Transcription
Hey everybody, welcome back. So today's video, I want to go through the basics and just talk about what exactly is going on out there, what changes we had at the end of the month, and just do a really quick review. I think that's the best thing for us to do.
And then we're going to dive into some of the specifics to start. We all can see clearly we're back above the 55, the 12, and the 22. That's what I use. You should use what you're comfortable with. Another thing that I think is just super important. Again, we're just starting with the basics and then we're going to get into some of this in-depth stuff between TPU, CPU, GPU, all of it, and just really dive into what the heck's going on out there on the AI side.
If we take a look here and we just do the simplest of things and and click off here, I want to go through smart money, dumb money as well. And I think we should talk about the Zag breath thrust just a little bit so we can understand what everyone's getting giddy about.
If we just look at what's transpired, this was that October 10th level. And we've talked about this for weeks that we need to undercut this and then from there we're going to figure out what we're going to do. Well, we've done the undercut and now from here we're figuring out exactly what we're going to do. And we've done nothing but lift. Now, there's a couple things to take from this. The first thing is this was not a small bounce. This was a huge bounce off of that level with 1, 2, 3, 4, 5 days of just higher highs. So, it is very clear even on Friday that the market at this point wants to go higher. That's unequivocal.
If you get to an area like this and you get some kind of milk toast bounce where you go sideways and you're not really lifting, for example, just show you what I mean by this. So, if you get some kind of bounce and you're doing this and you're kind of like sitting on there, we call that, you know, really eating up demand and then it's at more risk to break. That's not what you're getting here. Matter of fact, you're getting far from that. What you're getting here is you're just getting straight out buying. Now, something like that, it's really hard to ignore because you're not even really dropping. You're having these retest down, but essentially this is all you've done. Oops, there it goes. Gets a little crazy, but that's all you've done is just gone straight up.
Now, a lot of people would say, "Oh, you have to come back and back fill." Not all the time. Once a bottom's in like that, and I do believe that that's a bottom. I'll give you a couple indications on how you can determine when it's not a bottom. Um, but for me, I think it's super important to get this. When you look at something like this bottom forming back in April, it was boom, there's a bottom. Everyone's we had enough winning and liberation and then what happens? We find ourselves in a position where it's like, "Oh, I'll buy it when it gets back to there." Get some back filling and that's it. So, do I think you're going to get some back filling on this? I definitely think it's a possibility. I also think it's a possibility going into the end of the year that people are having that I can't believe I didn't buy that dip kind of moment because some of these names are starting to get ahead of themselves. And I'll show you what I mean by that.
So, take Meta for example. Meta was one after earnings, absolute dumpster fire, falls apart. And once we get into this Monday, Tuesday level where they start saying, "Hey, we're going to get away from GPUs a little bit. Um, we're going to start looking at TPUs and we're going to dive into what some of this means in a moment, but I'm going to keep it surface level." And then we'll get into it. But I think it's important because it means that their capex price probably is going to drop and it means that they're not going to have to worry about the free cash flow to capex numbers that we were all talking about going to become the new metrics. So people are starting to look at that and go, "Oh, this makes sense." And that's why we've seen some of these names, and we're going to get into it in a bit, why we're seeing AVGO and an absolute tear. It's why you're seeing some of these other names just, you know, start going by the wayside. It's why you're seeing Nvidia continue to get weaker, right? You're seeing this change. It's why Google's doing Google stuff, right? Building a little flag up there. There's a reason why all that's going on, and we're going to dive into some of that today.
But I think if we just go back again, and let's just go back now. We'll do it with the Qs for a sec. We could do it with the Qs, we could do it with the futures. I think at this point I just want to do it with the cash market for a second considering the bumps that happened in the market on uh th was it Thursday night with the futures market. So I just think it's cleaner using cash right now but it doesn't. So if we could see here, we have the same breakdown, we have the same level, we have a doji, we flip the doji and we've never looked back.
If we go and take a look at this and do the same overlay, which is a 55, a 12, and a 22, we could see very clearly that we are above all of them. We have not been above all of these. Let's get rid of the valve for a sec. We have not been above all of these for some time, have we? Yet, here we are. So, when was the last time we were really above all these? You'd have to go back all the way to October. Like, it's it's been a while since you've been above all of this. Now, you're not pointing up. These aren't pointing up. So, we have to always go and just say, "Well, where are we with the three, the five, and the eight?" And we'll get rid of the pre and the post for a second. We'll just look say, "All right, well, what are we dealing with here?"
So, what you're looking at is a three, a five, and an 8-day moving average. And on that, all we're looking at is those moving averages on a from a daily chart onto a 15-minute chart because you can actually see the interaction better. For those that are newer here, welcome, subscribe, click on notifications, cuz all these videos are connected. But when in when in doubt, when red's on top, it just means stop. It's not I'm not the brightest bulb, so I just color code it. When green's on top, green means go. It's really that simple. And if you look here, it's pretty much plays out that way, right? So, if we're taking a look at this, the three yellow is five. This is the eight. And you can see they're all starting to turn and they're all pointing up. So, can you get back filling into this? Sure. But there's some other things that you've done here.
