Transcription
Hey everybody, welcome back. Well, there's a lot going on here. A short time to go over it, and we're still getting news as the evening is going on, but I wanted to get to you because last night I was unable to, just because of what was happening with Oracle. We're going to cover some of that, but we're really going to get into it in Saturday's video.
So, you're going to want to watch Saturday's video because we're going to cover Oracle, definitely going to cover Broadcom and what's going on there, and certainly have to talk about what's going on at the proxy fight at Lululemon, which you guys are going to see move around pretty aggressively this evening. But, I think some of this stuff we just need to hammer out right now.
Now, the most important thing about today was the gap down and then the follow-through. The gap down under it all where they basically came in, wicks are price reaction, and we know this. So when we look at this on the basis, you came in, you open, you come all the way down to this under base right in here, under this little base, take everything, and you rip it up. If we take a look at this just very simply on a 4-hour, super interesting what happened today. To me, it was anyway. I'm just going to drop it right to it. So you can see that reversal on Sunday. That was Sunday at 6 PM. You see that reversal right there? And then from there, you can see how you've just been holding that level over and over again. And if we kind of go to that, you're going to note the difference on that Sunday, which gets you into what, the end of November. I think it's super interesting how you're unable to break that. And forget about everything that's over here for a second. But if you just look from here and come across, this is our highest close in December on the ES. And this entire area is now a base, and we've come down, undercut all of this until you go back to this level, and then you rallied and you have a new closing high. I think this is really important, and I definitely think it's something that we need to watch tomorrow. I'm going to leave it at that.
From a technical standpoint, this was super impressive what happened today. You did not have to do this. Far from it. If we take a look at the RSI, you're not even remotely overbought. This is really smooth, consistent buying. And it was like that all day. And it was very surprising because if they wanted a reason, you had it with Oracle today. They could have really smoked you because of Oracle. Instead, something pretty impressive happened, and we're going to cover that. And I think there's some reasons for that, and I think we're seeing even more of those reasons after hours. But we take a look at our level here on Wednesday at 10:00, and then you watch how we come in, open up Thursday morning, come down, lift, and then what happens all day. So if we watch this area again, and let's just drop this so we can just walk through the play-by-play for a second because I think it's super important. So they take you in around 9:30. They drop it down. Flesh out who? Retail. Ring it back up. Retail's like, "That's it." They drop it back down, and then they just spend the rest of the day grinding and buying. And I think that's super important to point out that retail got played, and that institution stepped in and got bought for the rest of the day. I wouldn't sleep on that. I wouldn't sleep on on on the fact that that's what happened. You had every reason to drop, and you didn't. And a lot of it was just really, in my opinion, the misunderstanding of Oracle's quarter and what they were saying, but doesn't really matter. We'll get to that in some detail later. But for what we're seeing right now, it's very hard to look at this and not feel some kind of bullishness going into next week, especially after earnings tonight and what some of these earnings are saying. So, that's the first thing that I think we really have to review.
The second thing that I think that you really need to take from this is looking at IWM. It's not often that I can say that we're looking at IWM and IWM is hitting what? Yeah, it's hitting all-time highs. So, we have an index out there, small caps, hitting all-time highs. To be clear, do you know when small caps actually lead the market, when you're entering a new bull cycle? Isn't that crazy? And now it's breaking out. I'm not saying that's what we're doing. I'm just saying that that's what IWM's doing. It usually leads like if you were coming out of a recession, you usually see IWM lead. That's what tends to happen. And that's not what's happening here. And I think that's really important for us to get now that we understand that. Do what you want with it. Like, don't, you know, I always get these comments and I love your comments, but don't shoot the messenger. Like, I I don't know why small caps are breaking out now. Maybe because they haven't moved in a long period of time. Maybe they're moving because when we look at it, KRE is 15.9% or financial service companies are 15.9% of the IWM, and then you have some home builders in there too. Maybe that's because of what just happened with interest rates and the interest rate cut. That's very possible. But no matter how we want to slice it, this is what's happening now. Super important for us to get that we have IWM breaking out. The ES undercut and then ripped. If we take a look at the S&P, you are sitting here at a level, and we have a new closing high on the S&P today. Like, you have an all-time closing high on the S&P. So again, we are climbing a wall of worry. And believe me, I'm worried too. I mean, you can hear it during the past two weeks as I look at this going, I don't know. I don't know how this is going to shape up. We can't get through this level. We're sitting up there. We're eating it up. But and then the misunderstanding, in my opinion, just blatant misunderstanding with Oracle yesterday. It was like, okay, well, they're going to kill tech. We're going to come in one and a half, 2%. And we saw last night that the, you know, the NQ was down about 2% last night at one point. I think it was like 1.7. And then you look at this, that's like the mother of dragons of liquidity grabs. Like, that's absolutely insane when you realize what happened today and you mark that off from where you are to where you were at. We almost have you have 1.8% from that bottom today.
