Transcription
We're in a war, but it's not the kind of war that people think. And we're going to have to dive into this pretty deeply today. Look through it through charts specifically so that you have an understanding for Monday opens. There's a lot going on here. And I don't think people are truly getting what's going on under the hood. So, let's jump right into it.
The most important thing we do with these Saturday deep dives is actually dive deep. And that's what we're going to do today. We're going to start with the basics and then we're going to really drill into a lot of things that happened with Davos, happens in Japan, and that's happening in Latin America. And then what you're seeing in the commodity markets and what the issue is there.
So, if we take a look at the ES and just start there and what we're going to do is just note that we have the fib levels set and where they're set. They're set from that high and they're set from that high solely because that was the daily high, not the weekly high. We're going to look at it on a weekly cuz it's pretty telling. And what we're going to see with this little area is that you attempted to get over there and you got completely matumboted. You tried to break down and you couldn't break down. And then what happened? You rallied, but where did you rally to? Well, you're trying to rally back to this level. And that level's pretty much been the bane of anyone's existence for a period of time. And you can see how it ties right in here.
Now, if we look at it from there, we're going to take this off for a second. And then the next thing we're going to do is we're going to drop this to a monthly. And then when you look at this on a monthly, you're going to realize that you just really have this bar. If it closes here, that is going to have a higher high close than the previous two months. So, is this really from an ES standpoint, an S&P standpoint, the end of the world if we close like this, which we'll find out very shortly. And the answer is no. No, this really isn't a problem at all.
Now, let's extrapolate this out for a sec. See, what everyone tends to forget is that there's 11 major sectors. And so, it moves very different than the NASDAQ and other indexes and other global indexes that have heavily weights. For example, when we spend some time looking at what's going on in Latin America, there's a very heavy weight there for exports and those exports need to move. If you're looking at another country, there might be another reason for that that it could move, right? So, you have to understand why those countries move when they move, why Poland's breaking out, why Italy is breaking out. You there's different structures that are causing these areas to break out.
When we look at the ES, you have to dive into it. This is why you always hear me preach top down versus bottom up. The tail doesn't wag the dog. meaning your the small cap name you like that makes that new chachki is not going to go up if the entire market and the entire market structure is dumping on it. So that is why I always go index sector stock and we look at the stool which is macro fundamentals and technicals. We overlay those three things on top of any index we look at and you'll see why in a second.
So when we drop this line down and all we did and I want to show you how I do it so that you can do it too. All I'm doing is going to this peak and from that peak I'm dropping a line. It's all I'm doing. And what you're going to note about that is this is the point of control. This is the value high. You've been unable to sustain any rally above it and you've been unable to break anything below it. And so what you're getting is you're getting sideways action more than anything.
Now there is something here that we should just talk about because it is something that is there. If I take that body and I always go to the body versus the end of the wick and I just stop for a sec, you'll note that you cracked. Period. End of story. Is it the end of the world? I don't think it is. And here's why I don't think it is. If we do the simple things yet again and from this peak we drop a line and then from this peak down here we're just going to drop a line again. So that's all we've done is just take where support and resistance is and now what we're doing is we're going to take a look at this line but we're going to do it differently. And I would suggest and if you're in the community you know this. I'm trying to get everyone to start looking at the simple things and then expand out. A lot of people don't even know how to read this chart and they're trying to go out there and look at candlesticks and 17 other, you know, indexes and indicators and oscillators and they don't even know how they're calculated.
If we are to look from this perspective from the bodies on an open, high, low, close, you get a pretty clear picture of of trying to break over a line that you're just not able to look at. Now, whether you agree with that or you're going to pull out your new, you know, indicator, it's going to tell me differently. That's cool. I use indicators all the time. Not saying that. But you have to start with is there supply and demand? And this is pretty much telling us that.
Pattern recognition from candles gives us even more color on that. If you already know how to read open, high, low, close. If you can't read open, high, low, close, and you're reading candles, you're doing yourself a disservice. Just remember that. So, if you're looking at here, we can't break through this area and we're hitting it here. Okay.
Now, watch this. See, when we look at the S&P and we compare the major sectors that are out there on a daily chart, I just went back to a generalized period. We can go to any period before we dive into this. Let's go to 25 for a second. And these are just the major. I I stripped out everything that's not a major, including semiconductors because I just want to focus on what the top ones are. And I have I do have some others in here like XLR, XOP. I people could make arguments that the percentage waiting of those in the S&P, but for me, when I just look at this group, it gives me something of everything from uh tech to also giving me um, you know, the communication services space. So, I just like the breakdown of it from a major and I have other ones that are literally like 190 on a on a screen, but this gives you a good sense of, hey, where where are the big moves coming? And then from those big moves, you can drill into them. And we're actually going to do this today uh and really drill into XME and what are the areas that are really moving. People think that, you know, it's gold that's really ripping and it is, but there's some areas out there that people aren't even paying attention to that are just absolutely exploding.
Um, so if we if we look at this, what are we seeing on the spy? We're seeing that they're buying the miners. All right, we're seeing that they're buying biotech. And if we just again go back to this, you can see that from this period on, from 25 on, it's really the miners, then it's biotech, and then its technologies, and then industrials actually over the XLC. So then what we want to do with this after we know that we're at best in a trading range since we're not breaking out and we're under that wedge, at best we're in a trading range, right? So then we'd have to just kind of go here and say, "All right, well, let's go take a look from December on about what we're saying here." And we're starting to see a little bit of a change if we just drilled from December to the end of January. We do have the XMA that's rocking, but you're starting to see them buy basic materials and energy as well. And I think that this shift is super important to get from that spot on. And I'll explain why. Because what you're seeing is you're seeing a rush to buy hard assets more than anything. You're seeing a rush into the miners, not because the miners are producing so much more, but because of the assets that are in the mine. Same with basic materials. They want the actual underlying physical asset. Whether that is Lynn developing some kind of specialty chemical, whatever it is, this is what's moving.
