Transcription
27 minutes ago, the US conducted self-defense strikes against an unprovoked Iranian attack. So apparently there was an attack at we are being told that this is not an escalation, but they did defend themselves and then they did launch missiles into Iran. This is something that is happening after hours and it's definitely having an effect on the market. Let's get to it.
So 4 PM this is where we're closing and then when they reopen the market you can see six o'clock you're down about 80 basis points and you recouped a lot of it but you can see the drops started ahead of time as this started to leak out and I just think it's important to talk about it because we're seeing it affect the names of the earnings that are going on. So we're going to get to that but we have to review some of the things we went over yesterday. So let's get to that next.
Subscribe. Click all notifications. I purposely do not run ads in the middle of these because I know it gets super annoying when you're trying to watch something, but that screws with the algo a little bit. So, you liking and subscribing, click all notifications cuz they're linked together. Let's get to it.
All right, so we know that we're down about 80 basis points and we came back to that level right here at 5:00. And this one's going to be a little actionable because I still think there's a lot of time left and I also think you're going to need it for tomorrow just to have some key levels. If we take a look here, we have a dogee. So we clean off the NQ and we look at the closing market and we get that dogee. Now we talked about the breath of the market 2 days ago and how it was getting worse and how that doesn't mean that it's the end of the world. If you look at the ES, you have a dogee here too. Dogeis are signs of uncertainty and then decisions are made. The decision made here was to make a lower low. What happens tomorrow is anybody's guess, but right now this is what you have. You can see the undercut here on the NQ and then we're holding. You would have thought that earnings would have held this together, but that's not the case. And we're going to have to spend some time on earnings because this is super interesting the way that we acted tonight. And it's very similar, but more excessive than what we did last night.
What I'd like to do is just spend a moment showing you a couple things such as NDFI. Now, NDFI is the NASDAQ 100 stocks above the 50-day moving average. We can see the peak here. We can see the peak here. And we can see that we're making a lower low here. But it's not too bad. We're still in that area. So when we look at the NDX, we would see that the NDX is lifting, but at the same time, the breath of the NDX according to the 50-day is not getting better. That's not great. If we take a look at the S&P, we can see that the S&P is making higher highs. But if we go S5FI, which is stocks above the 50-day, we can see that you're no longer making higher highs and you're barely holding on to that 50 level.
For a more broaderbased outlook, what we can do is just go to this super secret chart that we created which lists the 200, the 50, the 20, and the five. And what you're going to note is pretty telling. I think it is. So the 200s you're pretty leveled off on. And what we'll do is we'll just zoom into this really quickly and you can see for yourself, but you're you're pretty stagnant here, right? All right. We popped over and then some others are breaking. And so we have a little bit of a divergence here where less names are above the 200 day even though we're pushing higher. And we can see that right in here as that's giving us that little divergence. So we can see it really clearly. This is the one we just went over. And we can see that this is setting up a divergence. This does not mean that the sky is falling. As I said the other day, I do think that you've come too far too fast and that a retest of something coming back down here over time. I really don't view that as the end of the world. It's actually pretty healthy. But if you look at all these indicators that we're looking at, this is the 20-day. You're down now. Like this, I believe today was the first day that it actually broke. We're now less than 50% of all stocks in the S&P are above their 20-day moving average. It's not exactly where you want to be. Now, the five usually will sell down and then you have these little spikes and then what happens with that is the 20 usually what comes in behind it. That's not what's happening. So, we are deteriorating. We are getting worse on the breath. That's just a fact. It's just the way it is.
The other thing that we wanted to point out the other day, let's go to this very quickly and go look at the VI. And again, these videos are done and they're all done unedited uh on purpose just to kind of get through it, but also just to kind of get you there. So, and I like doing them unedited because then at least you get to hear, you know, the thought process behind it. But if we take a look here, all right, we popped up and now we're kind of just sitting there, but it's not really something we have to concern ourselves with. So, what do we have to concern ourselves with? Let's look at USO. Well, we were told that the the contract's there and they're going to agree and everything's great. And then they asked for what, a quarter of a trillion dollars to end it. And that didn't go over very well. And then what we saw when Iran came out with that was just we just saw oil just absolutely just rip on the day. And so the question is, is this baked in? If you see a move like that in oil, just to get it out there, if you have a move like that in oil, it's probably not baked in, right? So, if we move like that in oil, I think we'd all have to agree that move is not baked in because you wouldn't move like that if it was baked in.
