Transcription
With stocks like car up about 500% in less than a month, a lot of people are looking at this and saying, "How frothy are we?" And we're seeing a lot of this. We're seeing a lot of just straight up lockout rallies, but we didn't get that today. And I think that's really important place for us to start.
If we take a look at names like NDX, how high is something like car able to go? There's a lot to this, but the most important thing is just start with what we have. And I think that's the best place for us. So when we look at the NDX, what do we have? We have an open and then we have a wick and then we didn't finish where 50%. So let's look at that.
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Okay, now let's get back to it. The most important thing that I have for you is the NDX to start with. And why is this so important? Because when we look at the open versus the close, we're going to just note right here that you didn't break that 50% level. And I think this is super important. When we look at that 50% level, meaning you still had net buyers on the day. And now we have some news after hours.
While this is going on, let's get rid of the lines. Let's just look at this from a bare perspective from the cash level. I thought it was really interesting how the close on Friday or the open on Friday, that was the level that was that 50% from the move on where we were tried to get back over. Couldn't. And then when did we start getting back over and it's really important to start and I'm just going to say this, differentiating the days. And so when I say differentiate the days, I tend to use 2:30. You can use a little sooner, but that's a dentist's favorite time of day. And what you're doing there is understanding everything after that is probably more institutional. Why everything in that first half hour or hour tends to be what? More retail. So if we look at that, we see retail puke and then we see institutions saying it's not so bad. We're going to pick at things a little bit. And I think that makes a little bit of a difference. You can see that oh we have the scare and then we see the bounce and that is consistent with what we're seeing.
What was different about today was a couple things. The most important thing about today was yeah we did not hit a new high. Yeah we didn't close over the open but we didn't do that here either. And so when we look at this and saying well is that it is it over? You know I look at that from a liquidity grab standpoint and I would say that what we saw was that we just didn't break down.
So, if we get even more specific about what happened and we just drop it like it's hot there and blow this up into a five, we can see there's our level, right? So, we know it's not going to be exact, but let's make it exact. And then we'll kind of talk about it. So, we came back down, fell down, and then we wick right there, and then we bounce off of it, do a little bit of a back fill, and then that was it. So, you never really even got into the range of where you were on Thursday. All we really did was fill the gap and then they ripped it from the gap fill. And if you think about it even that way, it's even more powerful. So they came back down, gap filled for about 5 minutes, not even, and then they ripped it right back in the face. And when we see stuff like that, we have to recognize it for what it is. It's just gap filling and then they're getting involved and then they're going from there.
So then when we come over here and we go to this level and we drop it like it's right here, what's that line? and we're not even close to it. You can't even get close to testing the all-time highs on the NDX and people would say, "Oh, well, you know, give it time." Okay, maybe or maybe not. Like, you don't know that.
Now, here's what I will say. When we look at the NDX, we are really overbought and I'm seeing some really weird things going on out there besides the car, which is awesome if you're long at We're having a really good time with that in the community. But, yeah, we are up there. We are at an 80. And we do have to understand that when we start rolling over here, yeah, that could be pretty ugly. But, you know, I'm going to say, oh, well, when we get the negative divergence, it's probably time to sell. All right. Well, here's a negative divergence. And then, yeah, that gave you the opportunity to sell. This one wasn't a negative divergence, but how long did that take to build? Well, that's September 25, and you're coming over to October. All right. So, it's going to take two to three weeks if this is a top to build a negative divergence, if we get one. Okay, it's Tuesday and you're thinking about, you know, two Tuesdays from now. I'm not saying that you are, but when you start going through it and looking at this kind of stuff, I always look at that stuff and see if I can find them anywhere else and then say, "All right, well, how long did that take?" Well, here we are at June 17th and then you go to July. So, okay, so it took 2 weeks to develop it again and then after you developed it, you came down. So, if you even are of the camp that, oh, we're going to come in. This whole thing has to develop into selling off. It's not just going to sell off because you're you're looking at it and saying it's too high. Or is it going to come in because I'm looking at it and saying it's too high. And I think that's the important part of this.
