Peace Rally? Insiders Already Made Their Move!

What a day for public companies and for SpaceX. But the market's telling us more than just that. The NASDAQ continues to fight key levels that are being constrained. And are we able to get through that? If so, what's going to lead us out? A lot of us were looking at software as that next big rally, but then again, what has transpired? We had three huge moves and then all of a sudden we came down. So, where is the beef as they say? Is it possible it's still in semiconductors? And by these movements and buildouts, it's quite possible that it is. We're going to get to that.

But before we do that, we have to spend some time on why Tesla rallied so much on Friday. Why some of these funds that actually own SpaceX are absolutely imploding, why others are exploding. There's a huge difference out there between these funds. And we really need to understand that to understand what's going on with SpaceX. And even though SpaceX has only been open for a day, we have to walk through what are those key levels already that are going to tell you whether or not technically it's a success or failure and why the most hated rally in the world over the past 2 days has just this insanely strong breath. Let's get to it.

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Hey everybody, welcome back. Well, the very first thing that I want to do is just talk about the basics and then we're going to get really into the nitty-gritty today, specifically with SpaceX, Tesla, what's going on there. But I just think we should take a moment to look at what the market's actually telling us. So below is the 20-day moving average and percentages above. And we can see right in here that we're at that 713. So 71.3% of all names in the S&P 500 are now above their 20-day moving average. This is not a market where you see something like this and then assume that you're going to drop. If you see something here where you're at 60% of all names that are on the 50-day are doing this, you tend to push higher. You don't tend to fall apart. Here we are on the 200 day. And what's so fascinating to me is we're already hitting higher highs on the 200 day. So, not only on the intermediate term, if you can take a look at the five, usually when the five gets up here, you get in the 80s, you see some kind of pullback. But what we're what we might see here is you might see that you might get to that five level and then you pull back a little bit or that 81 level. But when you see the breath like this, it's very difficult to just say, "Oh, yeah, we're definitely going to come back down." Now, could you have a macro event? Could we see something else that does that? Yep, 100% you could. But the idea that it's out there that it's just going to automatically fall apart, uh, I'm just not buying that. And we'll get to ASML in a second here. But, and I do want to spend some time on it.

I think the more important thing for us to do is take a second and look at the NDX. And then I want to show you something. But for us to look at this and say, well, what do we have going on here? And I like looking at things very simple. So, I I just do I think it's a lot easier to keep it simple. That's a control bar, meaning that bar is in control of everything. And you can see these control bars throughout history. If we go and take a look at crude oil, for example, and we go over here and look at crude oil and we see how crude oil is going. Just take a look here and here. That's a control bar. Meaning, no matter what is said or done, you've never gotten out of it control. You've stayed in it forever. You can go see them all the time when you find them. Some are more are stronger than others. Here's silver, for example. And you can see if you take that bar, this huge bar here, you have control, right? Meaning every time that we've broken out of it, they pull it back in. Until eventually it just breaks and you can see that you've broken this level and then eventually what will happen is you'll find some other area that becomes a control area right super simple to get the concept but I wanted to spend a second there and this width of this bar that happened on Tuesday June 9th is enough of a market to get us there and it actually feels like a lifetime ago when we start taking a look at something like that and why did do I say that so if you take a look at what we went over on Tuesday's video we talked talked about this enormous drop in the market. I believe it was 5 12% when it was all said and done. But then what you wound up doing is you came over and closed over our demarcation line of 50%. Tested it the next day, trapped everybody and then gapped up. Now we're at the high end of this. So what do we really need to do? Well, we need to close over this level. That is the very first thing that we need to do is we need to close over that level. And I think that's very important.

But again, I do want to get into the nitty-gritty of SpaceX, and I want to spend a lot of time on the individual names and on Tesla and what I think is actually happening there. But there's a couple key things here that we have to look at. In front of you are the new highs. New York Stock Exchange new highs. And we can see where we're at in this level. And what are we doing? We're hitting higher highs. If we take a look here and we take a look at the New York Stock Exchange lows, what are you doing? You're hitting new lows. If you took the new highs minus the new lows, and I went over this recently from Friday, you had a divergence. We went over it earlier this week, and that's why I always say these videos are all connected. So, we're hitting new lows, which is a good thing, and you're hitting higher highs, which is a good thing. But wait, there's more. The NDF is now above 50 again. So, we broke below that, and now we're lifting back over that 50. So, this is stocks on the NASDAQ 100 that are above or below 50. In front of you is the New York Composite. And when we look at the New York Composite, you're going to see very clearly here a couple things. One, you look like you're breaking out. I'm just using a line chart, but here is summation. Why I like summation so much is because it takes forever to turn, right? I'm at the brightest bulb. I want as much time as you could possibly give me. And so, you see these little crosses. And when you get them, you just want to pay attention. It doesn't mean that it's always going to work. Nothing always works, but it's a data point. So, if we're down here and we're starting to cross, we want to pay attention to that. So, we are starting to see a broadening out, but it's not everywhere. And we need to be really cognizant of that. For example, you're not really seeing that in IGV. All of a sudden, it's like the emperor has no clothes. We got all excited. Everybody got giddy here. We're going to buy software. It's going to be amazing. And then, wham, matumbo, right? Just got crushed. It is what it is. And there's a lot of sectors here that no, I don't think that they're lighting the world on fire. And I'm going to get more into this on Monday because I don't think all the magnificent seven names are what we want to see. But what we do want to see is understand that in these kinds of markets, you get new leaders. And SpaceX is definitely on everybody's mind. Now, whether it's a valuation issue, whether it's not a valuation issue, whether you think robots are going to mine asteroids and everyone's going to drive a cyber truck and is all going to be connected to AI and somehow they're going to link it to space. Fantastic. But the bottom line is we still have something called reality and we have to trade in that. So, let's get to it.

