Transcription
Well, tomorrow is one of the last days that we're going to be able to use these memes with Jerome Powell. Itchy. It's coming to an end. We only have two more left.
I do think it's super interesting that we're holding the 660. We definitely have to go through the breath. We have to go through crude and what's going on. Remember, you always want to look at the breath of the market when you're in environments like this. We're going to go through exactly what these are and how they can help you and why the five days obviously popping like that. Nobody wants to be like Mr. Taylor Swift. Let's get to it.
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All right, guys. Lot to cover. I want to get super micro today on some of these, but I do want to go through the basics. So, if we take a look here at the S&P, and I think that this is really should be the focus. But if we take a look at the S&P on the 50, guess what you did today? You're back over it. And this is significant. We're going to explain why significant, what names you should probably start looking at. By the end of this video, you'll have an understanding of where my head is. Whether you like it or not, at least you know where I stand. But you're back over the 50. You really don't want to sleep on that. When you start flipping that, that's when you could put bottoms in, as my niece likes to say. But the most important thing about this, if you think about this, you're you're flipping the 50 right into the FOMC meeting. And we're going to talk about how little there is a chance of them doing anything on that. But that's a big deal that we're back over the 50. You don't have to be there. You didn't have the best news today. the 5 or they use a 50 here and I'm just want to be real clear. This is a 200 day percentage and you're back over 50%. This is the 50-day and you're not anywhere near that. But if the 200 gets there, it will pull up the 50, which is important. The 20, you've gotten to somewhat of a trough valuation. It could actually have dropped more, but you're starting to bang a U-turn. What we want to always pay attention to is the five. So the five is already back to 67% in two days. And this is really important because if this starts to roll over, that's okay because it means they're rotating. But if this starts to roll over and we watch the 20 start to roll back over, it means it's shortlived. So I'm going to say that again. It's fine if the five starts to come down. But if the five comes down and the 20 goes up, we're good. If the five goes down and the 20 comes down with it, we have a problem and we want to watch that. So it's really important for the next couple days to keep our eye on this.
There is one other thing that I do think is really important just to mention before we really dive into this. If we go and take a look at the cues and I said this yesterday and I just want to reiterate it at this level where all our nonsense is between the volume profile between the put wall between the old the new put wall is 590 the old put wall 600 the value low area of our volume profile every single thing that's in this area everything that's there everything we're dealing with and guess what we're not doing. We're not breaking down. So, we can say it all we want, but if we're if the earnings are not going to be affected on the semiconductor side and the earnings are not going to be affected and they're not going to contract the PE. The question becomes, if this isn't going to break us, what is? Now, you do have some other news out there on the private credit side, which was bad. We'll dive into that tomorrow and we'll tie it all together because I do think it's important. But overall, you have to give the market credit. It is holding in here.
Let's get to it. Now, in front of you is CME Fed Watch, and anyone can go to the site, but I think it's a great time for us to take a look at what's going on out there under the hood. Number one, you have the March meeting right here. Shows you the date. Number two, when you go and take a look at this, you can see that the probability of an ease tomorrow, meaning them cutting is .9%. Meaning less than 1% chance. And that is reflective in here as well. Why do you care about this? Because if they cut tomorrow, nobody is expecting it. Literally no one like 1%. So, we don't have any change there. And you can see it reflective here as well. It's been this way for a while. It's actually gotten worse as time goes on. Obviously, when you start dealing with the war, the chances of a cut get less and less. But also, we have to just be cognizant of what the expectations are. And we know we're getting a dot plot. So, when we get a dot plot, it never hurts to just take a look at and you get a dot plot, which a dot plot is just very simply what they think is going to happen out a year or two from now. Uh, but it never hurts to take a look at where you are again for next month or the next meeting. This next meeting is April 29th. Uh, that I think that's Powell's last. And I don't think that we see another cut from him. I just don't see how this is going to happen. To be candid. Uh, and I don't think for any reason, but if you take a look here, there's a 97% chance that you stay exactly where you are. If you take a look, a day ago is the same. A week ago, you would think that you had a higher degree. You had a roughly it looks like 13.6% 6% chance if you look right there of a cut. Um, this is 23% a month ago. So, it's getting worse and worse as this goes on with the war, which makes sense because it's inflationary. But I think it's important for us just to know that if they do show any sign of a cut, it's going to go that way. I actually think that they could see you could see language that leads more towards, hey, they might have to hike if inflation starts to rear its head again. Um, that language can appear and it could just be rhetoric, but it they're going to be aware of it because of what oil is doing. That's for sure. And the dot plot I don't think is going to show that, but they're certainly going to talk about it.
