Stock Market Today: Why Thursday's Rally Is Just Getting Started!

[00:00:00] Speaker 1: A huge week of firsts, and we're going to get into this, everything from the new Fed chair to what's going on with SpaceX and key levels. But I think there's some important things to note, and I don't want to overlook them. The first thing that I think is really important is just the volume that we had. Thursday's volume was absolutely insane. And when we go look at that buy volume, you can see that there's only been a couple times we've come even close. The majority of times has been in this area, meaning we had about three times when we were going through all that winning and liberation, where we had that kind of volume. And I think this is a very important distinction. If you take a look at the NASDAQ, you'll see very clearly at a very similar pattern. And there's some really good things that happened here that we need to talk about very clearly on these gap fills. We're going to get to that. But also, I want to spend some time today on the semiconductor index and some other indexes that are breaking out, because a lot of people are really not understanding why semiconductors are going higher and then what could actually drive them to go higher. And it's pretty clear what's doing it. Let's get to it. So as traders are reacting to the institutional levels, what we're trying to get you to do here is to know what they're doing ahead of time. Subscribe, click all notifications. What we go over here is timely by hitting the bell. You don't get it after retail is already in. The important thing is you get the information, education that you need. Subscribe. Let's get to it. Everybody, welcome back. So one of the key things I want to focus on is semiconductors and what they're doing. And then I want to look at the breadth of the market, because there's a couple of things here that are really standing out to me. Also, there's something here that I think a lot of people are missing when they're looking at the volatility. You have a lot of people out here saying that this can't possibly continue. You have one huge driving force in semiconductors. And it's the thing that never goes away. In 20 something years of trading, it just, it does not go away. You have earnings. And until those earnings slow down, you're just going to keep going higher. Like if earnings keep pushing and earnings keep going higher, then the semiconductor index will go higher. It doesn't mean that you're not going to have volatility associated with it. You will. A matter of fact, a lot of people are using the wrong tools to look at volatility right now, but you have to understand what your driving force is. I'm not going to say it's some great mystery. If you keep raising earnings and you keep rising faster than people think you're going to rise, you're always going to have this group of people out there that are going to say, oh, this can't continue. This can't continue. And I just want to show you something so that you can kind of wrap your noodle around it. This is where you were in March. This is where you are now. And so if we just take a look at it, click off that magnet and say from this base, what have we done? So you could be one of those people that say this isn't happening and be the ostrich, but you're up 84% on semiconductor indexes. So you'll have two kinds of traders and you have to decide who you're going to be, right? Are you going to be the person that's out here saying this is going to end, this is going to end, or are you going to be the person that's just going to buy and actually do the work and understand why this is going on? So one of the topics that you're going to hear today in this video a lot is that people need to do their own homework. You need to understand why something is doing something, because if you don't understand the why, then you're not going to understand when it corrects. For example, if you took a look at something like Micron, let's do this real quick. And you're like, well, Micron shouldn't be doing this. It doesn't make any sense. Micron's going higher, blah, blah, blah. Instead of saying to yourself, hey, why is this happening? And let me look into it. They're the people that are making money. Micron's doing $50 on average, that they're locked in to do $50 a year right now, for example, on an earnings. So if I look at the earnings here and I see 12, and then I go here and I see the earnings and it's four, and then I go here and I see the earnings and it's two, right? And you're saying, oh, well, geez, we did 280 and then we did 460 in earnings and then we're doing $12 and now we're coming into earnings on Wednesday, but this possibly can't continue. I don't understand that logic. I don't understand who's calling you and telling you it can't continue or why you're using that in your head. Instead, what you should be looking at is saying, what am I missing here? And then how do I get involved? And these are some of the topics I want to cover today. And we're not going to dive into that right now. We're going to cover it a little bit later, but I want you to get the concept because it's an important one. And sometimes when I do these rolling on edited, I'll leave out some of these details that are floating up in my head right now. But to go back to this, let's just look at the S&P and what happened. So the drag on the S&P was what? It was world peace. We were promised it over and over again. We're going to get it. You're not going to get it back and forth. And then eventually we've gotten it. Now, you have a huge amount of buying that took place on Thursday into the weekend. And what we're starting to see is we're starting to see just, it's