Transcription
The market keeps grinding, and everyone thinks that they're missing it. Semiconductors are up 50% from the bottom, and a lot of people are thinking that it's a short squeeze. There's parts of this that people are certainly missing, and we're going to cover both sides of this today. And I'm going to tell you exactly what I think.
The S&P keeps pushing, and I know a lot of people find it confusing because when they're sitting there looking at oil, for example, we're seeing these 80% moves in things like USO over since February. And how does that coincide with the consumer, for example, who so far doesn't seem to have a care in the world? And there's some other interesting developments even with earnings in Microsoft and Oracle being told that there might be some problems there on the financial side by one of their vendors. I think it's super interesting that we are continuing to hold this area, but I do think that a lot of people are just missing the basics. So we're going to start there, and then we're going to deep dive. By the end of this, you're going to have a complete framework on what's driving this move and what to look for it for when it's going to crack. The question is always, does it crack now, or does it crack three to four years from now? And we're going to cover this in today's video. Make sure you subscribe, click all notifications. These are all linked together, and they are actionable. 27.5% of you that do not subscribe yet watch all the time. Make sure that you subscribe, click all notifications, and let's get to it.
All right, guys. So the very first thing that I want to jump into is that we all can see what's going on with the market, right? We can all see these huge lifts and these huge pushes. We get it. We can all see that the socks is breaking out. I think the most important thing for us to do is to start with the breadth of the market and understand the nuance, and then go from there. Because when we start diving into things like the last hour, which I'm going to cover in great detail, and a lot of people don't even watch this, you need to understand this stuff because once you say it, you can't unsay it. If you're new here, these videos are packed, and there are parts that you're going to want to watch again. I do them unedited for the most part, unless I've really, you know, fubbed something. But I just think that starting and keeping them raw, I just think it's the easiest way to do it. And then for me, it just makes the most sense because it just flows so much easier. And you'll be able to tell that that's how these rock and roll if you're new. I think it's interesting that you're stopping here. I think that right the fact that the so for those that don't know, this is your 20-day moving average percentages above. So if you're above 50, that means 50% of all names are above their 20-day. And for those that haven't seen this before, that's the 50, and that's the 200, and that's the five. I created this. These are all available on TradingView, but I created it, and I think it's super interesting that you stopped there, and I think it's a good sign.
Now, if we take a look at the 50, which is really the one that institutions watch, you did something very similar. You undercut and you held. And now people are going to say, "Oh, well, we're getting a divergence." I don't know that we're getting a divergence yet on this. If we get a divergence, does it matter if you get a divergence there? I mean, well, it's not great if you get a divergence there, but you could get a divergence and you could be there for months. So, it's not like, I got a divergence, I need to move now, right? You can get these divergences and just have rotation in the market. So, it's not a be-all end-all. After you come out of something, you're more prone to getting those divergences, meaning when you come out of something like this, you're more prone to get those divergences, and it could just keep going for a very long period of time. Our important demarcation line with all of this is always going to be that 50 because once you break that, institutions put on the brakes, and I've covered that numerous times, but you can say it. You can see your break here when we had winning and liberation. You can see back in here in October as we started to get a little a couple of concerns, and we started to fight there, and you can start to see that underperformance get above that, and then we just kind of grind it out until when? Till we broke it. And then once you've broken that, that's it. That's why I always put this here. And on one of my other screens, I on one of these other things, I'll have an alert that'll go off if I ever break that area because I want to know, I want to know if I break that. We always want to know what's going on there, and we certainly want to know what's going on with the 200, which you are above. So when we look at the basics, we're there and we're solid.
In front of us are what I call the four horsemen. And I use that term a lot because it just reminds me of what they are. But let's go through this. Let's get rid of the 12 for a minute that on the weekly. Let's clean off my lines for a moment. And then we're going to go through these line by line and just take a look at what's going on. The RSI to me, I don't think we really have to go anywhere with it. We're not even overbought on the weekly. You're not even over the line yet. So to even think that we're in a quote-unquote overbought situation that I need to concern myself with, I'm not really feeling that.
If we go and take a look at the MACD, and I think it's just important just to get a lay of the land. All right. So we hit zero, and then from there, now we're crossing, and the signal is crossing the MACD. Yep, that's what happened, and it's happening on this bar. So if we go historically and look at when this happens, is this an area that we need to be getting out of the market, or is that an area where you try to get into the market? And what you might want to do is just go and look at those over a period of time and say, is this something long-term that makes sense for me to get in the market then, or should I be getting out of the market when that happens? And you don't have to go nuts. You can just kind of go through them and mark them all off and then just go back like 10 years and say, "Gee, I wonder what happened if we went back 10 years and we bought every single time that this happened. Did we make money or did we lose money?" And it's not, you know, it's not rocket science, but might be a fun exercise for you to do. And, you know, you should do what you're comfortable with.