And we're just going to stop with this one for a sec and stay here. And I'll just show you some of the things we were showing in the public pre-market. Just dropping a simple VWAP from the peak and just looking and saying, "Oh, well, we fought here. Double top broke." Not really rocket science to understand that, right? And you're right back to that 19 level. We know 26 is also going to be an issue up here. And and so what is this really telling us? Well, you know, maybe you have an issue here, maybe you don't. But here's what you do have. You are above what? You're above peak VWAP for the first time. And you haven't really been above peak VWAP for some time.
We also were dropping. And we're looking at this one because this was super important. That 10th and we were watching what was happening on the 10th, that low, cuz they're the most pain points. Remember, if you put VWAPs everywhere and then you point say, "Oh, look, it hit the VWAP." You're just VWAP all over yourself. What you want to do is just find where the pain points are and then think about how people are reacting to those areas. When you understand what a tool actually is, you can use it more effectively. So if you're sitting here and you're going, well, that's pretty obvious, like really, really obvious that that was a problem. Really obvious it was a problem here and really obvious it was a problem in here. Now, that is the first thing that you would note that we are above that problem, that problem area.
If we drop a volume profile from here over, this is where it gets super interesting because this is going to tell you where point of control is. Now, point of control could obviously move if we get some back filling down here. We actually want point of control under us, not above us. Point of control is just the area where the most amount was done. Meaning where did the most amount transact from the peak? This is where the most transacted, that point of control. And this is the absolute high value of that area from where it's all transacted. And this is the absolute low value of that area. That's why when we broke through here on Friday, it was such a big deal. That's why when we came back down here on Tuesday and tested that area, it was such a big deal. And you can see how you've been reacting right off that level. Like it's you hit that level and it's that level's just been absolutely perfect for us to do, you know, short-term trading as we allow this to settle out. So, I do think that there's something to that and saying like, okay, we are above all that.
Now, if you go and drop it from here, you'll see that you're above all of that, all that nonsense. So, you are in a way doing exceptionally well and looks like it's going to push higher. I do think you'd be remiss if you don't think up here like around the 21, 22 area on the QCC that you're going to run into a problem. If I do it on the spy, same thing. Just give you an area that you just might want to watch. You all see the higher high. I don't know where the yaw's coming from. I am in Charlotte right now. I picked it up somewhere. But uh if you take a look here, I'll try not to do it again. I promise. But if you take a look at it right here, you can see how you're hitting that point of control and wham, just whack-a-mole. You just stop dead. Does that mean you're not going to break through it? I don't really view them that way. Eventually, they they tend to give away if you stay up here. But it does mean like, hey, we've come a long way. Pardon the voice. We've come a long way in a in a short period of time, and this is something that we definitely want to pay attention to. Like, this is an area that yeah, we want to we want to zoom in on.
If we look at this from a weekly perspective, zoom out, you're having everything. To me, everything's perfect. Like, absolutely perfect. People like, well, how could it be perfect? Well, up, down, 1, 2, 3. And I know it's not three. I get it. But it's the pattern that's there. The up pattern, down, and then the Z. You you want to watch these jackknives because they tend to go. What I think super interesting is if I drop this here. Yeah. Does anybody realize that the spy closed at an all-time weekly high? Like nobody's really talking about that at all. Right? There's your weekly high on the spy and you close. I didn't mean to make a rhyme, but there it is.
So then we go and take a look at the cues and let's get rid of all my nonsense for one second and just dive into this and go, did that do the same thing? And the answer is no. So, we still have a little bit of noise there that we'd want to see. And we still have this gap here, which is right around 25. I'm going to call it 26, but it's up in here and it's still an issue. And tech takes a while to get going. People are always scared to put their toe back in the water if they had just had it bitten off by a bunch of piranha. So, you have to give that a little bit of time. I do like what you're seeing there.
And just to put this in and kind of segue into this because we're about to dive into some of this stuff that I think is super important. If you just look at the SOXX on a weekly, you mean all we did was rally up, come back down to major support, test major support, or resistance has now flipped to support, and now we're going higher. And these bars, just so we're clear, they're almost they're almost marubozu. Marubozu are bars that they close at the all-time high of that bar, pardon the voice, and then they close at the low. So, you really don't even have any wick. They're about as strong as you can get. It's very rare to see bars like this when you see them that long. And you always want to see what the ATR is of those bars. The longer they are off the ATR, the more they can go. And so ATR is real simple. So all you have to do for ATR is just go here. And uh I try to throw some of the stuff in. So you can see some of the stuff I actually use.
So if we go here and take a look at the ATR, we would say, "All right, so the average true range on this is 19." So if I go, "All right, so 19. So what was that bar? That bar was 22, 23, 24." All right, so you're about 1.25 over the ATR. Anything like that, you really want two, but it's extremely rare that you're ever going to get a two. Uh whenever you see something like that that you're above the ATR on an index on a weekly, you kind of want to pay attention to it because it does tend to show you like, hey, this may be maybe a bottom. And so that's going to segue us into, well, what about Nvidia falling off a cliff because of Google? And we're going to touch base on that, but I just think there's some other stuff here that we should really focus on for a second.
You do have leaders, and to tell yourself that you don't have leaders is doing yourself a disservice. I've really put off on chasing a lot of the biotech because the market until the market stabilized. If it got worse, they'd go for the generals. The generals are going to be whatever is leading. Uh, but you have a real clear breakout here. And all you're really looking for now is backfill on this because biotechs have been leading for a period of time. I don't think that's going to change.
