Transcription
Hey everybody, welcome back. As we know on Wednesdays, we like to do the strength report and just let people know what's going on underneath the hood for me, looking at something like this. The S&P, that 695 level has just been, just really our nemesis. It's a 4-hour chart. Not much more to say.
I just want to show this 'cause I think it's important. You have a high here, you have a lower high, and you have a lower high here. Do I think that's enough? No. Do I think I'm remiss if I don't point it out? Yes, I do think I'm remiss if I don't point it out. So, that's definitely something that I would be paying attention to. It is most certainly something I think you should be paying attention to, but as always, you should do what you're comfortable with.
When we're getting up here, we are constantly rejecting. And I do think it's important to note this, and I'm just going to use the ETFs. The other thing is you're still in this range, and I don't see us getting out of the range, but from a strength standpoint, we have to look at the rotation. You are rotating all over yourself in this market. So, I just want to show this.
Now, if you are attending the public pre-markets, you've already seen these levels. But I like pain points. So, this high is a pain point because someone bought that. They were listening to somebody on Twitter and their mom's basement eating a hot pocket and said, "You got to get in now while the getting's good." And then, of course, they puked here. But what we want to do is we want to mark off where their pain is. I know it sounds sad, but it is what it is. So, then what we do is take the volume profile from there and we, I don't know to say, we use their sadness to make decisions on what we're going to do. So, the average person in here, that's our range. This is your value high, point of control, value low. And people say, "What is this?" For those that are new or that don't use it, it's anchored, uh, volume profile. And this is my little tool thing right here for those guys that are always asking where is it? And it's just that little star right there. Yay.
All right. So, what happened today when we were live trading in the community, we were just watching it fall apart. And I have a saying where it's just like, "Just let it all burn and we'll pick up the pieces." And you literally came right to that level. Exactly. And it's always important for me to point out these levels because you can always have a level and then backfill as to why it's there. I've left this here the entire time. So, it's really important to get why you want to use pain points over other data points that people are suggesting that you use. As always, you should use what you're comfortable with. I'm going to use what works.
So, if we look at this, that was a really clear indication for us to start getting long some names and cover some shorts. And that's exactly what we did. Did that change the landscape today? Did anything really change because of that? I would say no. And from a strength standpoint, which is what tonight's video is going to be about, I think the strength became clearer. I do think that it's important to understand that the three variables that we were looking for are not there.
Number one, we were looking for silver to continue to rally. It, it kind of is, but not really. And this all goes back to Saturday's video. And I would watch Saturday's video, um, or at a minimum watch yesterday's video if you have it.
Number two, we needed Bitcoin to stabilize. Is it doing that? Yes. Remember, there were three things we needed. I would, I would say that that's stabilizing. We're going to cover this in a little greater detail in a second, but what I did here was I just marked off the piercing bar. This is your down bar. This is the undercut that pierces more than 50% of that bar. Right? So, as long as you pierce 50% of that bar, it's a piercing pattern. So, there's your 50% line. You've pierced, and that's what you're looking for, and that is a pattern. It's a pretty strong pattern, too. So, what you want to see, it usually can mark a bottom or a bounce. Did we mark a bottom or a bounce? All I can tell you right now is we have not broken that 65 and to the, I mean, literally to the penny, you're near that. It's, it's crazy how accurate this was. This is 65756 and our 50% line is 6587567. And that is the measurement of that bar. And you can go and measure it for yourself. But that 50% line takes you right there. It just tells you, do I have net buyers or net sellers, which is always nice to know, right? I like to know things like that. So that was number two.
Number three was we needed stabilization in IGV. I, I mean, I need stabilization. I don't really call falling from a tree stabilization. So, we had the rally and then from that rally, then we started to roll back over. I don't really call this stabilizing. We really should have had a much larger push. And if you really look at the big names, I'm a little concerned because we got to 425 and we were back down to 400 today. If we take a look at Oracle, we did something very similar. Now, could this stabilize? Yes. But that is the thing that's got me a little concerned more than anything is the size of the IGV.
And in this video, I'm just going to tell you, I am concerned that we're watching Micron just reverse and lift, and we're watching Sandis. Now, there is some great news out there tonight that we're going to get into. A lot of that news, candidly, is really going to revolve around companies that people don't think should really move these kinds of names, but the buildout coming out of Equinix tonight, just candidly, we're going to touch base on this, is up 100. Equinix is up $100. Um, and this is coming after VRT just said the backlog's absolutely insane and exploded to the upside. We're going to cover these in some detail, but I think it's important to understand why we're still moving.
