The Rally Is Lying — Bond Yields Just Proved It

S&P closes with a dogee on the week. It's not the greatest, but there's something else more looming. I think we have to pay attention to 30-year yield closed at a level not seen on the weekly chart since 2007. Do I think we have a scenario like that? I'm going to save you a bunch of time. No. But I think that there's something bigger here that's looming.

Very quietly, bond insurance was bought. 15% move on Friday. And I don't think people are truly getting this and why it's so important. At the same time, we're watching these DRAM names come off. Are they in correction mode? Well, you're down 12% from the highs, and I think that that's important. And obviously, we have the Stamrunk strike that is looming. We've gone over that in the past Saturday. And there was an update at 5:30 this morning that we're going to cover. But the biggest issue besides the strike is why cyber security names are absolutely ripping and up 20% on the month already. We're going to cover this extensively, why we're seeing this rotation, and why it's so important. Let's get to it.

Subscribe, click all notifications. These videos are all linked together. Very important considering last Saturday tied you directly into the Samsung strike and what sectors were moving. I do appreciate you also sharing these videos. It does show me when that's done and last Saturday's was shared a lot. So, let's get into the deep dive. There's a lot to cover here. There's a great amount of concepts we're going to go through today. Parts of this you're going to want to watch a couple times. The important thing for us to understand before we get into it, if we start looking at the weekly and I'm going to go back to candlesticks. Yes, you have a dogee for the first time. What are dogees? Dogeis are uncertainty. You have a dogee here on the NDX. It is red. You have not had a red bar for some time. That is not the end of the world. What you want to see here is do we undercut and do we go lower? We talked about this and it's why I always say people subscribe because even if you watch just, "Oh, I want to see what the breath is doing real quick and what he thinks of that." We walked through this extensively and why you needed to be concerned about this and why it was coming and you could see that this was developing. It's actually gotten worse and that doesn't mean that I think the sky is falling, but I do want to go through the bond market today because I don't think people truly get how this can impact us.

If we take a look at the S&P and we just look at something simplistic as saying, "Okay, well, this is major support right in this level." And then from that level, where could we drop to? Well, you have a gap in the chart to here. And all we're doing is looking at the spy and we're looking at this down bar and we're just saying to ourselves, "All right, that's a 2% drop to come there." To come back and test this major level, which you have yet to do, would put you roughly at 5%. Like, it's not the end of the world if it happens. A matter of fact, I actually think that if it does happen, you want to be prepared. The NDX candidly, well, we'll do that in a moment, but that would have more issues and we'll we will address that. But I want to do the simple things before we really get into what you should be focused on. We do not want to lose the 200-day moving average. And we're on the cusp of losing this. So, when we are above the 50, that means that 50% of all stocks are above their 200-day moving average. When that ends, that is bad. That is usually when you will see every great drop sustained over a longer period in time. We do not want to see that and we are starting to see signs of that. So, we want to be very cognizant of this move. You get a lot of people that chase the move and maybe they're having some second thoughts because of some things that are going on. I do think there's huge opportunity and we're going to get to where that opportunity is. But we talked about this on the 50% line and we did this, I think, earlier in the week, but let's just mark it off so you can see it for yourself. Once you broke, that was it. Everything, all your trades, you weren't as smart as you once were, right? You might have noticed that your trades earlier in the week, like they just weren't acting the same way. And it and and the reason for it is it's just the foundation of the market. If you're standing on quicksand or mud, it it just doesn't work the same way, right? When you're trying to build a house, you need something solid. And so what you'll note is everything worked a lot better between that Friday, May 8th, all the way over to April 13th. Your swing trades, you were a genius. Some of your stuff obviously is always going to work into this, but when the breath of the market gets worse, it's harder to trade. It just is. We're watching the 20. This is percentages of names above the 20. You're getting to a level where 65% of all your names are now below. And again, you can always look at the five, but you're not even close to being washed out. Now, why do you care about this? Why is this important? Because you're not at a level that's even commensurate with what you're seeing in the breath of the market. And that becomes a concern of mine. It doesn't mean that I stop trading. I still trade obviously, but I kind of have one foot out the door, right? Or as Skynard says, "Give me three steps." So, you kind of want to be aware of it.

Now, if we go and take a look at at this and go, "Let's just do the NDX real quick and let's get rid of this thing that I was playing with because it'll drive me nuts." Hold on. So, if I go and take a look at the NDX, we have the wick, we rallied back up, and then we have the breakdown on Friday. If we go and take a look at it from a volume standpoint, the volume outweighed everything on Friday of the past 2 days. It's not awful. And again, I don't know where we wind up with this, but if I look at it, "All right, maybe we come back and retest the 12." Let's start with retesting the 12. And that it's a possibility that we could retest that and retest that low. I don't think that's a a crazy statement to make and I think it presents opportunity. You have a lot going on with DRAM this week, a lot. We're going to cover that extensively because you had a big announcement this morning on that really early. Well, not for Korea, but for us it was really early. So, we're going to want to watch that because it's also going to affect semiconductors. But most importantly, if we look at NDFI, NDFI is the. Let me just turn this into a line. This is stocks above the 50-day on the NASDAQ. And if we look at this, we're hanging on by a thread and we made a lower low. And we made a lower low without the NDX making a lower low. And that's not fantastic. So, this is definitely on my mind. And it's certainly something that we want to pay attention to.

All right, let's get to it. All right, the very first thing we're going to do here in the bond market is we're going to focus on what the heck's going on. And I think that this is really important because there's a lot of misnomers out there, but the bottom line is, I'm not going to rehash it. CPI and PPI were absolute utter dumpster fires. And we are aware that they were dumpster fires. If you're not aware, take a look at it. I've got a lot to cover, so I'm not going to spend time just pointing at what it was. It was really bad, specifically PPI. And that is leading to people being concerned about inflation. We're going to look at it from a trading standpoint and we're going to look at it from an equity risk standpoint so you can understand the mechanics of what this data means in the market.

