Transcription
S&P is still holding that put wall, which is a good sign for sure. You're still buried in here around that 740. I mean, technically, you're over it. You did not take out a lower low, which is another good sign, but we're still below that 55-day moving average. So, we really need to watch that. And it's not great.
If you look at the cues, there's a lot going on here. We have a lot to cover. If we take a look at the cues, this was that pretty much wall that we were holding. We can see the 12 pointing down, the 22, and the 55 is actually starting to turn down, which is the opposite of good. I've seen good before. It doesn't look like that. You have a 680 put wall and you're trying to hold it.
Now I'm going to put this in and then let's take a look at this and look at what exactly is happening there. We're going to go just do a bare chart for a second. So we can see this 680 right down here and how we were playing with it literally all day today. And you had a couple movements off of the bomb market from 11:30 on. You had a short-term bond auction and right around there it marked the low. You came to one o'clock today and you had another bond auction and that marked that area as well and you can see that.
So going into the FOMC this week, I would strongly suggest that you watch the bond auctions tomorrow. They're usually at 11:30 and 1:00, but we did hold those areas and considering everything that's going on with oil that we have to cover, I think that's really important. There's a lot going on with semiconductors that transpired today. Things I haven't seen in years, and we need to dive into that.
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Before we go down that road, I do want to point something out. RSI is finally hitting that 30 level. This is where you can get a technical bounce. You don't have to get a technical bounce here, but I do think it's interesting that you're getting here right into FOMC, Microsoft, Meta, all those events. And it can always get worse. You know, I hate to say that, but it can always get worse than we think. We can see once you start getting below that 50, it gets harder for it to rally. And we just see they're literally walking us down. So, it's commensurate with the move.
If we take a look here and just look at the simple things, the bounces, the strong bounces happen when you're oversold and you go back over 30. I did a whole RSI video on this before. And it doesn't mean that you have to bounce and then just lift, but it does mean that you are setting up for something here because you can only get, you know, I say you can only get so oversold, but you can get to a level where it just gets ludicrous on a 4-hour chart. You're not at Ludicrous level yet, but you're getting to a part where people that are short are going to have an issue. And I think that meaning that you could bounce pretty hard. And we did see some things today that were super interesting.
So, I'll show you this with Micron before we get into the socks. So, we're not taking out lower lows here on Micron. Now, if we go and take a look at something like a SanDisk, you took out a lower low. So, NED is weaker than Micron, but is it weaker than DRAM? Well, DRAM did not take out the lower low, but I think there's some things there that are holding DRAM back. And you know, let's go down that rabbit hole before the AD kicks in and then I forget.
So, the first thing that I would say is that tonight you will want to watch, in my opinion, or tomorrow morning, you're going to want to watch what happens here cuz that is a new closing low on an IPO. And I know that it's been around for a while, but it's still an ADR. And you have to see what happens overnight tonight in Asia. And what do they do with this? Do they continue to sell? Remember their margin requirements are going to change on July 31st. You have earnings coming out Wednesday. They have a blackout period just like the US where the insiders cannot sell stock until then. So if they wanted to sell stock because of the ADR, they're not able to do that until Wednesday. So again coming in on Thursday that should it should be there because you know they're Wednesday night or exact, you know that's the way it works. It's actually going to be our Tuesday night which should it'll come out. So, Wednesday morning and that takes you into the FOMC and a whole host of other things, but taking out a low, if you were to look at this as an IPO and you're taking out the low, this is not good. I've seen good before again, and it's always those bars that you really want to watch.
Now, I think that's more, we covered this on Saturday, and I'll link Saturday's video at the end of this, but I equate that more to something like this where, okay, we have that close below there, can't make the higher high, and then we just break. And whether you're using this one or the formal break here where you try, you fail and you break. Either way, that's exactly what happened. This is exactly what you got. So for me looking at this, I think that you should be looking at SKH Heinix a little bit differently. Almost like an IPO from that standpoint. Some people aren't going to feel that way about it, and I get it. But the ADR now is completely underwater, meaning nobody that bought that is up.
