Transcription
Hey everybody, welcome back. We have a lot to get into. We definitely have to cover what happened with car today, how to play that tomorrow, and how to play it next week. There's some massive moves that obviously have happened here, and there's still a lot of money out there in that name. So, I want to get to that.
We definitely have to get into why Intel is actually pushing 80 after hours. Uh, a lot of people are not going to get the nuance of this. I'm going to walk you through it line by line. Super important to get that. But I really want to talk about what happened today with the market and why we need to be a little bit cautious of what was what transpired. Make sure you click all notifications and make sure that you subscribe. These videos are all linked together. They follow through during the week. I purposely don't run ads in the middle of these cuz I find it super annoying when I'm watching a video, but the algo doesn't like that. So, you subscribing and clicking all notifications helps with that. Let's go.
So, we're going to start with the basics and then we're going to really drill into this. Keep it short, sweet, and to the point. We obviously have this dogee here, we can totally see the undercut, right? So, if we went to here and we drop it. Let's put that magnet on. Perfect. So, we come down to that drop and then we touch this level just enough to get people into it, right? Just enough. Just enough to get them. And you can see it right there. So, you do the undercut and then after the undercut, they snap it right back. And then there you sit.
You had a battle of the tweets today, for lack of a better term, and I'm not really sure what term we should use, but here's what's happening. You had the resignation of someone in Iran's parliament, and then we were told that was fake. Then Iran said that they are drones in their airspace and that they're laying mines, now we're told that that's fake. So, you have this amount of volatility that you normally wouldn't have. And it started coming from credible sources apparently. So when this starts to happen, you're getting this level of volatility. Now you have to realize you're going into Thursday and no one was safe. The NASDAQ wasn't safe. It didn't matter what it was there. Huge volatility because when you see this kind of thing, you don't know who to believe.
And I think this is going to tie you into what do you do during the weekend. I think most institutions or larger traders are going to be flat after the runup. The concern that I had was really in crude oil and I've been using crude as a hedge more than anything. It's a lot easier frankly to just use the USO if you're retail and that's what we've been doing in the community just using that. Well, that's what I've been doing. And I find it very helpful because you get these tweets and then you're like, "Okay, World War II." And then you're trimming into it and then you're like, "No, just kidding." And you're seeing that over and over again. You're getting these spikes and then these pullbacks and these spikes and these pullbacks and you just don't want to be there when the music stops. So that kind of structure of trading that way is extremely helpful to have a core position and then have trading positions that you're literally just ripping when it looks like it's supposed to be the end of the world.
The one thing I will say is the VIX. And I think that again, super important. If we look at the VIX and what's been happening, work with me, not against me. Here we have these spikes, right? Right in the end of the day. Here we are again spike. Not in the end of the day, but the whole he said, she said, there are mines. There are no mines here. All of that, right? What we're getting here is on these spikes is you're not able to close over 20. So if they were really concerned, we would start seeing those closes over 20. And we're not seeing that. And I think that that's really important for us to get. So, we're not getting those kinds of closes, but we are getting these kinds of spikes. And we'll get more into this as the day goes on, but I really want to get into this on Saturday because it's super important.
Even when we look at something like move and we're watching the bond market, what we'll do is turn that into a line so that you can see it. You're not seeing the need for bond protection either. So, they're not out there really running to protect themselves. And I think that is an important distinction. Before we go further and cover some of this stuff that happened today, which is really important, that's not the one I want. Stay with me. Come on, Boomer. You got it. You can do it. I believe in you. Here we go. Good.
So, if we take a look here at just the breath of the market. So, 250 25. Yay. What we're going to see here is the 200 flat line and staying above that 50% line. And then we can be here, the 50 staying above that. And you can see where we are here. I will say that you're starting to roll here a little bit on the 20 and the five made a lower low. So, this does show the underpinnings of the markets getting a little weak.
