Transcription
A lot of developments after the close tonight. We're going to go over from everything with AVGO to what happened in healthcare, but I think we need to just start with the basics. So, we have our neckline right here, that 6544, really 6550 level. And I do want to talk about the breath because I think it's important as well. You had some really monster breakouts on some names today. I think if you look at the NDX here as well real quick and we do need to look at oil too, but you're at the same exact level. You can't miss it. And we're at that neckline and we're having a tough time with it. So, let's start with the breath of the market and then we'll dive into the fun stuff and what names are moving after hours and then what names look like they're going to move tomorrow.
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All right, let's start with the basics. We were oversold, we're back to neutral. If we go to the 4our on the NDX, we were oversold. We are back past neutral. So, the idea that we're just going to bounce now because we're oversold. This is what we got out of that. The important thing about this, and I showed people this pre-market today, is you go to the high, the previous high, and you mark that, and you realize that the 50% retracement that never happened. And I think that's a really big deal that this is where we are. So, that's definitely important to me that we didn't even we weren't even able to break that level.
Now, here's where it gets a little difficult. We have to start with NDT, and this is stocks above the 200 day moving average. We're going to clean this off and we're going to go to the breath of the market. NASDAQ 100 stocks above their 200 day moving average. And when we get to that 50 line, you can see historically that's where all heck will break loose. If you go back and take a look here on Thursday, and this was obviously during the Japanese yen. And then you can see here how we broke when we had all that winning and liberation. How we flipped the winning and liberation and held. How we broke here in November and then rallied. And then once we broke here March 2nd, since then it's just been well a suck salad. Let's leave it at that.
Now, if we go from here and we go to NDFI, this is really important because we got to a level and that level down here has been holding. Now, this is a level that you've only seen about 30 times in 15 years. I think 33 times in 15 years is what it came up with. If you're in the community, you know this because we went over it about two weeks ago. I put a whole study out on it. And the reason I'm bringing that up is when you go back and look for yourself and you go all the way back and go back to, you know, go back to 2010, 2011, you're going to note that the longest period you were ever under here was about 65 days. And that's 65 trading days, 65 days. On average, it was about 22 days. And what you're looking for when you get to these levels is okay, once we get there, and we're going to go to where it breaks the 20, which is right in here. Not now, Larry. We always want to pay attention to this and the important thing about it is this. We want to watch how we act and so up tests lift. So the breath of the market is getting better and that doesn't mean that your names are just going to go up and everything's going to be rosy because you can lift come back right down and retest. A matter of fact, if you really get to it, historically you lift and retest almost every single one of these when you hit it. So while you could be bottoming, while that is a possibility, a retest of that area is more normal than not normal in any case. So let's keep that in mind. And then we could ask ourselves, is that going to be the test or the retest or do we need more than that? And we don't have an answer to that yet. Only time's going to tell us that.
But when we go through the breadth of the market and the S&P and we look at the 200, the 50, the 20, and the five, there's a couple things here that someone's going to say are absolutely glaring. And I agree with them. You are well overbought on the five. And so if we swing this down real quick here, and then we pull this up, we're going to see that we were as high as a 78% on the 5day moving average. stocks above their 5day moving average, shrink that down, and then get to the 20. The 20 is soaring. Is that good or bad? It's actually really good. The problem with that is that you need the 50 to follow. So, if we go to the 50 and say, is that following? And the answer is it is. It's not following as fast. But when you look back on this and you go Friday, March 20th, and you realize that 80% of all names were under their 50-day moving average, and now 31%, right, are above that, that's a healthy number. So, we want to get this back over 50 as fast as humanly possible, but this is where we are right now, and this is what we have to work with. It is presenting an opportunity for us for some of the names that are moving.