But let's get rid of that one for a sec and let's go to the next one, which is just going to be here. And that's rate of change. I'm going to do the same thing for the NASDAQ, but the NASDAQ's stronger than the S&P, so it's kind of pointless, and I really want to focus on the breadth. We flipped the zero line. So once you're above the zero line, it means your rate of change is now positive. So if you were to go out on a weekly chart and do the simple thing of just going rate of change and when you flipped from after being negative to a level of positive, and then just go and take a look at it and say, I wonder how the market acted when that happened. You don't have to again go nuts. So you can just kind of take a look at that area and go back over periods of time. You don't even even have to use the periods of time, you know, for the past five years. You could go all the way back to here, go, you know, during the go the great financial crisis, and just take a look and say, geez, was there something here that we should have looked at when this transpired, or is it a bunch of, as you kids like to say today, who you guys still say that, right? And then you'll start to see that, gee, there might be something to that. Maybe we want to pay attention to those areas when we're emphatically over and pushing higher because that does tend to mark a bottom. But you should do what you're comfortable with.
Now, I do throw stochastics in here just to give me a sense of momentum. As long as I'm not rolling over and cracking, I really don't care. But you can see that this marked the bottom pretty emphatically, and it is what it is. Now, if we take a look at the NDFI, we will see that this is stocks that are above their 50-day moving average on the NASDAQ 100, which means 65% on the week, and what that gives us is a new weekly high on the NASDAQ, probably not something that you want to bet against, right? So, if we understand that and we understand that 35% of all the names on the NASDAQ 100 are under their 50-day moving average. I use a 55, they use a 50. You should do what you're comfortable with.
And then what we can do, for those that haven't seen this before, we take S5FI, which is the 50-day percentage above on the S&P, and then we divide it by the NASDAQ. And then we get a super secret indicator that anyone can create. And as long as we're dropping, NASDAQ's going to outperform, which means you're in a strong market. If you start to see the other side outperform, it means you're starting to run into an issue. This is really important during times like this because it tells us how strong this is because this will rotate first over anything else. And it doesn't mean that you have to act on it right away. You can always see the peaks. It doesn't mean that you have to act on it right away. It just tells you which way you're going directionally. So, if you look here on the 27th, you'll note that when you started to roll over, that is telling you directionally like, "Hey, they're starting to buy the NASDAQ again." And then you came in, and that actually marks the top or the bottom. And if you really went through it all and you looked at these areas, you will note it'll be very similar. And right now, we're continuing to roll over.
One of the things I'm really interested in right now is what institutions are doing and how aggressive they're being. And this one indicator really shows that. So, let's get to it. This is an indicator that I look at a lot, and it's pretty fascinating what's going on here. So, I just want to point a couple things out about this before we begin. Let me just pull this over a little bit. And I just want to be real clear. This is not me. This is by a corporation called or research firm called Sentiment Trader. No affiliation with them. I just really like these charts because they do a really good job of pointing out things that we see in the market that we don't really know how to quantify, and they quantify them. So, this is this chart's the last hour right here. I just have it set up as a 10-year. Can't miss it. And what we're going to do is we're going to look at different time frames, and you'll see them right up here when I do it. So, let's just get to it.
This move in and of itself in this area to me is pretty impressive, and it's not something that you see a lot. But if you don't know what this is, then it's not going to really be helpful. So when I show these kinds of indicators instead of just saying, "Oh, the last hour is doing this," I think it's important to take just a quick second and say, "What am I looking at?" Now, to be clear, once you understand what it is, then you can use it the way that you want to use it. So the way that they use it is the last indicator, the last hour indicator, is cumulative AD line. So it is a cumulative, meaning it stacks upon itself, the AD line for the last hour of the trading of the SPY ETF. If the last hour is up, you get a value of one. If the last hour is down, the value is subtracted from the count. The trend model applies to a moving average, the advanced decline line, and looks for instances where the count deviates above or below that moving average. I don't use it like that for a signal of trend change. I look at it to chart what institutions are doing and how aggressive they're doing it. So, I'm just going to say that again. I don't use it for a trend change. You could, but I use it in determining how aggressive institutions are being in the last hour of the day because the last hour of the day is when they really tend to move, especially on Fridays. And I can even give you guys an idea here. A really cool indicator would be to make this and then only use Fridays because Fridays are really when the pension funds really rebalance. But let's stay on point and not let the ADD kick in.
Now, I'm blowing this up for a reason because we can all see the double tap down here. And what it did was comes up, the cumulative holds, and then we lift higher. And we talked about this being a possible bottom for some time. Blow that up a little bit right there. This area at the end of March. And of course, this also coincided with the end of the quarter, but more importantly, it also dealt with when we started to see a turn in the breadth of the market. And we'll get to that. It's probably coincided together, right?
Look at the strength that you're seeing over the past three years. This is unprecedented. Meaning, you have never had anything like this. And I've gone back through this as far back as I can go. And I don't have anything where they had to be in so fast and so furious. And I'm not trying to make movie references, but it's pretty darn impressive. And what this is telling us is that they have to get in this market. Meaning there is something there where they are putting money to work. So, we're hearing words like short covering. We're hearing words like, "Oh, shorts are trapped." This is straight-up institutional buying at the end of the day. And we're seeing it over and over again.