Let's take a look at what happened with SpaceX. So, we know what came out. Everyone's excited. SpaceX shares sore 30% midday. Top six most valuable companies in the country. And they did a couple things perfectly here. We'll get to that, but really it was the float. SpaceX lifted first day immediately jumping 150. It was there for about a second and it actually went to 135 at one point and then pulled back down 11% higher than the IPO figure of 135 priced on Thursday. It is at 176. It did go a little bit higher than that as well. The capitalization is just absolutely insane. Sixth most valuable company in the US. Obviously, people are talking about it was overs subscribed. But the real issue here was the following. Only 4% of this company is trading. Now, in November, you're going to get 60% that's available for sale. Whether they all sell or don't sell remains to be seen, but they have a windfall, but for now, only 4% that means 96% of this float's not even out there. Early investors employees hold the rest. SpaceX also lobbyed to have the indexes. So, they're going to get in the indexes starting, I believe it's next week or the week after. I think it's actually early July. The company will now join those indexes in a matter of days. Yeah, they don't even have to wait. So, this is going to add support to it as well.

But there's a little bit of a twist here and this has been floated out before and I think it's worth us paying attention to this twist. Chatwell who's sea level at the company didn't elaborate on the specifics but sees tons of synergies between Tesla and SpaceX. Two companies are collaborating in a lot of ways. Musk's planned 55 terrafab facility. So, sharing the facility. So there's this question of a merger between these two companies or some kind of synergy between them. And there's a history of Musk doing this, but Space also spent millions on Tesla, 56 million worth of Tesla mega pack, which makes sense. And 103 million of Cybert trucks. Somebody's got to buy them. Musk also has a history of combining his companies. Shelled out 2.8 for Solar City. We will all remember that in 2000, was it 2016 is when he did it. a solar energy company run by his cousin and Peter in which he had a 22% stake and was the chairman social media X and he folded that perfectly right into what SpaceX which those people were doing absolute cartwheels because he got out of that and X AI was a money loser but are there synergies there maybe not in the end of the day does it really matter he did it so it is what it is so if you can find synergies and the purpose of me showing you this is he's got a history of doing it and also at the same time he's done it in the past and those synergies of saying well is AI is going to launch rockets okay he could have started that way as well right he didn't have to merge X and the X AI company together right he didn't have to do all of this and he did it anyway and it is what it is but I think that this is going to get a lot more attention SpaceX makes history noted that combining the two companies might not happen in the near term and I thought that was interesting so might not happen in the near term what's that and right Now you want to keep the lights on. Okay. Well, you just went public, so hopefully you can keep the lights on. Shotwell's comments l more evidence of merger between the two companies could come in the future. Some analysts already see the tie up as inevitable. I'm leaning that way and I want to see what your comments are below and I'd like it if you comment on this and then anything that you could allude to why or a time frame. I'm really curious about this and I'll tell you why. I think it's sooner than later and I can see why he would do it. I it makes a lot of sense to me. But Wed Bush senior equity research analyst Dan Ies chimed in. Of course he did. The holy grail must more control of the AI ecosystem. Well got control of both companies. So I'm not really sure what it does there. But there are some synergies there on the fabrication side. Sharing the AI etc. Sharing the cost between the two companies. It would definitely lower the costs. There's no question about that. Tesla bull 80% chance they will merge. Is it that high >> order? >> Maybe. Maybe. It seems like that's a big number. Again, super interested in what you guys think of this. made two billion in XAI. SpaceX acquired it. Isn't that convenient? And they just paid up for it pretty nicely. But again, I think that this is the real story. And to me, this is, and I'm trying not to laugh when I say it, it's really the cheap way of playing SpaceX is by buying Tesla. And you'll note that during the day, you saw this kind of movement. And I think that's very important to say. When they made the statement, Tesla's stock went up considerably.

