Transcription
S&P is flat. NASDAQ is flat. But if we take a look at the allworld index, it's absolutely breaking out. And what we need to focus on is why that's happening. What the heck is going on with software? How to play that? And how is that affecting the NASDAQ? Where is all the money going? And why are people looking at defense names again? Why are people looking at the industrial still? Is there any bottom that's going to come on the dollar? Why did we finally see it stop bleeding out? This all ties together and really even ties into the way that you should be trading SanDisk. And I know that sounds pretty far-fetched, but we're going to dive into it. There's parts of this video you're going to want to watch again. Let's do it.
Now, when we see trends, it's always important that we understand them, and we're going to get to that. But when you understand the why, the macro, and that's really what the stool is to an extent, right? What exactly is going on? We always want to understand the macro part of it. And I I want to explain this as to why I'm saying this. And there was a really good piece put out this weekend that you should watch. Morgan Stanley interviewed Duck and Miller and I don't know how they got him to do the interview, but it was good. So, if you just Google Morgan Stanley on, you know, use them internets, use YouTube, uh I think they have their own channel, you might want to watch it. But he talks about this and I thought it was really poignant. You want to understand the macro side of why something's happening, right? And what exactly is going on? Really important to get that and not just looking at the technical side of it because you'll understand why the technical side will start to fall if you understand what the heck is actually going on. And you don't need to be getting into migration patterns of birds over here to figure out what the heck is happening with the technicals. You need the action.
Meaning if you look at something and here we go on a tangent already, but if you look at something like Nvidia, AI is not going anywhere. Who makes the best chip? Nvidia. Until Nvidia no longer makes the best chip, people are going to buy chips from Nvidia. Up, down, until margins are an issue. Everything else, the stock's going to bonk around like it always does, and eventually it will catch one day. But we know long term that AI is not going away. It's becoming too productive, and we're seeing this consistently. Do I need to understand the differentiation between a GPU and a TPU and how a TPU stacks and takes up less space in a data center? Maybe to some extent, but do I need to get into the that nuance? Not everybody does and not everybody wants to.
So, where am I going with this? As we went down the rabbit hole there, we're getting to the point where we're trying to understand why in the heck we are seeing the world index outperform. So, the easiest one for you to use, let's get rid of this for a sec. And let's go to just this chart so that I don't screw anything up in my charting system. And let's drop this back to a daily. And as always, if you're new here, I write a framework out of topics that I want to cover that I think are most important to get you through the week and to make you as prepped as possible for the week. But this is raw and unedited and it's done on purpose this way. So, we just tap into the vein and we go where it goes.
If we take a look at ACWX, and we note right here that this is XUS, meaning we're stripping the US out of it. There are two major events that have happened recently. But the first big event that happened was when we had all that winning and liberation. And you guys will remember this. We were swimming in winning and liberation. I'd never had so much winning and liberation in my life as I had in here. And why is that important? Because when that transpired, the world realized that it changed. And when we saw that change, they realized that they had to invest in their own countries. Meaning they meaning other countries realized that they had to invest in their own countries. And that the US was just not going to be the de facto police of the world. And if they were, there was a bigger price to pay. I think we would all agree with that. So why we can say we pause the winning and liberation, we could look at the dollar and we can make a real clear distinction here that why, you know, everything's fine. Nothing to see here. Doing my best. Kevin Bacon and Animal House. When you start to see this, does it look like everything's fine? Does it look like Norway and all these other countries were just like, "Oh yeah, no, he's good. No, we're good. No, we're good." No. They're like, "We're not doing that again." And then we have this little mark here, and this is not part two. This is, you know, a subset of one. You know, give us Greenland or we're going to tariff you. Um, that went over like a ton of bricks. And and so what these places are doing is saying, you know what, the dollar and the stabilization of the dollar, it's not as stable as we once thought. We're going to have to trade there. And we have the tariff move that's going to make them want to trade more. Now that they understand that, hey, we can only do so much on the tariff side. They're going to want to trade with us again. Not because they didn't want to, but before, but now they understand the rules.
If you're playing a game, and let's go back to ACWX, but if you're playing a game and the game rules change, and I don't know how else to use it, but to explain it as a game, and the rules change every single time, then all of a sudden you're going to have a problem with the game because you're not going to understand how to win or how to get to the objective that you're trying to do. So, what will people do? They'll just stop playing the game. When the tariffs kicked in and then we're told, you can't do it that way. You can do it this way. However, all of a sudden, they understand, oh, okay, I got it. I understand the rules. So trade's going to come back and and I think the dollar will stabilize, but that's not going to stop the de facto of what happened here. So as we get into ACWX and we see this lifting up, it's really important that that the tariff side of this is one side of it. The other side of this is defensive. And this is important to get when we look at EU AD. The important part of this is to understand that this is Europe's aerospace and defense. And for time sake, we're going to do it this way. And I just want to clip this out because I think it's important. This is directly from NATO and this is December 18th, 2025. And they obviously did this before. But what I want you to do is just understand what happened because these are two things that are changing the entire landscape of what's happening over so that you understand the what and and I don't think you need more than this. I think if you understand how they're viewing the the taxation and liberation, I think if you view the tariffs, I think if you understand the defense side of this, you'll understand why what's happening is happening.