Now, what's so fascinating about this, you almost had a dragonfly on the market today, which is when you open and close at the same price on the 4-hour. And if we had that, the market really would have ripped, but we didn't get that. But look at where we're at. Look at that close. And then look at where we are. I mean, this is the highest close that you've had on that 4-hour in a long period of time. I mean, it's all of December that you have a new closing high in December. That bodes well for the end of the year so far. Now, what's going to be the thing that's going to hurt us? Well, you went through Oracle. We had Itchy yesterday. We're not going to get into that dumpster fire till Saturday, just for time's sake because I still have conference calls I have to listen to tonight. And then what we're seeing right here, um, we're seeing in ourselves in a situation here where for me, looking at this, I think this is super important to get. You're now through AVGO, and AVGO is fantastic. I mean, I'm just I'll get to it. We're going to look at the chart in a second here, but AVGO just in case, just to get to it. ABGO came out and said, "Hey, next year, 100% year-over-year growth." You know, you have ChatGpt coming out today and saying, "Oh, we're doing the, you know, you know, 5 whatever on Chat GPT Clippy 2.0, right?" So, you saw even Microsoft move on that, Meta move. But I wanted to show you this because this really stood out to me, and you've already seen this if you're in the community, but when you look at the Mag 7 and you divide that by IWM, well, we're going to turn this into a line so you can see this. So you would say to yourself, "Oh, if if you bought the Magnificent 7 over, you know, the market, you you would have killed it this year." Okay. So for the year, if we just took January and go Jan 1st and let's just find it. So here's Jan. Well, that's over. So we're going to take this peak right here and say if I bought Magnificent 7 in the beginning of the year versus the IWM, what am I up? And you're up 6%, which is just absolutely insane when you think about it.
Now, this is where it gets super interesting. If I took September and you come across here and you go from September 30th to now, I'm just going to find that exact so you can see where I'm going with this. If I said, oh, from September on, IWM versus the Magnificent 7, what should you have bought? Well, if you did that, you're down 3%. So, we're actually in a spot here from if you take this peak, 7% since November. So, you're better off buying small caps than you are buying these names. And I think that's becoming very reflective in the prices. See, one of the things that's starting to happen to the market, and I'll get again more into this on Saturday, but if we look at the S&P, one of the things that we're all struggling with as we climb this wall of worry because obviously what happened here with this undercut, one of the big things for us, and I do think it's super important to get this, is that we're dealing with the fact that we're not taking into account the rotation internals of the market. And I'll show you what I mean by that. So, if I look at something like Robo, which is robotics automation, well, these names are just on absolute unequivocal fire. This is one that we own, and we bought this when it broke over this 51 or 50 call wall. It was pretty obvious when it got over that that it was going to go, and you know it's absolutely been a rocket for us. And then you like that joke. And then if you look at as this is another that we did very similar setup, and then you could see the lift here, and then you had some other areas in here where it really looked like it was going to go. So we did this, and these things have just been we've just been killing it with these names, right? The space names, and there's a lot of reasons for that. SATS obviously was another one. We bought this at 80 off this news of the SpaceX valuation. So, everyone's looking for the new space name that's going to compare to SpaceX. That's one of the reasons why this stuff is moving. Also, I think it's a little bit of diversification out of like the hyperscalers AI and to get into different kinds of tech. That's just my opinion. You know, [clears throat] you should do what you're comfortable with. But what we're seeing here is we're seeing some of these names like even quantum, take the quantum space. Quantum's are back to the high. Now, that doesn't mean that the RGTI names are going to get there. But when we start looking at some of these other names like IBM, they're back to their highs. So, we are seeing rotation. And not only you seeing rotation that's keeping the indexes. And remember, when I show all this stuff, just so we're all clear, I trade top down, which means index, then it means sector, and then it means stock that's top down. So, I'm always looking at it and going, okay, well, what's the index doing? What's this sector doing? And what's the stock doing? So, you're getting rotation in the indexes. And you're like, well, what do you mean? Well, IWM's leading now, if anyone hasn't noticed. So, you're getting rotation in the indexes. You're getting rotation in the sectors. Meaning, when you look at the names, you're getting other sectors that are actually leading and breaking out. And you can see that again, not only here, but when you go and take a look at like XBI, you're seeing this stuff continually continually grind higher and lead. And it's very different than what we saw before. But not only you getting that, you're getting rotation. And you're getting rotation inside each sector. So, one of the guys today when we do those public premarket calls said, "When is the socks going to start moving again?" And my response was, "It is. It's just your names that are in the socks." And it's also, you know, my names that are in the socks, for example. You know, we all trade Nvidia, right? Everyone loves Nvidia. If you don't, you have issues. But everyone loves Nvidia. And we're looking at this going, "Well, 212, we're at 180. We're looking at this and going, the market looks awful. This is seven or 8% of the S&P depending upon what where you market." And then we come in and go, "All right, well, 187. We're below the 55. I use a 12, a 22, and a 55. You should use what you're comfortable with." And what's this telling us? Well, it's telling us that we have issues, isn't it? So, I do think that that's super important for