Transcription
The S&P hit another all-time high. And I think what's really important about this is a lot of what's going on underneath the hood is being lost. Dell was up 32% in a day on one of the greatest beats and since the AI boom has begun. But there have been signs that this was coming. We talked about Lenova last week and how this was breaking out and nobody was really covering this and what's going on. But let take a look at this really quickly. Micron jumps on an upgrade where they put a $1,600 target price on it and no one really understands why and everyone is saying bubble and I'm going to explain today why they're wrong and I will explain the thing that you need to watch that you really do need to be concerned about that would tell you that you might be getting toppy but this upgrade Dell's move that's not one of them. We have the end of the month close and we're going into June and a lot of people say sell in May and go away. We're going to explain why that is an enormous mistake this time around. The other thing I really need to focus on are three key metrics. Smart money, dumb money, investor positioning into the last hour. And one of the key things that I really think people are missing out here is when we start looking at the socks, the internal rotation of the semiconductor index and why people are not really understanding what's happening with ARM. I think there's a lot of really key pieces that are missing here. So, let's get to it.
Most traders are reacting to the institutional levels. What we're trying to get you to do here is to know what they're doing ahead of time. Subscribe, click all notifications. What we go over here is timely by hitting the bell. You don't get it after retail is already in. The important thing is you get the information, education that you need. Subscribe. Let's get to it.
When we look at the market, we can obviously see all the volume that's coming in. It's actually increasing at the end of the month. And I think this is really important to just start with the basics. And then we're going to dive into this. And I really want to show smart money, dumb money. So, we're going to jump right into that right after this. But what I want to do is go and take a look at the breath of the market. And I just want to show everybody this before we even get started. So on Friday, you can see that the breath of the market did sell off a little bit on the five, on the 20, and the 50, and the 200. For those that are new here, this chart below is a 200 day moving average, 50, 20, and five. And what it represents is percentages of stocks above those. So you can see on Friday, we did start getting a little weaker on the five and on the 20 and on the 50 and on the 200. And is this something to be concerned about? I think it's more positioning, locking it in and re getting ready for what's about to come because you have a lot of different are going to start happening in June. June is it's not going to be sell in May and go away. It's very clear that that's not where any of this is heading. So I want to get into that and start talking about the meat on why these moves are happening. But we have to spend a minute and just look at the breath of the market and see it's still very healthy. What's so fascinating to me about this particular move is the rate in which the fiveday collapsed versus the 20. It's telling you that you're actually going to probably sell down and then there's going to be some kind of bounce out of it. So keep that in mind.
But let's take a look at this. In front of us is the NDX. And I just want to take a second and draw it this way so that you can see it. Just using open, high, low, close. There's very little here that's changed. So if we're just going to be very simple, we've done an undercut here. After that undercut, what happened to the market? it absolutely ripped and went higher. And I think that this is very important for us to understand that this is what's happening. What I see a lot of day traders doing and again I know people will watch me do day trades and I I'm going to do a live one today on ARM so that you guys can see what we did there. But I think it's really important to get a couple things about this. When we see this kind of thing playing out or when we see this kind of thing happening, it's important for us to understand where we are. So, if I'm looking at this and I'm a day trader, then you have to day trade whatever you're making and then get out of the way. It's not up to you to determine the fundamentals of this market. But the fundamentals of this market are absolutely freaking insane. And I don't think a lot of people are getting that. So, we're going to spend a little time on that.
But, if you're just going to take a step back and you start with, let's say you just understand charting, right? So, after a couple decades of doing this stuff, what I've learned is this, and please listen to this part of it. We can all do this. We can all look at our fancy indicators and volume profile and you know proprietary clouds and chart the index on top of it. Proprietary volume scans and all kinds of stuff, right? We can all do that. And yes, there's value and there's edge in that from a trading standpoint. But sometimes when you do this, you don't see the forest through the trees. And I'll show you what I mean. If you're looking at this, there's a lot going on, a lot of decisions to be made. Right? At the end of the day, just start here. I can't be clear about this. And I'm talking about not even candlesticks. just start open, high, low, close, and say, "Hey, what's really going on here?" And sometimes just being that simple, it clears out everything. And you'll just be like, "Oh, well, the market pulled back and now it's going higher." You don't judge it. You don't say anything about it. And then you start overlaying the other things with things like, "Oh, candlesticks." And oh, look, there's a dogee and then we flipped the dogee and we did the undercut and now there's a dogee up here. You're overlaying things that could help you make better decisions. But at the end of the day, you have to deal with the bottom line that this is what's happening. So even when I look at breath indicators like MDFI right now, which I'll show you, I have to look at this and say, well, I'm still above the 50% line. We only were under it for a very short period of time right here for like one stock undercut. And since then, the breath of the market's there. So this is what we're dealing with. We're dealing with the breath of the market being strong. And this is what this is the hand that you're dealt right now. So we kind of have to deal with this hand. And one of the things I want to get over before we go any further is I really want to get into smart money and dumb money and show you how they're positioning themselves. So, let's do it.
