Transcription
You know, it's interesting because you're in the situation where the S&P is just refusing to go down. We look at the RSI and very clearly we see how the RSI has been acting. And I do think that this stuff's important. If we take a look here at that 71658, you can't even get to it anymore. And that's just a weekly chart.
If you look at the top up here, you have that 75845. You would think you'd have more volatility, especially when you take a look at what's going on in like the 10-year and how the 10-year is breaking out here. And when you tie all this together with tech and what happened on Thursday and Friday, I think it's super important to understand this. Like, you're at a 475 on the week and it looks like we're setting up to break out.
If you go even deeper into this and look at the US30 and you you're breaking out like you're legitimately breaking out of yield on a 30-year bond and what people don't really get about this kind of stuff cuz they don't have to care about it. But when you have these kinds of curves, it's the long end you have to worry about. It's not the short end. It's the long end long-term borrow of the country that becomes a problem along with the deficit.
So then when you get into situations like looking at, well, when was the last time we were at a level like this and do the simple things and just drop a line from there, it shows you it's the great financial crisis. And are you in the same situation here as you were back there? No. You're not putting a gazebo in your backyard and all of a sudden your house is worth half a million dollars more. No, we're not. It It's not that. But it doesn't mean that you can't be concerned about it.
The other thing that we have that's going on that people are trying to wrap their noodle around is what's going on in Japan. And if we take a look here at the weekly, we have the similar setup that we had back here in July 24 when we fell off a cliff into August. While all that's going on, you have Leopold that absolutely blew up, right? And they took down all those names with them. And so now people are trying to figure out, okay, how do they not turn into the next Leupold? And the question for that really boils down to what do you think's going on with semiconductors and what do you think's going on with memory meaning do you look at semiconductors and think that this bottomed you had a massive short covering rally and oversold rally that bounced really hard here and I think that again super important for us to pay attention to such a thing right but then at the same time I think it's important for us to dive even deeper into that and then look at something like DRAM and say well what did DRAM do something very similar.
And so when we're starting to put all these pieces together and then we start saying, well, what are they doing in software? Well, software is starting to rally again. So the question that I always have when I look at this stuff is trying to understand and connect the dots. And that's exactly what we're going to do today because you have some names that absolutely crushed earnings. Like Microsoft crushed earnings. And we're going to have to spend time on that because if you don't understand what Microsoft and Amazon did, then you don't understand what happened last week. And if you don't understand what happened last week, it's not going to make sense really what's going to happen with DRM or what can happen with DRM this week with something like SanDisk or memory I should say when SanDisk comes out with earnings this week. Like if you don't understand what happened this past week, you're flying blind. It it's going to be as I refer to it, it'll be a pickle and you got to be cognizant of that.
But you also have these macro issues of what's going on with crude. Now, I don't want to spend a lot of time on crude oil, but I do think we have to pay attention to the fact that with crude, it's that undeniable thing that's still there, right? Like, we don't know how that's going to end. It doesn't look like that's going to end anytime soon and it becomes an issue, right? Every week we're told it's over. Every week there's a new deal. Every week it it starts to accelerate again. And I don't see any end in sight, nor do I think anybody sees that. But at the same time, when you're looking at the VIX, you're at a 16. So it do they seem overly concerned about the market? And the answer is no. No, they do not. I've seen concern before. It doesn't look like that. Even when you go and take a look at the BXN and we see how that's going. Do we have an issue here? No.
So where do we have the issues and why do we have the issues there? And the bottom line is you're having those issues in where you're having those issues in momentum. But if you go and take a look at something like growth versus value, and I do think that this is important for people to get. So I'm going to just turn that into a line. You are seeing a bottom in that. So growth versus value hit this kind of key area that I've been watching. And when we get in here, we tend to bounce. It's no different than when I showed S5FI. And we're always just connecting the dots, right? And when we look at the breadth of the market historically, this is where you bottom. So the breath of the market kind of gets you in here and this is where you bottom. The question is why are you not seeing that the same way? And I think the answer is that people are still looking at this and saying, well, I want to trade momentum. Well, what you want versus what you're going to get are two different things, right? So, Microsoft is not momentum. Amazon and what they did is not momentum.
So, when we start going through this and then we see the bounce in semiconductor, we have to connect all these dots. And I think that this is where people are losing it. So, we're going to get into it. So if we take a look at something like the Q's and we did the simple things and we dropped down the Q's and you have the 12, the 22 and the 55 and we can see here you can't even get through the 12. You had a huge day you rallied and then we get a dogee. Dogeis are what? Dogeis are signs of uncertainty. If we take a look at the oversold versus the you know overbought levels you are still below your 50 line. You are still not able to get over there on the 50 line.