Now, I want to get into some things on semiconductors cuz I do think that this is important. So the first thing we're going to do is we're going to clean this all off. And then if we go and take a look at our level down here, we hit that low and we bounced off of it. So if we look at this low right here, we're going to get that 49854. If we go here, we're going to get 500. We would have rather undercut it and then bounced. But you know, this is what we have. So we have to take what we have, not what we want.
I don't have this much selling on the socks. This is where it gets super interesting because if you look at the SMH, and someone in the community, they were pointing this out. They're right. This is a level you have not seen since like 18 or 19. You have not seen this level of selling. Now whether that's good or bad remains to be seen. It tends to be exhaustive. But SMH is got 2x Nvidia in it. So I would rather have seen the socks do that than SMH because to me what that is really transpiring is there's only one thing. They're selling Nvidia.
Now, to go down this rabbit hole, you don't have a name in the ESOC that is over the 55-day moving average. I have this proprietary, and I'll show it to you. I have this proprietary breath scan, and I've only had this leveled three three times or four times in 25 years. I'll show you in a second, but if I go to ESOCS here, and I'm not going to go through the whole thing, but I'll just show you this. If you were to go through the ESOCS, and you can go and do this yourself, and or you can just screenshot. These are all the names that are in the ESOCS and you just went through them. Every single name, every single one of them now is below the 55. There's not one now that's above it.
And we lost ASML today on the news that a competing product is coming out of China. And so they've never really had competition before. Maybe it's still not competition. And I'm certainly not an expert in that field, but I really don't think that people are going to convert to that product. But it does mean that if China has a product that competes, China's going to use it and then they're not beholden on ASML anymore, nor are they beholden on some other things. So if you were bullish on China and they came out with their own kind of EUV that could compete, this gets somewhat interesting.
But let's go back to the socks for a second. So we don't undercut and we sit right there. The volume is not on the SMH, but the volume really is coming from the Nvidia trade. And Nvidia literally opened up and then just fell apart. Now, it's this $250 billion commitment that people are looking at and they're not really crazy about. So, essentially, they're not really giving OpenAI money. Basically, they're just a backstop and saying instead of using OpenAI's credit line, we're going to have a credit line for OpenAI to if they want $250 billion. I mean, they're going to okay it. It's up to $250 billion to build out. But this again becomes that circular revenue stream that they're talking about. And that did not have the desired effect I would imagine on the market today. I don't think this is really what Jensen was going for to lose 5% of the value in a day. And frankly, it's not really what I want to see either. I want to see these companies actually have their own capital to invest. And if they can't, you know, we got to stop coming up with like funny money in some of this stuff. And I'm not really crazy about these circular things after you saw what's happening.
So that's what's going on with semis. We need semis to rally. And if they don't rally, let me show you this and let me pull this up. We need them to rally and if they don't then we have an issue. So below is this proprietary indicator that I use and it literally is over a hundred today which is extremely rare. If we got back to March when we bottomed it was something like I'll do it this way cuz I don't want to take it apart but let me just lift this up so you can see it. When we got back to March and we fell apart here and it's triggered to do this to have steep drops to so it gives me a trigger that I can see really easily. You can see that. Look at it. So what is this telling me? It's telling me that this is some of the worst breath that we've had since back in April since we had all that winning and liberation. And I only have a couple other days like this. But what it would tell me is that usually within a week or two of this, we get some kind of bounce. It's that it's really bad.
So, I'll show you what I mean by this. Like, if I go back throughout time, there's 10 years. If I just kept going, it only goes back to 20 uh I think it only goes back to 2022 or something like that. But the levels, it's literally almost at the max. It can go over 100, which would just be absolutely insane. But if you look at it, you're nowhere near anything like that. Here it goes. We'll just pull that up. So, what why do you care about this? Because the NASDAQ can't go anywhere without the socks right now. All the growth in the NASDAQ is coming from semiconductors. All of it. So, we really need to watch this and see if it it's going to give us any semblance of a bounce. And to be candid, it's not. It actually got worse today.