So the very first thing is we're looking at US 30-year yield. This is the yield, not year. And what this is showing us is this just showing us the yield. I have a real problem with this. And it candidly on Friday, this is not something that I watch a lot. Like I'm not going, "Gee, I wonder what the 30-year is doing." But because it doesn't really do anything, you know, you're up, down, but we never really break F, you know, that 5% level. But here we are on Friday breaking that 5% level. Now, I want to explain why I care about this. So, if I go to this five right here, I'm just going to drop it like it's hot. I'm supposed to say "let it cook" or "it's cooking." I don't know. "Drop it like it's hot" is much cooler. So, these kids today just don't even know what cool is. So, if we go back to this level and we can see this October '23, we'd have to mark off here and drop that right there. Right. All right. Come on. Work with me. You know that magnet? It works when you don't need it to. So, we're going to watch that right there for a second and we're going to watch that close. And then we're going to go back to this and look at where we closed. And we can see we're back at that same level. There's a difference here in these two closes. And so, this takes us back to '23. Now, if we go back through this, we'll do it on the weekly. We'll do it live. So, if you go back here on the weekly, and we're going to take this. Now, let's get rid of the magnet, and we're going to drop this. And then we're going to get right into the equity premium here in a second. That's the last time you were here, and that's July 2007. Now, what's the difference between these two closes? And it's substantial. And I see us up here in October, but that wasn't a weekly close. And the reason weekly closes matter is because of what institutions are doing. Institutions are rebalancing themselves at the end of the week. That's why Friday's closes are so important. There are literally people that will do nothing but look at Friday's last hour and chart that with like a plus one, minus one, plus one, minus one. They'll literally take that last hour and if the S&P is up or down and they'll look at that and form a conglomerate on it. It makes a ton of sense because you're charting what they're actually doing. They are selling bonds here based upon all the data with the PPI and the CPI. It's just a fact. So this is a problem. It's not great for us. And it boils down to something where we keep hearing that the new Fed chair is supposedly going to lower what? He's going to lower the balance sheet. I'm going to show you the balance sheet in a second here. I know you're all excited, but it's something that people people don't understand. The balance sheet's actually increasing already. So it's impossible to do what he wants to do. It's just not possible.

But let's go take a look at the US 10-year for a second. And I'm just going to pull pull it up through yield. And I'll using the symbols right here so you can see it for yourself. So what do we have here? And why is this important? Well, this is the 10-year yield. And what don't we have here? Well, we're not hitting a higher high here, but we are on the 30-year. So the long end is breaking out more than what we're seeing here on the 10-year, which is that rate. Now, why is that important? Because the long end tells you more about what's actually going on than the short end, right? If you go here and take a look at US O2Y and everybody loves doing this, but if you go, "Well, that's three." It doesn't really matter, but it's same thing. You're going to get to that kind of same area. You don't really see that issue here, right? This is why it matters. In front of you is the US 2-year 10-year yield. And what I'm doing is just I'm doing a relative comparison. And you can see in here where the crisis pandemic hits and then it spikes. And then what starts to happen in October, it starts to rise. Now, this was a huge rise because they injected 1.7 trillion in the market. You guys remember this? NFTs, you know, they are what they are. They were really just JPEGs. But what are we starting to see in here that's a little different? You're starting to see it lift a little bit. Not a lot, but it's there. So, it's something that we have to watch. And I think the bomb market's giving us another signal. And this is where it it's nuanced, but you want to watch it. This is the 10 and the 30. And you can start to see how we're up, down, up, and then we're pushing. Do you really care about this? Yeah, you better care about this. You better care that the long end doesn't start moving faster than the 10-year. It's not what you want to see. There's a reason why when you're looking at this that the 10 years absolutely or the 20 years absolutely imploding like this. Like this is 100% imploding. And it's not something that he can fix. It's not like, "Oh, I want to cut interest rates." You can't just cut interest rates when the PPI is where it is, CPI is where it is, and you want to reduce the balance sheet. But if you look at TLT in the 20-year, it's telling you that we have a real issue on our hands here. And if we go and take a look at that, it's not that you're going to be able to cut rates. Not with what we're seeing with crude oil. And we all see this, like we can all pretend that everything's fine, but crude oil just continues to push and push, right? It's very clear that crude oil is going higher. If we look at this on a weekly chart, you have the second highest weekly close you've ever had on crude. And we're just acting like it's not a big deal. But this is out there and we have to talk about this and tie it into the equity risk premium and then we'll get into what's going on in semis. But we just want to get a concept of this and I think it's important.

Now, very quickly, this is the Fed's balance sheet. And as we all know, we really didn't have a balance sheet until the Fed decided one day to intervene in the stock market and like all good things, just 1%, right? And then all of a sudden, here we are. And then the Fed intervenes and now the Fed has a balance sheet and then just uses the balance sheet whenever the heck it wants to to try and control the market. Now, you can see when we peaked here and obviously that was the peak, then you start selling to retail and now what are you saying? So, and I think a lot of people aren't getting this that they've been increasing the balance sheet despite no matter what they're saying, they're already out there increasing the balance sheet. At the same time, the yields already going higher. This becomes a problem. Now, we could spend a lot of time on this, pardon me, but for our reasons, we're going to relate it to the equity market. Now, this data will be released again on Monday, and I think this is important, but this is foreign US Treasury holdings. And we always hear the same thing, Japan selling, China selling, and they always move around. I just took last 90 days and you can just do it month by month and you can kind of see where you're at right now. I think it's important to note, do I think that there might be an issue down the line? There could be. They can always change their mind. Sell Japan can do something with the carry trade if they're worried about their rates. But this is where you were December, January, and February. We'll get updated final data on Monday. But I think that this is just important to note because you see a lot of these headlines where they skew this data.

But this is in front of you is the equity risk premium. And why you care about this is because if institutions can do better buying bonds than they can stock, that's what they do. And that's why Friday's closes are so important, specifically with when we watch the bond market. Well, we're cracking for the first time down here. And let's see if we can blow that up a little bit bigger so you guys can see it right here. And this data is from Bloomberg, but the people that do this are a sentiment trader and they're right here. Let's blow back over here so that we can see it. And you can see that we've broken that level for the first time. And this is over a 20-year period. How is this calculated? I think it's always important for people to understand this. Earnings yield, S&P minus the interest rate, 10-year note. Higher the risk premium, the more attractive stocks are. You can see what we're dealing here. Earnings yield on the S&P minus the interest rate. It's great that we have earnings and the earnings are fantastic. If they start getting compressed because the 10-year is, you know, a better yield, that negates it to an extent. And that's why the equity risk premium is so important to understand. You can also see it's the lowest level that we've had when I just do a real quick screenshot of a past couple years. I want people to get the concept because then you'll understand why you really want to care about this. Like why should you even care? You should care because it if earnings are not going to grow faster than the yield's going to go, it becomes an issue for us. Be aware of it. Start watching the 30-year. Start watching move.