Now, if we drill into this, you're also going to see that you're watching energy and then you're watching the XLI names move up. Well, why are they moving up? XLI names are moving up for a very simple reason. You're going to need more industrial equipment for what people are doing and really what countries are doing. If you are not watching what's being said out there and you're not watching what happened in Davos and you're not watching what's happening in Japan, you're you're missing something here and it's really the death of globalization. And whether you like that or not, I I don't really care. But that's what's happening. And we're starting to see it real time. So what does that mean? It means every country is starting to look at this and build up their own infrastructure and their own reserves. This is all going to tie into as things we went through in the past month, which is why I always tell people, you know, with these deep dives, watch the Saturday deep dives. they carry through. You know, if it's of interest, you should be subscribing to it, clicking all notifications so that you can follow along with us here.
But if you look at the XBI, why would the XBI start moving from that period of time? Because XBI and biotech are something that is internal and it's really big in the US and it really has nothing to do with anything else that's going on. In other words, I don't really have to worry about what's going on in another country with a drug. We don't have to worry about that.
Now, if you drop this down even further and we drop this into an area where we're going to go back only to the 26 and see if we see any changes there and are those changes is developing since you have the tax situation that changes. And what you're going to see here is you're going to see a couple things that I think are really interesting. You're going to see that XME and XLE are still taking their place, but of course we're starting to see XOP and this makes a lot of sense. And the reason that it makes a lot of sense is because countries are going to have to build up their own supply chains and their own infrastructure with oil. Meaning the way that things used to flow before are probably not going to flow the same way. Of course, you have what's going on in Venezuela. So, you're watching the energy names rip. You're watching the miners rip, and we're watching XLI and XLP, which is more defensive, and that could be because of the tariffs.
But what are you getting here? The majority of the world's talking about what? AI. And we're all discussing it. I'm not saying to not discuss it. I'm certainly saying not to trade it, but where are the inflows really going? It's going in the It's going into the miners. It's going into energy. It's going to basic materials. It's going to building out your infrastructure. And it's going into bulk buying. And it's going into buying equipment so that you can do more of these things. That's where all this is going. All of this leads to one simple thing, more productivity. And you have more productivity than your GDP goes up. If your GDP goes up, your earnings go up. It's really that simple.
So if you start to look at it from a standpoint of globalization is obviously falling by the wayside and then as globalization falls by the wayside you're going to have countries look at national interests. If you don't believe this you should go look at what the prime minister of Italy has said recently about this and we talked about this last Saturday and we've also talked about what Poland's been doing. We're going to tile this all together later in the video. But understand where all this is going. I'm not saying to not look at the AI side of this. Of course you have to, right? because there's going to be massive movement there up or down. But you have to understand what's really happening here. And you have a a big war going on out there. And that war is for assets. It's for hard assets. And when you start to understand this for no other purpose but to make money, you can profit from it.
Now, I want really want to hammer this part home because I think it's super important. What we do here is we try to figure out where money is going following the the vein. And by doing that, I want people to understand there's no social value to what we do. And you have to kind of wrap your noodle around that. All we're doing here out of everything is very simply just trying to track all we're doing. Where money flow is going and institutional money flow is going. That's all we're trying to do. And by understanding that, we can profit from it. I'm not saying globalization's bad, nationalism's good, nationalism's bad, globalization's great. You know, I'm not saying one's the ants pants or the cat's pajamas. I'm certainly not saying that. But what I'm saying is you need to find out and look at what's really happening. And I have this statement all the time, which is you need to trade what's actually happening. Not what you want to have happen. Not the rainbows and the sunshine and the butterflies that you want to go outside and see all day, but what's actually happening so that you can benefit from it. And therefore, by you benefiting, the people around you benefit from it, right? That just kind of makes sense.
And I want to show this on what happened on Friday because I really think that there's one thing that people aren't understanding about this market. And this you want to pay attention to. you really want to get and drive home what I'm about to say. You have no depth to this market because nobody trusts anything because you're literally standing on quicksand. At any moment, countries are changing what they're doing. And that in and of itself scares the heck out of people. So, what tends to happen is you rally the wagons and by rallying and circling those wagons. And no, I was never a cowboy and I couldn't imagine being on a wagon. So, that's why I said rallying instead of circling them cuz not something I would ever do. But if you stay with me through these poor analogies, you'll get where I'm going with this. And where I'm going with it is I'm saying that that's what they're doing. Whether it's the US, we want a little piece of ice, or it's Japan, what do we need a House of Representatives for? All these things that are going on that people are truly not paying attention to as they're watching people dance on TikTok. You want to pay attention to because you're seeing major shifts.
And by no depth, this Friday's chart tells you everything that you need to know when I'm saying that. We've been looking at the NASDAQ and saying, "Oh, we have to get out of the NASDAQ." Best performer on Friday, NASDAQ. And then the 10-year, oh, they're selling bonds. Uh, okay. Looks like they looks looks like they're buying bonds because obviously yield drops. That means the the bonds are going higher. They're selling the dollar. This is an issue, and we're going to get into it. Remember, as they sell the dollar, as foreign nations sell the dollar, that means that they sell bonds apparently not as much as we thought on Friday, but they also sell equities that are in those. This is really important to get. But what was supposed to be our shining grace? What was supposed to be the the cat's pajamas or the ants pants? Small caps. This is what I mean by no depth.