Now, some of this I think we should get granular and then more of this we're going to have a bigger overview and I think it'd be helpful to look at what vehicles are out there that you can trade this with and then what my expectations are and what I think is going to happen here. So, the very first thing to me is that you would think that they would start selling more of Tesla to start buying SpaceX and they pretty much did. But when you get to this level, watch, take a look at this. I thought this was super interesting. So there's the 55day moving average. And what we'll do is we'll make this super unable to not see. And there it is. And you can see when we got down to this level, held broke. Whenever you see something like that, you usually break. Now, you usually do break and you just didn't. Meaning if you go over it and then under it tends to fall apart. So I actually thought that we were going to crack here and come down to maybe 360, maybe retest this breakout level. And that's not what happened. So then I want to go take a look at this for a second and just show you the volume. Now, if you take a look at this volume that happened on Friday, you'll note that volume's pretty much higher than anything you've had in a month. And if you look overall, it's pretty substantial to where you've been even through April and May. So, it's not small volume that happened. We have a little bit of a higher high here. And again, as I stated, I want to be a little granular here because I just want to show you this. So, we have that close over. Now, we can all say it right here. And then on top of that, we have a put wall that's right down here. Let's get rid of this magnet before it drives me nuts. You have a put wall right here at 380. So, to me, this is super interesting because I have institutional support here, meaning they're buying the 55 here. Now, why would somebody do that? I don't know for sure if and when that even happens. Nobody really knows if they actually merge. But what you're going to see here is if you look at the valuations of this company, and let's turn this into open, high, low, close for a sec, and then get the tops. If you look at the valuation of this company versus how you're going to evaluate something like SpaceX, and this is kind of funny to say, but this would actually be the cheaper way into SpaceX if they merge. So, I think what you're seeing here is I think people are playing this now for that merger. I'd watch this DTL and then see how you act because if you break through this, you're probably heading back to this level. Now, if you think about it from that perspective, you're going to note that you have this really wonky pattern, then you came back down and filled. You're actually getting a cup and handle on this, which I thought was kind of interesting as well. You can see your little undercut here, but that undercut takes you right to that 380 level. So, you can see that for yourselves. And I just want to pay attention to it cuz I'm not a huge, oh, I have to trade Tesla guy. But if Tesla is going to fold into this company and become the biggest company, which it would be, you know, in the US stock market if it happens, there's definitely going to be something to that. And the leverage in the indexes is going to be pretty big. Whether we want that leverage or not, we're going to get it. So, I think I would watch this one this week and just watch how it acts. Just disclosure, at the time of recording this, I do have a position in it.

There's a bunch of of these other little names that I I'd want to try out as well, but there's a couple other things here that are worth pointing out. If we look at this on the weekly, you can see pretty clean in here. Here's a cup, and it's a pretty wonky cup, but it's there. And then, if you take a look here, you have a handle that's been developed. We can actually just go in here and I'm just drawing them rough. But you can't really miss it, can you? I mean, you you can't not see that it's there and then you've broke out of that. You've come back to that level and you're holding in here. Again, I'm not going to assign a probability to whether or not this truly happens. But if I'm to look at something like that from the depth of that cup up to when the handle, if it breaks out of this, where that takes you, it's pretty significant. So, let me just show it to you this way. So if we go to the top here and then we take the low of that the fib level is going to take you up to like 673 meaning you have this base that you've had since December 24 and this is when they got their little hissy fit Trump you're mean no you're mean all that and now from there you can see that we've come back down we've retraced back down to that 382 like from a technical standpoint this is pretty fascinating to me how perfect it is right and then you're coming right back down to the 618 you're holding there you came up to here 786 you're rejected to the next logical move is to come back and retest these highs. Now of course between cyber cabs news everybody you know yelling at him for whatever godforsaken reason if you look at this it does take you up to that 670 level there's another way to look at this you can measure the base from here to here and then measure the points and on a percentage basis you're going to get a number and then you take the percentage from here up. So, if you were to just take this point, for example, and then take the low, you're going to get a 56% move. So, off of that break, if you break here, then you're looking at 56% up from that move, which is in the sevens, which is obviously pretty substantial. Again, I'm talking technically, I'm looking at a weekly chart, and that takes a very long time for something like that to play out. It doesn't happen on a random Tuesday. But what I find really fascinating here is the way that this held. In other words, no, I don't have the people getting out of Tesla anymore. I don't have those people saying, "I'm going to get out of Tesla and I'm going to roll that into SpaceX." And we had that after the COO's comments. I think it was the CO uh after the comments. You could see that people started thinking like I did like, "Oh, this is sooner than later and we have some support here in the name."

Now, there's a couple other ways in my opinion to lever this or to play this. But there's also some ways here that you could actually short and take advantage of what's going on out there. So, I'm going to go through a bunch of these and then you can look at them and you can do whatever you want with them. Now, this is really interesting and we'll just start with being Captain Obvious and looking at SpaceX. So, this is what you have on a day. I'm not getting into valuations. I'm getting into technicals and we can all argue the valuation. Should this company be trading where it is? Should it not? They're completely different arguments. But if we take a look at something like this kind of movement on that VWAP you held. Now, I also thought this was interesting. If I take a look here, it's telling me it came down to 135. If I go to a five minute, it's there. 15 there. Hourly, 4 hour. Go to a daily. And they're saying that it never got there on the daily. So, they're going to have to reset this to tell us whether or not it truly got there or it truly did not get to that 135. And I think that's really important. And I'll show you why. When you have something like this, and we'll clean this off. What you want to do is just mark off that level. So, you if you came here and mark that off, let's turn it to a candlestick for a second. You'd mark off that level. And then you would say if it ever breaks there then I just get out of the way. And it's a real simple trade if you're thinking about trying to stay in it. For me, this reminds me a lot of when Facebook went public where everybody got excited and then everybody all of a sudden puked it out. Now whether that happens or not, I don't have a clue. But that 163 is your 50% demarcation line, which means everybody in here, they would have sold already, right? For the people on that day, you had net sellers by the end of the day. So whenever and I'll clean all this off so that we can just look at it here. And I'll explain why I'm doing this because I think that you're going to have to watch what happens with SpaceX, not from what the naysayers are saying or like the, you know, the hoopal heads that, you know, Elon can do no wrong. I I don't really don't care about people's opinions. What I care about is what they do with and how they vote with their dollar. So from our standpoint as technicians, sometimes the price isn't as important as what happens that day, right? And then we just look at it that day and make a decision. But if you can't get above this and stay above that means the average person that bought that day on average they're out. And so we want we want to watch that.

