Did MU Earnings Save The AI Trade? PCE Inflation Data Report, Key Trades

[00:00:00] Speaker 1: My name is Gareth Soloway and I was a losing trader until I mastered technical analysis. Logic and charts beat hype and narratives every time. Now I teach investors the same techniques that made me a multi-millionaire. This is my trading game plan. Good morning, everybody. Welcome to my trading game plan. My name is Gareth Soloway, Chief Market Strategist here at verifiedinvesting.com. We have a lot to discuss today, microns surging on earnings, going right back to where it was about three days ago, just at that 1240 level. That was a pre-market high. That's right where the stock is trading right now. So incredible how you have a 20% drop and then earnings again, push it right back to those recent highs. Now the question is, will it take out those highs and continue to move higher based on what they said? Now we talked yesterday about some changes going on in the sector and those changes are still coming. We still have SK Hynix, which will be listed on July 10th here in the U.S. for investors to buy. They literally produced the exact same thing as Micron. Micron had great earnings. We all expected that. We knew the revenue and the guidance would be raised. The key was they talked about these long-term contracts. And again, locking in long-term contracts. I would just point out to people that generally those can be broken. So if you're charging $1,000 for X amount of memory, but price drops to $200, the companies are going to break those longer-term contracts. So it sounds good on paper and it's great and they were very boisterous about it, but let's just see how the future unfolds here. I'm still an overall skeptic. All right, let's go into the charts. We have a lot to discuss. Yesterday after the bell, by the way, we also heard from Qualcomm talking things up. So there was a lot of kind of bang for your buck yesterday after hours on the semiconductors. But I will say this, insider information leaked out once again. That's right, folks. If you look at the charts, just before the end of the day, the Micron chart started to pop dramatically as did it take up the futures. Guess what? The elites got that news ahead of you and me, and they were buying in heavily before this massive Micron surge. All right, into the charts we go. By the way, here was that late day surge on the futures right at the end of the day that took the markets up. And then we got Micron earnings out. You can see again, from that point on, really, we just went sideways to slightly up. We did get PCE data this morning, right here at 8.30 AM. The PCE data is the favored gauge of inflation by the Federal Reserve. And it basically came in in line with estimates. Core was in line month over month. Regular was essentially in line as well. So it is, I mean, when you hear in line, it says, oh, it's not so bad, right? Wrong. You're still talking about 3.6% inflation versus the 2% that the Fed is supposed to get this back to. They can't get it back in Pandora's box at this point. I have a hard time believing that without a recession, we will get inflation to go back below 2%. So again, pick your poison, higher inflation or a recession. One or the other. That's the only way you're getting the inflation back under 2%. All right, let's go to the S&P 500. Remember, we've been closely monitoring the charts to see if we were going to get a lower high. We already have the lower low. Today, we're going to be gapping up on the S&P. Again, I'm hesitant to say this is a lower high just yet. I really wanted to see here's our low with our lower low. And to confirm a lower high, I really want to see price come down and make one more lower low, right? So then you have a very defined lower high as well. We haven't done that. And today, again, we'll be gapping higher on the S&P 500 based on what we're seeing on the back of Micron, Qualcomm, and some other tidbits of information. All right, so that's something to watch. Now, for the markets right now, one of the big positives is the 10-year yield has broken back below a key support level. All right, so remember, the market wants lower rates. Now, lower rates are great as long as it's not associated with inflation. Right now, lower rates are probably because oil continues to see selling. We're now below $70 a barrel on oil. Remember, there's a key gap fill at 67-ish on oil. That's probably where it wants to go. So if we take a look here and we go to the 10-year yield, here was our downsloping support line. You can see it hit here, it hit here, then it broke out. Then we came back in and we hammered on this level, we bounced, we hammered on this level, and now look, we are breaking back below that level. As long as we stay below this line, that's a net positive for the market's lower rates overall. Now, you might say, wait a minute, why are we getting lower rates when Kevin Warsh appeared to be so hawkish to the rest of the market? Right? Remember, we had this, I mean, it seems like ancient history following all this other stuff, but just last Wednesday, the Federal Reserve came out and didn't do anything, but they were very hawkish. Many players on the Fed voting board wanted to hike rates later this year, and even Kevin Warsh came across as being a little hawkish. I think that was more of an act, personally, by Kevin Warsh. Now, I think the people on the Federal Reserve board, they are actually hawkish, but we know the president said he would only appoint someone that's going to cut rates, not raise rates, so I don't buy that we're going to see rate hikes later this year. I think that was more of a first statement to show independence by the Fed, to kind of show the market that, oh, well, I could be hawkish. I don't think he's actually got the backbone to hike rates later this year. I hope I'm wrong, folks, because if inflation stays high, you need to do it. The other factor for rates coming down is also oil, right? Oil coming down brings inflation expectations down, which then obviously relaxes the need for higher rates, all right, at least in the near term. Now, looking at the Nikkei last night, the Nikkei pushed up about 2%, so we did see a bounce back. Remember, they had the insight on micron earnings, as