Transcription
After hours, we did get a big announcement, as you are aware, but let's get to that in a second. I just want to get technical here and just let's get rid of everything for a minute and just look at what it is. Stripping it down to the bone, just for a minute, and then we'll get into everything and what's actionable for tomorrow because there's a lot that's happening after hours, and we'll talk about it. But this is what we have. This is exactly what we have. We have the November low, and then we have the undercut here, closing at a low. There is nothing about this that anyone from a longer-term perspective can get excited about.
So, what is it that's got people excited? Quick note, 27.5% of you do not subscribe that watch these regularly. I specifically do not put ads in the middle of these, 'cause it's super annoying. But when you subscribe, click all notifications, and like the video, it actually helps me greatly with the algorithm and counterbalances that. Also, these videos are linked together. So, if you enjoy one, you're going to enjoy all. Let's get to it.
Now, here's the headline, just so we can see it. Trump extends pause on striking Iranian energy plants with floats 15-point peace proposal. So, Trump on Thursday, right at the close, a pause striking a deal on energy until April 6th, saying talks with Iran are going very well. Envoy Witoff at a cabinet meeting, US presented 15 points. Mr. Trump said he's not desperate to make a deal. Now, that's the news that hit. And what we're going to do real quick here is we're going to go look at the futures market and see what happened with that. And I think there's a couple things that the market's telling us here that's really important.
Number one, we had a CTA sell level that, frankly, we're still not in, miraculously. Uh, we're sitting right on the precipice of it, but we're not in there. So tomorrow, and I'm going to go back to candlesticks here. If you get into that level, you just want to watch that 6512 because that's where CTAs will actually pick up their selling, and that's super important to get. But if we look at today's drop and we look at the volume, it's not really what you want because you don't even have extreme selling. You just have lethargic selling. And we saw that before we go any further. We saw that with the VIX. The VIX isn't even over 30. The VIX doesn't even seem to have a care in the world right now. And that is, to me, problematic, uh, because it's just that froggo boiling water. And we went from a period where we keep looking for this oversold bounce over and over and over again. And when I say "we," I'm talking about me and the mouse in my pocket. But it's just not happening. And today, that is a technical break.
Now, a lot of people will see these breaks and then say to themselves, "Oh, well, we needed to do the undercut, and now surely, uh, we're going to bounce." Okay, maybe. Maybe. But I think you have to look at a couple things here. And the first thing that I want to show is just the movement after he did this, and then what responded viciously after he did it. So, what we're going to do is clean off my thousand levels. And we're probably going to come back to them, but I really want to focus on this because it really set the standard. So, once again, we have one of those great god bars that just stands out and says, "Here we are, algorithm, because of XYZ, we're going to do this, right?" And what does that do? Well, that gets you a good, what? 75 points in a minute. And then it marks the high. And then what happens from that bar? So, I'm going to take the high of that bar and drop it to the 50% line. And I just want to point something out because it's important. When you break 50% is also important. You broke 50% in like two, three minutes. So all you had here was algorithmic triggering. That's all you had. You had a news event. It was triggered. They triggered the algorithms. They got involved. Everybody else saw it and just got out of the way.
So if we go and take a look at the NQ for a second, and this is where people are really going to run into problems because I, I'll show you in a minute. You still have names that are bidding up on this. And the names that are bidding up are no longer commensurate with where the, the index is. And this becomes, this is problematic because people don't know to look at this stuff. So what you see here is you see us trying to break out, we break down, we try to rally, and then we falter over. So once we see this, we know that we have a much larger issue here, right? Tries to rally, fails, can't get over there. And so out of everything with this 10-day pause, and again, it's kind of crazy. What, where do we really have at the time recording this, right? We have seven basis points of gains. My thought process by the time that it's around 8:00, and you can just time stamp this, and if it's right, it's right. If not, tomorrow, you just boo me. I, I actually think you're down by the end of it. That's my personal opinion because this, this is the problem. You're kicking the can down the line of a problem that's not going away. That's not going to work. And so what the market's done is it's responded in kind to that. Meaning crude oil drops, wicks, and so we lose what, eight bucks on crude oil. They couldn't have bought it fast enough. So when this happened, the very first thing I did was bought crude and then shorted high beta and shorted the index because it's not a tariff. You can't say, "Oh, we'll deal with this in a month." What about the people that don't have oil? Like, how, how's that going? I mean, not very well if you start looking around the world.