And I'm going to give you an example and then we're going to roll right back into this. We've all seen the volatility that's going on out there right now. And that is really how you define depth. It's not something that you can easily measure, but this is the easiest way for me to measure it. If I take a look at IWM, which is supposed to be where all the money's going, and I just take this here, and what we're going to do is we're going to mark that open. And then we're going to mark down here and we're going to mark that close. And it's going to get you to 550, right around six, we'll say. And then we're going to go to the ATR, which is your average true range. And you're going to see that this is roughly around 370 380. So what that's going to get us is close to 1.5 to 2 on an ATR on a just a common Friday that we're drive driving down. Now, you're supposed to stay in this range. And if you take a look at the previous day, the gap up on that and now the gap down on that, you're not staying in this range. And what people tend to do is they'll look at periods like this and say, "Oh, well, this bar is the same size as this, so it's really doing the same thing." But you already had heightened volatility in this area. You don't have that here. You actually have the volatility picking up and going higher. And what this means is that when we look at some of these movements, people aren't ready for them.
And here's exactly where I'm going with this. It doesn't matter the name. So here's a name that we trade a lot. And we trade this name, Rocket Labs, and we've done quite well with it. And on Friday, we were trading this name and one of the things about it was, oh, hey, we came down to the 22 and we held. And then as we're flipping, oh, well, surely if we flip, then we'll start seeing the buyers come in. Look at the day and what happens.
Now, if I do the same thing here and I just go to ATR and we drop the ATR here for a second, you're going to notice something. What I'll do is I'll get rid of the volume and we'll just leave the moving averages in. But you can see that that's a $6 range, right? So you have this entire movement and just so we're clear on this from that bottom to here and you're up $9 on that and then what happens after you're up $9 on that and just take a look at this cuz it's super it's super interesting to me how this is happening. So out of this you're moving up over $8. So you're moving well over the one ATR within how long if we take a look at this the first 15 20 minutes of the day, right? You're flipping and you're rallying. Okay. Flips down, rallies up, and then after it flips and rallies in what, more like the first hour of the day, right? Comes down a couple hours later, you're all the way up here. So stay with me because this is really interesting. If you're here and you're coming across, right? Took you 2 hours, 2 hours and 55 minutes to get there. To get from the open to there, from peak to trough, and you take a look at this. Look at how long it took you to get there, right? It took you 2 hours and 40 minutes. All right? If we go and take a look from this peak and we take a look at that and we're going to go to that low right there, you're going to see it take three hours.
Now, the reason that I'm pointing it out there is historically if there was news, you would just see it just drop on news. There's no news. This is just a a common Friday now where you're going to go up one ATR and down one ATR, which is absolute insanity. And what's what's happening here is the people that are buying are just like, I don't want to hold overnight because I don't know what's going to happen over the weekend. Yes, there's definitely some of that, but take a look at some of these other names. And it's not just the rocket names that I'm pulling out. It's the market as a whole.
So, if we take a look at something like an ESTS, same thing. You're down, you go right back to the same level, and you reject. And this is why I keep talking to people about, and we did it in last Saturday's video as well. These deep dives that we do on Saturday, the name of the game's rotation. And if you're not rotating and you're not taking it when you have it, you're doing yourself a disservice.
Now, it doesn't even have to be in here. People would say, "Oh, you should just hold SanDisk." Um, and again, we've been talking about this name since what? We've been all over this name since like 50, 60 bucks if you've been following this channel. But I said this here and I stand by the statement. No one is holding from 360 to 310. They might, but someday they'll get crushed. Like, you just can't hold stocks that are doing this. And the breadth of the market, yeah, it's pretty much rotating as well. And you are seeing more defensive names go. But when we look at something like this and you're like, "Okay, well that's 50 points in a day." And and again, I just want to show this because I think it's super important for people to get why you're struggling or why you're buying names and then you're getting smacked around and you're like, "Oh, it I got stopped out and then it broke out into 100 points. What I'm supposed to do is I'm just supposed to hold them, spray and pray and white knuckle it." That's the last thing you're supposed to do with this. What you're supposed to do is understand that you're in a heightened volatility with lack of depth of the market and trade accordingly with a core or trading position or just a trading position. And as this gets higher and higher these names, I just go to a trading position, get rid of the core cuz it's just a matter of time before we just get mumboed.
So when you're looking at something like that, you're seeing a 60% drop in this or 53 points I think it was. Here's 26. So you're 2x on the day on a random Thursday on a stock name. And people will be like, well, it's this, it's that, it's okay. So then what we do is we get rid of this for a second and we just look at what's happening here. So you can really just kind of wrap your noodle around it and look at these moves. And what you're going to see is you're going to see that on a just a common day out of nowhere they step away from the bid and they drop you down $50. And then the next day, what do they do? They rip it up $50. And you're seeing it everywhere. It's not one day that they're doing this. And this is the point that I'm getting at. Oh, here you are off the open and you're going to go from 406 to 443. Do you think that's institutional buying that just has to get in right away? And you're seeing this kind of behavior over and over again. And what's going to start to happen is this behavior will change. So when you're understanding that the behavior of the up and the lack of depth of the market will change and become eventually lack of depth down, you realize that you could be going for a ride. Meaning the genius here that bought at 285 up and like we're going to hold this forever walks in one day at 361 and he's staring at 315 and wondering where his $90 just went on his profit. That's the market you're in right now. And that's why most people are struggling. And that's what I mean by lack of depth.