If we go and take a look at the XBI versus the SOXX and take a look here, you could see that XBI versus the SOXX. Like, would anybody really believe that for the past 2 years, you're really in the same range? Like you wouldn't even think that because you would just be like, "Oh no, semis are killing it." Yeah, they're pretty much in line with one another. It's kind of crazy when you look at it that way, isn't it?
The news that's out there right now about Nvidia and what's going on with the chips and is Nvidia losing its dominance? Um, to some extent, the answer for me and looking at this is I don't know that they're losing their dominance, but there's definitely going to be a race and we're going to start learning new terms like TPU and CPU. I think it's going to drag out the cycle longer is where my head is. And I want to get into some of this, but we're not going to get into to all of it. But I just to get a sense of this, there's a competing chip. This is what you would have to know. There's a competing chip out there. It's been out there for a while. It's now what some of these larger models are running on. And so that you're starting to see people lean that way.
For me, with Nvidia, since th this this peak, you can just see that we've been doing nothing but selling off. There are steps here where Nvidia is just a better option than some of these newer chips very clearly. Um, I'm not going to get again into it all, but I do think it's worth mentioning. I also want to just point out there that people are probably going to buy both. I think that what people are going to wind up doing here is they're going to buy these TPUs and they're going to buy GPUs and they're going to keep relationships with both. What that's going to do, frankly, is I think it's going to put gross margin pressure on Nvidia. It already is, I think. But it does mean that some of these other names are probably going significantly higher in my opinion. So, we'll get into some of it here.
I do think it's important to note that there's a huge difference between an AI boom bust cycle and us looking at things like Oracle going out there possibly borrowing billions or OpenAI possibly borrowing billions and this cyclical kind of movement of oh I'm going to borrow money and then you're going to buy this and then I'm going to borrow that money and then you're going to buy this and then I'm going to get an equity stake. Um, these equity stakes to me that Nvidia is taking are ways that they're trying to control their gross margins. That's the more I look into it, the more I'm convinced of that. And I'm segueing into something here and trying to stay broad, but there's a lot of there's a lot of moving parts to this. So, Nvidia does these equity deals. If Nvidia does an equity deal, they get equity in the company. It's much easier for them to swallow that than them to go out there and saying, "We're selling uh, you know, X amount of chips to OpenAI at a 50% gross margins when our gross margins are really 73%." So, in my opinion, the more I dive into this, it's a nice way for them to keep gross margins where they are. I don't know how long they're going to be able to do that if people start really understanding what they're doing.
Here's what you here's what I think you need to know that OpenAI definitely sees an issue here um with what Google's doing. That's the very first thing and we'll get into that. So, if you look at Google and how Google's set up, Google's Gemini 3, and we went into this last Saturday's video, I'm not going to rehash it, but if you haven't seen that, I would strongly suggest that you at least fast forward to the part where the Google Gemini data is and go through all that. Google is is better, it's faster, it's visually doing better, it's everything is better with Google's Gemini 3 than it is with OpenAI. And that is very clear. Even Sam Altman has come out and stated that. You can go out there, you'll find tons of articles like this where Altman's memo forecasts rough vibes due to resurgent Google. Um, this is there's a whole article on this by The Information that's behind a a paywall that I get. So, I don't want to show it. Uh, but you can go out there and find these articles and find clips of them. I would strongly suggest that you do it because it explains what the real issue is. And if you for someone that's a layman with this and going, "All right, help me understand." Ask any of these models the same exact question. And if you go through all these models and you ask them the same exact question, then look at the kind of answers that you're getting and that will tell you exactly if you can see the differentiation between them. But this is this is real and that's what we're seeing out there right now. And we're seeing things along the lines of Nvidia newsroom. We're delighted by Google's success. Like who's delighted by someone's success? Are you like thrilled to death that like, oh, our competitor is eating our lunch?
Um, and they're not like like before we get into all all of it, I want to keep the performance of a difference between a TPU and a GPU. I want to keep this really simple, like surface level. Just understand that Google's coming along and they're able to do a lot, but Nvidia is on all the time. So, there's there's a huge distinction between these two chips. What I think is going to happen is I think it's going to be a combination for a while and then one is going to get embedded and that's going to be it. But I do think that they're going to be combinations of these running a program on this and running a program on that and the only thing that's going to do is hurt Nvidia's gross margins unless they can make such a leap away from this that it's not even a question and it is possible that that happens. But Nvidia is a generation ahead of the industry. It's the only platform that runs every AI model does does it everywhere computing is done. Nvidia offers great performance, versatility, functions, delayed specific a frameworks and functions. Great. But the one that's killing everybody right now, Gemini 3, is TPU dominant. And and it just is. And that's why Meta made that comment that said, "Hey, we're really looking at switching our model to that." You can't overlook that, nor can you overlook Nvidia's need to come out and say something. So why Jensen's out there and saying, "Yep, things are going great. We're really happy for you." Behind the scenes, this cuts into their gross margins. And it's really very simple. It just does. I'm a huge Nvidia bull. I own Nvidia. I have no interest in doing anything with it. But to pretend that this is not some kind of threat to the corporation would just be disingenuous.