This is a really good time to go over smart money, dumb money. And a quick refresher on how we look at this here. We don't refer to it as smart money, dumb money. We refer to it as institutions and retail. So, smart, no, dumb, no, because we want to understand what they actually are calculating. And then by doing that, then we can overlay the chart, make a more informed decision about how to utilize the data. For example, smart money is calculated by institutional order flow. And then you have dumb money that is calculated by retail order flow. And they use odd lots versus institutional size lots to make these decisions and other vehicles. So we won't get to the entire calculation, but just remember smart is institutional, dumb is retail, smart moves slow, dumb moves fast. So retail tends to move fast and smart institutional tends to move slow. Now red is going to be retail or dumb and smart is going to be blue or institutional is going to be blue. Above you just have the s and pate and let's get to it.
Now there are times when there are just really solid extreme readings on here and it gets very clear. So if you have something like this where you can see institutions just can't literally buy enough and retail is just puking everything that they have. You you would say smart versus dumb. Where I find this having great value and what people tend to not use it for is when you just see the status quo. So in other words, if we look at institutional here and we just go all right well this is where institutions started selling that's not really the smartest move in the world is it? So when we think all right well it's institutions versus retail. Well what's retail doing here? Well retail bought institution sold. So when we see this, we want to understand what it is because that helps us. So we don't want to say, well, smart money's selling, therefore we should sell, right? Or dumb money's buying, so we should sell to them because if you did that, you missed one of the greatest moves out there in years. So we don't really want to look at the world that way. How we want to look at the world is we want to understand what they are so we can understand what people are doing. So if we're looking at this, we're saying, oh, okay, wait a minute. institutions haven't even really overall gotten, you know, real heavy and real extended in here. And retail is not panicking. Retail's just out there holding their positions. See, one of the things we always want to be aware of is when retail starts to sell because when retail starts to sell, that's when you can run into a problem because institutions will not support retail. They will let retail burn, right? They're in no hurry. They're not going to go, "Oh, gez, we better save those guys." No, they're like, "All right, let them puke it all out and then we'll buy it." So, if you look back here where institutions really don't have anything and then you see them increase, that's great. If you see them in here over these periods of time where they're buying into it, that's great, too. But they didn't rush into it in enough time for retail to not puke everything out. So, what does this mean for us? We always want to look at what retail's doing because if they're blowing out of all of this up here and it's starting to show up like this, then we start having a problem. And the problem really would be that okay, well, there's no way that institutions are going to help us, right? I view myself as a retail trader. So then we have to say, all right, what's really happening here? Well, the status quo. What does that mean? Well, the institutions that are selling, you'll have some that are buying. Retail, those that are panicking are versus those that are buying. Do we have an extreme reading here one way or another? You could calculate these out and look at the confidence and say, well, you're a little high. But we'll do that in another video. For today, what we want to do is say no one's really doing anything. They're maintaining the status quo. So, if you're maintaining the status quo and you're bouncing around and we're just going to look at the three years right now, do you have other periods in time where you're just kind of held the status quo? And if you look at the chart, you can see it where yeah, you have periods where we're just really holding that status quo here and we're just really holding that status quo in here as well. You're bouncing around, but you're not having an extreme reaction to anything. And I think that's super important to understand before we go any further with this. So right now, retail is holding their positions. Institutions are holding their positions. So we're not seeing extreme moves where institutions are saying, "Man, we really need to get out of this. These guys, you know, we're way overvalued here." And I'm going to talk a little bit about the fundamental side of this market later in this video and what people are actually missing. Because there's a huge chunk of this that when people are relating to the past, they're just not getting it. So we're going to cover that in a little bit of detail today so that you have a better understanding of what's actually happening under the hood. But we don't see anything here we really have to concern ourselves with.
Now, if we break this down to an hourly, well, I should say a year chart. I shouldn't say hourly. I've got hourly on the mind because I want to go through some hourly charts. And we look at these inflection points that we talk about, these inflection points are always important because when we look at that inflection point here, well, this is where institutions and retail meet. Whenever institutions and retail meet, that becomes a key point. Well, why does that become such a point? Like, why do we go over this? And we went over this about a month ago. If you go back and that's why I always say these videos are always linked together. If you want to follow along, just make sure you hit the notifications for when they come out. But if you look at this, well, what happened from there? Well, retail's going to puke faster than intel or institutions are going to buy here. What happened? The exact opposite is happening here. They're going to get out slowly where retail is going to pile in. And those differences mark exactly these spots on the chart. So, we want to always be cognizant of these moves, right? You can have one and then just reverse and go right back to where you were. But what is this telling us? They're not doing anything here that makes us have to be concerned about their movement. Meaning institutions are not rushing out of anything. That's not going to work. That's going to drive me nuts. Now, let's go back to the square. There it is. Institutions are not doing anything that we have to concern ourselves with. And retail's not doing anything we have to concern ourselves with. And our last situation that we had was right here. And that signal is still telling us what retail is still buying. institutions are maintaining the status quo. That gives us a situation here where we're not seeing any extreme moves one way or another. Just for point of reference, cuz I'll go through a couple of these today. This is by Sediment Trader. I have no affiliation with them, but I have talked to them in the past and they're fine with me showing this information.