did the Kospi, which is the South Korean stock market. Kospi was up 5.42%, but this is still interesting, folks. Technically speaking, this is still an inside bar bounce of this massive drop of 10%, and I'm reticent to say that this is going to be negated. Are we going to take out the highs? And that's honestly what I'm watching now. A lot of people are back on the AI bandwagon saying, oh, here we go again. But be careful. A lot of the AI stocks, I mean, listen, if you're a memory stock, yes, you're up there. You're up sizably. But if you look at a lot of these other semiconductor stocks, Micron, Broadcom, and those are the big boys, but even looking at some of the smaller players, they are getting a bounce today, but they're not even close to their recent highs. And that, to me, could be the most telling thing. Listen, remember, Anthropics coming public later this year. We also have OpenAI. We have the SK Hynix deal for $29 billion. They want to dump on the retail investor by July 10th. So these factors, the institutions need to keep retail bullish. But if you look at the underlying signals in the charts, you have to wonder what is going on. Now, just to bring up that chart right now, look at NVIDIA. All right, NVIDIA continues to look weaker. I mean, yes, look at NVIDIA. It's bouncing today, but it's literally getting a tiny bounce. Look at that. Tiny bounce on NVIDIA. All right, let's flip over to Broadcom, AVGO. Broadcom, nasty move up. I mean, look at this beautiful trend line, by the way, that nailed the top on this thing. Huge drop as their earnings, they didn't raise guidance. And then look at today's bounce. I mean, sure, it's up, of course, because the markets are up. But this is where it's trading in the pre-market going into the open. And so again, you know, and listen, we can go to other names as well out there that are not specific to the memory chart or the memory trade. And those are stalling. Those have only gotten mediocre bounces. Now, listen, some of them are still decent, but some of them, again, are well off their high. So don't get fooled here. Let's make sure we want to see the entire market, the entire semiconductor go to new all-time highs, not just a select group that fools the retail investor into thinking the AI move is still going. That's what happened in the dotcom bubble. They had a few select stocks that were still strong at the very end, coaxing the retail investor in while the rug was getting pulled from underneath everyone else. And again, I'm seeing it in the comments and everything. People again, so robustly bullish, probably more bullish than they were even just days ago when we were at all-time highs on the semis. But many of the semis are not at all-time highs. All right. Micron. Micron here, guys. Notice these highs right here. Look at this. And this is just how cool charts are. This was the high in the pre-market on the 22nd of June. Look at that. Incredible. Absolutely incredible. We're just hammering there. Now, I do think this pushes through intraday, but I want to see where it closes today. Does it close above or below? But this is an incredible move. I mean, absolutely incredible on Micron. Can't take anything away from it. Again, if we look at the daily chart, you can see, again, we're trading up here from the daily, from during market hours high, but the pre-market high was back up there. I want to see what happens. This is very reminiscent of where we had a big gap up on earnings. I think it was, I think it was right over. Was this the last one? Or maybe it was over here, actually. The last time they reported an earnings here, they gapped up and then ended up getting a 30% drawdown. So let's keep our eyes on that. Qualcomm yesterday. Wow. Look at Qualcomm rolling over here. Still upsizably, but they came out, they had an investor day yesterday and they talked all the bullishness. I mean, again, these investor days are a dime a dozen now. It used to be like Apple did their investor day and that was it for years and years. Now it's like, oh, well this week we got Nvidia. Now we got Micron. Now Qualcomm, they're all doing it because they're trying to pump their stock. The more upside they get, the more shares they can dump on the public at a better valuation, instead diluting, but getting that capital raise for all of the AI spend that they're trying to do. But the key here is Qualcomm Micron made some very bullish comments. So yesterday after hours, it racked up to the upside. Now remember that insider trading, the elites getting in before? I want to show you this guys, because this is the kind of stuff I love showing to you guys out there. So Micron yesterday was trading down, down, down. It was at the lows of the day right here at three o'clock. All right. At 310, all of a sudden, it starts to go vertical, right? And it literally rallied $70 in the final 50 minutes of the trading day before earnings were released right here. Now was that just a coincidence? I mean, if you believe in coincidences happening every single time there's big news in the markets, sure, it was a coincidence. But my guess is the elites got that information just like they get information nonstop these days, and they put billions of dollars to work. And they had that trade entered and executed long before the market closed and all the rest of us got that information. Pretty wild stuff when you see that. I mean, again, it's not a coincidence you see a vertical. I mean, listen, if this was one green candle, okay. But to see literally buy, buy, buy, buy, buy into the end of the day, a 7% rally in Micron at the end of the day before this earnings pop, I find that a little suspicious myself. Now, other news. Now this is good news for IBM, but it's bad news for the chip stocks. Okay. But again, it's like, what's the shiny rock today? The shiny coin. It's Micron. And so you're going to still see, generally, a lot of these stocks are going to be up today, the semiconductors. But IBM unveiled, check this out, guys. IBM here, if we go to the intraday chart, look at this, pre-market, look at that pop on IBM. Now it's faded, but they unveiled a new chip that's going to compete with all of these other players, the Taiwan semis, the NVIDIAs, etc. It's literally under a nanometer. It