So NATO 5% commitment and this was updated December 18th 25. NATO has common definitive defense expenditures since the early 50s. Definitive agreed by by all allies and they they define it in here for the purpose of what the definition is to say what defense expenditure actually is. Major components of defense armed forces financed within the Ministry of Defense budget armed forces land maritime air force and they expanded it to space and cyber. And I think that's important just for us to point out for a second but take a look at this part of it. They have a 5% defense investment commitment. At 2025 at the NATO summit, allies commitment to investing 5% of GDP annually on core defense requirements and defense security related spending. They would allocate at least 3 and a half% of GDP annually based on decreed definitive NATO defense expenditures, resource core defense requirements, capabilities, and targets. Why do you care about this? And you're welcome to read the rest of it. Why do you care about it? Because it wasn't like this before. If you look at what these comp or countries were spending, it was nowhere near anything like this. I think at one point Germany was at 1% and other and other countries were obviously a little bit higher, but it was nothing like that. So if you take a look at what happened from February and March at that same time period after the winning and liberation, we ran up, we came back down. And if you're in the community, you're already aware of this because we've been talking about this one for a while. It's a real easy way to play these names. But what does this really do for you? It makes you understand that they're investing in their own infrastructure. They're investing in their own industry. When I say they, it takes us back to ACWX. And then that ties you back into what what we were just talking about, which is come on, work with me. There it is. And that ties you back into what's the macro change that's going on. And then fundamentally, who's going to benefit from that? And then it ties you into the technicals. So if we understand here for the basis of what we need to to do to to drill into this now is to understand, do we think defense spending is going to slow down? No, we do not think that they're going to say, you know what, we're not going to do this. No, they're going to do it. They don't really have it's not optional anymore. All right. So, we know that that's not going to change. Is anyone expecting stability right now on the tariff side? No. But they still are going to invest in their own country because of what happened previously and you have this administration for three more years and then who knows who you have after that, right? We don't know what's going to happen by Tuesday. So, trying to predict that stuff is kind of silly. What we do know is that investment back into their own countries versus what we're seeing now is a core driver and we're seeing industry thrive. That's why when you drill into the EUAD, you'll see names like this where you're seeing Rolls-Royce and we go take a look at the earnings from here from February was $9 and you're up 100%. And there's a bunch of these names like that that again we went through a bunch of these earlier and I don't think the easiest way to play these is to start becoming a master of European defense names. Um you can do that if you want and we have a bunch of people I think I think a decent size of the community is like you know five or six% is actually in Germany. Um but and they know these names way better than I ever will. But you're building these bases on some of them when you came out of that and some of these names are already up well over 100%. So what we want to do is just watch them. I don't think that there's a big deal to rush into them at this point, but I do think it ties you all back to this and that is ACWX. All right, let's do it.
So now clearly we understand exactly why this is happening. And when we understand just that surface level ability of it, we would know what would have to happen for this to change. And I'm going to give you another example of this. But now when you're on your Tinder date, you can go out there and explain why the dollar is dropping. And women love that kind of stuff. So, let's get to it here. E acide that by let's just do it by the spy, but let's do spx, right? And why are we doing it this way? Because they're taking it out. Meaning ACWX strips out the spy. All right. So, here we are on a daily chart, and we're going to do this in a couple different ways, but what we're going to start with is just go, "All right, well, that's a daily chart. Okay, well, that's something. Let's look at the weekly. All right. Well, this is what we've been doing forever, so we don't really see any change." All right. And then we're going to go to the monthly. And you would look at this and say, "You'd be crazy." Well, I've been called that before. So, it won't be the first time, won't be the last. So, here's what you're seeing. And I think this is really very important. We obviously have this trajectory down. And I'm not predicting this great everyone's going to leave the US and go and invest somewhere else. Far from it. Right? We have the one thing that we are really good at is exporting our capital markets. We're the best at export. If you ever want to know what the what we export the best, the US, we export our capital markets better than anyone and China benefits from it greatly by getting access to it. But we have this channel right in here. You can all see that channel. And what you do with a channel, when you make a channel, is you just click I use Trading View. You should use what you're comfortable with. There's a button here, clone. Why do you use that? Because when you clone, you're going to get the same trajectory of the channel. And what you want to do is that trajectory should align somewhere. And if it doesn't align somewhere, then you don't really truly have a channel. Now, you can extrapolate this out and just do it again and it'll have it pop out and then it'll just set them out apart from one another. And I actually call this forking, but I'm sure it's called something else, but I I just looks like a fork. I'm not, you know, I'm not a rocket scientist, guys. So, and I think it's important because usually you stay on that same kind of trajectory. Why? Just human behavior, fear and greed. All right, we have this here and then you're going to say, "All right, well, that's that's it. We're done. That's a bottom." I don't know that it's a bottom, but I think that if you said, well, what happened here that changed the trajectory of this that made this all of a sudden become of interest? Why did we not have the ability to get to the lower end of the channel? Say it with me. Winning and liberation. All right. So, this is where it got super interesting to me, and I'm going to point it out since you asked. What is the first time that you really have had a strong higher high? Now, I just want to point it out. That's a higher high. We can all see that that's a higher high