Transcription
If you're buying into software crypto right now, you might be catching a falling knife. We are seeing a nuclear winner forming in Bitcoin and the crypto names. Smart money isn't leaving the market. It's aggressively rotating in the storage and memory. Today, we're going to go through a bunch of names to show you why you need to start looking at these names, why most people are still upside down, and the exact semiconductors, memory, and storage names you should be looking at buying instead.
Hey everybody, welcome back. The first thing we're going to have to go over is the difference between the SPY and what's going on there, and also take a look at what's going on with the NASDAQ. This is going to be super important because we have two very distinctive patterns that are changing and we're going to have to talk about that.
Second, we're going to have to cover why software and hardware are seeing this massive divergence. Why institutions are actually selling software and buying hardware and why that's the trade for 2026 as of now. What happened with silver, why the market's lying to you, and why people are out here trying to catch a falling knife. As always, subscribe, click all notifications. Let's get to it.
So, first and foremost with silver, I mean, anybody can see that there was obviously a 37% drop and we're going to start right here. Did everyone think that there was a 37% drop out there? No. Nobody thinks that this is going to happen. Remember when we kept hearing people talk about there's going to be a run on the London uh Mercantil Exchange. It's going to be a real problem. They're going to have to go out there and they're they're not going to be able to find any silver. Well, they can find a lot of silver right now, 37% cheaper than they could have the other day. So what we think is going to happen and what tends to happen tends to be different things. And we want to take that into account is what we're about to go over.
But it's important to look at the difference between silver and then look at the difference between gold. And it's not that gold didn't come down. Far from it. Gold came down and gold came down really, really hard. A matter of fact, you're down 14% on gold. One of the biggest moves it's ever had. And of course, this spread everywhere and we can see that even copper got hit by this. And what we saw on Friday, and we'll touch base on this, is that we saw a lot of margin calls. So when people were long silver or they're long some of these other trades where they're buying levered silver, right, where we go from 427 to 160 in a day, there's a lot of damage out there today, guys. And we're going to talk about this and how to benefit from it right now because there's a lot to benefit from. So you don't want to be caught holding one of these things, holding one of these like falling knives. And what the market's done a great job of convincing you that you need to be in silver right now and that this job that they've done is excellent.
Where I think your head needs to go with this part is understand that are central banks in your opinion and you're always welcome to comment on this below. Are central banks done buying gold? Have they decided that there is stability in the US? If they haven't decided that and if they haven't decided that they're going to buy the dollar, which they are buying the dollar very clearly for this moment in time until the next amount of winning and liberation, then we have to look at this and tell ourselves that no, they're probably not done. But do they want to pay 5600 or do they want to pay 4720? And I think it's interesting how they held the 22-day moving average. This is a 12, a 22, and a 55. You should use what you're comfortable with. That's what I use.
So the one thing that we have to wrap our head around is that the silver trade is not the gold trade. They are very two very completely different trades. One has retail packed into this trade which is the silver trade because they believe that there was going to be a run on silver and it was a whole thing, right? And we got to that. We did actually have people that were reaching out in the community that were telling me they were having their taxi cab moment where they're getting in a taxi and the taxi cab guy is discussing why the passenger should go out there and buy silver. And when we get to that, we call it the taxi cab moment. Um, it's funny how that always starts popping up in the community when you're when we start seeing that. But anyway, if you're trying to get in the community, there's a link in description. There's a link uh pinned as well. Uh, it is a wait list and some of the invitations will actually go out this week. A small group will actually go out this week. So just FYI if you're trying to get in, just get on the wait list.
So let's just keep rocking and rolling here. But on silver or on gold, two completely different trades. Understand that as we go forward. But let's dive into what I think is the larger question. We can look at the SPY and we can look at the S&P 500. And we can see these moves, right? We can see these breakouts and then these breakdowns and then we can see the fades and then the rallies. What we want to look at is the SPY in regards to the Qs. And we want to look at this for a reason. We want to understand what's really going on under the hood. So we use relativism. And by using relativism, it gives us an example on what we can use. So we have the SPY divided by the Qs. And we can see how we're set up here, right? We can see how this is playing out for us. And it's playing out pretty nicely. So what we're having is this rotation. But if you look back from November on, you're seeing that the SPY is tending to lead. But when we get to a certain level, we're seeing that rejection. And I think that this is super important to get because when we look at the Qs, what we're trying to understand, and I think this is really important, is are we going to break out or not? My sense of this is that yes, but it's not going to be a straight line. And the reason it's not going to be a straight line is because a lot of people were overleveled in metal trades. And when these metal and mining trains when they unwound like they did Thursday, Friday, the margin calls that come in are swift.
So, let me explain this. If you're in silver and you're levered and you're a huge account and you come in and one of your positions closed at let's say 106 and it opens at 88 and your margin, your phone rings and all of a sudden your margin requirements on your Nvidia position could go up and then all of a sudden you have to make a decision and they give you to about 240. A lot of people don't understand that investment banks and private prime brokerages can just raise your margin requirements at any time they want. They could say you're at 3:1, 4:1, but they could just call and say, "Hey, we're moving everybody to 2:1. That's in your your bracket." And then guess what you have to do? Liquidate. People don't understand that they have that kind of movement. And on swift moves like this, do you think the bank cares about you or protecting themselves? The bank cares about protecting themselves. Make no bones about it.