So, no matter how we look at it, we have to play the hint that we're dealt. The one thing that I was hoping for today, which I did not get, we have to go through some of these other names. But the one thing that I was really hoping for today and we didn't get was that we were going to close over. Let's get rid of all this for a second. Let's go to a plane chart that we would at least close over Friday's close. So, if we go to Friday's close, which was 68423, and people always ask, do you get this specific? Yeah, I do. So, you know that you have institutional buyers or sellers on a Friday. So if you can get over that level, you can see how we held there. We formed this little pushy and then we broke it, tried to get back over and then we just kind of came all the way back down, broke the put wall, and at least we closed over that. But you can't get over that level. So if there was one thing to take from this, it would be Friday's close. So you want to make sure tomorrow if we do a rally that you stay over at least Friday's close.
But that's going to take us into the week. And now what I'm seeing is what I thought we were going to see. We did cover some of this on Friday where or on Saturday's video where CIBR looks really weak to me. And if I go and take a look at the IGV for a second right here, the IGV people are looking at and going, "Oh, it doesn't really look that bad." But if we take a look at this during the day and all I'm going to do here is I'm going to turn this into a line chart. And I like walking through how I do this so that people can learn how to do it for themselves. The cues and then I'm going to take the spy for a second and throw that in. I'll throw oil in as well. And I'll throw in the socks. And then I'm going to clean this off. And then all we're going to do is go to a one-minute chart so you can see exactly what transpired today. So if I go back to the 9:30 time when all this when everything broke loose and you look at how this is playing out. Here we go. Perfect. And you can see Hold. Let me just get this perfect. And I have to do these unedited, guys. I don't have the time. So I apologize for you watching me try to use this old man uses computer. There it is. All right. So, you're up here, right? So, and then you look at where semis are, but watch as the day goes on and watch what starts to happen. Larry, not right now. And so, here you are at one:00, right? And then look at the difference at 1:00 on. All of a sudden, the NASDAQ and the SPY as the day is going on, as you're starting to get more and more what institutional selling, what's happening here? Semis are leading. Oil's going flat. The market's going flat, but they're selling these names. And you can see the selling of those names. And I think that's really important to get.
So do we have a lot of buying end of day? I think that if you went to like the last hour of the day and you looked at that, what did you really have? You really had some buying in semis from that period on. Now if I again I like looking at the last hour specifically for the next day. And I can see that I had buying in oil. I had flattish on the indexes, but I had net sellers in IGV. So take a look at this. Here we are on IGV. And you can see that you're lifting up. And so I think that's important for to point out. But when I showed you the CIBR and a couple people asked about BUG today as well, these are absolute reversals where you're pretending that you're going to go higher and then you just falter. And then you see it in the bigger names. They did this perfectly today where they took you over like, nope, that's it. We're going to go and then they just sold it down all day. So crowd P A N W P A N W. Use your fingers. And you can just see these massive reversals. These are really nasty reversals and they tend to get you down to some type of support level. Now, that's first level of support usually is the 22 and now all of a sudden you're at the 55. So, you're looking at seeing if you're going to hold the 55. And if the breath continues to get worse and we start rotating through them, there's only a couple sectors left that can get worse. Crowd's one of them. Pan's one of them. You know, FT&T has earnings this week. So, you know, maybe they're going to try to hang out into that one. But this is very telling to me that they are getting out of other winners and they're doing it in such a way where they're trying to say like, "Oh, don't look over here."