With tonight's news on Intel, I'm kind of surprised by two things. One, Intel, people are going to say they had this right. It's an absolute blowout when we get to it, you see the numbers. The second thing is even though something like Avis has nothing to do with the market, when you see names like this blow up, and this is an unequivocal blow up, right? We can all agree it never should have been where it was. But you just went from 870 to 212. Usually you'll have margin calls and people will have issues with this. That's not what's happening. Not at all. A matter of fact, this is having zero effect on the market. Nor should it really, but it usually has some kind of effect where people want to get out. What was shocking to me with the market today when you look at the cues was that the tweets started having more and more of an effect and I think that's one because of where you're at, but also two because of where those tweets were coming from.
Let's start with car and we'll start with the AVA and we'll start with this AVA trade and where it's going where what I think happened and then I really want to get into Intel and semiconductors and set up the plan for tomorrow. As always, they take the stairs up and the window down. I want to spend a minute and talk about this. We've been going through this chart on Avis for a pretty long period of time now. If you've been following along for about couple weeks and if you're in the community, you already know this. This is where we got involved right when it closed above this level and we went long and we traded some options calls and then we reversed that position and we actually got out of the long this day and there were a couple reasons for that. So, let me just walk through why this was pretty much that area where so that you can see it for yourself if you're ever in a situation like this again. And it was early in the day that we did it.
Now, if you look at CAR and what happened here, you had this huge, absolutely huge runup and it goes back clearly to where you broke out, retested, and then you had some massive ups and downs in between there. You definitely did, but when you got into this area, you have a huge variance that starts happening. And so, this variance is very different than the behavior there. Now, there were a couple signs that were telling you that you were getting to this level and we'll get through that in a moment. But this is just a really important concept to get below is the ATR and that is the average true range. And we can see this curl and how it keeps rising and rising even though it's dropping. And this is just telling you about the range, how you're rangebound and what to expect with that range. It's not telling you up or down. It's just telling you what the range should be. Nothing more, nothing less. It's not picking a direction.
Then when we drop it to an hourly, you're going to see right here and then just starts lifting and exploding. So it looks pretty similar, right? Just remember this area and remember this area here. And now we're just going to drop this to a 15 for a minute. And then from here we're going to drop it to a five. And now we're going to drop it to a one. And you're going to notice a massive change here. So even though you're getting these little spikes, the day where it started getting really nuts, all of a sudden the ATR just jumps. So you're going from an ATR peak of like 9 or 10. And even though you're roughly around the same price that you've been, even the day before, you're roughly around the same price. And you can see this and you do pop up, but that pop is not commensurate with anything that you've had before. This tells you that for every one minute bar, the average move is going to be $20. That's what this ATR is telling you. Once you see that, you know that your volatility is going to increase. So, you're getting increased volatility at the high of a chart. And I'm going to explain why this is so important. At the high of a chart, when you see this, it's not telling you that, hey, this is definitely the high, but it's telling you, hey, this is where things are going to get goofy. And it's telling you that you're probably near the tail end of the move.
So in here, and actually I think it was like 6:30. We wound up just kicking out the stock. We had a day trade on as well at like 375. I went through this about a week ago. And so what you're doing in this scenario is you're not waiting. You're not saying I need to get this. But you're saying, "All right, I've been in this for a while. Just get me out." Because if I just think about this for a second and the average moves 20 or 19, let's say 20 to make the math simple. Well, that's telling you that in 3 minutes you could be down 60 bucks and that would be completely normal. So when we start seeing swings from like 750 all the way down, it starts to become an issue.
What we started doing in here on the 21st was actually start getting involved in puts. So, we're getting out of the stock and then into this. We're buying puts on the spikes up. And what this is doing for us by scaling into it is it's giving us leverage. We don't know if we're right or wrong. We don't know that you're going to go to 1,200 or you're going to go to 300. At this point, you don't know. You think you know and you're using what certain other characteristics which I can explain. I'll give it some detail and I gave it a little bit earlier, but it's telling you, hey, this is getting a little goofy.