But that's going to take us back into the Qs and understanding what's going on here. I do think we're setting up. I do think you have some excess that's going to come out of the market. I think the excess is in a couple really key areas and we're going to discuss that. What I'm not seeing a lot of people understand is that semiconductors are seeing the inflows of capital and the reason for that is the buildout. It's not the compute side of the market where you see things like Nvidia, they're staying there. You see where they're going with the SOX is how it's lifting. What we want to focus on is why is that happening? So you can always look at SMH and SMH will have 2x the amount of Nvidia. But if we take a look at the SOX and we see what that's doing, it's obviously breaking out. If we take a look at ESOC, which a lot of people don't look at, that is the equity weighted side of the market. Equity weighted meaning they're all equal weight. All right. And if we take a look at ASOC, which is AI based, we can see how that's acting. So what we're seeing here is that ESOCS and the ASOCs are pretty much aligned perfectly right now. And it's not always been the case. So, you're broadening out in there. And that broadening out is coming from areas of memory and storage more than it's coming from the fancy compute area. And I think that that's really important. I'm not saying that Nvidia doesn't look good. It does. It's still basing. And now we're starting to make those what? Higher lows and higher highs. Maybe this thing will finally get going from that earnings quarter, right? So far, you're just flat. But there's definitely better names out there, which we're going to go over. We have names like SanDisk out there which we have to cover. We have to really go through what the heck actually happened and why this move is justified. You can obviously comment below and tell me that it's going to blow up. You're wrong, but I'm interested in your comments. And you look at things like STX or you look at things like Western Digital and we see how those things are going to play out as well. And we look at Micron. You need to understand what's actually going on out there because what I see a lot of people doing is trying to bottom feed. And you don't want to do that. The last thing that you want to do is try to catch a falling knife and think that there's quote unquote value here. If you didn't call the top, you're not going to call the bottom.
So, the quote unquote value that people are looking at in the IGV names are Oracle, which clearly from this earnings call here has never come back. Now, I like Oracle and I have a very, very multi-year long-term position in it. But, am I swing trading it here? Absolutely not. I wouldn't even think of doing that in an area like that. You might get lucky. You might be able to catch the bottom. I have a couple guys that I work closely with that that have done that, but is that going to hold? The same chance of that holding is the chance of Microsoft holding here, right? So, we can all see this gap below it. And so, when we start looking at the IGV names, we all see that here. Look at it. So, when we all see this, we want to understand what's going on. And really, software is not eating the world. AI is eating software. And anyone that doesn't think that is not watching what's truly going on. Now, Microsoft had its own problems because it's using OpenAI, which is actually having trouble with this financing at the time of recording this. Um, the video looks like they're going to back away from the amount of money that that they're supposed to give them. But you can read about that, but I would follow up on that. It's going to be a big story on Monday. But what I I really want to focus on here is, yeah, you could gap fill here. That's a problem. So, when we look at IGV, do I really want to catch that and try to pick the bottom? I'd rather understand that the trend is my friend and follow the trend. And so, that's exactly what institutions do. One of the easiest trades so far from 2026 and it's been a month is if we just go to this Friday and we just measure that off. Look at where you closed. So long SOX, short IGV. How'd that work out? 34% in a month. If you're not looking at stuff like this and doing these kinds of comparisons, it's a real issue.
The other thing that I would say to you besides that is this with Bitcoin is completely utterly misunderstood and why it's dropping. And we're going to have to spend a lot of time on this and we're going to have to spend time on understanding this crypto bill that's going through. But what people really are missing is that when we look at the market and how I look at the market and you're going to have to bear with me for a second cuz it's coming. Yep. A stool. So you have to understand how I look at everything besides the technicals that tell you that this is a dumpster fire floating down the river with a bunch of raccoons. I look at everything from the standpoint of a stool. And why this is so important is really, it's kind of how I was taught, but it's macro. The tail does not wag the dog. So, the chart's not doing this because the chart's doing this. Chart's doing this because of a reason. The macro reason here is because no sovereign fund ever really went out and bought it. Retail is filled to the gullet with Bitcoin and Ethereum through, you know, please BlackRock, save us, and every other ETF out there that everybody was just willing to just invest in. No one's left to buy. There's nobody left. And now you're seeing record outflows, which we will cover in this video. And so we're understanding that there's a macro theme that never really came to fruition here. And now people are just filled with Bitcoin and filled with Ethereum and none of what they were told is actually happening. I know, shocker. Fundamentally, that outflow is going to put pressure on this market and that's going to lead to the technical breakdown of it. So when you put that together, that's how you should view it. This is the exact opposite, the literal exact opposite of how the macro and the administration is driving the spending in memory and storage which they are driving through the big beautiful bill. If you look at how depreciation is, if you look at the fundamentals and you go through this, you'll understand why SanDisk is doing what it's doing and why anybody that thinks that this is over needs to listen to an earnings report. Listen to the conference call and over the weekend you're going to see that I believe one of the firms Bernstein already put a thousand dollar target price on it. You you might want to watch parts of this video again and as always this video is raw. It's unedited and I find that this is the best way to just really hammer my points home.
So, let's get to it. The first thing that we have to do is understand exactly what happened this week as far as earnings. And what I've done is compile what I think are the most important facts that happen with three very specific companies dealing with memory and storage. And what I want to do is just go through those highlights before we get into the charts. Remember everything we do, technicals, fundamentals, macro picture, it's all linked together. And as soon as you get that, you'll find out that you do a lot better. But the most important thing about this for me, Seagate kicked it all off. And when they came out and and you really understood what they said, it was pretty impressive. Um, and if you take a look here, you're just looking at the 283, which was 22% year-over-year, 311 versus 284. Nearline capacity is fully allocated for for the year. And I just I just want to say that I don't think people truly understand this and why that like the cloud names are getting absolutely destroyed. But if you really read what they're saying here, cloud demand nearline capacity is fully allocated for the remainder of the year. Visibility extends into 2028. We're in 2026. These guys are saying that they're basically filled out all the way for at least 18 months. I would not I would not sleep on this kind of thing from a long-term standpoint. Most people are going to look at the volatility and say, "Oh, I missed it." We'll get to the charts. And this is super important to get because this is what's actually happening. And then we can look at the technicals to figure out when we should take advantage of what is happening. So really, you have who's affected by it, what's going on, and then when do we take advantage of it, long or short. And there are some some great short ideas out there right now.