And so when this problem continues, and the higher that oil stays, and this is the other thing that people are not getting about this at all. If I go to February 1st and I drop this line, I'll drop it like it's hot because the kids still say that. And then we watch how that lifts up. And then we get that level right here of 64. Then we're going to drop it here. And what we're going to do is we're going to mark this off right here to the end of February. And that's going to get you, it's actually a little higher. It's like 64-ish is the average price. And then we're going to go here and we're going to take that level, which is now 87. It's actually a little lower. I think it's like right here. That's 87 bucks. So in a month, that's what oil prices have done, right? They're up 35% month over month on average during that period of time. What does that tell you? That's something you have to pay attention to. That is 100% something you have to pay attention to. And the longer that this stays here, the more damage it does, the more it eats into earnings, the more it eats into global GDP. So kicking this down the line is not what people want to hear. They want to hear we have a ceasefire, the straits opened 100%, and business is back to usual, and now we can start dealing with the other stuff. That's why the market reacted the way that it did. That's why you're seeing it move the way that it is. It's my belief that you could actually see oil go up tomorrow on the announcement because what he's doing is saying, "Oh, I'm going to buy myself $10 or 10 days, whatever. $10. I got money on the mind." And, and the comment was, "Oh, they asked for seven days. I gave them 10." Well, why? Why not just get it done? And the answer is because he can't get it done. And I'm not, it's not a political statement, but it's becoming very clear that they have no interest in wrapping this up. So, he's coming out and finding a way to kick the can down the line. The market's reading through that right now.
So whether or not we get something else, I am sure you're going to have tons of comments this weekend on this. But this is the bottom line with this, and then we're going to look at the breath of the market. If I look at the NDX and we go through what happened today, we have to go and take a look at what's actually happening. We have to trade what is happening, not what we want to happen, but what's happening. We closed right on the low of that anchored from April. If we go and take a look here on the cues and we drop it here on the cues and just click on that, we broke it today. So, just FYI, we did break that today, and I do think that that's very important.
If we take a look at the socks and we look here, the socks got over the 55 and then broke down, and now you have a black marbuzu right here. Now, a black marbuzu bar is real simple. This one's not perfect because it's got to be the open and the close, both have to be, the open has to be the high, the close has to be the bottom, but you're very small wicks. So, what happens here? Drop down and then you look at that close. So, what you do is then mark that close off. And what does that tell you? That this bar has encapsulated everything that's been going on for weeks. That's not telling you that you're going higher. That's telling you that you're probably going lower. And this in and of itself becomes more of a strategical problem. And I'll show you what I mean by this.
So here's the anchored VWAP. And you're going to see that that takes you all the way down to here. And I'm not suggesting you need to get there, but if you go and take a look at something like XLF for a second, and when we look at XLF and we watch how this one broke, hit test, broke, broke, broke, and then that was it. And it faltered. Not only do we have no leadership, but the little bit of leadership that you have, they're already rotating out of. So, if you take a look at something like XLE on these breaks and on these little rallies, you're hardly able to sustain yourself. So, then if you go take a look at oil services today, all oil services has done is pull back down, and now you're trying to get back over again. But even that's getting weaker. So, the question becomes, what's really going to lead us out of this? And you start looking at like IGV and start saying, well, maybe that's going to bottom along this level. Now, if the market holds, you would think that, and I'm just trying to give you some technical things to watch tomorrow. So, if you're like, "No, no, no. This is it. We're really going to bounce." And, and timing a bottom, it's not easy at all. A matter of fact, it's probably the most difficult thing to do. It's why a lot of people don't even bother doing it. Um, but when you're starting to look at something like this, you're like, "Oh, well, this should hold." What should happen and what's going to happen are two different things.