today. At the time recording this, it's 27th. And so we can see that real clear here, right? So if I go through time here over and over again on these peaks, you will see that you don't really ever have a higher high. And I thought that this was so interesting and I wanted to share that that you never had one. And since 2008 when this came out, you've never had one. So what does that mean? It means something to me if I get a monthly higher high close and I've never had one in 15 years. It means a lot if you're not paying attention to it. Does that mean get out of everything else and only buy European names? No. But it means that if you're not understanding what's happening, then you're going to be behind the eight-ball. And this is really what I refer to as a repricing. And this is what I think. Let me let me tie to this while I'm on this page. So, what we want to do is we're going to clean this off so that you can see everything that I'm about to show you. And then I'm going to just show you RSI. So, my RSI is different. People ask all the time, why is it different? Because it's better. 15 open, high, low, close is all you need to know. Sometimes I use an SMA here. Sometimes I use an EMA. I use an EMA if it's if I want a faster movement. Remember, what's the difference between SMA and EMA? I'll say it. They EMA will calculate the first three double. So, an EMA will take that first three, one, two, three data points and calculate them double where an SMA is just linear. And then you can get into double SMA and triple or double EMA and triple EMA, whatever. I'm just People are going to ask that, so I'm going to put it out there. But we can see that the RSI here is breaking through what? The neutral zone. Oh, that's interesting. It probably does that all the time. It does not do that all the time. And you can see right here, h at least I make myself laugh. All right. So, it does not do that all the time. And you can see that you're breaking out right here, right? Okay, cool. So, we have the RSI breaking out and following along here. Well, that's pretty interesting as well. So, this would explain why people are investing overseas, why it's probably not going to change. And I think that this is very important. And then if we just do the simple thing like let's just take a 12 and drop a 12 SMA here. I'm going to have to change that to white and take a look at that and go, "Oh, that's interesting. We've been over this before and it's I'm sure it's been curling up like this before as well." And what we're looking for is differentiation. We're always always looking for differentiation. And we're going to note that yeah, you have curled up before back here. So, it's probably not that big of a deal, right? Okay. So, again, we're just looking to see if anything out there is different than what we've had before. Now, this is really dark. So, what we're going to do is we're going to go here. We're going to make that one white. And that's a 22. So, that is a 22 SMA right there. And it's on open, high, low, close. And so we're gonna say, "All right, well, we've closed bel above that before, right, on the monthly." Yeah, we did right in here. We did it for a couple times and then we rolled right back over. Um, we didn't do anything where you ever had a higher high close on the monthly. 22 SMA. Never. Never. You've never had one. And I think that's very important. So, when we start to dive into this, we're really seeing a differentiation of change. And what I think is important about this is everybody is looking at the S&P like this. And I think they're looking at the S&P the wrong way. So, here's the monthly S&P. And I think that they're all looking at this and going, I'm just going to leave the 22 in there on the weekly. We're not going anywhere. We're not going anywhere. This is going to happen. We're going to crash. Uh AI is going to take my job. AI doesn't know what day it is, let alone take your job. So, if we go and take a look at this, right, as we pop over and then we're here, and then you go, well, when did that happen? Well, January. Well, what happens in January? Well, all the 401k people rush in. just you should do what you're comfortable with, but probably investing when everybody else is dumping their money into the 401k is probably not the best idea. Anyway, so if we take a look there, right, you could see that level and right from that wick, all right, from the October over, we're just not able to get over that. Wow, that means blahy blah. Maybe they're just outflows of the US and into other areas in the world that are cheaper. Maybe you don't need to crash. Everything's not everything's not a zig and a zag. Maybe it's just allocation of capital. And I think that this is really where people are faltering. So, like when you look at the cues, and I just want to point this out because it's important. We're going to clean all this off. This is a 22. Again, we have broken the 22 weekly, but are you in a trading range? And to answer the question, I don't really feel that you are, but I do want to point this out because I think it's really important. Right back here, we did break. And I'm just going to leave them white. What the the fast is the 22, and the I'm sorry, the fast is the 12, the slow is the 22. And you can see the cross right here. And you can see the cross here as well. If you wait for these on the weekly, you're going to miss it. I don't think this is great. And and from a trading standpoint, you want to know that this area in here is becoming an issue. So, you can always see those numbers right there. What we're going to do is just look at those for a second and realize that 61566306. And you might want to write those numbers down and just stop here for a minute, just screenshot it, and just see if those numbers have any effect or reflection on what happened this week. You'd be surprised. But what is this telling us? Well, maybe we're going to roll, maybe we're not. But I always go on the premise of moving averages are great when you're in a trending market. You're not in a trending market. So using moving averages is really going to be somewhat of an issue. So when we see this and look at this, what are we seeing? Well, we're seeing an area where you're just not going anywhere. But does that mean that you have to fall out of bed? And we're going to tie this all together in a second here, but I want to just get the concept of maybe we're just going through a reallocation of assets based upon price, defense spending, AI investments, which are now global. Maybe we're just going through a repricing of that. That would make a little more sense what's going on here. Then the sky is falling and the stock market's going to crash and this is bad and that's bad. Instead of that, if you just look at it from what we just went through with again the defense spending, we need to invest in our own country, it starts to make a lot more sense. You know, you start watching names like ASML that are absolutely breaking out. And why are they breaking out during that period of time? And you go back to that February, March