Raw Transcript
The one thing that we can say about everything is that we have the ability to draw a level and that level has been holding forever. We're going to talk about exactly why we're holding in here again. The amount of buying that came in at the end of the day, which is a lot of stronger, and we need to take a look at the breath of the market. Let's get to it. 27.5% of you that are listening right now do not subscribe. As you know, all these videos are linked together when we go very actionable, especially during the week. Give exact levels. Make sure that you click subscribe. all notifications. Make sure that's on as well. Let's do it. Now, we have to get pretty detailed tonight on some of the technicals. So, we have the undercut and we're just going to look at this undercut really closely here and I think it's super important. So, the very first thing that we've been watching this 88 89 level. You keep coming down. You keep undercutting. Here's the 55 that's above you. And I'm going to leave the volume in because this is bigger than I thought it actually was at the end of the day. And this is really what you want to see, an encompassing of the volume on the green side. Now, do I think we're out of the woods? You know, anything could happen. We'll get we'll get to that in a minute because you have a lot of moving parts here. And I don't think it's going to be that clean with that little headline risk. But there's some things here that you have to look definitively on. And whenever you see days like this and the people that are just calling it and saying that's it, it's a bottom. It's absolutely impossible to determine that with the amount of headline risk that you have out there right now. What I will say is today's bar if and I'm going to use the NASDAQ because it's just more prolific. It's just going to point it out even more. If I use today's bar and I come across on today's bar and I just look at everything from February on and we'd say to ourselves, how much of the time were we in this bar and how many times were we not in that bar? Well, you'd have to say for all of February, for the majority of February and for the majority of March, you spent at least 80 to 90% of your time in that area, uh, with really just a couple times outside of it. And that's pretty important. And the reason for that is this bar encompasses all all that where this may become a control bar. And what might make that a control bar more than anything is also the volume that you have and the retest of those levels. But wait, there's more. And I think that this is really important. And you never know until you see it, you look back later in life. You're not getting down here yet, which is that 7475 level on the Q's. But if we go and take a look and we don't look at just the cash market and we look at NQ and what I'm going to do here is I'm going to clean all this off and then what I'm going to do is I'm going to drop that back here so you can just see that by itself and that's going to take you exactly the where the futures hit today. It is the exact point on where you hit and we talked about this publicly today and said you you really need to hold this level and you did exactly what you needed to do. So if I'm looking at this is this something that could signify a bottom. There's a couple things here that are super interesting. Number one, the amount of volume that came in. Does that mean we're out of the woodwork? It's very hard to say it's over until it's over. And I don't know that we have any leadership. What I do like is that you did have pretty significant volume today. And again, I'm just going to show this because I do think it's important. If I came straight across here, and what we'll do is we'll change the color of this so that you can see it. And we'll make it, you know, probably make it this yellow. And let's make this huge so that we can see exactly what we're talking about here. So, if we go to the volume right here, and then we're just going to go to the 26th right here, and just drop it like it's hot. How many other buy bars do you have here in January that have that kind of volume? This is it. How many times are you above that moving average uh on the volume scale twice all year and here? So, I can't I can't blow it off as much as I want to because it happened on a tweet. I I really can't blow it off. And that's one of the things that we really have to focus on here. We hit the level. the level held. If we came across and then just dropped here as well, you're going to see that now that's entirely too gigantic and too yellow. But we'll leave the yellow, but I think we need to just get that. There you go. There you go. So, we definitely have something here that we have to pay attention to. We're going to do some simple things and then some more in-depth things. Did the RSI make a difference today? Not really. No. A matter of fact, really what we did was just hold that level and bounce. Now, there were some signs of this today that maybe we were going to get a tweet that was going to change things and we we did to an extent. And when we look at that, what did it really tell us? Well, a couple things that that I think we'll we'll get to it where we might as well come out with it. He just said, "Oh, I think this can end in a you know, I think we're towards the end of this." I I don't