Western Digital cloud dominance pretty clean, right? Uh, if you take a look here, you're up three billion, 25% year-over-year, 213 versus 188. Cloud segment generated 2.7 billion accounting for 89% of total revenue. What do you see happening here? Cloud demand. Nearline capacity is full. So what you're seeing is just outright demand for product. Just outright demand. Give us as much as you can possibly make. We'll pay what you want us to pay for it. If you look at the pricing of these models, it's through the roof. And if we start talking about through the roof, I just want people to wrap their minds around something as we get into this because I don't really don't think people are getting this kind of thing. If you look at something like a Seagate, and you look at something like a Western Digital, and you look at the actual growth of these companies, it's not just the 25% year-over-year, it's the consecutive growth quarter over quarter, which is roughly on both those companies something like 10%. All this compounding is just really driving this and it doesn't seem like it's going to go away. And that leads us into SanDisk. And I really don't think people understood what happened with SanDisk. So, we're going to get into the when of this, but I think it's important to just get this. I I really don't think that people understood that they were looking for an estimate of $5 on earnings and that they're guiding somewhere between 12 to 14. I I just want to hammer the point home because I I just when it came out that night, Thursday, I just started laughing because everybody is just off. So third quarter adjusted EPS is guided to 12 to 14 versus the $5 guide. So we were looking and people were on the street saying they were going to do 14 in a year. They're going to do 14 in a quarter. We were told that they were going to do 21 by Morgan Stanley on the year before these numbers came out. They're doing 14 12 to 14 next quarter. I I really don't think people are getting the the amount of demand and the pricing power that companies like SanDisk, Seagate, Micron. I I don't think people are truly getting it yet. I saw this a lot when we first started trading Nvidia in 2023 and people like, "Oh, this moves so much." Okay, so if you extrapolate something like this quarter out and you looked at that quarter and you said, "If I did that for four quarters in a row, where does that put me?" and you think about it and say, "All right, well, well, the low end, where does it put you?" Right? And then you think about the high end and where does it put you? And then times a 20 multiple to it. You don't even have to use the multiple of the growth of the company. But if you just looked at the multiple and said, "All right, well, 20 multiple over here. Where's it put you?" And you do that math and you realize that you're looking at like a $1,200 stock just off of that. I mean, it's it's absolutely insane. So, keep keep that in mind when you're understanding the the earnings of this. People will say it's going to end and it's this and it's that. The same people that are telling you it's going to end just told you silver was going to go to 1700, right? And that there was going to be a run on the bank. How'd that work out for them on Friday, right? Let's deal with the reality. Nobody ever knows what's going to happen. You have a snapshot in time and that snapshot is right now. And you make the best decisions you possibly can on the information you have right now. And then you extrapolate it out 12 to 18 months if you're a long-term investor. That's how you look at this stuff. That's how you're supposed to be looking at what's happening. Projected quarter 4448 for the next quarter. Revenue 303 31% not gap 612 they beat by 80%. Unprecedented supply demand imbalance NAND flash driven by AI data. Just so the NAND flash driven AI data just as a side note here it's really important for people to just remember that Lam Research LRCX what you see with them is about 39% of their revenue comes from NAND flash drivers. So when we're watching semiconductors up, software down, and you're looking at this, you should be understanding why that trade is happening and why semiconductor capital equipment manufacturers that are tied to NAND are going higher.
Now that we understand, and I just want you to understand what we're doing. We're going from the macro side of the trade, we're going we looked at the fundamental side of the trade and now we're going to where the technical side of the trade. And I I want to state something because I think that in a way when I go back and I look at the videos and I look at what we're doing, I I want people to understand this that I'm doing this full-time and I've been doing this full-time for 27 years. I'm very very old. And so when I look at this, I'm trying to get people to understand. I actually started doing this in my early 20s. But what I'm trying to get people to understand is the following. I want people to understand that I do day trade. It's probably 20 to 25% of what I do. Understanding and developing the trends and following the trends is a heck of a lot easier when you say it. And I'm not just talking about in the past and you're going like, "Well, if you bought it here, blah blah." The trend hasn't stopped. So, it's people's and here we go. They're going to like here he goes with his earthy like, you know, we are the universe kind of speech. But people have very limiting beliefs on this stuff. And so, what I I was just talking to someone when I do these onboarding calls for people that are trying to get into the community or or in the community. And we just did this whole talk on Google and I showed him this chart and I said, "When was the right time to sell Google?" The guy like stutters for a minute. I'm like, "Well, just when was the right time? Was it was it here, you know, when it starts to roll over or was it here in 2021 at 145, right? Like when was the right time to sell Google?" And so it's up to you as an investor. And what people look at is not understanding the stage that they're at. And so what what I'm going to do is I'm going to do a video on stages because the guy that's got $10,000 and I I want to preface this all because it's on my mind and I'm going to go off on one of the tangents. So here we go. When I started I started with literally like $3,000 in an account a long long time ago back in the day. And the reason I'm bringing that up is the way that you trade from three to 25, from 25 to 100, from a 100 to a million, from a million to 10, from 10 on, those thematic ways that you move money and trade are completely different. And a lot of people don't understand that. And I think that I'm doing a disservice by not pointing that out. So, I'm going to do a video on it so that people get it because it's not it's not the same. You can't move the same way because it it's just the law of diminishing returns. What got you to X is not going to get you to Y. It just isn't. So, I can get I can get deeper into that if you guys want, but I I want to get that out.