When we look at the names that we just held and then we're watching them get smacked around, this is why you're having a problem. And I see it all the time and we correct it pretty quickly in the community where we're just like, "Hey, take it when you have it." You know, and a great example of this is one we just went through and I I'll show you this in a second. But if you're looking at these up, it's like, oh, just going to spray and pray. I was just told because memory forever, they're always going to need memory. They they are and it's going to be a big industry and everyone will be worried about the new, you know, I think everyone's worried this weekend because someone has a a 5-minute clip on Deep Mind and he said he's in a bubble. And if you really listen to it, he actually that's not what he said at all. But nevertheless, if you look at this, look at what's going on here. So, do you hold this or do you come in on Monday or Tuesday and you're down another 60 points, right? And then everything you just held for a week is gone. You have to understand that the game has changed. And the reason for that is lack of depth. Why? Because as the dollar drops, Europe's going to pull money out of the market and so is Asia. And and the reason for that is because if they're going to rally the wagons and buy what they're buying to build up their own country, they don't need US dollars. They need their own money. And when you start to understand that that's really what's happening, you'll watch the lack of depth of the market increase as the dollar drops. You'll watch the lack of depth of the market increase as the dollar drops. I said it twice on purpose. It's not a glitch.
This is why names like Intel on their news, by the way, this was a dumpster fire of a quarter. Um, but this is why when we're inflating these names and we're doing it in the name of national interests, this is what tends to happen. you have these names and then there's no depth and people don't understand why they keep dropping because the story and narrative that they were told in here just isn't true. So what tends to happen with names like this and I'll just show you. Um and this was again if you're just looking at it from a super easy standpoint you rallied up for a total of 5 minutes and then after that 5 minutes watch that close bar right there. And then after that was pretty much it. All you did was just kind of rally back to the top of it. Have a little reversal up one two three there's your little trigger bar down one two three. I did a whole candlestick video, educational candlestick video. You might want to watch it. Um, but when you see these kinds of patterns, it's really hard to miss, right? That's really hard to miss those that kind of pattern. And and something like this, people will understand, oh, well, it's clearly going to bounce back up because of blah blah blah. You don't know that. You don't know that these names are going to bounce back up. And believing that, you know, we're here from the government, we're going to save you is probably the most delusional thing anybody can, you know, we're here to help. Uh, is probably one of the most delusional things that you can hear out there. And it's actually in my opinion creating the lack of depth in the market because people are just like okay so we're just going to prop up whatever company we want to and I think that that's super important to get that is also increasing the lack of depth in the market. So is the uncertainty the global and geopolitical uncertainty but it's all leading back to one thing. Nations are basically rallying themselves up and focusing on themselves which has been very different than this collectivism. and we're all going to share and hold hands and and make circles and sing songs around the campfire. And this is exactly what I'm talking about.
So, when we start looking at some of these others on the deep dive, you'll note that I'm going to do a refresh cuz I got asked to on some of the ones we went over last Saturday. I always read your comments. Thank you for sharing these videos. I purposely don't run ads in the middle of them. So, when you share them, it kind of picks up the difference for the algorithm. So, if you find value in this, please share these videos. uh ARGT. If we take a look at the weekly here, I don't really need the RSI, but what we're going to do is just watch the breakout. And you can see that that's a pretty strong breakout on the week when everyone's worried about a tiny piece of ice apparently, right? And why do you care about this? Because what you're seeing is demand. And you're seeing it all over Latin America right now. Like it's it's really all over the place. And if we if we take a look at this, just look right here. This is where he obviously won his party. you know, they reun their whole little slants slide of I guess it's a House of Representatives. I believe it's called something else. I'm not a geopolitical expert. Um, so if anybody knows what it's actually called, let me know because I'm pretty sure it's not a House of Representatives. I think it's something else. But, um, you can see how you were in this area. And we were talking about this and the banks and how the banks look. Uh, and those banks that are over there look exceptionally well uh, to me from that breakout. I'm just going through a couple of them here so that you can see what they what they look like. Um, and you see how BBR is breaking out. you know, this was one that we've been playing with forever. And there you are. You're finally breaking out and it's not rocket science. This is when he got control of the country again, comes back, retests that area, and then okay, there's five bucks or 20% um, you know, in less than a month. And Argentinian Bank, you you have to start thinking like this is where it's going. Take a look at YPF. And again, when you start to see this stuff and you're looking for these kinds of names, this is what's moving now. And this kind of stuff's not really going to stop.
So, if we look at something like an Argentina or we start looking at what's going on in Latin America, which we're going to do in a little bit here, you know, one of the names that we recently bought was this EC. And of course, it had to do with what happened in Venezuela. Uh, and you know, obviously that was, you know, pretty I don't know what another word for. It's pretty crazy like no one had that on their bingo card, right? So, if we if we look at that Colombia and their national energy interests right now, well, what's happening? Well, they're skyrocketing. Well, why? because all this is changing like the entire landscape is changing and what what we're seeing happen in Colombia, what was happening in Venezuela is that a lot of the natural resources and I don't care I don't really care what side of the aisle you're on because this is what's happening and we have to trade what's happening. A lot of the natural resources in Latin America are going to other countries. They're going to Russia. They're going to China and the US is it doesn't want that. Very, very simply. It's really that simple. And so if we're looking at that, then they're trying to find a way to stop that. and they will find a way to stop that if they want to stop it. And that's why you've seen escalation in Venezuela. This is very clear what happened there. This is Colombia and you can see how that's setting up to break out. This is something I think we bought in like off that breakout. Need to see how it's going.