us to get. And we see this with all these names where you're seeing like Microsoft's under the 55 and the 55's declining. We can see this like it's not rocket science. Meta's under the 55, and when it got near it, if I clean up all my nonsense, you'll see the same thing. It's declining. So, what's happening? Well, it's not that the socks is not hitting all-time highs. It's that people are in the wrong names. They're in like pigs like, you know, AMD, things like that. Meanwhile, AVGO comes out tonight, and we might as well get into it. Beats all expectations, raises guidance, and says AI semiconductor space is going to grow for them at least 100% year-over-year. I don't know really what you're supposed to say about that and where you're going to come out with something bad, but all that needs the buildout. So, and then you get into, well, if it needs the buildout, what's the buildout? And then you connect the dots and go, go, go, go, go, go, go, go, go, go, go, the buildout's ASML, you know? So, you're going to need those machines. You can see how that's just been hitting new highs. And then you need all the tools and semiconductor equipment manufacturers, which is KAC, right? So, then you have ASML, and then you have KAC, and then you have Lamb Research, all these names. And then even AMAD's got it together, right? So, when we get that and then go, oh, okay, so we're having rotation, and we go back to this and say, oh, so you're having rotation from in between the index indexes. You're having rotation in between the sectors, and you're having rotation in between the stocks. What's this mean for you? How do you take advantage of this? You need to rethink everything. You need to rethink who are the leaders. You need to rethink who are the leaders, what are the leading sectors, what is the leading index. You need to rethink the whole thing. And when you do that, the easiest way to do that is to go through when you have a piece of bad news and watch what stocks hit new highs.
So, I'll give you an example. To me, I did not think Oracle was this bad. I I truly didn't. And what was great was it actually held that 185 level. If the market was a little stronger, it would have been an awesome spot to buy it. I did buy it. Traded a few times today. Very happy with the outcome of that. Not happy with how it acted last night. It is what it is. I don't know that you're going to break this. I don't know that you're also going to just figure out, you know, all your life choices by tomorrow either. So, I definitely think that's something that we have to pay attention to. But I do think that what they missed here on this on the side was one, they re they stated they're not going to lose their investment grade bond uh rank rating no matter what they have to do. They were very vehement about that. And the second thing that I would say to you is all this capex spending. They said, "We're not spending like the other people until we have signed deals and we see money." That's very different than what people thought was going to happen here. And I would just say that that's very important. I would listen to this call and I would listen to a couple of them as we're talking. The be avo calls going on tonight, and I'm going to have to listen to that one in a second here. But I want to just review this. So Oracle comes out, but what happens today? Well, the market bounces on this. So not only does the market bounce, but go take a look at the storage names. They're all breaking out. 175 was a trigger. It was a perfect trigger. You're at 190 already on Western Digital, Seagate, and we're sitting here climbing 309. We're climbing a wall of worry. And as that wall of worry continues to grind, we're seeing some of these names just continually push higher and higher and higher. And there's no reason to think that that's not going to continue. So, it's a really good idea to go through everything and re-evaluate and go, one, what sectors are moving, what indexes are moving, what sectors are moving. It takes you back to this, right? What indexes are actually breaking out? What sectors are breaking out? And what are the leading names in there? Don't assume any of this because a lot of it's changing. And a lot of it's changing because you're going into the end of the year. Also, you're getting a new Fed guy. You got a lot of you have a lot of moving parts which I will get into on Saturday.
One really big standout for me, one thing that really stood out was when I looked at the breath of the market. And this is the 200, the 50, the 20, and the five. You're just grinding along. Market's grinding along, and these are just grinding along, hitting, holding their core levels. And I'll get into the details of it on Saturday because I'll have Friday's data for them. I'll have a full week. But you're just rotating within it, and it's just going to present opportunity. And a lot of this stuff's washed out. I thought it was super interesting that not only AV Joe obviously is hitting new highs tonight, but here's what I thought was super interesting is in a proxy fight, and so the CF or CEO is leaving, and the reason the CEO is leaving is because the one of the founders that has shares is coming back and fighting the board, and he wants significant changes. I thought that was very interesting, and you're not doing that if you think one, things are going well, two, if you think things are are going to go poorly. So if you thought it was an issue with the market or from a standpoint of the economy, you wouldn't be doing that. You wouldn't be going after people. You'd be doing it a little bit differently. So clearly they think that they could do a little bit better. And you might want to watch this tomorrow because when you start seeing proxy fight, he might not even have enough of a say. They there might be another backer coming in here like someone on the private equity side that he's going to partner with to like start applying pressure to get the, you know, the equity up. Um, because obviously that's what the guy cares about. I mean, if if you're a chip and you own a bazillion shares, what do you care about? The stock price. Like, you really. So, what what are the private equity going to care about? The stock price. So, they're going to have a lot in common. Um, and the CEO stepping down, the stocks actually up on it. And the guidance was okay. It wasn't great, but I think it's the proxy that's got it going. That is it.