If you go and take a look at what happened with gold, and this is super interesting because here's that 11:00 area and then go take a look here and you can kind of see where it it kind of took off right around the same time. And why is that? Why is that moving right around that 11:00 the same way? Because they were unwinding the energy hedge against the equity market. So there's an energy hedge against the market. Meaning people are buying crude right now as a hedge against the market. Well, when we were promised world peace for the 40th time, what did they do? They took they started taking that hedge off. They started believing this time because it did look pretty credible that this was going to be it. And then what they did was they started hedging with what? They started hedging with gold again because that makes sense, right? That's usually what they use for a hedge. Why would you use gold? Because you would hedge against inflation. Okay? So they're not worried about that hedge anymore and they flipped to this hedge which means the breath of the market is getting worse and they are starting to hedge again with crude going into the weekend. At the same time you have an escalation. Now the White House has come out and said this is not a a restart. This is just a I don't know what it is but it sure looks like a restart. And so they're trying to downplay it but very clearly the market's not having it. And if we look at crude, just to put it in perspective, here's that 10:00 level. Here's where you are on crude right now and you're up 8%. I don't really view that as a non-event. It's something that we need to pay attention to.
If we go and take a look at the bond market and we look here at 9:00 and we go and take a look at 11:00, what did they do? They started selling bonds again. What did they do with the dollar? Is there any correlation here? I'm glad you asked. At 11:00, the dollar started ripping. Why? Because you're going to need more dollar to go and buy more what? So, this is all connected again. It looked like they were unwinding this trade and then it looked like they put that trade back on right around 11:00. So, once we see that, we have to understand that we might start seeing some of the movement that we saw earlier beforehand. And what we really need to understand about that is this is where we are in the market now. Now, we're up here. We're not down here anymore. We're having issues in the straight. The market's up here.
Now earnings have been coming out and earnings have been fantastic overall. I mean we've all seen these moves like STRL absolutely exploding to the upside. All these names have had some all of them I mean Intel all of these names you start going through they're absolutely crushing earnings. No one was even close. I think the average guide on semiconductors on an earnings revision is 25% higher to kind of put it into perspective on how crazy the guidance has been and how crazy what we're dealing with. But what does this mean for you? And like why do you care about that? Because it means that you do have some teeth to this market. So when we look at something like an Intel or we look at something like a Micron, yeah, did they go far fast? Yes. Should they be up here? We can all argue the valuation of these. We can all argue the valuation of things like EWY right now. There there are arguments. What you can't really argue is that earnings are considerably better than everyone anticipated on the street and everyone has to take their numbers up. They're just facts. How we respond to those facts now going forward is a little different and we started to see that yesterday. But before we get there, but wait, there's more.
So, I just want to point this out cuz I do think it's important. If you start looking at the socks, we had something very similar in here and then we broke down. You know, you're you're pretty much setting up for something similar here. Now, whether this holds or doesn't hold remains to be seen, but I just want to say that's the daily and here we are. And now you have a lower high on the daily here. Does that mean that the sky is falling? No. But you are really far off your base. So if we are to measure our base here and just look at the base in and of itself, meaning just take a look at that base and what do we have here? That is your 1.68 off that level. You can see we came right to it. And all I've done is take this swing low. That's all I've done is take that swing low and this high and just draw from there. That's all I've done. And what you're seeing is there's that first fib where we kind of fought it. And now we're getting to that second fib off that base. That's pretty staggering. Now, if we wanted to look at a more longer term perspective, we would go to that swing low from that high. And you would see that takes you to that fib level. And this is what we did yesterday when we showed that. And we also showed the Ballinger bands here. And how the Ballinger bands are reacting.
What does this mean? And and why do you care? This is where I think it gets super important. I think you care because you've come pretty far, pretty fast, and that there's no real base under here. So, if I get rid of the pre and the post here and we start seeing these divergences set up like that, we have to realize that if we're sitting here at a level like this, that we're at risk, it does not mean, as I'm going to say, as I said in the other two videos, Tuesday and Wednesday, that you're coming back down 25%. But you're due for some back filling at this point. And the market's telling us that we're getting these divergences. So, we need to be cognizant of what the market's actually telling us. Whether you want to listen or not, that's up to you. But this is really what we're seeing right now. And I think that this is super important for us to pay attention to.