Now Sunday night you'll probably be watching this obviously before that or maybe not. But Sunday night Asia is going to get access to SpaceX. The question is do they go out and do they buy that? Do they not buy it? Do they sell it? We're going to find out. But if we crack this level we want to watch. The other thing that I would suggest that everybody do besides this level, but just a suggestion to get a sense of this, when you start breaking an IPO VWAP, you're toast. Meaning, if your daily starts closing under the IPO VWAP, that's how all these things start breaking down. I could actually see people playing te Tesla thinking and waiting for the merger, even if it takes a year. I myself included am looking at that and saying, "This makes sense. They're going to wind up doing this. how they're going to do it, how long it takes it, who knows? But they've done this with Solar City. He's done it with XAI. He just folds everything in there and then wants to, you know, share the cost across. But where do we go with this and how do we benefit from this? I want to show you like why you want to watch the IPO VW. And I'm not comparing the companies. I'm comparing what happens technically. So, let's start there. So, if I look at something like a Meta Metico's public and it was a dumpster fire, right? It really was just a really bad offering. But once you broke that level and you take out that first day, that's it. You're done. And it doesn't mean that you can't come back. And I'll show you how you start looking at it whether it can or cannot come back. And again, I'm just going to talk technically. You put an IPO VW there and you can watch how it keeps rejecting in there. How it hits there, flips, and then lifts from that area. And then if we take a look at it, we can watch the battle flips and then you see it never comes back. Now, if we go back through time and look at this area, that's your IPO VWAP. Take a look here at what happened during 23 and how you held in here during 22 and 23. And then you can see obviously what took what transpired since then has just been an absolute unequivocal monster move. What's what I will point out about something like a meta as well is personally I think meta is in a lot of trouble but and I don't want to go off on too many t tangents and hopefully the add doesn't kick in too bad but left head right and you can see that neckline and neck lines don't have to be straight but we're here so we might as well do it. I love when we can do stuff together. And then we'll just draw this down to that level and you can see you got to love this thing, right? But you can see where you're at here. Yeah, that's your neckline. So, this is really setting up to be to get really ugly out of all these names. So, we can get into why, but the bottom line is what I want to focus on here is this IPO VWAP because once you break those, that's pretty much it. And so, we want to pay attention those up or down. And in regards to SpaceX, you want to do the same thing. I've did we did this with Rivian back in the day and you can see it right here like the minute that you're breaking those IPO VWAPs. You're toast. You don't come back from them. So, you want to watch this very carefully. No, Tesla will not be special. No, SpaceX will not be special. Nothing is special no matter what anyone told you. But you just keep an eye on it. And if the daily start closing under it, you probably want to be in a position or let me rephrase this. I will be in a position where I will be way more defensive than I will be offensive with something like a SpaceX.