Now, we can see how retail's positioning themselves. We can see how institutions are positioning. And it still takes us back to this and that this is what we have going on right now, right? And we all have this amount of information. I I refer to it as information overload. and people just are not really critically thinking about what's actually going on. And we saw this pretty clearly with a couple things. We saw this with ARM the other day and people not truly understanding what's happening here. And a matter of fact, I think it's important to take a second to state this like there's a reason that ARM moved like this. And there's a reason why it happened after the Nvidia conference call. It was very clear that day and we covered it, I believe, in Thursday's video, last Thursday's video. That's why we said they're all these are all linked together, but we covered what was going on. Nvidia came out and said they're going to be a behemoth in the CPU space. I mean, he must have said the word CPU a thousand times during that conference. It was crazy. So, who's their partner on the CPU side? Well, ARM's going to be their partner on the CPU side. So, it's not ridiculous that this thing's breaking out on that move. Now, you could argue the move as people try to get ahead of it. Does the move make sense? Does it not? That's fine. have that argument. This is the chart and this is what's happening. Why you're making the argument that it's too hot, right? And that you're going to predict when it's going to correct, which is the basic problem and the basic premise that I'm going with this. If you look at smart money, dumb money, it's telling you that no, they're not puking it. Retail's not puking and no, institutions are not out there trying to take advantage of that. This is what you have right now after that conference. So, they kept saying the same word CPU. We've all seen the move that's happening in AMD. We've all seen the move that's happened in Intel. And there's a reason for these moves, right? There's a reason why they're acting the way that they are. We have end of month close. And so, you have some different positioning, of course, but at the end of the day, there's a reason why they're moving this way. There's a reason why Micron was upgraded with a $1,600 target price. And we've discussed this in the past. But it's up to us as traders to do two things. One, understand where we are. Are we going to day trade this? are we going to swing trade it? I tend to compartmentalize my trades where I will do day trades, but at the same time I also will have trades that I'm just leaving on because of the fundamentals underneath the, you know, what's going on there, right? And I think that's really important. If you watch these videos, you've understood that that's kind of how I trade. I look at the stool, but I also do everything top down index sector stock. All right, I'm trying to pack this in and then I'm going to tie it all together right now.
So if you look at Micron and you look at how this is breaking out and you look at the target and you look at how you were came out and they said, "Oh well this is stupid because it was here and it's stupid because I didn't buy it and this is what's happening and that's where a lot of people are getting this wrong and I'm going to show you something." Now if you're in the community you've seen this if you're trying to get in the community or you want to be on the wait list links in description and I also pin it if I remember. Enrollment will open again in July early July. I just we just opened enrollment and then I do the onboarding calls and then once that's processed and everyone's settled then we do it again. All right, let's get to it.
