Transcription
S&P pulls a massive reversal today and rips to all-time highs. We need to talk about why this happened, and I think a lot of people are a little confused by this. NDX follows as well, but the breath is still something we have to talk about. This is one of the reasons why I think we're driving. I think there's three main reasons for this reversal.
The first, if you take a look at China and what's going on there, there's a lot of excitement around this. You're seeing Kweb, FXI, everything's lifting right now. We have this cohort that's on a plane heading over there and we're getting tweets. So, that's really big news as far as what's going to come out of there, what's not going to come out of there. But, I think there's two other things that are driving this.
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All right, so there's two main drivers left. You have the China story, right? But the other bigger story here that I think is super important is what happened overnight. And when the KOSPI imploded yesterday because of the Samsung strike and we had this reversal, and I know people say, "Oh, it's not that big of a reversal." Yeah. Okay. When you're in something like this and it drops 7%, yeah, it's a reversal. It it doesn't feel good. I've had things drop 7% on me before. It doesn't feel nice. So, we want to pay attention to that.
But look what happened. If we take a look at this even greater and we're going to do through EWY. This is what happened in the US the next day. You'll note that it gapped up. Why did it do that? Because South Korea bought their own stock market and they bought it super aggressively. So what happened here is really interesting. It's trading at 8 times PE. Now, someone's going to put in the comments, well, that's if this and if that. And we're going to if all over ourselves, right? But the bottom line is it's trading at an 8 PE. If you took out Samsung and Hynix, just FYI, it's trading at a 14 PE. The US is well into what, 21, 22. So, it's still a discount there.
Now, are there things that we're discounting here that we shouldn't be? Yeah. I mean, people don't really seem to care about crude oil anymore, right? It seems like that was so last month. But for us, they really didn't care about the PPI. They didn't care about the CPI. And we talked about this. But the second thing I really want to hammer home is if they're going to buy their own stock market when it drops like that, you have a support that was pretty surprising to a lot of people because in here we didn't have that support. But up here with everything going on, we now have that support and I think that is a huge differential.
The other thing is earnings and the growth that we're experiencing. We're going to talk about some of these names tonight like NBIS. Cisco's up, I think something like 16 or 17% right now. Absolutely crushed. Ray's guidance and this was completely and it was really misunderstood. So we're going to go through that um in some detail because when it came out, they actually had to remove it. So we have those pieces that are going on and we have earnings that are just absolutely crushing. And this is where people don't get the difference between what the winners are and what the losers are. And we're going to spend a lot of time on this.
I want to say one thing. You need to focus on the winners. I know people like a rising tide lifts all boats. That's not what's happening right now. Not in a weak breath market. I'm going to cover this in a little bit of detail, but it's on the back of my mind right now. So, I want to do it again. When the breath looks like this and it's all rolling over, you're in a weak breath market. That is not a rising tide. You want to focus on these markets. The focus for me, you should do what you're comfortable with, is on who's winning and who they want to own, not what's the next one to go. Right? We're always looking for that next one. Now, here it's who's winning. That's where we want to focus. We don't want to reinvent the wheel. We just want to hop on for the ride. And you can see the differential here where you don't have names like AMD that are pushing or you don't see the ESTs pushing, but you see Rocket Labs ripping everybody's face off. We're going to get to it.
Finally, just FYI, if you're on the wait list, please look for an email tonight. There's a group that are going to go out tonight and then if you're trying to get on the wait list, link in description. But also, I'm going to wind up closing. There'll be no enrollment during June. So, if you want to get on the list, get on now because June's going to be pretty wild with the market and I'm going to have to be focused. All right, let's go.
