Transcription
Hey everyone, this week was absolutely amazing for trading as we all know. But there's something that's brewing, and I don't think a lot of people are aware of it, specifically because it's going on overseas and it's not dealing at all with what we think it is. We're really dealing with what's happening in South Korea right now, and a lot of people are not aware of this.
So, we can all see the moves that are just absolutely exploding in the DRAM names, the memory names like Micron and SanDisk. And a lot of people aren't aware of why this is moving the way it is. And it's really kind of a time bomb. And it's a time bomb on both sides. And I just don't think people are grasping it. So, we're going to spend a lot of time on that today so that you're prepped for it. So, whether or not we see Santis go up a couple hundred points or down a couple hundred points, by the end of this, you're going to know exactly why it happened. So, let's get into it.
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The most important thing that I can do is just start with the basics, and then we're going to dive into these details. And I think that these details are extremely important. But if we look at the S&P, it's pretty clear. I mean, you're seeing the gaps in the chart. We're watching Iran. Will they open the strait? Will they not open the strait? It really doesn't seem to be having the effect that people think it's going to have. And we keep waiting for this correction or retest, but candidly, the earnings have been fantastic across the board. 83% of all companies are beating or exceeding and raising guidance. It's really that huge. It's a huge miss. Now, what happens next quarter? I don't have a clue because everyone's going to take their estimates up. But for this quarter, this is what we're dealing with. So, it is very difficult to look at a chart like this and then assume that it's going to drop.
If we did the simplest things and just very simply go to a level here, which would be that swing high, and then just drop it down like it's hot to that swing low and say over a weekly chart, where could this market go to? That's the measured move, 8,300. It's pretty insane to say that, but based upon when we had all that winning and liberation and then from that swing high, I'm not even taking the breakout. And then we would look from there and say, well, where does that really put us? And that puts you another 12% higher. And this is a weekly chart. So, when we look at something like this, we have to understand we're not talking about next Wednesday. But this is setting up. And if we look at here and we go look at the NDX, we're going to get something even stronger. And it's getting stronger and stronger.
Now, this one's a little funky. Now, it's funky because you have a lot of these memory names moving, and they're not understanding why they're moving. So, if we go here and lift again and just drop it down here like it's hot. The kids still say that. And if we mark that off, we're going to get a level to here. It's going to tell us that, hey, we go up another 10% before we're even at a fib extension. The issue here is what the heck is really going on. When we look at something like EWY and it's exploding, a lot of this has to do with DRAM and the shortage of DRAM and why 40% of all DRAM might go away. There might be a huge bottleneck coming here that we have to watch. But again, before we go down that rabbit hole, I want to do the basics. I want to just overlay the basics here so we can see what's really happening.
If we look at the S&P, and this is the 200, the 50, the 20, and the five. And this is percentages above their corresponding names. We're going to notice a couple things. We're going to notice that the 200, we're just going to start there and then dive into it. The 200 is starting to roll over. And we're going higher, but at the same time that that's going higher, we're hitting lower highs. And that's happening. No matter what we think, no matter what's going on, that's just a fact. From here, we have peaked on the 200. And since then, those names were losing more and more on the 200. It doesn't mean that you have to roll over right away, but it does give us pause. It's the same thing that's happening here, and we're back to that 51 level. We really don't want to get below 50 again on the 50-day. It's an institutional level, and they do watch it. And I just want to go over the broad-based indexes before we go any further.
This is the 20. And we can watch the 20 continue to roll down. It's not the volatility that's bothering me. It's the fact that the underlying market overall is deteriorating on a breath, and I don't like that, and it's a concern of mine. But I think that you have to overlay this with something else. So, what we want to watch here is we don't want this, which is S5FI, to get below that. Now, if we click off of this super quick and we just do the simple things and go NDFI. Now, NDFI is going to be your 50-day on the NASDAQ 100. You'll see that we've peaked and you'll see that we're still holding that 53, that level right here, and that we're not breaking 50, which means 53% right here. It's now 55% are all above where they need to be, which is exactly what you want. We want to make sure that we're above 50% on the NASDAQ.
Now, if we take S5FI, which is the NAS stocks above the 50, and we overlay that with NDFI, which is stocks above the 50 on the NASDAQ. So, the S&P compared to the NASDAQ, and you've seen me do this chart before if you followed along. And what we're starting to see, and we can see this, when it's rising, what happens, right? We sell off. When it's dropping, we rally. What are we starting to see in here a little bit? We're starting to see this starting to hold in this level. And if it holds in this level and then starts rising, well, that's going to be an issue. And you can go and take a look at this historically over time and overlay with the S&P and you'll see that it works that way.
