Transcription
I love trading days like today. It's a lot of fun. But let's go through the basics. So in front of you is just the S&P futures, right? And so we have a VWAP right here, which we have rejection. And then we have this VWAP from that October 10th, which is say it with me, rejection. So you have two matumbos. And then if we take a look at this one on the low, three matumbos. One, two, three. Right. Right in that area. Okay.
So we have this pocket of this wall that we just can't get through at all. And then underneath this, we're going to clean all this off for a second and make this super simple. We'll get rid of the candlesticks. We'll drop this to bars. And then what I'm going to do is just crop, grab, crop. I'm going to grab that volume profile. Here we go. And we're just going to make it candles. Get rid of the candles and just make it open high, low, close. Can't close over it. Closes under it. Pops right back over it. So, we're still in this range. Nothing has really changed there, right? We're still in that range. And we're still watching how this is playing out. And I think that this is super important for us to get. Why? Because if we stay in this range, there's nothing for us to do. There's nothing for us to say and there's nothing for us to do. What do I mean by that? Uh I mean by the fact that if we're not out of the range, you haven't really made any kind of key decision. You popped out of the range, it pulled you back in. The range is not moving. The range is staying right where it is. So we're staying in that range. When you were out of it, you could see how extreme it gets, right? It gets super extreme when we get out of that range. But we're not doing that yet. And I think that's super important to get.
Number two, if we go and take a look at the NQ and do the same thing, and we're just going to leave that these these candles or the open, high, low, close off, and just forget about the candles for a second. Look at the undercut. Look how you you ride the lightning up here. And then when you break point of control, that's it. Now, if we do the simple thing again and just drop a VWAP to there. Oh, look. Look how it fits perfectly in there. Let's just drop one from that peak. Look again. It's a Christmas miracle. 1 2 3. Every VWAP is now coalesced right in here from the peak from this level from the October 10th and here. Why am I picking the October 10th? Because that's pain. If you were long stocks, you know that's pain. If you went long here, that was pain. So, I use pain points. You should use what you're comfortable with. So, then when I look at that and go, okay, well, that seems to be a a pickle. Let's call that a pickle. All right, cool. Let's see if there's anything around that area that would coincide with something else. But wait, there's more. So then if I click here and I get rid of the volume so you don't get distracted by the colors, you're going to see that right in here we have a 55. I use a 12, a 22, and a 55. You should use what you're comfortable with. So we break here. Tries to get Matumbbo breaks. Matumbo. Guess what? Today was Matumbo's third day, right? Bonk, bonk, bonk. And then what? What do we get from that? Well, I mean, it doesn't really get more obvious what's going on here, right? So, we're going to get rid of that line for a second, drop this to a bear, and just look at it and go, "All right, well, how's that going?" Not very well. So, what is happening to us is that we're getting up to what? That 55 and rejection. Rejection. Flipped over it. Everything's good. Not so fast. It is not good. And then they broke us down. Let's get rid of the pre and the post. So, you can just see what the cash trading looks like since you broke it. So if we even go back all the way from here from when you broke it rallies tests it rallies back over broke it rallies into it broke it right like it's not rocket science here guys like what's happening they are rejecting a level of institutional ownership so it's not up to us to say that it's doing anything fantastic when it's not doing anything fantastic. It is rejecting. We are better off stating exactly what's happening instead of stating what we want to have happen. Not the guy that's going to say oh we're going to rock it because this guy said we're going to rock it. you know, that guy probably sells ETFs. So, you really just want to be super careful about this stuff right now and watch what actually is going on. And sometimes getting rid of the candlesticks and just go go and open, high, low, close is really helpful.
