Transcription
Well, we obviously all saw the news about world peace and the fact that Iran and the US have a, I guess they're calling it an understanding. They have this document. We're going to call it an understanding. The more it comes out, the more it looks pretty sustainable because it's pretty broad in what they're saying, but the important thing is the market bought it and the market continues to buy it.
Now we have some buying going on here in the spy. But the important thing is that we held the open and the open is the low. If we look at the cues, we can see the same exact thing. This is exactly what you want. And the important thing is we saw who the leaders are. It's not even a question anymore. And it's not just the socks, but it's very specific parts of the socks that are doing the driving. And I'm going to show you how to differentiate this so that you can do it for yourself. Let's get to it.
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We all saw the open and I think that this is very important to get. We'll look at this breakout and we'll look at how tight that area is. And this is important whether you have a lot of volume or a little volume. We can argue that later. But what's important about today's move from my perspective and how I look at it is see how tight this is up here. You don't even have an average range. So this to me means we opened. People are saying to themselves, I missed it and I don't even have the actual average range. And you can actually just take a look at what an average range would be. And it's very easy to do this. You know what we'll do is we'll go here and we'll go ATR and I'll just show you. So if you go to this line and let's make that line white so that you can see it. I don't believe you can see the red. So we'll make it actually, we'll make it this so you can't miss it. There it is. Look at it. All right. Cool. So you see 30 points. So if we look at from the open and we'll get rid of the magnet before it drives me nuts. And we'll just go here and click on 623. Right. And then if we look right to here you can see where you closed. So on that move just on the day you only moved like $4. Now if you take the whole move from here up you can see that you closed on the ATR but the move itself was not broad-based meaning well was not 30 points out of the rip. It was a gap trade. So if you weren't in from Friday and you bought the socks and you came in today they really didn't chase the socks.
And then if you look at SMH which is 2X because 2X Nvidia that's the waiting in SMH you see something similar but wait there's more. There are subsectors of the socks that can help you in understanding what's moving. There is ASOCS that I've broken out in the past and then there is ESOCS which is the equity waiting and you can already see what's happening here but I just want to take a second to walk through it. So if we look at something like ASOC and we go to this level and we see these names well there are big names right there that's going to be your Nvidia, your AVGO, those kinds of names and did they move kind of? Yeah, they did move and some people had some really good trades on those today obviously but from my perspective we always want to see where is the real money going and if we look at ESOCS we can see that breakdown.
Now for those that are newer to this channel and the way that I trade. I think it's really important for me just to point this out. I just am top down. So, it's not just stock to me. It's index and then it's sector and then it's stock in that area. So, I look at index, sector, stock. And that would tell you exactly how I view the market. So, I'm not really interested if the ESOX is breaking out if the NASDAQ looks awful. That doesn't work for me. The other thing that I use is I use the macro and I use the fundamental side of the market. And then of course I use the technical side of the market. And this tells me what, who, when, right? And that's how I use it. Meaning what's going on, who's affected by it, when do I get involved. You can have the best idea in the world. You can have a company that invented air, but if you had all that winning and liberation in April 25, it didn't matter, right? They were just going to sell everything anyway. So it's what's going on. World peace, who's affected, everybody. Oil's dropping. European markets are going to move, Asian markets are going to move on that. When do we get involved? We would look at the technicals for that. And then which of those names do we we want to look at? Well, we want to look at the index that your stock. This is how I do everything with swing trades. Day trades are very different because you're going to lean on the technicals. Really, with day trades, you're looking at the names that you like, and we're going to get to that on how you can identify those from a Friday to a Monday. The most important days to trade the closes are Fridays to Monday. We're going to get to that. And I I want to cover that today cuz it's the second time this in the past two weeks where this has worked literally perfectly and I want you guys to understand the concept so that you can do it. So we're going to cover that the more I think about it and then we're going to cover a bunch of other names and what's going on with the rocket space out there.
Let's clean this off. So we can see that the ESOX is moving. So let's go through this so that you can see how to identify this. So there's the NASDAQ. NASDAQ's rocking. Yay. And we're up. Now the important thing too about this was 740 is going to be your call wall which is where you know that's usually a resistance point. 80% of the time you're not breaking those. Now if we go and take a look at this and no it's not drawn perfectly and don't comment on that but because you're always welcome to comment but let me just drop this down here. Drop it like it's hot and I know they still say that. So I think this is really important. Whenever you have a call wall and you watch it and you could start seeing that the call wall started to become what support. So you knew and that was by after the first hour. So you knew okay we're going to hold here. We have the probability to hold and of course you have the higher highs and how you would trade. And then of course you look at the ESOCs and you can see what's going on there. And of course that's going to follow very similar pattern which it does and then starts breaking out. But what you can do with this is you can start running through those names. And I'll show you I do this and then you can do it for yourself too. But you click on the ESOCS and then you just click on all those names and sort by change and you'll see what's going on out there. So for example, you saw Wolf that was up the most, right? And then you had Micron, Marvel and you have that whole edge trade that's working right now. ALGM's breaking out. ENTG's at all-time highs. O and you're starting to see all these different names instead of just looking and saying, "Oh, Nvidia's doing this or AVGO is doing this." And you start to see what those driving forces are behind everything. And I think that's a very important concept for you to get.