area, which was it's not a surprise that this was the low. Remember, they're based in the Netherlands. One of the top 10 holders out there of Nvidia used to be a Norwegian bank. And just because they were buying the dollar and then they wanted a place to put the money, that's why all the XLK names and all the MAG names dropped, right? Not just because something was wrong with them. Please stop. uh not because something was wrong with them, but because all that money came out of the market. All right, so let's wrap it back up and get back to this and what what we're seeing. If we understand this, then then we would want to see where the money's going. If you look at something like ASML and you look at something like Nvidia, it's not rocket science, guys. What's going on here? And if you look at something like this from that August or July level, what happened here in November, you can start seeing where the turn is, right? You're going to get your initial bounce of all that money in. And then from there, this is an enormous move. Enormous meaning if you shorted Nvidia and went long ASML from that bottom peak there in August, you're up over 113%. Now, many people will look at this chart and go, "Oh, I missed it." And they don't really understand what's happening, and I think that's the important part of this. So, you have a complete utter repricing of things. So, the first repricing that we have is countries reinvesting in themselves. And I'll give you a couple more examples that are not as extreme. But if we really look at the bottom of when this market bottomed and this is just South Korea, but if we really look at when did this bottom, it was when we got all that winning and liberation. And again, you can see from there, we're just every week it's up and up up. Well, this has to stop, right? We just can't keep doing this unless there's a real reason for it. And what has transpired over time was this. Everybody was willing to pay a premium, a very big premium to be in the S&P, to buy US, to have the dollar. That premium is going away. And if you think it's not going away, all you have to do is go back to where the dollar was, get rid of this for a second, and then go, okay, give me a date of winning and liberation and drop down to here. We'll go to the where we closed. So the dollar versus other currencies are down 10%. So, if you think that it hasn't dropped off or you think that people aren't getting rid of the premium of the US, you're wrong. It's pretty clear in black and white here that they are selling dollars and buying other currencies. Very clear. And they're also buying gold and other critical minerals. And hopefully, we'll have time for that today in this video.
So, let's just take a moment to discuss what's going on here. Two things are going on. Number one, they're investing in their own country. Number two, they have two companies in the EWI that make up about 45% of it that are absolutely exploding. But everyone's looking at things like this and they're saying they missed it. What people don't understand is how cheap other assets have been across the globe. And I want to put this into perspective. A lot of people will look at this and then they're going to say something silly like, "Oh, but it's not going to keep going and then it's going to stop." But if you didn't predict the boom, don't don't predict the bust. You're just embarrassing yourself. All you want to do is understand this is where you are right now and all you have right now is this specific time and place. You can look out and say what's going to happen. I would argue is AI going to be more in our lives or less in our lives in 12 months to 18 months. It's going to be more in our lives. You're going to need more memory, more storage. It's just the way that it is. If we look at how this is playing out with these names such as Samsung and Hinx that are in there, the current pees are 29 and 12. And we'll get to why this was in a minute. Micron was 40 and now it's 10 and 12. SanDisk was negative. We'll get to that in a second. And it's 15 and 16. But what I really want you to focus on is the bottom two are us, right? And we're going to view those as memory and storage. And we're going to view this as memory and storage. I I pock the whole thing. I look at the whole thing as a um as memory. But it is what it is. Let's just stick with it. So what what would you notice is the big difference here. And this is as of February 28th. I want to be real clear on that. So, let's just take this and we're going to say, okay, well, that's going to be 12 and that's going to be 16. And what we're going to do is we're going to take the high end of that or we'll take the low end of this and we'll say the low end's 12 1/2. So, let's give it 12 1/2, right? We'll take the low end. We'll be super conservative and say forward PE on Micron and SanDisk right now is 12 1/2. Okay. Forward PE on Samsung and Highix are 7 and a half. So, you're still at about a 50% discount. It's a little less, but you're still at roughly a 50% discount on these names to US counterparts. Now, we can get into why even Samsung and Heinex are actually actually out competing these two companies, and that's fine, but we're not doing that. We're not doing the comparative analysis for that. What we're doing in this specific time is we're looking at this from country to country and why you're seeing what you're seeing. So when you look at something like this and you realize that they are buying their own currency back and they're investing in their own country and you're trading at 7 and a half times forward earnings and people think that this is going to stop. As always I'm presenting information and education. You have to make your own decisions on whether you agree or disagree. I always love your comments on that. I think that when you look at some of these and some of the highlights is trading at a five five times. Um, it's kind of crazy if you start looking at this that you were depressed because of the 24 earnings. the PE, you're definitely recovering. You were elevated, but you had that huge turnaround. Uh you you're negative just because they spun off from Western Digital. And I think that that's important to get as well. But and they I have this thing outlined here. But just so you understand where you were with Western Digital, I think the important part of this is that people still are not aware of just how cheap some of these assets, not only in Asia, but in Europe, actually are. So when you look at something like an SKH highix on a chart and you go to these dates when obviously this boom started and you have a boom now and could you have a bust? Sure you probably will someday. I don't think anytime soon. But you realize you're looking at something that's trading at five times earnings and people are looking at this going oh it's it's definitely going to end. Uh okay. Um and and so I think that where I'm going with this and the important part of it is to keep like an open mind with some of this stuff and when you're looking at it understand why it's doing what it's