know how we're towards the end of this. And we have to remember we tend to float up balloons and see what happens with those balloons. Right? So, if we look at the 4 hour here, you have your mark and then you rallied and then from the rally, what happened? We bounced and we're done with the oversold and we're back to neutral. I don't know that that's all that we're doing there. I still see the same pattern of behavior here that we have. And if we just did the simple things again, which we're just going to draw DTLs, you can actually start even up here and you just draw these DTLs. You know, are you going to get through those downward trend lines? Those downward trend lines tend to mimic a little bit what's happening here. And obviously you have the larger one here as well. You are not breaking lower really when you're getting to this area. So can this hold? It has the ability to if a couple key things happen and and we'll get to that. So what's the first thing that has to happen? The VIX needs to hold. Now this is pretty much a shellacking for the VIX. And and I'll leave it at that where you're at 35 and you're at 25 by the end of the day. It's a shellacking meaning it's very rare that you're going to have and that's the technical term she lacking. So if you're at 27%, anything where you have these kinds of moves where it's like 20% and you're the higher high, anything like that, they do tend to mark those levels. So if you're here and you're dropping like that, it's like 26% very similar this 27%. If you're the high breakout and you do that, even if you break down the next day and then you do it from there, you'll note that that'll probably be the same kind of percentage between these two. And I think that one's 25% with these two combined over the green bar. So, it does have that feel to it. What I'd like to do is see a forehandle because a forehandle it tells you like it's time. If you ever see a forehandle out there and you only had one, but if you ever get to a forehandle, it's just historically you step in and you buy if you have long if you have a long-term kind of thesis because it just means too far too fast. Another thing you can always look at is the VIX's VIX which is VVIX and you divide that by VIX. And what you're looking for here, candidly, is you're looking for it to get into a range. Um, we didn't really get down to that range. What you do is you just divide the two by one another. And you didn't really get down to that. You don't have to get down into it for it to bounce, but it's really very good when it does because it really it's very definable. Like, hey, this is definitely an area where when things get that goofy, it's definitely worth paying attention to. And that that didn't happen. So when we're looking at that, are there signs here that are solid? And so the answer to that is yes, there are signs here that are solid. This percentage drop after taking out the high, that is definitely solid. My concern is that there is way more moving parts here than what we think. So looking at energy and saying, "Oh, it's it's over." Because he said he was done. I don't know that Iran's done. At the time of recording this, I stopped because they started bombing something else after they just said they weren't going to. So, another area in the Middle East is being bombed by Iran as as I'm getting this out. So, I I don't know that, you know, just because they want it to end that it's going to end. And I don't know what has been resolved by any of this. So, I don't know how how this ends. I still don't think there's an offramp here. Um I'm hoping at the time of recording this, we're doing a public speech at 5:30. If anything breaks in, I mean, Trump's doing a public speech at 5:30 at the time recording this. So, I waited a little bit to do this so that if there is breaking news, I'll just work it right into this. Uh, but I'm not really seeing this shortterm end. Like, I I'm not really sure um where we're going to see the short-term end. And and and the idea that this is it for crude oil to me, I I just don't see it that way. Like, that's that's just not really how this ends. It usually ends with some kind of blowoff. A dogee is not a blowoff. the dogei is just I got ahead of myself and I'm going to work it off a little bit. Now, if we start cracking below that 80 and you started rolling over, then you might be able to say that. But right now, you're in this trading range and I don't think there's any reason to look at crude oil and and convince yourself that this is over. So, that's where I stand on the crude oil side. But 80 to 120 is an insane move. Perhaps it too far too fast and then maybe it starts working its way back. And the other telltale sign for this is we always want to look at the dollar. Did the dollar have a pretty insane move today? And it did. So the dollar is getting weaker, which is something that we wanted to see because that means they're sick of they're not doing the flight to safety. When everyone was worried about what's going on in the world, they do the flight to safety. And the flight to safety is definitely something that we want to pay attention to because when that starts to unwind, we pay attention to it. So we started to see a little bit of that today where they reversed on the airlines. And I was short the airlines and I covered it today. I