So, usually when these guys have a lot to sell, the market makers will bid this stuff up if they can. And they were really able to early this morning. And that does what? It lures retail in so that when we go here, let's just use a bear chart to take a look at it and look at what a great job they did. And so what they did here was lure everybody into their doom and then you watch those Friday closes. Friday closes are the most important closes of everything because it shows you where the institutions are. Market on close on a Friday comes down never can reach sits at that level and then around what time is that? Around 12:30, 1:00 it just breaks and then that becomes that level. Take a look at PW. It's like looking in a mirror. It's the same exact thing. So when you're sitting here looking at this and they're breaking right around the same time, that is consistent selling and that is somebody getting out of cyber security. Institutions are getting out of those names. That's my opinion. You don't have to agree with me, but when I see that it happens later in the day versus the beginning of the day, it's usually institutions that are doing that. And it looks very coordinated to me to be candid about it.
If I got into some of the other names out there like Oracle, I'd have to look at this even though there's some issues here and say, you know what, out of everything off the open, you held up. So, you know, maybe there's some kind of bounce coming in Oracle finally. Maybe, you know, it does look exhausted, but maybe I'm surprised that you weren't even able to gap fill considering how bad it got today. But take a look at Microsoft, and that's going to take us into something else here. Here's Microsoft. Here's your rallies at the end of the day. Look at the last hour and what happened. So the majority of the range on the day on something like Microsoft, so we just take Microsoft here and this is your range on the day and it's roughly what 1.66%. And then you take a look from the hour on to where you are and then you realize that out of that 1% of that move in the last hour on the way down. I think that's very telling as well because we know that they have earnings this week and if we look at the mags, they bid the mags up. At the time of recording this, I'm actually short mags. But if you look at this, you had nothing but net sellers. Even when they tried to rally and today, and then it gets you to that 3:00 level and you just mark off 255, 3:00, what happens? That's the high. And you just have that selling.
So when we go back and take a look at the mags, that's telling us the same thing. They bid us up, say, "Oh, no, the mags are fine. Come on in." And you saw this with Google. They lifted Google up like it was going to go, only to be flat. But at least it had a different day. You know, it had a different day than the Meta and the Microsoft. And I want to spend some time on this because I do think that you're setting up here to have a similar situation that you could have had. Watch when I show you this. So there's the 55. I use a 12, a 22, and a 55. See how you're hitting it, rejecting. You could have anything happen before earnings. But Meta, if Meta gets to a point where the cash flow goes negative, free cash flow, that's going to be a real issue for this company because they don't have the same kind of wherewithal that some of these other companies do.
Now, Microsoft didn't do that today. And I think that's interesting where Microsoft actually, let's clean this off so you can see it. And then I can just use open, high, low, close. You guys can always comment if you like the high low close or you just rather me stick with the candlesticks. I think sometimes it's easier to see it with the high low close, but when you see that you didn't close the same way that Meta did. Meta got you over and then closed under at a new low and the 55 is right here and you're going obviously into earnings, but then at the same side, take a look at Amazon. Now, what's interesting about Amazon is your put walls right here. Like your put wall is 230 for this. So, you're right on that put wall. Meta's put wall has dropped to 550. Now, it didn't drop today. It's been at that 550 level, but you're at 550 on the put wall. So, which one has more downside? Just predicated before it runs into support on the option market. It's Meta. So, can Meta come down to this kind of level on earnings. Well, if we look at some of these past moves on Meta. So, for example, here's Meta's earnings. And let's just take the open on the day was 7%. By the end of the day, the low was 10%. All right. So, if we took this and said 7, where's that put us? 67 puts it at 550. If you took take it that low, it's going to take you to about I think it's like 535. And then you just kind of walk through them and say, "All right, well, this one wasn't that bad." Nope. You were up for a day and then you rolled back over. And then if you come to this one where they missed and said they were going to continue to spend, that one we gapped down 10% and by the end of the day we were down 12. So, you can have a move here. And what we should probably do is measure from this close to that open and that's 10%. So really in the last three earnings you have a 10% move, right? So if you take 10, 107 blend it, you're going to get 8 and a half. But call it 10 to take a look at it. And then you again we'll just do it and say well where's that put you? You know put you through that put wall and it puts you down here at 530 put you back at this level.