So, this is the hand that we're dealt. And I I'm of the camp like, yeah, you're going to come down, you're going to break this eventually, and you're going to rally back up and if you don't take out the high, you're going to get a negative divergence and then there'll be a bill to pay, but to think that bill is Tuesday, Wednesday, you know, if we get a super special tweet, maybe it is. But even today's tweet with no ceasefire and then someone else comes out and says ceasefire, it seems like the move now is for them to come out and say no ceasefire on either side and then they just both throw it on Pakistan and Pakistan says please ceasefire and then they just say okay well Pakistan wants it. Like it seems like both sides have kind of gone that way with it. That's what happened this evening.
Let me take a look at the cues after hours. Um, we'll go and take a look at this really quickly so you can see what happened and I'll save it from everybody some time here. I'll save you 10 minutes of your life. So, this is when Pakistan came out and said, "We're going to ask for the ceasefire because we think it would be good." And then both sides said, "Well, you know, if they want it maybe and we we'll look at our options and then it went up." So, we'll see how this goes. But that's why one of the reasons why the market rallied.
You have some other news that's coming out after hours with Apple and Tim Cooks out. We're going to get to that. I definitely want to get into the Amazon news because I think that's absolutely fascinating what's going on there and we need to talk about that too. And what's going on with the rotation within the socks because it's not just rotation of the sectors in the socks. It's rotation of those names which is super interesting.
Now, here's what I mean by that. So, when we look at these names, let's take a look at the socks really quickly and then we'll jump into it. So, here's the socks and we can all see that it's just ripping everybody's face off, right? And we're all waiting for it to come down. Even when the market's dropping, all it's doing is just pulling back and then just ripping again. And it's not just that the same usual suspects because you can look at ASOcks, which is the AI part of the socks, right? Just ASOCs. And then you can go look at ESOCS, which is the equal weight, and you go and take a look at like which one's breaking out, hitting all-time highs today. It's the equal weight of the semiconductor index versus the ASOCS that is just wicking down and not. So, and this is super interesting. Well, it is to me, but maybe I need a life.
So, if I look at ESOCS versus ASOS, what are you saying? You're seeing a very clean breakout right here, aren't you? Right? And it's been that way. And this is when the rotation's getting super weird. And I'll show you again what I mean by that. So, and you could just screenshot this or just remember that you can look at this that way. And I do think that there's something to it. I actually want to grab this while I'm thinking about this and get that out there. So, because I do find that fascinating, but but here's where I'm going with it.
So, here's ASML. Now, ASML was leading and it was ripping the market up. And you can see right when ASML peaked is right when that ESOC trade started taking over. So, ASML comes out with earnings and then it sells off. And you would think that all the names that sold off with it that the socks would drop. The socks didn't. Taiwan Semi comes out with earnings and the earnings were good, but you know, expectations are built in. What happens? What happens? It sells down and what happens to the socks? It still goes up. So, they're actually rotating through the names and they're find different sectors in there.
So when you look at this and you say look at the analog names for example all the analog names are completely breaking out right now and you can see that as they push through Texas Instruments breaking out I breaking out like names that people have just completely forgotten about are setting up and they're breaking out and they're not doing it on little volume they're doing it on a lot of volume. So that's super important because not only are you going higher, but you're broadening out of the semiconductor space is really significant, but it's leaving people hanging because they're not looking at the right names. So even if you're out here looking at KAC, that's hitting an all-time high today and then you go and take a look at Lamb Research, you're like, well, that's not running. And even during the intraday movements, you're not getting the same kind of movement that you had before. And I think this is where people are getting frustrated.
So if I take a look at something like Micron here, I'll drop this to a fivem minute. And you're seeing these opportunities, right? So like here's a great example of this. So here we are in Micron comes down, undercuts, and you can see your divergence here. And then you can obviously see the big bar right here, which led to a possible day trade, right? Some people did it, some people didn't, whatever. But here's the point that I'm getting at. If I take a look at this and that undercut and then you take a look at SanDisk and what happened there all you did from that point on from where SanDisk is and you go take a look at Micron from that point all SanDisk did was come down. Well before these names even though SanDisk was outperforming were like two P's in a pod. They would just go up together or trade together. A matter of fact if you saw one move you could just buy the other one and they would kind of move in tandem. It's not doing that anymore.
