Transcription
We definitely got some developments today to go over. We're going to just start with the basics. You know, you really didn't go anywhere on the S&P, but it was more of a rotation that we saw today. And I think there's a couple key levels that we should go over. That 685 is just holding right in there. You don't really have to worry about major resistance until we're way up here, right around that 690. It's a little higher than that. And you don't really even have a call wall until you get into the sevens. So, we don't really have to worry about that either. It'd be better if this just drolled. We're going to have to just do this roll unedited, but as always, we tend to do it that way. But so you're up here at 700. So you have plenty of room. I don't really see you you're coming back down to this level where you're really busted. Like where's this busted under 670? You're pretty busted because then you're going to start closing under that 55 again. Remember I use a 12, a 22, and a 55. You should use what you're comfortable with. But I I don't know. I don't know that you really want to chase into this. You have a full day tomorrow, half day Wednesday, Christmas, and then we're going to have a full day on Friday. But the rotation's vicious and you can really profit from the rotation.
And I just want to point something out. And if you were watching today, uh, and we did this pre-market, but you can see our level right in here where we have that point of control from where we marked it off earlier today with the public pre-market. And when we dive into that, um, we can see these levels pretty clearly. So, what I'm going to do here is we're going to clean this all off. And I just want to show you this so that you can see it for yourself. I have like a hundred different levels on here. And what we're going to do is just drop it straight from there and you can see exactly where you hit and how you rejected. And it's not really rocket science, but you'd probably want to mark the top of that dogee from 8:00 today using pre and post. That's probably not the worst idea to mark the top of that dogee for yourself. Right there. I believe you can see it right there. Looks like it's 62165. Drop this to the hourly and you can see it even clearer. And you didn't really break out of that. And I do have the pre and the post in just FYI. I'm going to get into this in some detail in a second, but that's your control bar. And you can see that you really hung out near the low end of that today. But there was more reason for that. One of the key things that's going on there is you have a call wall right here. And that call wall is 620. And it did not want to break that call wall today. A matter of fact, you know, off the open, one of the easiest trades was just selling into the strength, which is what we really talked about today. Even though in the public pre-market and what we did in the community today and then just took advantage of the dips. Some of these dips were really simple to take a look at like this was not really rocket science. Um, when you start seeing it, I mean, you can't look at it. I mean, here you are, here's the lower low and the RSI is in the same spot. You know, it's pretty obvious that you're just stop hunting. Um, this presented a really good opportunity for us to like pick things off that we really wanted and where we're seeing the rotation.
I do want to get into where you're seeing some of the rotation because I do think it's pretty important uh to go through that and I do think they're attacking certain sectors on purpose and I expect that to continue this week and also uh I do think that you're going to see some of that happen a little bit more. We're going to get to that but I want to go through those sectors. So I'd watch that 620 tomorrow and go from there. I think the most important thing today was you could have broken, you could have really come down pretty hard. You didn't and you could have and you chose not to. So, we can always talk about where we're at, what's going on, but we are above some key levels right here and they are levels that we want to pay attention to. Um, you know, this RSI could have broken through. It could have broken through that net and it just didn't once again. And I think that's important. So, like we can always say, oh, it's late volume. It's this. It's a Monday. It's There's always an excuse, right? Everyone's got excuses. Um, but this is what it did and we should take it for what it is. When are you really busted here on the chart? I don't I'm adding a ton of value by saying if you break 600 you have a problem. But what you are doing is you are setting up this beautiful pattern of you have a low, you have a lower low, you have a high, you have a lower high, and now you have a higher low possibly. You don't really have confirmation to you're really above that 630. I don't know that you're going to get that until they move that call wall up. And I don't know how crazy and how aggressive they're going to be doing that. They were more aggressive with certain names. And I would argue that this is not the time to be following the herd and what the herd's doing on the most active. There's two trades that were super active today on mega cap. Um, and I'm not so sure they're going to pay off. And I'll just walk you through those for you crazy option guys out there.