Now, when we see it on the yearly chart, it's very clear from the bottom and where we are. And we can see how we're just absolutely ripping over and over again. A matter of fact, your cumulative average here is over where we were before. So, when we think and we hear the words, "Oh, by the way, this is, you know, just a big short squeeze and it's going to come back down or how sustainable is this?" It's commensurate that the cumulative average and accumulation is greater than anything that we had over the previous high. So, it actually matches. And this is important. Another important factor of this is I don't have anything on record on these kinds of bounces where they are that pot committed that fast. And I think there's a couple reasons for that. We'll get into that later. Again, I just want to show it's cumulative. So, we had periods where this was much higher for much longer, but the speed and rate, I don't have anything like the closest I could find was '98. And I went going back into this, and we had this move where we just popped out of this. Now, it's not going to look the same, but on a cumulative basis, the numbers are pretty strong. It's just that back here it was 200. You have to remember this is cumulative. So it's not going to be just your simple, you know, straight line. But I thought that was interesting that there was this period in time in '98 where we lifted like this, and then we kept pushing. I've been saying that this is very similar to the '90s for a long period of time now. But I think it's much stronger than that. I think it's more sustainable, and we'll get to that.
I wanted to show the pandemic, and then obviously you can see the dates. The dates are down here so that you can see them. Then that's March 20th, and we lifted, and we had this big rip in here. But that rip is nowhere near what we're dealing with right now. And then after everybody gets in, you can see that the cumulative, it starts to slow down. And we really didn't need them to buy because we had the Fed buying mortgages, right? Remember that 1.7 trillion that was injected into the stock market, and now no one can afford a home. Okay? And to be clear, just because you're lifting doesn't mean that everything's going to be okay. You can see it in here, and you can see how we were rising, and into that rise, what was happening? You can see how we were still falling down, and this was a very difficult time to try to understand all the nuance and what was going on. But I do think it's important to understand that it's not just a directional bet. It's just, "Hey, what are institutions doing aggressively?" And they were accumulating in here when retail was panicking.
This one really stood out to me because this was March 2025. And remember, we had all that winning and liberation, and then in here, institutions were still looking at this and saying to themselves, "I don't know," because we have some real issues. And what were those issues? We still didn't understand tariffs. We just had pause after pause, and this is before we even knew what the word "taco" was. We can see here in '22, and this obviously is when we started to bottom totally on the market, and we can see that level of accumulation. And I thought this was pretty important as well because what you're seeing here is when we're getting that accumulation, we're not moving. See, there's a difference here in the movement and the strength of the movement. And I think a lot of it is because people didn't get out the same way. We had people stepping away from bids, and I think that's why the market was dropping the way that it was. People were just getting out of the way and letting it fall. But at the same time, a lot of that was retail, if you remember.
But what is this telling us? Well, this is telling us that they're getting in, and it just means that they're eating up what supply, and that's why it's not moving as fast. And this is an important distinction. When we go and take a look at this time and how aggressive they're being in buying, this is commensurate with the move. Meaning that the supply out there is nowhere near as great as it was in previous bottoms or when we bottomed before. We had a lot of supply. People wanted out. And when we go back to November '22, we can see that pretty clearly. They want out. And when they're trying to get out, what are they doing? They're just eating up supply. This time we don't have that level of supply. And some people are going to look at this and say to themselves, "Well, we've gone too far, too fast." I would say you're not even at a cumulative level where you were in the past. So, it's not like we're at cumulative highs on the market where you might say, "Well, back here in '17, '18, so we really don't have anywhere to go." Far from it. This can continue to push. What we want to do is we want to monitor this. We want to make sure that it's going to continue to do this. And for the time being, I think it is. And I wouldn't sleep on this. If we were seeing this level of accumulation and we weren't moving the way that we were moving, then we could say to ourselves, "All right, there's a lot of supply out there." There's not. All we're just seeing is institutional demand. And it looks like it's going to continue.
Now, in front of us, very clear, is forward PE ratios for the S&P indexes. And I just want to show this because we get a lot of dot relationships. People saying, "Oh, it's like .com." And this only goes to '23. So, just FYI, we're going to switch to another graph, but this really hammered it home for me when you can see that you're up here in the 25s and the 26s. And there's definitely something about that, right? Where, okay, if we're getting up here, it becomes somewhat of an issue, but PE ratio over long-term doesn't mean that that's what's going to get you into a crash scenario. And I think that this is really important when you start looking at '08, '09, 2010, 2011, and you realize during that crash where the PE of the market actually was. It's usually something systemic and a change that does it. Meaning if the earnings fell out of bed, if everyone realizes, you know, AI is like the wizard of eyes. It's just really clippy, something like that. But I really just want to hammer this home. We're nowhere near these areas. And I'll show you.