As for other vehicles and other ways to look at this, there's a couple different things. So, this SPCL was one of the ones the guys were trading. And this is where it gets kind of goofy. So, this is actually a swap that is going to be able to convert into stock, but they had a swap out here, which was 2x what SpaceX is. And what we're seeing is they just halted it on them at 10:45 a.m. Trying not to laugh. But when they halt stuff like this because of the volatility, and we can all see how this played out, you know, I mean, I'd be like I'd be livid if I was in this thing and they halted it and then all of a sudden they're not explaining why, you know, why it's been halted and they halted it again because the volatility. But if you can't trade, but assets under management on this thing are sitting at something like 3 million when it came out. Like it's super thin. Watch the volume on this because you could just see what happened here. Like everyone started to realize, oh, I can have access to this and this is where I'm at. And okay, so I again this will open up and when it does, it's going to be extremely volatile. But this is a 2x space. And here's what I think about this stuff too. These are swaps. So it's going to be wild when this opens, but keep that on your radar for sure. You are going to get these guys SPCU, but they're not out yet. And I think there probably gonna be SPCs or D, one of those. You'll see those come out as well. They're not out yet, but there are some other vehicles. And we should talk about the good, the bad, and the ugly. And I was really surprised at how some of these guys managed the risk on Friday. We'll talk about that. But Xovvr, you can see that very clearly. That is one XOVL as well. These are Defiance daily targets, but they have some exposure to it. And obviously that exposure has been built in and you can see how they're acting based upon that. So I don't think that they're the ones that make the most sense to really look at. What I thought was going to make sense versus what actually happened on Friday was two different things. And you never know how this is going to play, but this is where it gets super interesting. So there are people that have owned some of this privately, right? You have the Baron first principal ETF. And obviously, you know, this thing's not as levered as something as let's find this BP TIX. I think that's it. This might be it. Yeah, there it is. So, it's not as levered as something like this, right? Which has these huge stakes in Tesla and has this enormous stake in SpaceX. Like, these are absolutely huge, you know, huge investments in those names. And so, they're acting really well. But there has been investments where you're trying to get exposure to it and that you're not able to get that exposure and and so since you weren't able to get it, you traded those. Now, one of the ones I've been trading for some time was this SATS and we could see how that acted here. When you start and I'm not going to get into all this, but when you start looking at the fact that they own 2% or 2.2% of the company, there becomes a valuation here where this starts to make sense. And the question becomes where is that valuation? And everyone's going to have to go through it and make their own decision on that. But take the market cap of this company, figure out what 2% is of that other company, SpaceX. Do the math, come up with a number, and see if you're comfortable with it, right? You should do what you're comfortable with. And there'll be a level where it just becomes ridiculous. But there's also a lot of spec that was built into this that provides opportunity. And I mean on the short side. So I'll give you an example of this. So you have this DXY Z. All right, let's get the fingers working here this morning. And why does something like this make sense? Because a lot of these valuations of these guys like DXYZ, all these private companies that you don't have access to, when you get access, when they go from private to public, there's no premium anymore. So something like DXYZ, your NAV is actually something like 20 bucks. So this thing to go from 38 to 28 is probably to me just the beginning. And something like this actually winds up heading back down to its NAV. Like there's really no reason for it. And when I say things like this, people will always say to me, "No, you don't understand." And I'm going to just repeat back, "No, you don't understand. Things are only worth what they're worth." Right? If I have access to it through another way, I can actually buy something like SpaceX. And then if I wanted to hedge myself on the SpaceX, I'm just going to go out there and short this and I could be hedged and put on a pair trade. and I already have the levered ability. Now, this DXYZ has other stuff in it, but the real cat's pajamas here was that SpaceX position. So, right now, the idea that this should be trading at a 30% premium for what it owns underneath the hood is kind of silly. And this presents opportunity. It's the same thing when we were looking at stuff like BMNR and we were talking about this and you know, we could turn out that this turned out to be the exact kind of pig I thought it was. But when we're looking at this kind of stuff and you're paying a premium to own something that you could just buy in the open market and you're getting less of the value, it makes no sense whatsoever. So in other words, something like DXYZ when these guys are trading it, yeah, it makes sense because you're getting true value out of what you're doing. But what you start to see here with this kind of stuff, and again this is just my opinion, that value when it comes out of the market, it doesn't just plow back in. They just don't go, "Oh, we have an oopsie." and get back in. So these things tend to fall apart and then that's it because the public now has access to what it didn't have access before and that's a very important concept to get.

I'll give you another example. So this is VCX and this is something that I I've been shorting for some time. Everybody got excited. They bought it here. It it goes public at 35 36 and they come out with it and then it does this in a day. And again, when I was shorting this thing, I was shorting on the premise that people can just be as irrational as they want. So when I'm shorting this, I'm actually shorting it and thinking it could go to a thousand. Not because there's any realism for that, but just because people are hoopls and they just they don't think it through, right? They just want to be involved in it. Get in, get out, tag, you're it. So, but when you go through something like this, you come up with this and say to yourself, all right, well, why is it moving? Because you don't have access to anthropic. You don't have access to data bricks. You don't have access to Open AI. They own all those. They you don't have access to Andural, Ramp, SpaceX, Epic Games. Well, now you have access to SpaceX and you get a real mark on SpaceX. So 5% of this now has a real mark. What do you think is going to happen to this that has an NAV? I think the NAV is $31, $32, something like that. Let me pull it up exactly and get the NAV. Oh, it's even better than that. It's $18. So when something has an any fee of $18 and it's trading at $130, it's not an if, it's a when. And so a lot of people again don't get that, but you should do what you're comfortable with. So how do I think about these kinds of things? I think these things are just outright shorts. And as anthropic goes public, it's 21%. Data bricks goes public, it's 18%, opening a all of a sudden you're going to get real marks on this. And those marks are going to absolutely slaughter something like this. That is no different than something like that. DXYZ. And it's not like, oh, he's a hater. No, I just if I'd rather just buy the damn company. It just Why would I pay up for that? It's like the same thing. My argument with the BMNR side of this and here we go. We're going on a tangent. I mean, told myself I wouldn't, but you know, promise broken. So, like this always made me laugh because everyone got like giddy for like three or four days. And then, wait a minute. Wait a minute. You're going to go out there and buy Ethereum and Bitcoin and you're going to keep the stake value and you're going to pay yourselves an exorbitant amount of money and then you're going to keep issuing shares to go buy more of it and then you're going to keep paying yourself the dividend. Well, why don't I just go and buy it? Like these things shouldn't trade at premiums. They should trade at discounts because of their lack of liquidity. And it's no different than like when everybody had to be in GBTC, right? So, what you're understanding here is just very simple supply and demand. Like why would you go and buy someone else's Bitcoin when you can go and buy your own? makes zero sense. The only reason to ever do that is when they're trading at a huge discount to the underlying asset like they were in here. And then you can do really well with those kinds of trades when everybody starts to figure it out. These kinds of names like VCX, they will be no different. Same thing with this DXY.