If I go and take a look at the 4 hour and I thought that this was, as someone likes to say, absolutely glaring. I was really surprised, Larry. I am in no mood today. But I was really surprised that you couldn't even get over that 50 line. Like you just stopped dead. And that's not good. I've seen good before. It doesn't look like that. So the question then to ask yourself is, do you have a situation here where you have an oversold bounce or do you have a bottom? And the first thing that I tend to do with these, let's get rid of this magnet before it drives me insane, is just start looking here and seeing if I get any kind of change in trajectory. So your main DTL or downward trend lines there, and then you're getting this other DTL right here. And if we take a look at this, we can see exactly how that's playing out. We've hit a level. We're rejecting that level. And this is something that we have to pay attention to.
Next, we would go and take a look at this and mark that off in here. And you can see that you are completely utterly wedged in here. This is actually a little lower. I think it's like 684 the level. And we actually undercut it and then bounced. And the hope was that we were going to hold it. If we go into some of the simple things again and compare the spy to the Q and then go look at a daily chart, you're going to see that the spy is still outperforming.
So one thing I like to do is take this and then turn it into a line. And so what we're seeing here is that the spy is still above the 55day moving average. So the spy relative to the cues whenever you're like this and you see this, it usually gives you a headache for tech and momentum. So in other words, if you were to flip this and what we'll do to make this simple is we're going to get rid of the 12. We'll get rid of the 22. And we'll make this some kind of neon color that you can't miss. There it is. Yay. Let's get rid of the volume. So realistically, whenever you flip to the downside and you break this, if you're long tech, you're killing it. When you flip that, if you're short tech or out of tech, you're doing okay. And you can see historically over time, like even back here when we had all that winning and liberation, you try to get above it and you can just kind of see how that plays out. And it's actually really good to watch. I mean, here it is back in January 23rd. We all know what that was like. you know, you wanted to be long a ton of tech going into that. And then of course, you can just see these different periods like this was obviously the pandemic. Um, and then you can kind of see where it starts to reverse and pop over and when you start running into problems and then of course you can see those reversals.
So I think it's an important way to measure what's going on with the market, but more importantly it just gives us more color what's really happening out there. And so we are getting more growth and value. But the issues for me are that we're had zero follow-through. And from a momentum standpoint, you should have had another follow-through day. You should have had something more than this. So that's going to lead us to the simple things and looking at these charts and understanding that yeah, you might have some issues out there. And I don't know if it's going to be the US dollar Japan issue that does not seem to be getting better. And nobody seems to really be, you know, overly concerned with the way they were back here in 2024 when this absolutely imploded the market for a couple days. No one seems to be like very concerned about that yet for whatever reason. And maybe we're not as leveraged as we were back in 2024. Maybe people got smarter. They didn't. So, I do think that's like out there.
And then at the same time, when I go and take a look at the 30-year and you're looking at the yield and the yield's breaking out, these are things that you have to realize are going to affect the equity risk premium of the market and they are going to affect us. So when we see these things, again, for me, the antenna goes up and I have to pay attention to it. But we have to watch what's going on. So, and what I mean by that is this, like Meta had earnings. You have to look at these mega companies and see what they did with earnings and what they're planning. And so when Meta, Amazon, and Microsoft came out with earnings and then at the same time we're watching some of the momentum sectors like in South Korea is a momentum sector and they're having a hard time even mustering, you know, two connecting two days together where we go up. We have to pay attention to that.
So we have to look at this as always from a couple different ways. And today we're definitely going to do that. We're going to look at the macro side of this market. We're going to look at the fundamental side of this market. We have to we have to get in the fundamentals today because if you miss this, you're going to be absolutely hosed next week for lack of a better term. Hosed is the best term I have to describe it. It's the cleanest. And then after that, you know, you have the macro issues which we're not going to dive into. Understand that they're there. I'm not going to spend a lot of time on the US dollar, Japan. I don't think there's a whole heck of a lot you're going to do about it. Oil deal on, deal off, but the fundamental side of this, that is the dog wagging the tail right now, and we have to dive into that. But you also have to understand the momentum mechanism that's going on. So let's get into it.
I want to take a moment to go through some slides because I I really think this explains what we're going through here. Now in front of you is just year-to-day performance by total strategies. So these are systems or fundamentals or multistrategies. And so systematic funds are they're going to move whenever they move predicated upon you know some kind of fluctuation usually technical. Fundamental is exactly what it means. LS means long short multistrat meets exactly what it means which means that equities only four to five times leverage. Now what's so important about this is what we just went through when we saw someone like Leopold that just blows up and it's it happens. It is what it is. So but 18% that was the peak and that happened right at the end of the quarter. So if you look at that 18% and then you drop down to where all these funds are currently sitting candly they're all roughly at the same area but some of the leverage has to unwind itself and that's what obviously happened in his case but the important thing about this is all of these funds when you go and take a look at them if you look at the levered guy coming across the levered guy is completely back over until you know probably the May level the and I think that that's important to get where if you look at the system guy and the process guy if comes across, he's really back to where he was in June. It's very different and people, you know, obviously everybody always wants this kind of return, but the point that I'm getting at here is that leverage absolutely slaughtering people right now. So, when you're forming a bottom, which we could be going through, those levered funds when they trade up, they are just constantly delevering. And this is one of the things we're dealing with right now.