Tying this all together before we go down the the rabbit hole and what names that we should be looking at, I just want to just be real clear on this. Whether you think AI is done or not done, I I personally don't believe it is. I do think that you're going to have these battles that are going to go on. And right now, you're going to have a battle between AVGO and Nvidia. That that is very clear between the architecture because AVGO is the architecture of this TPU chip and you can see how this is going. I do think you have broader things to concern yourself with. So I want to go through three things that I think are broader for the market and then I think we should take a look at what smart money is doing and then what the ZG breath thrust is doing and then kind of tie this all together with what names to be looking at.
So the very first thing for me or there's a bunch of things out there that I think you need to look at such as um let's just start here with F5. FI and this is stocks above the 50-day in the S&P. And why I want to just bring this to everyone's attention is we're finally getting back over and staying over that 50% line. This has been a real battle for us for a period of time. And you have not really made a higher high in the breadth of stocks above the 50-day in a very long period of time. It's been a real I mean it's not been like weeks, it's been months since you have not been able to to do this. So here it is finally. Now whether this is a breakout or not, I don't really care. What I do care about is that if the S5FI, which is stocks above their 50-day, are breaking out like this, that means the breadth, overall longer term breadth of the market is getting better. People could look at some of these other indicators, uh, such as the stocks above the 5-day and not be crazy about where they are because they're much higher. And that is definitely something that's out there that is a shorter term issue. From a longer term perspective, those working off the five-day, the 50, as long as you're staying above here and you're staying above this 50, that's a big deal.
If we go take a look at NDFI, stocks above the 50 on that are on the NASDAQ, you're still not above that 50. Now, this did not have anywhere near as much damage done to it as it did previously, but I do think that if you go and take a look here, this might be considered some kind of washout. Uh, it is a level that was a washout before and I'll just going to mark it off so you can see what I mean. So when you came down here previously and this was in July and August 5th, that was your washout level. Now there are times of course where in April when we had all that winning and liberation uh, that it's gone lower. September when you got into single digits, single digits like this is really rare because what it really means at these levels, just FYI, is that like three names out of a hundred are above their 50-day moving average. So, it's not normal to have one name above your 50-day moving average, just like it's not normal to have, you know, a hundred of them and then you're going to work it off. So, this is an interim level that we've seen in the past, whether it's December or March '23 when we thought we were going to lose all the banks. Um, or anything along those lines, August 8th when we had the Japanese yen crisis and that was going to be the end of the world. It does tend to mark a bottom. Where you really want to get above is you want to get above 50. And we're still seeing this dichotomy. And for me, I'd like to I'd like to get past it, but until we do, it's still there. And I can't pretend that it's not.
So, what you're looking at is you're looking at stocks above the 50 divided by stocks above the 50 from the S&P and the NASDAQ. And we always want the NASDAQ to lead. If we go and take a look at this over '23, '24, any of these levels, any of these spikes, any of them will mark bottoms. You can just go look at the charts and they'll mark a bottom. Um, and then you can kind of see where you go from there. I don't need them to be extreme. I just need the trajectory. So, what we really need is you get sideways action and then it'll start dropping. So, we're getting the sideways action right now on this and then as long as we keep getting that sideways action, that's really what we're looking for. So, I can't stress that enough. Now, I tend to use this. Not everybody has to, but I tend to look at this and I find great value in it.
Something else that I would strongly suggest that people watch is MOVE. And the reason to watch MOVE is because people are buying in insurance. So you're buying insurance on bonds. You're worried about your bond portfolio. So like HYG, if you're worried about high yield and you think the high yield corporate market or you think the repo market's in trouble, the bond market completely disagrees with you as it goes out there and continues to buy high yield bonds. Right? So they're lifting and they're buying high yield bonds. So they're not overly concerned about what we think. Right? If you take a look at the liquid bond market, you can see how they've been buying bonds. They really don't care what we think about the repo market or the bond market. They're buying bonds. And as that continues, that will tie directly into what happened here on the 20th where we had capitulation. And that 20th on that as we drop down, and I've done this in the past, and just to walk through it so you guys that are newer can see it. If you go ahead and you put the S&P in, every bottom in the market is going to be marked by MOVE. Like almost every single one because when the market gets concerned over a macro issue, that's what tends to happen. Now, people like, well, we didn't come all the way up here. You don't have to. It's more about trajectory than everything else. Here we were scaring the bejesus out of people when we held up the piece of cardboard and said, oh, you know, double secret tariffs, you know, we're not even going to tell you what they are. They're going to be so high. So, you that's scaring the heck out of people and they don't know that the corporations are going to be able to make their payments. So, you go buy bond insurance. Again, don't overthink it. It is what it is. So when you have these bottoms in like you're getting right here, you know, to say, "Oh, that's it. That doesn't matter." All right, boomer, it matters. So pay attention to it and don't pretend that it doesn't matter because it doesn't fit your narrative of Armageddon, right? You're not paid for being right. That's not why you're paid for being in the market. You're paid for making money. Like no one gets a button because like they called the crash. I know Barry wants to call, you know, I think he's called 12 of the last two. But what you want to do is you want to focus on what exactly is happening out there. And right now they're selling their bond insurance. You might like it, you might not like it. You might want the great crash. This is what's happening. And if I can give you any advice after doing this for 27 years, focus on what's actually happening and trade what is happening, not what you want to have happen.