All right, everybody. This one was a little bit convoluted and the reason was when it came out, they had it mismatched. Looks like they did a misprint and then they redid it. So, it was really hard to read at first and then they put it out. So, I just want to cover it because they absolutely crushed. So you can see the rise is fourth quarter revenue tops estimates and then the fiscal year was actually 427 versus 429. The estimate was 416 and now they're raising it. When this first hit, it looked like there was a typo and it looks like they just took everything off. So, I it's important because it it's pretty much a crush and there's a line in here I really wanted to include. So if you can see the earnings, they beat the sales beat and then of course the raise that we just covered. But they also raised the revenue uh and their margins are pretty solid. So when you raise revenue by, you know, even a small amount, it matters a lot to a company like Cisco and then you could just see the fourth quarter adjusted just because of a little bit of a raise on a billion, it really tends to move the earnings. So you're going to go from 107 to 116 to 118, which is a fairly decent jump if you just would look at this on a percentage basis versus what you're doing on the revenue side. So the margins are really there and that's important.
So we have the raise again, but this line sees fiscal orders from hyperscalers 9 billion up from 5 billion. And that's really important to us because it shows us where the hyperscalers are really starting to put the money versus us guessing where this money is going. You're looking at the order flow on hyperscalers essentially doubling with a company like Cisco. And I think that's pretty important for us to note.
Now, after hours, you can see you had this really wild move in here where we went down, we undercut and then lifted. You had like an 8% move in the name and then as they started to restate it, people got it and it just started to lift. It's always important to get this because once you see that previous close level and that's not really where you're at, but that was like the first bar. Let me get exactly where I want to show you because it's that 359 bar. It's right there. Once you can't get below that or close below the close, it really gives you a clear indication of what's happening. And so you can see they wick it down, but they're unable to get it close under there. And then this one ties directly that low. If we can blow this up. Well, we can because I can do it. I can do stuff. You can see that you can't get under that previous close. That's always a really good sign trading after hours. People always ask why I I trade after hours. It's really where the money is instead of coming in tomorrow and buying this thing up 120. If you know how to read these earnings reports, you can get involved with them and you can actually do quite well.
So, after I'm reading this, what I like to do if I do this trade and just disclosure at the time recording this, I have a position and moving my stops up and let me do it this way. Hold on, let me grab this here. I like doing these unedited. It's just easier for me and I think it's raw. It's just better, less nonsense. So, that's a wrap. We were focused on Cisco tonight. And then I just go out there and say, "Hey, they raised. They're putting the earnings back out there." As soon as I saw that and they raised, it just gave us an opportunity to take advantage of it. So, we seized it. Well, I seized it. They should do what they're comfortable with. Uh I I'm long and then it went up four and then I trimmed. Usually after hours, I am super aggressive about trimming. How many times have we all been in names where we're buying something on earnings and then it's something else drops or the call comes out and the call's not great and you can just see the order. Once I saw that 9 billion to 5, I was pretty comfortable with it, but I kept moving the stop up and trimming as the stop's going up. So, I'm trimming as the stop's going up. That's super important for people to get with this stuff after hours. There are times when I really like the quarter and I'll go to break even on the rest, but and I'm just posting that for them, organize the highlights, and then the stop was staggered to 115 to 112 and I'll just stagger it. And I did get clipped on the 115 obviously at the time of recording this. And so now I'm down to that 112. You know, I really could put it back to that dogee there. But, you know, we'll see what happens.
If you look at the volume after hours, they were getting pretty aggressive in here. I mean, there's like 300,000 shares on that one minute bar just there. So, it's not mom and pop that's buying this after hours. And I don't think people understand how liquid some of these names are. And understanding these calls and being able to read them is it's a huge advantage. So, I strongly suggest that people start watching this stuff. It's it does make an enormous difference.
If we look at what this means tomorrow for Cisco and where they're at right now, you're looking at about a 15% jump in Cisco and I mean it'd be really nice if it opens like that, wouldn't it? And you're seeing some followthrough in some of these other names based upon that as well. HPE is having follow through on that just on the hardware side. You probably see Dell have a little bit of a bid as well. They're up about six bucks on it. So overall, it was a really solid quarter.