It's very difficult to look at this as I'm sitting here and telling you, hey, it looks like we have, you know, more room here and that, hey, we're pushing, but what could really dislodge this or what could take it up another level? And I want to be really clear about this. This is a binary event. This is not an event that maybe it's going to happen. Something is going to happen with what's happening in South Korea. And when it does, it's going to be an extreme move with semiconductors, and it's going to be an extreme move specifically in memory. And then it's going to trickle down into the NASDAQ. And if you're not aware of this, it's going to be an issue. And it's a really big issue. And I don't think a lot of people are aware of it. So, let's get to it.
Let's talk about what's going on with Samsung because I think this is the most important thing out there right now for technology. I don't think anything even comes close, and frankly, I don't think anybody's even aware of it. I certainly know that it was on a back shelf for me, and I'm pretty in tune to this stuff. So, what I want to do is I want to get into what the headline was. I went through all this research, and if I remember, I'll put down all my links in the description so that you can go through the data yourself and then you can just go and read those pieces as well. So, let's get to the heart of the Samsung strike and why you should even care about it.
So, in South Korea, they don't really strike the way that we do, but there is a huge disconnect going on between Samsung and what's going on in SK Hynix and in the profit share. And there are your two really big companies that deal with DRAM. And so this is significant. There's a strike that's planned, and it's an 18-day strike, and it's from May 21st to June 7th. And this is why those names such as Micron, SanDisk, that's why they were moving the way that they were on Friday. And if we look at this, it's going to be the largest strike ever in 57 years. And it is the National Samsung Electronics Union, or NU, as you'll see mentioned a couple times in these notes. And it's going to threaten the global HBM and AI memory supply. They are doing a mediation on May 11th. And this is really serious. I mean, you have the prime minister involved in it. You have a lot of people that are getting involved in this, and they are doing quote, "forced mediation." I want to be real clear about that. I'm doing this in headlines and bullet points, but there's a lot going on here. And without making this video two hours long, we're just going to get to the meat of it. But understand, 93 or 94% of employees want to strike. They are way far off on where they're supposed to be here on both sides.
Let's take a look at the timeline of the key events. And this is our timeline of what's transpired so far. So, three unions formed a coalition, and this happened in November. And then in March, 93.1% not they didn't just make it, 93.1% voted yes on this strike. And a key crux of this is profit share. And to be clear, SK Hynix is doing this profit share. And SK Hynix is making about three times what an employee is making at Samsung. So, it's not like they're looking for a 10% bump here, to be really clear. So, 40,000 worker rally, president criticizes the union. May 1st, they already had a strike. So, to be clear, it's not like they're threatening something they're not going to do. Their biologics unit already did a strike. The chairman issued a statement on May 5th. May 11th and 12th, they're going to begin this mediation, and it's very clear that it's starting to deteriorate, and that's why we started to see the rally that we saw. And this is a boom-bust cycle, and I can't think of a better case of reflexivity than what's going on here.
So, we're going to talk about both scenarios and then how I'm going to play this, and you should do what you're comfortable with. Starting Monday, they're going to do this formal mediation. May 21st, it's on. And that strike's going to begin if there's no deal, and then they will strike for 18 days.
Let's take a look at the core dispute. Right now, this is what the union wants. They want to abolish the 50% performance cap, meaning get rid of the cap. They want a 7% base salary increase. They want 15% of operating profit to a bonus pool. The flashpoint: SK Hynix bonuses are 3x that of Samsung. They've already lost, I think it was like, 200 workers defected in 4 months. So, they are losing people to just go to the other company because, hey, come over here, and I know you were making, let's just make it a US number so that makes sense. You were making $100,000 over there. Why don't you come over here and make $300,000? That's, that's really hard to pass up for anybody.
So, when we start diving into the money and look at what's at stake, JP Morgan did a really decent piece on this. Extra labor cost somewhere between 15 to 28 billion. So, what would happen to Samsung stock if this happens? Well, the stock would probably go down, which is tied, 28% of that is tied to EWI. And we're going to get into the names, but I think it's important to understand the lay of the land. So, again, if we go through it, 15 to 28 billion is extra labor costs, 7 to 12% downside to the operating profits, $2.9 billion of revenue loss over 18 days. Meaning they strike, you're going to lose $3 billion. So, they could actually look at this and say to themselves, and this is where it gets really interesting, if you're going to lose $3 billion over 18 days, do you want to lose 15 to 28 billion? So, they might look at this and go ahead and strike. We know the other people aren't all going to leave to go to SK Hynix, and they could play this hand. This is something that could happen. But I just think down the line, they're going to have larger and larger issues.
So, my cap in my head is, and we'll get into likely scenarios. I'll bring it down to the big three. But if we just talk about it for a second, are you going to have to deal with this again? And if the answer is yes, then maybe just deal with it now. If the answer is no, then 3 billion versus 15 to 28 billion. It's a huge number. Direct losses off the rip are anywhere between 6.9 to 11 billion. And Korea's estimating, and I think this is important because you're really affecting the GDP. When you understand how big Samsung is in South Korea, the median estimate is somewhere between 14 to 22 billion in losses. So, this means that this is why the prime minister, this is why everyone's getting involved.