actually perfect. You gapped up. And then from this gap up, you filled the gap up. And then after you filled it, you rallied. So we came down, filled the gap up and rallied again. And then what we're always just watching are the simple things like, okay, here is the gap up. Here's my 12. Here's my 22. I see that we crossed over, but we're still holding those levels and up. So we could just turn right around again and start to lift. If we start closing under this level 7,400, then you might say, all right, well, we might come back down and retest 72, 50, something like that, right? Retest that 55. I use a 12, 22 and a 55. You should use what you're comfortable with. That gives us a lay of the land on what's going on out there. If I look at the NDX and we take a look here, we did the same exact thing. We came down to our level. We held the gap and then we rallied. And right after the close on Wednesday, they did this announcement and no one believed it because it's like the boy, the Christ wolf. We have an agreement over and over again, but guess what? We actually have an agreement. So this is what we have. This is the hand that we're dealt. And these are very specific patterns. I'm going to show you something. So if I clear everything off here, you have your breakout, your pullback, where you did your undercut, where this is where everybody panics because, oh, we're hitting a lower low. And what did they really do here? They just did an old-fashioned liquidity grab, grabbed as much as they could. And then from there, they just ripped. And with the algorithms and high-frequency traders, you're doing a lot more of these kinds of trades now because they know exactly where people put their stops. And that's really why where you used to put your stops is actually becoming an area of interest where you should be looking at getting involved. But more on that in another video. If you take a look at how this is setting up, you're running right into that DTL downward trend line. Do you flip it? Do you not flip it? The bottom line is nobody really knows, but you don't have an earnings problem. That's the one thing that is just being very objective. You have people that are saying the earnings can't go on forever. I don't know how they have that crystal ball. I don't know what's going to change here. You have these companies that are out there raising billions and billions of dollars to go and buy more semiconductor chips. And then you have people that are on Twitter telling you, well, it can't possibly last. We've never had a growth cycle like this in semiconductors ever, ever. Just to be really clear about this, in 20-something years of trading, ever, you've never had growth this fast in semiconductors. Not .com, nothing. They are growing so fast and they're taking their estimates up so fast. And it's not because of the future. It's not like .com. You see, when we traded .com, back in the day, all right, here we go. So when we traded .com, I always like using Cisco because it's like the best example of it. But when we were trading this, these companies were trading 80, 90 times futures earnings because we used new metrics and we were using eyeballs per day and all these weird stuff to justify what was going on. Even if you go and take a look at something like Intel and we go back to here where Intel was absolutely exploding, right? These companies were trading 80, 90 times earnings. There was no rhyme or reason to it. People always look at these names and say, oh, well, that's what we're going through now. Well, the reason that we moved the way that we did was because of all this money that was pouring into .com and you didn't understand it. In 2000, all the computers were going to reset. It was a whole thing, right? But what do you have now? Well, now you have earnings. You have growth. They just hired an ex-CEO from SK Hynix. And I have my opinion on why they did that. And disclosure, I have a position in Intel. And to be candid, I was not of this. I was like super grumpy, like old man shaking his hand in the cloud. Like, there's no way this is going to go. But I get it now and I understand what they're doing. But the amount of revenue and earnings that these companies are going to do is staggering compared to where they were in the past. So if we go with that, and we just look at a couple, just to kind of get it perspective before we go any further with this, because it's not the meat of what I want to go over, but I want people to get this. So you're doing $23 a quarter last quarter. The quarter before that, and you just look at the earnings, you did five. I'm sorry, they reported six and then they standardize it. You're supposed to do three. So you only beat by 71%. And then here you reported a dollar and you were supposed to do 88 cents. So you're doing it. You're supposed to do a dollar and then you come here and you're supposed to do three, six, and then you do six, 20. And then you come here and then you do 23 when you're supposed to do 14. And they say they're supposed to do 33, but people are thinking they're going to do 50. So you're starting to see these companies grow at an exponential rate. And what people are doing with this is saying it can't keep going. I don't understand that logic because there's nothing behind it. Just because they have a limiting belief on this doesn't mean that it's true. And you really need to wrap your head around that statement because that's what's really happening here. Oh, it just can't keep going. It's going to go until it doesn't go. And that's what's very important about this. And I want to get it out while it's in my head. If I get back to the beginning where I really want to focus here on the