doing. I'm not saying that people have to rush into other countries, but I think if you're not understanding what's really going on, which we've just outlined, you know, what exactly is happening, you know, who's affected by it and looking at these names, if you're looking at something say, well, that's trading at 10 times earnings. You'd be looking at that going, why don't I own this? If you're growing at X and you're trading at Y, why wouldn't you own that name? And so when you're looking at stuff like EWY, and I know a bunch of people, you crazy kids, like trading stuff like this, like Ko Ru, which is 3x bull fund. This really isn't for me. I want the play. I I we did this trade. We own this. So I put an alert out on it uh you know, like 30 something points ago, but whatever. The point I'm getting at is this. I don't want to come in one day and be down 100 points. Like that's not fun for me. I've had fun before. It doesn't feel like that. So I don't want to bleed out through a three axe if I'm going to go sideways for a period of time. So, I just rather own the exchange. It's just easier. If you overlay what's happening here and then you overlay what's happening in other countries, there's a reason why you're seeing things like this. There's a reason why you're seeing Poland, which is just I I don't and I don't think people actually get this, but when you look at something like Poland and you look at next to the spy, Poland's getting set to break out again. And and all I'm showing are just what happened around this particular time and now you're setting up for breakouts. Remember Poland's the one out there that's buying more gold than any other country right now. And so when we start to see these things transpiring, we just want to pay attention to them. You know, the other one that was super interesting to me was Italy because what Italy is doing with the tax base, they're allowing people from Europe to come into their country and then they're set anywhere really and then they're setting, oh, this is your allotted amount that you have to pay for the next 10 years. And people like that. So they're going into this. So why does that matter in the grand scheme of what we're talking about? Because not only are you having money flow over overseas because and you can see this again if we look at the dollar but you're also having these pockets where you're getting com competing in my opinion competing places within Europe and within Asia and that's where it gets super interesting because why would someone move to X when they can move to Y you have a lot if you can look it up and see the whole what's going on in Milan right now it's pretty fascinating but the point of it is it doesn't mean that you just run into and look at the DAX and say, "Oh, I have to get into the DAX." Far from it. Maybe you want exposure that way. But understanding all these nuances, I think that that makes the biggest difference.
Now, where are we going with this? The next thing that we have to look at, in my opinion, is that we have to understand why that would make sense. That this is why the Q's not falling apart. Well, why? Because people still have exposure to it. And and I'm not saying that this looks great. I've seen great before. It doesn't look like this. I I'm I'm watching this here. Let's just go and take a look at why this is not great for a second. So, if I take a look at the cues and we see the 55 here on top and we see the 22 pointing down to 12, we are getting structure here that's significantly changing from where it was before. I don't really want a declining 55day moving average on the cues. It's getting somewhat of a pass because you're in a trading range and that trading range happened back here on October 9th. And we can always go back and take a look at what set that level and where we're at. We can also do the simple things where we look at the RSI over this whole area and we see the pop and then the pop like we were going to break out and we can see we had zero follow through on that pop and now we have this little suck salad. Right? So from a technical standpoint we could see the problems that we're dealing with there. There are technical issues here. I want to be make sure of that and that we get that if I go to what we use all the time here and we'll just do it super quick but let's go take a look at the four horsemen. And what this is is these are just four things that I tend to look at about what's going on in the world. And we're just going to look at this real quick. And it's just MACD and then it's rate of change and then you have the RSI and then you have stochastics below. So when I look at something like this, I still am above the zero line which is where I want to be. When I'm below the zero line, you're always going to underperform. It's just the way that it is. I do have some things here that are saying it might be getting better. You can start seeing what's happening with stochcastics and MACD is trying to point up. We're just neutraled out here. As long as the rate of change doesn't break zero, I'm okay. When the rate of change breaks zero, it starts getting a little harder. And you can see that here. Anytime rate of change breaks zero, you you kind of want to just be really careful because it's telling you that you have a negative rate of change. It's kind of hard to fight that, right? So, we're looking at it from that perspective. Go to this on the weekly real quick. And again, this is just here. We'll just get rid of this so that we don't have to stare at that's just the 12. But if we look at this here, and we can see the MACD is rolling over from here. And we can see that you're trending down and you're under that zero line which we're going to pay attention to in a second and the statastics is rolling over on the weekly. We have to be, you know, blunt about this that it doesn't look great. So when I'm below the zero line here, we always want to watch that because it does it's it's not good and you don't want to have a negative situation here. I do find it interesting that this negative situation is happening at the same exact time as it pretty much happened last year. I do find that pretty fascinating. I don't really care about the drop of rate of change. I just care when it breaks the negative. Some people do care about that. If we spend a second and just look at this again, we could see that from a MACD standpoint, from your cross here on the weekly, you never really got over that. And if you start breaking below the zero line, it's usually too late on the weekly, but it's definitely there. And then the RSI wasn't really telling us anything. Um, I do think that stochastics pretty much is gross and you already have a divergence here on that. So, do we have some technical issues here? Yeah, we do. Could it get worse? Yep. And as we all know and we all like to say, it can always get worse. So, we want to understand this. What I do think is important about this are a couple things. First and foremost, if I just go to volume for a second, and then I just drop a pin from the most recent