If I take a look at the VIX, it's completely imploded. All right. I didn't even have time to get a short off between the way this thing acted. So very clearly, you popped up. It looked for sure like you were going to break out. Inside bar breaks down next day, can't even close below 20. So you're still concerned and then the next day just completely imploded. So the VIX and MOVE are telling you right now you don't have anything to worry about. Now if it if the VIX starts to lift up and the MOVE starts to lift up then you might say okay well we're getting ready to turn and those areas that we were talking about are starting to become a problem. But it's hard to look at this and to look at the you know the ZG breath thrust and how the market's broadening out and say that we have a problem here.
So let's take a look at that. Now in front of you is the ZG breath thrust. And what we're doing here is we're doing this one calculation. Before we get into it, let's walk through the calculation so you know exactly what you're looking at. The way that this is constructed, it's a technical indicator. It identifies momentum. And what we're looking for is extremes. So it's computing the number of advanced issues on an exchange. Really should be with the New York Stock Exchange. Anything else and it's not the same thing divided by the total number of issues advancing declining generating 10-day EMA exponential moving average. It indicates the potential new bull market if it moves below 40 and then gets over 615 but it has to do it in 10 days. It's the 10 days that usually is the problem. What they're looking for is an extreme move and there is value to it even without that extreme move. But let's get into it.
What we tend to see are these extreme moves when everybody tends to panic. And what we're trying to say is I don't know that you need to panic. I don't need need to do anything with it except understand it. Once you understand it, which we just explained, then we can kind of go forward and look at it. Go, all right, is there something to it? We see this extreme level here that happened in April and we got all that winning and liberation. We can see completely utterly washed out. It couldn't have gotten any worse. And then we tend to bounce off of that. Problem with these are, do you bounce within 10 days or do you not? That's always the issue. Just like in here, people are like, "Oh, we undercut and then we came back." But are we within that 10-day range or are we not? The faster that you get back to it, the more important it is for it to be a true one, you need 10 days. But you'll see that when these things bounce back like it did here in May 24 all the way up, that was more significant. Why? Because it happened faster. So even if we don't trigger exactly, the faster that we get up over this level and back over a level of extreme breath, the better it is. The longer it takes, the more insignificant it is. And you can even see that with what happened in December into February and January rather of this year versus how you did from April and to to moving over. So one was a little faster than the other. The more drawn out it is, the more of an issue it is. So you really want to see it happen as fast as possible.
Recently we undercut it and this is why it's getting so much press, so much attention. The question is, do you get there in time or not? You know, at the time of recording this, you're dealing with, you know, a half day on Friday. So really have to see. You're have to get there early next week for it to be something. But you don't want to just rule it out because of that. So I would say that we did get to a point when you are here and you do break that point 4 level. It is an area always where you are grossly overdone. And I do think it's worth paying attention to that. You can always see how the the breath was just getting worse and worse and worse over time and then finally just came home to roost.
So for us, what are we really seeing here? We're seeing the breath of the market overall in the New York Stock Exchange get incredibly better and incredibly faster. And that's really what you want. It's actually faster than it even happened back here in April and of course faster than it happened back here in December. Obviously, this was extreme and way and obviously way deeper, but the breath of this and is it's at that level, but it was pretty fast. This bounces pretty fast. You still have the ability to trigger a true one if you can out the days and it's business days. So, you want to can out those business days, but you still have a shot at it if you if it happens early next week. So, it's definitely something that we're going to monitor.
You'd always look at besides looking at the breath that way is just take the market apart and look at the breath this way. Now, what what do I mean by that? So, we're looking at the five, the 20, the 50, and the 200. So, actually diving into the S&P and just taking a second to and seeing if there's any like patterns here that we've have seen before that we might be seeing again.
So, the first thing that stands out to me, and this is the five down below, and you can see you're at 91% of all names are above that. And that usually is like kind of a peak on a short-term basis. So, we might be at some kind of peak on a very short-term basis, but if we look at when we were at levels such as where we just completely imploded and then rallied back up to levels that were up in the '90s, you really have to go back to this kind of move to back in here where you really saw this in April. You don't really have a lot of moves that were that fast over the past 12 months. You have some, but nothing that really got you back to where you are right now. Like, there's just not really much like it. Especially if you just kind of drop it from here over, you really don't have anything that you were this high except for April. Usually what happens is a broad-based rally like that, it tends to lead you to to kind of maybe a little bit of a pullback and then push higher. Even when we get into the 20 or the 50, which obviously this was way worse because it was just broadened so much faster uh from that implosion standpoint. When you really look at it, you're grinding right along. So if we look at the 200 for example, you know, everything is you're at 60 now above that. Now, you weren't at 60 before. You were at 44. You were at 28 on the 50. And now you're over that 28. But where where were we 28 at any time this year? Really had to go back to that April level to even come close to anything. The speed in which you're bouncing back is pretty impressive. Even on a percentage basis, when you look at the 20, that speed from obviously you were down a lot more here, but it took a long time to get back up to here. This took days. And what that usually means to me, I like I want that speed because that means like, oh, okay, we were dead wrong about this versus like I don't know, they keep putting their toe in the water and they're trying to figure out how this is going to go. Instead, they're saying, no, we made a mistake. We have to buy. So, it's the speed in which something moves that that velocity that tends to give us a little more of a feeling like, hey, this could actually hold. Now, we'll watch the technical levels there, but I think that this is very important. If I had to find some negativity about the breadth of the market and looking at what you have in front of you right now, the first thing that just comes to mind is that you're over 91. And that usually would mean that hey, not not 91% of all names can stay above their 50-day or their 5-day moving average and we may see some kind of pullback.