And the So, you have three main events. And we should probably just make sure that we cover this so that we understand that you're going to have three main events when you look at this tomorrow. And most people get this, but we'll go through it. First, you're going to have the announcement. And then after that announcement, you're going to have the dot plot that comes out right after where people are going to read the announcement and his statement, but then they're going to read the dot plot. And then the third thing is going to be his speech. So you have three things there that can move the market versus normally two and they're all effective and no one expects a cut tomorrow. So they're going to go right to the speech or they're going to go right to the notes of the Fed, anything that they give them and the dot plot and then from there it depends on what he says and what he speaks about. But I would expect a lot of volatility on his speech, specifically on the speech more than anything else. I don't know that the dot plot's going to be that far off base because it's only been a couple of weeks that oil's popped.
Now SanDisk, we're all aware Micron has earnings tomorrow night and we can see the SanDisk move and the undercut right here, you know, and this is when tech everyone kind of becomes, you know, Monday morning quarterback. They're like, "Oh, I should have bought here because of this." You're in the middle of a a conflict. So, you have to give yourself some grace during this period of time. Uh, everybody seems to think they know what to do when they see it. But when you're in the middle of something like this, it's much harder. So, I always tell people that with when you have this level of uncertainty, give yourself some grace. Um, you don't have a ton of buying going into the FOMC tomorrow, but you are breaking out and you are hitting new highs. And they're all they're all doing it where even Micron obviously is doing it as well. And we did go through these yesterday, but as I refer to them, the four horsemen just look fantastic. And this became really clear with Nvidia yesterday. You're seeing Western Digital breakout. And I'm sure Seagate will not be far behind. The problem is into the FOMC and into these moves. You're just seeing a ton of volatility. So, we have a swing trade on in SanDisk that I left alone and I'm not doing anything with and it's pretty telling that you're setting up here to push, right? But you're going in the FOMC and you're coming into a lot of news. Still a lot of headline risk. We'll get to the VIX and the fact that the VIX has backed off considerably. You're at a 22 now. We're going to get to that, but you're still seeing huge volatility in individual names. And I'll I'll show you exactly what I mean by this when we go and take a look at something like a SanDisk today. Let's make this a bear chart for a second. And you're going to see it as soon as I show it. And these patterns are you can repeat them. I'm actually going to do a video this week on repeatable patterns because once you get the setups, it's easy. And I say it's easy. It takes time. It gets easier because you've seen it a thousand times after doing this for 20some years. But you should all you can see the double taps. And then if you watch those double taps, all you do is just overlay the RSI with it. And these are my RSI. My RSI RSI is going to look different than your RS R RSI because I use different settings. Um, but what we're looking for is these retests of areas. And then we're looking for something and some semblance to put that trade on. And then this becomes an area where you probably want to try the trade. We actually tried this uh and it worked pretty successfully. A lot of people be like, "Oh, you should have just held on to it." Here's the problem with that. And I'll I'll walk you through this trade in a second, but I I want to walk you through what your issue is and why you're running into an issue. You know what? Let's watch this day trade play out and then I'll come back to you and show you what the issue is and why you're running into problem so much cuz I don't I don't think a lot of people are really aware of this. But the watch watch this in action and then we'll get back to it. They're back. See it more SanDisk low day stop. I could take the buck and a half but SanDisk up nine trimmed just the ad. Nothing more. I just want to start locking in short-term winners just in case we roll back over here. This is where we stopped last time. I'm just watching that level. I won't sell more till 10. There it is. Finally, I've trimmed this ad. Now, why did I do that trade? I'm glad you asked. We can see this right here from the previous day. And we can see this here. We can see the RSI here. And we can see the RSI here. And we can see that they are at the same exact spot. We know we have a call wall right here. We watched it hold the call wall. And we bought because we have the level right here. If we overlay that with our super secret private cloud, we can see the color change here, the retest of the color change, and then the final flip of the color change in there. Hence, that gave us the opportunity, and that's why that trade worked. You're back to the open here. If you bought here and you didn't get out of the day trade, you just want to watch that area. This is definitely an area where people are going to get out. You've been up in this area before, you're having issues here. So, just FYI, if you want to trim, that's where it is. Kick the rest of that day trade out. A little bit left a runner. And FYI, guys, I do these raw, unedited, so you're going to have to bear with me as I move around. I My goal here is to provide the best information, education that I that I possibly can so that you guys can learn. uh it's not to be the best YouTuber. So there's there's a big difference in what I'm I'm trying to do here, but I love the format and getting people to learn.