So what do I see here? I see a broadbased rally in the market. I see broad-based buying in semiconductors. It doesn't matter what I think. And this is so important. And I was doing an onboarding call today and somebody was talking about how negative they are on the market. Whether they're right or wrong in 3 months, this is the hand that you're dealt. If anyone ever played poker before you, that's the hand that you have or played cards any game. This is what you have to deal with. So you have to trade what's in front of you by using index sector stock, macro fundamentals, technicals. So it's very hard for me to look at this and say, "Oh, we have issues." Especially when you just went through all this and you came down, held your 22 and your first close over it held and now you're hitting all-time highs. Hard to say that things are bad and that we're just going to simply fall right back over. A lot of people are out of position because they didn't buy in here and then you come into Friday and now you have world peace and now they're out of position. At the same time, you look at what's going on in the bond market and the 10 years now below 450 and we're going into a Fed meeting on Wednesday and he's clearly not going to raise rates and he might not want to really saber rattle, right? So, when you put all that together, you have a lot of dry powder going into the weekend, going into a Fed that's probably not going to do anything. And candidly, that's going to be pretty wild on Wednesday and we're going to cover that. But when we look at the world this way, it makes my life a lot easier. Then what I want to do is then I can go through those names and I can make decisions. You had an upgrade on Micron today. You have SanDisk which looks like it's going to rip everybody's face off. Right? We have those names that we can see and what's going on out there. But most importantly, the process is working and I'll explain what I mean. Meaning the names that they bought on Friday, those names that institutions bought when they had the opportunity, they wound up buying more of them. Let me give you an example of this.
So let's take a moment and focus on what is working and let's focus on what's not working. And I think this will be very helpful to people especially in these kinds of environments because you're getting the volatility that you want on these names which is exactly you can trade that volatility but there's certain things that work very well in these environments. So we'll get our super secret magnet on and we're going to mark this off. And the one thing that I want to say to you is you always want to watch Friday's closes. And Friday's closes are the most important closes of the week out of any single day. And the reason is that's when the institutions and pension funds tend to really balance their positions on whether they want to be long or short. And if they don't get as much off as they want, meaning if they want to reduce or add, they look at the where they're at the end of the week. They trade very differently than us. If they want exposure to this name, they might say we want 5%. Well, if it's Kalpers or one of these funds that's billions of dollars, they just can't go market. They have to scale in. So, but the end of the week, they'll look and then on Friday, they just tell their brokers or their traders, hey, add another 100,000 shares, right? Very different, of course, than how you and I are trading. But the important thing for us is understanding that Fridays are the more most important closes. That's why people will build entire trading positions around that level and watch those levels on Fridays. And that's why if the market ever sells down on a Friday, it's usually a much bigger deal than if it rallies on a Friday and closes strong on a Friday. It's very important to watch that last hour. But that close is important.