Now on global memory which is really the hot space right now and we have to spend some time talking about some of these names especially with SanDisk and Western Digital coming out with earnings next week. But when we look at what's happening here these are two-day flows and it's showing you hey where are we here in regards to two-day flows and it marks off this period in time. And why this is important is when you start to look at something like this it's pretty insane how far and fast we dropped. Now the question really becomes is there a fundamental reason for this? And we're going to touch base on this today a little bit. Or is there something stronger going on out there? Meaning, is it just a technical inflow outflow issue? That's one of the questions that we're going to get into today in some detail. I think the more I'm looking at it, I think we should just cover it so you have an understanding of what to expect next week. And there's some signs of this and there's some signs that this could be, you know, could be a bottom. There's also some signs that it could just be starting and it's not very clear. So, we'll cover some of that today. But when you have extreme moves like this, you do tend to see a bounce and it can come in the sense of it forms a bottom or it's an oversold bounce and only time really tells you.
Now in front of you is a momentum index and I just want to show you a couple things here that are really important I think. So these are your median line right here in red and that's the median of the move. And then you'd have your first standard deviation and that would be right here. And then you'd have another standard deviation right here and then you'd have your second standard deviation. And what they do is they fork it. I refer to them as forks where they have the line and then they just fork off and it'll show you your range. What I think is really important about this is a couple things. The first thing is you can see the breakout above what we'll refer to as like a second standard deviation, the push over and then from there obviously the break below that level. And so then you start asking yourself, well is this an area that you buy that? So when momentum comes out of a market, it comes out of a market. And so the question really becomes, is this the beginning of that momentum trade ending or is it just we're going to bounce? And again, I want to be very clear as I'm showing all this stuff. It's not as simple as we broke. But if you go and take a look at this, and I just want to point this out cuz I think I thought it was super interesting. You're below everything in 26. So the momentum trade for people that are still in the momentum trade, and this is why people get slaughtered because they just think, "Oh, I'll just hold on to it." you know, ask people how that's going. You have to understand that you're in a momentum trade and then if you don't understand that, that's when you get slaughtered. And if you're in a momentum trade and you're on leverage, you get Leupold. So, and that's really important again for people to get like you have to get in and out of this stuff. So, especially if you're levered. If you're not levered, like we just showed that one graph, you start looking at these levels and go, "Okay, could we bounce in here?" What tends to happen and we'll spend some time on this is you bounce back up to one of these levels or standard deviations and then you have to see how you play out there and it's just a it's more of a regression. So if you look at something like this momentum and you overlay fibs with it, you would see that and it would be very clear. But for our purposes, what's the point of this? The biggest point that I want to show you this with momentum is that this is one of the single greatest drops, if not the single greatest drop that you've had in momentum ever on this chart. you have never moved on that percentage that fast in momentum. That usually leads to an equal or opposite reaction at it at a minimum for an oversold bounce. The question is did is that what we started to see on Thursday or is that a reflective move? And we're going to address both sides of that today.
And the purpose so when you're looking at these slides and going, well, what's the purpose? The purpose is to understand how much carnage you've actually gone through and then you have to make a decision, right? It's not up to anyone else to make a decision for you. It's up to you to make your own decisions. But if you're looking at this and this is just unconstrained momentum, right? Just what are what's momentum doing now? You're down 41%. And so when was the last time you were here? COVID and the great financial crisis. So that's how much damage has been done to the momentum trade. So, you have to ask yourself a question, and this does get into the stool for me where I have to look at this and say, has something fundamentally changed? I don't know. I don't know that it has, but I do think that there's some points here that we should talk about. I think the Microsoft news, the more I read it, it's pretty interesting. I think the Meta news is kind of interesting, even though they're a dumpster fire, but we should talk about parts of it. Amazon was definitely important. There's some buildout here that we're going to get into today that I think is relevant.
But what I have to what I have to think about I'm trying to figure out how to parse this because you have and you know again everyone knows I do these rolling and unedited on purpose. If you don't welcome but this part of the stool the fundamental side that's the part that always scares the living be Jesus out of me because if the fundamentals change at all then you have an issue. That's I learned that a long time ago. I learned that the hard way. The easy way or the hard way? The hard way. So when the fundamentals change, that's when you have a real problem. So we really are not looking for the guy that says, "Oh, I'm at a 40 PE and therefore I got to get out." That's like loser mentality, right? Like no one's buying your stock as a PE. They're buying it because the growth rate is commensurate with what you know where the the price earnings multiple is. That's why these names will trade where they are. So you have to be careful also of the value trap on the same other side of that. So I'll explain this where like you have like a micron, right? And so like I don't know how to draw on this thing, but now you got that crazy U. So that's Micron. All right. So then you have Micron and then Micron says, "God, that's awful." But then all of a sudden people are like, "Well, Micron's got a 5PE, so it should go up." Yeah, if the fundamentals are there, if you if you're unwinding, then we have a problem. But the important thing is for us to understand here and go, well, is this a buying opportunity like CO or do we have a fundamental problem here?