And so, what is JP looking at and what are they saying to do? Buy the dip. Okay, that's easy to say, but how do we do that? And we're going to go through these different scenarios. So, let's talk about the meat of what really matters to us as investors and traders, and let's look at the production impact. 40% of global DRAM market, 30% of global NAND market production drop in a 1-day test. So, when they did a mock strike, they'd strike for a day. What did production fall off? 58%. So, we already know there's a bottleneck here. And out of that bottleneck, what happened? 58% dropped off just like that. HBM forward deliveries to Nvidia are at risk. Customers are going to shift to Hynix and Micron, and you obviously saw the uptick in SanDisk as well. And if I showed you what DDR5 prices are doing right now, they're absolutely through the roof and they're spiking. And this again gets into how do we do this? How do we trade this information? How do we make money off of it? And so, we have to look at scenarios. It's not going to be as clean as, oh, just do this.
So, in 2024, before they all aggregated as one, what happened? What did we get in 2024? And this was the first ever 1-day strike. 6,500 workers went out indefinitely. The strike ended, participation fell. They reached a deal. The resolution: they had an increase in wages, they got a 1500 product credit, and paid leave. And this was really important for us to get. Mediation failed. Now, why do we care about this? Because we're going into mediation right now. I do think the stakes are higher for South Korea. I do think they're higher for Samsung. But if you're the corporation, you have to look at this and understand that your employees, 93% of them are voting for this. And if the mediation fails and this goes through, this is going to be way more impactful than 6,500 people.
Let's take a second and just look at the most likely scenarios of this for me. Again, assigning a probability to this. So, a last-minute deal. If you're Samsung and you're selling everything like hotcakes, you're looking at this and saying, "I want this done." So, I think that the most likely outcome is that mediation produces something, and that's going to take us into that May 11th, May 12th, which is going to be coming into Monday, Tuesday, Wednesday. And so, if we see that, then you're going to have one scenario that's going to happen in the market, which I believe EWY will drop. I believe Micron will drop. I believe SanDisk will drop. DRAM ETF, and we'll we'll get into the the levels. But if they strike and then there's a deal while this is going on, and I do think you're going to get government pressure on this, then those stocks are probably going to continue to push into this because we don't know how long it's going to last. And this is a classic definition and and scenario of reflexivity.
Full 18-day strike. This is worst case. I don't think you're going to go there, but you could see, and and you're already starting to see signs of this, where this coalition that started in November, it could fracture. And if that fracture happens, you could have certain groups fracture out of the large union that conglomerate, and then they could say to themselves, hey, we're most at risk, so we're going to strike. As I stated, most people aren't even aware of this. But on top of that, there's even a wild card here. Samsung has asked the court to look at this and even say, is it legal for them to strike? And if the court decides the strike's legal, then you're going to have a real issue here. Now, the court's going to rule on this May 13th, and you have this window where they can rule on it between May 13th to May 11th. But if you're in mediation and you're a union leader, you might look at this and say, if they say that we can't strike because the damage is going to be so great to the country, then that's a whole other can of worms, and now you've lost all your bargaining power. So, if you're leading this, you have to look at this and say to yourself, I would rather get something done now because if the court says we can't strike, then we lose all our power. The court does have a precedent on this, by the way, and we're going to get to that. You'd fall right after mediation before the strike, right? So, that that's really kind of interesting. The injunction could block the 21st walkout or it can impose limits like biologics, and we're going to get to the Samsung biologics in a second, but this changes everything. Your entire timeline goes out the window if the South Korean court rules that they're not even allowed to strike.
And I want to preface this. We've already seen that they are willing to strike. So, Samsung has a biologics unit, and they went to court. Samsung went to court and said, "You can't strike." And the court said, "No, you're allowed to, but there were certain things here. They had these cells, and they're not allowed to let that those cells go away or thaw, something happen with the cells. You can't damage equipment." So, you have to stay there and make sure that damage is there. So, could they say you can strike, but you have to make sure that you don't damage anything before the strike, or people have to stay there because of the because of certain criteria so something doesn't get damaged 100%? But the court has already ruled that they are allowed to strike, and I don't think that people are fully grasping this.
Now, the question really boils down to is, if you're a union boss and you're looking at this, are you rolling the dice on this? I'm not even going to pretend that I have any insight into this. But what I will pretend is that, and I will say it this way, I'm not going to pretend. I don't think people have a clue why this stuff is moving the way that it is, nor do I think that they have any idea of these dates that I just went through with you, because I know how long it took me to put this together. So, I I know that the majority of people are just looking at these names and saying, "Oh, they're going up, and this is silly." And they don't know why, and it's got to end. And that's not the case at all.