We're going to hop right back on that SpaceX train. And the purpose of me explaining this is when people look at this and they say to themselves, "Oh, well that's it." Now, there's no reason that this shouldn't be trading at or under. So you guys can always comment on this stuff. I like that banter. I'm always interested in other people's opinion. I mean, I know I'm right, but I'm interested in your opinion on it as to why you think I'm wrong, if you think I'm wrong on this, because when you can buy something in the open market, why wouldn't you just do it? So these things tend to lose their premium over time. And I want to say this cuz I think it's super important. That's very different than me looking at something like Baron Partners Fund that's marked to NAV and has huge stakes in these companies and is basically saying, "Hey, we're not going to sell." Like I know guys that have owned this thing for years and they're absolutely killing it. So the thing about it is a lot of these things like DXYZ or VCX, they kind of mimic or make you think that you're in something like this when you're not. So the devil's in the details.

Now I want to spend a minute talking about the mechanisms and a lot of these mechanisms got thrown off and they were way different than what I thought they were going to be and I think that's very important to get. You know you man plans God laughs. You never know what's going to happen. So the idea that these funds like UFO or NASA went out there and didn't get out of their positions ahead of time to make room for SpaceX. For example, you can't say that you're the tea space innovators fund if you don't have SpaceX in it now, right? UFO. You can't say that you're the space ETF if you don't have the sixth biggest company in the world or in the US in your ETF. So, these funds need to make room. Now, you would have thought, and here I go again, thinking you would have thought all these geniuses were actually getting out and these portfolio managers were actually getting out in here. And maybe this is my fault for one, thinking that they're smart. Or maybe it's my fault for thinking that they were actively managing these and they're just buying random amounts and saying random things. But you would have thought that they were scaling out of this to get themselves in a position so that they have cash for when SpaceX comes out. Instead, what you got was this rally pops over and this complete collapse of UFO of NASA. And I'm not so sure it stays this way, but it's definitely an issue. And I'm going to explain what happened because I think this is really important. And there's also another mechanism that happened on Friday that we really need to pay attention to and it's in semiconductors and I do want to get to it because I think it's really important for you guys to know this going into the week. But when I look at like NASA and I look at like UF, you you almost have to laugh. It's like you had the best IPO, the largest in history going out and your ETFs are down. And I'm I have to laugh because I was long. You know, I wound up actually shorting some of these like the Rocket Labs and AS, but made way more on Friday going long semis than any of this stuff. And we'll get to that cuz I think it's I do think it's very important for us to to talk about that and what's going on there because you have a massive imbalance there and that imbalance is starting to come out. I'll get there, but I want to stay with this for a second. So, how do these companies fall apart after doing something like this, right? Like, how are they completely imploding after this happens? And the bottom line is because supply and demand. And what we're seeing here is people at that own UFO that own NASA, like the actual owners, the quote people that are actually supposed to be managing these things are now getting out of those. And they're probably getting out of those because of their allocations. That's what I think the trigger was. So, in other words, you come in and this is how it works. So, you come in and you're NASA and you're like, we're an ETF. Yay. And we want to make, you know, the best space innovators out there. And so, we manage I don't know what they manage. Let's look it up. $2.9 billion. All right. This is get and again this gets really to me interesting because with NASA they went out there and they're like okay we're going to allocate 10% of this portfolio to I think it was 10.3% when I went through it and was researching it. 10.3% was supposed to go into SpaceX. Now they're asking for an allocation. Interestingly enough the UFO they just wanted to buy it in the public market. That's the way that they were going to buy this. So this that's even more of a like a kaibos, but we'll get to that. So if we take a look at NASA, right? So everybody's out there going, "Oh, okay. So we're going to buy this." So what do they do with their holdings once they get their allocation? And this is when they find out they get their allocation that morning. So you come in the Friday morning and that's when you get your allocation. You don't know your allocation very it's very rare you know the night before. You usually know the next day. So you have to have all that cash sitting there waiting to take advantage of this. So once they get the allocation, what do they do? They sell their other holdings. Once they sell their other holdings, what do you think happens to their other holdings? Well, their holdings start to drop, right? So, all of a sudden, if you're trying to get exposure like everybody else is into SAT and you're getting it that way, which they own 10% of their portfolio was, and then if you go through it, the rest was 9% and Rocket Labs, and then you have as here, and that and that's 8%. What do you think they're doing on Friday? Because they didn't plan ahead. They have to sell all these other names to get out. And so the mistake that the majority of people made, including myself that has been doing this for over two decades, is, "Oh, well, clearly you're going to get out before Friday, right? You're going to raise the capital ahead of time." No, no, we're going to get out that morning with everybody else. Okay. So, what's going to happen here, and this goes into a much larger situation, all these funds are going to rebalance themselves. Now, the thing about UFO is UFO doesn't go out in the private market. they will only buy the they'll only buy in the public once it's trading. It's a the way that their the way that their charter is, it's different than NASA. So NASA's plan was we're going to raise this money and out of this money that we have, if you go and take a look from when this was out, hey, from when this money's out, what we're going to do is we're going to buy 10% of SpaceX. Like they knew what their goal was when they came out with this thing. UFO has been around for a long time and they want to own this in the public market. Why these guys didn't

raise money or raise their capital ahead of time. I don't have a freaking clue, but none of them did. And so what you have is a golf ball through a garden hose where everybody is trying to get out at the same exact time. So it's not a function of just Rocket Labs or AS, or a function of their businesses. It's a function of supply. And so now, what you're going to have with these names like AS, Rocket Labs, PL, any of these names, they're going to want out. Even when you start looking at them and you start thinking to yourself, well, there's got to be clearly some value here. It doesn't matter because they have to get out of them in order to make room. Even this G set, which is getting bought out, that actually even came down, which is kind of weird. It really shouldn't, but whatever.