I've been using Bitcoin really as a guide. Uh, and it's just been a fantastic one. I'll walk through it later. Um, and you know, some of these treasuries that are just absolute the easiest shorts in the world. Um, I never knew you could make so much money, get paid so much money for losing billions of dollars, it's crazy. But uh you know I do think you're heading to that like 73 level and then down to maybe like that 50 level. I think both are on the table. I'll cover that in a little bit. I think what I want people to understand is when you're in these kinds of environments and you're watching these names rally, how do you play this? Like how do you actually play a day like today? And I'm trying to tie some of this educational stuff into Thursdays because I get asked to do more educational video. Uh but but I just really don't have the time. So I'm going to tie it into this one. Um and we're just going to start by taking a really quick look at AVGO. I think that's a really good spot to start because this was just super super technical today and just super such s such an easy setup and like when you watch this one you'll see the others. So when you have setups like today and you know what you're expecting you're expecting this good news and everyone's expecting it to rally what you do is you go look for like the weakest names. So this clearly is one of the weakest names. You have a rebalancing but after earnings AVGO's been pretty weak. So, all we did this morning, and it was super fast when it happened, but all we were really looking for today uh was an opportunity and and this really provides it. And I'll show you I'll get rid of the pre and the post for a second. And really, all you did was just pop up to a level where you've already had some issues and really just watching how you act at those levels. So, you can see how you wick down here and as we know, support becomes resistance, rejected in here, and rejected in here. My hope was that we were going to bounce back up. Now, when that doesn't happen, you have two options. You can either do it or not do it and scale into it. I did it and scaled. Now, by scaling into it, it does give me a lot of flexibility. The flexibility is if I don't really like what's going on, I can just trim it, let it trade back up, look for another spot. But we knew where we were with the market, too. And I think that this is always important for people to get. When you look at the market, you have a very clear demarcation line going on in the market. And that's that 55. And you can see once you broke that 55, hit it, held, rallied, hit it, held, broke, can't get over it, can't get over it. And then look at today, could not get over that 55. You kind of know even when you got below it, you know, you can't even get up to it. Like, you already know you have an issue. So, when you see this kind of stuff, it gives you a better positioning and understanding of how you're supposed to be positioning yourself that day. And this gave us the opportunity here. And then it was just literally like this one. And then we bought puts on Micron. It literally set you up perfectly uh to put shorts on today, like right into that open. And that's exactly what we did here. Watch one of these trades just play out live. That's what I kind of thought was going to happen. That's kind of an easy short. Maybe if you bounce up and then go, but I don't know that you're going to get that. So, you're going to have to watch this stuff here and see if you're going to get that opportunity or not. Doesn't really look like it. Really don't feel like shorting into down five. So, let me see if I bounce first. You're not going to make it. I don't think short short high a day stop on AVGO. What are we up in that three? Nothing for me to do there. This AVGO is just a layup to me. I haven't done anything with it. These kinds of huge bounces where you're up like $25 in a minute. It's more short covering than anything. You just always want to be cognizant of that. I'll tell you what I'm going to do with it cuz I don't feel like adding back and adding here. I'm just going to put it here once that closes. And that's going to get me like a dollar and change on it. Actually, get me close to $2. I don't want to keep putting it on and off and on and off because that's like a perfect evening star, right? So, if I do flip it, I'll just close it. Just take the profit. I'm still short this whole thing. I haven't done anything with it. Still haven't trimmed any. I If you're not going to bounce, I'm not going to trim it. Like, you have to actually bounce. Oh, I'm going to do that. I'm not going to trim yet. I've covered zero of this darn close to it. So, I'm just watching. We're going to trim it. Trim the short. All we're going to do here with the rest is that is going to be my stop. All right. And let's lock that profit in. And usually for people say, "Well, how do you know where it's going?" You always have to look at the risk versus reward. And all we were doing was just using the previous closes, saying, "This stuff's all got a gap fill." Um, and you could see them, the majority of these names, you know, did come down and they did gap fill today. Some didn't. You know, some did clearly. Um, and some are going to hold. Now, what happens tomorrow is anybody's guess. You know, this is getting real close to that rebalancing next week. So, you might see some option changes tomorrow. You might see people buying calls in anticipation of that. But you could see these names play that out. If you look at the same setup, it's exactly really what happened here with Micron, too. You have that rally up and then watch, you have the fake little move up and you can just see the whole time your RSI is just rolling over and then it crosses. I don't use the moving average, but a lot of people do. You should use what you're comfortable with cuz it does move you. It does show it like here. And I I'll do a video on this because it's so I you know, I think everything's easy after doing it forever. But like if you look at those little crosses, people like these because they're so simple. It's like, oh, it broke the RSI, moving average. Oh, you crossed back over the moving moving RSI. Like instead of using anything else, all they're doing is just watching that RSI moving average and from here to here, you know, they're short at 260 and they're covering at like 247. Like they caught the