So we're going to start first by comparing apples to apples. And just to put this out, this is not my research at all. This is Jardini. A lot of this stuff is actually free, and you can just Google it and find it. But he also has a free newsletter. I have no affiliation with him. I've just been reading this stuff for two decades. I would strongly suggest if you're interested in like a long-term view and just straight-up objective research, his stuff's really good. So, Magnificent 7 forward PE, 26. All right, great. But Boomer, isn't that where that is? Yep, it is. That's seven names. Seven. And if you take out Tesla, it's nowhere near there. So just FYI on that because a lot of people can look at this graph and say, "But the MAG 7 also." Look at the growth of earnings that just happened this past week. But if you look at the S&P and where you're at right now, this puts us right around to 20. So you're still at a 20% discount to where you were during that period of time. Now, to be clear, you never hit a number and then everyone just goes, "Oh, time to sell." It doesn't work that way. But when we're looking at the last hour and we're saying to ourselves, "Oh, this might be getting expensive." Far from it.
During the late '90s, we would have these funds called Asian Tiger Fund and things along those lines. And this is forward PE ratios on selected MSCI, meaning all over the world. And I just thought that this was just insane and worth sharing. So here's emerging markets. So if we think about emerging markets, I think of things along the lines of Taiwan. I think along the lines of things of South Korea, areas like that, Japan. They break out on their own. But if we really look at this, like companies such as Samsung and SK Hynix that are absolutely killing it, and we look in this area right here, we're basically saying that this thing's trading at 12 times earnings right now. That emerging markets are trading at 12 times earnings. And then you go and look at the growth that's coming out of Samsung. It's pretty insane. If you go take a look at that, most people will not look at that because they don't understand that they have access to it. But Samsung, SK Hynix, you can actually chart those on TradingView. Maybe we'll do that so you guys can see what's really going on there. But again, we were significantly higher back here. And I'm not saying that from a standpoint of, "Oh no, this isn't .com," or this isn't going to have a bust cycle to it. Of course, there's going to be a bust cycle. The point of trying to figure this out is the bust cycle coming Tuesday, or is it coming, you know, Tuesday 2029? We don't have a clue. But right now, if you're looking at these things and you're thinking that these things are overvalued because they moved, well, that's just not the case. They moved because they moved. They moved because earnings were absolutely insane.
Now, if you said, "Big T, what keeps you up at night?" I'm glad you asked. Well, I would say looking at growth versus value. This would be something that I would look at and say, "Wow, this is pretty out there." And this does get become a concern because you're seeing, you know, so much in the hands of few versus the many. And that's really what's been happening. And it actually kicked off from 2010. Now, we don't have to get into it, but we're here, so we might as well. When was the first real federal bailout of the US stock market? And you can see when that happened, right? So, you know, you've really kind of screwed up the playing field there, in my opinion, but it is what it is, and that's none of my business. I guess we'll get into that in another video.
I do think that the value side of the market's super interesting. I do think that there's names that are just completely thrown out. But also, I think that you might be coming into an area where you might have some issues because when we look at what the Fed is doing with the rate cuts, and I'm going to touch base on that today, there's just as much chance of a rate hike now as a rate cut, and we'll show that.
Now, this is something that I like much more than a PE ratio. And this is something that I use a lot. And what I really like is looking at PEG. And this is how I was trained. So if something's growing faster than its PE, then you're going to have a growth that's going to be under one. So if we took something like SanDisk, and people like, "Oh, I missed it." If you really looked at what SanDisk is doing and the growth of SanDisk, then you would understand that the stock is just insanely cheap. And as time goes on, people will get that or they won't get it. And frankly, I don't really care. But there's things that that people will look at objectively on the fundamental side and go from there. Right? And what I'm saying is when I say that I don't care is that some people are just going to be stuck. They're just going to say, "No, I missed it, and that's the end of it." When you look historically at what you're paying for something, that's what's really important.
So this chart does a really good job of it. And what you're going to see is there's a dotted red line on this chart. And you can see it here. See, pretty clear. Let me hit that little button so you can see it. Yay. And you can see how they all extend out over here, right? And then you here's your legend where you have the red, the blue, the green, and all of these average. So average on the 600 over time is 1.23. Average on the 400 is going to be that 1.28. And average on the 500 is 1.32. So on any historical basis over time, the growth, the PEG ratio right now historically is much lower than where you are over a myriad of time. And so when you look at something like that, it really kind of puts it into question. Whereas when you're falling down here and you look at the PEG ratio here, and the market's imploding, you're like, "Well, yeah, the PEG ratios too." Like companies are imploding, they're losing their value, blah. It's an issue what's happening here.
If we take a look at what the S&P PEG ratio has been doing since we had all that winning and liberation. Let's see if we can blow this up a little bit. All right, good. So, if we just take a look at all that winning and liberation that happened here, you can see the dates after that. What happened? Where are we? Well, the PEG ratio keeps dropping. So, you're below historic norm. So, you can see why something like that would trigger fundamental analysis guys to come into the market. But also, the PEG ratio is dropping as the market's going up. So if you are to try to understand this, and where I'm going with this is the growth is actually getting stronger in the market, and the move that you're seeing in the market is not commensurate with the growth. And that's objective fact. It doesn't mean that it continues, but that's the fact. So the reason that this could not work is if they think that growth is unsustainable. And that's a slippery slope. And I'll explain why.