The 200 couldn't get going. But I just want to before we go any further, I just want to show this because I think it's super important. And I'm going to spend a little more time on this, but I want to go through some of these names like AEHR that broke out today and has earnings tomorrow night. This is the 12. This is the 22 and the 55. That's what I use. You should use what you're comfortable with. This is the 200 day right here. What is all this telling us? Well, these are all declining. So, you still have a a huge weight on you. If you go and take a look at the NDX, you can see it as well. We can even do it with the Q's. But let's stick with the NDX for a second. What you're going to notice, the 12 and the 22, we hit, we rejected. The 55 is pointing down. Technically, you have a weight on you and you're getting to where you have a death cross. The problem everyone worries about these death cross, and I'm going to go over this again, but they usually mark bottoms. They usually don't mark what people think they mark, right? X marks the spot. It usually marks a bottom, nothing more. Just go back in historically and you can look at that. It's the decline when you break the 50 and the breath that you have to pay attention to. Anyway, it still acts as weight above us and we're not really blowing through it. So, there are names that are moving, but we have to be nimble with those names because we don't have the great foundation underneath of us. That's the difference.
All right, let's get to it. Now, this is why I really enjoy doing the pre-market Publix because I don't have all the best ideas. You get different ideas and then we share them in there. It's just not me saying what I want. So, if you can ever watch those, they start between 8:15 and 8:30 and I leave them available for at least 2 to 3 days after to kind of go through them. But, and they're public. You should pay attention to them. There's some really great ideas in there and it's always the same. I cover earnings what I think and then I'll do the indexes and then we discuss names I'm looking at and then people throw out other names and we we chart them and it could be anybody just you know first come first serve but AEHR hit that and then when I looked at it was on an options survey that I run really a scan and it was just through the roof the past day just amazing volume on the option side so when we start looking at this and then we realized they're coming out with earnings you could see that the stock was in just huge buying and then all we did was just watch it off the open and then from there let's get rid of the pre and the post. All we're doing is just watching the action. That's literally all we're doing and you can see it in here. It was just absolutely perfect. You get this dogee. Dogeis are clearly uncertainty. You have this huge volume. You can see that you have that dead space in here. And whenever you have dead space like that, we have like literally no volume and it goes like that. that means there's just no sellers. And then you could see how you closed and that was pretty much exactly what you were looking for. What made this trade so great was that was your little area right there where if you got below that then you know you had a problem on the close and what we're seeing is we're seeing some of the story stocks run. The question is for how long, right? Because of everything else that's going on and we'll get to that. But this allowed us to get up and in this trade fairly quickly and then hold it and actually be able to position ourselves going into earnings here.
Let's watch this play out live. AeHeR, did you get over? You're over. They want to be in this for earning. I'm going to buy stock. Then I'm going to go out there and I'm going to look at these calls which are freaking ridiculous. They're four bucks and I'm going to buy them. And I got them for four bucks. I bought the 50s. I'm going to hold them for a while. I think I can get the 50 before earnings. The way they're buying this damn thing, they want in this name. Up a dollar and a half on the stock. Trim the stock. Going to hold the calls. Up 50 cents. And if it pushes into 50, I'll probably trim some more and then just hold the calls. AEHR up two and a half. Trimmed rest break even. Thank you very much. A$125 now on the calls. I'm not doing anything with them. Trades paid for the calls essentially. It's free. Up four trimmed at 50. I'm just going to use the cloud I think on the rest of it. I'm up 60% on those calls. I'm not going to do anything with them. I'm up 80% now in those calls. I've done nothing with them.
Now, the great thing about this and the options actually went up. I mean, I think they almost hit eight bucks at one point today from the four that we were in. It gives you a lot of optionality because you can stay with the trade itself. You can roll the calls up. You can just lock the whole thing in and take no earnings risk, but you get a lot of optionality once you're up and in. When I do trades like this, sometimes I actually like to use the stock to pay for the call. So, it's a free trade. That's really how I look at it. But from this on, I'm really curious what the earnings are going to be because somebody thinks they know something. Now, if you look at the last earnings, it wasn't that great. So, it's going to be I'm very curious to see how this plays out tomorrow night cuz somebody certainly wants in this and they are certainly buying the heck out of the calls ahead of this as well. Now, I ran it earlier just to look at it and I'm like, geez, I wonder if this is some kind of, you know, short squeeze ahead of time, but you you have two and a half days to cover, which is not a lot. 15% of the float short. So what we're seeing is we're just seeing buying and it's a testing equipment semiconductor company. So maybe there's something there. We're about to find out and we'll see how this goes. But definitely you should put this on your radar.