Now, on TradingView, and a lot of people know this, and but just be aware of it. You can actually look at Samsung stock and SK Hynix stock, and there's your numbers, but you can just type it in for yourself and find it. So, this is coming on the heels of when we start looking at where earnings are, and then we start looking at how these names are playing out. Wednesday, Thursday, Friday, we could see the gap down here on the threat of a strike. But this company just hit a trillion dollars in market cap. So, I don't think the courts are going to look at this and say, "Yeah, you really, you know, you're really starving here," I guess is the way that I'm looking at it. So, I don't really see that. I mean, if we go back to something like, you know, even the, we'll just take winning and liberation, even though it had nothing really to do with them, or we'll take the election, and we go through these dates. I mean, you're up 5x on the stock from the election, right?
All right. So, what do we do with this and how do we see this playing out? From my standpoint, the stock's probably going a lot higher. And so, I don't think that we have an issue of demand, right? So, we don't have a demand issue. We're going to have really a supply issue, and that you're going to have more of a supply constraints issue. And I have to do it this way because I'm not going to have time to make all these slides. So, you really have a supply constraints issue. And I think that's what we're dealing with here. So, if we understand that, we'd have to look at who has supply. Like, it's not rocket science, right? Like, let's not get it too convoluted. Parts of this are going to be hard to understand. Let's not get the easy parts convoluted. All right.
So, they strike and they can't make what they make. So, what's going to happen if that takes place? This will drop. Samsung will drop because they're not going to be as profitable. Let's say that they meet the demands of what they're supposed to do. Samsung drops. Let's say Samsung comes to terms. I don't see a scenario where Samsung goes up except one. And that scenario is the court says you can't strike. If the court says you can't strike, Samsung will go up. And if the court says you can't strike, then other names are going to go up. EWY will go up.
So, this is something that we've been playing with in the community for a long period of time. Have a very long-term buy on this thing, but we did have a swing, and I did close the swing uh ahead of this. And it for me, it was more the movement on Thursday dealing with Iran than anything else than really diving into this. But you can see the activity playing around with this. And this is kind of interesting because we're looking at EWI, and 28% of this is going to be Samsung. I think 18% or 14% is SK Hynix, and we'll get to that. But when we look at something like this, and the names that are just ripping, you, we've talked about this for months. We've been on this thing, and in here, you can just see when you're not able to get oil, the stock came in. And a very simple way to look at these things is, oh, look, we got above the 55, and then what happened? Oh, it just kept ripping. All right. It's again, I don't think long-term this trade's done. I do think that you could hit a a top on it at you get some kind of blow-off, and that is a concern of mine as a trader that you get a blow-off or exhaustion buy associated with it.
So, if we look through the likely scenarios of the South Korean stock market, we'll leave this up. Strike, they strike. All right. Well, profitability comes out. So, they drop. All right. They don't strike and they meet all their demands. Okay. They meet all their demands. Okay. This may still drop. Why? Because Samsung's not going to be as profitable as we once thought. Therefore, the South Korean stock market could come in, or its uncertainty is over. And this is where the caveat comes in. Uncertainty is over. We don't care that you're paying more because you're making a boatload of money. This has been something that's been holding us back. And we go higher. So, that's the rub there. It's over. So, you have less uncertainty. Therefore, we're going to commit more capital to South Korea because of the less uncertainty.
So, see, when you think about this scenario, and people say, "Well, just tell me what to do." I don't have a clue how this plays out, and all I can do is assign probabilities, and then by assigning those probabilities, then come out with a way of saying, "This is what I'm going to do if this happens," and then I'll see if I'm right or if I'm wrong. Right? So, when we look at this and just think about it, we're discussing a company that's in South Korea that makes a very specific chip, and we're assigning probabilities to it. So, if you were to look at the world and say, what percentage of traders, if this being 1% and this being 100%, even know that this issue exists and what's going to happen in these scenarios? You have to think that you're maybe 10%. Let alone the world of investors, but just on a professional basis. I was talking to guys Friday about this that are, it's their profession. They manage an inordinate amount of money. A lot of guys were like, "I don't know what's going on over there." But it's leading to one of the biggest issues out there, and as the week goes on, going into this week, this issue is going to be getting a ton of attention.
So, understanding that it lets us know that on a, what I look at it as reflexivity, the difference on the outcomes here is going to be staggering, and that means that there's a lot of money to be made, and that's why I care about this. But understanding how I'm going to play it. Well, you'd have to look at this and say, well, does the uncertainty of this outweigh what's going to happen with the money that they're going to lose in profitability? And so, when I look at JP Morgan says, if they meet demands, the stock's going to drop. The stock's going to drop. 28% of this drops, and that's the stock market. That very well could be the case. And if this does, I think that that's where I'm going to add to it. If it spikes up because I have certainty and this ends, I'm going to be a net seller into that spike. So, that's how I'm going to play it, right? You should do what you're comfortable with. But if they met all demands and they spike up on that, I'm going to be a net seller of that. I am not going to be a net buyer of that on pullbacks with Samsung meeting all demands and people saying, "Oh, this is awful, yada." I'm going to be a net buyer of that. And that's how I'm looking at something like EWY and playing that.