was short XLB and I covered it today. And the reason for this candidly was just because I started seeing a real bid in the market and and this is ca candidly one of the leakiest administrations we've ever had. I mean there's so much stuff that comes out so much sooner. So it very clearly hit the tape or we're just more cognizant of it now for whatever reason. So when we start to see it, we just pay attention to it, right? It's just easier to do it that way. I don't know when I see the names like MU just break out in reverse. And I'm g I'm getting a little ahead of myself. Yeah, I love that this is holding. I love that it's in here and I love the fact that you held the 55 in here. Like I think that's the cat's pajamas. Like I think that's great. If I overlay this with the RSI and I'm looking at this, it's not fantastic. If I drop it like it's hot to a 4 hour and I get back to the pre and the post, I do see some signs like, oh, that's kind of interesting. Maybe we do hold here and bounce off that level and get back up to 440 and have a shot at the highs. I mean, but DRAM's not dead, right? So yeah, maybe we do have a shot at some of this. Maybe this is something. Um I personally think that we have to look at it that way and I think that that's definitely something we want to pay attention to. Now what we want to do is understand that we're going to have tons and tons of headline risk. That's what we want to understand and we want to understand that we're going to want to change and trade with that risk. That is the easiest way that I can explain this. So when I look at something like crude oil and I'm just going to use USO because a lot of you guys are going to trade that. It is very difficult for me to look at this and tell you that this is just done when all we've done is just come back to Thursday's level. That's all we've done here. And coming back and back filling before you go higher, that's not crazy. So, did we really do anything here that is that insane? Not really. When we look at the VIX, I feel the same way. As much as I want to look at this and say, "Oh, we're definitely, you know, we're out of the woods because of this movement." You have to you have to look at this for what it is and think to yourself, is this really what it is? Is this really the end of it? And the chances, let me reiterate this. There's a chance that yeah, this is and I think it's less than a coin toss right now because there's some other things out there. So, if I go S5 FD and that is S&P stocks above the 5-day moving average. So, S&P stocks above the 5day moving average and I click here, what you're going to note today is Monday and that was Friday right here. So, I really only had Friday before today. But see, we're at that singledigit level right here, nine. Whenever you get into this level down here, which is really single digits, but if I go to 10, that means 90% of all names are under the 5-day moving average, which is pretty insane. So, just to show you how insane that is, if I go back just to 2020, and we don't have the crazy magnet on, so we don't have to worry about it. and I just go here and we go back to 2020 and you just look at the amount of times and we can actually raise that because there will be no negative. There's always like 1% or something like that. So, we'll leave it there. You're at a level that when you get into this or around this area where it goes into single digits that you're due for some kind of bounce and you got into that area where you were due for some kind of bounce. So, does this mean that we're definitely going to continue to follow through? I I don't really believe that yet. I believe that you could be out of the woods, see a bounce, and then go from there. If and I'm going to stay with this for a minute, then we're going to get into the ES. But I want to go back to the Q's for a minute. And I just want to show this. So, if we look, and we're not here yet, right? If we drop it this way and we go to the 4 hour and then we go to extended, we never really got down there either. But I do think, and you have to realize there's a difference between the cash market and the futures market and the hours that they trade. But if we really look at this, we could see ourselves in a position here where we're running up to the same exact level we were at before and then we're rejecting it. I don't want to make it sound like you don't have the possibility to bounce, but to think that you're out of the woods just yet. We just want to make sure it holds. This is to me where everybody always does themselves a huge disservice at these inflection points. If you didn't call the top here, if you didn't call the top last Thursday on the 26th, why are you calling the bottom? And that's really important. You might want to listen to it again when I say it. If you didn't call the bottom this time and you didn't call the top last, like what are you doing? Just let it happen and let it develop. I see what's happening here. I think it's great if it holds. Again, I tend to use RSI and look at it. We'll drop it to a 4 hour and we'll get rid of that. And I see it down here and I see that we're oversold. And I see that usually when you're oversold here, you do tend to get bounces in the semiconductors. that does tend to happen in this area, especially when it's extreme like this. So, you can