Let's get into Samsung and the strike. Now, as you know, we covered this extensively last Saturday. I will link that video at the end here if you want to watch the full update on what's going on with Samsung so you know everything as far as all the outcomes and who's affected by it. I'll link that at the end of this video and I'll point out exactly where it is. Just scroll through Saturday's video until you start seeing all the white background and green bold lettering. So, let's just get to the update because this happened this morning as I started to film this and I just think it's important to get this part of it out because this was not expected so that you'll be ahead of this come Monday morning. Samsung Electric, South Korea Union to resume pay talks on Monday. So, there were no talks scheduled. They had a court date that was filed whether they're allowed to strike or not allowed to strike and they're supposed to get a ruling by the 20th at the latest. But here's the update. Samsung and its South Korea labor union will resume pay talks on Monday morning. Government mediator union said it moved that could ease concerns over disruptive strike. The strike is really very disruptive to what we see happening in South Korea and what we're seeing happening quite frankly in the whole DRAM market. The union in a statement Saturday said that Samsung Electronics has replaced a company's representative for the negotiation. So very clear that somebody in there was not really working towards coming to a resolution. The two sides would have separate meeting on Saturday. Did not elaborate on Saturday's agenda and Samsung didn't say anything. Anyway, Samsung Electronics chairman apologized to customers and the public over the labor dispute in the first public statement. Pretty interesting. "I apologize customers around the world for causing anxiety, concern, the issues to our company. This is the first public remarks. Deeply balanced apology to the public." The union leader said the new company negotiator apologized for breakdown in trust and pledged sincerely in negotiations. He added that he conveyed his frustrations would make it every effort if Monday's talks prove constructive. So this is a very different tone and it may explain a couple things on why we're seeing the movements that we've seen in Micron on Friday and perhaps this started to leak out and this is why we're seeing what we're seeing. Also, it's interesting to see that EWY was coming in and DRAM was coming in on this and we're going to get to those charts in a second here.

Now, I don't think people know how big Samsung is to South Korea. And just to put it in perspective, it's 28% of EWY, uh, as far as a market cap. So, it's a pretty big deal. And there's a couple lines here that I just want to clip. So, after pay negotiations broke down this week, Labor Minister Samsung Electronics Management Saturday has urged the company to take an active role in resolving the dispute. This is a very different tone than we've seen come out of the country and also come out of the company and the union. So maybe something constructive is about to happen. South Korea government officials including prime minister and financial minister voice concerns a strike should be avoided at all costs. Warning could pose significant risks to the growth exports and financial markets. And that's very accurate. It certainly could.

Now I think it makes sense to spend a little time on these names. Meaning let's just focus on some of the semiconductors and what's been happening. So we have this whole CPU craze and everyone's getting involved in the CPU names also on the foundry side which I think is really actually great because you are hitting this huge bottleneck but we have had a huge move in a very short period of time and when we see these kinds of moves we always have to pay attention to it because how much is factored in and this boils back down to reflexivity to me it does anyway of where are we on the food chain like how many people are aware that this thing could absolutely explode with the foundry and how big this could be etc. If everybody knows and there's nobody left to buy, why am I in the name? But if it's substantially different than what everybody thinks, there's still opportunity, right? If we do the simple things and looking at a chart, you know, we'll note that this name has had its first close below that 12 SMA. Is that great? Not particularly. No. Needs to kind of flip above that and go from there. Usually, when I look at any kind of chart, not usually how I look at any kind of chart, 12, 22, 55, you should use what you're comfortable with. And for me, it's really simple. Can I swing this? Meaning, is it a swingable kind of trade? If I'm below the 12, it usually isn't. If it's below the 22, to me, are the bulls in charge or the bears are in charge? So, the bulls are still in charge, but it's not really swingable until I get over that level. And then the 55 to me is, do I have institutional support? Are we going to go through a period where we have to worry about that? Yeah, I'm not so sure on that yet. What I do see happening here is I do see this kind of retest of the area. And I'm not really crazy about this. I'm going to overlay the socks and then I'm going to dive right into the memory names and what's going on there. But I'm no I'm not really crazy about this. I'm certainly not crazy about the fact that we have the dogee, we flipped higher, and then from there we broke down and gap down again because this just looks like a classic gap fill up and then just candidly just a drop. So it's not something that I'm really crazy about. The volume here to me, yeah, it's something that was an issue. How easily this dropped on Friday, especially end of day and the reversal end of day was an issue for me. And I'll show you what I mean by this. What happened on Friday is extremely rare. So, you have patterns and those patterns, they're tells to an extent. When you make a higher high, you usually tend to go higher. So, if you have a bar like this, for example, on this 4-hour chart, you tend to push. You tend to flip. If you go higher, then you tend to gap fill and go from there. If you look at this chart in general, and we're just going to take from March over. And this is just a 4-hour chart. And all I'm looking at right now are candlesticks. And then I'm going to take a second and then we're going to look at it from an open, high, low, close perspective because you should do what you're comfortable with. But looking at both of those perspectives tells you a different story. I use candlesticks for pattern recognition. When I look at open, high, low, close, it it'll it's pretty darn clear what's happening, right? It's it's not rocket science. But there are certain things that just happen. So in other words, if I hit a higher high on a 4-hour chart, well, you go higher. If you hit a higher high and then you reverse, that then becomes a problem. And if you really look into this since this all began, you'll see here 9:30 and then 1:00 and then all right, so that's that 1:30 bar for the 4-hour. Then you have your dogee and then it reverses and then we go higher. Then we we're here and then we drop down here. We never do it. Higher high gaps down the next day. Fills higher high. What did this crazy kid do? It's the first time that it's done it. And it doesn't mean that, pardon me, it's the end of the world. But we have to pay attention to this stuff. So what you did here was you formed a bottom, flipped over, and then you broke down. So if I break this to an hourly, and you'll see it here very clear. And this kind of stuff, they're traps. And when you see it, you you really can't unsee it. So, what they do is here's the first hour bar, second, third, fourth, you get it. We pop over and it looks like they're going to go. They close it below it and then it breaks that low right here. Once it broke that low and we broke down here, we knew we had a possible issue. The last hour, you had nothing but selling. So, what this does, and it will catch people that candidly, not everything you do is going to work. I actually bought this. It did not work. And then you just have to know like, "Okay, I may have a problem." But what you want to do here is focus on this. And I'll tell you why. See these bars? See these bars? You have a failed breakout and then this bar gets longer and then this bar gets longer. We have to pay attention to this and we have to be cognizant of it. And I don't want to spend too much time on this and get into too many tangents, but this one's important. So, we're going to spend a minute on it. If I look at the hourly, you can start seeing the peak and the rolling over here. And this is becoming somewhat of an issue. If I go to this on a 4-hour, we're starting to roll over. This is not ideal and it doesn't mean that we're definitely going to come in hard, but it does mean that you have the potential to come in. And I don't think you're going to fall down a lot, but I do think that there's a possible move here. So, I start looking at thinking of like, "Okay, what's going to drive this? Like, is it just profit taking or is there something greater?" And this is going to lead us into DRAM.