Now, if we just do something as simplistic as dive into this and then what we're going to do is get rid of the pre and the post and then we're going to go to a one minute chart. And I just want to show you this. So, we open up and we completely implode the whole way down. So, you're going to get retail. And what's retail going to do at something like this? Well, they're going to panic and they're going to get out of it. And that creates opportunity because you need this kind of panic for an institution to get in. But if you know where your put wall is, which is 395, and you're at the previous close, all you're doing is watching this. And you're watching your dogee right here and your dogei wicks. And when I did the trade in this today, and we went long just for a day trade. And the important thing about this is that I'm not out there. And when I did this trade, and I'll show it to you live, I'm not looking at anything else. I didn't look at the volume. I didn't look at RSI. I didn't look at a moving average. I didn't look at, you know, the private cloud that I use. I didn't use anything else except watch the price. So whether I'm doing it through candlesticks or I'm doing it through this, it doesn't really matter. I tend off the open to like looking at candlesticks. And I'll explain why. If I have a long red bar like this and then this one's shorter and then it ends with a dogee. Dogeis are uncertainty. They show us exactly where we want to be. So, especially a long-legged dogee is perfect. And so, what you're getting here because long-legged dogeis telling you you have rejection up here and rejection up here. And then you're watching where do you start filling in on the dogee? So, you start filling in up here and then you start filling in here. So, that's why I like using candlesticks in this position. You can see that you start getting bought in here. You start getting wicks to the downside, meaning they are now rejecting selling this area right in here. You can see it right there. Look at. And then we flip up and then we start seeing buying and then the buyers push and it presents an opportunity for us to get in and have a fairly decent day trade as it comes back in. And then as it's popping from a day trade, you scale out into obviously positive slippage because you'd rather scale out in a day trade into positive slippage versus obviously the negative slippage when it's coming down here. Watch this play out live. You see how you came all the way back down to here and you're holding 395, 399. Let's watch this if it comes back down and retests and we're coming down more. I bought Dell lower day stop and I'm going to sit with it. I really should wait for the retest of this area, but I don't know that I'm going to get it. I jumped the gun on that. Your put wall is 395 now. I'm buying it on the put wall as well. I'm up three on that. So, I trimmed into that very small and the rest is low a day here. And that'll reduce the risk of the trade. That's what I need. 405 on that. I'm up six. I trimmed. And now the rest of that I can just leave at my break even. I don't have to do a thing with it. Thank you very much. Real level is going to be that little wick right there. I trimmed more. I'm down the half. I'm up 10 on that dough. I took more off. I'm down to a third new highs. This is why you sell into them. Dell's done probably for the day. I have a runner. I'm just going to leave it and let it go back to break even. I always read your comments. So, please comment. And the reason I'm taking the time for this is I was asked, "Hey, start showing more live trades and start talking about why you're doing them so that you, you know, not just from the community, but so that you can see what we're doing." So when I trade live, they record it and then John will just actually uh actually denote it and translate it when I'm doing it. But the important thing about this is if you come in on a Monday morning and you want to buy something like a Dell and it pops up, you can just watch those Friday closes and see if you get retest and see if it holds. You might not have gotten the retest. There were a lot of names today that you had no shot at getting that on because we now have world peace. But the important thing about that is that's also a great way to get involved in a name that you want to be in a swing trade and then just buy the thing and then basically you know exactly where that support level is. So you know you held Friday's close, you know your put walls there. So if you're doing this from a swing trade and you're like I I think in a month I can get back to this level, the 466, you know where your stop would be placed, right? You should do what you're comfortable with, but this is a great way to look at this.
Let's get to some other names. Now that we understand that, we can do the same thing in very different circumstances. Let's take Oracle for example. Oracle kind of came down there but didn't, right? But then you could look at the IGV and is the IGV does that look anywhere near what's going on out there? Does that look like something I need to be involved with? Maybe I caught the bottom, maybe I didn't, but it depends on what kind of trader you are. If you're looking for value names and you're waiting for them to come back, that might be your trade. If you're looking for the Momo during the day, that's not going to be it, right? So, we would know that.
Another way to identify this is do the same exact thing I just did with the ESOCs. I'm giving you these examples because you're asking for them. But if I take a look at something like the ESOCs and I went through those, I can also do the same thing with sectors. So, I can literally go through the sectors. I put 40. I think I'm up to 41 in here. I try not to do I have like 190 in one but I just try to keep the top 40 in there to not get too goofy and you can see that well gold clearly but it wasn't able to sustain that SMH clear breakout block you had a nice move not really able to sustain it XLK let's get rid of that able to sustain it robo not really able to sustain it and on you go through the names right and then all of a sudden you start seeing oh biotech's breaking out and so this helps you identify where they're going with their movements, right? So that's why a bunch of people when they look at something like XBI, they'll start going through all the biotech that they like, they might look at something like a CRSP, see if that's moving, or go look at the big guys and go say, "Is Amjen moving?" Until they find the names that they're looking for, right? And it could be anything. It could be anything in biotech. Could be tea. It wasn't clearly. What it seems to be for whatever reason that people are playing with is genomics. And I don't know why they're in genomics. I don't know why genomics is the cat's pajamas right now. I almost said cat's bananas, but it's not. It's cat's pajamas. So, we want to watch this and we want to see how this goes. And I think that's kind of interesting, right? So, that's definitely something that's on my radar that I would like to pay attention to going forward because we broke out, failed, broke out again, undercut, failed, and now they're buying that again. But we find those names by identifying what sectors were the hottest, and then we drill down into those. I hope that makes sense.