get a bounce and these can lift. There's no doubt about it. But we have to be cognizant that you have a tremendous amount of headline risk and you're one more shut in away from watching oil go through the roof. And I think that that's really very important for people to get. And if we start to see that, it's going to become a problem. So, what do you do about this? Well, the very first thing you do is I think you have to take two sides of this. The first side is you need to either be long-term or very short-term. I refer to it as a barbell because you don't want to be in the middle. This is where people will say things like, "I'm a swing trader. I'm this." I try to get people to not define themselves by these categories. And I'm not saying that you shouldn't understand that there are categories, but you don't want to define yourself by it. I think a better way to look at it is saying, "I have a skill set that is geared right now towards swing trading, and maybe I'll develop another skill set later that's geared more towards day or long term or something else." Right? If you look at it that way instead of identifying with it, but look at it as a skill set. You won't lock yourself in as I do this. It's like this is the skill that I have and now I have to get the other skills just makes sense. But the short-term side of the market and the long-term side of the market makes sense. If you think that this is all going to pass, which it will. It will it in one form or another it will pass or we have bigger problems. So if you're thinking like that and you're long EWI and you're watching this, then you might look at this and say, "Well, a year from now I think it's going to be higher or 6 months from now I think it'll be higher." Okay, that's great. If you're looking at it from that standpoint, I get that for me. I completely understand that and I completely understand why somebody would look at the world that way. If I'm looking at this and saying, I'm going to swing this for the next week. I good luck. It's not going to work that way. If I can come into this and say, "Oh, gez, if we undercut the low, then maybe I'm going to hold." And then we looked at this today and there were a couple levels that made sense. But really, the reason all this stuff moved to get back to it and what I'm saying is all this did stuff didn't break out because you're some great technician and you nailed it. It all broke out because you got a tweet that said, "The war is going to end. I see this coming to an end sooner than later." So, your strategy right now isn't your fantastic skill set in picking bottoms. It's maybe I should buy some stuff in case he tweets. That's not a process. That's a dream. So, you want to think about this and go, "Well, why why did I," and I know this sounds nuts, but you I I still do this after 27 years. I'll sit down at the end of the day with a journal and go, "Well, what happened today? And why did this stuff work?" Okay. Well, it worked because I got tweeted and that that lifted my longs. I'm still going to take the W on the long side and I was short a bunch of names when he decided to get in front of uh you know his truth social and I was short here and I was a genius until the tweet. So, you know, it's going to happen and it is what it is. But that said, when we start to look at these names, these are clean reversals. And one of the things when you say, well, what would make that a clean reversal? Well, besides your piercing down below and going over it, I'm just going to give you a real quick tip here. And I'm going to start trying to do Thursdays a little more more educational stuff. I know I've been saying that, but it's just been crazy lately. So, if you look at the ATR and that ATR is 25 26, all you really tend to do is measure that bar from here and you look at that low and then you measure the top of that and that bar is 32. You really want 2x ATR. You're probably not going to get 2x ATR when the VIX is at 35. Um, boy, I sound like a nerd, but yeah, you're probably not going to. So, if you know if you're over one times ATR because the ATR is going to pick up because of the V and the equity V is so much bigger than the imply than the index V anyway. So, you're at 31. So, you're way over, right? So, when you have that, they do have the opportunity to hold. But I do think that there's some significance to this. And and I'll tell you what I mean by when I say what do you mean there's significance to this? If that's the long end of the trade, I don't think that MU is going out of business. I don't think that they're going to stop on the DRAM side. So, the fact that you're buying this and it's holding the 55 is great for traders. Like, that's that's great. Maybe you trade up. Maybe you get through the 1222 and you break back up to the 438. Awesome. There might be a trade in there that makes sense, right? And then that might be something that, you know, makes sense to you and you might want to get involved. The other side is to understand what's in play. So when we see something along the lines of and and I again I think this is really important. When we see something along the lines of US we know it's in play. Last night we were trading and we were trading out of this stuff in the overnight markets. But today we saw an opportunity. So when you see them really what you start