volume line. Work with me, not against me. If I drop a pin from the most recent line, and we can see it right in here, right? That volume, and then volume, and then volume. This was the third greatest volume that you've had. That marked a bottom. This marked a bottom. Is this going to mark a bottom? I don't know. Here's what I Here's what I do know about what's transpired so far. On Friday, we had PPI core PPI year-over-year PPI Chicago PMI. And I'm going to spend a second on this. These numbers are gross. These are really bad numbers. So, consensus.3 previous 4.5. So, you're increasing PPI. Core PPI you're increasing. You were consensus was.3 came in at 8. Core PPI year-over-year 36. Consensus was three. Like these are gross gross numbers and they are showing you if you always look at the PPI in here the actual versus the previous. This will tell you straight up what it is on a dollar for dollar amount versus the previous number. So that I do like looking at that. If you take out food, energy and trade all if you take out all the things you're flat. Why you want to take out food energy and trade take out all the things you're flat. Year-over-year you were looking for 26 you came in at 29. I always find this fascinating how you can do that when the month is up so much. But anyway, where I'm going with this is that if this is not going to get us to crack and this really should have gotten the market to crack and it did not. See, what we're doing is we're tying all the things together and then we're trying to make the best decisions that we possibly can about what's going on. So, if we take a look at the NQ for example and we look here at that 9:30 level from when it opened and I'm just going to use futures for a second because I just want to point out exactly where we're at and what's happening. So, you're looking at this 6:30, 7:30, 8:30, and then what happens? Boom. Right? You say it. You can't miss it. What do you do with this? Like, what do you do with this information? You could see what happened. They couldn't get out fast enough. This is Thursday. Watch. Let's mark that off. Here you are at 9:45. Here you are. I'm at 10:30 and that cut. So, when you start to see this 8:30 number, it comes down. It retests that level. Comes down and then rips. So, Thursday, we're falling apart. End of the world again. Why Nvidia only did 75 billion in sales, not 78 billion in sales. Okay. Um, so then up, down, up. And so here you can actually see it if we zoom in on it a little bit better. And why why is this so important? It's important for a couple reasons. And then I'll get into how you should trade it, how you should be looking at the market as a whole here. So if we're looking at that 830 bar, we always want to kind of mark that off and just look at what they're doing there. And then just see how it's here. Here, look at it. And we always want to see how that's undercut, rips, tries to get through, can't. Undercut, rips, tries to get through, can't. So, what you do is you have a battle of the algorithms here. One saying, "I'll sell everything you have." Another one saying, "I'll buy everything you have." Let them battle it out and you pick up the pieces. Here we are. Over, under, over, back down, right off the open. Ye old flim flam, ye rip, ye test, and then off. And then you look at where you tested, and you're right back to that level on Thursday. So, it's important to understand why we just went through Thursday and Friday here. So, you have a level. You're watching the undercut. You can always use tools to look at these undercuts like, "Oh, that's interesting. Here's where the RSI was there." And then, "Oh, that's interesting. Look where the RSI is here when it's lower." So, the RSI was lower here than it was here. And then we'd have a divergence. And maybe we could benefit from that, right? So, if anyone tells you divergences don't work, you could screenshot this. You can send it to them and you don't have to say anything. So then we note that after that we're not really going anywhere. And this is where I think you tie it all together. And I think this is really where I'm going with this because you have to look at this and saying, "All right, well, how do you profit from this?" You have to understand that at best, and I'm going to say it exactly as I just said it there. At best, you're rangebound. There's no other way to say it. At worst, you're rolling over, but at best, we're rangebound right now. And I think that this is really significant because if you understand that, then you have to use the different tactics to trading a rangebound market. Now that's on the domestic front. If you start looking at the European and Asian front, things like EWJ, does that look rangebound? It doesn't really look rangebound, right? If you look at Italy, does that look rangebound? Not really. Is Poland rangebound? Not particularly. So, what I'm referring to when I say we're rangebound is the domestic market. The domestic market has been rangebound and continues to be rangebound. And it goes back to what we covered earlier in this video as to why I believe it's rangebound. But as we just spent 5 minutes going through technical analysis, you could have an issue. I would think and here I go again thinking if I was going to have an issue, I wouldn't have this little divergence that I have here. But I don't know that. And so I'm not going to come out here and say I know exactly what's going to happen. But a month ago, I went through three things that I said this really needs to happen. Right? So what we got through is we got through the State of the Union. We got through Nvidia's earnings. And I get the whole I don't really like Nvidia's earnings conversation. I get it. They're doing too many deals. They're investing in Open AI. Open AAI is investing in them. Nvidia is getting something for the money. They're getting an equity stake in Open AI. And I get that. Whereas something like AMD to me basically sold a portion of their company to sell chips. It's like literally walking into a store, buying milk, and saying, "I'll buy milk from you if you give me 1% of the equity of the 7-Eleven or the Wawa or wherever you kids buy milk these days." So, or maybe you don't buy milk, whatever. But when you get it and you think
About it that way. I understand, like if Nvidia does not invest in OpenAI, does OpenAI buy chips from Nvidia? Where else are they going? Where else are you going? Right? So, you have to think about that a little bit. But maybe they're not buying the amount that they're buying because they don't have the money. So, that in and of itself, I I get that argument and I think it's valid. I mean, how many times are you going to inject OpenAI with capital and then hope that it works out? You know, you're getting into areas here with these valuations. To me, you used to invest in the private equity market because it was cheaper and you couldn't get access. The valuations of some of these names, specifically OpenAI, to me is absurd. You know, it doesn't make any, it doesn't make any sense. So, another video, another time.