What do you do with this information? I think that what you have to understand is that this can get a lot worse than people think it can. And I think that when you start understanding, and this is why I'm spending time on it, when you start understanding what the mechanism is that I just explained, these people have to sell now to go and make room. So if I look at something, and I'll explain it this way. So take UFO, because I think that'll be the easiest one to explain. If UFO has a 6% stake in Rocket Labs, and NASA has a 6% stake in Rocket Labs, right? So, let's just make it 15% for a second. And we're only going to take these two funds. We're not even going to get into all the others that are out there, but I want you to just understand what's happening. Like, you have this Space Innovators one that's, you know, from overseas, and they also own a stake in it. Now, let's take a look at Rocket Labs, and you realize that you have 62 million shares trading that day at 100. So, it becomes a self-fulfilling prophecy because they're selling those stakes in order to make room for SpaceX. And then people like myself are watching this and going, "Well, I might as well short it, or I better get out of it." One or the other. And so, it just becomes a self-fulfilling prophecy.

What I think is going to happen is, one, I do think that the selling persists until you have a rebalance. And then I think that they're all going to trade whatever SpaceX is trading, and then the SpaceX multiple, whatever that multiple winds up being, will become the standard, and that'll be the premium, and then the others are going to trade at a discount to that, which probably means these things might be in more trouble than we think they are. And I think that that's really important. Another thing that I thought was super interesting, and I'm spending a lot of time on this because I think it's really important, because a lot of people are going to look at this stuff and think, "Oh, it's over. I should be taking a look at these." I'm not feeling what you're putting down there. So here, take a look at this. So some of these short sellers are coming out with comments, and of course, they did on Friday as well, but that's not really the driving force of this. But I think that there's some really important notes about things like this. So these are the names: ESTS, RKTO, SIT, you know, Space, all these names, whatever. Shortell says, "Space sector faces reality check after listing." Fugazi Research says, "Many listed companies generate little revenue, rely heavily on stock offerings to fund operations." I don't care about that. "Remain years away from providing commercial viability to their businesses." That's what I care about. But there's a part of this, and I'm not going to read the whole article, where he says they're in for a reality check on valuation.

So the easiest way for you to do this, and I'm going to explain it, and you might want to follow me on Substack, 'cause I'm going to start writing research reports again. I've been threatening to for some time. I used to do it years ago, before actually Substack, back in the day. I don't know. I find them fun. Anyway, here's the thing. If you take a look at what SpaceX trading times revenue and earnings, and you go and take a look, I'm banging on the desk. I was told not to do that. You can hear it on the mic. All right. So, if you take a look at ESTS or Rocket Labs, and you look at what these things are trading at in regards to revenue, in regards to earnings, forget the earnings, but just the revenue, you're going to find out that they're trading at a significant premium to SpaceX. And so, as that reality sets in, as this starts to become clearer, as those funds, and I want to be really clear about this, I was shocked. Shocked, I tell you, that these guys did not get and raise cash positions ahead of this. It's baffling to me, but they did not, and I don't know why. But as that happens, these can come in pretty hard. So the idea like, "Oh, it's cheap now 'cause it was here." No, the question is, where is it relative to its peers? And when you start looking at it that way, you're going to get a different story.

So I'm not going to get into the whole article this guy came out with, but I do think it's interesting, and I do think there's something to it. Now, let's get to the fun stuff. I want to spend a minute on what's working and what's not working. So, we have this entire SpaceX trade and the Tesla trade, and that's one side of the market. The other side of the market that people are forgetting about, and I'm going to walk through this, and one of the key things I think people are truly forgetting about here, and I think it's super important for us to get, is that as we push through on something like a SandK, people will start to say to themselves, "Oh, this doesn't make, you know, it doesn't make a lot of sense. It's too expensive, blah, blah, blah." The earnings of these companies are going up so fast that last quarter, all semiconductor earnings were raised in one quarter by 17%. I've been trading a long time, over two decades. We've never really had that. You didn't have that in.com either. So you still are in this massive cycle. A lot of people look at these cycles and then they decide that they don't want to be a party to them, or that it's got to come down. If you didn't pick when it started, the idea that you're going to pick when it ends is really a deadly game, and you want to be super careful of that. And I'm saying this for a reason. We're going to get into some of these names and what's going on.

The one thing that became very clear is, once SpaceX was behind us, they bought semiconductors. They wanted it over to go put money to work. You also have the war that may be ending, the war that ends every four hours and then escalates every four hours. But more importantly, when you got a catalyst behind you, look at what they're buying. And we're going to get into some of these names today, but I wanted to show you this because there's a lot of discrepancy, and I hear this all the time. You know, options are like super efficient. Far from it. They are really very inefficiently priced, in my opinion. And here's a great example of this. So on Friday or Thursday, we're buying the SanDisk 2000s for next week and this week. We paid $5 for this week. We paid 50 for next week. And I'm putting it exactly like, "Hey, if we break 1,800, just going to kick them." And then as they start coming, we just get out of them. And then you come in the next day, and what happens? They actually lift, right? And they go. Now, obviously, all of them aren't going to work this way, but you know, 5 to 30, and then the other ones went from 50 to 100. There's a ton of potential out there in this market in semiconductors still. And I think a lot of people are missing this.