All right. Why is this important? Cuz it feeds the same narrative that we've been talking about. And we're going to get into this in some detail in a second here because when you start to see some of these other areas that are breaking out, it's pretty insane. you start looking at iron ore and watch iron ore and people like well why is Veil running because China's just taking as much as they possibly can by the boatload right now if you go and look if you want to understand why China like why did you go from 13 to 16 because when what happened in Venezuela happened and you go and take a look at the date what you'll note is that with veil which is obviously in Brazil if you go and take a look here why did we pick up on Friday on that Monday and why have we rallied since then since you were over here well this was when Madora was captured. But so China's looking at this and going, we better get what we want while we can because there's a chance that this spreads. And so what you're seeing is you're seeing that throughout Latin America. And you're going to see this everywhere, even with something like a a petro, which I believe is PBR. Um, which if you're from Philly is Peps Blue Ribbon. So if you take a look at this and see 12 to 1428, and you see how you're breaking out, and then we look at this and go, "Oh, well, what what happened in here?" I don't know what a what a coincidence. Anything that they can grab in Latin America, anything that they want access to, they are going to get right now for as long as they can get it and they're going to turn up the heat. And for us, that tells us where we should be looking at investing.
Now, one of the things I showed last week was the monthly of XLK versus EUFN. And if you want to watch last Saturday's video, go ahead. I'm not going to recap why we're using financial European financials. It's in last Saturday's video. Um, and you can go and find that in the video library. But if we take a look at XLK, which is obviously tech, everyone's like, "Oh, well, tech bottomed here and Microsoft's up and this is up and that's up." Okay, financials still outperformed you. European financials still outperformed XLK this week. And I I when I start to dive into this stuff and you start looking at that, it's kind of crazy when you think about it, right? That even with everything going on in Davos and everything else that this is what you're dealing with. It's not going away. So what that means to us again is to look at these names and say are these things that we want to buy or do we want to see if we're going to get some kind of pullback in Deutsch Bank, UBS or any of those other names. It's definitely something to consider that gez maybe you do get a pullback. I think that the biggest thing that people are missing out on and we've been talking about this since I think 30 bucks um is that NATO has to get spending out of Europe and they're going to and Europe has to build out their own infrastructure. And I'm not saying that they haven't. And I'm not saying that the way that anyone's going about this is fantastic. It's certainly not. And I don't think anybody would say that I don't want hollow candles. We just do these rolling unedited guys if you're new here. So you have to I'd rather just go through it and see tell you what I'm saying instead of spending time editing it. And it is what it is. So as always, you're welcome to comment on that, but I don't know why. I'm not going to change.
So if we're taking a look at this, one of the most important things that we have to understand is European spending is going to go up. And if we start talking about Europe, the one thing that I thought was super interesting was Poland really didn't have a lot to say this week. And Poland's the number one buyer of gold out of all of all the countries in the world. I and I couldn't get over it when I mean I actually went through and like I think I triple checked the darn data cuz I couldn't believe it. Number one buyer. And what you're seeing here is very clear, right? There's nothing here that's telling me that this is going to change. Look at this monthly chart. But you didn't really hear a lot of rhetoric coming out of there. You heard it out of other places that are not doing what? Focused on just their natural or national interests. This collectivism mindset that's out there, it it's a real thing that's going away. And the people that have understood this are doing a lot better than the people that are not understanding it.
If we take a look at uh EOL versus the S&P, which is Poland versus the S&P, you're going to notice something. This was the little box that we drew. Let's just blow this up. Come on, little guy. Work with me. So we can obviously see that 50 month 50 moving average is setting up. Let's get rid of my little area here. And you can see that we are outperforming still. And so if we're looking at from this standpoint, you're like, well, why does this matter? I'll tell you what it matters to me. If you go back and look at when they started buying gold and using gold to shore themselves up and shore up their reserves is pretty much when they started outperforming the S&P. So to me, this really boils down to the same thing. Is that what's going to happen here? In other words, people are going to have to start having gold reserves to build boost up their currencies. It's a pretty interesting statement, right? And then how much higher do you think gold's going to go if that's the case? Something to think about. Hopefully, you can see how this is all tied together at this point.
Now, other ones that I thought were interesting because again, the comments that I got, and I got a bunch of them, were how is this stuff playing out? You know, how and which ones are really important to watch? And to me, this was really important for us to watch where we're seeing Google and what we're doing is Google relative to Baba. And what we're looking at is this shape that you're taking over the monthly chart. Now, if we take a look at this on the weekly, what you're seeing again, and I try my hardest to trade Baba and BU, but you know, every day you come in and they could have, you know, a Jack Miles on quote unquote vacation for three months and they don't know where he is. Um and that kind of stuff it plays with me and it makes it very hard for me to get involved there. When we start to see what's happening, Europe and the rest of the world is going that way. They are throwing money in inflows into China are increasing. And that is what tends to happen when you do something. And what I mean by that is if the US po goes and says national interest, national interests, it takes those other countries that don't want just nationalism or want better partners, they'll go and find them. You know, Canada did that this uh this week. They're just like, "Okay, well, if you're going to do this, you know, we're going to take our toys and go home. We're going over here." And there's nothing wrong with that because it's in Canada's national interest to do that, right? So then you're going to see inflows into those countries. And so something comparative of Google Taba, people are like, "Wow, that's a weird way to look at it." If you remember Saturday's video, the way to do that is just based upon market cap. And then after market cap, trying to find businesses that are comparative, right? Not exact, not similar, but comparative. And this is pretty much where we're at right now.