S&P, do we break out? Do we not break out? You're getting more leading sectors. We're going to get into those leading sectors today. Whether that continues or not, I don't see how it does it. I don't see how the industrials don't continue. And we're going to talk about those. You have a DTL on the NDX here. Will they, won't they with what's going on in the world? That's a completely different conversation. And we'll address that because the market's clearly telling you that they will, that there will be peace one way or another. And there's some really interesting things coming out today as well that I think are very important. But I have the 200, the 50, the 20, and the five here. And these are above moving averages, meaning what are we above? So I'll say it again, because that didn't really make it very much sense to people that are nowhere. They're like, what is he talking about? Stocks above the 200-day moving average, this counts as a percentage. 50-day above their percentage, 20 above their percentage, five above their percentage. And if I'm to look at this, you're actually setting up to push, which is super interesting. You've undercut here on Wednesday where the majority of names are below their five-day moving average. So we have the majority of names lower below their five-day moving average than they've been in months. And then at the same time, and you can see that right in here, and then at the same time, you can see that we're seeing the 20 is still above, we should still be above that 50. We are. And if we break 50, then maybe you want to watch it. But right now, you're completely oversold. You're more oversold on the short-term here than you've been since April. And I don't think a lot of people are getting that. And I think a lot of people are going to be really shocked at what could happen as you start going into earnings in a couple of weeks here. But if we start taking a look at the 55-day, and we'll clean this off for a second, you're still above your 50. It doesn't mean that you're not going to bonk around, but when you break 50, that's usually where you have an issue. If you get above 50, you start to get support. And very clearly, you can see the divergence here, where you broke here, you undercut here. And then the whole time, the breadth is getting better. So if the breadth is ever getting better on the 50, like it is here, and the market's taking out lows, it usually will not last. It's not going to tell you when. They're not going to say, hey, Tuesday, we're done. But you always understand that it's not possible for the breadth of the market of more stocks to go above their 50-day moving average, and for that to get worse, for the market to get worse, it doesn't work that way. So if we take a look here, and you can see how you started to come down, and you started to break up here, and then you start coming down, like that makes sense to people, right? But so did this divergence when you're here, and then you take out a new low, and then you don't really take out the new low down here. And it's hard to see how tight that was. But you can see it if you look at it, look at it right there. All right. So then if you take a look at it from that standpoint, you can see, all right, well, these divergences, they're kind of interesting. And we have one right here. And then if you can't see it, we'll just mark it off real quick, where you would take out that lower low on the S&P. And then from here, you're taking out that high, right? And so then we're looking at that and saying, all right, well, that's super interesting, because it actually is working yet again. When we get below 50%, I kind of put the brakes on. And I want to watch what's going on. And it's super interesting. But again, if you just do the simple things, and you don't get out of whack, for example, if I just go here and drop a 50, if you go look at any time that people are struggling, you're usually struggling when you're below the 50, it's fighting to get back over it below the 50, struggling to get back over it below the 50, 50 becomes here. And then all of a sudden, guess what? And it doesn't mean that you're going to go up, I want to be clear on that. But what it does mean is that you're in a better environment to trade, close below the 50, and you probably shouldn't be doing swing trades closer to above the 50. And guess what, you're a genius again. So all of a sudden, your trades got way easier. So when you look at the world that way, it makes a lot of sense. When we look at the 200, all I want to do is stay above the 50. As long as 50% are above there, I'm in good shape. And that's what I want to focus on. You can see the same divergence here. But this takes a much longer time to form a divergence. So I always want to pay attention to that as well. NASDAQ, I use NDFI, and this is stocks above their 50 day moving average. And you can see right here, you came down the other day, it's like, oh boy, we're going to break. And that was Wednesday, and then Thursday, world peace, and we're back above 50. So this is telling us a very clear story that you're also getting breath in that market. If you look at the rest of the world right now, and we don't just do again, simple things, let's go back to candlesticks, because it makes it much clearer. You can just see the downward trajectory of gold. This is where everybody has to buy gold, we all have to get involved, give your reversal. And then everyone convinces themselves, no, it's not over, it's over. So then gold is obviously coming down, it's coming down very hard. There's a lot of reasons why this will continue. We need to discuss a couple of things that make the Worsh very different than J-PAL, and