A lot of people will also look at playing Cororo on this, which is the 3x ETF. Look, I have no idea if that's what you want to do and that's what you want to play. Go for it. But you're taking an inordinate amount of risk where I'm up 100 or down 100, and I just don't know what the purpose of me committing that level of capital is to something like this. You know, you could look at this and say, "Yep, there's your breakout, and then on your breakout, you did fantastic, and you're up from there." That's f that's great, but I still don't know what I'm going to get here. So, I want to be super careful about what I'm dealing with and understand all the moving parts, right? That's all we can do. So, that's how I look at the South Korean trade. And also, I don't see a scenario that's bad for Hynix. So, if I look at SK Hynix, which is, you know, obviously smaller, but if I look at Hynix there, now everybody knows that they can go there and get make more money. Now, everybody knows that that's the place that, oh, you have a strike, great, we're going to produce more, and we're going to go higher, or our chips are going to be worth more, and the stock's going to go higher. Oh, your strike ended, that's great, now we're going to increase this bottleneck, or the bottleneck's going to slow down, and now we're going to get the production going, but everyone knows that we're the company to come and work for because we're going to pay you more. And you're still, just to be clear, even on the profit sharing, you're still not going to come up to what you're making here. So, I think that this company will continue to push, and that alone will help EWI. The question is, does it offset it? And I don't think it's going to offset it as much.
See, everyone this weekend is going to be reading their research like all the institutional dudes will be reading their research from Goldman, Morgan, JP Morgan, Bank of America. They're all going to have a piece on this. All of them. No one was looking at this. So, then the function is going to be, how are they going to play it? And I think that you have to make your own assessments. For us, looking at something like a Micron and seeing this move, it starts to make a lot more sense why all these dips were constantly being bought. And then when we finally get some forced mediation, which is what happened here, we're like, we're not getting anywhere, right? And this was the day, May 5th, that they come out, and I think it was the head of the company is chastising the employees. And you could see what's going on and the movement from here. It's so funny because it was, I think it was back here, or yeah, it was back in here, where the that guy put 337, came in and put 337. The head of Taiwan Semi put 8 million in the open market. I mean, he only has a double now, and everyone was like, "Oh god, that guy's crazy." And now you look at it, what happens here.
So, you have a couple different scenarios, right? So, let's look at this, the scenarios where you'd say, all right, you have a strike. So, what happens if the strike happens? So, if the strike happens, Micron's going higher. There's very little doubt in my mind. If you look at this bar, it's a white marubozu from a technical standpoint. They couldn't get in fast enough when they started to realize the issues, and understanding the issue is the is everything, because one day you're going to come in, and this thing's going to be down. In my opinion, going to be down 100 points, and whether that is, you know, May 21st, or end of June, or beginning of June, rather, you know, when the strike ends, people don't have a clue. So, you now have a clue on that. So, let's say they strike. All right.
If they strike, and Micron and SanDisk are much bigger events, they're more binary. And the reason that they're more binary is because it's strike or as you would just look at it this way, just go or no strike. Like, you're either producing or you're not producing. And all I care about is, what is the price of DRAM DDR5 or NAND? That's all I care about. So, if I think about it from that standpoint, when this strike ends, Micron's going to drop, and it could be putting in one of those kind of short-term tops in semiconductors, and because you get these blow-offs, and that's where my concern comes in. Now, is Micron 900 before then? I don't have a clue. I know the longer that this drags out, the more people are going to buy Micron. That's just a fact. And we can see that very clearly here on the way that it was just moving, and the amount of attention that this is getting. But when that strike either ends, or they're not allowed to strike, or the mediation is reached. So, you have a lot of dates that can come out next week on Micron that is going to move it violently. Mediation ends and there's no sign in sight. May 13th passes and you have nothing going on out there. Meaning that the court has to the 20th before the strike starts. They have 13. Any of those dates out of nowhere overnight, you could see an announcement, and then you're coming into down 100, up 100. And I, and do I think it's going to be that big? Yeah, I do think it's going to be that big.
So, if we went and looked at this and said, take a look at the ATR for a second on the movement, and so here's the average true range of a stock, right? This is what the average range is right now. 40 points. So, that means that the average day you're going to move 40 points on that stock. You don't think that you can have 2x the ATR on a given day on an announcement like that? 100% you can. So, that means that you could have an 80-point move either to the upside or the downside on any given day on strike versus no strike. So, looking at a chart and saying to myself, well, where does this put us? I don't think really does me a service. I I can I'm going to mark it off in fib extensions in a second here, but we have to look at it and say to ourselves, this is really what it is. And I've given you the core dates that you need to pay attention to.