Now, if we take a moment and just look at the NASDAQ doing the same exact thing, I'm just going to do the NASDAQ 100 because I think it's important. You are 92% over on the 5-day. The 20 is 61. The and the NDTH, which is your 200. These are out of whack. This is the 50. You are back above 50 there. So that is good. But with 92 being over, you could be at a point here where it might be too much too fast. And maybe next week we get a little give back now that we're through what we've already seen. This kind of ties in a little bit with what we're seeing in smart money dumb money with we've had this massive drop in retail dumb money and then we've had this massive buy in retail. It's actually flipped and I've only seen it happen a couple times in a couple different uh time periods. I'm going to go through that in a sec. But I want to hammer this home. You're nowhere near over on the 20. So like if the 20 is going to level off and we're going to start grinding higher, I would argue that you really haven't started this period yet. You're really at the initial pop. This could be a bottom now. Now maybe we backfill similar to what we were dealing with here. The one thing that's really good about this particular time is that the breath on the 20 is much better than it was down here. So that means you have way more support from a bullish standpoint that you've had previously. What tends to happen with the 200 day is it takes a little longer for it to turn obviously once you break it. But with the way that the 50 is lifting and the five and the 20, it's just a matter of time before other names start flipping their 200-day moving average. Barring some other piece of news or some more winning and liberation, but other than that, this is looking fairly good.
And this recent like besides the thrust that we just went over, this really ties directly into what we're seeing in smart money dumb money. So in front of you is smart money dumb money. Now for those that have been watching this channel for some time, you know that we don't refer to it like that. We refer to this as institutions and we refer to this as retail. And the reason is because this is calculated as retail and this is calculated as institutions. What you want to take from this is that retail moves very fast and institutions move very slow. They want you to buy when smart money is buying and they want you to sell when smart money is selling. That's kind of the the purpose of this. Although that's not really the way that it should work in my opinion, but everyone has their own read on this. So I'll tell you how I look at it. I always look for the crosses and where the sentiment is.
Now, if I get extreme levels like we did back here where retail can't get out fast enough and they are out of everything, yeah, that usually does tend to be a bottom. What you do find with those is it really depends on what's going on, not only macro, but where the order flows coming from. So, if you look at this 5-year chart, even though that they were really negative in here, meaning the retail side or dumb money, um, it really wasn't the wrong thing to do to be negative in here because it got a lot worse. Now, what happened is they got invested and then they got out again and then you can start seeing that institutions are fully invested and then they're getting out. But institutions are getting out down here in January '23 and they're fully out even though we have retail fully invested. So there are times here where just saying, "Oh, because institutions are out and retail's in, smart money, dumb money, that we have to do something or that they're right." I would say on the ultra extreme side of this, they're usually something to it. So like if if you have an extreme move where retail can't get in fast enough and institutions can't puke it fast enough, that does tend to mark some kind of high. If you see where institutions can't get in fast enough, smart money and retail can't get out fast enough, that usually will mark some kind of low. There is something to the inflection points that are going on in this little area, but it's hard to see on a 5-year.
So, let's drop it to a three. Now, if we look at a three-year, you're going to see that we have a cross to the downside and then we're ringing back up through it, meaning smart money is going higher. They're still buying, but this gets super interesting. And we're done. We're puking it out. Retail's just puking it out. Now, they changed their mind. And when you start looking at these areas where retail's like, I have to get out. I'm wrong. I need to get back in. You'll see them. They're not very common, but it's like, "Oh, I have to get out and then I got to get back in. I made a mistake." They're pretty interesting.
Now, take a look at this. What we're going to do is just zoom in on the year and look at these kinds of areas because it can go it can go a couple different ways, but when they have to get out and then they realize that they made a mistake and it's fast, you're probably going to see some level of stabilization and then you have to kind of play with it and see what happens. I'll show you what I mean. So, over here a year ago, they made a mistake. Oh, we're out. And then we have to get back in and then they got back in the market and this was in January and then sideways and then of course we can see we had all the winning liberation and we puked it out. So there's a macro event that really triggered what happened here but the stabilization and actually higher high came from smart money kind of leveling off to breaking down to dumb money coming back in and being a buyer and I think that this is super important for us to get coming across that we did have some stabilization. So is that what we're going to get here? Are we going to get
Some stabilization? I'm not so sure on that part of it, but there are times in the past where this has given us a real clear indication that yes, you did put some kind of bottom in. You might get stabilization. Watch.