So this is MU DDR. DDR is DDR4 DDR5. But what this graph is showing you and it's doing a really good job of it is under LTA or no LTA. Meaning do you have a long-term agreement or do you not have a long-term agreement? And why I think this is so important is you'll see right here in February, that's when it falls off, February 29. So, it could always extend, but right now, Micron has a base that it's never had before. It's never had a long-term base where they're doing 1050 every single quarter like clockwork. So, the idea that this should be trading, and just so we're clear, yeah, it's trading at five times earnings or was trading at five times earnings. And the argument that the investment banks are starting to make and the research houses are starting to make saying this is not your mom and dad's micron. This is not just a cyclical business anymore. They have a sustained steady income stream. That's why this is being as they've referred to it rerated. And to be clear, what did they do with Micron? Did they say it should be trading at 40 times earnings? Did they say it should be trading at 50 times earnings? No. They said it should be trading at 15 times earnings. 15. Not even where the S&P is, which is roughly that 2122. No, 15 times earnings. They're saying it should still trade at a discount to the market even though it's growing at an inordinate amount. So this is what you're fighting when you're sitting here and saying, "Oh, this should stop. This is crazy. This is like dot com." This is nothing. As someone that traded.com, this is nothing like.com. We were coming up with new metrics. So back then, back in the day, we were coming up with new metrics like eyeballs. I don't know if Amazon will even let me go back this far. Let's take a look. So, yep, it would. So, this is Amazon when it goes public. I think it's like seven cents now, right? And everyone said, "If you just held, believe me, nobody was holding this." We were all in panic mode. So I go, "Oh my god, what did we buy?" It was literally abandoned chips. So for those that like, "Oh, I just held." No, you didn't. So if you're here and you can kind of see like where these things start peeking at these pops over, it's super important to get that back here, what were we dealing with? Oh, we were dealing with eyeballs, amount of website visits. We weren't looking at revenue. We we created a whole thing, a whole myriad of new metrics on why you needed to own these names. How'd that work out for us? It worked out pretty well for about two years. And then someone came out and said, "Hey, they can't borrow any more money. Hey, they can't do any more secondaries." Remember, all this was all of this back here in the dot back in the day was all all of it was funded with one thing. Retail money and debt. There was no earnings there. None of that. It's very different than what you're dealing with right now. You can always drop your comments and disagree with me. I'm always open to hear different parts of this. And there are things here that I'm going to get into today that do concern me about that time frame that I do see some similarities to now and I will get to that. But it's more a mechanism of the investment cycle than the actual companies themselves and the earnings themselves. Right? Whether you're paying five or 15 times, it doesn't make a difference as long as somebody's willing to pay it. We're going to get to that part in the video. But when we look at something like Micron and what's happening here and people are saying, "Oh, it shouldn't be doing this. It shouldn't be doing that." It's the same thing when Sandis came out with earnings and it came down and I remember reading this quarter and they were supposed to do 14. They did 23 in earnings. Just so we're clear, $14, they did 23 and they said, "Oh, by the way, I know we said we were going to do 23 or 24 next quarter. Yeah, we're going to do somewhere between 33 to 35." So I mean when you start really looking at the growth here we did six. This quarter we were supposed to do 14, we did 23 and now we're going to do 34 to 35. When you start looking at these numbers and you start really digesting them, the amount of growth and earnings and revenue here is absolutely staggering. So the question is it slowing down or is it not slowing down? And that's a great question.
So let's take Dell for example because this should be just crazy, right? What's going on here with Dell with these earnings? I mean by 64% and revenue only grew by 22% over what was expected. So, I will refer to this as I think that this is their quote unquote Nvidia moment. And I'm not alone in thinking that like this is Nvidia 2023. And people will say, "Oh, it can't be because back here, blah." Okay, I'll get to it in a minute. But here's what you have to wrap your noodle around. This was telegraphed. And we went over this when we went over Lenova. And I don't know, I hate when it does this, but when you go over Lenova and you go 992 and that's how you find it. They were very clear on this that this is what was going to this was booming. And that's why HPE jumped the way that it did. It's why even HPQ moved the way that it did. And a lot of this has been pretty cleanly telegraphed by HPE back here where they bought a company called Juniper Networks. It's growing about 135% and this is one that we're trading the community. We've been in for a while now in the mid to high 20s and you have earnings on Monday. I wonder how that's going to go.
So tying all this together, how can you look at this and say that oh this is definitely too expensive. All right, let's take a look at this quarter. And I want to be clear, these are not my notes. These are notes from investment banks and what they're telling institutions. Dell's up 35% in the pre-market and now up 250% year- to-date after one of the biggest beats we've seen in this AI cycle. So, are these companies starting to beat by less or they starting to beat by more? They're starting to beat by more. One of the biggest beats we've seen in this AI cycle. EPS by 50% to 1731. 468 beat. Consensus guidance stronger than expected revenue 181% year-over-year with guidance for greater than 100% growth. So, not only did we beat by 181%, we're saying our guidance is for 100%. And this is where it gets super interesting to me because you'll have people come out there and say words like this can't possibly continue. That's not up for anybody to decide. You need to actually put a thesis together and explain why it can't continue. You just can't say this just can't keep going because it could keep going for years. And we've seen cycles where it's gone for years. More than offsetting software margins likely impacted by AI server mix. And I think that's important. AI server momentum was a highlight with orders of $24 billion in fiscal first quarter 27 versus 34 in fiscal raised outlook 60 billion in the server revenue versus 50. So just to be clear, last quarter they said we're going to do 50 billion in server revenue. Now we're going to do 60 raised outlook up 27 billion 10 billion in AI server sales 69 to 148 privately or prior. Sorry. I think that there's parts of this besides the 1790 that people are lo are missing out. So I'm just going to remember this 27 billion numbers we tie to it. So if we go and look at this quarter, we're supposed to do 35. We came in at 43. Why do you care about this? because $27 billion when you go back and look at this is the equivalent of another quarter in earnings that they just happen to add to that number. Like it's that big of a number. We're not talking about increasing by 5 or 10% here. We're talking about an increase in their fiscal year that's so big that it actually adds the equivalent of another quarter to their year. It's absolutely staggering this beat. I think when you tie all this together from a from a fundamental standpoint and that's how we always look at things and I want to tie this into ARM in a second here but when we look at this stuff from a fundamental standpoint and we're going to draw the stool you knew it was coming and I think it's important just to get this you have a macro outlay here you know where we're all worried about Iran and will they won't they you know is there going to be a peace is there not going to be peace and frankly the markets just get to the point where they're just discounting anything associated with it unless it escalates deescalates. You're getting intraday movement, but when you look at these charts, it's not even reflective anymore. So, what does this mean? We have a macro overlay. All right. What are the fundamentals of the market right now? They're absolutely crushing. These stocks are absolutely unequivocally crushing earnings. It's actually greater than anything that we probably had earn on the earnings beat side and the earnings growth side. It's probably greater than anything we had in 20 years. Then you have the technicals. People keep saying that these look parabolic. Oh, this is parabolic. I keep hearing this word over and over again. This is parabolic. This is parabolic. Parabolic is like tillray. So this is parabolic. Just so we're clear what parabolic looks like. That's parabolic. When you have no earnings, no revenue, and you're doing something like this. This is what you refer to as a mispricing of an asset. Right? There is a huge difference between the mispricing of an asset and parabolic charts that have no theme or nothing behind them. I cannot stress that enough. Could you make an argument that something like ARM is trading on future earnings that it really doesn't have because of Nvidia's earnings, like they're not there yet, so they're starting to buy ahead of it. Yeah, that could be saying like, hey, this one might be getting a little frothy because Nvidia says they're going to do 20 billion in CPU sales, but ARM really hasn't benefited from that yet, right? Like they just people are waiting to buy it. It had an okay quarter, but you're moving ahead of that. So, this is something that when you start looking at you might say something along those lines. Now, next week there's going to be this big event and I think ARM will benefit from that. But where I'm going with this is that you have to understand where you are in each individual name and what's actually happening. And that's very important to me to get that concept out there because people will look at this and say, "Oh, they're parabolic. I I need to get what is that? What are you talking about?" No, they mispriced the asset, right? If the assets mispriced, the stock price is going to go higher. That's how this whole thing works. If you look at something like STRL, right? STRL. Oh, it's parabolic the move. Oh, what does that mean? No, you were wrong. The whole street was wrong on what they were going to do on earnings and they absolutely crushed and ripped everybody's face off. There's an enormous difference of that. And this does present a huge opportunity.
So, like one of the I'll show you this in a sec. Let me just do it this way. So, one of the things that we saw the other day was when the market was pulling back and right in here, you started to see this build. And the market was actually pulling back when this was happening. Here, I'll drop the cues in really quickly here. so we can see it. So see how the Q's are actually dropping in this area at the same time that this is going higher and pushing and you can actually see the Q's are dipping and at the same time this is pushing and pushing. This presents an opportunity from a short-term trading perspective because if the NASDAQ turns that's going to push. There's no doubt about it, right? Because this is showing high relative strength here. Well, watch this play out live. They raise the cobalt. I think you're going to do it. If this market turns around this thing's going to rip people's faces off. If I'm going to buy ARM, I think that's going to break out. I'm just going to stay with this cuz I'm winning. Up five trimmed. Just the day trade. I'm up $10. There's nothing for me to do with the rest of it. I did trim some of the ARM. I really didn't want to, but I'm watching what's happening. I got nine for it. Up $9. If it's a day trade, you really don't want to be hitting the lower lows. If it's a true day trade, you don't really want to close under this level here. Watch. Say it. I tend to use these clouds on a 1 minute. And as long as the clouds are holding, I'm good. If the clouds start breaking and I entered off a 1 minute, then I'm going to use the 1 minute. You could also use that dogee and say dogeis are uncertainty. If I close below that dogee, it's made a decision from a longer term day trade. Like if you're trying to stay in for the day, that's definitely a fiveminute close under 32720 and you're probably busted on the day. Now, one of the things I like doing because I will do this in the community, I'll go out there and I'll actually put the timestamps in there so that you can actually see what I'm doing with the trade. So, when this broke out, all we start doing is just keep moving this stop up over and over again and just keep pulling pieces of it out. as we're doing that once it gives me a reason to. So when you start ripping up and then coming back down starts getting a little tired. I'm not going to get into the whole trade, but I'll just put out little alerts on that. And so this becomes a function of day trade versus swing trade, right? You want to own the name, but at the same time, if you could pull money out during the day, I will do that. And I do that I do that often, especially in markets like this because the volatility is so insane. It's just it's worth doing. But at the same time, I do like to hold these kinds of names in one form or another because you don't know when they're gonna it's really going to end. And this really ties to something. So when we're looking at doing those kinds of trades or when you're looking at these SanDisks of the world and they're breaking out and you know you're coming up to 1,600 and you're pulling back, you're always trying to figure out, you know, how this is going to play out, right? Like what are these institutions really doing with these positions? One of the things over a very long period of time that I have found extremely helpful with is just watching the last hour of the market. And a lot of people will watch this and there's a lot of different ways to calculate it. I want to show you one way that I look at it and that it's extremely helpful to me to look at what the NASDAQ or what the S&P is doing at the end of the day. And I don't bet against this like there are certain things that people could say I'll take the contrarian side of that. It's very difficult to take the contrarian side of a steamroller. So take a look at this.