So, when we're looking at something like Western Digital, if we get past our limiting beliefs on the fact that we've missed it, even if the stock drops to 200 or 19 188, did you miss it or are you getting an opportunity? So, from a technical standpoint, let's just look at this bad boy and say, okay, we're breaking out. We know that we have huge demand. Are we ahead of ourselves? Yeah. Yeah, we're we're way ahead of ourselves. We're way over our skis here. But what we need to do is find areas of common interest. So, we would mark off those areas and say, "All right, well, when we get to this trend line we seem to hold." So, I might go out there and say, "Hey, I'm just going to put an alert on that trend line, and when I get there, I'm going to get involved." If I looked at this on a monthly, you would look at this and go, "Well, what do we have from a monthly? Oh, I don't know. We have a 10-year base." Okay. Well, let's look at this base. And what I'm doing here or trying to do is give you an understanding on how you may want to look at this. Now, when I look at that base, all I have to do is go out to settings and start lifting them up, right? And just saying, well, where are the next where are the next fib levels? And then how does that play out? So, if I look at that monthly on the fib levels, you would see that, you know, 300's pretty much you're up there. And you can see that you rejected this fib level already. But you could also see that that 200 would get you to like 191. And so this gives us an understanding of hey 300's on the table whether you're going to be there or not. And then as this starts to consolidate from its next run this is what you have. So you have unlimited demand like you know that everybody knows that and we all know what happened with Meta, right? We all we all understand that Meta increased and and I don't want to just drag this into a 14-hour video. So I'm just going to get this out there and it was something I was going to save for another video but I just I don't want a happy face. I just want to get this out there. That that sounded I guess I do want I mean I want everyone to be happy but I just don't want a happy face right now. So if I look at that right and let's just say that that circle represents the amount of capex and everyone thought that this was going to happen and this is what people really are not getting and everyone thought that was going to happen that capex well wasn't that bad but capex was going to decrease that's not what happened this is what happened capex increased this quarter that's what meta did that's why meta jumped I'm not saying that you look at meta but understand that capex increased so that when we're looking at something like a western digital and saying oh it's going to slow Well, I don't know. I don't know, Rocky. The guy the guy that's actually buying your product just increased his expenditures to buy more of your product. So, why is it stopping?
So then we look at this and try to make better decisions on the on the daily side. And what I tend to use for people is just the simplest things. Did you break Did you break the 12-day moving average? No. If you break the 12-day moving average, how's it responded in the past? It's actually just kind of been in quicksand. Okay. So then we would look at that and say we probably don't want to get involved if it gets 12 SMA. Now there's a couple other things that we could look at here that I use. I use certain cloud functions. I use Ichimoku Cloud. I'm not going to get into all of it, but for me looking at this and saying let's use the 12 as a guide. If I start getting below that, we're in quicksand. Then we'll use the breakouts above it and then we'll have to start using if it closes below the 22 and go from there. The other thing that I want to do for you guys is give you a quick exercise and you should be able to do this super easily. Start looking at whether or not you were in this from a long-term perspective versus looking at it as if you were day trading. So, I think a lot of you people are missing the uh the actual themes of these moves because you're in and out of them too much.
If we look at something like STX, very similar, but we're noticing a pattern here. So, what we're noticing is that you're really chopping up the 12 and the 22. And I want to say something here. One size does not fit all. I've seen people say, "Well, if I just use this over and over again, it'll work." It will, but it's your job to use your mind. So, when I look at the STX chart, what do you notice more about STX that you notice about WDC? If anybody had to say, "What do you notice more about it is that it respects its 12 and its 22 more than STX does?" You would have to just agree with that because it's factual when you look at the charts. So, what that would mean to me is that if I was doing this and buying it when it got above a 22 or a 12 and a 55, which is what I use, you should use what you're comfortable with. I might suggest that in this scenario, I really only want to do the chart if it touches the 55-day moving average in here and then get back involved with it and then using that area as a stop. And people would say, well, it doesn't do that that often, right? So, that's what you're looking for. You're looking for those opportunities that don't happen that often. And so what we're looking for here and I just want to be really clear about this again cuz people are going to look at this and go I missed it. You know the same people that are saying that are probably looking at something like Shopify and saying that they missed it, right? Probably the same. It's very similar people and then you look at where Shopify went to and you look at where it was and you look at the dip and you look at your ability to buy that. Or you look at something like Melly and buying it in here when it was like 600 and then it was back here at like 50 and they're saying they missed it and then it goes to 2000 because they missed it. Um, and then it comes all the way back down to 630 and then it goes and takes out highs, but they missed it back here, right? So, when you develop these themes, and I'm not saying buy a $500 stock, go to 2000, hold it when it goes to 700, and then get out. But there's actually a, you know, an area that you could do in between the ridiculously long I'm not selling for the next 20 years, and also I'm not selling because the five-minute bar just dipped down by an algorithm by some kid that's 19 years old in his mom's basement. So like there's a huge difference between those two, right? And in that chasm is really what you want to focus on. Hope that makes sense.
U so when we look at STX, oh it's too high. Okay. So again, if we go and take a look at it, that's what people sound like to me by the way. So if you see where you are on the earnings front, and I'm just going to make this super simple. If you're growing at like 40%, you do the 10% quarter over quarter growth and then you make it 40 and then you look at these numbers and even if you just took like sequential growth of year-over-year of like 30%. Something like that, right? And you extrapolated out where does it put this? Even if you had just had digits like it you're so you're so under that it's silly. And this reminds me a lot of what we dealt with in 2023 with Netflix and people or I'm sorry in 2023 with Nvidia. I'm thinking back a decade ago. Um God I'm old. So if I look at something like a Nvidia and I watch how many people told me that I had no idea and it's definitely going to crash and CoreWeave, you remember all those guys in CoreWeave and they all told you you better get out of this because CoreWeave and Core bad and everyone's like yeah CoreWeave bad and a bunch of people tweeted and then you bought their substack, right? And then Nvidia went up 10x. So what you want to do is be able to make your own decisions, right? And by making your own decisions, what you're going to do is you're going to look at the facts. And the facts are that these are absolute unequivocal blowout quarters. Do they continue? I believe that they do. Do I know that for a fact? No. I could only go like everybody else with the data I have right now and extrapolated out 12 months. This is what Soros does. This is what Druckenmiller does. Maybe do what they do unless the guy on Twitter is doing better than them. Then maybe listen to the guy on Twitter.