Um, I think some of the others make sense. But so if we take a look at what happened with Nvidia, we got through that. We got through the State of the Union. We are where we are. We have other issues going on, which we'll, we'll, we'll touch on for a moment. What is this really showing us here? So, we go look at the socks and go, "All right, well, there's the socks. Let's take a look at the socks and compare that to the S&P." Okay, so semis are definitely the cat's pajamas. All right, well, that's interesting, right? So that's still working. All right, let's take it back to the cues now and start looking at where we have the 12 and the 25 and we're rolling. And let's tie it all together now. Month ago, we had a series of things that had to happen in order for us to stabilize. And I just want to point this out. We have IGV, and again, the sky is falling. No one's ever going to use software again. Yada, yada, yada. And to be clear on that thesis, to just touch base on it, these earnings quarter for software were gross. If, if, if gross was an earnings quarter, software would be that quarter. Like, it was really bad. Now, CRM was not as bad as people thought, and you're trying to hold. But things like TTD, this was disgusting this quarter. Workday, it was gross. 10% mess. Do these names try to rally? Do they not? I would argue if you're looking at this side of the market where my head goes with it, you got to go after the big dogs. You got to look at Oracle. And again, I mean, it looks, it looks gross. And then you look at something like Microsoft, you know, everyone's like, "I'm going to buy it at 400." How'd that go? So, these names are not looking fantastic. Far from it. They look really, really, really bad. The question is, do they look so bad that it can't get any worse? That's a real slippery slope. But what we needed to have happen, and we talked about this literally it was about a month ago, was we said, "We need to hold here and we need to stabilize." Now, so far, if we look at IGV and we look at some levels of stabilization, we would have to see here. We'd have to see the undercut right here. Let's blow this up and pull this out. We'd have to see here. We'd have to see the undercut and we'd have to see the bump. So, there is the possibility of stabilization. But charts don't do this. Charts just don't go, "Oh no, everything's better." So, you're going to come back down, test, build, undercut maybe, and it's going to take time. That's fine. What I'm trying to wrap my noodle around is with Bitcoin doing what it's doing and IGV doing what it's doing, we're not breaking. And I think that that's the most important thing for me.
So, Bitcoin, I I've been saying this for months that this thing was going to come in like this, and I think it's still going to go a lot lower. I think you're heading at least to like the 48, and I think you're going to break that. And I think Ethereum is going to do be very similar. Been talking about this for some time. I think 1400's basically a no-brainer. Remember guys, you don't have these guys buying this stuff anymore, right? They shoved as much of it down everyone's throat as they possibly can, and they're gone now, right? There's there's nothing left. No one's given them anymore. They realize that they got sold magic beans that don't do anything. So, what does this mean for us? And why do you care about this? Because Bitcoin's breaking down pretty darn hard, right? We would all see that like Bitcoin's breaking down pretty hard here, and IGV is breaking down pretty hard, and XLK really can't get out of its own way. Please stop. XLK really can't get out of its own way. So, and we can see that it's really mimicking the the Qs, but the Qs are not breaking. So, we have a put wall at 600. And let's clean all this off. Actually, let's do it this way. Let's go old school and we'll go to the candles. And if we just did the simple thing and go, "Show me where 600 is and we drop a line." You really are holding that level. You'll do a couple undercuts, a couple liquidity grabs, but at the end of the day, you're not breaking that put wall. There's a huge, huge put wall here, like enormous put wall here. You're not breaking that. So, if that's not going to break, then what's going to break it? Like, what is the thing? And you guys can always comment on this, but what's going to break it? So, instead of that, you have to realize that you're in a trading range. Trading like you're I'm going to tie it all together now. Trading like you're in a trending market using the moving averages and everything else. If you're trading tech right now, you're getting so chopped up. It's like chopsie. It It's absolutely insane. What you need to do is understand that you have to identify those areas and then utilize those areas. Like for example, someone would look at swing trading SanDisk right now, and I'm going to leave the open high low close up because it's it'll just be so much clearer and then I can flip in a second. These this is the earnings bar clearly, and this is this is what I would refer to as a control bar. You really can't get out of this. And we've seen these with all those names, right? We've seen it with Western Digital. They have the control bar, STX, they all have it. They're all staying in that control bar from earnings. All of them. It's all it's like one big soup. All right. So, when we when we see this, we would look at that and say, "Well, what do we do about it?" We understand that we're in in a non-trending market. If you're in a non-trending market and you're trading sideways, you have to use different tactics. So, those tactics are not buying breakouts. You're selling to those people that are buying breakouts because that's not going to work. So, what we have to do is look at it differently. So, one of the things that we've done is something like a SanDisk. Well, when they're when it's breaking out, we're not buying it. When it's breaking down, we're buying it. So, you have very clearly defined levels on something like a SanDisk that make it really easy to trade on short-term basis. And I want to just say something. A lot of people like, "Well, I don't want to do that. I don't want to day trade." Or then don't. But don't delude yourself that you're not going to go for 15 or 20% rides and call yourself a swing trader. That's not you're hoping and dreaming. No, no one that's swing trading goes for 10 or 