Here we had 1.7 trillion dollars injected in the stock market. What did that do for us? Well, they had these things and they were NFTTS. They were really JPEGs, but they were NFTTS in disguise and people had all this freak money and they thought they were super smart. So, we're not going to get an injection of capital here. We're actually getting the exact opposite if you look at the market and the Fed right now. So, that you have that macro part of the stool that's not really great for us right now is is yields going to the stratosphere. But what is good for us, some of these companies are absolutely crushing. And I don't usually get into this much on the research side, but if you know me, I read a ton on the weekends. the community guys know this, but this is stuff where I think the momentum volatility is important because it shows us like what are we really dealing with? Like how crazy is this? And again, this is people, it's interesting because people are watching that either just joined the community or that have been in the community for a long time or people that have been watching these videos. Uh, and I appreciate how much people shared last Saturday's video. I can actually see that there was a lot of stuff in there that I really want people to know so they know what the hell they're dealing with. Excuse the language, but it's important to me. It's one of the reasons why I do this. Let me get my little drawing tool so that we can highlight this so I feel important when I draw it. There it is. Yay.
So, what I like about this and why I think this is important. Is this reflective of what you're seeing in the VIX? And it's not. So, if you look at the VIX, you have like this low move. You're not seeing anything. But if you take the volatility of momentum and momentum volatility, you're at great financial crisis levels. So you're at levels where we have bottomed in the past. Now the question becomes, do you have a macro issue? Do you have a fundamental issue? Remember, you have a completely God, that's an awful stool. But you have a completely different scenario here on a macro scale where they're going to, you know, free cash for everybody. Everybody you get free cash, everyone gets free cash, right? What could go wrong? So once we have that, we're not getting free cash here. We're not getting a Fed that's going to, you know, try to zer us out on zero interest rates and free cash. You're getting a Fed here that's basically, you know, injecting some, you know, scared mindset into the bond market. And why this is important is because that's really like the Fed should not be involved in the equity market. And this unwinding that you're seeing right now, a lot of it has to do with the Fed too, in my opinion, which I actually think is healthy. I think of it as healing from itchy.
Now, what I want to do is I want to segue into this a little bit on the fundamental side for you so that you can see what I'm seeing and you don't have to agree with me or not, but these slides are available to anybody that wants to go to, let me get my little drawing tool again. Anybody that wants to go to Meta's website, you can just get this and anyone can have access to these slides. They're not proprietary in any sense. You can go through all these slides. You can see exactly what I'm going to show for myself. So, Meta has spent how much so far on Capac? billions and billions of dollars. This is their net income for everything that they spent. Their net income when you look at it is declining. Why do I think that this is important? So, if we go and take a look at this, we would say, "All right, well, where were we second quarter here?" Well, this is second quarter 2025. This is second quarter 2026. This is second quarter 2024. So, you've spent how much? The numbers are staggering. We all know this. And this is where we're at. All right. So, are we worried about this? Are they spending more on purpose? Where's the issue? Maybe they're just spending more blah blah blah. And we're going to go down that rabbit hole and say it's okay. Here's the problem that I see for Meta. And I'm showing this from a broader picture, not just to pick on Meta and call Meta Pig. But, you know, I we'll go down that rabbit hole later, but like here's the point that I'm getting at. I do think it's important, and I think people are missing this.
So, ad impressions delivered year-over-year percentage. So them driving ads to Meta, meaning Instagram, Facebook, that whole thing, all the money they spent was to drive, one of the things is to drive what they're doing. All right. So these are ad impressions worldwide on what they're delivering year-over-year. And you can see that US, which is going to be their largest market, but nowhere are their ads impressions going up on a year-over-year basis. People are saying, but they're still going up, but the growth is declining. So no matter how you look at this, the growth of what you're dealing with here is declining. So it's pretty obvious that this is the growth. This is your growth now. This was your growth now. And I can just do this over and over again and draw my fancy arrows. But you get what I'm putting down. You're spending all this money and it's not increasing the percentage change in ad impressions anymore. It's actually stopped. So is this a social media issue? It doesn't really matter because what they're doing is not working. And this is why the stock got hit so hard on earnings. And I think that's important going forward.
Now, what we're really trying to get into here and what I think is important again and where I'm going with this is just understand the fundamental side of this when we go through it. So, this is operating income for Amazon. And we can see these numbers and that these numbers are greater than anything. And so, we can see that the operating income and when we get into this, it's a very different story. Here's net income. And there is a thing here. Your net income includes net nonoperating pre-tax other inre income from 53.4 from investments in anthropics. So we understand when we start looking at why these numbers are where they are. But we can break it out and then look at net income over TTM which is trailing 12 months. And the reason that they do trailing 12 months is to break it out. Meaning break out and then smooth it out. So in other words, trailing 12 months, all they're doing you is just showing you if you trailed it, you're going to get a smoother result. So every 12 months, they just trail the number and it gives you a more smoothing outlook. That's what TTM means if you ever see that. But let's just break out the segment results of AWS. So when we start looking at something like what is Meta doing with their investment, what is Microsoft doing with their investment, what is Amazon doing with their investment. So, if you look at net sales on Amazon, what you're going to see is that net sales on AWS are through the roof. They beat every single metric. The operating income on AWS is up through the roof. And then you just TTM it, which is the trailing 12 months, and it'll show you those numbers as well. So, it is very clear that what they're doing is working.