So, the first one that I saw was Tesla. And I do think, you know, as I've been saying, you're going to have FOMO over 475 and and you got the FOMO. But what we're seeing here is pretty textbook stuff. We're going to get rid of the RSI for a second. Um, I tried twice. Um, I tried three times, the third time worked. But you're doing these undercuts and then from there you're starting to rally. And what we're seeing again, and I'll just point this out for you guys that, you know, ask for the educational stuff more. I'm going to start doing that um, and start trying to do an educational class on Thursday and then maybe what we'll do is even have like a workshop on some Thursday nights, like a free workshop or something for education, like just do it live, take questions. Um, if I can get a moderator, I'll definitely uh I'll definitely do it. Um, which I'm pretty sure I can get one of the guys in the room to to moderate it while I to go through the questions and everything in regards to what you're seeing here is you're just seeing that what lower what low, right? No, you have a low and then what do you have here? You have another low and that one is higher than this one. You have a lower low. So therefore, what do you have? You have a positive divergence. Positive divergence was respected. And sometimes you have to do that. You're not going to see it on the five. You're not going to get the divergence. You're going to see it on the one. That's why you have to use multiple time frames. You know, I always look at multiple time frames. I look at a one, a five, and a 15. I know people that hate the one, and they tend to use a three because they want to get rid of the noise. That's up to you. You should do what you're comfortable with. And you can see right here, there's where the algos were. And where'd you stop all day today? Right where the algo was saying, I'll take everything you have. So, they just kind of whack you down a little bit. And then the algo goes right back to doing what it was doing. You get everyone's hopes and dreams up. And then what happens? Right. You just smash them, right? Right in the Christmas. Isn't that just like mean? Um, the big trade out there, the biggest option trade out there is 500 calls on Tesla this week. If that's the biggest trade out there, I would be leaning towards the fact of going against that trade. And I really do want to go through the sectors here and where we're seeing that rotation because it's it's pretty vicious. And I'll explain why I think it's happening. But if we take a look at something like a a Tesla, I don't know that you're going to get through that 500. If I was a betting person, which I am, I think that's going to be really hard to get through that five with the amount of calls that you have up there now. I think the market makers are really going to fight you. I will say this, if you flip 500 and it's vicious, it's going to go.
The other side of this is we're going to talk about the tax side of this for a second. The capital gains guys, they're not going to want to sell this till next year. So January, the first week of January, this probably gets smoked because you're going to have people that have huge capital gains and they're not going to want to take it. Remember, you have all the capital gains and capital loss, all the tax harvesting that's going on right now, and you can actually play that. And I think that's what's going on with uh Quantum. You have people that want to play the Quantum names. Some people come out and they're pretty big on it right now, but Key Bank was pretty big on it uh late last week. So, you're seeing these divergences, but I I just want to point that out. This was the first one that 500 that this was miles away from any other option. Um and of course, they're probably going to be mega caps, which they were. The other one that really stood out today was Nvidia, and you had massive buying of the 185s, like massive. And I I don't know that you're going to see that either. So, I'd be on the other side of those thinking that they're really going to try to hold them back and not pay those people, quite frankly. And, you know, they have they have a lot of firepower to to kind of hold those things back, the option market maker. So, they might be able to pull that off. Um, obviously, this one's a little closer. So, and you know, you didn't really you didn't really fall apart today either. So, you know, this one, you know, do you want to take the other side of it? I don't know. You have to take the other side, but I think if you broke 18350, I might look at this. I'm trying to give you like actual levels I'm going to watch. If you broke 18350 tomorrow, you might want to put a little alert there. Uh, that might be something. You know, if you break that, I think you're heading more towards gap filling than you are rallying. So, we're kind of splitting hairs in here, but I don't know that I would be on either side and taking either one of the trades that the majority of the masses are doing in here. I think I would be on the other side of those right now. I don't I don't think there's a lot of edge in following the herd here. Sometimes there is. I just don't know that you're going to get that kind of capital commitment on an institutional side knowing that they they know where you're going and they know that you're going to take some some gains uh in the beginning of the year. And what I mean by that is if you have capital gains e, you know, even in even here, you don't really want to pay that 143 to 180. Anything that's up substantially, you're not going to want to take until the end of, you know, till January kicks in. Um, and we could see some of that here. I mean, you're right near high. So, clearly, you're going to have that same thing going on here.
And this is where it gets really interesting because why you have that going on, you would think that you're going to start seeing a lot of tax selling in some of these other names, right? Like the QBTS from people that were in over these levels, but frankly, a lot of these guys that are in the quantum names, like, they're going to be up on the year. and I don't think that they're going to want to sell. So, what's happening here is the slightest move in like RGTI or QBTS or QBT um NQ more so than I guess that one. You know, you're going to see these guys, they're going to kind of flip in here where let's get to January so you can see it. As long as you're above this, these people are short. You're not going to have as many net sellers in these names. So, what you're really trying to understand is what are these people thinking? and they're thinking that they don't want to pay taxes, they don't want to pay the capital gains. So, they're probably going to hold these names now. And, you know, especially if you see when you start breaking January, like those levels, it can it can exacerbate upon itself. And it and it looks like they're going to hold in here. So, I I think you're okay here on the quantum side. Um, and I think that I think there's something to that. You know what? I don't want to go that way with this yet. I don't want to get into the quantum just yet. I want to stay here for a second.