whole trade. They caught the whole move. I I get it. I should probably do a class on this stuff or some educational video. Like it does make sense when you start to see them like here. You see it? Uh oh, we broke that. Okay. So like that's where you'd put your short on. All right. Well, where would you cover the short? You're covering the short when it closes back over. You close back over here. And some people say, "Well, it still rolled over." Yeah, it did. Nothing's perfect, right? So, you know, from 2:55 to 2 like two or three bucks there. Um, and you'll just see it over and over again where you can see these. Here's the end of the day. Here's 3:00. It flips back over. You know, if you're long and then it goes to there, you can see that one as well. And you could do this with any name. Uh, you just want it to be when you do this kind of trade, you just kind of want it to be a most active name. Like in that situation, I don't know what you would have made. But you also write off that moving average too or that call wall. So, what's there like $25? Um, so you can see like little areas where you could pull money out of that. Usually what you really want with them is oversold or overbought conditions. If you do it when you're in the middle, you you got a better chance of getting chopped up, which is obviously what you're trying to avoid chopsie. Um, but these moves, they were they were just literally everywhere today. You are seeing the attempt of stabilization, but I don't think you're really getting anything. I I truly don't. You're seeing the attempt of it. Like people were all excited like, "Oh, we held this level." like you know that's like coming in fourth place and being like happy you know what I mean like like okay so we didn't break down and completely deteriorate like maybe we should set the bar a little bit higher than that right and what you're seeing is this is getting tighter and tighter going into tomorrow so some other things we should really cover here as well one of the things I've been using a lot as I just has been working really well for risk on risk off is just Bitcoin we talked about how this was rolling over for a period of time this the RSI and how it's just breaking uh for our purposes I'm going to clear all this off and I just want to show you so that you can see it for yourself. Um, and you can just kind of kind of get a sense of how you're rounding here and how that pendant's actually turning into just an outright bare flag. And that bare flag now is just absolutely breaking. Whether you use the bodies or you just want to move it up and use the bodies, which you can just do right here, or use the wicks, it's actually the same trajectory at this point. And either way, you've cracked it. If we clone it and then just kind of drop it in the same spot, you'll see it. And then if we want to get crazy, we can just go out there and just draw the complete, you know, flag. And you can see the break of it. Uh usually means you're heading to like this 80 level. You know, you really have demand that is just completely utterly dried up for this right now. Uh a lot of people, you know, remember when you had all those treasuries that are out there. You know, just understand a lot of these treasuries, in my opinion, they're they're in a tremendous amount of trouble. I'm short this uh BMR. Uh I've been, you know, I've been playing with it for some time. If you've been listening to this, uh you're fully aware of it. Um you know, I would really look into the structure of these things. you know, when you start going through it, they don't make any money. Uh they only make money if they can do a secondary and go out and buy more Bitcoin and then they pay themselves an exorbitant amount of money. Like when you go and look at their salaries and their bonus structure, uh it's absolutely insane. And you know, you're basically getting 1% after they're done staking. So you're making like 25% of what a 10-year Treasury is. Um and they're just taking it all in like fees. It's it's really absolutely insane that these structures are allowed to exist. And it's not just BMR ARM. I'm just not picking on them. It's it's all of them. SBET. When you go through them, it's it's it's really crazy. I I actually think one of them will probably blow up. Um I actually think it might be BMR and then you'll go through it and then you you'll get washed out on Bitcoin, but I would use Bitcoin uh as as as kind of a guide there. I mean, four what is it like what they lose in value so far? $4 billion of Ethereum. Like you're paying them to lose money to trade crypto where you can just basically own it yourself. Like it none of this makes any sense. So the MSTR always made sense to me because it gave people more exposure if they wanted it. meaning insurance companies wanted a convertible, they could buy the convertible and the convertible would give them exposure to the investment. You really can't do that with the treasuries. And so from my standpoint, like these things just make absolutely no sense unless you're the guy that, you know, you're paying yourself $3 million a year as the CEO for running, you know, the ability to buy Ethereum and lose $4 billion, then I guess it makes a lot of sense. Um, but to me, when I look at something like this, it's just absolutely astounding. And this is really where all the demand was coming from from all the crypto for a while. As you'll remember, this was where the demand was coming for all the crypto. We were going to have everyone was going to have a treasury, treasury for everyone. The government was going to create a treasury, the whole nine yards. We went over this a little bit yesterday. So, that demand's completely gone away. No states starting a Bitcoin treasury. It was just all so like, you know, they would think you're cool and you'd elect them. So, the question is with the lack of demand, where does this thing really come to? You know, I think you have to you're going to come down to those 70s. I think that's almost inevitable at this point that you're coming down to there. Uh, every real correction was about 80%. And so, you know, when you start really getting into that, I think that's only like 40. So, every single one would take you a little bit lower. I think this comes down to like 37 or 38. Last time I measured where you could probably get to, wherever that is. Where is that 38% or 80% line? Let's just see if