Let's get into some other names. NBIS was one that we traded. We had a position in this. This is one I'm actually going to walk through. I don't know that I'm going to obviously do the whole thing tonight. But we actually played with this a lot and had some calls. We had stock in here from a day trade. We just held it and then we held it into it because I had enough of a cushion. But more importantly, when this is going up like this, we're buying calls. So, we bought the 170s and then they basically doubled. Rolled them into the 190s. They doubled. Very fortunate that happened so fast. And then I got out of those. Bought the 200s and then kept the 200s. And then we blew out of those when this peaked today. And you can actually see when this thing starts to peak and when it starts to roll over. If you start looking at where the RSI is here and you can see how the RSI is right there. So your RSI is peaked here and then it's not here. If you go and take a look at this, let me grab this. I'll do this part real quick. So let me just show this here. So, what you're doing is you see where the RSI is like right here at 8:15 and then you look at where you're at 140 and you can't get over there even though you're this high. Why am I using pre and post RSI? Because you had earnings and tons of volume. So, we bought the 170s, rolled them up, bought the 190s, rolled them up, and then we put them into the 200s and then they hit. And then when we were up in this level, I moved the stop to 12 on the rest of them. But I think the think we got at like 16 or 17. I'd have to look. But once I saw that, I'm like, you know, I'm not going to hang out here cuz I already have I still have stock on it. It was a great quarter. I really like it, but I just want to stay in there.
I actually think on for those that are on the wait list, I actually think I get into it tonight. I I sent out a bunch of invites. So, if you're on the wait list, you would have gotten an invitation. So, take a look in your email this evening and then you have 5 days to respond. And I enrollment will be closed for June because I think June's going to be wild. And I do all the onboarding calls myself. It is what it is. But I enjoy doing them actually. But I just have to get through the onboarding call. So I can't have too many at once with the trading and everything.
Anyway, so if we take a look at Cisco and what it's doing here, you came or I'm sorry, NBIS, you came back and you retested that level and then you held that 200 and you lifted and that's was your call wall and it didn't break. That's pretty impressive. What we get tomorrow, we'll see. I I really like the way we acted today.
And I want to point out one differentiating factor that I just don't think a lot of people are going to notice about this market and I think it's important for you guys to get. It's not a rising tide lifts all ship. It's all the names that are the winning. They're are the ones they're buying. And you'll be like, "Okay, what does that mean?" Like, here's an example. So, if they decide they want to own AAOI because it's ripping, then they're going to buy that. If they were waiting for earnings and then for it to settle down, then they're going to buy that name. That doesn't mean that they're just going to rotate into GLW because it's also in that field. I know they're not exact companies, but that's not what it means. So, you have to be super careful of that right now. It's like out there with Rocket Labs. Rocket Labs is going up because of their earnings and what they talked about and their guide. And this was a really good quarter. If you've been watching since Saturday, as I say, all these videos are linked together. You know, we've been talking about, you know, hey, this has been like a really just a blowout quarter. It was just a textbook breakout. These kinds of names are going to lift the sectors, right? Like we know that. Yes, you're going to lift the sector with it, but it doesn't mean that they're all going to lift. So, like as that wasn't the one they wanted to own. This was an awful quarter. So, the stock gets destroyed. Yeah, it could get short squeezed. It's possible, but why play games?
When you look at something like Rocket Labs and you're out there on the market, you're noticing some key differential factors of these names. One of the keys that you're noticing, and you'll see this with a lot of your names, the previous day, if you go and take a look at them, let's get rid of the pre post just to make it cleaner. The previous day, if you're holding in here, these are great spots to add. We added to this morning when we were trading live just because it kept holding. I'm like, yeah, it really doesn't have anything to do with semis. Doesn't have to do with anything with what's going on with Samsung and the strike or anything like that. And this does provide an opportunity. I don't think you need to chase things. I think you're getting plenty of opportunity to get involved with the volatility out there, but you want to be focused on the winners and stay with those, not thinking, oh, rising tide, I'm going to buy this one next. That kind of thing. It's a huge differential in what's going on in the market right now. And I think that it has to do with the breath.