why it's actually good for the market. Most people are going to just look at the VIX and say, all right, it's collapsed, but they're not going to understand the volatility under the hood. And we may get to that, we might not. But I think it's more important to understand that the 10-year absolutely is collapsing. And that's what you're looking for. At the same time, you're watching the dollar rise. And that's pretty self-explanatory, I think, as to why that's happening, and why the dollar is rising, but why you're seeing yield drop. But I think more importantly for us, the breadth of the markets there, gold is doing its thing where it's collapsing. They're telling you which way they think this is all going to play out. And you're seeing that with crude oil, which is completely imploded and started to control or close below that control bar. So people that are trading the commercial hedgers and everything and speculators, they think that inflation is as peaked and it's coming in, and that's why you're seeing some of the movements. But there's some serious issues here that people missed with the war speech. And as someone's been through a couple of these guys, it's really important to get the difference. So let's get into that and then let's start diving into this. Now, there were some key differences this week with the new Fed chair, and I think it's worth spelling out the difference between him and J-PAL. And I've highlighted six of them. There's some more, but let's just go through them so we can see what to look forward to going forward. The statement's going to be shorter, simpler, and to the point. This is very Greenspan-esque, if you were ever trading in those times back in the day. But this is super important to get because less words. We got 130 words, not 300. So the statement's been cut in half. So you're going to get short, sweet, and to the point, and not a lot of hemming and hauling. Just, "Hey, this is what we think, and this is what we're going to do." And I do think that that's refreshing and apparent in a statement. It makes our lives very easy. And it even came out shorter and simpler. No personal dot plot. So I actually think they're going to get away from the dot plot altogether, but Warsh personally abstained from even putting a dot plot on there. And the reason why he did this was it shows future guidance. And what he's saying going forward is we're not going to give you future or forward guidance. We're not going to do that anymore. And that's very important. There's none of this. Oh, I think we're going to have to hike in the next quarter, or I see four rate hikes coming. We could do three next week and two a month later. And like all that nonsense is gone. And that's a really good thing for the market because now the market's not going to anticipate what's going to happen. What happens when you get rid of this is you get a truer stock market. You get a market that actually moves predicated upon what it wants to with the equities. And it's not holding on for what might happen. It's just saying we don't know what's going to happen anymore. And we're going to play the hand that we're dealt versus dealing with some of the other stuff that you'd be dealing with down the line. I really like that he's doing this and we're going to get more volatility out of the stock market because of which I also like. Five task force announced. So this task force that were announced, he announced five of them. What they're going to do, I don't have a clue, but he's looking at operations, communication strategy, data sources, inflation frameworks. I do believe that he thinks things are antiquated. And I do think that anyone that looks at this realizes that things are completely antiquated. And I think that it would be a good idea to look at these and rehaul them in some form. But we'll see what actually comes of that, if anything at all. Number five, Powell's senior staff remained in place. He didn't get rid of anybody. He brought in two other people that are interim advisors and no other personality changes. His conference did not last hours and this was about as long as he's ever going to get. So what we are going to do here, what we're going to see here is some kind of environment, right? Some kind of environment where you're going to get some level of continuity of what we had in the past, but that's also going to lead to shorter, simpler. Forget your dot plot because that's going to be phased out. And if the Fed chair is not going to use it, you don't have a dot plot anymore. You have something that no one's really paying attention to. So he basically kiboshed it in his first day, which I think is awesome. It's an absolute waste of time in this current environment. No forward guidance is also great. Press conferences, no longer guaranteed. We didn't used to have press conferences every day. And a lot of people don't know this because they've gotten so used to the 24 hour news cycle of the Fed getting a piece of information saying, maybe we have to raise rates now. Maybe we have to cut rates now. This volatility that they've put on the marketplace where they've came in as if they're an investor. It's kind of nuts. This was never the way that it was supposed to be. Powell never missed a chance to speak and get up there and tell the world what he was thinking or do things. Warsh wants to go about his day. And so he's not going to commit at all to holding press conferences on every meeting, which is basically breaking from what Powell did for eight years. And he even says it here that his mentor's mantra was that press conferences are useful, but you have to save one. I think there's got to be something to say. So if he's holding