we can get that real quick for you. And so, you know, people say, "Oh, it can't do that." It it takes you to 25. I I mean, I don't know if you're getting there again. You have a lot of institutions that are out there, BlackRock, etc. they'll probably step in uh and start buying a little sooner. You know, you have a little more control over it now with BlackRock. Um they're probably not going to want that to happen. They'll probably step in, but you know, could you get down to 50 again? Yeah, pretty darn easy. Um you know, you you could get down there pretty darn easy. So, the other question is, are you having some tax selling in here with some of these ETFs? You know, if people are down on those ETFs, you could have some tax selling there. If you go and take a look at it from January, uh you could see that once you broke that year-to-date VWAP, and you should be checking this with all your names, but for the end of the year. So, you know, that gets you to 73. I think that gets those like like the BMNRS into the high teens, low 20s. Uh SBET probably gets that closer to five. Um so, those things are in a lot of trouble, but re really the the crux of this is besides talking about what pigs those things are is to just kind of get you to focus on, you know, Bitcoin and using it as a guide. Because if we tie it back to really how we started, you know, the one thing that I think these guys are really sick of me yammering on about, they're just going to have to get used to it. Um, is just keep it basic sometimes. Like don't don't get it twisted. Like if you're below the 55, you know, I use the 55 and that tells me if I have institutional support. You know, all your swing trades in here, like if you held, sure, you got lucky, but your process it's not the best process in the world. So that puts you in a position where you're looking at this and saying to yourself, "All right, so what do we do now?" Well, with something like the cues, we got right up into this levels and this is exactly how we started and you can see it. It's not great, guys. You hit it and you reject it. So, you're going into tomorrow and when we really look at this and say, "Well, what's the VIX doing?" Well, you're kind of elevated. We look at Move and Move's falling off a cliff and I don't think we have to really worry about Oracle so much in these CTAs, but or I'm sorry, the CDS's, but do we really want to be out there buying this? Not really. and I I like the company, but when you're starting to see these things break down uh the way that they are, do I do I need to be first? No. I what I really want is I this is what I do in these kinds of environments. You should do what you're comfortable with. I make a shopping list of the best names that I want to own. And then when those names get to those levels where I want to own them, then I make a more informed decision. And then I take advantage of that and I will buy them. So Google having a bad day and comes in down to 284, I'll get involved. something like that happens, I will gladly get involved and and start stepping in. But if that doesn't happen, I don't really have to do much. Uh other things that were super interesting today, Lulu got involved by or got an investor from Elliot Management. I think that is absolutely huge for them. They also taken a position in BP. It's funny because the stock's coming in because they're putting someone that's in charge of fossil fuels uh instead of all the ESG stuff. I mean, go figure, right? So, I guess it's the E ESG funds that are blowing it out, but go figure that an energy company is actually going to go and create energy. I know, wild world we live in these days. Um, so I do think there's some of that stuff going out there where you have these little pockets of opportunity. I don't know you have to change th those. You know, you look at the Amberies of the world, they continue to grind higher. You look at the American Eagles of the world, they very quietly are grinding higher, but they're looking a little tired, right? So, that really just puts you in that position of like, what names do you play? Uh the idea that you should be rushing into any of this stuff right now to me uh is really just kind of delusional. I think what you really want to do is play it by ear. You know, you really want to play this stuff by ear and on a case- by case basis until the end of the year. Unless you truly understand tax selling and that these guys are in preservation mode. And that's the one thing you're like, "Well, what do I take away from this video?" I would take away the fact that these guys are in preservation mode. They're like, "Cool, my micron's up. Tag, you're it." If things are out of pocket in any way, they're just going to move on. Like tonight you're going to see Nike's down and Nike has earnings tonight. I might as well just rock rock and roll with these u and bring this home. But like Nike has earnings, right? So the earnings when you look at China, China they were an absolute disaster. Like just absolute unequivocal disaster dumpster fire uh on China. Like the earnings on the when you read them, they were decent. Like I read them like oh they're not bad. And then you realize that they miss China by like a mile on the sales. So that's why you're dealing with it. and they didn't give guidance at the time of me showing you this. Um, other things that I think are super interesting that presenting opportunity is like I keep looking at at FedEx and again I'm not on the call. I'm recording this u so we can spend some quality time together. But like I'm looking at this FedEx. I I I bought this and you know I'll figure out what I'm going to do with it as the as the night goes on. But as soon as I saw the news I just printed it. And the reason that I did uh it made zero sense to me. Not only did they crush, but packages are up, margins are up, everything was up. And I'm like, this is all you're really going to do? I'm like, okay, I'll just sit with it. Like, I don't mind making that. But yeah, I think that this could have a really good day tomorrow. And and the fact that the package side of it up, what that means to me is that you might see a good day with UPS. Uh UPS could benefit from this pretty good. Uh, and you're not really seeing that kind of move with it yet. So, that's something else that's super interesting to me. Uh, but as always, you should do what you're comfortable with. That's it.