So, the question is, are these going to roll the same way as IGV? I know that the underlying chart looks different, but we have to really ask ourselves, is there anything here that we could really add on? In other words, is there anything here that's a little different? Um, and I see it. I mean, I see the difference between the SOX chart and the IGV chart, but I'm a little concerned about like, oh, no, yesterday we didn't, we won it out. Now, today we won in. Nothing's changed. And to me, candidly, this feels like a good old-fashioned short squeeze. We look at like SanDisk and we're going to take out the, you know, the put wall and then we're just going to reverse right on you and now we have you trapped for a day or two. And that, that becomes a concern. Now, hopefully that's not the case and these stabilize, but they're not really the ones leading.
Let's take a look at these sectors in front of you are 40 sectors. I put this on a chart and then I run this screen, and it's a very, very simple screen. What I'm looking for is from the February 5th over, which was our inflection point. And we can just see right from here that that's Thursday coming in. So, Wednesday to Wednesday. And I like to do this during when we do these strength reports. And what we can see is gold, silver, uranium. So, and then we have semis and oil and crypto. So, if we really look at what's going on here, commodities once again, off that bounce, are leading. I've been stating that I think gold makes a lot more sense. I do think there's some more interesting things that you could do with semis to find strength. Silver to me is more of a, a follow-through with gold, but I do think gold makes more sense. But I do think it makes sense to look at some of these semis to see what's really going on out there and what names are actually moving in the semiconductor space. I also think it makes sense from a strength standpoint to look at them and do a comparative analysis, which is why we like to do this on a Wednesday, just to give us an understanding of what we have going forward. But if we're to look at this, just back-of-the-envelope, just real quick screenshot, this is pretty clear from a week ago.
Now, if we break this down and we just look from the ninth, and I'll show you why the ninth. That's when we absolutely exploded again on silver, and I just want to show you this because I think it's super important. If we take a look from the ninth, when we exploded and you saw this rebalancing, you'll note that all of a sudden you have the XLB in here, the SOX, XLE, XLU, XLR. And this is where it gets really interesting because usually you don't have these up here. You would have like biotech up here, software, cloud, financials. So, when we start to look at this rotation, and I'm just showing you the rotation because I think it's worth paying attention to. XLB, XLU, XLE, the SOX, XOP, XLRE, and then here's the Dow right there. So, what we're seeing is we're seeing financials and software really take it on the chin. The NASDAQ really take it on the chin. And what we'll do is we'll come all the way back to the 10th. Now, we're just using the majors. And if we just use the majors, you're buying what? Basic materials, critical minerals, utilities, energy, and then semis, which really, if you want to be blunt about it, was just today. It was the rally from today off the open. Other than that, semis would have been way, way down in this area, and I think that might have been more of a short squeeze, but we'll talk about that later. But you're seeing XLR start creeping up. So, from a main thematic standpoint, I do think that you're seeing interest in the XLRV names, even considering what happened today with non-farm payrolls coming in considerably better than expected. Extrapolate this out and then say, all right, out of the majors over a period of time, which ones are actually just straight out ripping, right?
So, when we start looking at the majors from year to date and you start looking from January over, you're up 14% on XLI, which is the industrials. And then you would go, "All right, well, how about semiconductors?" And of course, if we just go here and just look at semis, we'll just pick January 2nd and you come up here, 17%. But the thing about semis more than anything is, has this been an easy ride? No, far from it. If we came here and we said from January over to here to the top, it's 18% and then from here you'd have a 5%. So, at one point here, within 3 days, you lost 75% of the value in semis. And we know that they're, they're pretty wild. We know that. But what I think is really telling is that you really don't have that in XLI. You just have constant buying. And there's a couple reasons for that as we start talking about some of these industrial names. But if you start taking a look at XLR as well, I think this is where it gets really interesting because we've all heard about these data centers. We're all hearing about storage and we're all hearing about these issues that are out there. And I think that people aren't understanding that, yeah, you have to build a foundation. This stuff takes time, right? But what we may really need to pay attention to more than anything is the understanding is that everything that we're doing, everything that we're doing is going to take longer and not be as great as we think it is. It's just the way it is. It's been like that since .com.
And so when we understand that you have these huge run-ups on names like EQIX that just happens to be up tonight, which is one of the reasons I want to cover it for everyone. But if we really look at these runs and we look at something like EQIX over time, and of course we have, you know, the big, the big run-up and then we can see here in November and then everyone's like, "Oh, these data centers are going to take forever and no one's going to need a data center." And so then, of course, you go from a thousand down to this 700, 695 level. We can all see support down there. And then they come out tonight and they talk about the incredible growth that they're going through and what's happening in the space. And then this is what it looks like after hours. And then this is exactly what I talk about all the time when I start talking about reflexivity. That everyone has a plan, right? And it's just like what Tyson used to say, "Everyone has a plan until they get punched in the face." And the bottom line with this is the same people that were throwing the baby out with the bathwater saying this is over aren't understanding how the industrials are tied into this. And they're not understanding energy either. So that puts us looking at some of these names like EQIX or DLR, or you guys can go and do your own homework and find out an ETF that might own both of those names. But most important about this for me and looking at it is, are we seeing a thematic strength in that area? And the answer is yes.