Now, one of the things I am always very acutely aware of as a trader and there's a lot of value in this and a lot of people really don't pay that much attention to it and frankly they should really what happens the last hour of trading. So, in front of you is a chart called the last hour. This is a 20-year chart and we're going to break this down into much smaller clips, but I wanted to show you this because it's pretty significant. The last hour is a cumulative total, meaning plus one or minus one for what they do at the end of every single day. On the last hour, if the last hour is up, they get a plus one. If the last hour is down on the S&P, you get a minus one. So, you get the idea of how that's playing out. And this is really important to overlay. When we looked at smart money, dumb money, and I'll explain why. Institutions, when we look at smart money, which we call institutional money, that is basically flatlining. And so when we see that flatlining, we know that that's definitely something that we want to pay attention to. It's clean all this off. Again, I do these unedited and raw. It's just better. Uh, and I think it's just better to get it out that way. So, if you take a look here, right, let's just say that that's really what Smart Money was doing when we looked at it. But at the end of the day, what's really happening? Well, that's not really what they're doing when we look at the last hour. You're flatlining on Smart Money, but really what they're doing is they're continuing to buy at the end of the day. We're going to zoom in on this now. So, if this is a cumulative total and we take a look at this, we can see real clear what they're doing at the end of the day when we get to this 10-year right up here. And we can see that very clearly if you were to draw a line from the peak here from 10 years ago all the way down, you would say, "Geez, that's kind of breaking out." I can draw that a little bit better, but there you go. You get it. And I think that's important. People would say, "Well, do you chart it like that?" Yeah, I do. I want to look at everything. I want to see, are is the cumulative total getting over a higher high level? So, if I see a cumulative total here and then all of a sudden we hit the same level and we stop, well, that's going to tell me something. Well, what's that really going to tell me? Well, institutions at the end of that hourly are not cumulatively getting any stronger. So, if you look at where institutions got to the point where they start puking at the last hour and then you came over to that and you look at that, it's pretty much going to mark the high. So, this always is telling you as a precursor to what's going to happen. You know, there's no like crystal ball. But here's the thing about it. If you have so much of this, let's just say that this is supply of stock and then you have the demand by institutions just increasing all the time at the end of the day, the supply gets eaten up. This is what concerns everybody when they talk about the SpaceX IPO and anthropic IPO and so much going to be dumped on the market that they're not going to be able to eat it all. That's that becomes a concern, right? But whether that is, we can do, we'll talk about it another time. But here's the thing about that. If this, let's clean this off for a sec and do it this way. So, if this is the supply of the market and the demand of the market at the end of every single day is something like this. Well, and they keep eating it up, then you're in a position where you're looking at this going, "Okay, well, there's not really anything for me to do because eventually you have to go higher because supply and demand. Just it's really that simple. When you start seeing those turns to the downside, you want to get a little concerned. And it's not perfect by any means. you're going to see in here, you sold down and then you start seeing them start to creep back up again. And it's not telling us direction. It's not telling us anything but what our institutions doing at the last hour. Here, let me zoom in for a sec. So, what I mean by it's not telling us direction. It's not saying, "Oh, because we're doing this then by Tuesday you should do that." It's not saying because we're here and we're ripping like this that all of a sudden we're going to explode. What it's saying is at the end of every day from July or this was roughly September I think that was that peak CPI number into here from that peak you can see what what's transpired right and you can kind of see where the S&Ps held since that level I believe that was October 23 I think that's when he said no more rate hikes but what is this really telling us well they're eating up the supply all the way through that period in time it's not going to tell you the direction or magnitude of the move but it's going to tell you later that hey all that supply in here is being eaten up and that's really what you're looking for.
