Transcription
All right, guys. A lot to go over. Short time to do it. Let's dive into it.
660 is our put wall. We know that it's also where the 200 SMA is. That's the first thing we have to be aware of tomorrow because I'm not sure that this is going to hold. I don't know how many people saw this. So, I want to show you now so you're aware. I want to show you what you can do about it, too.
But 20% of all LG comes out of this facility. 20% globally of LG comes out of this facility. Iran is bombing it and they were continuing to bomb it. It wasn't like it hit it. It's been doing it for hours. This is a problem. This is why emerging markets dropped.
So, we're going to we're just going to roll right into this and dive into Micron as well and what's going on there and how you can play this. As always, subscribe, click all notification. But tomorrow, I'm going to go through some key levels here. I'm going to keep this quick so that this is really actionable for you. You got to watch 660 tomorrow. That you have to watch 660 tomorrow on the spy because I'm not really sure a lot of this stuff's going to hold.
The good news is I think they just ripped the band-aid off tomorrow. Candidly, if we look at the cues and we look at our volume profile and where we are, we tried again. We failed. We're down. I'll show you exactly what I talked about yesterday and exactly what happened today and it was exactly what we didn't want to have happen on the breath of the market. We need to see if we're going to hold this area 92 to 90. My sense of this with the way the market's acting after hours is it's probably not going to hold. But I don't know that. If I knew that would be something, but I don't know. You never know what's going to happen. So, let's be really clear about that.
If we take a look at this level from 990 to this level, to me, we're leaning as we're going to go through it. I'll show you why. As always, subscribe, click all notifications. 27.5% of you don't. All right, let's get to it. So, you know the thing. Do the thing. What we didn't want to have happen was exactly what happened.
But on the fiveday, and we'll start here now, for those that are new to this graph, this is your five-day, and this is stocks that are above their 5-day moving average that are in the S&P. So, stocks in the S&P 500 that are above their 5day moving average. We talked that we were setting up for an oversold bounce. We got it and shot up and then we said we're done. What we don't want to do is have this drop and then hit the lower lows of other corresponding percentages. That's exactly what happened. And I had to wait for this to close before I could do this video and it finally populated. But that's exactly what happened. And it's exactly what we didn't want to have happen.
So all I can do is tell you what's happening and then I can show you how I'm acting on it and then you can do what you're comfortable with. For me, when I see something like this and we take out the lower low here, that means the breath of the market just got worse, not better. So, that means that we're breaking on the 20-day values where you are in a value area where this has held before has gotten as low as a one. I'm not suggesting that's going to happen, but if we go back to something like December, that had us in an eight. You're at a 17. So, this could come in and it could come in hard. And maybe they rip the band-aid off tomorrow or later in this week or Friday and that's what does it because after the Fed today and PPI today as well, the Fed, they're going to stand pat. They're worried about the Middle East.
I'm not going to spend an inordinate amount of time on that. I want to go over stuff that's super actionable to you that you can use and I'm going to do the short, quick, and to the point. And the reason for that is I can go into the deep dive on Saturdays like I do, but I want to get this out to you. So if you see this, the breath of the market got worse. Did it get worse here when it ran up and pulled back? No. It stopped, right? It got better. Down, up, down, down, up, down. Like, say it with me. It got worse.
All right. So then we go to the 50. And I know this seems super simple, but when you say it, respect it because it's telling you everything that you need to know. In other words, when you see you break the 50-day like this on the percentage, all you have to do is go right to that level right here and just mark off that 34 and just wait for it to flip it because until you flip that, you're not going to have the possibility of even getting any kind of divergence down there. So, you would have to look at this break and think that there's more pain coming. It doesn't mean we don't get world peace tonight. I'm going to go out on a limb and say you're not getting world peace tonight with everything that's going on.
At the time this was still active what's going on in Qatar and there's been some attacks in Saudi Arabia as well. And I just want to show you this on the 50 on the 200. You've broken the 50 and this is where you are. This has gotten worse. And what we're seeing is a massive change in sediment. And I'm going to show you what I mean by this. Now what I try and do in these videos is I try to show you what you're supposed to be looking for. And then after you say it, let's clean this all off. Then you make your own decisions. That's really all we can do, right? Because nobody truly ever knows what's going to happen. That's just a fact.
But the important thing about this is Micron crushed. I've been trading, God, it's got to be over 27 years at this point. This is an absolute unequivocal crush. Probably one of the best that I've ever seen, hands down. Now, I put this all into a sheet so that you guys can just see it. And it's gonna be in two sheets because it was so there's so much to it. But I put this all in a sheet. I'm going to start putting these out in the substack too. But here micron these are the quarters. And what I did was I just consolidated it all so that you can just literally screenshot it and you can see everything. Okay. Quarter 2386 versus 197 beat margin 749 versus 691 cash flow 119 versus 893. This is a crush. Take a snapshot of this. Look it up in the dictionary. It'll say crush. This is what it looks like. Guidance. Oh, we were going to thought we were going to do 23 billion. No, we're going to do 32. So, you're Oh, so you're raising your guidance by 50%. Look at the earnings. We're going to do 18 and 3/4 by 1129. Gross margins are going to 81. Oh, but what about in 2028? Like, that's not why it's down. The people are going to say, "Well, gross margins are going to come in." Okay, gross margins are going to come in on everything someday.