If I go and put a line and make that a line chart and just go to Micron, we'll make that a line chart real quick. Yeah, they're moving, but it's nowhere near the same. You can actually see the movement here where Micron does the undercut. This one doesn't. This is where SanDisk breaks. And we don't really break the same way. A matter of fact, we can't really break under that level right here. That's super important to see. And it's super important to me to point it out because when you're pe what's again what I see happening is I see people getting very frustrated because they're used to these moves and when they're moving in tandem like this and then they stop and they start diverting it gets not just dangerous but it puts you in a position where you're not sure what to do.
This is why today one of the things I was telling people when we were trading just sticking with something like SO XL it's making your life so much easier and I'll just go to this on a bare chart because you're not playing the game. You're not having to deal with you know which name do I have to look at. It's not like playing a game of where's Waldo or which one's moving today because one day you're going to be buying the analogs and then they're going to roll over and you're not going to know why. And people say well you know can you give me an example? I'm glad you asked.
Everybody had to be in Intel. Now, Intel did have a negative article from the Wall Street Journal. Right or wrong, I don't know. Nobody knows until earnings are out. And then the people that said it was bad will come out and say, "See, I told you it was bad." The people that said it was good say, "See, I told you it was good." But nobody ever really knows how it's going to go with a quarter. Right? So, if we take a look at this and we look at the undercut here, you have almost a perfect evening star that's set up there. If you look at the 4our here, you can see your negative divergence and how this is rolling over. These are the negative divergences that we talk about and that they take weeks sometimes to build. This one didn't.
What's important about this is AMD was moving with it. And now AMD is up here with like an 87 RSI and you can see, you know, where you're at. And I'll show you examples of RSI where it just it doesn't matter. Like RSI can stay up there. It's when it breaks this level that it really matters. But most important is they're trading in tandem. And when you go and take a look at that, you'll see it where you have like if you put Micron in here and I put Nvidia in here. You know what? We'll take Micron out because that's one of those kids that's been doing its own thing in regards to the other names. And let me clean this out. We'll just use these three for a second and you'll see what I'm talking about. And we'll get rid of this.
So if we look at how these guys have been trading, even though they're trading at different levels, they really have been trading together, right? So one moves up, then the next moves up, and you can see here's Nvidia, and then you start looking at what happens today, and you start getting a very different overlay of the market. And this is why I tell people like putting all your names into a line chart at the end of the day and just looking at them, it it's not a bad exercise, but you can see an inflection point here today at 9:30 where these sold down and then all day what did they do? Well, all day they just bought Nvidia. What did they do all day here? Well, they're really getting out of Intel and they're kind of ambivalent about AMD, but they're really getting in Nvidia for the day. And it's not just there that you're seeing this.
I noticed it with Western Digital today. And what we saw with Western Digital, you can see that Western Digital comes out, hits a new high, and we do this undercut right here, and then we rip, and then we're sitting. Go look at Seagate today. Seagate and these names, it's like they share a brain. But today, what you have is you have this rally, and then you completely encompass this other bar and now you're pulling back and you're gap filling. When you look at Western Digital and what Western Digital is doing, it's not doing that. It's very different.
Now, you might people look at this and say, "Well, you're being nuanced." I am. I'm being nuanced on purpose. Because not only in the socks are you rotating, so you're looking at the socks and going, "Oh, it's up a dollar and a half." But when you look under the hood, it's the fact that the ESOC is outperforming. It's not that they're buying AI names. And this is a really important distinction because if people start going in there and buying the same names that they were buying before, like, oh, I'm going to go and buy SanDisk and we're watching SanDisk unable to rally today and it's really analog devices that's ripping everybody's face off and you miss that because you don't understand these nuances, it's actually very costly.