So, if you look at SanDisk, for example, and this is really what I want people to get about these trades. When we're looking at something like SanDisk, I'm going to clean off the old call wall and put wall and we're just going to look at this and say, "All right, well, what are we noticing about this?" Well, again, we use our brains and we look at the systems that we're using and we realize that this is fitting into a much better pattern. Well, what do I mean it's fitting into a much better pattern? Here's the 12 and it respects it. It breaks the 12 and we really don't want to be a party to it anymore. And then most people would look at that and go, "Well, I could have sold at 290 and then it's here." Well, you know, earnings are coming. That's up to you to make those kinds of decisions, right? And then what we're seeing coming straight across here is you're respecting the 55. And what are you doing? You're respecting all of this. Do you realize that this stock could get all the way back down to 480 and it not break its trend. So, we have great earnings. We have this move and the majority of people lost money in it. Why? Because they don't have a longer term mentality. They don't have positions that they're buying at a breakout. And I want to be really clear about this. If you go through what I've been saying, the volatility in this thing is insane. Not many people are going to be able to handle full positions where they're buying a breakout using a 280 stop and then you're running to 356 and then you go from 3 and I'm just telling you exactly a trade that we went through in the community and then you're back down to 310 and you're like, don't worry, it's fine. Like no, you don't have any hair left on your head. You can't eat solid food and you're a mess. So you have to look at this and say, well, what's the process here? And the process is smaller positions, core size positions, and trading positions. So like if you take a 1% position, I'm trying to tie education into the information if you can't figure out where I'm going with this. So let's say you take a 1% position in this account, which is not how I trade, but let's just say it's 1%. The way that I trade is risk. Everything I do is risk. I don't care about the the percentage of the of the trade. I think it's silly. Um, you'll never get anywhere. So but if you look at 1% risk, right? So, like let's say that you have a $10,000 account and then you're like, "Okay, I can only risk a hundred bucks." Fine. You buy whatever you can here. If it's one share and that's your stop and it is what it is, but you know what it does is it keeps you in the trade. And you might think that, well, that's silly. Okay, but now you're up on that invested capital. If you did this, bought at the high, use that as your stop, what are you up at that point? You're up 92%. What are you up at the close? 64%. How many people bought the open because they missed it. Because they that and they said, "That's it. I had it. Now they're down 100 points." You know what they're going to do? They're going to sell it and they're not going to wait a month or two to see what really happens or use a system. So, what we're doing is saying if that's your situation, you're like, I don't want to make 1%. Great. Have 50% of the position that's a core and have 50% that's a trade. And then that allows you to do things like this. And I'll just show you this really quickly because I think it's really important. Now, if I had half the position going into earnings and then look at what the position does after hours. Oh, you came back to that level. I wonder if that level's really very important from the earnings. What else was there? Oh, that's where you closed. So, are and this is where it gets this is where it gets really wild. When you know that this is coming and you know that you're going to test this and there's ways to determine not not to know for sure, but there's ways to decide whether or not you're going to break down and have the probability of going in here. And there's a a trade that we did, and if you're in the room, you know it. I'll break it out in a sec. But the purpose of me showing this is if I had a half a position going into earnings and I just waited for the gap fill, put the trade on, then I get involved. And you'll be like, well, oh, sure that's easy to look at. In the past, people in the community know how to do this. People in the community did this and that's really important for me to point out. This is a process. And what you are doing as a trader and an investor is you are setting up processes and you have to figure out which one of those processes work for you. It's not up to me or some other guru to tell you, right? And I am certainly not a guru. I make mistakes like everybody else. If you're looking at this, the people that bought the close bought this. Those people are in and I believe it we went up to near 600 by the end of the day. Went back to 600. But you know what? Do I know? I wonder who so sells off the open and who buys at the end of a day, right? It's almost like retail does one thing and institutions do another. Right? Keep this in mind because when we're looking at these names, this is really, really important. I am going to walk through this the more that I think about it because I want to show you the short-term trading and then I want to show you like the long time the long-term side of it. So I'm going to redo this part. So this refers specifically to just the day trade and again it boils down to who you are but you can see right here at 257 uh SanDisk 555 puts spec they were a dollar hero or zeros is what I call them. Don't ask me for a stop.