The bottom line with this is you're down because the sentiment of the market is shifting. And basically, nobody cares because nobody knows what to expect. And you can see this. There's more documentation here that I want to go through that I think super important for people to get because when you look at the holes here and I did listen to the call and I wanted to make sure I listened to the call before I did this for you guys and also because I had a position in Micron and here we are second quarter 12 versus 9 122 versus the estimate of 9 quarterly dividend they've increased it operating income 1646 versus 121 there's not a hole here there's not one hole here except they can't make enough product and they're building out facilities to 28. So it's not a company issue.
But what happened was stock rallies up, pulls back, everyone reads it, stock rallies back up, and it just starts rolling over. Why? They'll come up with a reason tomorrow as blah as the blah of this, but it's a bunch of crap for lack of a better term. And I that's the technical term we're going to go with. And the reason for it is it's down because they want to sell and they're going to give you a reason as to why they want to sell. But the bottom line is with what you're seeing in the market, nobody trusts anything.
So what started to happen today, they attacked a general of the intelligence in Iran. I'm not going to get into all their names. That was it. It exacerated everything. They started bombing Israel again. We hit another facility, the US. I'm in the US. They started bombing Qatar, Saudi Arabia, Dubai, and they're hitting big targets that are interfering with energy. That LG target, what do you do here? That LG target is got to be, in my opinion, a last resort for them to go out there and literally attack the neighbor and say, "We're just going to disrupt everything because we can and we don't know what else to do."
So when we're starting to look at this and you look at UNNG today or you can even look at something like boil and watch how these things actually moved, you can actually see when it happened. And what we did was when we saw this happen is we got involved literally right away and bought LNG. And the reason for that is because if you take a look at this chart, nothing's setting up better than this chart right now. Like nothing. Now, the question becomes, and this is where I'm going with it, how much longer can this go higher? Well, out of that LG facility, they're just going to have to shut it down. They're literally going to have to shut parts of that down. So, let's walk through when they shut that down. And what where does this lead us to? It leads us to understanding that the risk in the market has shifted not just from oil, but now they're going after LG, meaning Iran is disrupting LG. So now you have the other part of the energy that's being disrupted besides oil, besides the straight. Now they're doing this. So you have the complete other side being disrupted.
Now that we have that happening, you have to think this through and go, well, that's not in a lot of these emerging markets, which is why we've seen things like EWY come in or EWT. After hours, we're starting to see these drop a little bit. And the reason for that or even Taiwan semi and the reason for this is relatively simple. They're dropping because all of a sudden LG disruption on top of crude oil disruption and that's not something that they had full-fledged disruption of. So you have another risk situation that was not factored into the market and was not put into the emerging market cycle which means what? It means they're going to buy the dollar and they are going to buy crude, right? That's what they're going to do now. And they're going to buy LG companies. That's going to be the move. Are they going to get back into the URA trade, which is CF or UAN? Maybe not. But sticking with the actual trade of LNG or sticking with the trade of crude as much as I was of the mindset that okay the top on the VIX is in cooler heads are going to prevail you know things are slowing down they're going to start working on this that's not what's happening so you have two issues that are going on right now and the first issue with energy is stabilization of energy so we don't have energy stability we don't have any off-ramp to this right now. And the off-ramp is just the escalation.
So the question becomes, does the US have to escalate and go actually into the straight to control it or is there going to be some kind of agreement reached? I don't know that we're going to see any kind of agreement. So let's just go on the premise that we don't know because we truly don't know. And that leads us to the VIX. A VIX of 21 is not reflective on where we are. A VIX of 25 is not reflective of where we are. I started shorting the VIX at 27. I covered it today and I covered it before it did this. And I'm just being candid about it. I did not have Iran escalating and attacking their neighbors.
Now, the question could be and the question that people could say about this when we look at something like LG is what else are they going to do? I don't know. But I did not have that in my bingo card that they're going to try to disrupt everything. And I don't know how that's going to go because Qar is now in a point where they're expelling certain members of Iran out of their country. So this puts us in a very precarious position. And looking at the socks right now and saying, "Oh, I really like Micron's earnings." I don't think anybody's doing that right now. I think what everybody's doing when they're looking at the market and they're looking at this very objectively, they're saying to themselves, "Let's rally the wagons. Let's watch the 590. Let's watch the 200 tomorrow."
And again, I'm not going to go through a lot here, but you have to go back and take a look at that breath and what's going on there. This really has not been rolling over. You've been stagnant. You've been waiting to see what's going to happen. You have not been going crazy here. It's been extremely stagnant in my opinion. And I think we're past the stagnant part. I think we're at the part now that when we rally and we're starting to blow off really good earnings, which is exactly what we're doing tonight, that's when the panic comes in and that's when they rip the band-aid off. And we want them to rip the band-aid off. We want them to flush it so we can get on with our lives. This stagnation is not what we want. We want the disruption and I think we have a better shot of getting it.
Now, the number one thing that you want to monitor more than anything, if you want to take the one takeaway from this video, it's definitely 100% watching the breath of the market. You need to start seeing these levels that I went over making higher highs. That's it.