But before I get there, I think that it's important that I just comment on something that I said because people will say, "Well, why are you saying that?" So, I'm talking about that I think that there's just as much chance of a rate hike as a rate cut. And if we look at this, this is from FedWatch. This is actually free. Anybody can go there. Anybody can pull this up, and it will show you exactly what's going on. So, here's the current target rate, and that's that 3.50, 3.75 area right there. And you can see that there is now a 77% chance. Oops, we'll drop this down here. There you go. Yay. 77.7% chance that rates are going to stay right where they are. And then if we go and say, well, if they cut, this would be the cut. All right, that's 12.3%. Here's your date. You can always see the meeting date here. And then here you are with your rate hike. Also, they do a great job of just putting it all up here in one spot. So, you can see there's a 77% chance of no cut. There's a 9% chance of a hike, and there's a 13% chance of an ease. If I was to show you this over time, you would see how this has gone from zero to 9%, and you would see how this is dropping. The next time the data comes out, this will skew even higher, in my opinion, to there's a chance of a hike versus a chance of a cut. So, you're going to start leaning more towards a hike, in my opinion. That's my opinion. Do with it what you will.
But if you look at oil and gas, and we can do that real quick. I'll show you a real quick way to just kind of see which way this is going to lean. All you have to do is just look at crude oil and gas. So, let's clean off my fancy chart. And actually, let's do this with it. We're going to go to bars. And I think the bars sometimes are better for you guys. You can always comment on this, but some of you crazy kids watch this on your mobile phone. I do think it's cleaner to look at that from the contrast standpoint, but let's just do something as simplistic as go to March. You see the two dates there? We're going to click this right here. All right, boomer. Come on, work with me. Them internets, they'll sneak up on you. And if we go here, let's just change the color of this, and I'll show you the easiest way to do this. Well, I think it's the easiest way to do it. You should do what you're comfortable with. Here you are, March. And then you go to end of March, which is going to put you right here. And then all we're going to do is just grab the beginning of that and then go to wherever March ends, and you're going to see that right there. Okay. So that is a 23% rise in oil prices. Two-thirds of our GDP, one way or another, is related to oil. So there's no way that inflation doesn't go up with this. No matter who says what, there's no way that it that doesn't happen. That's a 23% move in the cost of goods for things to get anywhere.
And then we'll get take a look at gas really quickly. But then if we go to here, and we're going to take March 31st over. So then we're going to go right to here, 31st, and drop it there. If we take a look from here over, we'll see what that it's slowing. So we don't really need to do it, but we'll do it. And we can see that it's slowing. But this is already done. So, you're already kind of cooked a little bit, right? Because that's going to come into Let's get into gas now. Um, isn't that crazy how oil can stay same, but then gas can go higher? Shocking, right? It's like when you watch oil prices drop, but they don't drop at the pipe. Yep. Okay. Maybe look at names that benefit from that. Casey's. Anyway, so if we take a look at how this is going, right? There you go. All right. Cool. And you can see your level here. And then UB from here. And then UB. I'm going to need more way more coffee if we're going to talk like that today. And then we're going to have to go to that level. And you're going to see you have an 18% rise in what? Gas prices. And you know this because you're going to the gas station. And then if we look here over, you're going to see something as well. And I'm just going to take it from the average to here. And that has still gotten you a 5% bump. So if you were to look over this period of time in the past two months while everything's supposed to be okay, in two months, gas prices are up 37%. On average, obviously now it's getting worse. And so that, you know, depending upon where you are now, these will obviously continue to increase. And that eats into people's, you know, pocketbooks. I went and filled up the car, I think it was recently. I think it was like a hundred bucks or darn close to it. It's kind of crazy. So anyway, so when we talk about this, and I make those statements like, what could derail us? Well, if this keeps going and we, you know, then that could be an issue. It's a function of how long this lasts. Now, some companies benefit from this, but you should do what you're comfortable with.
So then when we get into it, we really get into the minutiae, which is where I want to go with this, and we see some of these earnings coming out, we see some of these moves, and then we say these words of, "Oh, I missed it." And I'm going to really talk about some theory here that I think is important. But if we take a look here and say, "Oh, I missed it." So, this was a pretty classic island reversal where you've broke down and then you gapped and then you came into it, and this can mark a high. Now, what's going to change the idea of marking a high? Any good news that has earnings, right? So, if the earnings are fantastic, then that's going to change exactly what what's going on out there. Like it's pretty clear that you had a just blockbuster quarter like across the board in memory and storage. And the issue that I tend to see with this kind of stuff when it happens is people saying to themselves, "Oh, I missed it." If you didn't catch when it started, how do you know that you missed it? Right? So I would just suggest that when you see things like this, you might want to say to yourself and ask yourself a different question, which would be, "What is exactly going on here and why are people buying this?" or "What's going on here and why are people selling it?"