Now, we don't have the updated numbers yet at the time of recording this, and I wish I did just to see how the breath acted today, but we don't really have that yet. So, it's not something we can look at. But, we've been talking about the 200, the 50, the 20, and the five on the S&P that's up here and how they're stagnant and how the breath is getting worse. It will be really interesting to see if we get back over the 50% on the 50 today and see if that happens. I'm not so sure how this is going to play out. The biggest driver obviously was what was going on in Korea and I think that that's something we should pay attention to. This was really huge and the fact that that we're going to show it through EWY. Of course, you could always just go KOSPI and take a look here and look directly at it. But we trade EWY. So, we're going to talk about EWY. And if we just go back and take a look at yesterday, start new. I'll just click that to get rid of it. This is what we came into this little suck salad. And so obviously you think that there may be another day unless you're clairvoyant. And then you get this.
Now what's interesting about this is the 12's right here and that's been acting great. I use a 12, a 22, and a 55. You should use what you're comfortable with. So you're trying to get this reversal in here. Now, we couldn't get back to the open or the close. But what happened yesterday was when South Korea opened, they bought their own stock market. They were like, "Oh, it's at a discount. Finally. Finally, we can buy our own stock market. The rest of the world's not buying it anymore." They bought and they bought super aggressive and that gave this support. Now that support probably isn't going away and I think a lot of people started to realize that today. What would make me think that it's going to go away is if you just undercut right here and if you start closing under that 174, you'd have to start re-evaluating your life choices. But overall, I don't see it that way at all. And I think that this was very strong the way that we acted in here. And this was surprising. You usually have these are usually two days, especially when you're not getting above that open. And that's not what you did. It was quite far from it. So if you go and take a look at the S&P 500 for example, you didn't get back above the high. You have another dogee here. Cisco should be good enough to push us, but we'll see. I do like the fact of this bar yesterday that you didn't close 50% down. Whenever you have these kinds of bars, the easiest thing for you to do and just use it as a demarcation line. Let's get the magnet. We're always wrestling with this sucker. Is just drop it like it's hot. I know the kids still say that. And then we'll go and get rid of all this. I'm just going to use a 50% demarcation line. People always ask me how I get this, so I'll start showing. It's just fib retracement. I click 50 and there it is. Yay. And then you can see right in here, see how you have wicks? Wicks are price rejection. So I use it as a demarcation line. It works for me. You should do what you're comfortable with. But this will tell me, hey, do I have buyers or do I have sellers? If I'm above it, I have buyers. Does that mean that I want to go long? No, not necessarily. But here it would mean that hey I probably don't want to put myself in a position where I'm short thinking that this is going to be the cat's pajamas and we're going to come in versus if I have a long bar down. Yeah, that might be a situation. Now we can go and find the difference between you know a long bar down and maybe you're going to get something out of it but you know you can also get reversals clearly.
I do think it's important to note this. So when we see this yeah but we didn't get over the close. So what we would do is then maybe tear into the S&P 500 for example and say, "Well, what about a S&P 500?" No. A S&P 500 meaning the the S&P 500 just by itself. Were we able to get over that? No, we weren't. How about if we took a look at ESOCS? Was that able to on the equal weight? And this is where it gets super interesting. So if we go and take a look here on ESOCS, which is the equal weight, you're going to get your numbers. They'll be right here, right up top, and you can just go look at them. 21.84.52. And then you'd go here and go 21.8914. So the equal weight hit a new high today. That's really important because the AI did not hit a new high today. So that's actually telling us that they're broadening out from AI, which is super interesting and not what anybody would really expect in my opinion. So then you'd start going, what does that mean? And then you look at something like Texas Instruments hitting all-time highs, ADI hitting highs, ASML hitting highs. Very interesting time because everyone's looking at like myself, oh, they picked up, you know, the CEO in Alaska and he's going to China with everybody else. You know, this thing's going to rip. I'm not knocking a move like this when you're hitting highs, but it's far cry from what you're seeing going on with Texas Instruments. And why is this important for us to look at these distinctions? Like, why do you care? You care because it shows us where the money's going, right? Like if we can follow the money, we have a better chance of getting in front of the right name, right? Like it's you're fighting for inches. You're playing. You know, people say always say this. I watch these videos people will send me and they're like, "Oh, it's so simple. Just, you know, do this and when this line crosses this, buy." I've been doing it 27 years. Nothing about this is simple. You have to realize that you're playing against the smartest, most disciplined people in the world, and you need to act like it.