We're going to go into the breath of the market in a second, but you might want to make sure that that actually holds because if we lose software again, you have a real problem on your hands. You rejected hard into real levels today on major names. And when you see this, it is what it is. So, and, and even on the major names, but if I look at things like, like this ALM is something that I, I play around with. And if we go and take a look at this right now and we say it, we hit the 55 and we held, but it's pretty much like a, a limp holding the 55, right? If we could take a look at this FRO yesterday, rallies, breaks out above the 22, and then what's it do? Rolls back over. Everybody in every category is still de-risking one way or another. It doesn't mean we don't get a, a, a big kumbaya hug over the weekend and everyone's happy. But I'm telling you right now, if we have to trade what's in front of us, no matter what the sector is, no matter what we're seeing, they're rotating out and they're going to cash. It doesn't matter. We had GE break out the other day and it went to 948. It's at 873 a day later. AOI. And I said this yesterday on purpose where I literally, and you go watch yesterday's video. And I'm not saying it for any reason like, look at me. But I'm saying it from the standpoint of this is the market that you're in. Any other market you would have bought this breakout, but in this kind of environment, you know that those kinds of breakouts are just the kiss of death. So what's it do? Closes up, gaps down. Oh, I'll get out when I'm break even. Down 15. These things are setting people up. And I don't even think that most people know that they're being set up.
You could see this even with light today. If we go and take a look at light on a 4-hour chart, I was posting these earlier where you could start seeing your negative divergences right in here. And then you can obviously see your breaks and then your rallies and then start seeing how this stuff starts breaking down again, right? Takes out the higher high. But look at the difference. So like it's not really shocking that you're coming in to this kind of sucks salad today, right? This kind of trading, it drives everybody nuts. But not only that, you're doing things that you don't normally do. And when you do that, you're going to get results that people are not normally used to because when the things start to break, like really break, that's when people start running into an issue.
And here's a really good one. So this is your put wall on the cues. It's right there. It's right. So it's 580. There's, if you know anything about options and put walls and call walls, there's legit on the indexes, it's like there's an 80% chance that you don't break those. It's the same thing with everyone saying we're going to be fine because of JP Morgan's collar, which is the most ridiculous thing in the world. Yeah, it'll apply pressure, but if you break that pressure and you flip the gamma, good luck, right? It's not going to hold because JP Morgan put a collar on. It's like, it's so stupid. So, what you have to do is look at this thing. I sound so grumpy, but you have to look at this thing and say, "Okay, well, we, we shouldn't really broke that." Like, they moved it all the way down, and we still broke because they moved the call wall and the put wall down. If you watch the pre-markets, we went over this. And when you're doing this kind of stuff, you have to realize it's a game changer.
So, one, one of the trades that we did today, and we did it like literally immediately 'cause we saw it. The algorithms will trick or trigger people like almost as as possibly as fast as they possibly can. So, here, right here is so what they do, and they did a great job today of retail, and they ran you right into the 220 call wall right here. And you have to watch this tomorrow because they're going to do it big time tomorrow. Same game. They might even do it on the put side tomorrow, but it's the same game. So they open you up and they're like, "Oh, you better get in. You better get in now, Bob." And so then all of a sudden, Bob and all these boys pile in. They high-five one another. This is it, man. And then all of a sudden, bam, right? And then that's it. Now they're eating hot pockets. So the problem is that with the call wall there off the open, you hit it and you rejected. The minute you did that, we shorted it. No pattern, no nothing. Like, like instantaneously shorted it. And then we just left that there, trimmed on the way down, left that there. And then our stop, we had a whole plan on this one. And the, and like we got out, I think the last piece I got out of was like 208 or 207. I have to go take a look. But we absolutely nailed this, and we didn't have a care in the world during the whole trade. If I just put something on, you know, I'll just throw the super secret private cloud in. But like it never changed colors the whole time on a one-minute bar. It never really changed colors. A little bit here, but then you had no follow-through. It was a really simple trade. And I think it's really important during these times to find things that work.