Um, when we start looking at things like quote unquote Deep Seek or Deep Mind or, you know, whatever new thing they're going to come out that they're going to name Deep. Now, one of the more interesting charts for me out of all of them from last week was the FNDF divided by the S&P. Now, this is global and European fundamental companies that are growing in cash flow and dividends. Why I think this is so interesting is these are your lower beta names that are fundamentally and who knew fundamentals were going to drive the market at some point, right? But these are your fundamental companies that are starting to see this money. So if we start to look at something like this and you start to look at the S&P and then I say things along the lines of, oh, they're going to have to go to the fundamental companies and they're going to start investing in their own companies and they're going to put money like the Dutch. Oh, it's only $100 million that's leaving. No, guys, it's it's more than that. um because everyone keeps talking about this one article, right, that everyone wants to keep putting out. No, it's way more than that. So, if you're starting to understand this, all right, well, why why do you care about this here? Here's why you care. Because when you look at something like this, the question you should be asking yourself is, what's the one company out there that has great cash flow that everybody really needs, and then you'd be like, "Oh, well, that could be ASML." Yeah. Right. Oh, okay. And then you're looking at ASML and wondering why the stock's going from January over here and you're up another 20% and it's at all-time highs, right? because obviously this is based in the Netherlands. So why are they investing in US technology companies when they could be investing in their own? Again, this is what you're starting to see. This is also some of the reasons why we're starting to see these tugof-wars with is Taiwan semi really coming here or not? Is it really coming to the US or not? You're starting to see a lot of that kind of talk and what does that infrastructure buildout even look like? It's a really good question and as we mentioned last Saturday, when you start to understand where this is all going and where it's where it's really going is think about defense, think about Golden Dome or whatever the heck that thing that new thing is, right? But when you come out and look at this, you have names like Planet Labs, you have names like Rocket or Planet Labs, you have RKLB, right? Rocket Lab Corporation. Yes, you have these levels that we just went over and this volatility or you have names like AS. But you think that that's going to stop? Like does anyone really think that defense in the US is going to stop or that defense in the US is going to change? So when we start to see these movements here, we start seeing something like a KTOS that just broke out and let it sell down. Let these things sell down. This is what we're talking about. There's no depth. So when you don't have depth, let it just let it all burn. There's nothing wrong with that. And then you go back and you pick up the pieces. So when you see something like, oh, AVAV, I've got to buy this breakout. No, you don't. No, you just have to wait and have patience and watch what happens. It gets back down to here. It'll be down 100 points in a week and everyone will be wondering, gee, I wonder why I'm still in that. See, because it goes back again to index sector stock and it all goes back into this like, oh, you're in a tra you're in a trading range that the NASDAQ's going sideways. You're in a trading range and you're not trading names. You're just sitting there holding them. No, you can't do that in this kind of environment unless you're going to do it in beaten down low beta fundamental names like in XLV. One of the things that we did the other day, maybe I guess it was a month ago at this point, was just buy and I think we paid like 180 for it because you could see that the fundamentals of companies were starting to matter and a lot of these names that were beaten down. You started to see money start to flow into them. This is a this is a great example of that and you know, you'll continue to see something like this move and got completely washed out. Now you're starting to turn. Flips the 55 and now the thing's probably gone. I think
We paid, I think we're up 21 bucks in it, and we haven't done anything with it. And you're going to see more and more of this kind of thing where you're seeing money and inflows into those kinds of companies. But at the same time, while you're building out the low beta, which is actually helping stabilize the market, by the way, you're also underlying pinnings are going to be there of nationalism and building out your military. But that doesn't mean that that all of a sudden the depth of market is going to increase. And the reason that the depth of market does not increase, see, it's all tied together, is because the dollar is dropping. And if the dollar is dropping, that means money is really outflowing. Where from? From Japan, from the US, it's staying. But from Japan, you're having an issue. But you really have an issue from Europe. And there's a way to benefit from this, and that is to look at what nationalism actually looks like in each one of those countries and where they're going to put their capital.
See, when we start to understand this, and we understand the moving parts and where it's all going, and we look at something like a Poland, or we look at something like what's happening in the EU, and all you have to do is just go watch Davos and watch everybody freaking out right now. But you take a look at physical gold and you take a look at physical silver, and we start to understand what's truly happening there. And one of the key things here, and I think it's really important again for us to get, is I don't know what's going to stop this. Now, you have the issue of the commodities market. And I watch all these morons out there, and I don't know what else to call them, that are like, "Oh, well, they're not going to be able to deliver gold, deliver silver." The market will always protect itself. You know who it's not going to protect? You and your dream of $13,000 silver because it can't be delivered. That's not what will happen. What will happen is margin will increase. They'll go to a cash market and they'll say, "Physical, physical delivery by the end of the day." And then all of a sudden, people get locked out of the market and they won't be able to participate. They'll only go to certain merchants. They've already started that, if you really look at it. They've already cut back on the amount of contracts that certain people can buy. And that's where it goes. That doesn't mean it doesn't go higher. But this dream, and what you have to understand, of, "Oh, I'm going to be in there because they're not going to be able to deliver silver." Go ask the Hunt brothers how that worked out. Oh, this time it's different. Okay.
So the goal here is to get you to understand how to look at the world and what's changing. And there's a lot that's really changing here, right? We all see it, whether you want to talk about it or not, there's a lot changing, and it's up to us to navigate. But something like a physical gold and silver ETF, yeah, this makes perfect sense when you really think about it, doesn't it? Like, they're not going to stop buying more gold because all of a sudden we're swimming in world peace. And even when you look at the dollar and what they said, "Oh, no, everything's fine." You know, it's like when I don't know how to say this politically correct, so I'm not going to say it. But it's like when someone tells you that everything's fine and you're like, "I don't know, man. It doesn't really feel like everything's fine. You seem kind of irritated." So the way that I'm explaining that is Europe's basically looking at the US going, "No, no, everything's fine." Well, I don't know. I mean, the dollar, you know, you seem to be selling dollars. No, no, we're cool. Everything's good. Don't worry about it. Nothing to see here. It's just a rebalancing." Okay, that's what's happening right now.