So when you see something like this with Cisco hyperscalers 9 billion up from 5 billion, do you think that they're rotating? Do you think the hyperscalers are rotating where they're putting the money? Are they going into the more traditional buildout? And then if you start to see something like this here with Texas Instruments and ADI, it might make sense. You know, maybe ASML is going up because they're going to need more equipment to do the buildout. Remember SKH is out there trying to get more ASML equipment. So this all links together. And then you start looking at things like Lam Research where 39% of their revenue comes from ND memory. Starting to see that start to shape up. doesn't look as good as I thought it would. KAC is not really looking that great either, and neither really was AMD. So, we didn't see it in the equipment manufacturers, but this is where it gets interesting.
So, right here, I'll have ESOCS, and that'll be just the S&P 500, but equal weighted. And then I'll sort all the names in there. And if I sort by change, and you look today, it'll show you that you only had a couple that were down. Only a couple. AMD, that pig, obviously. But if we see how this is playing out, it's pretty interesting. This was something again, these videos are all linked in together. We've been talking about this one since 30 bucks. And you can see this might be your blowoff. I think Hatrinis Research came out and put a buy on it and said, "Hey, pay attention to this. They have a foundry. We got in this I think at like 30." One of the guys in the room, it was their idea. It was not mine. Just to be candid. I don't have all the best ideas. Right. That's why I like the community because it's a that's a melting pot of ideas. But what's interesting about this is Hatrinis usually retail will buy and then they'll wash themselves out and then it will either work or it won't. Remember they're the ones that looked at this back here and everyone said yay and then they bought it at like 1180 and then they got themselves washed out. Boo. And then it just absolutely ripped, right? So you have to have patience with that stuff. They're they're pretty long term when they come out with these ideas.
But to get back to case in point before I go off on another tangent, you could just start going through them when you sort by ESOC. See, like when you start going through this again, index, oh, we're hitting new highs. Sector, well, you didn't hit new highs. Well, let's split it up. Maybe AI's hitting new highs. No. Well, what about the equal weight? Yes. Well, let's go through the equal weight and just sort by change. It's not rocket science, right? But again, we're playing against the smart most disciplined people in the world. So, we have to look at this and go, we're fighting for inches. So, when we look at something like that, like, oh, ON's breaking out. Marvel is breaking out of this flag. And you just start going through them. COR, MU, Micron, ASML, GFS, Texas Instruments. And so what you do with this is obviously entirely up to you. But I do think it's super interesting to note that you had all these names on a percentage basis. And when you would say like, geez, what were the top three or four names? Like no one's going to tell you that Wolf, well maybe they would have said Wolf, but no one's going to tell you, Marvel, COR are going to be in the top three or four. So by doing this extra step, you can get it you can get yourself a little bit ahead of everybody else, which is what you're doing. Again, you're fighting for inches, right?
Okay, cool. So if we look at it that way, same thing we would do here. We'd look at IGV and say to ourselves, oh, hey, IGV, you're down, so software might not be working, not so fast. What you do is you subset into software. Well, how do you do that? Well, you look at the different components of software and what are moving. So if you look at something like M&D which is just a you know dumpster fire and just keeps melting down or you look at something like Microsoft you would say to yourself well they're not doing too well. How about Oracle? Well, they're not doing too well either. Okay, there's other subsets such as cyber security. So then you would drill into the subsets like CIBR which is something we went over for you guys on Saturday. I believe we've been talking about it for at least a week now that the cyber security and the fact that AI somehow is going to do cyber security when they don't even know what year it is probably pretty delusional, right? So when we start to get this and put the pieces together, I think that we could see that hey, we're probably not going to turn over our company to, you know, clawbot. Probably not the brightest idea right now. Maybe 5 years from now, maybe not. But when we look at this, we're starting to see the cyber security names come in. So that got us into trading PNW and I think CrowdStrike we're up like 60 bucks on now. So these names are ripping. So it's diving into the sector then going into the sub sector and then finding those names that are pushing. I hope that makes sense and if you listen to that part again it'll get you ahead of like 99.9% of people. That's it.