Now, what starts to happen here? See where you're at this level on the ATR? See where the ATR is aligned? See where the spike is? So, you're getting increased momentum on the trade at the same time the ATR stops. This tells you that you're getting near a top. So you have extreme ATR and then the stock breaks out on an ATR that is commensurate with where it was before. This is telling you that you're getting to a level. Now we can all use the more simple things when we look at this from like a 4-hour perspective, but the problem with that is it's over by the time it triggers. If you drop it to a 15 something shorter term, it becomes very obvious that you have a divergence in here. But if you're waiting for that divergence on a scenario like this, yeah, you could have come in, closed at 560, and been at 430. So, you have to make a decision, quantify your risk, and pull the trigger. It either works or it doesn't work. There's no mystery to this. Whether you want to go out a week or further on puts, it is what it is, and you're making a bet here. You're not It's not a high probability trade that you're going to call the top. Even if you call the top, you still have to get the momentum on your side, obviously.
So, what we're doing in these scenarios is we're actually levering into calls as well as stock. So, in here, we bought the 500s for eight, and you're buying these things way out of the money, and you're waiting for that what we refer to as delta expansion. I did a video on this before. Maybe it's time to do another option video on this to so you know you what you're looking for is you're really looking for the delta expansion out of the movement more than anything else. You're not just looking for to get to a price and then you can just see that then the next day we're buying the 500s. So we're just rolling this stuff up and we're going out further on them and then over the weekend we doubled them and then as they go up then we're rolling them into the 600s. So after we're pulling the money out then we're rolling those calls up. Not because we think it's going to come down, but because we're looking for that expansion on those calls. Hopefully that makes sense.
Now, for time sake, I'm not going to do this side of it because I want to go through some other things with what's going on with Intel, obviously, and looking at some charts here cuz some things are going pretty wild after hours tonight. But I want to just point this out while this is going up into this on the 21st. And you can see that these are from yesterday on the 22nd. We're actually going out there and we're buying puts into these spikes. I'm not waiting for this day to go hog wild. I'm getting involved into this. I'm picking at them still in here. Quantify how much I'm willing to lose and then we roll into them from there. So, in this scenario, I think we paid Gez, I think we paid eight for them. Let me see if I can find it real quick. I'll see if I can find You know what? I'll do it on Saturday. We'll go through it, but we paid eight for them at the end of today. We were getting out of those at like 130, the last tail end of it, and it was just absolutely slaughtered it. And we had the 500s, which I did close. I was going to hold them into next week, but it just got way further, way faster than I anticipated. So, I decided just to clean house with them all. But, you can't even make a higher high yet. And if you're still in something like this, yeah, I can see how oversold we are. Uh, and what I'd want to do if I had puts still, which I don't. I'm completely flat. Using like 260 would probably be the way to go.
There's a lot to this. There's also where people were in the food chain, meaning by the time this hit retail, and we said this, I think it was Monday or Tuesday, you start seeing all the Twitter people talking about it. And as soon as they start getting involved and explaining to you why it's going to go to a million and all that, they're the last people in. You know, remember, I always draw these circles. All right, let me see if I could find them really quickly here. But I always draw these circles on how you need to look at this stuff. And it depends on where you are. But you have these scenarios and let's just draw one more. Put that one there. Put this one here where you have to think where are you in the food chain. So usually the institutions or we're going to say the insiders. So the people that really orchestrated and controlled all this the shares, they're here. Then the insiders catch on to what's going on. And then by that time retail catches in. By the time retail and they're talking about this thing at the water cooler and everyone has a Twitter account and they're looking at it, you're at the tail end. There's nobody left to buy. Now that doesn't mean you're going to stop at 800. You could have stopped at 1,200. You don't know that yet. This gave us an indication of that because we were looking at the ATR and so that gives us something. But you have to understand where you are in this food chain on a trade like this. So I hope that makes sense. I probably am going to get more into this if there's comments on it. I'll read the comments and see if you guys want me to cover it more. But these kinds of trades, they don't come around too often. So, when they do come around, you want to know what to look for and how to play them because the returns on these, if you catch them, is asymmetrical.
Intel after hours absolutely crushed. We're going to walk through this line by line. I have not listened to the conference call at the time of recording this, but you can see the general numbers here. We're going to get into this literally line by line. It's important. 1242 136 is where they're at. Supposed to lose or make a penny. 29 cents is how it's being reported. It was an absolute blowout. So, let me just show you what happened on the chart and then we'll walk through some of the other lines that are going on here. But this is what you're dealing with and it's my belief here and I'll show you from this perspective. I don't think people are getting this yet. So this is a proprietary indicator that I created and it charts volume. This is nothing. This is above average volume. And I don't think this is reflective from this quarter. I don't think it's remotely reflective from this quarter. That's actually a really good thing when it's this low and the news is that good because it means that people aren't really paying attention to it. So I still think there's room for this tomorrow. You know, again, I'm not there for the conference call, but I want to walk through this line by line and we can see that this is flowing into other names such as AMD after hours as this conference call is going on. But let's get into Intel line by line.