Couple of these other little story names started to move. You can see this VRSN. You're breaking out as well. This is breaking out for a bunch of different reasons. I think some of these agentic AI trades are setting up really nicely. The problem with these kinds of trades is you just don't know when the party's going to end because when you have that overhang of the market, you start running into that problem. And I don't want to go down this rabbit hole too much, but I'm going to show you what I mean by this. So, if the cues look like this, and we really are running into that neckline, but if they if we have a situation where here's the 55, the 22, and the 12, and they're all pointing down, even though we're over, they're all pointing down. So, from a topdown perspective, the market's heavy. No matter how we look at it, this is very heavy. It's leaning on it. If we put the 200 in here, we can see that we broke the 200 as well, and we're getting close to that death cross. You know, usually it's funny because if you go look at the death crosses, by the time they happen, everyone always goes death cross. They tend to mark a bottom more than they tend to mark, you know, a new trend because it just takes so long. It's so lagging. So, I Yeah, I see it. It's definitely not great that we're in here, but we know this. So, what we always do with this is we just go top down.
I think there's a couple things for me to go over here with the cues that I didn't cover. But the first thing is if the indexes look like this and they don't look great and then you look at some of the sectors and all those sectors don't look great, it's really hard to get excited about staying in a name for a very long period of time. And I'm not the only one that looks this way. That's why you saw a lot of these names just roll right over. You know, one of the things that we were talking about for people that were trading like >> US after hours movers health insurance. >> Sorry about that. I'm not going to have time to edit that out. But if we take a look here, what you'll note is every time that this thing's hit highs, you've backed off 30%. So you're up. And Larry, I am in no mood. There's 30% right there. And then here we go. We hit another one. And this one was 20%. So every time we're hitting highs, we're back filling. Now, I don't know that we're going to come all the way back down, but I'd be careful of stuff like that. When you have patterns like that in this kind of market, they're just there's just no follow through whatsoever. And it's not just the optical names that we've seen it, but they're all doing the same thing. They're all running up and backing right down. They're all getting to these levels and then they're just rejecting. This one couldn't even make the higher high today. And I get it. We're looking at Sienna and all these names and everyone's getting excited. Oh, all-time highs. You don't buy all-time highs in a market where the 55 is pointing down and screaming down. You just don't do that. You can. It makes life a little difficult. What you need is you need a catalyst. So, when I look at something like AEHR, there's a catalyst. There's earnings. Somebody thinks they know something. Whether they do or they don't remains to be seen. But when you're at all-time highs here, you have to go to yourself, okay, well, what's the catalyst? If the catalyst is like, well, people just want to own optic names. Yeah, that's not really a catalyst. That's a dream, right? And that's great in a good market where everything's lined up. But when you've gone from 80 to 400, you just don't have anything underneath you. It's very different to trade like this. And this is why I think people are having such a hard time because they're not overlaying the market. So, if you think about it from the standpoint, I'll go back to the Q's real quick. And you think about the index as a foundation, right? And then the sector you think about as your framing. And then inside your house, you would have your stocks. If you think about it that way, you would understand that your house is not really going to stand up very well if the framing's off and if the foundation's crooked. And if you think about it from that standpoint, it might make a little more sense for people that are newer. But bottom line is if you don't have a strong index, you can't be looking at your name and saying, "Well, that's okay. My name's special because nothing's special, right?" But if you have a catalyst, yeah, that catalyst might work.
You had a great catalyst tonight with Medicare and that's why these names are absolutely exploding and we're going to cover that. Stat news. I have no affiliation with them, but they were the ones that came out earlier today and told you that this announcement was due out before it was out. So, they do give some indications ahead of time on this, which is good. It's always nice to at least have a clue what you're looking for. Now, after hours on the 2027 Medicare rate boost, which was supposed to come in flat, we saw Humanana, UNH, and CVS all absolutely rally. Humanana CVS climb after Medicare finalizes 248. So, you're supposed to come in and you're supposed to be at zero, and instead you're going to be at 2.48%. And this presented a huge opportunity for those of us that caught this and then went to trade it after hours.