If we take a look at IGV, and this is where I think they're going with the market. Let's go take a look at the IGV for a second because I do think that this is really where they're heading with the market. I think they're looking for value. I think they're looking for beaten semiconductor or I'm sorry, software value, not so much semiconductors. I think they're looking for these names that got absolutely trounced and trying to figure out how they're going to get in them and stay in them. That's my opinion.
After hours there was some really significant moves and we should talk about this but you had some really nice moves today crowd breaking out of those higher highs that's a really strong move PW very similar the question really that we have to ask ourselves let me get rid of my million levels here the question you have to really ask yourself is after what happened with net tonight is that going to be the way because you're down about $40 and we should talk about this but first I think we should just go through last night very quickly the CO HR like this was not awful by any stretch and we wound up going down. IQ they raised guidance stock comes down. Ax exceeded estimates you're at a low valuation and you're at the same area where it beat by 34% last time and now you've got two quarters under your belt and it's just sitting there. ARM was this great? No. But you had a huge move up and I don't really know what they want. Beat exceeded race guidance. FSLY got taken to the cleaners. So, we have these names that came out with earnings and it was very different than what you had on a Tuesday night, right? We saw happen with AMD and some of these other names. So, then you go into, and I'm not saying that all earnings are the same, but there were some really good earnings here and they just did not care.
Now, we saw Nen come out and Nvidian put in I think like $2 billion. But if you really read it, when they started really explaining it, people just started selling the stock. And you can see that pretty clearly. Everyone got giddy. You know, you always have to watch these algorithms. This is why I love the algorithms. let them trade up and trade themselves into oblivion. So far, you seem to be holding here. But if you look at the quarter, you know, and you really study this quarter, like again, when I was looking at it, I don't really understand why everybody was so excited about it, but then they saw the the money that was going to come in. Essentially, they gave them, you know, a billions of dollars worth of rights to their own stock at $70 and they're funding their growth. And so for funding the growth and buying the stuff, they're giving them basically all that money in equity and warrants. It's kind of dilutive to say the least. It doesn't really matter. It is what it is. So, the stock trading up. We'll see how that goes tomorrow. I think it's a pretty dilutive deal. I mean, I don't blame them for doing it to grow, but it wasn't received very well when it was started to be explained.
Core from my perspective looking at this, you're missing, but the growth that was there as far as their buildout was pretty decent. AOI missed on the revenue, missed on the earnings, and the stock getting smoked on that. If we take a look at RKLB, this was fantastic in my opinion. Now you people can find things to poke at and go through it and say, "Oh, well this was off." I mean, when you start building out your revenue and earnings and you're raising that because I mean seriously think about it like who are your contracts? They have to be government related. I mean when you start really getting into this like who can afford you, right? So I thought this was super interesting that it didn't act as well and I just want to point that out. Coin missed on the revenue missed really across the board. It was pretty gross quarter and so was guidance. So, they weren't fantastic earnings and what's been holding us up previously have been absolutely blowout earnings. You don't have that tonight. So, when you come into tomorrow, you're going to be playing a different hand. And you're going to be playing a different hand that also is dealing with the fact on what's going on in the world, which is a little different. And then on top of that, we're going to have to deal with some things.
One of the key things that we're going to have to deal with in regards to the NDX or even looking at the RTY is that you have some real problems here when you start seeing names like JP Morgan do what it did today where it reversed. And what we want to do when we understand this stuff is get ahead of it. We don't want to wait for it. So, for example, when I'm buying things like Dell, you look great, you're breaking out, but maybe I have to tighten the stop on those. Maybe I have to start looking through my portfolio and tightening things up a little bit because I have to ask myself, I have to look at this and really say, "Hey, what happens if I get to this level, right?" This is why I always use three kinds of stops. I use a time stop, a stock stop, and an account stop because when I go through it, it just lets me know like, "Oh, hey, if I came back down to here in a couple weeks, like how much is the damage? Like, what would really happen?" And that's not ridiculous to think that you could come down here in a short period of time. And then we also have to ask ourselves the question, if we get no escalation or no deescalation going into the weekend, how many people are going to want to hold stocks and their current positions going into Friday's close to walking into god knows what on Monday morning? That's it.