So since our, you know, big pop here and that's really important to get.
So we can get into the macro stuff and we can get into what's going on with oil and everything else. But you're starting to see signs of this. Now, could something come out overnight and change this? It could, but it's going to take a lot now that you've broken through that 27, which was that level. But you can see these patterns everywhere. And to be really clear, you have a level in here and most people think that, you know, you're up here and I'll drop this one down, but because you have like a 28 and a half, but if you look at the option market on with where people are at, 23's been huge. And then we have another one right there at 25. And then I'm just going to drop this right there on the 27. And you'll see it. You can't really miss it. This is where you hit, rejected, over, got up to 28 and a half, pulls back. I can open this up way more. And we can get into this. And you can see you're right along that level. And you've been dancing all the time. Broke down, couldn't even gap fill, comes back down. It's that follow-through that you're looking for and we're getting that.
You can always chart it. You can chart anything you like. And you can see in here as well that you're starting to break down on the hourly. If you take a look at the 4-hour, you're below 50 and this is the lowest reading that you've had. Now, with where you're at here comparison to here, you actually have a negative divergence, which tells you that this is going lower. The bottom line with this, to be really clear, it changes if you have a macro event. So, I don't know what Iran's going to do. They don't let me know their war plans. But from where you're at right now, it's very clear that this most likely was the top on the VIX. This is good and bad because what it will do for people is they might start going out there and playing options again. And now they have to start understanding that the implied volatility of their options is just going to kind of kibosh on them. So, when you're in situations like this, you're really better off being a net seller. Credit spreads versus debit spreads in environments like this because of the implied volatility. Some of these options are like really expensive. Uh, but just be aware of that. You can use that in any environment, specifically the VVIX and the VIX, and there is value in that.
Bottom line here, there's a couple things here that really cracked. Number one was the VIX. Number two was oil. Now, last night, uh, if you're in the community, you remember this. We were going through these levels when futures open. But for those that aren't aware, you can come back to this Sunday, March 8th, when things started going a little bit haywire uh in the market. We could just mark that off right there on that level. We can see the breakdown, the retest, the retest, the retest, and then you're flipping this level. That level in and of itself was more than enough. You have another one that's literally, let's just mark it perfectly right under it. That's right there. And it's this little doji, the top of that little doji, and this little sucker.
>> US movers, Rhythm Pharmaceuticals, SEC.
>> So, sometimes I forget I have some of these speakers on. So if we take a look at these levels, the important thing is that you have clearly tested and you have clearly cracked. So you can see up here you're trying to get through, you can't. Pops up Sunday night, comes back down, retests that level, gives you a really good entry for like a quick long, not now, Larry. And then over here, you start breaking that down. Now the realistic area for this is the gap fill. That would be what would be most realistic. And I think if you just did a couple quick things with crude, like drop the anchored VWAP from the peak, you'll see that you're not breaking it yet. You're still holding that area from that peak. So, there could be some people here that are like, "No, we're not done yet." And they might be right. I I'm on the short side of this.
Now, I'll just tell you that I think that what you're seeing is that everybody is starting to cut their own deal. And if everybody starts to cut their own deal, this is going to get pretty weird pretty quickly. From a technical standpoint, you got some issues here. And I'll show you to you this way. What I would do, I mean, on the long side, they have some issues. Let's see if we can do it this way. So, it's easier to see it this way. If I go to the bottom of this wick right here and then here, as well as in here, this could actually even be a little tighter into that. And I'm using this instead of using candlesticks because it's really clear to see that you've broken here and that this is a reversal bar because you can actually go through these and say, okay, how many have this range? And I'll show you what I mean by this range. Meaning open, closed, open, closed, open, closed, open, closed. See how tight they are? They're either super tight or they're really wide to the close to the upside. What is one of these kids is doing their own things. You guys will know what that's from. Open, close. That's a reversal bar. So, you really just want to watch this. Again, I don't know what happens if we're going to have more winning and liberation. Maybe it gets a little bit worse. But for now, I won't use that because then people will tell me I'm drawing a resistance point there. But as long as you're not getting above that 102 in here, it seems to me that you're at a spot here where you could say, "Yeah, we're we're starting to form that that bottom."
Now, on the RSI, it's really wonky because you have your pop and then you're rolling over. You look at that on the 4-hour. And if we drew this a little bit cooler now and you'll see it much clearer there where test, test, breaks, and that's it. You still have that VWAP you have to get through and you still have a bunch of other stuff that you have to get through. If I took like the anchored profile from that breakout, you'll see that you're sitting right on it. So, all I did was take the anchored volume profile from that breakout and you'll see you're sitting right on it. So, if you start breaking this 92, yeah, you're in a world of pain and your targets probably like the bottom level. This is how I always know that what I'm doing makes sense. They you'll start seeing things that coincide with other things. So in other words, I'm drawing a trend line right here. And that trend line tends to just perfectly coincide with exactly where the point of control is from the breakout, right? When you see things like that, these become huge places of interest. So from a technical standpoint, that 7624 area is definitely an area that we're going to want to watch and pay attention to. I'm not saying you're going to get, you know, peace love and understanding overnight, but you know, we're getting somewhere.