So when you looked at the market, like let's take a step back here. So when we are falling out of bed here, we have to ask ourselves like, why is the market rolling over, right? And the market's rolling over here because we're wondering if we're going into, you know, Iran for the next 20 years and what's going to happen. Like that's exactly what we're dealing with now, right? And so once we start to see that rolling over, that's what we're assuming. It wasn't earnings that were bad. It was, we don't understand what's going on. Market hates uncertainty. Market gets out because of the uncertainty. Earnings season starts, and what happens? The market rips. So let's just let's not get it twisted about what actually happened here. The earnings are coming out, and they're crushing across the board. I think it's something like 83% of all companies in the S&P have beaten and raised guidance. It's something insane like that. And if we take that for what it is, okay, great. But that doesn't mean it's going to last. Well, did you say that it was going to be a good quarter? Because if you didn't say that, why are you saying it's not going to last? So, you're saying that because you have a limiting belief because you missed it, right? So, you got to get your noodle out of that and say to yourself, "What's going on here? Why is this happening? How sustainable is this?" Right? Ask yourself better questions, and you'll get better results. I can't stress that enough. We all have that bias, right? We all have a bias. And when we see that bias, we just have to realize that it's there.
So, let's take a step back and let's look at this a little differently because maybe I'm not going to be as clear here as I want to be, but hopefully you're going to listen to those questions and go from there. So, we're going to clean all this off. And I said this Thursday night, and we talked about this on Wednesday, too. And we're going to cover some of these earnings, but you're getting clear winners and losers. And we can all see that. We can see Western Digital, and this thing's just had a monster run. And if we look at this, and we look at the earnings, and you look at your move on, you know, Friday. All right. So, you beat by 15%, and the stock's running. And then you're looking at something like this, and then you're doing something like this where you're going, "Oh, well, here's the 12, the 22, and the 55. Oh, I'll buy it when it pulls back." Or, "I missed this one because gosh, look how far it's come." All right. So, just FYI, these companies were trading at five or six times earnings down here. So, if we look at something like that and say, "All right, well, maybe we are going through some kind of cycle, or we're not going through some kind of cycle, but quote-unquote, I missed that." Okay, so there's earnings right here. This is the move commensurate with earnings, and that's the volume of earnings.
And then we look at something like a Seagate, and we see Seagate have earnings explode backfill, and then on Friday breaks out, and then you get a ton of volume. Fridays are known for what? Institutions, specifically pension funds and large institutions who don't get all their fill, making sure by the end of the day that or the end of the week that they did. And so it's always interesting to watch what goes up on a Friday. And so then we see that move, and that move becomes commensurate with what? Possibly this earnings. But you're going to say to yourself when you look at something like this, "Oh, I missed it. It's come too far, too fast." All right. So before I go any further and show you two more examples of too far, too fast, what you want to do is just take a step back and go, "All right, well, too far, too fast."
All right. So let's go take a look at something like Netflix, for example. Let's go look at a weekly chart. So, if you go and take a look at something like a Netflix and you were to look at this historically over time, and you came out and said, "All right, well, what are we doing here and what's happening?" Right? Like, why are we moving the way that we're moving? Why are we breaking out here? Oh, we're still fighting with DVDs and all that nonsense, right? Oh, why are we breaking out? Oh, people are watching what some show. Uh, what was this? That House of Cards. Oh, and they just have to get in the stock. Well, I missed it. All right. Well, that did what from there? 5xed, 6xed, but you think it missed it. And I'm not saying you specifically, who knows? Maybe, you know, maybe you didn't miss that one. But this concept that you missed it because it left, you're going to miss a lot of names. And you're going to go through a bust cycle with this. Like, don't get it confused. It's not going to go on forever. But the idea and understanding that because you've gone from here to here that you've missed it, you don't even know why it's doing what it's doing, the majority of the people, right? And I think that's an important, really important concept.
So like when Western Digital spun off SanDisk, they saw this coming, and that's why they did what they did. That's why Western Digital, they bought SanDisk a long time ago. And you can see the breakout here. And this is where people will say, "Oh, I missed it. I'll wait for the pullback. Oh, I missed it. I missed it again here." Not realizing that what the stock's even trading at and how cheap the stock still is on any value metric. Why they won't buy it is because they'll say, "I missed it, but this is going to end. Their demand's out for two years from now, but you're not going to buy it because eight quarters from now they might miss." Okay?
So then you take a look at something like Micron, right? And Micron comes out with earnings. And then we had all that situation with Iran. We're going to close the straight. We're going to open the straight. We don't know what we're doing. And then all of a sudden people panic, and they get out of the name. Was it because of earnings? No. So in here, I think it was 337 when he came out. It was this bar you have right in here. The CEO of or the ex-CEO of Taiwan Semi going in the open market and saying, "I want to buy stock in the open market." He puts like eight or $10 million into the company. Now, if you look at this, most people are going to say, "I missed it." He's saying, "I understand the industry and I want to buy in the open market," and that's what he did. And then from there, we all know what happened with Micron.