Now, this is where it got super interesting for me because you flipped to the trailing 12 months of negative free cash flow. And so why are they doing this? The goal is to optimize free cash flows. And that was super interesting because he did a really good job, meaning the CEO did a really good job of saying, "Hey, this is why we're doing what we're doing." Very different than how Google handled it where Google said, "This is the, you know, the second or third inning of this. Get used to it." Whereas free cash flow for Amazon was like hey we are going to optimize free cash flow but to do that we're going to go negative first and then turn around and then people got it and said oh okay this is what you have to do in order to come out on the other side of it and that was handled very differently and that is why the stock moved the way that it did. So it wasn't just that the numbers are the same it's the way that the CEOs handled it and that's why it's so important to listen to these conference calls if you want to get into that level of detail.
Now, without going too much into all the research, there's a part of this that I think is super interesting. Then we're going to get into the charts, but I do want to get into something else that I noticed that I think is pretty important. This is Microsoft and this is their cloud business. And you can see 43% right here was that growth. I'm going to just circle all of these because you can see that other parts of their business are not doing, you know, they're not growing the same way that this is the driver. But what I thought was very important about Microsoft and one of the reasons why Microsoft did well was two things. One, they said they're not going to increase Cap X. But two, they're going to be able to use what they have longer. And three, if you look at what's going on with their Azor product line right here, that if you look at these numbers, the growth of their products are actually accelerating. And because their growth is actually accelerating and at the same time they're saying they're going to not increase capex, people are looking at this and saying, "Okay, so you've made your investments and now what you're doing with that even though you're spending is you're starting to reap the rewards." That's why Microsoft moved the way that it did. Let's take a look at those charts. And we will get into some detail here on those levels in a second, but it's very clear what happened here from a Microsoft perspective. And I just went back to, you know, you can go to any line you want really. You can go back to kind of go back to July if you want and just pick a spot. Doesn't really matter. But if we go back and take a look here, well, what really happened here? Well, the move off of that July 1st or going back to that quarter, what really was up? Well, Mike Meta was up and then Meta's earnings got rid of all of July's gains. So, you're actually on July, you're actually down now. Amazon's now up 14% from the beginning of July. And Microsoft's up 25%. But what really did it? It's all the earnings. The earnings were the same day for Microsoft and Meta. And you can see how they one one went up, one blew up, and then Amazon the next day. And we can see how Amazon lifted and what it did. And I'm focusing on these guys versus focusing on something like an Apple because Apple's not really in the capex game. And so what we're trying to do is think about it from a component standpoint, right? So the component standpoint to me is what you want to focus on because are they going to buy the components because if not then the semiconductors aren't going to go higher. And this again is where it gets really interesting.
So I'll give you an example of what I mean. So if we take a look at the cap xnet, meaning the guys that do the buildout of the semiconductor capital equipment space, you're getting a tale of two tapes to an extent. And it doesn't look like that when you start looking at where you are in July. But KAC had earnings and their earnings were not great. So I'm going to go to a one minute chart now and you'll be able to see clearly the differences here. So this is when KAC came out with earnings and it was right here and then you can see when Lamb Research came out with earnings and it's right here. So what happened and what's the difference from that time and all I did was just move this to another just random period and it doesn't really matter if we go to the same level right here and we'll just take the beginning of like Tuesday the 28th. And so what are you really saying? Lamb went up considerably and you can actually see that even that day that KLA went up on that news but this is where it came out with earnings. KAC came out and said yeah things are pretty good but you know they're in line like they didn't crush. Everyone expected this huge buildout because of what Intel said about all the money that they were going to spend right and then it's not reflective in not only the growth of just what happened but it's also non-reflective in something else. It's not reflective in their guidance. their guidance was in line to actually low-end where Lamb came out and said we crushed and we're going to build out and the difference for that is this. So 39% of revenue for Lamb is going to be in the memory space. So their buildout really is the memory space where KAC think about them as more broad-based right and they are more broad-based. So that's the difference between these two names. So when that happens, it tells you, well, where's the growth coming from? Well, the memory and storage spot.