So, if you look at this and how it starts to just come in and there's an area in here where when it breaks like right in here, you can see the break and what I'm doing in this and it's super important to get once I see it break a very specific level. That was it. And the reason that I did this trade and I'm going to just shrink this down for a second. And then what I'm going to do is I'm going to drop this to a one so you can see it for yourselves. And I'm going to mark off a key level here. So, you could see it breaking that level. And you'd say, well, why wouldn't you use that level? Or why wouldn't you use this level? And why are you using something else that I can't even see? And the reason for that is really simple. And I'm just going to mark this off right here for a second. And I want you to see the behavior of how it's acting in here. And then what I want you to do from that area is just watch that behavior of that bar. So in other words, you can see the break, the rally down, and in one minute bar. And I put this out earlier in the room so that they would know like, hey, in one minute we just dropped $10. Like it's nothing. Now, this is very different from a swing trade, long-term trade, right? But this goes back to our core thesis of do you want a core position and a trading position. Let's just say that you want 50/50, but you should do what you're comfortable with. And you watch this thing come down to this level. If once you break in here and you see that mark, right, and you start to see it actually start to break, I tend to look at the option market and I look at the option market book and then bring this up for a reason because we're going to start making this available to people. They're going to start having access to it. So, make sure that you follow the channel. Um, there is a platform coming that's going to start showing you guys all this stuff and then I'm going to actually do educational classes on the platform. Uh, you'll see it. It's it's going to take some time, but just make sure that you're subscribed. You get the news. Subscribe to the YouTube. Make sure you get the newsletter. Organization is not my strong suit. Trading is. You guys know this if you've been watching this. So, when we started to break right in here, I knew underneath of it that there was a huge gap. And if we got into the gap, I knew that we would break. Like, I knew, let me rephrase that. I knew we had a high degree of probability because the option market makers had nothing in between here. And once you understood that, you knew that it was just going to feed upon itself and it was going to be fast and it was going to be awesome. So it did exactly that and then it did the gap fill. So people would think that oh it's just a gap fill trade. You have to understand the mechanism in here that led to this. So it this is not common. Let's just call this what it is. It's a home run. But what we were able to do at 2:00 was buy an option for a dollar and then by 3:00 what was it? 3:00 I'm sorry. By 3:00 and then by 3:30 we're blowing it out at 2000%. We're up 20x on the damn thing. And what I'm doing is what everybody should do and please listen to this. And I say this as somebody that been trading for a couple decades as and you know this. If you are trading options and I'm going to do a whole video on this as long as there's interest, just comment because I think there's going to be but just show me that there actually is. Um, if you're trading options like this and you're not scaling out into positive slippage, you're doing it wrong. You know what you can do? Swing trades and long-term trades and you can say this is how I do it. If you're not doing it the way that I'm telling you how to do it right now, you're just doing it wrong. And this I was a registered option principal for nine years. I'm telling you that you're doing it wrong. And if you look at the results of the people in the community that are doing this kind of stuff and they're following what I'm doing versus spraying and praying and holding these options went, I think to 20 cents later in the day or 10 cents within 10 minutes of us doing what we were doing. And we we were getting out at 20. 15 was the stop from a dollar stock in a half hour. So I they don't all do this. If you are trading small lots,
Please listen to these words. Let's say you're like, "Oh, I'm not going to buy 10 or 100 or 50 of these, whatever." It doesn't matter to me like the size. But if you're trading like the ones, the twos, the threes, and you don't want to scale, you need to set up a system. That's I'm going to just tell you exactly what it is. You need to have a win rate above 50%. Just write this down. You need a win rate of 50%. And if you're not hitting 50%, go hit 50%. If you lose 50% of the value of the option, sell it. If you're going to all do all none and you're trading small odds, if you're over 100% from there, you should be selling it or moving the stop up in 25% increments, 100, 25, 150, 200 like that. If you do that and you start charting it, that's how you get successful with small lots so you can go and do bigger lots.
Please listen to that part of this video again. If you're trading smaller lots, which I know a bunch of you guys are, you got to start somewhere. You have to, right? So, no no problem with it. It is what it is. So, that was a great trade, right? Here's the better trade, the one I was like more impressed with, the people that understood the long-term idea of what SanDisk was, and I obviously have a long-term position in this. But the people that did this trade, the people that knew that when it got back, this was the one like when I saw people in the community doing it, that's the one that's like super rewarding for me. I'm like, "Oh, they get it." Like they know you're going to probably hold the gap fill that all they have to do is just wait for the flip. Like that's a perfect bullish homing pigeon it's called. That's the candlestick pattern right there. And all they did was just buy the damn thing. Where's your stop? Oh, if it closes under here, it's not rocket science, guys. Right? They're in at 5:45 and here. So, the person that understands what I just explained from a long-term perspective and understood the earnings and waited for their opportunity during the day, the what, who, when, right, was able to buy this at the same exact price as it closed, knowing that earnings for next quarter were going to be five bucks and now they're going to be between 12 and 14. That doesn't sound like a bad day, does it?
The crypto act. We need to take a a second about what's going on here because I don't think people really understand this quote idea of a crypto winter or what's really going on under the hood. Um, and I just want to take a second. So, what I've done with the this video today, and you guys can always comment on this, and I appreciate your comments. If you're in the community already, you know, I do a ton of research. So, I literally read at least an hour or two every day. Just research, research, research. People don't get that a lot because they look at the videos and go, "Oh, he's a day trader." Far from it. 20 to 25% of what I do uh is day trading. It's nowhere near the level of long-term thesis or short-term uh swings that we're doing. It's just that it seems like it's more day trading sometimes just because it's more active and just understand that. So I and the reason I bring it up is I want you to comment on these little snippets. I think putting this together in more of a research format is a better way to look at it and do it versus what we're what we're dealing with right now. So, um, and I have some ideas on this, so just comment below. I think it's way more helpful than just ripping the headlines and and going from there, but actually consolidating it down. Um, and I'll try to get, you know, as objective as possible. But some of this stuff does make me laugh.
Crypto act market structure bill status. So, January 29th, Sen Senate Agriculture Committee passed digital commodity act 12-11. Party line crypto all of a sudden, anybody have that crypto good by the Republicans in their bingo card and uh, crypto bad bill? Uh, Democrats don't want that. Um, you candidly this voted this party line. I'm just going to say it, get it out of the way. You have the old guard which gets all their money from the banking system, which is the Republicans, right? The JP Morgan, the Goldman's of the world. And then you have the Democrats. They get all their money from, you got it, all the crypto companies. So, and we've seen this in the past. So, they just vote party lines. The idea that these companies are going to overtake the banking system. We can just go total tinfoil hat on this and just do tinfoil hat after dark one night, but it's just not going to happen. Um, and I think that this is I think when the more I read this, the more delusional it seemed to be. Uh, first time crypto market structure bill advanced beyond Senate committee. Uh, Democrat, of course, orange man bad grifting on crypto because he would be the only one that does it. But it does seem to be a problem. I mean, I don't think that a president should have their own memecoin, but we'll leave it at that. Um, advocacy sources 50 60% chance of a comprehensive bill passing. Yeah, I I do think that this is going to pass. Markup postponed after Coinbase opposition. Coinbase pulled out and took their toys and went home because they're not going to be the only one that's going to be allowed to do any kind of tokenization. The idea that they were going to be allowed to do equity tokenization um and they were going to be like the only ones or also all the staking and they're going to be the only ones and everyone's trying to get a bill in place so that they can limit competition. It's so fascinating to me and I guess I'm going to pontificate here for a second, but it's like it's so it's so fascinating to me that we went from deregulation and crypto is going to rule the world and you can travel with your your phone to please Black Rockck save us um, you know, create ETFs with this, right? So it it's absolutely insane. And then when people realize that that the banking system got their hooks into it that now it's being controlled and manipulated. And if you don't think it's being controlled and manipulated, I I'm sorry. It's just that's that's just delusional. Of course it is.