one, one, you're probably going to see a policy shift. And then if that policy shift happens, then he's going to do something and say, hey, this is what we did. This is what we're looking going forward. See in three months, none of this, what we've been dealing with. And I think that is going to be extremely refreshing to the market. Overall, he's a net positive. So if we take a look after the Fed meeting, what really happened? Nothing. I mean, I'm showing you a weekly on the 10 year right now, but nothing really happened on the treasuries. And I thought that was kind of interesting. You have this initial move down, right? And then we're rolling back up, but did anything really change, right? You have the precipice ahead of it, but nothing huge there. Now, this is where I think it gets a little interesting. If you look at the same date, you can see what the dollar did and how the dollar rose. Now, at the same time this was going on, obviously we had what's going on. We now have world peace. We'll see how long it lasts, but the dollar is absolutely exploding to the upside, which means more money comes into the US because they want to buy the dollar because the dollar is strong and then they need the dollar. Why? Because now they want to go and buy oil and you have something called the petrodollar. And so that money will flow back into the US market. Norwegian banks do this all the time. We've gone over this numerous times in these videos. But the important thing about this is you have a strong dollar and Treasury is not affected by it. If we go and take a look at US 30 yield and we'll just go out to 30, do we really see anything that's changed since Tuesday, Wednesday, Thursday? Do we see anything out there that's really affecting us? Not overly, no. So I just think it's really important to get this like, yeah, yield came in. Okay, why? Because things are getting a little bit better in the market. Also, I think with the points that he went over, the more that he does not talk, the more they're going to buy bonds because they don't have to worry. Because now they're like, well, it doesn't really matter what people say because he's not going to speak. So this is going to be my yield for three more months or until the next meeting. And that we know that much now because he's not going to come out. These people aren't going to speak. They're going to have task force. It's a very different kind of fed. And people might like that certainty of, oh, I don't have to worry about, you know, what's he going to say at Jackson Hole or what's he going to say here? I don't have to deal with it anymore. And that's kind of nice. So if you look at financials, you rallied into this Friday or Thursday, rather. I just think it's a reflex to get out of something if you're buying into it. I don't really think that that's a big deal. There's a couple of sectors here that are really breaking out. But before we really cover that, we should probably just talk about crude and how crude's absolutely imploding here because there's a sector here that we want to talk about. So inflation is obviously going to come down if crude keeps dropping. If we took a second and looked at let's go look at gasoline for a second. And I mark all these off. So this is what the average price of gasoline was in April. So from April on, that's going to take you through. But you really look at from like April 1st all the way to let's go to April 30th. And then what's that going to do? It's going to take us to what the average price was. So the average price was like 316. And then if you come here, you're going to see May, the average price to May 30th is going to be right around that 342. So that's just called about an eight or 9%. But this is where it gets interesting. If you take the 340 level to where you are now, we are about to break $3. You have about 11% drop from the close on average of where you were there on gas to now. So gas is plummeting. Now, how much lower, as long as it stays here and get under $3 a gallon for the majority of the world or the majority of the US, I mean, that's really what you want to see the majority of the world. But if we took a look at this and you said, well, from peak to where you are now, what are you looking at? Well, you're looking at a 22% drop in gas and oil pricing. On the oil pricing side, crude obviously has dropped, right? And you always know that they come in, they look at ranges. They look at $20 ranges, really. But here you're looking at this and saying it's a 35% drop from the peak. From where we are with, I look at it on average because that's what you're going to pay on average. Let's get back to that real quick and we'll do this again so that you can see it. But if we just went to here, you're looking at a 22% drop. So I do think it's important to note and it's going to show you why some of these sectors are actually up when we get to it. So there's some sectors here that people really aren't looking at, and I'm just going to point them out because I think it's important. You're going to have sectors like jets that are going to break out. And the reason for this is really simple. Why? Oil prices drop. And if oil prices drop, that is their biggest cost, then profits go up. Oil drops, profits go up, airlines go higher. It's not rocket science. It's really that simple. Some places are more levered than others. UAL is pretty levered, but they all have like their little different things where I think it's Delta that has the refinery. I'm not an expert in the field, but you'll see them all the time. One will be more levered than another. AAL is pretty levered to try and do some kind of deal with somebody right now. But for me, I don't get