Start with DRAM and then we're going to break it apart. And I think it's important to look at this. And we're going to look at some names that you guys definitely aren't trading. But I want I want to spend some time on this because I think it's important when I say things like, "Oh, I look at reflexivity and trying to understand the market." The one thing and I'm going to be very clear about this right now. I'm long this, but I have to be cognizant and start thinking to myself, the Samsung strike, how much of this move was coming into the fact that we thought there may be a strike? How many people are ahead of me versus how many people are behind this? And I think at this point after last Saturday and it being in the news that a lot of people are now aware that trade that there's the strike outstanding. So we'll do the simple things. We'll just make it candlesticks for a second and then we'll just drop them here like it's hot. The kids still say that. I think they say "let it cook" now. Isn't that? I think I was told that it's cooking. I don't know. I don't like that one. We're going to still drop it like it's hot here. So all right. We have a dogee. We didn't do much there. But what is this telling us? Well, we rallied up. We rallied back to the top of this. We tried to get through it. We weren't able to get through it. And then this is where we're at. Now we go back to open, high, low, close. Here's the top. Tried to get back. Got right to the close of that bar. What happens? Can't get through it. This is three names. 75% of this is three names. Comes in and then we start to look here and we're back to that close. Not the end of the world, but there's some things here that we should probably be paying attention to. Number one, the selling volume these two days is greater than any of the buying volume that came in previously. That's not ideal. We'd like to see people go, "Well, I'm getting a bargain." Very similar to how it starts to escalate in here. There's your peak buying. Is that exhaustive buying? I don't have an answer to that yet. I'll have an answer to it probably this week, candidly. And then you start seeing the selling volume increase over the buying volume. Not really where we want to be. And I'm saying this as somebody that's long it. But when we look at this over this period of time, it's a little bit of a concern. So, if Samsung goes out and they settle this dispute, what happens to pricing in DRAM? Does pricing in DRAM drop because people were aware of something before I was aware of the strike. So, let's go take a look at this for a second. You'll see what I'm saying. So, if we go back and here's Wednesday, Thursday, Friday, Saturday, right? Here's Monday. We come in. All right. So, there's your peak. Everyone's aware of the strike. And then we start to see from that period, you never got over the strike when that became like real news and people start paying attention to it, right? And now we're going to have this mediation that's going on Monday morning. So does DRAM pricing drop on this? This is something that we don't really have an answer to, but we need to be aware of.

So take that for a second. And now let's look at this on a weekly. And again, it's only been out for a little period of time, but you can see this the huge move up. You can see the retest. And this is not, "Oh, DRAM's over," but is DRAM, did DRAM build up faster because of Samsung? Did pricing move because people were getting as many chips as they possibly could because they saw this coming? You have to think about this. If you're in the industry, you know that Samsung has union problems. You're aware of this way before we are, right? So, like, if you're out there and you need these chips, you're aware of the your supply, your suppliers. You 100% you are. And just like any industry that you may be in, if you owned a company and the tire company that you're buying from, let's say you own a car company, you need tires, you'd know if they're having a problem. You'd have a clue. You'd be talking to Bob the tire guy, and he'd be complaining that the workers want extra pay, something, whatever, whoever you talk to, whether it's Bob or Harry, who knows with you. But if you take a look and you look at that, you're like, "All right, that might be an issue." The selling on the week is singly greater than anything else that we have. So again, I am long this. I have not ever hit a lower low. So what would be the first thing that we'd want to see here would be I don't know why you do it that way. That magnet's always like playing games with me. I don't know why it's got to be like that. But the first thing we want to make sure of is that we if we come to this that we don't start closing below that this level. And I think that is definitely on my radar as something that's a concern. It's telling me that this is 4832 up here. It sure looks lower than that. So, let's just go to that 4832. That's close enough. You can see the numbers right up here if we go to it. So, we'd want to make sure of that, right? That we don't close below that level. Let's go take a look at this on the daily and see where we would be. I don't know why it's giving me that price because that's definitely the price, but it's giving me a different price on the weekly. All right. So, we're going to stick with this and that level right here, which would be Yeah, that 4832. That's so weird that it's giving me that price, but clearly it's lower here. So, we're going to flip the candlesticks for a second. And now we're going to found a problem with Trading View and their data. So now you have now you know what the problem is. Use the data off of candlesticks, not the high, low close, because that's definitely a mistake. So if we look at that, we can see it right here. There it is. 4832. And that's definitely something that I'm going have to watch when I'm using them. And then so we can see it right here. All right, cool. Why is that something you want to watch? Because we haven't hit one yet. So if we start, if we have a lower low close, we just want to be aware of it. It doesn't mean it's the end. We have to again, how much did they buy going into this?