Um, what I think about Coinbase is they have themselves in a real pickle here and I do feel that way and I do I am net short Coinbase here um, long term. Citron accuse Coinbase of opposing the crypto bill to limit competition. There's 100% no I no doubt that they're doing that and that they were trying to do that. But this act really solidifies a very different structure than what we were expecting in the crypto and the Bitcoin space. But I just want to point out some dumpster fires floating down the river with a bunch of raccoons for you because I still think there's a lot of money here to make on the short side. And I know I'm going to get a lot of a lot of flack on this. Um, and I've been pretty vocal about this that I I am completely out of things that in crypto that I've held for years because of what I see coming. Um, and sometimes I'm pretty good with themes if you've been watching this channel. Uh, BMNR, you know, this thing is just an absolute dumpster fire. And I've said this for some time, but this really doesn't even do it justice, but I tried to be as objective as possible. And just side note, I am short this. And I just want to review a couple things I think are really interesting. And I go through their losses down here. And I just want to point out, I really think it's kind of interesting that when you look at January 5th's holdings of 14 billion and how much ETH they had here and then now their holdings are 12.8. You know what's so interesting about this with where the the the drop is from the fifth to this level. And what I'm trying to do here is be as objective as I possibly can. This loss is multiple billions of dollars, right? It's it's insanity the size of this loss. It's like $4 or5 billion. I can do that on my own. I don't need to pay you the entire staking fee that they're taking out in $175 million bonus structure. But but when you guys really start digging into this thing, it's an absolute utter dumpster fire and it's starting to come down the river that these things were actually fueling the buying in Ethereum in Bitcoin, these treasuries and they terminated the president without cause. I I don't think it's his fault that he's out there and I don't know what he did. I'm just going to be blunt about this. I I just think that they're looking at the pie and they're just, you know, it's looking at like rats that are fleeing a ship, right? I mean, if you look at Tom Lee's hair lately, it tells a complete story on what's going on there. when he's on TV, it looks like he's been through a war. But for me, looking at this thing, I think that this is an absolute dumpster fire. I think they're going to have to unwind the whole thing. And I think all this is going to put a lot of pressure. And I don't think they're the only ones, but I'm putting this one out because it's fun. But I don't think they're the only ones that are going to run into this issue. I I truly don't. I think SBT I think any of these Ethereum things are going to have to unwind to pay a lot of the fees, a lot of the structure. None of it makes any sense because they don't produce anything. And I've been saying that it's very different than MSTR for some time, but I am also short MSTR.
I just want to go through this with coin. And again, I just want to be really clear about this where my head is. I am I have been short coin. I starting last week with something we saw in the market. I've been short BMR forever. Um despite them yelling at me in the crypto room in the uh community and you know I am short uh MSRC and I am short uh BMR. So let's just keep going here. uh Coinbase January 26 notes th this thing's really under attack and I think it's coordinated to an extent. If you really look at some of the dates that are just popping up here right now around this bill, um you fell 6.1 after UK advertising standards banned ads is irresponsible for crypto trading risks. Right? We can all remember fortune favors the brain. They put Matt Damon out there on a rock staring at us. Um but again, the UK says no MOS. Uh bar initiated neutral citing weakening trading activity, ongoing regulation risk. You know, when crypto drops in price, people don't trade it anymore. They're not as smart as they once were, right? We we all know that we're always much stronger and smarter in a bull market. Uh crypto bill backlash dropped 6% on early January. We're all aware of this. Uh down 16% year to date, trading 52 weeks below the levels. It's in a lot of trouble. I also think that this was interesting where Argentina is pausing USDC peso trading effective January 31st, 2026. Cuz I'll just tell you why I think that's interesting. Does anyone really think that that's like Argentina doing it by themselves? To me, that is their relationship with the US. And it makes me wonder why, like, why they would not want a USbacked dollar peso. Like, why wouldn't you want that? Why wouldn't you want that stable coin? I just thought that was interesting. And of course, the Philippines are blocking by regulators over licensing rules. I think that this is a very interesting structure that we're seeing. It is very clear to me that it's a coordinated attack and I do think that it's going to hurt Coin. Coin's coming out with earnings soon. But now we can start looking at the technicals because you understand the fundamental landscape. My sense of this is and I have my own belief and of course you're going to have your own belief on Bitcoin, but my sense of this is besides all this news that technically this is setting up for a dumpster fire and I've been pretty vocal about this for some time and I'm just going to say spend a second here showing the pattern of the RSI lower low or I'm sorry lower high lower high lower high and of course you're making lower lows at the same time but see the turn up in here and I pointed this out to people and then they just get so angry. So, I'm sure I'm going to get comments on it, but you know, I've been saying 75 is maybe you're lucky and maybe it stops there. But, you know, you have some other levels down here. We start getting into 68. And when I start saying that, hey, this thing in the past has corrected, you know, 75 85% or I think it's 79 and 89%. And you realize that that's going to put you somewhere, you know, down here. Um, you know, it puts you right around like from from those areas somewhere like 20 20 grand. And people have a real hard time like wrapping their noodle around that. But if I'm looking at this and let's just get this right so we're all on the same page. But that cuz I think it's a little bit better than that actually. I don't think it's that bad. I think it's a little bit better. Yeah. So you're like around 25 26 something like that. Um when I show people that and then I show that this one from this peak you know it came down to here and that puts you at like 15. Um and people like oh it can't possibly do that again. It's the same exact pattern if you see the pattern. And you know, again, I am always curious when I just say to people, show me what the catalyst is because they they shoved enough of this down retail's throat, right? You know, please Black Rockck, save us. Um, and then you have those treasuries that came out, you know, where everyone from Tom Lee to Dan Ives was either selling you an ETF or some new line of clothing. Um, and you just start seeing these patterns over and over again. And when you start to see them, and you can even go back here with it really, but it doesn't matter how far back you go. I think that the the larger issue I guess it could matter a little bit but and again they did it here as well and I've shown this at nauseium but we're going to show it again. Um and you really just have this little level right here and then if you look at that level you'll see it right here as well. And this is when it started getting futures contracts. But I think the important thing about this is that when you start understanding these patterns and then what we said here was, oh, I think you could drop down and then I think the trough of this was somewhere around like 72, but maybe it even went Yeah, it went way lower than that, didn't it? Hold on one second. So, we came down to that level, 3 grand, something like that. And I actually think at one point it was even lower, but maybe not. No, it got you right around that 3,000 level. And then, of course, you fell off a cliff here. And then what happened here is we got what? Yep. $1.7 trillion injected in the market, but sure JPEGs are NFTTS. Anyway, so the important thing about this or these areas is that it can get a lot worse and I don't think that people are truly understanding that.