I just want to show something because I don't really think that people have gotten it. So you can see the move here on the ATR and the ATR is your average true range. So whenever you look at ATR, I want you to think about something and it's called ATR, average true range. So whenever you see that, you have to understand something about it. It's telling you what what the range should be 67% of the time. So 40 meaning 40 up from the open or close, 40 down or 20 up and 20 down. It's given you the range on where it should be. And what's happened here, if we take a look at this from where you're at when you're over here to over here, your volatility has gone up dramatically. So if you're in a position here, and this is usually what happens to people. So let's just take this level that right in here, which is very similar to where you were here, and your ATR at that particular time is 32. and you're like, "Oh, well, last time I just used, you know, a $10 stop or a $20 stop and that worked perfectly." If you're using a $10 or $20 stop here, you might as well just write a check to St. Jude's because there's a 67% chance that you're going to get hit by it. So, it doesn't make sense to use the same stop, right? You need a stop that's dedicated to the area. This is why I always tell people to start learning how to use volatility stops, and we're we'll get into an educational video on it. Um, but it's definitely the way to go because you have to look at the volatility of the market. In other words, you're coming out and saying, "I'm going to use the same stop with a VIX that's at 13 versus a VIX that's at 30." It's absolutely silly. It's not It's never going to work that way. So, that gets in the position sizing and everything else, but this is hurting you and it's hurting people when they're trading Micron and all these names. It It could be common where it stays roughly the same spot, right? But when you start seeing these breakouts and then you have those retests of those areas and like one area was like, "Oh, I'm at a 16." This one's not as pronounced. You're at 16 versus 26. Well, I guess that is pretty pronounced. Um, you just want to be aware of it. So, what's happening is people are entering these names and not understanding that the amount of volatility per individual name has gone up dramatically. Now, you're getting that on some of these names, but what you're looking for is something like Circle where it's like, oh, okay, well, the stock's up considerably and the amount of ATR has hardly moved from when we were back here. Like, they're they're much easier to trade because you're not dealing with the volatility as much. But that's what's happening with something like a SanDisk. So something like a SanDisk can present a lot of opportunity during the day. For example, it's nothing when it's down here. Like if you're using a dollar stop in here and this is your ATR, like why bother? Like literally, why bother with the trade? It's just absolutely silly. But later in the day, if you're like, "Oh, I'm going to buy this dip down here and I'm going to use a $2 stop." Well, then you're not going to get hit with the volatility as much. It's really important to get this, especially environments like this. You know when you should try to watch this? tomorrow during the Fed the FOMC meeting. Watch that and you can actually even look at it on like a five minute and watch the difference on the market between when it starts speaking. You'll notice it. You can't miss it now that I pointed it out.
I do expect Micron like everybody else to have just a blowout. I don't know how it can't considering the demand for product. The function is going forward and what they say. I would imagine that it's going to be pretty powerful and I'm not going to waste a lot of time on it. But uh you're going to see this move the market and this will move all semis tomorrow. Good or bad. it will lift them and that's definitely something to pay attention to. It's also going to move the emerging markets, right? It'll definitely affect Taiwan. Um it's totally going to affect Taiwan. It's totally going to affect um you know, South Korea as well uh pretty drastically. So definitely something to keep in mind and certainly something to uh to watch tomorrow for sure. It's going to have a pronounced effect on the market Thursday morning.
Let's get to some other things that I think are interesting. This is why I have trust issues. So, Rocket Labs was perfect today. Out of nowhere, no real news or anything. Huge volume, huge spike. Um, and then all of a sudden, we even got the close over, let's just get to this here. We even got the close over the 55. Um, it was perfect. And then out of nowhere, wham, you just they decide to do a secondary and they just completely kaibashed everybody. And this is the kind of nonsense you see in markets like this. And you just got to deal with it. So, I marked the 50% line off. I actually shorted this um at the time of recording this. I'm still short it and I'm just watching the 50% line. So once you break 50% of the individual day on news, you tend to find yourself in a position where you might be on the wrong side of that market. Now once this settles and once it pushes maybe you have something here maybe, you know, maybe when this settles it picks it back up. But the question is were we you know were we manipulated today or were people manipulated today um by something that to get everybody giddy before the secondary? Well, it sure looks that way, doesn't it? But we'll see how this plays out tomorrow. That's definitely one on the radar.