All right, now, let's take a look at a couple things. In front of us is SK Hynix and it's a company that a lot of people really don't follow, but it's a Korean company. They are a competitor of Samsung and you can see here we have this blowoff and then from there we're getting this dogee that's sitting up there by itself. So, for that to come down and fill this area, that really wouldn't be that big of an issue, would it? So if we go here and we measure this out, what would that gap fill look like? All right, so that gap fill would be about 5%. So for us to come back on a weekly chart, gap fill down 5%, that wouldn't be that big of a deal. Pretty realistic that something like that could happen. If we start looking at what's happening up in here, you get a perfect what I would refer to as evening star. You're up, you have a little dogee here, and then you break down. This is a really interesting pattern because it can mark the top of a chart and it's just understanding candlestick patterns are just really charting human behavior, what supply and demand is, but greens up, whether this is red or green to me does not matter. Technically, they always want the star to be red to be perfect and it is in this case. You came up, you finished. So does this mark a top? Well, having an evening star at the top of your chart is not great, just FYI. But again, we do the simple things because we're simple people and we would say, "Well, here's the 12, the 22, and the 55." That does not mean that we're going to fall apart. But we also have to be cognizant of what it does mean. It does mean that we could come down to here, which would be a 5% gap fill, right? That's not a big deal for that to happen to a trade that's just been an absolute freaking monster. And if we came down to here and retested the 12, which is again not a big deal, that's a 7% move. We are at risk up here. So let's say Samsung and this goes well. Hynix is going to drop on that because pricing is going to drop on that. So again, I have to look at this and say, "Where am I?" I'll explain what I mean by this. So I always have to look at it and say, "This is a zero line of investors and then this is a 100% line of investors." Meaning how many investors out there understand that if Samsung and this strike end and we're starting to see the replacement, that's why I spent time going through that article that came out at like 5:30 this morning, what and I mean our time, I'm in Eastern Standard Time obviously, not overseas, but what is this telling us? Well, it's telling us a couple things. How many people are one, aware of that article? Two, understand that DRAM pricing is going to drop? Is it 20%? Is it 50%? Or that looks like 75%? Is it 100%? So we know it's not 100% and we know it's not zero. So if I had to estimate how many people understand that DRAM prices will drop when this ends, I don't think a lot of people are getting this. So I would say that I'm probably at 25 or 30% on that. So what does that mean? It means that you might have something like this happen. And so what does that mean for us? Well, that might mean that when when this strike ends that DRAM prices drop, Samsung drops, Hynix drops, MU drops, Sandis drops. Does that mean that DRAM's over? No. So then we'd have to understand that we want to look at the other side of that trade after the strike settles, not before.

So let's go through Samsung and some of these other components and then we could talk about how to play it. And I think that this one really kind of hammers it home where Samsung jumps up and obviously earnings they just absolutely crushed, right? I mean earnings were just absolutely fantastic. It wasn't even close and you could just see all the buying. But what what's going on here is Samsung's dropping. Why? Well, because they might have to spend more money on labor. They might not have a product to sell. Does this look like it's acting as if they're going to have a strike and that strike is going to lead to a shutdown and a massive problem? Probably not. And so why well why would you say that? Because if we take a look at that low, we can't even undercut the low. All we've done is rally up and then we can't get to this level. So it looks to me like Samsung saying, "We might a we this is what it looks like to me. Hey, there's a probability greater that we might avoid this." And based upon that, there might be stabilization. But that stabilization, is that going to be counteracted by the strike ending and that DRAM pricing dropping? See, if you have more supply, RAM demand's still going to be there. But if you have more supply, then pricing will just drop. It's just econ 101. Pricing is not going to increase based upon this. If you go and take a look at this on a weekly and you could just see this huge run, what would you have here? Well, let's say we get an undercut of that level. Well, where could that lead to? Well, a retest of that area would just be back filling. And is that a bad thing? Not really from a long-term perspective, but it depends on where you are on the chain again. What would that be? A 14% drop in Samsung if it happens and you came back down to this level. And I'm not saying that's going to happen, but you need to be aware that could happen. So what we have to look at again is on that and say to ourselves, "Well, what's the probability of this?" I don't know that the probability is that you'd come all the way back down to here. But I think if DRAM pricing drops based upon this and the strike ends, that you could see more of a a sell the news event here and that again is going to put us on something like this. And I would view this more as a curve more than just a straight line of where we are because you're dealing with two major issues here, right? And what are those two issues here? So if we looked at it this way and we just said that down here is the probability of the strike ending. That's what this is. And then if we looked at it here and we said RAM pricing. So this is DRAM pricing and that's the probability of it it ending. Just think about these as an XY axis. Where are you on here? How many people think that the strike's going to end? Is it over here? How about pricing? How many people think the price is going to go up? So you're going to get what I would refer to as you're going to get a spot in here. And you could actually even view it this way here. If you split them between RAM pricing dropping and the probability of the strike ending and you're going to get an inflection point somewhere on this graph whether it's here or whether that inflection point happens here you don't know but there's an inflection point out there and we need to be aware of that.

So what does this mean to us? Strike ends. We have to watch what happens with Samsung stock. That's going to be really important because if the strike ends and Samsung stock skyrockets, then we understand where we are. If the strike ends and Samsung's stock starts coming down, that means that DRAM prices are probably going to come down a lot more. So, the movement of Samsung on the end is going to tell you more about DRAM pricing than anything else. So, I'm just going to say that again because I think that's really important. When we see what Samsung does when the strike ends is going to tell you more about DRAM pricing than anything else.