Now, when we look at something like Bollinger Bands, you would say, "Oh, we're at the third standard deviation." It doesn't matter because the third standard deviation was here, it's here. You're having an event, right? So, you could even get up based upon yesterday's standard deviation into the 780s, and you're still there. So, can you break out of this? I think 100%. Like, let's say that there's a strike, they're allowed to strike, there's no mediation that worked, and they go for 18 days. Let's just say DRAM prices right now. I'll pick one. Let's say they're 35. And what do they go to if the company that makes 40% of that product goes out of business for a period of time? You already have a backlog, right? Do they go to 50? So, what does that do to Micron's earnings? Oh, it's going to be short-term. How do you know that they don't strike again? How do you know that they don't reach an agreement? How do you know that they don't have rolling strikes, which is what they did in 2024, by the way? They went on and off and just slowed down the bottleneck. And they did it for a while. That's an issue when we look at something like a Micron.
What we do here is super simple. We just take a look at these levels. Actually, what I'll do is I'll redraw it. So, I don't want to take the same day here. I want to take the previous day off the move. And I'm going to take the swing low, which is really right here. So, I'm going to take that breakout the previous day. I'm not going to take this. And it shows me that a one standard or like the fib level. We won't do standard deviations, but 1.6, the first fib extension takes you to 840 on this trade. So, you're looking at another 100 points up here before you're even extended on the weekly from that swing high to that swing low. What's I what I think so interesting about this and the way that it was done is that 50% level took me right to that 306, which is that undercut here in March, and that also it also took that, and you can see this, which I thought was super interesting. But you take that fib retracement to 363, and look where it lies. It lies right there. Look at it right there. Kind of interesting, isn't it? So, I I do think that that's possible, and I think it's very possible the more that this goes on.
Then if you take a look at something like SanDisk, this was really very easy to follow. And you know from a trading standpoint, you can see again, you have that white marubozu. You can see that undercut right here and that grab. And this makes a lot of sense to me because the thing's so damn cheap. And people are always saying the same thing. Oh, well, when this when the cyclicality of this ends, these names are going to come in. Well, those arguments to me are always the dumbest arguments. And I mean that, I guess, as respectfully as I possibly can, because you just didn't plan for the what if there's a strike, right? So, always looking at this stuff and thinking that you know that something has to end and not assigning a probability to it. Always thinking that something has to end and not assigning a probability to it. I said it twice on purpose is a fool's game. You don't know that it's going to end, and you don't know when it's going to end. If someone's waiting for Microsoft to pull back, they've been waiting 50 years, right? So, you have to think like that, like, oh, operating systems are obsolete, okay, or people aren't going to search, go tell Google, okay, right? You're still waiting. I don't know. I'm not saying that this is has that kind of moat, but us just looking at this and saying it has to end, that's not a solution. You need a solution. You need something that's viable, something that's actionable.
See, when you understand what the issue actually is, let's go to pre and post here for a moment. When you get rid of the pre and post, when you understand what the issue is, and we started picking it up, and because not everyone's reading South Korean newspapers on a Friday morning, right? We're all looking at non-farm payrolls. So, when I started getting reading these newspapers, looking at these clippings and the articles, I was like, "Oh man, this is way bigger than people think." And I was doing trades, for example, on Micron in here, and I'm a genius because I'm buying Micron, and I'm looking at the 700s, and I'm selling like the 710s for like 10 bucks against my Micron position. I'm selling the I'm buying the stock, and then I'm selling the 700s for 10 bucks because I'm like, "Wait a minute. You're going to give me $10 if I just hold it on the day." And again, I did those trades, it worked out perfectly. But had I had more information, you know, I wouldn't have had to keep adding, taking it off, adding. And so, when I finally got up to speed, I'm like, "Okay, this is what's going to happen." It changed the game, right? You start understanding that.
So, here's where I'm going with this. Once you understood this and you understood the timeline, you knew it was going to push into the close. Like, you knew that there was no way that this was just going to stop into the close because they're not even, and I'm not saying that they can't do something, but they're not even supposed to talk this weekend. So, once you understood that, you're like, "Oh, people are just going to position themselves for Monday morning long. They have to, right?" And this allowed us to put on an option trade. I'll walk through it in a bit, but where I want to go with this is here. I want to do the same exact thing, and I think it's laughable, but I think we have to do the same exact thing that we just did with Micron and kind of walk you through it.
So, when we look at something like a SanDisk, and we set the level here at 50, and here's your 618, and all I did was take the previous week, and then I took from where this actually SanDisk actually became SanDisk, right? And I took that level of 50, which was the breakout of that level, and I just dropped the fib from there just to see, and I think it's super interesting that 629 level sitting down here. Boy, everybody would want to pay that, right? I remember buying this thing at 300 and thinking I was paying too much. It's going to take you roughly that 1,900. Do I think that you can get another push out of this? Yeah. You see, you have to remember things about momentum names. When they're in motion, they stay in motion. So, you're up 28% on the week. So, if you went up another 28% on the week, where does that put you? Right. Well, you couldn't possibly do that, right? Well, did you know it was going to go up 28% this week? No. Okay. So, don't you have to get rid of things like limiting beliefs when you look at this stuff and start understanding that if the strike continues, you have no idea what could happen, right? Let's say that they strike. Let's say that they go back to work and they don't have an agreement. Let's say that this, you have rolling strikes for the next 3 to 6 months because they just are going to try to outlast them. Let's just play that devil's advocate, which is probably less than 10%. But what where do these names go? We don't have a clue.