So where do you go with this? Well, my personal opinion is you need to ask yourself better questions, right? And it doesn't mean that you don't trade this stuff around. Far from it. But you need to understand what's really going on out there. And I think that this part of it is really being lost on people. So what I've done is this. These are all direct statements from the records, and then what I've done is I've cross-referenced it. So this is all from the company filing, but I just want to point a couple things out that I will kind of hammer home what's going on out there. So here's storage earnings, and these are standouts. All right. And and I wanted to just grab some quotes so you can see out there, meaning just give you some one-liners so you can kind of wrap your noodle around the growth. So, data center revenue exploded, 66, 645 year-over-year, 145, 147, sorry, 251. All right. So, I'm up 251%. So, what did they say they were going to earn? 22. They came in at 34. So, if you're going to take, I'll just make you laugh. So, if you're going to take a company like this, and you're going to say, "I want to take its earnings and I want to times it by its growth rate, and that's what I'm willing to pay for it." All right. Your growth rate is 250, and times it by 33, and tell me where the stock is, and tell me that it's expensive. Now, no one's going to do that because you're going to say, "You're never going to grow at 251%." All right, so do you take 50% of the growth rate? Do you take 25% of the growth rate? Right? So, let's take 25% of the growth rate and look at it that way, and then look at where they're growing, and then what they said they were going to earn, even though they just increased it by 50% from last quarter, and look at the number that you're going to wind up with. And this is why people like Caner are coming out and saying, you know what, we're just going to put an $1,800.
target price because this thing's insanely cheap and it's going to keep going. And so, that's what you're starting to see. But people are still saying, "I missed it."
You look at Micron, record $23.86 fiscal revenue, up year-over-year 200%. It's the largest sequential revenue jump in the company's history, right? So, it's not like it's all, "We haven't seen numbers like this in three years." No, it's the largest sequential revenue jump in the company's history. So, when I say a statement like this, 50% of all the earnings growth in the S&P, meaning all the earnings growth when you look at the EPS, is coming from one company. Starts with an M, ends with a U.
So then you look at something like STX on Western Digital, and you have like non-GAAP gross margins hit 47%. You're up a thousand basis points on gross margins. Okay, with EPS of $4.10, up 115%. So, do you think you have pricing power again? What are people going to say? Well, this is going to fade. Why is it going to fade? There's only a couple companies that do this stuff. And so you'd have to build out this entire infrastructure to even compete. Gross margins cross 50% for the first time. Okay, that's 50% for the first time in the company's history.
When this dropped that evening, I couldn't get over that the stock was down. I couldn't get over SanDisk was down either that evening, Thursday evening, and we actually got involved in them. And we got involved Friday morning because it was just silly. But when you're looking at this, EPS year-over-year is up 289%. $8. Now, I understand people's reluctance looking at this because they feel that they're chasing things. But for us to understand when we look at the PE and we look at why institutions are being so aggressive in the last hour, all this stuff starts to make a lot of sense. There's very few names that are doing this, and there's very few leaders, and you're starting to see who they are. You know, I call those those four names the "four horsemen" because I don't think anything can touch them. Not now, anyway.
But when we start looking at stuff like this, and I think that this also becomes really important from a more macro standpoint, understanding what's going on, you're getting winners and you're getting losers, and that is becoming abundantly clear. And we're going to have names like OpenAI that are going to be our Excite or our LIOS. Like, that's definitely coming. But when we look at something like Google and this report, it's very clear that Google's going to win this AI race, or be one of the big winners of this AI race. It's very clear if you go and look at Amazon that they're going to be one of the winners of this AI race that is becoming abundantly clear to people.
And so what we have is we have people that are trying to understand this, and what they're doing is saying, "Oh, well, I'm going to just get involved with Mags." Well, that's fantastic until you find yourself in a situation where, you know, Meta is throwing money at something that no one even knows what they're throwing money at anymore. We don't even have a clue what they're doing. If you listen to that conference call, and I do listen to these, I suggest that you listen to some of these. We can't even tell you what they're doing. I couldn't even tell you what they're, what, where are we going with this? Like, what's the plan? Because you, you don't have a standalone product. You really can't compete. Like, if someone outlined Grok, you could explain it, right?
And then you look at something like Microsoft as well. Now, the interesting thing about Microsoft is they understand their mistakes and they're starting to pull away from them. So, they're already spreading out and getting away from OpenAI as much as they possibly can, and they're starting to understand that they need to have more, you know, be more fluid because this is a changing landscape. I think that's really important as well. And I will, I will say this, some broadening out in some of these tech areas, and we're going to see another sector that's coming out in a second here I want to go through.
But if we look at something like IGV, you had every reason to crack the other day on Microsoft's earnings, and you didn't. You had every reason to crack when OpenAI CFO came out and leaked the fact that, and I do believe that was a leak with the Wall Street Journal, that they may have trouble paying their bills unless they can figure out how to either generate more revenue or pull it back. I would really read that article. It was very telling. But if you look at something like Oracle, you would expect Oracle with their ties to OpenAI to completely implode on such news. That's not what happened. A matter of fact, what's happening is you're backfilling in this area, and you're holding in this area, and that is a very different kind of development. So while I think that you semis and storage and memory are definitely there, I don't think that the software is going to be the momo space. I truly don't think that way. But I do think that there's some things here that are very interesting the way that they're starting to hold into that area.