into the nuances. I know the best balance sheets are ALK. They have the best balance sheet. But to me, I don't really want to play. I don't want to get that nuanced with this. To me, it's like spy jets. They all trade with one brain to me. If you all look at all those charts, they all look very similar. So this probably continues to go. And then where else are you getting into? You're getting into the summer season. Everybody travels, the kids are away. So that tends to work here in that type of environment. You look at this right now, and it's so crazy to me that we never even got back to the pandemic levels on these airline names, not even over. So you're really depressed versus the rest of the market. I think this is super interesting for people that like low beta trades. Just something to think about, something to put on your radar. But wait, there's more. Another sector that's going to benefit greatly from this and oil prices dropping. And make no bones about it. We can all talk that the war is going to pick up again. The war is not going to pick up again. Crude's telling us no. Gas is telling us no. They're the commercial hedgers. They're the big players. So I tend to listen to them and not a TikTok video or somebody on Twitter. And that's really important because if we saw that, you wouldn't see them doing what they're doing. I mean, look at the energy sector. It's completely broken. You have a head and shoulders here. It's on the neckline. You could say that this is the neckline and it broke, but these are all breaking, O-I-H. And this really, to me, when I look at this, or if we look at GUSH, which is like the perfect short for this whole thing, all these names make perfect sense, right? To short them, or at least come back to levels. This is pretty much, there's probably only 10% left, but that kind of thing. It does make a lot of sense. You look at Exxon and these names, they're all rolling over. I don't know if it makes sense for like MPC to roll over and break down or VLO because they'll print money for a while. You know, PSX, all those kind of refiner names. But I do think that you have to go on the premise that the commercial hedgers, those guys, they know way more. And then the speculators too, but you really always watch those guys. If you look at PEJ and you look at the leisure and entertainment sector, yeah, that's going to get you involved in some other areas. Of course, that's going to get us involved in the cruise lines. It's also going to have airlines in here, but you start looking at something like a CCL and these charts are all starting to shape up. RCL, right? NCLH, which has been the laggard, even that's bouncing off the bottom here. So you're seeing money flow back into those areas. And I think that's important. I guess you can make the argument that Visa and MasterCard might be busier, people have more disposable income, but I think that's a stretch and you might see that aftermath. And frankly, you might not even see that because you still have the gas prices. You know, it's funny how they don't drop right away, isn't it? So there is some of that, but you can see that stuff through Casey's as well, you know, just monster earnings. And then we came all the way back down and I find it helpful sometimes to put the names in. Let's use that magnet when I'm talking about this. So you can kind of see those names and there's that 50% line. And now we're back down to that 38.2 from that, you know, that peak all the way down. So this area might hold, and then we might want to just look at where the 12, the 22 and the 55 are. That's what I use. You should use what you're comfortable with. You'd probably want to see a green bar before you see anything else in here and see if they can turn around. You might want to go out there and just add an alert and just say, hey, when we're back over a higher high, you know, let me know when we get back over that 50% line. That might be something to pay attention to, but you know, do what you're comfortable with. If we take a look at PEJ, you're seeing that you're seeing other sectors start to participate. This is exactly what we're looking for. You had the financials that ran up into this, and I never really play that game into when you have a Fed speaker. And I know a lot of people will, but you start looking at those names and they tend to do this. They tend to just go, you know what, that game's over. We're going to rotate out. And there's a lot of reasons why that rotates out. But if we take a look here, they rotate out, I think because they've had a huge move and there's the growth's just not there. But if we look at some of this other stuff, you know, industrials are not hitting highs when we're going to go into quote unquote a recession. And industrials are clearly breaking out here. And I think that's very important for us to note. Even the bigger names, you start looking at like Caterpillar. Now, this was a textbook breakout, retest back down on that news. And then look at Friday, very quietly, 985. And you just broke out and you get these weird bars like they sell down every day. But you are seeing the movement. That's something else that people have to pay attention to in this market because you're seeing a lot of this with these names and the open and what you're getting that day. It's just been going away with semis. And we're going to get to semis next. But when I'm looking at the industrials, we're starting to see this kind of thing. And you're seeing certain names in the industrial space really start to break out. VRT broke out. GEV was something we put a swing alert on the other day. And this just made a lot of sense. So if I clean these off for a second, I'll