So, I also think the way they look at this, and we've been trading this as well, but candidly, you know, when you're dealing with one issue and you think that your issue is Iran, and then the next thing you find out, no, your issue is South Korean strike and DRAM prices about to go through the roof, you have to switch hats. You can't say, "But Iran." You have to look at the next issue. So, these are the big ones that I think make the most sense. But we have to look at this from a whole standpoint and understand something like SanDisk and DRAM, for example, when this strike ends, and like everything else, it ends. You have a boom and a bust cycle with it. This is going to get ugly because price is going to drop a lot on these. When they settle that strike, DRAM prices will drop. Everyone is going to extrapolate, and they just started doing it. So, just understand that. But when that strike hits, these names are going to get smoked. It's just a question of when. And I'm speaking as somebody that is usually long these names and is usually long the socks. But you have to think about this and understand that the socks is going to get smoked that day. SOXL gets smoked that day. And you have to be ready for it and understand why it's going to do. And then what are you going to do about it? To me, I would think that it puts a short-term top in the socks because of everyone betting that the strike's going to go on and positioning themselves. Then when that short-term tops in, they're going to sell. Once they're done puking, that's probably where I'd step in again and start looking at buying larger positions in SanDisk.
Right now, what I think makes the most sense is speculating and then thinking about how much risk you want to take overnight on the long side. I I think on the short side, you could have something out there, but when we go through it, do we really think that South Korea is going to say they can't strike? They've already said that they can. Do we think the mediation's going to work? These are the things that you have to think about. And then you have to look at the scenarios and where you're at and take advantage of it. And I'll explain what I mean by this.
So, once you understand the players, you start understanding your time frame. So, like here's a great example. I'm watching these levels, and you're sitting right at this little peak. And I put out this little clip, and I can see that this is getting ready right here, and I'm like, "No, boy. We're going to push. We're going to push through this." And I'll show you this. I'll do it this way. So, I go out there and I buy stock, and I buy calls, and I put out there, I'm buying the 1550s. I'm paying $3 for them. Look at the time. And I'm I can't put a stop on them because it I can, but it's kind of silly because what am I going to say? Oh, well, if South Korea makes a statement, your stop's 150. No, your stop's zero because they're wallpaper. I mean, you have to the risk is the risk, right? And so, what I'm doing in here as it's going up is I'm pulling money out and just to protect myself. And then Discord went down, but you can see where it
was and they closed at like 12 bucks or something. But I closed them all and I'm not getting assigned. And I don't want over over weekend risk of the prime minister calling in the head of Samsung and the head of the union and saying, "Guys, figure it out or we're going to figure it out for you." Like, I don't know how it works over there, but I just don't want the risk of anything like that. I'd rather just come in fresh. I can trade it Sunday night and and stay as I want to be as nimble as possible with this because there's too many moving parts to it. And you have to, that's why when we go through it like the way we just did, we go through it that way and then say to ourselves, "All right, now what do we do about it?" Right?
So anyway, we're buying these at three and they're closing at like 12, but we're scaling out of them the whole way. But the reason that I did this trade, this is a really good one. I should actually do an entire video just on this trade so you guys can understand why I'm doing it. But I put this out after I did the I put the alert out for the community. If you're trying to get in, just stay on the wait list. I will get another batch out this week. This week was crazy. So, I didn't send out as many invitations as I thought, but just get on the wait list if you're interested. Count target breakout intraday is 1560. I bought end calls. And so, yesterday time stamps 251 so that you can say it.
Now, how did I do that besides shaking my magic eightball, right? And then we closed by two. Sorry, I was off by $2. Go to Let's use our super secret magnet. Go to that swing high. Take that swing low and you drop it there. But it's not marking it off right. Hold on. You're giving me that close. I don't want the close. What I want is I want the top of that bar and I want the low of that bar. Come on, magnet. Come on. Oh, I don't have the magnet on. Whatever. Hold on. We're not going to do all that right now. Drop it right to the top of there. All right. So, it's the top of there and it's the low of that bar. So, I'm taking the top of the swing high, the previous swing high and the low. And I'm watching it. I'm like, "All right, last hour they're going to push it." And so, you're watching it in here. And my thought was, well, that's where the extension would take me. I have an hour left. We're paying three bucks. And then out of that three bucks. What could I make? Well, if I got to here, then I could make what? 12. All right. Well, 3 * 4. Okay. So, I'm making four, right? 4x what I paid, and I would lose one. Well, I'll do that all day long. I'll just And I know the last hour and I know how they're going to position themselves barring any news because you could always get news. You just don't know. So, that's how we did that trade.