Now, in this scenario, you're going through 2012 and you obviously came through something, but you'll note that over here, uh, we broke down over it. We popped back over it and we have smart money. They're just dumping and dumping and dumping. And this is January. But if we look at this area in January from December to January and we look at these little battle areas, you can see that as retail came back in, they moved faster than institutions can sell. They always do. We kind of grinded and we went higher. And then obviously we came down here in May and we have the cross and this is the one I really want to focus on. Once we crossed and it was like a month or two later and they're like, "Oh, we made it to we made it. We were wrong." And what did they do? They got back in. It's these kinds of convergences. Now, it doesn't matter if it happens a day or a month or when it happens, but when it does happen and they start coming back in the market like, "Oops, we shouldn't have gotten out." They tend to be pretty aggressive. Retail does. And that's what I think we're setting up for here.
Here's another, and you can see this in February of 2009 where we do the undercut and they're like, "Oh, we got to get out." And then all of a sudden it was about a month later. They're like, "Oop, we have to get back in." Again, I'm not really looking for whether it's a month, a week, or a day. But it's when they make that decision that they shouldn't have been getting out and they're getting back in. And what we don't want to do is we don't always just want to look and say, "Oh, smart money's out so we should be out." Because smart money got out in 2009 and they stayed out for a very long period of time and the entire time that bottoms in and you're just grinding higher during that period. So there's definitely something to it.
Now like everything they don't always work if the macro is off, right? So, if we go and take a look here in 2001, 2002, you have a cross and then that cross from here into this area, it it gets you up and then it kind of rolls right back over because why? Well, retail's like, well, we made a we were wrong and we're getting out. All right. And then they have a little bit of a battle in here. It's something very similar where we're like, up, we're in, and then we change their minds. So, when we have these crosses, what we really want to take from it is we have to watch when they cross what dumb money does because they're really in control. Retail becomes in control when you're in these crossroads. It's the crosses that make the most sense to me from where where I'm going with this. But if retail says, "Oh, we're wrong." And they get involved and they get involved fast and they stay involved. As long as institutions hang in there, then you usually find some stabilization, you might actually take out the highs. You just have to you just have to watch it because you don't want to lift and then roll right back over super fast. And that's why both of these didn't work. And I want to give you an example of when it's not going to work. So when we monitor it, we can see what would make it work and what would make it not work.
Now that we have that out of the way, where we understand the smart money, understand the breath of the market, we know where we're at when we tear those numbers apart. I do think it does make a little bit of sense to just spend another minute on this and understand what's going on under the hood. And I'm going to just start with retail. So we were told for some time that retail's dead and the consumer's dead. And I think there's certain parts of it. If we look at XLY for example, we would see that okay, well this might look a little weaker, but XLY has other different parts into it, right? You have your Amazon, Tesla, things like that, but also you have things like the Carnival Cruise Lines, um, or even RCL or NCH, and there's real reasons on their spending why these things are down. And that's probably not going to change for them for some time, and it's going to start being a little bit of an issue for them. So, their spending there definitely is going to be a problem. But I think on the apparel side, this is why I think looking at XRT might make a little more sense. And if we really go here and just said something like XRT divided by XLY, how are we doing? And we'll see that XRT from November on is just absolutely crushing the XLY. So retail versus consumer discretionary since November is up about 7 8 let's call it 8%. Right? All right.
So, let's go back to the XRT and say, well, what sector of that is moving? So, if we go O, we'll see that this name clearly has broken out on earnings. And I just want to go through what we would refer to as obviously the sneaker companies. And you can see Nike coming all the way back down to this level and holding. And you would say, all right, well, sneakers, they seem to be they seem to be holding a little bit better, right? And we could see like Deck, right? How did this do? Not great. All right. So, is it really just all apparel? And I think that it's more obviously clothing. So, if we start looking at some of these names that people have just completely thrown off, like for example, people have just completely thrown off something like Victoria's Secret, and it's just absolutely fascinating to me that you come out, they did that show again, and all of a sudden, the stock's just on absolute fire and it's on a tear. Now, whether this continues or not continues to remains to be seen, but this does not look like your sneaker company. This looks completely different.
When we start tying this together, we're all looking at the AI side of this. I think that we're looking at the I think people are are looking at the wrong side of this in the community. We're pretty on this actually. So you look at names like the department stores like raw stores. Well, here's earnings. They absolutely crushed. If you look at names like Walmart, Walmart's breaking out. I mean, you say what you want, but that this is not recession behavior where Walmart's absolutely unequivocally breaking out here. And so when we start to understand what's truly going on in this environment, it's definitely the retail side is stronger on the apparel on the clothing side than we think. And I think that this is super important for us to get. So when we look at something like a Walmart, we have to understand why what's driving that. Now we did see some stuff there to me that they're telling you that it's more about the celebrity brands and it's more about the influencer brands that they're on fire. But I've been saying things like this for some time. A lot of these names have made zero sense where they're trading at. So here's Kohl's for example. If we look at something like a Kohl's, you know, this company has a tangible book value of $334. Came out and said they're going to earn a $145 to $125 next year, which is double what people had in their book. These names are trading at something, you know, this name was trading at like 15 times earning. It's it's absolutely insane when you think about where the S&P is trading at 22 or 23 times. So, I think a lot of the value guys are starting to look at these names and get involved. Just disclosure, this is one that we bought um up we're up fairly decent on. And to me, it's just a no-brainer trade. And what you're starting to see is a lot of people start to buy these kinds of names even on Friday with there was no volume whatsoever. Um, and we could even see that with Amberi where they just they just cannot get in these things. Now, Amber is a classic example of, and this is what I mean when they really come in hard on these names, where Amber is the kind of name where, all right, you're earning $2.36 here. And if you went back through all this, here's another 230, right? It puts you at $5. And then you go back to this one and there's another dollar a.5, right? So then you go, okay, we at 650 to 7. And if you come back to here, there's 350. So you're looking at this thing and saying, wait a minute, I'm trading at here. you were trading at six times, trailing 12 earnings, which is absolutely insane. It makes no sense whatsoever. I know it's like, oh, but tariffs, I know, all that winning and liberation, but here we are and they're absolutely crushing.