Now, I wanted to spend a second on this because I do think it's important. If we look at ND, and I'm just going to butcher the name, but so it's down here. I just call it the K name at this point cuz my pronunciation skills with it are horrendous. But the stock sold off, and the reason the stock sold off is because analyst and buy side were higher than the guidance that was given. So this is an ND company and it's one of the largest companies in Japan. I actually think it's going to become the largest company in Japan in my opinion. But their guidance is here and they gave guidance and then after giving guidance they give you the results of what they've done. So just to be clear before we go any further, they beat the guidance that they gave on May 15th. The issue is that the street was higher than they were and the buy side was higher than they were. So they're not knocking the cover off the ball in the same way. Meaning the analyst expectations were greater than expected, right? They were greater than what the company said. And this is important for next week. Everything right now has extremely high expectations.
So if we go and take a look here, and this is the company right here. There's also a an OTC name that tracks it, but if you just type in 285A on Trading View, you'll find it. So, if we take a look at what we're dealing with here, and what I like to do with these names is just look for the swing low. So, here's the high. Here's your swing low. Here's your Here's another high. You're coming back down. Here's your swing low. And then, obviously, here's your peak. So, if I go to this level and I drop us here, and then I'll just enter this in super quick so that we can see it and where we're at. We'll get rid of the top end because it doesn't really matter. But what you've done is you've come back down to that 23 23.6% level. I think this is really interesting and I'll just explain why. Because you're continually beating the earnings estimates and the revenue estimates that the company's presenting for itself. The street is ahead of itself. So if the street's ahead of itself and they're wrong, they get out of the trade. So I want to be really clear about this. the analysts and you go and take a look at this and you'll see that it'll show that revenue missed and earnings missed because the street is substantially higher than where the company said they were going to be because everybody got giddy and excited. But when you're looking at something like this and you realize that you're down 65% and so where I'm going with this is here's last earnings, here's where you are, here's where the stock is. I think this is really important going into SanDisk next week because you have this enormous rally. The earnings are still killing it, but analysts are way higher than where they should have been. And therefore, you're not exceeding the greatest expectations. You're exceeding the corporation's expectations, but the analyst expectations, you're not beating. So, you have to think about that. It's very different than someone like when KAC comes out, for example. Let me think about let's go through it this way. So like KAC comes out and says, "Yep, we're going to give guidance here." And then the guidance that we gave here, that guidance is going to be in line. So their guidance is roughly in line with expectations. And there's even a lower end of guidance. Lamb research comes out and says, "We gave guidance and we're going to be way higher than that guidance, right? Not anything more than that." So they stuck with that guidance with this name. What happened? I don't I hate when it does that. Let's go back to this and go to 85A. What that what happened here was we gave guidance. Everybody raised the guidance and then based upon that we missed. It's different. It also means that the expectations for these names could make these kinds of names come in because that just means they got ahead of their skis. But when you have drops like this already on these kinds of names and you're down about 65% on them and nothing's changed except they're doing exactly what they said, you really want to pay attention to this and that's where my head goes.
But on the flip side of this, you have SanDisk this week and SanDisk came right back to the previous level, held that previous level, rallies up, and then rolls right back over. Now, there's a level here at 1390 on something and I'm going to go I'll go through a bunch of names and some different levels to watch. But 1390 has been a huge level for SanDisk and we hit that level and we rejected. And if you go back and just take a look at that chart when it broke 15, we were talking about 1390 and 1390's just been a battleground for it, right? And you can see that battleground in here over and over again opens up into that battleground completely gets kibbed. The question that we have to ask ourselves with something like an with SanDisk is because their businesses are similar. The question we have to really ask ourselves about it is does Santisk come in and beat their expectations but not beat Goldman's expectations or JP Morgan's expectations etc. And then does that affect it? And this is where it gets super interesting because someone like Goldman, when you go and take a look at it, some of their metrics are almost 30% over where SanDisk is on what they're saying. And they are very similar businesses. So when we go into this quarter, we have to understand that the fundamentals might still be there, but that the analysts might just got way ahead over their skis in regards to these estimates. And so if you don't start seeing them raise their estimates and work into their estimates, that becomes a problem for names like this. And I think that that's really important for us to get. So where I think you go with this is understand that you have to watch SanDisk this week very closely. From my standpoint, hitting that 1391 and coming back down, I think that there it's worth paying attention to.
Now the other thing I would say is the flip side of this. If you look at something like STX and Seagate, well they absolutely crushed and stock bounced off a key level, rallied back up and so you can start actually seeing something like a Seagate start formulating a new base. If you really look at it, you're actually starting to formulate a base here. And I can even turn it to a line. Just makes it so much cleaner to actually say that base and just kind of go from here and you'll say it. Can't really miss it. Okay. So, why do I care about that? Because then you're going to go into Western Digital this week. And Western Digital seems to be forming the same exact kind of base. We pointed this out a couple days ago. And that's why we say that these videos are all linked together. We're trying to hold in here. And then you look at this 4 hours and the 4 hours starting to flip a little bit and starting to hold in here. So, I think that's very interesting because they kind of share the same brain, Western Digital and Seagate. And Western Digital tends to do better than Seagate. So, I thought that was interesting and worth pointing out.