Now, I want to preface this with looking at cuz now we've looked at I think it's 48% or 45% of is those two names that we just went over, which is why I spent so much time on it. And if we look here, this looks very similar to what Samsung. So, we have to be aware of this because South Korea's stock market, for a lack of a better term, is DRAM. Their entire economy right now. People will say, "Well, no, it's not because if you took out those two names, if you took out Samsung and you took out Hynix, it's still trading at 14 times earnings." So, it's ridiculously cheap in regards, but how much of that growth happens if you lost DRAM. And I'm not saying you're going to, but you have to look at EWY and tell yourself, you could correct 10% on this. And it doesn't mean that that's the end of the world, but as somebody that's long this, I have to look and say, "Where's my risk?" And my risk is that I come back to this neckline. I'm holding the 12 for now, which is good. Remember, the 12 means, can I swing trade it or not? Bull or bare at the 22 and do I have institutional support at the 55? I need demarcation lines and I need percentages. That's how I can wrap my head around this stuff. You should do what you're comfortable with. I I spent time on this also because people look at like this KR ru and they trade it. You have to understand something like this. If you're long this for this to get back to here on KU like the ETF, you have to go over that high. A lot of people don't understand how these things are calculated. So if I'm looking at something like this and it gets really bad, this thing can get absolutely smoked. And when you go and try to figure out like why do I care about this? Because you have to think about it and say, "Well, where's the puck going?" Right? There's a couple things here like where where's the puck going and I I steal that from Gretzky even though you.

Know I'm a Flyers fan. But if we look at this and we look at AI and whether we think AI is going to revolutionize the world or we don't think AI is going to revolutionize the world, it doesn't matter, right? It's completely irrelevant what we think. What matters is what people think, right?

So when we look at this, I'm just going to create a couple boxes here to kind of hammer this home. And I, I did this about maybe 6 months ago in one of these videos. And I just want to just kind of hammer it home. Where are we going? Where, where are we going? All right.

So where did we go first? Well, this was compute, right? And so then you had Nvidia and everybody. Nobody thought Nvidia was ever going to go higher and that was the compute side of the trade. And so all of a sudden everybody had to get into that. And then you had the connectivity side of the trade which people didn't understand, right? And then you had, you know, the connectivity was AVgo and people didn't get it. I'm just giving major names. I know other names fall into these boxes.

And then you have what? Then you had to take all this information you were creating and then it had to go somewhere, right? You needed memory, which I referred to as, you know, memory was the bank teller, and then storage, right, which is Western Digital. And I know there's more companies than this, but I'm just trying to make it simple. And then you needed the banks. Well, what, where were the banks? Well, the banks were Western Digital, right? That was your storage. And then on top of all this, it had to go someplace, right? All this had to go someplace. And where did that go? Well, it would go into data centers. So, you know, people are fighting to not have these data centers in their backyard. DC. Is it DCTR or is it DTCR? I should own the damn thing. I, we don't, I think I should know. I think it's DTCR, but I think the dyslexia kicked in. Hold on. Let's see. All right. It's DTCR.

So then they all need to be put, what? They all have to be put someplace. Well, where do they have to be put? Well, they have to be put in a data center. So, we know the one constant is that data centers are going to exist and they're going to get bigger. Whether they're in Jersey, Texas, Singapore, or Malaysia, this is not going away. It's only going to get, it's only going to get bigger, right? We keep hearing that everything's in the cloud. No, it's in a warehouse in Jersey.

So, when we start to get this, we have to figure out where it's going next. And I think that this is super important, right? Once you get this, you can start saying, well, are we going into this or where's it going? So, when we see names like Dell start like ripping and breaking out, it starts to make more sense, right? Because you see names like Dell start breaking out or HPE, which, you know, we own, these names are really moving.

If you're trying to get in the community, by the way, I did send out a bunch of invites from the wait list. Please check your email because then it's going to close for a period of time, specifically in June. Enrollment will, because I think this is going to get pretty wild and I have to focus and I do all the onboarding calls myself. You're not forced to, but I, I want to give everyone the opportunity when they join.

So, where is this taking us and why do we care? Because you have to look at where it's going next. So if we take a look here like Cisco is a great example of this and people would look at this and say, well, this is just like back here. No, it's far from it, right? Because you actually have the earnings now. But we have to say, like, what made Cisco do this, right? Cuz you have to follow where the money's going next. And so when we think about it that way, it makes more sense because if you look at Cisco and what happened, the reason that this jumped wasn't just the earnings, but they had one line here and I covered it for you guys on, I think it was when this came out. Was that Thursday when it came out with earnings? The one line was, oh, hyperscalers. Yeah, we thought we were going to see about 5.4 billion and hyperscaler demand. Yeah, we're seeing nine. Is the money moving? See, as the hyperscaler money moves, everyone just thinks that it's just going to go into the one thing. No, that money is going to flow into different areas and we're going to see that these kinds of reflexivity moves.

So, if you're seeing the money flow into something like Cisco and then you have something like HPE, right, that has a move like this and you have to ask yourself, like, well, why? And there's a reason for it. They bought a company called Juniper. It's absolutely crushing. But follow the money. And it makes sense because you're still going to have that, those reflexivity moves where we think that things are going to break down and they're not going to break down the same way. So you're going to have this internal struggle in between this movement because the spending is not, it's just not going to stop. That's not going to happen anytime soon. But it's going to flow to different areas. And if it starts flowing out of memory, you have to realize that might be a problem. Why would it flow out of memory? Well, DRAM prices go flat to down. I'm just devil's argument. People say it's not going to happen. Same people that are going to tell me it can't happen are the same exact people, right, that didn't tell me it was going to happen and were telling me it couldn't possibly happen.

So, we have to look at this and say what it is, right? We have to realize that it's a cyclical business. At some time, it will slow down. They don't have enough demand, but were people frontloading their buying of this because they knew that this was coming? And this is, I'm talking to somebody that's long these names that is looking at them and going, "Okay, what's going to absolutely, for lack of a better term, screw me?" If I don't understand that, then I don't, I shouldn't be in the trade.

See, I learned a long time ago back in the day. I learned a long time ago that what we think is going to happen and what's going to happen is always two different things. It's just trying to figure out how fast we're going to get there. And I'll give you an example of this. So when we looked at IGV, right, every company was going to go out of business because of, you know, Claude. Claude doesn't even know what day it is. If you ask it, usually comes up with the wrong year, but somehow it's going to, you know, fix all my problems until it can do laundry. You know, I'm not really worried about it. But do I think that this, that AI and this stuff is going to be around? Yeah, 100%. And I do think it's important to understand with AI that we have completely changed from, oh, it's going to be this sentient being that's going to be around to, oh, hey, it's going to make ads more effective. Like, it's completely changed what we were told.