So, what we're seeing mostly with the space, especially since SATS, and you can see that you got a new closing high there on this. We've been talking about this for a while. We bought this in the community here when people started to realizing how big their SpaceX position actually was. It's also interesting because you have Google um and Google didn't really move today. And I should point this out as well. There's so many little nuggets from today's trading. You'll note that basically Google and some of these other really large caps, they didn't really go anywhere. They opened and closed the the lamb researches of the world. Um, you know, you could look at the microns of the world. They didn't really go anywhere. The oracles you know, they kind of opened up and then they stopped. And the question is well why? Why is that? A lot of it has to do is they're large caps and they're tied to the cues and the cues has they have a call wall at 620. So if that's not going to go anywhere then those names they're going to really have a tough time going anywhere. Some of them might you know might get somewhere but you're going to see the majority of those names. they're really not going to go anywhere if you're locked in like that. The names where you're going to really see it are going to be those secondary names. And really what we're seeing is people starting to understand that the entire space area, the entire area also where you're dealing with drones that is seeing an inordinate amount of money coming in here. If we take a look at stuff like AVAV, you know, we talked about this this morning and it never really gave us the opportunity. Uh, never really pulled back and we're seeing a lot of money start to go in that. Jedi is also another one of those and obviously this is defense drones and modern warfare which is obviously different than looking at something that is just really focused on space. Um, but if you go through those names you it's kind of hard to miss this. And those names were just you know on fire today. They rocketed up. Get it? Um, so you have names like Rocket Labs that just absolutely exploded and that's hitting all-time highs and of course they had that huge contract. But that's really where the money's going. Those kinds of names today as um obviously you had, you know, some of these newer ones like Fjet, which was a recent IPO, uh, and that is just on, you know, that's just all and it's definitely something worth paying attention to tomorrow. Um, it got halted three times. Three times for me is usually the charm, you know, but by the third halt, the market makers tend to catch up with the order flow and that usually marks a high. I think the fourth one happened right into the close and you can see how that's acting. And uh this was a fun one today. Traded it a couple times. Have no position on right now at the time of uh recording this. Doesn't mean I'm not trading it later this evening. Um I I'd really want to see, you know, where this thing opens because you had this huge move up and then from there they halted it and then it was like the 4:00 halt. I just think a bunch of people were like, "That's it. I've made my money. I'm getting out. I'm not going to deal with it." And you have the huge puke right here. And now you're starting to try to hang in here on this level. Now, whether or not you hold that, you know, remains to be seen. Depends how aggressive people want to be today. But I do think it's really important to point this out. You you didn't roll over and you're going into some of these other areas that are super important, you know, and look at like UFO and what's going on there for Monday from the Asia level. you're kind of holding. But more importantly, when you look at this, it's really hard to ignore. And it's really hard to ignore things like this. When you came down to that 55 and the whole thing held, and I I truly think a lot of these contracts end of the year were a bit of a surprise. You had a lot of insiders that sold this day, a couple hundred million worth of stock, huge percentages, uh, and then two, three days later, they're getting this contract. So maybe they thought they weren't getting it or maybe by the time they filed, you know, they didn't realize, but by the end of the year, you you're starting to see that. And it makes sense that a lot of governments try to get those contracts done before the end of the year so that they can, you know, increase the the amount of money that they ask, you know, Congress for uh before next year. You know, if they don't spend it, then they don't get the the increase usually. So uh there is something to that. I do like the space. I don't know that I need to chase the space. That said, these names look pretty poised when we when we clean clean clean them off. You had a call wall at 80. We went through it like butter. Uh, we just kept exploding right through it. And it actually flipped that level at a point today. If we take a look here, let's get to that. Uh, right through 80 and it didn't have to break the 80. It truly didn't. But if you look right at that when we got to it, tested, failed, tested, couldn't get near it again. It becomes support and then just lifted. So tomorrow we'll get a better understanding of where all the option market makers are. Clearly they're going to be higher than 80. It's not going to stay there. And I think that's really important especially on light volume weeks. So like 275 was the call wall here and then we could see how that went today. You started using that and that they flipped it. That started to become a level of what sort of becoming a level of support. And when we see that we we don't want to ignore it. We want to pay attention to that with Micron and go from there.