We saw what the Iranians said when they reached out to India today about, hey, if you release these ships, we'll let you through the straight. And I think that's what's going to happen. They're going to start doing deal by deal. And this did not go the way that people thought it was going to go. The the EU and UK are are not there for this full-on control of the straight. And based upon that, I think that this gets solved sooner than later. I think that's one of the reasons why you're seeing the VIX do what it's doing. I think that's one of the reasons you're seeing crude do what it's doing. And of course, you have the oversold. Now, that's going to lead us to a lot of activity in what happened today.
So, here we are at the 200 day moving average. Nvidia came out today and said they see capex next year near a trillion dollars. And everyone was somewhat shocked by that. And what they're saying is that everyone, what he's saying, Jensen in a special leather shirt is, hey, everything's great and things are going to rock and roll. Now, rallied up to 87, pulled back. Micron. And this is really what they're doing when you have no depth of book. And there's not much you're going to be able to do about it, guys. Where there looks like you're rallying up, comes all the way back down. And let's take a look at exactly what they did today at the 350 market on close. Isn't that a coincidence? So, they flushed you down as fast as they possibly could. Aren't we glad for all those algorithms and the fact that they give us liquidity? They're surely not manipulating the market at all. And if we take a look at these levels and where we're at, that 437 level right here, that was the low. And then 350 market on close kicks on from 350 market on close. What happened to Micron? All that happened was the stock went higher. That's that's literally all it's done since 510 is just grind higher. So they basically triggered everybody into end of day, triggered their stops, and then just basically grabbed. And since then, you've been doing nothing but just grinding higher. And that's exactly what we thought was going to happen here. We actually were able to get involved on a trade down here, and it worked out fairly well. Obviously saw the same thing here with SanDisk, which is fighting back. But if you go back to this level again, what is it? Does that look like they're trying to get in or out of these trades? It looks to me like they're trying to get in these trades. And what they're trying to do is they're trying to trigger retail at the end of the day. They did an excellent job. 718 all the way down to 698. And they even did the fake breakout ahead of it. So, it's definitely something. And and to me, it's pretty telling.
So, when we look at these charts, you're seeing Sandis come out, hit close at all-time highs, Micron closing at all-time highs. Like, this is not what you would see if we were going into a bare market. They'd be blowing institutions would be blowing out of things, not getting into them. We also saw something that was really interesting and I think that this is more poignant than anything is you broke a 100 on the DXY and since you saw that today you saw money start coming into the uh EWI, you start seeing money flow back into South Korea, you start seeing money flow back into Taiwan and I think that's exactly where candidly this is heading. So we're starting to see that we're seeing the VIX roll over. We have Micron coming out with earnings this week. We definitely want to watch that as well. Some other names out there that were super interesting. We're starting to see the tankers hold and I think that's a real sign that the curve on the crude oil is starting to slow down, but also a sign that they may be opening that up. We do want to watch a couple things here that I think are really important. We definitely want to take a look at IGV. We definitely want to make sure that we're going to make that higher high because we're already starting to see some more cracks there. Uh, we've been talking about Crowd. We talked about this one on Saturday as well that this was setting up to be literally a perfect short. Uh, and it was. It just was just a matter of time with all the dojis up here. You broke and that was pretty much the end of it. So, you probably just want to be super careful in here and make sure that we actually hold those levels. CRM came out with excellent news that they're going to start their buyback. Nobody cared. And I think that that's really where we're going with this. The question is, do people really care?
I will say this because I've been looking forward to it for some time. You are seeing Bitcoin start to get above a critical level. And if it does, it is a sign that we're getting back to risk on. If we look at when we broke the 55 here, we can see that pretty clearly. We're at 90. This is going to be your first close over since then, if we get that close and we have to see where, you know, the session closes, but that puts you at 74,000 and a close over the 55. And I think that's really important to note. We definitely want to watch this tomorrow because that just means global risk on. I mean, it's not a store of value. It's a it's pretty much just a risk-on asset. And I think that's very important for the market as a whole. As we see the dollar start to drop, this is exactly what we want to see. Moving money back into semiconductors, which is what we started to see. Let's look at it this way. And we're trying to get above that 55. Whether or not we do, we have Micron coming out, you know, Wednesday night. And then you have South Korea exports Friday and on top of that, sucks salad. We have the Fed on Wednesday. So, we have a full plate out there.
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