That and relative performance also tell us a story and I'll show you this in a second. But what I want to do before then is get into some more of these names that are also in the ESOC. So if I look at something like Micron today got an upgrade $15 $1,500 target price and the stock is clearly breaking out. If we take a look at the storage side of the market, you had a bunch of upgrades in there as well on the Seagate and the Western Digital side, right? And everyone's starting to feel a little bit more comfortable because crude oil is dropping. And of course, if we take a look at crude oil is telling you exactly what it thinks about this and what's going on. Crude oil dropped $5. You are clearly breaking the 12, the 22, and the 55, and they are rolling over. So, they are a very firm believer here in this that this is going to stick. Whether or not it does or doesn't, everyone has their opinion on it. I'm just looking at what's happening and they're selling that which means that's good for the Asian markets. So if you understand how strong that is for the Asian markets, that's why you're seeing EWY almost taking out the highs and we'll see what happens in, you know, Asia tonight and we can also see what happened in Taiwan and how Taiwan's almost back to highs as well, right? This starts to make sense as you connect it.
All right, so we get back to Micron and we can see Micron's breakout there. We can see that SanDisk, which we've been talking about for some time. We recently put another swing trade on in the community on that break. I think we're up, you know, well over two something on it, 200 something points. And then, of course, you have just like these ETFs like DRAM that are breaking out. And some people just like to trade DRAM and the SOL because it's just easier instead of picking what name's going to move. But you saw massive amounts of buying in these names today. Whether that be ARM, which rallied up substantially in the past couple days after hitting that 22-day moving average, or Marvel, which came off that bottom and came off that 12-day perfectly and now is back over those levels. 300's your call wall there. So, you're seeing movement into those names. So, we really want to pay attention to that.
The other thing that we're starting to see, and I'm going to give you an example of something that I picked up today, and when I saw it, I had to really kind of reposition myself, and I I'll show it. I don't know if it's true or not, and it's speculation, but I do want to show you it. But if I take a look at something like UFO, well, clearly I'm below now that 55day moving average. This is not where I want to be. This rebalancing was run very poorly. You can see what's going on with AS. you're trying to hold that 55. Somebody mentioned that they have launch this week and maybe that'll help. It looks like that launch is going to be with SpaceX. We're going to get to that in a moment. It does not look like it's going to be with Blue Origin. And then Rocket Labs got an upgrade, but it really didn't do anything. And I think you have a lot of weight on those names right now as the ETFs reposition themselves, but also as other funds reposition themselves and saying, why do I want to own Rocket Labs and AS versus I'll just buy the best? I'll just buy SpaceX, which is now clearly the best. And if you're looking at today, it is very clear that SpaceX made a decision whether it holds it or not. It's pretty rare to watch this thing just kind of roll over at this point and then kind and then come back. We had a couple day trades in that are actually scalps in it, which means I'm just we're just trying to pull money out as fast as possible. But I actually did put a decent sized position on in this at towards the end of the day and there was a you know there was a reason for it, but I'll get to that. Let's go over that.
So I'll show you this and I thought it was super interesting. So I'm big on relativism and watching what's happening. So I'll have a screen up and I'll have a screen like this on one of my screens and I'll just show you this. So, here's SpaceX. And if I look at SpaceX here, and then I drop right into here, you know, let's do it this way. So, all of a sudden, I'll just do it volumewise and you can say it. All of a sudden, around 337, we're rolling over and then we pull back and then you can just see that it just starts to really rally. At the same time, if you take a look at Tesla, which did catch end of day, but now it's down. If you look at this 337 level, all of a sudden you start getting sellers coming in and they just start pummeling it, right? And then it just starts rallying again, but you can see you're down a couple bucks and a day. For me, this was a tell. And I I could be wrong, but if they're selling Tesla, see, my premise on buying Tesla was this merger. And I don't know anything. I want to be really clear about that in regards to any inner workings of this merger. I still think it's a possibility, but I think something happened here where people said, "Okay, maybe this this merger doesn't happen and someone got spooked." That's where my head is with it. And when I saw that, I saw SpaceX and I saw what SpaceX was doing. And when it made that kind of move, I got involved in SpaceX and I'm still candidly in the trade at this time. I have a fib level up here at 2011 3/4. I don't know if there's some piece of news out there on there. I couldn't find anything. thing. If someone has a rumor, you can drop it in the comments and we can talk about it. But I do think that is important to note and it happened at the same exact time. If you do it, do this. And I tend to look at things this way. If I'm interested in some kind of merger or something like that and I see something like this start to take place where one's dropping out of nowhere and one's ripping out of nowhere at the same time, I don't really believe in coincidences. You know, I've been doing this a long time. I don't really believe in that. And so for me, that was kind of a tell that they, hey, they're leaning this way. They're kicking out one and they're buying the other. The other thing that was super interesting was how weak the option market was on Tesla today despite the stock being up. I thought that was interesting as well. And I want to leave you with one piece because if you're looking at Intel right now and you're seeing that it's down, semi analysis had an article out. I don't think it's that negative, but it's being perceived as negative and that's why Intel's down a couple bucks after hours. That's it.