The other thing is, if I start looking at XLI, what a lot of people are understanding is that a weak dollar is going to drive up the XLI. It just is, just a fact. And that's because our goods all of a sudden are cheaper to other people. So, if you go and take a look at the XLI and you're going sideways, sideways, sideways, and then we break down right here and right here in November, and then what happens from there? All of a sudden, guess what? We just start ripping because they benefit greatly from that. But there's also more to it. So, if we go back and take a look at the XLI and then say, "Okay, well, what else would be in there?" Are cooling companies, electrical companies, companies like Caterpillar are going to be in there, which is benefiting greatly from what's happening with AI. And people don't understand this at all, but very clean chart. I mean, up, breaks out, and you're up, what, 150 points. You haven't lost a night of sleep, really. You had one bad day, which was earnings, right? And that was really it that you had to worry. Other than that, you're seeing other names as well. Look at John Deere today, which it just absolutely explodes to the upside. And you're seeing this across the board. But when you start getting into, you know, cooling a data center or heating a data center, well, all of a sudden today, look at the volume. And I listened to this conference call and I would suggest that you listen to this conference call. What was 11:00 today? VRT. Very clear what's going on here. But their backlog, I think their growth was something like 252% and their backlog is pretty much double and it's billions with a B. So, it's definitely worth paying attention to. Of course, you're going to have the naysayers. They're saying it's all going to go away. It's all smoke and mirrors. We have to trade what's happening. And this is where the strength is right now.
There were a bunch of other names and candidly, I haven't done enough work on them to where there's like this GNRC. Couple guys reached out to me today and said, "This one's going to move." Yeah, it did. Huge volume and then you can see where you are right here, obviously, as well. Uh, even though the earnings are what the earnings are. So, where does, where does this put us today in looking at these kinds of names? And I think it ties in pretty, pretty interestingly where you look at something like GEV where someone wrote them a check yesterday for something that's not going to be built for four years. So, while we're all looking at these stocks on five-minute charts, and the purpose of tonight's video is for you to understand what strength is and what strength looks like. We can look at this and we can go and say, "All right, well, gold is the strongest right now." And I, I do have a position in gold and I don't think central banks are going to buy it because retail got overleveraged. Like, they're not going to stop buying gold because retail was overleveraged in a silver trade, right? We all kind of agree to that, right? Do we go back and start looking at the miners again? That very well could be the case. But if I'm going to go out there and look at the miners, I have to go out there and look at the industrials at the same time and say, "Are the industrials stronger? Are the REITs actually stronger?" And then make a decision from there. We could argue that the REITs right now are not. Now, what happens next week with these remains to be seen.
You start think looking at things like PLLD, which looks like it's breaking out of this multi-year base in here and all of a sudden, you know, maybe, maybe we start breaking out. Maybe the REITs start seeing a little more action than we're expecting. A lot of people when they think of REITs are thinking like Simon Property and looking at, you know, what retail sales are doing. I'm more interested in the other side of that, more on the data center side and then the industrial side, which is PLLD. Those kinds of names are way more interesting. But most important, we have to go back to the industrials and say, well, this was a pretty simple straight line that you never really had to worry about. And then when you compare this to something like the SOX, and believe me, I, I'm trading these names, but this is pretty volatile versus what you're dealing with. So, if you're looking for less volatility, there it is.
The flip side of this that I think we should really be talking about is not just so much the understanding of where we are, but where we were and what we thought was going to happen and what we're paying attention to. So, from a strength standpoint, it's super important for us to get that IGV's only had two days of winning and it's already done with its winning and it's already exhausted and we're already seeing it roll over. Now, again, this is a strength report. We're focused on strength, but if I can tell you where the strength is not, I'm going to use that as a segue and I'm going to do it because when I look at this, this should have pushed. You should have had at least one or two more days. Instead, I'm going to show you what this looks like. I'm going to get rid of that. I'm going to show you on a pre without pre and post. So, what happened was here's the IGB. And for those that are familiar with this, this is an eight, a five, and a three on a 15-minute chart. So, daily moving averages that I just plotted on a 15-minute chart. Why do you care? Because it shows you what's happening. And I'm not the brightest bulb, so I color code them. Red on top means stop, right? Green go, right? Simple enough, isn't it? So, when I see the red on top saying, stop. You could see how all of a sudden it's like, uh, not today. And then all of a sudden, you just like, okay, we probably should stay away from this. Tries to get over, flips in here, and this is where we're at.