Now, it's important to note before I go any further that there is a huge difference between pardon the voice and ND and ND. It's crazy I don't have an ETF for NAD. Probably come up with one in a week. But there's a big difference between Micron and SanDisk, right? And what they're doing. And I want to take a second and show you something. So, I actually chart this stuff literally daily. But let me show you this. I want to show you contract and spot pricing of the difference. So what I'm showing you is from March on or third quarter I should say September is what's going on with pricing. So pricing is obviously going higher and people are locking in those contracts and I do think that that's very important and they're doing it with DRAM and they're doing it with ND which is flatlining those numbers and doing a really good job of it. Now that boisters up these, you know, up and down scenarios where these companies start making, you know, real cash, like real money and now they have these agreements locked in and people know that they can continue to buy or have access. Now, this is the difference. This is the spot market. So, this is what it is. And they're doing it on a monthly basis. But what I think is really important about this and you can actually chart this stuff daily when I actually do look at it daily but there's a definitive movement here that if you take a look at the difference in the quarter and this is why I believe that you you're getting some concern in the NAD space is that the spot price of that is dropping and so you're not where you were previously in regards to spot. it's actually peaked where DRAM hasn't and I think that there's a nuance here and I think you need to be aware of that before SanDisk's earnings. So the question really is do we
I have an issue with SanDisk on the memory side going into this week. I think you have to be very aware of that, you know, do you have that issue? And I don't have an answer to it. I truly don't have an answer to it, but I do think that you have to be cognizant of this, and I know that you're not going to see this anywhere else. So I wanted to present it.
My sense of this is no matter what, the RNAs are going to be through the roof. I don't see how they're not going to be, especially when you look at some of the other companies that have come out on the memory space. But do they start talking about lower ASP prices or inline ASP prices? You know, there's a lot of, there's a lot of moving parts to it, and I want to present it.
Now, we have all the movement that has happened in these hyperscalers, and we have all the movement that's happened in, you know, with all these Leopold names. I, I'm going to start with like the Leopold names because I just think it's interesting where people will look at these lows and say to themselves, "Oh, well, you know, these are all going to go lower because Leopold's out." No, it's kind of the opposite. And I've been through this a couple times with long-term capital back in the day. And also, I've seen margin calls where they've taken Disney to like $8, and then, you know, it'll bounce back to 15. I've seen when those calls are out there, they're real. And so, they price that stuff at a discount to get those people out of there.
So in Citadel's case, you had them working with JP Morgan, Morgan Stanley, Goldman Sachs to come up with a margin number to bail them out, and at the same time for Citadel to get in. It's not a function of, you know, someone like Leopold getting any money back for shareholders. A matter of fact, like he has no public holdings right now, like zero. You know, essentially the, that whole public position is just completely washed out and got cashed out and paid down margin. So it's kind of interesting what happened there.
But the point that I'm getting at is this will mark off levels. So if I go and take a look here, I'm always looking for these kinds of divergences and starting to see if I'm going to get them. And I'm not really getting them yet. So I think you have a chance of kind of backfilling a little bit here on some of these names. Usually, you see an extreme and immediate follow-through the next day. You're not seeing that yet. And there's a lot of these names, and I'm kind of surprised by that. You didn't see that in NBIS. You didn't see that in BE as well. A matter of fact, you've already seen BE break below its previous close, which is super interesting.
But they did a great job on Friday of just gapping these things up and then just luring people to their death. And, you know, one of the things that we talked about the community was like, just do not, you know, fall for the banana in the tailpipe Friday morning. Just like, chill out. Let it all sell down, and then we can kind of go from there. The issue with the sell-down from my perspective is it just never really stopped. It just was all day long.
So if we go and take a look at things like even SanDisk hitting those levels, you sold down and then you try to get through the previous closes and you were just unable to. Now, the function of something like a SanDisk or the NBIS or the BE, and I can go through hundreds of his names. What you don't want to have happen here for any of these names that you're trading, you don't really want to see them not being able to get above Thursday's close. So if you're looking for demarcation lines on any of those names, and there's tons of them, you really want to make sure that they can get above those.
So I was looking at something like even like this TE, and then if you go back to that Thursday close, you can't really get above it. And so really, the people that bought into this, you know, they had like 10 minutes of it, were like they were geniuses, and then it rolled over. I think you want to watch that stuff because I think it's also very different than what you had overall in the market.
So, and I'll just give you an example. You know, something like a Tesla sold all the way down, but then it got to its put wall, which is right around that 300, and then it bounced. And why is that important? Because that's telling you really like the market from a beta standpoint. They were buying TAC to an extent. And were they buying larger caps tech? Yeah. I mean, you look at things like Microsoft, and you have earnings, and then if you're taking a look here from those dates and going, "All right, well, this is where we closed. All right. Well, that close the previous day became support." So that they're telling you that they're buying those names.
Right now, I understand not everybody wants to look at a a daily chart or a five-minute chart, but it's very clear that you have the tail of two tapes here where they're buying Microsoft, and it could be because of their lower capex. And then you look at something like an Amazon, and, you know, to me, it just go that like the numbers on Amazon were just freaking staggering. So people have been waiting for Amazon's kind of breakout quarter. You know, you might be there. It, it really might be there.