Uh Lulu was a dumpster fire, and I guess the idea that it was going to be a dumpster fire was on everybody's radar because it's not really doing anything about being a dumpster fire. It's still just sitting here in the conference calls going on right now. We have our first bar down, but just to give you an idea, and I'm just going to type it out there. So, we were looking for I think it was 212 next quarter. Uh let me just see if I have it. Yep. So, 212. I'll just give you the headline. you can spend time on. It was the estimate for next quarter. Uh now it's 161, something like that is where they're at. Um and they got it a little bit lower. So I can see why Chip's a little annoyed with the company. I'm really surprised that you're not down more, but maybe it's just gotten so beaten down that people are like whatever. Uh and they're they're over it.
Couple other standouts to me today that sectors that I think are super interesting. You have something going on with MA, Mastercard, where they came out and said, "Hey, we're buying a new company that does cryptocurrency and stable coins and we're interested in the stable coin market processing faster, yada yada yada." And it was they wrote a check for $2 billion. It's not a small buy for them. And you can Google the news and look at it. But what's interesting is you've had Bear come out and you had another firm come out and everyone's looking at this and saying, "Hey, this thing's going to 170 or it's going to 190, I think, is the high end now." Um, look, they crushed and a lot of people were on this and absolutely nailed it on the breakout. You can see your breakout right here. I'm just going to walk through what's going on here because I'm going to tie it to something else. Uh, but you're seeing your breakout here and then from there you lift it. What you really need to do with these names is be super careful because there's a twofer here as I like to refer to it. So, you have your peak VWAP and you guys have been watching these for some time know how to measure your peak VWAP. Uh, and then here you can go here as well and you can also go to the IPO VWAP and they're both sitting right there. So today what we were doing, we did a trade on this and absolutely nailed the trade. You're going to see the divergence right here again, right? You can see it right here, right? So that I would call that more of a disguised or a covert divergence is how I refer to them. Um, and then what you see is you obviously see the one that's like in your face in the face right here. Right? So once you start to see that stuff, you can see but you once you knew what was here, you don't want to reject those. So once you reject those, you can see how you broke. So with us, it was a pretty easy spot for us to either close the day trade or what you do in situations like that is you put yourself in a position where you're just like, okay, if I can't get through this, then that's something that I have to, you know, really pay attention to. Um, and for us, you know, knowing that it could get through 160 there was definitely important, but we want to make sure that we know where those levels are. So, once you see that of an IPO or a peak, you definitely want to pay attention to it. And that's exactly what happened.
But, I'm going to just tie this all together because I think this is super interesting. It does look like we're coming to the line of stable coins. And what I'm trying to figure out, and you can always drop it in the comments, but if we take a look at Coin, you can see Coin got an upgrade today, too. But the other side of this that I think is really important is if we take a look at coin and you take a look at circle MSTR is lifting through all this and you just flipped a level in here that's a pretty big level. You know for time sake I don't want to get into it all but you're pushing and you're pushing on a day MSR is pushing on a day when Bitcoin was down so on the session. So you always want to pay attention to those kinds of days. I find that really interesting and it's definitely something that's worth your time.
Um two areas that I thought were super interesting and I just want to walk through where my head is with this and I'm trying to give you as much unbiased as I possibly can, but a lot of people are looking at XLE and thinking like, okay, that's that's it. We're done. The problem that you're running to on the crude side is a couple things. And this is from somebody that was short crude and decided to really cover the entire not really covered the entire short today. Um and I didn't make money on it. So I I thought for sure we'd get the follow through. It looks like there's two things that are happening. Crude's going to stay higher longer and we're going to get used to it. And the reason I say we're going to get used to it is because the VIX absolutely collapsed on it and we could see the VIX at 22 as we've already gone over. But why is crude staying higher longer? Because the rest of the world, meaning Asia and Europe, are not getting involved. They have France said we'll we'll come over when things calm down. UK is like we'll we'll be there shortly. And I'm not saying it for any reason, but the longer that this goes on and the more that Iran sees that other countries aren't coming in, the more that Iran is reaching out to other countries individually like they reached out to India and said, "Hey, let's cut a deal, you know, money hall." So all of a sudden that means crude can stay higher longer because it's up to the US and Israel to figure this out. And whether Israel is in a big hurry here or not, I would imagine that the US is probably in a bigger hurry, but I I don't know that. So what we have here is we have a situation where we could just stay higher for longer. And what that's going to do, and we're just going to bring this all together now. When you start looking at gasoline, this is gasoline futures, that means gas could stay higher for longer, which also means that inflation can start coming back again. My sense of this, and I'd like your comments on it, you tell me what you think, but I don't see how that changes anytime soon. That is it.