But if we look at IGV and we watch how these names got absolutely destroyed, you go through boom and bust cycles where everybody loves them to everybody hates them. And understanding when it changes and where they're wrong is where the opportunity is. So, when I show things like, this is why I love the comments so much, so please comment. The comments are always like, "Oh, he was just telling us to buy DRAM." One, you have to make your own decisions. Two, I have no idea what's going to happen. I don't have a freaking clue like the rest of the world. And anyone that tells you they know with certainty what's definitely going to happen, don't walk away, run away screaming. You have to constantly be connecting these dots and looking at it and charting stuff and looking at this stuff. You know, you're playing against the smartest, most disciplined people in the world, and everybody wants to act like this is so simple.

When you look at IGV and you look at the panic here, what did they panic with? Let's just talk about the panic. Oracle. Oracle was the panic. Well, why was Oracle a panic? Now, Oracle was a really simple trade for me to add to. I have a very long-term position in the name. But all I did was just, oh, you closed back over the 55-day moving average. Oh, there's your confirm bar, right? Something as simplistic as that, I'm up 30 bucks on that ad. And this is a super like long-term trade for me. Why? Or whether they're making data centers for OpenAI and OpenAI, you know, does it look like they're going to be able to pay their bills, yada, do you think someone else isn't going to want their data centers or their tech or access to it? Like when you start really thinking it through, it starts to make sense. So, you just watch all the hoopla sell and then you just figure out like, okay, well, this looks like it, it might hold in here and if it doesn't, I know where my stop is under that 55. You make your bet with the best decision that you can. If it doesn't work, you pull the plug and you move on. Like don't overthink it, right? You don't need to go to a mountain and meditate on what happened. You came up with an idea. It didn't work. Move on to the next one.

All right. So, before I go off on one of the tangents, here's where I'm going with this. What's happening here is IGV is certainly starting to see more momentum and we're making higher highs. So, why is that? There's two reasons why IGV could be moving. The first one could be that it got completely beaten down. And the second one could be is AI can't do what you think it can do, right? It got completely beaten down because we thought that it was going to be this somewhere in the middle between AI is not going to do everything that we think it's going to do right now. Two, should they have come in as hard as they did, right? Like they over, we overdid it and AI is probably not going to do everything that we think it could do, just like every tech always doesn't do exactly what we think it's going to do, right? I've never seen a tech come out and then it does more than we thought it was going to do. You know, you look at something like Instagram and social media, what does it do? We're sharing cat videos with each other, right? It's not this huge thing that made us way more productive. So, just think about it for a second.

So what do we have here? We have these rallies, we have these dips, and now we're lifting higher looking at these sub sectors like we just did with the SOX and we did earlier in the week. You will remember that we went, we're looking at a SOX at the AI semiconductor and we were looking at ESOCS and what was going on there, right? We were looking at those two and trying to figure out, hey, where the money's going and that rotation was keeping us alive. You remember when we went through the breath on the week and we looked at all of that.

All right. So, one of the things that we noticed was that cybersecurity was really coming in and it made no sense to us at all because the idea that cyber, when you look at cloud bot and you look at these people using cloud bot, say, well, we're going to use this for cybersecurity and you know, it's going to do all this and it's going to sort that by and then it was like deleting people's emails and everything else, whatever. Here's the point that I'm getting at. Cybersecurity names, even in a down market yesterday, they are buying the heck out of them. So this is a clear example of what I was explaining earlier that when you look at the market and you're trying to figure out, I'll just do it real quick as a refresher so you don't have to go back. When you're looking at the world and you're saying, you know, where am I meaning zero gets it to 100% gets it. Like when everybody gets it, there's no money left. It's very clear here that on the cybersecurity side, as we're hitting, and just so you get it, all-time highs on cybersecurity, that people aren't getting this. They're not understanding it, right? You're ripping and people here are still thinking that this guy that told you that, oh, we can't put Mythos out because it's so big, but it's so scary. We're so important that you have to watch this. Like, I don't know. Maybe he's trying to raise billions of dollars. Like, I don't, maybe it's hyperbole. And so, what you're seeing here, and I know everyone will tell me, "No, it's not." Okay. So, I've been around a long time. I've watched how this plays out. What's going on with CrowdStrike? It's absolutely ripping. So, if this is all supposed to happen, are we overshadowing just what's really going on out there? And it certainly looks that way to me.

So if we look at something like a CrowdStrike or we look at something like a Palo Alto Networks, they're absolutely ripping. So with these names, again, we, we've owned these names for some time. People are way off on these. Like, just completely way off. And you can see that. So here's where this gets super interesting. Is there something on the cybersecurity space that we're missing? In other words, what are we missing that everybody has to get in these names ahead of earnings? And is it based upon what happened with like Datadog and how great earnings were there? See, everybody will look at these after the fact, but trying to follow where we're going is where you make like the real money. So, you look at Datadog and how Datadog broke out there, right? But if you understood that ahead of time, like here's one, like here's a great infrastructure play and everybody loved this name right after the fact. But I, I know a guy's been buying this name forever because he's like, "No, this is where it's going. It's all about infrastructure." and he absolutely crushed it on the trade. Right? The same thing that we have to think about is the same people that were looking at something like Five9 and going, you know, this is where it's going. It's going into this space and they're going to need this. When you understand where the theme actually is, all you're doing then is just, once you have your theme done, all you're doing then is just looking at technicals and waiting for that to work and following the patterns, right? Then you just become a pattern trader of the, of said theme.

So this is really important to get. So, like for us looking at CIBR, this became really very clear that, and people still aren't getting this. And I can tell you how, you know, that people still aren't getting this since you asked. And I do want to say something. I, I really appreciate the amount of shares that you guys did last Saturday with that video. It means a lot to me. Like, I put these videos together cuz I want people to know what it truly takes to be successful doing this. It's a lot of fun for me to do these videos, but seeing people share them and it, I just really appreciate it. Uh, I wanted to get that out there. Yay. Gratitude. All right, cool.