Now, one thing we can do when we look at the last hour is we can say how fast are they accumulating it. How fast is that happening? And this is one of the reasons why I wanted to use the 5-year and the 10-year. So, if we go back in history and we look at what's happening, we can see this is really very strong. And we'll zoom in a second, but the only other time I have in this chart 20 years that you ever did anything like this was about 2014, 2015 in this area. That's really the only other time that you ever had anything that just moved this fast. And again, it's not retail that's doing this. It's institutionalized trades and institutional money. And I think that's a very important distinction. Now, let's look at this over and we can see that. Yep. So, you got some buying and then you have a little peak in here over the year and then you can see that it's been declining over this entire period of time. And it's not really rocket science to see that. Hey, at the end of every day, you know, you're cumulatively it's getting lower and lower and then eventually what happens? Well, the market finds a spot and then it gives way and it gave way obviously right there. And look at the trajectory of this from when that kicked in. And usually this is lagging. But I believe the reason it's not lagging is because the magnitude of the amount that they were buying. And I want to be real clear about what this chart does because we're going to have to talk later about what is the one thing about the market right now. Like if I was to find one thing that really bothers me, I'll show you from a bare case like, hey, I we need to watch this. But if I'm to look at this, what would you take from it? And what you'd have to take is that you're getting really no rest. It is every last hour they are just really buying. Even in here, you saw a little bit of a pause. And if you look at that little pause, you can actually see it a couple days later show up in the market. But they're just out there cumulatively day after day getting involved. And this is not at some all-time high level. We're not even at five-year highs on the cumulative total yet. And I always want to look at some of these areas and say, okay, well, when we do get to that cumulative total, what does it, you know, what does it look like? So, if we just go back 10 years, you start looking at those cumulative totals again, plus one, minus one, plus one, minus one. Well, when you look at that 590 really was that kind of level. What's that? You know, when you really think about it, it's 40 more plus ones. So if you think about it from that perspective and say, "Well, where's that even take us to get us back to, you know, something up here, it's like another 10 or 15 days of just constant buying." So when you're going out there and thinking to yourself, "Oh, this has to end. It's definitely got to end." No one's told institutions yet that. And institutions aren't leaning that way yet. And there's a lot of reasons for that with what you're seeing in the earnings front. We'll get to that. But if there's something that really bothers me, it would be what I'm seeing. So we will get to it. There's one thing that out there that does bother me a little bit, but this is very clear. You have buying from institutions and I think this is where it all ties really together because what we're seeing is we're seeing an area where people are saying, "Oh, well, semiconductors can't keep doing this." Well, the idea that software was dead is pretty much just outright delusion at this point, right? You can see your negative divergence or your positive divergence here. I was looking at this one, this negative one, but you could see your positive divergence right here. You could see your area in here. And we've been talking about this for months. And if you go back through these Saturday videos that hey, you're in this area. You really want to watch what's going on with software. If you go and take a look at this on a weekly chart and you know, when in doubt, zoom out. If you take one thing from this video and you can see your support line right here over and over again, getting to those areas, you can see your divergence right here. You can see how that held. And what's so important about this from my perspective is that you're starting to see these other areas, subsectors in here, like really start to lift. And I will go through a couple things that I do think you need to watch on on Monday. But I do think when you look at something like this and you do watch how this thing is
Moving that you are getting other sectors that they're rotating into. So you could be looking at semis and saying, "Well, that needs a rest." Very well could. That's a liquidity grab, but very well, let's just say it needs a rest. They're rotating into software. They're buying software. Software is not even remotely near the highs. So the idea that you can't find another subsector or sector to rotate into, what we did here was just drill into software and then just start looking at where they're going to rotate the money into because software, relatively, is cheap.
See, you still have the fundamental side of the market where people are going to say, "Well, how cheap are these names relative to the moves and what is the growth potential?" Like that's one of the reasons why with EWI, when people say, "Oh, I missed it," I tend to laugh because I'm like, "All right, well, 50% of the index is still trading at eight times earnings, but you should do what you're comfortable with."
So, if we get back to IGV and look at this, what is this really telling you? Well, you have your divergence here. They're rotating into it. Cybersecurity, we were supposed to lose all our jobs, right? You know, one guy wants to tell you that he's going to, you know, fix the educational system and cure cancer, and then the other guy's telling you we're going to lose all the jobs, right? No one's going to have a job anymore because, like, they're just, you know, it's the new snake oil.
Anyway, if you take a look at this CIBR, look at what's going on here. Cybersecurity. See, you're not going to need less cybersecurity. You're going to need more. And this was something that we picked up on pretty quickly and started buying CIBR, started buying CrowdStrike. And if you look at these names, they've just been absolute monsters. I don't have a position in CrowdStrike right now or P&W, but could be something that I regret. Tuesday coming into earnings there. CrowdStrike here as well. And you could take a look right in here, Wednesday. So, it's going to be a big week for these names.
I would say this. So, like, if I always lay out this case, I always have to take a step back and say, "What is the thing that I'm most concerned about?" And I want to show you something that if someone was to say to me, "Well, tell me what concerns you." I want to show you something that, yeah, this does concern me and it is something that we need to watch because it's called the top of the dot-com and it's called the great financial crisis.