Now, this is a great example of, you know, when you think about the stool, because I know you guys sit around and think about the stool all the time, but when you have like a macro situation where you have a macro event and then you wonder how the fundamentals are going to affect that company and then after that you start looking at the technicals of the trade. This is perfect because Medicare was supposed to be zero. That was the growth and then they came out at 2.48% growth which is obviously going to affect the earnings of these companies. And then you look at the technicals. So what happened? Who benefits? When do we get in or when do we get out and you can see the pop as soon as it happens. So you have to know that this news is there. Let's just put the top on that stool. There you go. Yay. Oh boy, it's crooked. Hold on. So what this does for us is it just puts us in the position of strength because we knew what the news was. Then we saw that the news came out and then we knew how it was going to affect the names and so that we can get involved in these trades. And then by the time that you go through it and look at which ones and then how they're going to act and make sure that they hold. Yep. You don't have to be the first bar, but you want to get involved. And you can see all this. You can see this through Humanana, which is still pushing. And you have to be pretty fast. And then you have to look at the ranges. You have to look at this and say, do I really want to pay up, you know, 15? Like that's not really going to work for me. So I have to find another way in. Maybe it's got to get tighter and then get in on that bar with that as a stop. or sometimes I'll pass on those and go to the secondary names like CNC that haven't moved yet because that prevents or presides an opportunity and this MO is a big Mike Barry name so he'll be out there talking about it but so what I did was I just did three of them and then as they traded up I trimmed them and then after I trimmed them then I just got out of the way and here I'll show you the time stamp so that you can actually see that I put them out there so that you can at least see what I'm doing. So, what I'm doing is I'm adding to them as soon as the news hits. That's just me with the little alert and the time, but then I'm just saying what I'm doing. So, I started going through the names and the ones that made the most sense to me was UNH because I could get in and then I had a little level in here that I could use as a stop as it pushed. And you don't know how much these are going to move, but I would say this and UNH was the bigger one. I made 10 points there, but Mo, we made money and CNC. The question really boils down to what happens tomorrow with these names and I think a lot of people were short and weren't in the space and now I think they're gonna have to kind of come in tomorrow and re really reevaluate what their thought process was there. So you could have a big island on UNH and I think Barry and this is just where my head goes with it. He loved this thing like absolutely loved this thing at 180 and was looking longterm and he said that you know a lot changes if they increase that. So, I would imagine that he puts a piece out soon on that name and when he does, it tends to move those kinds of names. So, interestingly enough, I didn't think I'd be talking about I really didn't think I'd be talking about healthcare tonight, but here we are.
On a secondary note, I do like when I see stuff like this where AVGO is partnering and expanding their partnership with Anthropic, but the important thing about this partnership is that we're actually watching the stock lift and stay lifted, which has been rare. We haven't been seeing that. So, we're seeing some developments here that I think are really good.
Other things that are somewhat, you know, troubling to me when I'm looking at stuff. And just FYI, I do have a short position on in Meta at the time recording this when we have these breakdowns and then you can't rally through them. And it doesn't mean that we're not going to be able to, but when you're in here and you're hitting, you have a dogee, you can't get over the dogee, you can't close over the open or close of said dogee, and then you hit the same level and reject, and you make a low. And now we're closing at that low which puts us right here. It's like the exact opposite of where you want to be. So I think that some of this stuff we're going to find out when you start to see it like this too. It's not really a divergence because you know this was high and then this was lower. But when you're hitting these necklines and you're rejecting, you really want to pay attention to that. You know, because we're not out of the woods. We're still trying to figure out what woods we're in.
And really when we look here, we keep studying crude oil and we keep waiting for crude oil to roll over, but it's not. So I would use crude oil as the guide. I do think that what you have here are a bunch of people that really aren't sure which way this is going to go. And we all have this Tuesday deadline looming. So we're watching the dollar. We're watching the Treasury market. And we have PCE and CPI. PCE is Thursday, Friday. So we have that little suck salad ahead of the end of this. The hope is that you have some semblance on what's going on with Iran so that you can see what happens with the actual market itself. What actually happens with USO, you know, all the rhetoric and everything. This is where it was supposed to end and we were told it was another week and then here's where we're at. So, just if you take a look at that, you're up about 40%. I would say I thought it was good that you did see some of the tankers hold. I did think that was a really good sign today because the tankers did hold and they're actually the majority of them are actually pushing which is actually a pretty good sign that they're actually lifting and holding. So somebody thinks that these are either going to go one into a different direction to start being busy again. Either way it would mean the flow of oil. So we I am watching the tankers pretty closely.
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