So when I talk to people when they join the community, it's always so funny to me because they're like, "Oh, you know, I missed SanDisk." And I always will look at it and go, "Well, when did you get in?" And then they'll say things along the lines like, "Oh, well, I just didn't." So, it's interesting. And I'm just going to explain why. And then people are going to say, "Oh, well, I missed it. Oh, I missed it." If you take a look at something like a SanDisk, and you look at these numbers, and you're going, "All right, well, here's $14. You're supposed to earn. You earned 23. Okay, that's one quarter." All right. So, you're supposed to earn $3. You earned five. All right. So, what were we supposed to earn here? You were supposed to earn 80, and then you reported a $1.22. 22. So, in three quarters, this company has gone from supposed to be doing a, you know, roughly a buck a quarter when you start going through it, right, to now we're doing $23 a quarter. It's not the same company anymore. And this is where people get lost on these kinds of movements. And I want to be real clear, I'm not saying it's going to go on forever, but the memory game has changed forever. Meaning, no one's ever going to get themselves into a position again where they have to rely on fighting for scraps. They're always going to have what are now referred to as LTAs.

So on Friday, Goldman puts this piece out where they're saying, "Hey, we're a little worried going into Micron on the 24th for earnings." And the reason is because, you know, we don't know how long these long-term agreements are going to be. And they came out and said, "Well, I think they're going to do $50 roughly." All right, they're going to do $50. Well, $40 of agreements are already out there for the next two years, every year. Unless people are going to break those long-term agreements, and maybe you can, maybe you can't. But are you really going to want to put yourself, like if you're a corporation, are you really going to put yourself in that position to break that agreement and then if something happens, you have to go back to them to buy more? You're probably not going to do that, right? The other side of this that I think people are truly missing about this big memory, and we'll call it boom bust. Everyone likes saying bubble. Okay, let's call it a bubble if it makes you happy. So if you take a look at something like DRAM, and we look at the way that DRAM has come up and you know, come down, and then started to lift again. One of the key things about the DRAM drivers that when you're looking at something like an EWY, which has the SK Hynix in there, and everyone keeps telling you that SK Hynix, right, like that's definitely going to stop this time for real, and then you look at them saying, "Up here, by the way, over the next 5 years, we're going to double our production." Like they're not saying, "Hey, this is coming to an end." You know, it took a lot of time. Even Samsung, if you go back through Samsung and you take a look at what they did, most of people that don't understand about Samsung is that back here, back in the day, they were cutting and shutting plants down because they weren't effective. And then they had to fire them back up, and now they have so much demand, they can't even meet the demand. They're actually paying these workers hundreds of thousands of US dollars just to stay there and work. There's that much going on there. So the idea that you're going to pick the top of this, I think, is one of the most delusional things that you could possibly do.

What you would do with this is, you might want to look at DRAM prices. And I do chart DRAM prices as a lot, and see if I see weakness, which candidly, I don't. But that's what you want to focus on. You want to get away from the hype and look at what's actually going on. So what did the market do Friday after SpaceX was behind us? And I do think some of it also has to do with quote unquote world peace. But take a look at the semiconductors for a second, and where you closed. And then take a look at the ASMLs and where that closed. Then look at the SOX and where that closed, and you'll see a difference between those two, and it's a pretty clear difference. So why is that happening? KAC hitting highs, AAT hitting highs, and this is the part of the economic cycles and the cycles, the semiconductor cycles, that a lot of people don't really understand. And so I want to explain this and tell you why I'm showing you this. Lamb Research, 39% of their business comes from NA, and ASML. None of this exists without them. Why are these moving? The beginning of cycles, the beginning is the semicap movement, not the end. So, in other words, what these guys do is they build the equipment that makes the production. So what you have to do is go out, spend money, get the production. After you spend money, get the production, you produce more chips. As you produce more chips, you sell those chips. And then your revenue and earnings go up because of that. The end of the cycle is not when the semicap names move up. Now, could these companies be wrong? Of course they could be wrong, and they could have the greatest buildout in history, and it could be a dumpster fire. But I don't think so. I don't see any signs of that at all. Could it happen? Of course it could happen. But the biggest mistake that you could make here, just like any mistake out there, is not understanding the true power of these kinds of moves.

So instead of going out there and saying, "Oh, this is over. This is over." You might be better off looking at this and saying to yourself, "What's it going to take to make me believe that this is over?" Like, what would have to happen? Companies would have to miss earnings. So you'll see these rotations, for example, and again, I want to go through concept here, but something like AVGO comes out and says, "Hey, the TPU sales are off." Well, that's about as bad as it can get, right? So here's the gap down. TPU sales are off. And then you're saying, "Oh, well, how's your deal with Google?" "Well, it's not great." "Okay." "And well, is Google getting out of TPUs and going back into CPUs because that's great for Nvidia?" And then you find out, well, that's not what really is going on. What they're doing is they're actually aligning with Intel. See? So, you're going to have cycles. You'll have boom bust cycles inside of this other cycle. So, instead of just doing the lazy thing and saying, "Oh, it's over because I missed it." If you actually start getting into it, you start connecting the dots, it starts getting a lot clearer.