So you don't really have tech overall rolling over. A matter of fact, if you kind of you look here and you go take a look at the mags, well, they're setting up again. And I think that's again, you have to get over the 55. But I think that's super interesting to note. Whereas if we look at something like a DRAM, you know, and some of those names are in there. Some of those are Leopold names, but you know, they gapped you up and then they rolled you over. And now you're going to go right in again into what? Well, we're going to go right in again into EWY on Sunday night. And so that's going to become an issue because look at how you're rejecting already. And I think that's really important.
It's like here, watch this with Micron because I noticed this where we got right back to that 55, and they opened you up there, and then they just rejected you all the way back down. The Sandis, they did something very similar with, but at that 1391 level, and then they rejected you. So going into the week, and then of course, you have Western Digital this week as well. Western Digital tried to get over the 55 and failed. But that could just be Friday jitters. And considering how well the name did, or Seagate did, I think that this is very important to watch this week. But Sandis could really set the tone on the week. That could really be it's a pickle because you think about it and you're like, well, you could just absolutely crush and you're back to the same levels. And then you're saying, all right, well, you know, ASP's kind of peaked. So, do you have an issue there? Do you have a gross margin issue there? Do you have some of the same issues that you've seen previously? And I don't have an answer. I don't have an answer to that. I have a belief system, but like, you know, that and a bowl of soup gets you a bowl of soup right now. It doesn't mean that I'm going to be right, you know, about how this plays out.
But if they have a margin issue or anything like that, similar to what happened with, you know, Coaxia, however the hell you pronounce it, but there it is. If you have any a problem like that, like, you know, you're looking at 800, like this thing will fall apart. And that's important because it's going to drag the other names down with it. And what I'm noticing is you can do this and then base and then rebuild. So it doesn't have to be DRAM that goes up. I actually thought that it was going to be more of the semicap names, which it's not being. And quite frankly, you know, you had an oversold bounce, and then we can see how that oversold bounce played out so far. And I'm leaning towards that this was an oversold bounce more than a bottom. That's where my head is with it right now.
But if we look at it and you look at how you moved, you're already rejecting just the 12. So we're not, you're not pushing the way that you should be pushing on follow-through, like at all. And it's becoming a little bit of a concern. So maybe we need to flush out some of this other stuff and then go from there. And then you're watching what's happening here with obviously Microsoft and the larger mag names. And I do think that's important. I do. I think it's really important what these guys are doing. So, I think that patience over everything will pay off.
If I go and take a look at the market as a whole, this is not how markets break down with financials breaking out to all-time highs. So, I have some comfort there. But I do think that you have to look at the broader picture, and I'll give you an example of this. So, if I take a look at EWI, which has really been leading the market, we had one day where it absolutely exploded. Asia traded up with it, and they actually took it up even higher, and we could see the huge amount of buying. And then, you know, obviously the next day we rolled over. And now they get to deal with our suck salad on Wednesday night.
But one thing that I always tell you guys to look at because I do think it's important, and I'll clean this all off, and what I'll do is I'll make this a line chart. So in front of you is SKH Highix, and again, DRAM, and these guys are going to try to get into the NAD space, whatever. But there's your VWAP on this. So then if I go to this one, and now we'll go back to candles, and we just watch what happened here. So we got right to the IPO VWAP, and then we just imploded. So that means the average person is still selling. And when you're starting to see that going into even things like this, and I'll show you what I mean by this, and you have a lot of wild cards that we went through earlier, but take a look at something like a SpaceX.
So SpaceX was something that, you know, we shorted, did exceptionally well with, and it gave me my first real signal that, hey, this might be done. And it wasn't even that big of a signal. So like, there's your 12, right? And it's very hard to use a 12 to stay short this thing the entire time. Hindsight's a beautiful thing. You know, P&L is completely different. But if you go in here and take a look at a five. So I actually closed over the five back here, and then I rallied, and then I closed over the five here, and then I rejected that. And now you tried to get above it, and then they rejected. Then you tried again, and then they rejected. And now you've got a close, a lower close, and you're going into earnings this week.
And the interesting thing about something like SpaceX is everybody knows that is coming up, meaning that sales coming up. So, cuz now they're going to be able to sell stock. And again, let's just connect the dots for a second because I think it's important. Well, that's in the NASDAQ now. So, now we're going to have SpaceX that's in the NASDAQ have an event, and then that event could, you know, could trigger us. So the question then becomes, you know, what do we really want to do here?
And I'm just going to go back to, you know, how we started all this and say, well, here we are in the daily. We were oversold, and we've already worked off a lot of that oversold. When we go back and do what we did earlier on the four-hour, really already we bounced off that oversold, and we're already back to that neutral. So to look at this market on a four-hour basis, you're already completely neutral out, and I think that that's something to pay attention to. So this should be a pretty wild week, especially with all the macro issues. That's it.