15% rides. They they don't. You you can't do it. Your stops have to be too tight. And you have one of the single greatest dispersions right now between the S&P movement and stocks. And that's why it's so wild. But what you're seeing, and we're seeing it again over and over again, we shorted here on Thursday, and it's the same levels over and over again. So when this happened Friday, and we were live trading, um, we live trade every single morning uh for an hour. So anyway, when we're doing it here, I looked at this and said here, I'll show you on the one minute. I looked at this and said, "Okay, it's the same exact level we were at before. It's right here." And then you're just using your tools to see if it makes sense, right? So, you know, you're looking at the RSI. The RSI popped up over here. Then you're watching it roll over, and then you're watching the RSI roll up over here, and then you're watching it roll over. You know, then you're just using the high of the day as stop, and it presents like a great opportunity, especially for option traders on Fridays because, you know, the theta decay. So, you know, people are just selling calls, doing credit spreads, whatever. Um, and so what you have to understand is that there are your levels and that's how you have to look at it. Most of these days, something like a SanDisk is moving like 100 or 120 points. This was no different on Friday. Up, down, sometimes, sometimes you actually get the down from that off the open and then you get it back up like you did on on Thursday. You're literally getting 120 point swings. And to think that you're going to just ride that out right now to me is just absolutely insanity.
What does concern me, and I and I'd be remiss to not state this, is when you have that level of volatility, you're going to get a change in trend. And whether that change in trend is to the upside or downside, I'm leaning towards it's to the upside because of the growth. But if you look at everything, you have to realize that we're still vulnerable out there. And now we have an escalation that's going on overseas. And so we have to tie that into this just a little bit. Look, if you're looking at this stuff, I would look at it from, and again, you've heard me over and over again, the community, if you're listening to this part of it, we've been doing this for months, you're buying the lower beta stuff that's just crushing, right? There's names out there on the lower beta side that are just crushing. Like, AI, you know, this was not my idea. It was one of the people in the room. Um, and she absolutely just nailed this. Like, just absolutely crushed it. Um, and it makes so much sense. But there's earnings out there that are crushing. So even if you look at something like Dell, I mean they crushed, like they raised their guidance. So you can't say this is going away. I just think the capital expenditure is moving down the pike if we look at it that way, right? And that's why you're seeing a lot of these names and you know we talked about like antimonium and some of this stuff why you need to look at some of these critical minerals. I I got asked a lot to do a video on critical minerals. I I do plan on it. There's a bunch of these names that I'm in that when you have to understand where the where I'll leave this part of the video in. you need to look at where China is really cutting any kind of control by the US in critical minerals. They're are the companies that you want to buy. So might want to look at that. So when we tie that together again, you have that part of it. But look at names like GLW, right? Look at names like John Deere, which did come down and is starting to reverse here, right? So when we look at stuff like this, we really want to pay attention to it because industrials are just running. Well, doesn't it make sense that industrials are going to keep pushing if the rest of the world is going to start increasing their GDP and expenditures for what's going on with building out their defense spending? Don't you need infrastructure? Aren't you going to increase capacity? Aren't you going to increase production? But you're still going to need a tractor to do that. You're still going to need equipment to do that. And I think when you start tying that all together, it starts to make a little more sense, right? So that's why industrials look like this. And that's why global industrials look like like this. And that's why I've been saying that you want to look at some of these global funds. It makes a little more sense.
Now, tying all that together, and I will leave you with this. You have to understand with what's going on in Iran that you're going to just see crude and crude is going to wind up pushing. And the reason that crude is pushing is not only because of what's happening with Iran, which is in my opinion going to get worse, not better. Trades that we've been doing or things like this uh T man, I need more coffee. DHT. And when we see something like this, why is it pushing? Uh they are the leader in VLCC, which is a really fancy way of saying very large crude container. So you're seeing these levels of push and you you can go through them. You know I think this is the other one I really like. Scorpion tankers. Maybe I like that because it reminds me of like a James Bond movie or something. I don't know. I really like the name. But you could see them all like breaking out. FRO, right? All of these guys. Why? Because oil is going to get more expensive. It's going to get harder to ship. Especially if you start screwing around with Iran and the Strait of Hormuz, if I pronounced that correctly. If I didn't, you're going to tell me I didn't and you're going to comment on that and I'm going to ignore it. So, I think that that's really where you want to focus on these these kinds of names if you think that that's going to continue. I don't see world peace being achieved anytime soon. And I do think that that's something that we just have to keep in the back of our heads. But the idea and the premise of all this is are we just seeing diversification across this entire world, which is what I think we're seeing, or is this setting up for something a little bit more nefarious? My sense right now is if it was something more nefarious, and it could always it can always come, right? But if it was something more nefarious, I think we've already would have seen start to see those cracks.