But what we're seeing really too in my opinion with like the quantum names uh to get back into these sectors is you are seeing rotation into those names. I do think that that can continue. I also think that what you're seeing is people starting to realize that retail in and of itself really does not look as bad as we're being told. Now we had CCL last week and CCL obviously they reinstated their dividend which has been years since they've reinstated that dividend. Years and you're seeing that followthrough. And they were talking about how people are upgrading their packages to bigger cruise line packages. I'm not really a cruise guy. You know, you guys would know this stuff more than I would if you if you go on cruises, but I think that's very important. So, where do I think this leads you and where do I think that you should be paying attention? I think you should be looking at the smaller cap names. I definitely think there's something to that. Uh, it's definitely something that's on on my mind, the smaller cap names. I I really wouldn't sleep on that. you know, you probably want to spend some time there. If I start going through my list, you'll see all kinds of names that have a lot to do with space, like KRMN, all these little names, all these little guys, they were all over the place today. Lunar with that follow through. Anything space related really probably wants to have your full attention. I do like gold a lot here, too. I thought gold was pretty interesting the way I'm trying to get give you specifics so you have levels for tomorrow. Um, I really like the way gold acted today, the way you broke out. I did think it was super interesting that, you know, the NEM was open and close and that's all you got out of it. But I think the volatility is really your friend, meaning looking for those kinds of pullbacks or selloffs. One thing that you're not seeing at all, I'm not seeing anyone really care about the pot names and the fact that that schedule changed. It seems to me that they're kind of on to the next grouping of names. So, you have all those names out there that have to do with uh, you know, obviously the the mushrooms. And I think we're starting to see people flowing going, okay, well, what's the next one that might start seeing some more of decriminalization or change in schedule? Um, and if we really take a look at what happened today with like MNMD, I own this one, by the way, and I do think that this is going to get some kind of scheduling or some kind of lowering in regulation where you do see something there where they can use it for PTSD. Uh, obviously it's got really good results when people you know people talk about it and you see some of these things out there that they post some of those studies. Um, obviously 14 and a quarter would be huge. You are seeing them look for hey, what are the what are the really beaten down ones? Uh, and you can see that even with MRNA you know, you tried to break out today and I'm really surprised by this and how strong that was. So I would look for your second tier names and that would really be my focus. tomorrow you get a huge data dump with GDP, some PCE price data, and that's really where my head would be.
The one name that I really am looking at on the long side, there's actually, you know, there's actually two that I'll give you that are like the big dogs on the long side. Um, AVGO is really put in that bottom in my opinion and this has been a level of massive support. We can see that right there, right? And obviously this was your first higher high and now we're holding that area which is exactly what we want to see. But I think more importantly when they do that rebalancing that everyone and their sister's aware of now a lot of it's factored in already now maybe we're not you know rocketing rolling right now but as you get closer and closer to that and I believe the I believe it's tomorrow is the last day for that. I think it's the 23rd when they're going to they're going to do it not the 24th. So that would be the close of tomorrow when the rebalance kicks in. So after that rebalance they're done. So the net selling pressure or net buying pressure of those names should start really alleviating tomorrow. So, you might want to watch AVGO on that. The other thing is with the tick tock deal here, um, and you know, you have some resistance up here if we were to really dive into this. I think around 200 is going to be a little bit of a pickle. But if we really look at Oracle, Wells Fargo came out today and said, "Hey, they see 50% upside potential in the next 12 months here." Uh, you can read the article yourself. It's on the tape. But I think you could have an issue here. But also with them taking in Tik Tok, uh, they really increased the amount of free cash flow coming in enough to basically pay a quarter of their entire debt service. You know, like one year would equal their entire, you know, one quarter of debt service. I think that's super important to get just from the Tik Tok, their percentage of the Tik Tok profitability. So you might see some stabilization in here and going, okay, this might not be as bad as we thought. And if you guys remember, you know, everyone was a CDS expert. Um, CDS is a way that you can look at insurance on a bond. Remember when we talk about move all the time and we can see how moves imploding. But with Oracle, the the insurance was going through the roof. And you know, the insurance was like 12% and increasing. And now what you're starting to see with that is you're starting to see there there's a little bend in here. Yep. So now you're starting to see it look kind of like this. It's starting to slope down a little bit more. And as that starts to slope down, the people that because this is the trade, the trade is you take the you buy the bond, you buy the insurance, you short the stock. So in other words, they b they buy the bond, they they buy the insurance, and they short the stock. And really from that, you're getting a sense of how this is playing out. And they they have a habit of doing this, too. They have like really bad earnings, and then everyone's like, "Oh, the company's dead." You can go back through history and look at this, and it's like three to five days, it gets kind of washed out. I think this one took six. Um, and then they kind of figure it out. But I think the Tik Tok really when people that understand the balance sheet and you watch how that CDS is coming down, it's probably getting to that point where you put a bottom in here. I I think you're really getting there with that. And I think that this is definitely worth your attention. I went through a bunch today and I tried to do it broad so you can kind of see where all the money flow is going instead of going deep so that you have some ideas for tomorrow. That is it.