is so small, but it's so powerful. And this is what I'm talking about, guys, is that competition is coming. Whether you're in the memory sector, or whether you're in regular chips that NVIDIA does, or any of these other chips, Arm Holdings is producing AI chips. We have Intel now starting to produce all this stuff. The competition is coming. So when Micron says, hey, we had 86% gross margins, that sounds amazing. Sure. But the thing is, is that the second we start to see those margins coming in, that's when the stock is going to take a dump. And we're already seeing that on NVIDIA, right? I mean, you look at NVIDIA, it's way off of its all-time highs. Broadcom, same thing. Broadcom, again, just the fact that they didn't raise earnings guidance is very, very telling. Now they might be selling more chips. But again, if their margins are contracting, then they could sell, I mean, if margins drop 50%, they could sell double the chips, and still make the same amount of money. And that's it, right? And it's versus making more money. And so obviously, I'm using a big example of 50% cut in margins. But that's the idea here. And it is coming, whether it's this year or next, we will see it. All right, looking at a couple stocks, this is one I'm highlighting for you guys. This is one of my favorite potential swing trade setups. If it comes down, we've seen Alcoa collapse here over the last, this is a weekly chart, by the way. So four weeks down in a row, at 48, you have this former pivot. And it's also approximately a 618 Fibonacci from this low to this high. I love those chart setups for a swing trade. Now, it's not a long term investment for me, just swing trade, but we should get a major bounce off of that level. All right, so keep that on your radar here as we get in to the next week or two doesn't it probably will not trigger today, frankly. But I would say could trigger in the next week, it's going to be on my radar for a swing trade gold getting a small bounce today. So again, notice we came down to that 39 to $4,000 support level that I gave you guys yesterday, I said, we are at support here, we're probably going to get some small bounce, I don't think we're at the lows on gold yet. But I do think it's due for a bounce and we're starting to see this bounce in smart money commodities at verifiedinvesting.com where I have my commodity service and I just trade ETFs and stocks so you don't have to trade futures or anything like that. But I did pick up the ETF for palladium and platinum yesterday because they hit major technical levels. I also took profits on COPEX on a short which we made I think about 13%. That was a short on the copper miners, that was a great exit yesterday as well. Again, smart money commodities and miners there. Now again, I'm looking to enter on gold a little bit lower, got to come down, I'm going to get a bounce here, but it's not enough for me to jump in yet. And then I think we get one final flush out 36, 3500 and then I start buying heavily silver. Great. Well, I wouldn't call it a great bounce today. It's up about 2%. Normally, that's a good move on silver. But after its dump recently, just in the last week from 71 and a half down to 5570 yesterday, it's getting a small technical bounce. Again, if we look at this, this is my short term support, we almost hit it. We almost hit it. This 54 level is going to be support. And then the big one is this $50 zone right down here. And again, I still remember people saying it would never go back below 100. I have comments back on videos where I said, guys, this is going to correct and it's going to be nasty. And we were, oh no, it's never going back, back below 100. Silver's never. I mean, the demand, the physical versus the paper. I mean, I heard every excuse in the book and it's like, yeah, but emotion rules the day. Remember, and if there's one thing you remember from today's lesson, short term, emotion is in control of the markets. Long term fundamentals matter. Fundamentals absolutely matter long term, but short term, greed and fear. And fear is pervasive just like greed. If greed can make silver run up in a matter of two months from $50 to 120, then you can drop from 120 to 50 bucks very easily. And we've almost gotten there now. All right. Let's go to a couple other charts. Oil continues getting a small bounce today. We hit gap window yesterday. Gap window is where kind of the low from the gap here. We had a close here at 67 and change. We gapped up the next day and began our bigger run. This is now a gap window. I still think we'll fill the gap, but again, you may get a small bounce. Oil is oversold here, guys. It is very oversold. If you're any of these countries with strategic reserves that are now depleted, you are buying millions of barrels a day to replenish because you still don't know if the 60 day window here with Iran and the US will yield a result. You just don't know. With Trump and his rage tweeting or with Iran and their unwillingness to give up uranium, you don't know how it's going to play out. So you are filling up your reserves at these points. But needless to say, it's been a great pullback. Hopefully we see it all reflected at the fuel pumps sooner than later. Natural gas continues to inch up a little bit. I still think this is starting to look a little bit better here as a cup and handle. I actually am starting to like this chart set up more and more for a potential breakout. I'm not in yet, but I am keeping a very close eye on it. And then lastly, Bitcoin. Bitcoin flushed down to 59,000, making a short-term lower low and then rebounded. Today, it's up slightly, only slightly, which is disappointing, right? Because yesterday and the day before, we had big sales in the tech sector. Today, we're getting a big bounce in the tech sector. Granted, it's very isolated down to the AI stocks, but Bitcoin not getting much of a bounce. Now listen, as long as it holds this lower pivot area, it's okay. But again, the price action is not great on crypto right now. There's no doubt about that. All right, I've got to get going, guys. Got to get to my trading room. I will keep you guys in the loop on everything going on. Thank you so much for spending time with me on this Thursday morning, and I'll see you soon. Take care.