I know a lot of people got excited when they saw TEAM and what happened there. If you can hold this, maybe it's something to start looking at. You know, some of these other names people were getting excited about like NOW, and they just absolutely collapsed. The area that it seems to be going and where people seem to be looking for their, you know, their next trades is you had AXTI come out with earnings, and we had this move. Clearly had a very large move. But if you see something like AXTI and you're breaking out of that area, I mean, clearly that's a monster of a move on earnings, and it's done exceptionally well. You're going to start seeing the optic names, right? They're already starting going into earnings where people are going to start trying to get ahead of them. That becomes a function, candidly, of do you think that they're going to have moves like this again? And if so, what do those moves look like? Um, I, I don't have an answer to that.
Sometimes these things, you try to get ahead of them for earnings, and you're actually able to buy them cheaper because everyone's frontloading. SanDisk was a great example of this, right? So, did I need to own calls or own SanDisk ahead of the quarter? I think there's certain names that you might have to because I don't think that people are picking them up yet. But if you look at something like SanDisk, you had all day the next day to buy it. It's actually better. I mean, Micron, I own earned the 525 calls, and candidly, I was better off coming in flat, you know, than earning the calls into that, you know, versus the Sandisk quarter. But where does that put you going into next week? So, you're going to have these companies that everybody loves, like, you know, LITE, and obviously we need the optic names, but do you have to own them ahead of the quarter? You know, everybody has to make their own decisions. They should do what they're comfortable with. I think you have a lot of flexibility, and I think there's a lot going on there.
One, one name that, you know, is super interesting, and we've been playing with this thing forever. We just did a a swing on this one, and you're starting to see people getting involved, and I think that some of these second-tier names are, you know, this obviously second-tier are starting to really shape up. This was something we bought actually. We had this little undercut and then rally, and then got involved with it and doing quite well with it since then. So, you're getting some of this the second-tier name stuff that looks fantastic, right?
Like, because I, I even think when you look at something like an Apple, and I thought this was a really good quarter, you got right to the top, and then you just got, I don't think you got there, did you? You just rejected it. And I don't know that that's the right move. I mean, everyone has to figure out what they want to do, but institutions on Friday certainly wanted to sell. I just think that I just think that they're going to open up the door for more hardware is coming down the line. I know people are talking about Perplexity, computer things like that, whatever, you know, who knows? You know, we all wanted a Palm Pilot at one point in our life, right? So I think Apple was super interesting from an earning standpoint. I know that I traded it, I did okay, but I did better with the other names. I just think that when we are looking at this, we have to keep, you know, our head on a swivel.
So for me, it was something like Intel in that quarter. Like this was an absolute, unequivocal fantastic quarter. Like it was just an absolute crush where I, you know, I've been pretty vocal about this, and I've been tormenting people in the community because they've been, you know, all over this thing and they love it, and I keep calling it a pig. But at the end of the day, I'm the first to look at something and say, "All right, I have to, I have, what's really going on here?" And then when you, when I saw this report, I understand why people are buying it. It makes a lot of sense why people are getting involved in this name. Once I saw the actual earnings, listened to the conference call, read the transcript, and actually did work. You actually have to do work on this stuff. And now I get it. I understand that.
Same thing with Nvidia. You look at Nvidia and you're like, "Okay, this is it. They're going to start doing this. They're going to get involved again. Here we go. The GPUs." And they're like, "Nope, we're not going that way, boomer." Okay, you have to look at the shift. And if you miss the shift, and people are not going to listen to this part of it, if you miss the shift, you're hosed. So when you start to understand those that you have to go and go, what's going on?
So when I look at something like this, you have to dig into it, you have to take the time and go, what's their thesis? So the way that I always do this, and it works for me, and people say, "Oh, he here he goes again, rambling, whatever." Some people are going to get this, other people are not. So if I look at this and go, what is the bull thesis? Right? And I do this a lot. So like, walk me through the bull, like what is the bull case? So let's call it this so that we don't confuse people there. All right. So what is the bull case? So I would just take and put my, "I love Intel. Intel's the best." And then look at Intel and say, "I'm going to buy Intel." And then I would do the exact opposite. And then I'd go here and go, "What's the bear case? Intel's a pig. I can't believe people are buying this. This company always screws everything up." And then by sitting down and doing that analysis, you're going to come up with a decision, and you're going to have looked at it from both sides. And I think that's a very important distinction. I think that's a lost art now. And I don't think that people do enough of that kind of critical thinking. I think you kids today are too busy watching TikToks and waiting to see what people are going to say. You crazy kids with your TikToks.
And the wild card through all of this, it's not watching the financial names and hoping that they hold, or are they buying, you know, healthcare? And yeah, I mean, there's some of these healthcare names were completely utterly beaten down, and we had a huge trade in this one. Some of these healthcare names look fantastic. Here's your wild card. And I actually, you know, I look at this, and it's a huge concern to me because I don't think that we're fully grasping what could happen here and how fast this could unravel. But I think it's super interesting that we're watching oil drop with the rhetoric keep up. And it does seem to me, we had a position in LNG that I closed, and I closed my position in oil. And the reason that I did is I feel like there's something out there that I just don't know about when I start seeing like divergences like this over and over again. But that's the wild card out there. But nobody seems to want protection for the wild card. So the question is, what do they know that we don't? Right? So you put that thesis hat on again. What's the bull case for the VIX? What's the bear case for the VIX? And this is what the VIX is doing. That's it.