Now, where does this leave us? By the way, guys, if you are trying to get in the community, and I went through a batch of people this week, we had a group that was invited in. I think there's, at the time of recording this, I think there's 24 hours left. So, if you have an email, there's 24 hours left on that. The next batch will go out and then they'll be notified as well. But just look at that. And it's important because demand's been pretty crazy to get in. And I'm bringing it up because once those are out and it's done, it's done. And then it cycles through again. I want to go through this because what I noticed when I dove into this was that you're seeing massive breakouts in Latin American markets, like massive. And I don't think it's going to change. So, when we see something like Mexico, where why I think Mexico is going up is because, and again, if you start to really look at when these things started moving, let's go to this weekly area and say, "Okay, when did this really start to break out and move?" And it really is all in the same area. It's right around January. You start seeing it get tighter and tighter and then it pushes. And I think a lot of this has to do when we saw what happened in Venezuela. But you're seeing this huge breakout here and you're seeing this enormous push through, and I think that's really big. Now, if I just drop it to here and then we start looking at that area, you'll see January 5th, that weekly close, and that's pretty much one of your strongest closes. It's your second strongest close, I think, that the Mexican market's had in about 10 years. And then you're breaking out of that. So then what you're looking for is you're going to take this out. I mean, I think that's pretty much where we're going with this. And then Mexico is going to be at all-time highs. And I think that's super important to get. So again, this is what we're seeing. And we're seeing it throughout Latin America. You're seeing it in Europe in certain parts of Europe. For me, it was Poland and also Italy, right? You're seeing those developments.
But if we take a look at something like this, what you can see with the, this is the all-world index and it's all countries minus the US. This month is one of the greatest moves that it's ever had in a very long period of time. And the reason for that is because of what's happening. So, if we dive into this on the weekly and you look at the weekly move, and everyone's worried about what's going on there, right? Look at what's actually happening. You're actually seeing inflows into these places. Watch when we take a look at it compared to what's going on with the ES. Now, if we take a look from down here and when we had the election and then we had all that winning and liberation and then we could kind of see that we leveled off and now versus the S&P 500, you're actually setting up. And this is where, to me, it gets like really, really interesting. And I'll just show you why. So, if I look at that, let's just drop this to a monthly to speed this along and we look at this area. That's a 50-month moving average. And look at what you're doing. You're trying to close above it. Now, whether or not we close above that for the first time in this existence, I don't have a clue. But low, low, high, down, high. Does it flip? Does it not flip? I don't know. I don't have a clue. I trade what's in front of me. I trade what's actually happening. I don't pontificate, right? I really try not to. I want to trade what's actually going on because it's much easier. Remember, they're the sharks. We're the remora. We don't move the market, right? We don't. We have to trade what's happening.
So what I think about here is trying to give you a framework on how institutions actually look at things and then where they put their money. And they're doing it based upon what's happening on the macro side, and then they look at the fundamentals of the companies that are changed by that, or countries in this case. And then from there, they build and then they put their chips where they may. Now, if we take a look at this, what we're going to do is I want to show you a couple charts here that really going to resonate this home. And I run this monthly scan every month. And I'm just going to show you a couple that I thought were super interesting. So, here's the emerging markets. And if we look at the emerging markets as a whole, what you're going to note is that the emerging markets are completely, utterly breaking out. I think one of the guys in the public pre-market that we do every morning, I think it was Jacob, that actually was pointing this out like a couple months ago. And you could just see, you know, that that's exactly what's happening. There's a lot of great ideas in there. You guys should watch those videos even if you can't attend them because of how that plays out. But you're breaking out pretty strong in here. And this goes back to what, 2003, since it came out. If you take a look at this coming straight across like this, this is what's happening. And it's, I don't see how it changes. And a lot of this is because they're throwing money at Brazil and they're throwing money at what's going on in Europe. By throwing money, I mean, China's like, "Yeah, we'll take as much iron ore as you could possibly give us because it's probably going away." Okay. And you can see that right when, you know, he got Maduroed and then from there, look at what's going on. And then what happens here. And so, just so you get it, with these kinds of moves, what tends to happen here, and people don't get this, is that you can actually check the weekly imports and exports. And some people actually have access to it on a daily basis. And I think that's really important for people to get.
So when I show you things like right for example, and you dive into this and realize that this is global metals and mining, this is like BHP, or BHP. You're that's going to be in here. RIIO is going to be in here. Vale's in here. Like, they're your big dogs that are in there, right? Freeport is in there. And you start to understand this and go, "Well, this is only going to get bigger." Like, there's no way that, you know, China's not going to come out and say, "You know what, we have enough iron ore." Anybody see that coming? Anybody? Bueller? No. Right. Okay. So there's the chances of this actually slowing down. And maybe it does eventually, you know, maybe we all hug it out, right? Because that always happens. So I really don't see how demand does not pick up for this. And so to me, looking at Brazil and understanding that is huge. There's also a couple other things here that I think are really important for people to get when I did these the monthly scan. And I know it's at the end of the month, but I think that this is very important to get in '22, '23. And I'd have to go back and look at what happened because the only thing I really remember there is that everyone panicked that we were going to lose every regional bank. But this might be where it's not really where Itchy started cutting rates. This is really where he stopped right here. Is where he said, "We're not going to raise rates anymore." So if we look at that, he's like, "We're done raising rates." And if we really mark that off, you know, from there, you really exploded. And was it the fact that they weren't going to get higher yield on the bonds on long-term bonds that made them start buying gold? I don't think that it is. I don't know what it really was. Like, what is the trigger in here? If you guys think you know what the trigger is in this area in like March and the regionals, or if you know what it is and say maybe it was in April, whatever the trigger was, because it, if you really look at it, yes, you had a move here, but you didn't have a move like this. There's something there.