And you'll start seeing this. I'll show you this pattern, too, because this worked like a charm today. Um, so you know your put wall is right here. That's that red area. And if I go here and I show you this. And so what we're going to see is once you hit a put wall and you break a put wall, you look for the retest of the put wall. So up over retest right here, you get a shooting star. Like it doesn't get any cleaner than that because essentially what you're doing is you're hitting it and you're dropping fast. And the minute you did that, I just shorted it. And then that, this, this part right here literally becomes your stop on the trade. The top of that. So you're putting it on, and that's it. There's your risk. It works, it doesn't work, you move on with your life. But with your quantifying that kind of risk, we were actually able to stay in this for a very long period of time. And I actually thought that you would run into the end of the day because you start to look and guess what you didn't do? Run. But from that, you could see where that was. And this gave us a huge trade today in this name. I want you to understand this so that when you see it again, you'll know where these levels are and you'll understand that how you can learn how to do this for yourself.
Here, watch this. Short sand. You shouldn't have done this. You shouldn't have rejected that hard. I'm in at 46 and a half. I'm up three already. See, that's a nasty, nasty rejection. Trimmed up five. All I'm going to do now is use 650 as a stop and stay short for the rest of the day. Think can get hammered. You ran right into the put wall and you have a shooting star on your put wall. As soon as that happened, I saw it. That's why I did that trade that fast. You could take it here, and you're up five. But if I catch the trend, and the trend's down, I want to pay attention to that. Once you break, that's it. And now you're getting $10, $15 bars like that. Staying short. All right, up 12, trimmed. That bar set the whole trade off. And that's why we're up 20 points right now. Trimmed. That's my stop. If it gets through there, I'm going to close the rest of it. 100% out of the SanDisk. So that's what's working right now. So the best thing that we can do is understand what's working and do more of that.
If we had an announcement today, and if that announcement not, and I'm not saying that the announcement is not a step in the right direction. Maybe it is, but clearly crude oil doesn't think it is because crude oil, all they did was buy it. The market truly doesn't think that it's a big deal, right? So what are we supposed to take from that if the market doesn't? We're supposed to tell the market it's wrong. When this starts to happen, and I just, I'm trying to really hammer this point home. We're, we're keep making excuses for it to some extent, right? And again, I'm not assuming you are, or I'm going to say that I am, and the mouse in my pocket is. If we look here, this is what you have. You have the 55, the 22, and the 12 screaming down. That's it. It's exactly what we talked about happening here, and it's happening. You don't have a 40 VIX handle. We have a 22 VIX handle. 27, 27. Okay. So, what do we really have here?
Now, if I dive into some of this other stuff, I keep waiting for this bounce, and I keep saying that it can get worse. Can always get worse. And what you're seeing is it's not really getting worse, which is actually good. When we look at today's activity on Thursday, the breath of the market here, it's not getting that much worse. So the five actually rallied back to the same level, and then we sold off again. What might be troubling is this, this bounce we didn't get over. This bounce we didn't get over. So we're actually making lower lows as they rotate down through the names. But you're getting to a level here which is a trough level. The problem with me saying that is people like, "Oh, well, it's going to be over soon." I do think that you're going to get some kind of snapback on it. I do believe that. But here's the problem with the snapback. You have to understand it's like looking at a dragon's tail. You don't want to be on the back end of that. In other words, yeah, this was over in 3 days from that day looking at it going, "Oh, well, we're breaking here, so we're probably close." And then if I was to measure, let's just take that bar and say, "Well, it looks like we're stopping here. You know, we kind of broke here. How much did we drop in like 5 days, 3 days was another 15%." And I'm not saying that that's what's going to happen here, but, and that's where the put wall is. No, but I'm not saying that's what's going to happen here. But what is setting up to happen is that you are setting up for something here that could get even uglier. And we just have to have our head, head on a swivel tomorrow, and trade what you can make, and then just get out of the way, and then decide how much risk you want to take over the weekend. And then I, I'll go into Saturday, and Saturday's video will be a big deep dive on how this usually plays out historically. I already h kind of have it mapped out in my head, and then we can start talking historically about how to start looking at this, this kind of thing because I do think it's there's going to be huge opportunity here. You just don't want to be picking up the pieces before that happens.
All right. If you're trying to get in the community, start looking for a, um, a letter. I send another batch out, um, and we'll be doing that for next week. And then next week, it's going to get pretty crazy with the market. So, I'm probably going to shut the community down for enrollment for a period of time. So, if you're trying to get in, start looking for it. If you are not in, the waitlist link is in the description, and sometimes I pin the comment. That's it.