doing and I'll show it to you. Really what you start doing you start looking for these opportunities. And why do you start looking for them? Because you're trying to find really quick spots to get in and to get in cheap. And really with something like this, I'm just going to mark off the top of this. I'm just going to mark off the bottom of that. And all I'm doing is watching this one minute bar. And what you're going to do with that one minute bar, this works great for futures, anything futures related, right? Anything futures related that also is tied to an ETF. So you can see that little wick right here that's sticking out right in that little spot. Look at it right there. When you see something like that, that's a liquidity grab. That's a liquidity grab. And then you can see how we lifted from there, came back, tested that same area, and grabbed again. So, right in here, I bought. You can see that they were accumulating it. And then from there, we got news uh that the G7 was like, "Yeah, we're not really ready to do that yet. We're not really ready to tap those reserves." And we lifted. Now, I knew what that was. It was a gift. So, when the trades work in this kind of environment, you have to take it when you can. And so, therefore, what we're doing there is we're just very simply trading it out and then we're getting out of the way on the way back down. And just very simple, you know, you can use a 9 EMA. We have a private cloud that I use. Um, it just tells you that trades pretty much that's pretty much the high for the day. Now, again, when we're looking at this and we're seeing what's happening here with oil, we can see that it busted that area that I marked off for us where all those wicks were. And what happened when that area busted, right? So, just because you're done with an area doesn't mean the area is done. Meaning, if you wanted to be on the short side, when it broke that area, it was perfect. Here, watch this play out live. I think you're going to hold right there. What is that? 1850. I'm going to buy some USO. I'm going to use that little wick right there. I paid 18 and 3/4. I was able to buy a lot of it. Now I can just use 1840. If I take that out, I'm just going to kick it. I might take it out, but at least there's a little area in there where it makes sense to try. There we go. USO. Boom. I'm going to trim that USO I just bought. We got some kind of news hit. I'm trimming some of the oil I just bought. Trimmed more of the USO. Getting ready to kick a bunch of it and just lock it in. I trimmed more of the USO that I bought here. And I'm just going to watch. I'm out of the rest of it. Like right in here. I got out. Maybe they just got me. Whatever. But I'm not gonna hang out and wait. I trimmed on the way up and then I got out. Something even as simplistic as the cloud was right here. Pretty clean from there that that was going to break. Now, those kinds of trades we do a lot, especially when I'm live trading in the morning. But what we want to focus on is looking at this now and saying, "Well, is that it? Is it over?" I I'll tell you where my head is with all of this. If you go back here and this is Friday and this is where oil is now, do you really think that things are better or worse than they were on Friday? I I don't know how anybody could think that that things are now better than they were on Friday. So, the fact that oil's cheaper now, I think is really interesting. Um, are you better than Thursday? Like, where does this kind of sit, right? Where does oil really go to here? And I I think that's what you have to be asking yourself. Now, you do have some other really interesting developments that are happening out there, and I think that they're worth just pointing out. So, the first one that stands out to me is something like Oracle. Oracle coming out with earnings tomorrow night. that might be something that could actually help the IGV as a whole and continue to hold. Those IGV names held very well today. I could say anything I want about them, but they really held very well and we did see some volume come in. What what scares me about markets like this, because I've lived through it before, is this kind of stuff. No news, no nothing, and all of a sudden from 437 to 428 for no reason. But that doesn't happen that often, right? No. Here it is off the open from 425 to 434 and then here it is 1010 from 435 to 426. So, yeah, it happens all the time. And so, what always gets me about these kinds of markets is you need to be really careful because you can get clipped and then everyone's like, "Oh, I'll just hold it till it comes back." And then it just doesn't come back. One name that came out with earnings tonight that I think are really important just shows the economy a little bit is MTN. You might want to just watch this one tomorrow. I was try to leave you guys with something. Take a look at how they produced the uh last quarter. Um and it was not great. And then take a look at the production of revenue going forward or the estimate rather of revenue going forward. Uh it was lower. So this one might be having a bad day tomorrow and uh we'll go from there. But head on a swivel guys. You know, you have a tremendous amount of headline risk. You could feel that you're out of this and then it's just one tweet and we're right back in the middle of it. That's it.