So, let's just take a look at it and then let's talk about what's going into and what's what we're looking for next week. Like the big event that I don't think anyone's really looking at in front of you is New York Stock Exchange margin debt on a percentage of growth. And instead of saying like, "Oh, everything's fine." And there's a couple reasons why I'm comfortable here, but I think it's important to just point out a couple things and then we can make a more informed decision about them. And I think that would be very helpful. But for me, understanding what you're looking at is the most important thing because when you understand that, you can make a more informed decision.
New York Stock Exchange margin debt as a percentage of growth. So, I'm going to show you really quickly how this is calculated. This is a sentiment traders indicator. It's not mine. I just want to make that very clear. It gets updated monthly by New York Stock Exchange. And what they're doing is they're taking a 12-month rate of change percentage on margin debt among US investors. So, not global, US. That's all they have access to. But what's so interesting about this is it's month by month. So they're comparing this previous month to the previous month and it gives you a sense of how fast they're moving to increase their margin.
So what I did was I went back as far as they have data for and said, "All right, well, where are those areas where you could start running into a problem?" And meaning, where are they maxed on, you know, that kind of margin? And if we look here during dot-com, you got to a level which is about 75. And so let's just grab this thing real quick and make sure that we're good. And so we'll just kind of mark that off up here. It got you to 75. And then if you look back here during the great financial crisis, that got you right here. And then if we just kind of drop that one. They're not perfect. You can see that right there. I don't know why. Maybe I can get that a little bit better. Yay. So we'll put that right there. And so now you kind of have what? You kind of have this range where if we were to look at this, the last corrections that we've seen in the market. So, like, if you had to say, "Okay, over from 1985 to now, was there an indicator that could tell you where you had the biggest, you know, the biggest issues?" And I think you can. This is going to bother me. So, let's clean it off. I have issues. So, we're going to clean that right there. And then we're going to just drop it there like it's hot, like the kids say. And that's going to give us a range, right? So, that range is going to give us the dot-com. That's going to give us the great financial crisis. And that's going to give us, you know, when the Fed stopped printing $1.7 trillion and buying everyone's house.
So once we look at that situation, it really puts us in the driver's seat. No different than when you want to see, you know, those trough valuations down here, right? And we can draw that a little bit better. All right, let's just do it this way so we can get on with our lives. So you can see like where the trough valuations were where they've completely puked everything out and they're not only are they out on margin, but they have like an inordinate amount of cash. But for our purposes and from a correction, where are we really focused on? Well, we're really focused on if we could just stay up here. We're really focused on that area, right? And why? Because that's going to tell us like, "Hey, this could be a real problem." If you start maxing out and you're growing too fast, now a lot of things can happen here. You can start going sideways, you can stay up here for months, you could really get yourself in a position where you pop over and then everyone gets off margin again. And that presents opportunity. But what we need to start seeing is some slowing of margin debt. Meaning if everybody is out there and everybody starts getting into this range, and I'm not saying it's going to happen and it's going to be obvious to see on like a random Tuesday. Far from it. You can actually see the peak here. And this is really important what I'm going to say. So I want people to kind of get this. And that one's not drawn perfectly, but this part's really important because you have to look at the time frame on this. And it's like you can see that monthly peak right there. And you can see that monthly peak right here. And you can see this monthly peak right here. And I want to be really clear about this. You'll note how these peaks, that one, it's drawn awful. You'll note how these peaks in 2007 were faster than this peak. And I just want to point this out. The reason that we peaked here and then we dropped is because the Fed was still buying stuff. So the Fed's still buying the open market. We could do a whole video on that nightmare. But what we really want to focus on is that when you peak, yeah. It's pretty much like a month and then that's it. Unless the Fed's out there buying everything in sight, right? Because then it doesn't matter what institutions or retail are doing because you have you have another player in the game.
So, we do want to watch this and it is something that we're going to start watching very closely on a monthly basis. And once again, to reiterate this point, it can just stay up here forever. It could just slow down and you could just see the growth not increase the same way it slowed down because it compares it month by month. That is a possibility, but we want to be really cognizant. So, if someone said to me, "Hey, what's the thing that would bother you the most?" This is something that is a concern. Now, that's the one concern that I will be watching. And it doesn't mean it's ever going to happen. It could just stay like this for a very long period of time and the growth could slow month over month.
I, we have to talk about Nvidia and this cryptic message because I don't think a lot of people really understood this. So, I'm going to save you a lot of time. So, this message goes out with Nvidia and everyone's like, "Ooh, it's a date. These are dates. These are not dates. These are coordinates." Just so we're clear on what this is, right? So, a lot of people are not going to get that. But why this is important to this is because of this. And they're saying Microsoft have something very similar. Computex is next week. These are the companies that are going to come out and speak on it. And I do think that you can see movement on Computex and they could be rolling out something new. Maybe not. You never know how this is going to go. But I do think that you could see a lot of movement come out of that. That is it.