Now, I'm trying this also on a weekly basis, on a long-term basis on this level. And I'll just show it to you. Let's go to a bare chart and I'll show you exactly what I'm trying to do. I'm trying to see if we're going to hold in here. Um, and I'm not feeling really warm and fuzzy about it anymore after today. And I think that this is telling us something and I'm going to get to why I'm showing industrials because there's more to strength.
So, if we're looking at Microsoft and people say, well, yeah, it just, it bounced. It was a bounce for ants because what it did here was bottom and then run right to 25 and then you're already back down retesting 400 today. That's not how bottoms are formed at all. That's how oversold bounces are formed. And I think what you had here was a good old-fashioned short squeeze on something that had a 15 RSI. If we go here and take a look at IGV and you look at the RSI, I mean, you were at like a 15, 13 and you worked it all the way off and you're past, you know, you're not anywhere near as oversold. Super interesting. So, you would have the IGV and you remember what we said about Saturday. Remember, all these videos are tied together. And then we look at Bitcoin. Well, we're trying to get up there and maybe we're going to hold this. Now, what I did here so that you could follow along is we just measured this level off. And why do you care about this level right in here? Because that's the 50% line and we held. So, Bitcoin candidly is holding up better than the IGV is.
Now, is every software company going to go the the way of the buggy whip because all of a sudden Anthropic and OpenAI are going to take over the world? You know, I'm still waiting for these guys to know what day it is, let alone that they're going to take over everything. So, let's, let's slow a roll there. Once again, this stuff takes longer than we expect, but this ties into what I think we're seeing. And I do think that there's pockets of strength here. For example, if I was to look at the SOX and someone said, "Gun to your head. What semis do you buy?" I would be telling you, look overseas. I would be saying, "You need to look at Samsung. You need to look at SK Hynix. I have this." And if I put EWY versus the SOX and I did something like this, you're going to see that EWY is breaking out over semiconductors, right? And if you were to look at this over a long period of time, you would see that that is normally not the case. But it is the case now. And there's a reason for that, right? So, all you did was take EWY and divide it by semis. And they're what's leading. Why I'm bringing this up is because we're looking at names like Micron that broke down yesterday and all of a sudden we're getting these huge gap ups and everyone is coming out and going, "I missed it. I missed it." I love trading these names as much as everybody else. If you think that all of a sudden everything changed because they held a conference where they said the same exact thing that everyone's been saying because they had a conference today, that's delusion. What happened today was you trapped shorts and you did a fantastic job of trapping shorts. Now you need to see, can you get back through these highs? Can you start building and get constructive again from what you're seeing on the damage side? I'm not so sure that that's going to happen.
So, if we look at something like a SanDisk, all I did was run into the 8-day moving average. If I run into something like a Micron, you're flipping and you're structurally getting better, but you still have work to do. There's still a lot of work in here for this to do. So, I'm not so, you know, high and mighty on these right now as I would be if I was looking at the industrials or names that are in that space. And don't get me wrong, I love trading these names, but I would be looking at things that were, you know, like Taiwan Semi, which all of a sudden you're out there and what are you doing? You're breaking out and you're hitting all-time highs today, just like EWI is hitting all-time highs today because Samsung's 28% and Hynix, which is also over there, I think is 14%. So, you know, the Korean stock market, I think 50% of it or 40% of it is two names, very similar to what's going on with Taiwan Semi. And of course, you also have what's going on in Japan and all the changes that they're going on there. So, you have a hotbed of growth around because Japan's changing the way that they're doing things. You can look at that, all of a sudden Japan's a hotbed of growth. That whole area is going to be on fire and grow. So, that makes sense for me. I just think you need to be super careful right now looking at the SOX and thinking, "Oh, everything's great." Nothing would be better than it just breaking out and seeing huge volume coming in and we're ready to rock and roll. My concern is, and I get that they're two different charts. I'm not, you know, that daft. I see the difference between IGV and the SOX. But what I'm afraid of is the pattern that we just saw that happened on Friday where everybody rushed into those names. Everybody had to buy these on Friday and Monday. And now they're over them. And the question is, with all the technical breaks that happened on things like Micron where we broke the 22 and that that's it. Now it's, now everything's better and we're back to normal and now we're going to run? Maybe and maybe there's some short-term trading there. But we really have to look at what the market's giving us.
So, for me and understanding this, it puts me right back in the driver's seat looking at the Qs and looking at the SPY and saying, "Well, which market do you really care about?" Right? Because when you look at the SPY, let's just do this. You're going to have to deal with the unedited version of this. That 6.95, you can't get through. But this still looks a heck of a lot better than the Qs. So, then that leads us again to looking at the XLI names. And then we're seeing a lot of those names really start breaking out, right? The VRT that's obviously breaking out. And now we have this EQIX tonight and that's going to wind up driving that thing's going to be up 100 points tomorrow. A REIT talking about growth in data centers. So, clearly they're not going away. It's very clear that that's the