So, if we look at something like CIBR, how do I know? How can I state with any level of certainty? I'm in a situation here where the street, it doesn't get this yet. And this is how I can look at that. So, if I look at CIBR, which is cybersecurity, and I know there's a bunch of these, right? There's HACK, right? You crazy kids love all these little ones. Like, there's HACK, there's BUG, they're all the same thing, but there's different pieces to it. Why am I doing the one that I'm doing? Very simply, the reason for it is just because I like the makeup of it. I like what it owns. Frankly, it has different, it has some hardware in here as well. And also, it's the largest assets under management, which I would rather be in. I'd rather be in the 800lb gorilla. It's just easier for liquidity purposes. But to back to it, how do I know? All right.

So here you are on the day. And let's just take a look at some simplistic things, right? Let's take a look at CIBR and we'll leave this up. And you can do this with anything, but I'll show you how to do it. All right. So you go CIBR and then you just take the Qs, right? And then you take, I don't know, we'll take the SOX. We can take any, you can do it with anything. We'll just throw the SPY in here as well, you know, and let's just take XLV, XLP, and we'll throw some other things in here so that you can kind of see what's going on. And if I look at the past, well, you can do it over the past week, for example, right? And just kind of see what's going on here, right? There's the SOX and here you are, right? All right. So, and we just go from like May over for a minute here and just see what we're dealing with. What are you seeing more than anything else? You're seeing a clear differential in what they're buying versus what they're not buying. And I tend to do this with all 40 sectors. But also, if you, if you're interested in one sector and you note this, you want to pay attention to it. Like, what did they sell on Friday, right? And you always want to watch Friday's closes because it tells you what institutions are buying and selling because they have to be in or out end of day. The big guys do because they really look at the week and their exposure.

All right, cool. So, what are they buying? Well, they're buying the heck out of cybersecurity. Like that. If you just dive into it on a one-minute chart and go and take a look at this and we'll go and take a look at the 15. Like how many names, how many sectors looked like were up when you have the S&P or the Qs dropping like they were, and obviously this is the down way more than it's showing, but how many sectors were up that day that are intact? This is ripping and it's ripping ahead of what we're dealing with. So, what we're trying to do here, and I'll give you an example again of this, is we're trying to get ahead of it. So, how do you get ahead of this? Well, you're watching these patterns form. You wait for your breakout and then you pull the trigger. It either works or it doesn't, right? You don't need to do more than that. See, the one thing that I see a lot of people doing is, "Oh, this is wrong. That's wrong." They're telling the market what it's going to do. Make a decision after the decision, and then you just go from there. Like, here, let me show you this. So on this day, this was super easy to me, right? And I'll just show you why. So if I hold, let me grab this. Let me drop this here. So this is the day that we got involved in it, right? And you could see it coming. So we bought this on 58.77330. There was the stop. And that's John, the moderator, putting the alert out cuz I'm, when I'm live trading, I just will tell him and then he'll do it. It works. So we're getting involved in the trade on this day. And you know, I'm really waiting for that like flip. And I'll show you what we're really waiting for here so that you can see it. So here's the seventh. Here's the eighth. All right, cool. And we'll go to this. And so you can see it. And all we're doing is saying, all right, so we gapped up. And then all I'm waiting for after this because I don't have confirm that day. You can say it, right? You're kind of falling down. Maybe you're going to hold, maybe you're not. You tried to rally back to it. You couldn't. You couldn't make a lower low. All right. You couldn't even get down there to test it. Flips, holds. That's pretty much it. That's really what you're doing, right? You're watching the volume, etc. Some other stuff, but the trade's on. There's your stop, right? If you're more day trading, it either works or it doesn't. If I undercut here, I clearly don't want to be in the trade. That's the trade mapped out, you know, in a heartbeat. And now we're in something that there's really nothing for us to do except sit back and continue to win.

And so, when you get these concepts, and I, I'm going to walk through a couple more so that you can get this because I do think it's important. It's no different than when you're looking at something like this and you're waiting for that higher high. Right? Right. So, here we are on the seventh and then you can start seeing that breakout on the volume and you're looking at the volume and I do look at volume in these kinds of moves, but you're watching this build and develop. Tries, fails, and then it goes. Now, why are we in a position here that you can get involved with these? Like, why does that make sense? Because you're understanding that everybody was wrong. Everybody was wrong on how they got rid of these names. And this boils down to the same exact side of the coin. And you're going to say, "What do you mean?" And here it is on 58. Same day that we bought this. What do I mean by that? That you're on the same side of the coin. Everyone's looking at DRAM the same way. And this is again from somebody that's long the DRAM names and we're all saying, "Well, this is going to go on forever and these are going to keep pushing." You have to look at the other side of that and you have to say, "What if we're wrong?" No different than when everybody here was puking these names out and saying, "Oh, I don't want to be in them." Right? I don't want to be in this space. It's just the other side of the trade.

So, you're always looking at this and saying a couple things. One, where are we? Do I want to get involved now? Do I not want to get involved now? How many people are aware of this? How many sectors, if you looked at, are up on this day? Not many. Not many at all. And you can see them here, too. I'll just put it out. I hate saying that we're in stuff and then just not showing the time stamps. So, and I waited for confirm to add to another one. I didn't add them all the same day. I tend not to do that because I want to make sure that I'm right. I want to increase my exposure as I'm right. Right. On swing trades, especially thematic swing trades, this is kind of important. I always want to increase my exposure as I'm right. I don't want to decrease my exposure to a theme. I want to increase it as I'm right.

All right, cool. So, when we're seeing this kind of stuff and we go here, let's do it this way so that you can kind of get this. And we'll go here and we'll go 40. And these are the top 40 sectors that I look at. Like, how many were actually up that day? They're buying solar. Why? Because everyone's realizing what's happening here with oil and they're realizing that this is turning into a dumpster fire, right? We are, we're all getting that this is turning into, this is going to be way more of a nightmare than we think it is. And, and they're buying some defensive names. They're buying the BTI of the world, right? They're buying the MOs. They're buying the PMs, right? I mean, they're getting defensive. But at the same time, they're getting defensive. They're finding sectors where they want exposure. So, I think right now what we want really want to focus on is just kind of have our head on a swivel. And the two big events that are going to be this week obviously are what happens with that Samsung strike. But we constantly have to be analyzing our positions and trying to figure out, you know, where the puck's actually going.