Now, before we get into some of these other names that are just ripping, I just want to go through if you look at the breadth of the market, it's absolutely ripping. So, this is the 200. This is the 50. This is the 20. And this is the five. They are all in tandem. They're all above key levels. The 200's above 50. The 50 is above 50. You're at a 60% now. The 20 starting to get ahead of itself. But as long as the 50 keeps pushing and the 200 keeps pushing, we're fine. If you start seeing us going sideways or down, then when you're up this high on the 20, that could be an issue. But even where you are on the five, are you vulnerable? Maybe a little bit, but right now you're seeing the breath and you're seeing that rotation, which is really exactly what you want to see. And I think this is important and I wanted to point it out.
But what about all these names that are ripping? So this is one that have been watching us. We've been talking about it for some time. I actually think you're going to get a lot of people picking up on this. It's crazy where we got involved with this in the community. If you're trying to get involved, there's a link in description and I also pin it if I remember in the comments. It's a wait list. I'm trying to get through it as fast as I can, but I do onboarding calls. So, you know, sometimes the wait list is a little bit long, but if we take a look here and we look at the the break through and then the push, it's just absolutely insane. This is when we got involved. And the reason I did was cuz I knew it was going to hit a lot of 52- week runs, but also it was the amount of short interest relative to the float and the amount of days to cover that really got my interest on it. Now, what's super important about this is the breakout and how that breakout is going to continue to push. And I think that's very important for us to to pay attention to.
So, what do I want to do with this or what do I want to see with this? And for me, it's very important for us to pay attention to this. Now, as these grind higher, we had calls. I'm going to I'll probably do a whole video on this one because we absolutely slaughtered it and frankly, it's such a teachable moment. You know, people always saying, "Well, I can't get involved here because it's already gone, or I can't get involved here because it's already gone." But when you understand it, you know, you try to find a way in. Here's what I think's going to happen next with it.
So, when these things blow off, they get blowoff tops. These are blowoff tops. And this to me is super important because you can see that blowoff right here. And how that blowoff plays, right? So, that's a blowoff. I'm not getting that yet here. And I think that's a very important distinction that we're noticing, right? We're not getting the blowoff, are we? No, we're getting something far different than the blowoff. They're just grinding us higher. Now, do I think that there's a really bad red day out there? Yeah, of course there is. When's that going to happen? I don't know. What I've been doing with it is trimming the stock up. I've only done one or two day trades candidly that when once I catch it, I just leave it on and then trim some and then move the stop to break even. And I've been playing that game, but I we still have a decent size of the swing that's still on from that level and I just keep moving the stop up and eventually I'll get stopped out of it. On the call side, I bought the 500s on Friday. I rolled them out when they were up and I rolled them up to 600 and then later today I actually just rolled them out again. And the reason for that is I'm just constantly taking money out of it because I know that this doesn't last. It ends in tears. It's just a function of what day.
So then the next thing that we have to focus on is the news that came out after hours. So Tim Cook is gone. They're going to put him in a role of chairman. You know why? I don't really have a clue. I thought it might be a good thing for Fresh Blood. The market's not responding to it very well. Maybe they don't like this guy. We'll see. Apparently, he's head is SVP and we'll see, you know, what he does. But I actually thought it might move, you know, fresh blood, get something in there. Maybe not. But interestingly enough, it's just flat on the news. So, it doesn't really look like they think they have to worry too much.
If we take a look at something like Amazon after hours and we're watching this curl up uh they're getting more inbed with Anthropic, they're getting an investment from Anthropic and then Anthropic is doing a circular investment into them and the AWS. So that it's really important for us to get that yeah why this is good news and it is flagging it does look like that. And I want to just finish this with one thing to be aware of. I still as as much as we're moving and trading the lack of depth when we fall apart there it's just not there. So there was this AVX that we traded and this is and I get it. It's a thinner name but man when these things break we bought this on the IPO like the day it came out and just held it over the weekend. When these things break guys they're breaking. So what I tend to do in these kinds of environment is just move the stop up and then go from there. move the stop up and use trailing stops and then just sell into the pops. I find that works best.
This week's going to be pretty wild, guys. Between the ceasefire and what we have going on with Tesla and earnings and Intel with earnings, it's going to be a pretty wild week to say the least. That's it.