But I want to just go on this pre preface one more time. And there's a couple other names and some things here that I think we should just cover. But I just want to go on this preface so that we understand it. I don't know when this ends. I do think that you get some kind of eventual blowoff with this and from there we're going to have to pick up the pieces and I don't know what that's going to look like. You're starting to see movement where people are like, "Oh, this is insane. Oh, these movements are insane." If you go listen to Paul Tudtor Jones and what he's saying, this is a bubble. It's a bubble. It's like 1999. What did he do this week? He started laughing on CNBC if you watch the clip. He's like, "Oh yeah, I'm buying." He's like, "This could go on for another year." See, these kinds of moves when we were trading back in the day when we were trading, this is what you got daily. Like people think like, "Oh my gosh, we're going parabolic." No, we were up like 10% on names every day for like a year and a half. You'd come in and be like, "Oh, I'll just hold it. It'll just double again." It was insanity what we dealt with. And we didn't have that in 2020 either. So, you know, back in the 90s when we were using abacuses. So, keep that in mind.
But there is there are some other ideas here and some other trades that are out there. I'm just concerned that people aren't going to get this when the strike ends and the socks probably drops on that, but there's a couple other things out there that were super interesting this week that we should cover so that you're prepped. So, we all know semiconductors continue to push and we all know what the event is there. If we take a look at what the market's actually doing and we look at something like IGV for a second and we pay attention to this, we can see that you're clearly coming back down retesting core levels and then those levels are pushing. And so we're watching this test pulls back retest and over. That's very clear with a bottom like this. And if we did the simplest things of just overlaying RSI and go take a look at this on the weekly, we can see this. If you're in the community, you know this. We've been talking about this forever, but it's here. Get used to it. It's not going anywhere. And we're seeing also the buys and what names they're going after. It really is very focused on what? Cyber security. This was one that we bought on Friday, did quite well with. I don't see any reason for that to end or these names to end. PW absolutely exploded. I don't see any reason for this to be going away. If anything, I think the cyber security space actually gets stronger and that's definitely an area of focus to me.
The other thing that I would say in regards to the UFO space and the space area here in general, if you're looking for a leader, I mean, this is one that we were trading forever, this as maybe it gets it together. Maybe they're done, you know, the insiders are done dumping, but if you start looking at some of these other names like PL and they're tighter, you have your 800 lb gorilla and I I would suggest that you read this quarter and you take a look at this name, but this is not going to go away. I mean, it's very clear that Rocket Labs is going to become the deacto standard in the space and the name that we trade after this. Take a look at the volume on this name on that kind of break. This is pretty darn insane. Like, it is the most volume that you had. I was really surprised. You heard me ramble on about this already, you know, if you're in the room, but like I couldn't get over that it wasn't up way more on that call. Like, it just made no sense to me whatsoever. And then clearly they were just waiting and you know maybe there's a shot if this thing pulls back but that is enormous volume over 75 million shares and you've exploded to the upside and it's almost a perfect white marbuzu where the open and the close are the low and the high. It doesn't really get any cleaner than that on a chart like it's that's picture perfect. So, you are seeing that and I think as people start seeing SpaceX come out, they're going to get this a little bit. And this is also something that I'd be paying attention to.
You're going to have, and I don't know how else to say it, you're just having a ton of headline risk. You know, with things like Dell, I'm very happy that I'm in this name. I'm very happy that he tweeted about it, but you're going to continue have tweet risk for the next three years. It's not going away. You can complain about it all you want, but it's there. And when those names hit the radar, they're probably not going away. And not only you seeing that with Dell, but then these companies want to do business with the ones that are being tweeted about. And there's a lot of reasons for that. And again, you know, you can hate the game, you you can't hate the player. So th this is really what you're dealing with right now. And so when we look at something like this, Apple wanting to partner with Intel, I think it has a lot to do on the supply side issue. When they look at something like a Taiwan semi, which candidly I, you know, was a gift, you know, on the drop, I tried to day trade on it, just didn't work. I was too early. But I do think that the idea that Taiwan Semi is going to go away or they're not going to be this huge vendor, I think is just silly. And I think that was an opportunity. But I think when you look at something like Intel, yeah, it makes sense that you're going to want stuff to be more domestic right now. And so if they get this contract, if they work on this, which it seems like they're going to, well, that's going to be huge for Intel and it's huge for ASML. Like, it's enormous to get another company out there that's going to need to buy your product, especially when your product is $400 billion. It's not like everybody's going into, you know, a Best Buy and saying, "I need a lithography machine." So, it's kind of a big deal and I don't think people fully understand that the bookings will probably go up on that, etc. I do think the Intel news is much bigger than people even are thinking it is, and that's definitely an area of interest as well.
This is really where I see us going. My concern really is earnings were great. I just want to get the strike information out and get that certainty one way or another so we can figure out you know the best course of action forward. That is it.