So, the question really becomes the consumer is not as much trouble and the apparel side is not in as much trouble. Now, we're going into this week where everybody wants their super secret jeans, you know, by another influencer or actress. In this case, an actress. And so we saw what happened here with AEO and we're coming right into this on Tuesday. Um, and the idea that this isn't going to have some kind of similar move. It it could not. Sure, they might have moved on to something else and want someone else's super special jeans. Who knows? But right now, you're seeing this play out pretty nicely and setting up going right into earnings. So, we do have that as a driver. You do have the retail side as a driver and I think that's really important.
When we go into the biotech side and look at names like Amgen and these names that have just been, you know, really just not going anywhere for a very long period of time. If you really take a look at something like an Amgen and you just kind of come back to it, really that whole year you haven't gone anywhere. It's actually been a little over a year and a half. Really just haven't gone anywhere. You just had this massive massive base and it was a huge company, but you can go back to October 23 and you could say, "Well, I could have bought the same thing in May." And you could have. Um, and then you're just kind of watching it bonk around and now you're back up to this and you're forming this flag. And the question of course is, is it going to break out this time or not? And nobody ever really, you know, you really don't know. But when you start going through some of these others like BIB, Biogen's just they're lifting ren. You start look at some of these names, they're just on fire. They're just absolutely breaking out. Now, you're going to get your secondary names like MLYS, you know, from this name from when that news came out on it, Absolutely Lifting, or INSM. And we can just see how these names have just been grinding and grinding and grinding since the news came out. Okay, you have retail going, you have biotech lifting. So, we do have driving forces in the market that aren't just AI. And that kind of broadening out really can lift the market and certainly give it support when we when we come back down. So, if we do lose AI, let's just play devil's advocate. Everyone stops the capex or the capex changes. So, things move. You have other things, other pillars that are out there. It's not enough to stop the bleeding, but it's certainly enough to slow it. And I think that's super important to get.
So, as we go into next week and we understand that, you know, Google's new chip hands down is a threat out there to Nvidia. And if you think it's not, you can go read what Meta is doing. So, it is. And this is from somebody I follow this stuff pretty closely, and I really do like Nvidia's spot here, and I do think that they'll maintain their dominance, but to think that it's not going to possibly affect gross margins, um, is delusion. And I I try not to do delusions. So there's definitely an issue there where it's going to affect it. You are seeing new leaders emerge because of that. Things like AVGO and I do think names like AVGO, you know, they're coming into the earnings and we'll see how they explain this or what's going to happen with it, but they're ramping up. They're not slowing down. If we take a look here, this is no different than what we've had before. 3 months of basing after this and now you're starting to rip again. Closing at all-time highs in quote, you know, a tape that everyone's expecting to roll over yet once again. I think that this is super important to get and that's going to lead you to other names and going well what should we be doing with Nvidia. I I far from ruling them out but you can see that you're breaking the 55 here and you're losing institutional support and I think institutions are looking at this now and saying okay well I've got someone out there that's going to affect their gross margins and it's becoming very clear that that could be a weight on them. So does that drop the stock? It could but where you know from if you're a long-term person like where does that put the stock because of what you're trading at? Does it come back down to 150 or something like that? It it might. And is that really the end of the world? Another 17 or 15% drop. It might if you're a day trader. It might be the end of the world. It could be a problem for you if you're a short-term trader. Long-term, I don't see it that way. But from a short-term perspective, yeah, it could be a problem. I think it puts AMD more in the crosshairs. But AMD to me, you know, they seem to have so many people that are short this thing that it just continues to lift. and and I can say anything I want, but AMD is the one that's closing above its 55. Nvidia is not. So, I can say anything I want about it, but even if you look at the the past two days, AMD has acted the exact opposite.
So, what we really want to do in my opinion is start diving into some of these other videos that we'll start connecting, you want to start looking at if AVGO and TPU take off, if we want to get super specific like we did with the retail side and diving into apparel, you know, who else benefits with AVGO. You guys are always welcome to drop your comments below, but who else benefits with AVGO and who else is going to, you know, benefit from some of these changes in the data centers because if you do switch over to, you know, who has the best model right now and what they're operating on, then any of those data centers, whether it is, you know, those Neo clouds or if it's Wolf or CIFR or NBIS, it doesn't really matter. But are they going to start having an issue because they're not using TPU versus GPU? Or are they going to start branching out and doing both? This this gets super interesting to me because it could just be this thing that happens back and forth for a period of time where they keep switching until someone becomes dominant. And we'll see how that plays out. That is it.