So, one of the things that I've been doing is I've been short MSTR for a period of time. Uh that was the old put wall. You really need to bounce here and I still have it here, but you really really need to bounce here. what you are getting here and why this is super interesting is you're starting to rise through this on the RSI even though you're at this level but this is a huge huge level for it and you you really need to hold here that 150 level if you break that and if if Bitcoin breaks it's obviously going to break but that that gets you to you know do we get back to 98 um and does that break and I don't have an answer to that but I do know that you don't really have anybody that's buying on on a grand scale you know where's the sovereign funds from Bitcoin that we were all hearing ing about that, you know, that the states were going to do that. That's over. Where are the institutions? They're gone. So, who's doing it? No one, right? There's nobody doing it. And so, then you start looking at these other names that we just went through like Coin and this put wall. I'm still short this. And then you look at what's going on out there. And the idea that they're going to be able to win over JP Morgan Goldman, it's just kind of silly. Um especially when you realize that the banking system is predicated and in existence by the Fed, like we don't have to go down that tinfoil hat, but we all know it, right? So the idea that they're going to be the only ones that get to do tokenization um is, you know, it's just kind of weird. I I when the more I look at it, the more I'm like, how did anyone ever think this was going to work? And and I think there's some issues there. But you know, you look at that break from there, the 222 and now what you're breaking and this is a very different setup to me than when I look at something like an MSTR which is actually making higher highs through that area which means that maybe you get to a point here where this can find some support but we're not seeing that. And if you look at coin now you just broke and everyone's like well now it's oversold. You can see oversold for a very long period of time like a real long period of time. you were oversold here at 50 and then you went to what 30. And it's always so fascinating to me that people think that these names can't go down to those levels. You have earnings coming out and you're like, "All right, there's a$150. Here's, you know, more money. I I forget what they sold here to get that, but you you look at the revenues and the projections here. What do you really have?" Right? So, you're really all over the place. Like, there's no consistency to their earnings whatsoever. So, that's kind of scary for me when I look at it if I was long. So, my next real level here is that 140 area. And I think that you have a chance to to get there. Um, and we'll see how it goes with this bill, but that that bill to me is leaning that way. So, I'm trying to give you some things here that I'm actually looking at. You know, last week's Saturday deep dive went a little um went a little more globally and more macro and then we didn't really do a a Wednesday video on like the strength report and the reason for that was obviously the Fed meeting and we had to get through the earnings. So, I'm kind of trying to tie it in together with Saturday's deep dive and where I'm looking.
But if I look at something like a BMNR and you know you see what's going on here and you have this president resigning and you know I'm sure there's nothing wrong nothing wrong there. I'm sure it's all fine. Um you know and you kind of take a look at what's going on here. I mean this can get absolutely destroyed. The idea that people think that they can't be forced to unwind like Ethereum. How you paying your bills? You know how are you going to deal with when people sell the stock? Like people truly don't understand the mechanisms of these things. And I think if they did, they'd be a little more concerned about them. And I, you know, I've been talking about these for some time, you know, like the SBET, all of them. And these mechanisms like they're they're going to trade and and just understand it's happened before and people didn't understand why, but you know, when you looked at like GBTC and people say, "Oh, that can't happen to me." Okay. Um, but you know, you had periods where GBTC was trading at a 50% discount to Bitcoin. And to think that that's not going to happen here when people are losing, you know, $4 billion. It's not like these guys are geniuses that are picking the bottom on Ethereum and then Ethereum's bouncing. What they did was they took a worthless company, jammed everybody into it and then said, "We're going to buy Ethereum and then you're going to be party to this." And the the thing that I always tried to explain to people was they're keeping the staking fees. They said they're going to split it with you. Why don't you just go buy Ethereum and get it yourself? like what they're doing and thinking that there's something here makes zero sense. And I'm not just picking on them because I think there's like 14 different companies that just did this gold rush. But well, I guess I am picking on them because I'm short them and I think it's going to probably implode. But the point that I'm getting at is once that's done, where's the demand here? Like where's the demand for Ethereum? Oh, it's going to be in stable coins. Really? How's that going? Because countries are saying we don't want them. So that's completely different than where we thought this was going. And that's why you see names like Circle that are breaking down, right? And this looks like you you need to hold here, by the way. So, when you start to understand this, like it starts to make a little more sense, right? You don't have anybody out there that's going to be jamming. Let's go back to this. You don't have anybody in here that's going to be jamming somebody into this. So, you start watching this stuff break down and you're like, "Well, where did it start breaking out before all this?" Okay. Well, you were at right down here in April. You were at 1,600. Oh, it can't possibly go there. Why not? It was there in August 23. Was there again? So a 100% can and that puts that you know BMR that thing's going to be single digits. So if that happens and really just to to hammer this home you know this is my thesis on it right now and this snapshot of time and that's how you know I view it. Now that's it.