I don't know how earnings are going to go, but I don't think any of these guys are going to come off a cap back. And I'm wondering if this becomes that cathartic move, right? We flush out on Meta, we flush out maybe Microsoft, we flush out on Amazon because they do what Google did, right? Would they increase that capex? And they could be increasing the capex because the price points are going up on things like Micron. Now, it's interesting because Micron's dropping and DRAM is dropping. But month over month, if you look at their core product, it's up 10% in July. Again, you're, you know, it's discounting that they're going to drop in the future, but we're not seeing that. CXMT went public to today, but their price point is no different than Micron. So, it's actually higher, which is a whole thing that we could do a whole video on, but the point that I'm getting at is they're going to have to increase capex if they just want to increase the spend the same way. And this is a point that I think a lot of people lose. So, if I was going to go buy Micron's core product and they I'll just give you the number. So, the number is 28 in January. That number right now is 48. So, to buy the same product from Micron you would have bought in January at 28, it's now 48. That's the easiest way to explain it. So, if Meta wants to keep consistently buying the same product, well, the price point went up. And so, it's not that they're just increasing to build even more and more. It's just to buy what they want, it's going up. Talk to anybody, and people can comment in the video below on this. Talk to anybody that's out there trying to buy something from Dell right now and what the price of that has gone up in 18 months. It's significantly higher than it's been. And I do think that's what you're dealing with.
So where does this put us? It puts us that maybe we get a flush event with the FOMC and maybe that sets us back up. The first thing you'd have to see with the Q's is getting over Friday's close. Can we do that? And I'm going to be real clear about this stuff, guys. I'm reaching like I'm reaching for the thing that's going to turn this around. I'm actually sitting here telling you it's so bad that maybe we bounce, right? That's where we're at right now. So, I don't see that.
What's working for us and what do I think is working? Well, we had news today that came out in regards to oil and oil clearly broke today. But Saudi Arabia after the close came out said their main plant they're shutting down. We can get into that, but you had this announcement that came out and I'll just use the spy for it where there are talks and there talks and maybe something's going to happen with the talks. So, we're talking about talking, right? And that gave us a one-minute bump and then everybody said, "Yay, we're talking about talking and then we just kind of rolled over from that point." But the point that I'm getting at here without the sarcasm is nothing is clear. Nothing is moving in the straight. So even though oil collapsed today and I'm really surprised that you have no bid on it whatsoever, but they tend to know things that we don't. So maybe you do get some relief there. Maybe that does help us. But then again, you can hear what I'm saying. I'm reaching once again for something that might help us. And I I don't know that that's what's going to happen. You know, we don't know what's going to happen over there. But it's certainly not getting better. I'll leave it at that. Despite the comments today, if you actually look at what's happening, it does not seem to be getting better.
So, if we look and say, well, what's actually working? And I think it's pretty clear like, you know, AT&T, we own, well, I put an alert out. They may have done it, they might not have. AT&T is working. Verizon, those kinds of names where you're getting a dividend. That kind of stuff is working. What else? Consistency is working. Something like spot, you know, you're setting up to break out here. If I take a look at this, you know, you're above your moving averages. Not everything is. And what is this telling us? Well, this is telling us that, okay, they want to buy those kinds of names. Why? Well, you have subscription businesses. They even tried, you know, they bought Netflix. It closed basically flat, but anything with some kind of consistency or revenue stream like that, they are they do seem to be getting involved with. Do I see some bright spots? I mean, you usually don't have a complete meltdown and crash in the market if financials are hitting new highs. I will say that you usually don't have that. You're watching the REITs or the other REITs. We're watching regionals do what they do best, which is just drive everybody crazy and roll over already. If we look at the XLR, they're breaking out and they're holding in here. So, we are seeing some pockets of strength and you can take that from it. But really, what we need to see is something cathartic and then maybe a reset. And we're going to get a better clearer picture of that tonight to start with to see what does South Korea do with the suck salad we're handing them this evening. And then what do we do with that tomorrow morning?