Now, could it be when Ukraine and Russia and that that came in and it was the fact that we were telling countries like, "Hey, do what we want, or you can't process your oil, or you can't do this." When we decided to become the, you know, the policemen of the world, so to speak, and I don't care where you are politically, but like if you're a country and then you think that you can do business with everybody and then all of a sudden you can't, it's an issue, right? And you shut out of a system. And that's how you get BRICS. And so all of a sudden, I'm wondering if that is really what led to it. But they don't want the, they don't want the long bond anymore. And this is a, this is a pretty standard thing that people look at gold divided by the 20-year. And it's very clear that they'd rather own gold in their own currency than own the long bond. If you take a look at copper, I have no idea why copper is not breaking out higher than this. Everybody needs it. Everybody wants it. You can't really have a nation without it. And the fact that, and people would say, "Well, it is." No, like I'm surprised it's not a lot higher. And I think that this is going to be the next, the next one that actually goes. And I think that we're seeing it that way. But again, we got into Brazil, so I don't really have to go and do it again, but you guys get it. Copper to me is super interesting.
If we take a look at the Nikkei, and a lot of people are looking at this, and I'm not suggesting not to. It's not really the index that was the problem, right, with what's going on over there and how they're trying to reshape everything. It seemed to me that it had more to do with, here it is, the dollar and Japan. And obviously watching it completely implode that relationship. And that's a pretty heavy percentage of the DXY. And that's why the DXY is actually down. And we're seeing that. And I think that's super important. I'm trying to wrap it all up, but there's a lot here. So, if we look at the SPY versus gold, I thought that this was like super important because you're actually down. Like, you're literally down now at this point. And I'll show you what I mean by that. So, if you bought in '25 and you bought the S&P in gold, which nobody does, but if you did, you're actually down. So, if you go back to this, just to kind of look at how fast that's now. If you bought in 2022 in like March, three years for you to be down in the S&P. Now it's taking, you know, a year for you to be down. Not even a year. It's actually accelerating. And I think that that's something that people are really missing out on. So, do I think gold would go higher? Yeah. I think it's actually even silly to be putting a number on gold and saying, "Oh, gold's going to go here." Where's gold go higher? And how does that end? I don't know how it ends because everyone's going to want their currency backed by gold. And that's really, you know, the one thing I would take from it.
The other thing that I thought was super interesting, and I definitely want to point this out, is this is the Reuters Thompson Reuter Commodity Index, which also has lumber in it. And you haven't really been breaking out of that, but you're certainly setting up for it. It's a really interesting time because watch, like there's a couple things here that I thought were super important. If you take a look at the Qs versus the SPY, you're not getting anywhere. But break it down to growth versus value, which is what VUG, VTV does, and look at this. And look at how that's changing everything, right? You're, if you're not buying value names, you're doing yourself a disservice. I know that people are looking at this stuff and like IGV and they're trying to time the bottom. I get it. I can't think of a worse strategy. Long-term, short-term bounces, I totally get it. You know, this is ridiculous. They shouldn't be down here. You're picking up, I have a friend that's been trading for a long, long time. He's like, "You're picking up pennies in front of steamrollers." And to some extent, I understand that theme. But it really makes me think about, like, do I want to be looking at picking through software companies? And you're like, you're trying to do that. And then you turn around and look at something like, you know, a Newmont, which is just up 24% from like a month ago. And you're trying to figure out if you should be buying, you know, Microsoft for maybe a short squeeze, or does it now bounce from here? And I'm not knocking that. But you have to think about, like, what's your time worth? And what is the best use of capital, right? It's not even, does this work? It's a function of, is that the best use of capital? Maybe, maybe it is for how people trade. You know, some people don't want to trade tech and they don't want to trade the high beta stuff. And I get that. But this is where I'm going with it. If you look at the value side of the market, the value side of the market is clearly outperforming the growth side. And it's been since October, right? And then you start taking a look at what's happened in that period of time.
Another thing that I thought was super interesting is this is the total assets and balance sheet of the US. Would anybody notice they stopped selling? And they stopped selling exactly when Itchy said they were going to stop selling in December. They're no longer selling the balance sheet. I think that's super important. And the question becomes, do we actually start to flip this area on that 55 on the balance sheet? Does it start to lift again? You know, you remember like that huge injection of capital at 42, and now you're at 65. This really shouldn't even exist, frankly. And if you go back to when it did exist, it was back here, right? And it was a trillion dollars. And now you look at it and go, this is the balance sheet. This is what they're covering. And to me, it's definitely an issue. But when you start to look at this and you tie it to the market and these moves, you really want to watch this because if they start buying on their own balance sheet, yeah, that's going to shore up the US.
And I will leave, I'll leave with this. I understand that we're all going to want to watch these tech names. And I'm certainly not, I'm certainly of that book as well. You're going to start coming out this week with Tuesday, and you're going to start seeing STX, Western Digital, obviously follow that. And these names, you definitely are going to want to watch. You're definitely going to want them on your radar because that's why you're seeing the Microns of the world rally the way that they are, or the SanDisks of the world rally the way that they are. The problem for me with these names, and we'll get into this more on Monday's video, is because I don't know how you're going to justify some of the valuations and the growth if the growth is not explosive. And it really needs to be there. But we'll deal with that on Monday. That is it.