So, I broke this out by segment and I think that's the way to look at it. But we'll go through the headlines. Obviously, the EPS was a massive beat. The revenue was a massive beat. 10% for Intel is absolutely huge. It's just a really big number. Adjusted gross margins 41% versus 34%. These guys are usually fighting for basis points. So this is just an absolute blowout. If you look at the operating margins estimate was 3% versus 12.3. Shares are jumping after. To be candid, I have to listen to this conference call and go through it. To me, this is almost like Nvidia 2023 to an extent where there's this inflection point and no one's really expecting it. A lot of people are going to tell you that they're expecting it, but Intel wouldn't be at $79 right now and pushing if everybody was expecting it to beat this big. It just wouldn't. It would be more into the number. So, and as they're speaking, this is actually going up. And I think that's very important to point out.
So this is absolutely huge on the segment breakdown. The computing side of it, 773 versus 71 estimate, that's going to help your, in my opinion, your AMDs. Your data center AI revenue 505 versus 441. It's impressive. Obviously, for me, the Intel foundry revenue was really interesting because it shows that people are gravitating towards it. And that was not what I thought at all, not even remotely. My thought process is why would you go this way if you're going to use Taiwan Semi and Samsung but very clearly Intel Foundry their revenues are up substantially people are using them and their guide was insane. We get to seasonally schedule for foundry improvements. This is great for ASML, Lam Research, your semiconductor equipment guys, KCAT data center chips supply. They that's exactly what you want to hear. Looking forward to working with Elon. Hopefully, he doesn't get on the conference call. I'm not commenting on deals with external customers. Well, that's actually a good thing.
Now, let's get to the guide. So, the guide is 138 to 148. It's really hard to screw that up on a conference call. 1304, well above the estimate. I mean, if you take the high end of this is just an outright blowout. The adjusted for the quarter, they're saying they're going to come in instead of 8 cents, we're going to do 20. It's a huge beat. The gross margins they're going to grow by 10%. Increasing spending on new machinery. It this is really good for a lot of the cap guys, semicap guys, lifting capex plan within even to next year. Intel strong outlook. Uh, obviously stocks up. Shares are jumping. Intel 12%. The guidance was absolutely huge. So after hours, we're watching AMD lift and Intel is clearly pushing as well. We did see the socks lift. I think it's important to note that this is being hyper specific on what it's lifting. Instead of the rising tide, of course, the socks is lifting, but it's very specific. So, in other words, you're not seeing Nvidia share in this. A matter of fact, someone could even say that this actually will hurt Nvidia and we're not seeing that reflective. You are seeing reflective in some other names such as ARM and we're seeing ARM continue to push after hours and we'll get into maybe that on Saturday as to why, but that stock's clearly breaking out as well. If you take a look at this on the daily, you can see your breakout right here. And these are the kinds of names that have just been once they break, man, it's just been on. You have these large bases. This thing's been basing for two years. Broke out the other day and since then's been pushing and obviously it likes the news and it likes what it's hearing right now. And this should benefit it greatly.
Also, I just want to point out you're not seeing everything rise. In other words, you're not seeing Micron rise. You're not seeing these other names rise with it. You're not seeing SNDK rise with it. And I think that this is super important just to point out for when you come up with your battle plan for tomorrow so that you're hyperfocused by watching this and you take the value from it and you focus on the names that are actually benefiting from this. I will leave you with this because I think it's super important that you know that there is a huge the call wall's down at 70, but there is a huge call position at 80. If they flip that, there's really nothing above it. So 80 is going to be a critical level.
If you're trying to get into the community, please look starting tonight, but even over the weekend and Monday and Tuesday for the invite letters, links in description if you're trying to get into community to get on the wait list. And I also pin it. That is it.