show you why we did this one. But in regards to the industrials on GEV, if you take a look here, you can see that this is pretty much a lot of selling, right? So I have selling here. And to me, this is exhaustive. And you could say, well, you have the same here. Well, that's day one of below the 55. So a lot of people look at those levels 50-55, use what you're comfortable with. And then they break down. And then this is what you're getting, right? So this is what you've gotten. You've gotten the breakdown, couldn't get back over it. So you don't really see the need to get into that. You don't know that that's exhaustive yet. When you come down here and you see this, it's aligned at the same area. And you're near more the lower end and you're a higher percentage off of that 55. Yeah, that's when you start looking that way. So we did this on 6.17. But if I go and take a look at that and that amount of volume, like it's pretty darn excessive. Like this marked, when you see excessive like that, I call it exhaustive selling. When you watch those areas, look how you just came right back down to it. You couldn't break it. And you'll see them over and over again, right? Where you'll hit these levels and then you'll bounce back up. So I thought that was really impressive. But some of the other things that got me in this was the next day, they just bought the living heck out of it. The next day, did they buy the heck out of it? No. So when you look for that, that's what you're looking for when you have those kinds of things. Like the next day, did they buy the heck out of it? Not really. It was a day later and then it held and it came back to the same level and you had less selling. So like that was a really clean shot at getting back involved. And then you have your reversal bar right there and the green and then the green picks up. So that's a better, you know, to me, that's a better trade. If I look here and then I have buying the next day, but not a lot. And you can see we retest those levels. And then as you retest them, they start realizing it's not going to break. So they start getting more and more involved, right? So you have to use more than just a thing, but you start with the thing for me watching that 55 and how you act on it. It's very interesting, right? So you can see your break on it and then you can see this over and over again. And then we're actually getting stronger into Friday, which is exactly what I like. And this is of course, you're behind the little dividend there. And I don't even have to worry about earnings till July. Jeez. So to me, this is setting up perfectly. It's got me in the right space, data centers and data centers are just on fire. People keep talking about these silly cancellations. They should go look at what's going on globally. But if you take a look at this, you know, you're 80 bucks off all-time highs going into and coming into the cycle. So I think this is super interesting and you're going to see more of those kinds of names coming into that XLI. So I think that's the one space here that people really need to look at. Now we can get into semis. Now this week, you would think that SpaceX would have been the thing that would have been the biggest thing to talk about as far as anomalies, but something going on with Bitcoin and these treasury names is really misunderstood. We're going to spend some time on that so that you're prepped for Monday. At least you'll understand where my head is. I just want to go through a couple of things that I think will be really helpful to people that are trading SpaceX this week that you should watch. It is very clear that when we got up to this gap fill, this 190, we rejected that level and that level is starting to become resistance. It is also really interesting that at this opening price right here that we saw on Monday, the 15th, that we can see very clearly what's transpiring in this level and that 170 is being held. And so we have a buyer there. So I want to just show you a couple of different ways that you could look at this chart, especially when they're newer and make more informed decisions. So what I'm going to do is leave those levels up for a moment and we're just going to tighten them up. And really where you're at is roughly right around that 170, it might be a little higher. And that 190, that's a pickle. But there's a couple of things that you do with new issues that I tend to do. You should do what you're comfortable with. First thing is I always put an IPO view app and I leave it there. And I can go through this. I was talking to someone this week about why I do that, but I could literally go through history and show you that once these things break their IPO view app, that's pretty much it. They're dead until they come up above that level. And I'll show you a couple of them because I think it's helpful just to see them. When you look at something like CVNA and you find these peaks, the books with peaks too. I'll show you with a peak. You have a huge level up here. And that huge level is like where all these people got stuck. And it's a pain point, just like IPO is a pain point. So when you see something like this with CVNA and you see it trying to break through and then it can't, it comes back down, can't, and then it finally can. That's really what you're looking for, for that area to become, for support to become resistant. So just like with SpaceX, you'd look for that as well. If you're going to take a look at Circle, you'll see something very similar here where you have that IPO VWAP or you can take the peak as well. It's not that long. It won't be that different because it's only a couple of days since it was out between the peak and the IPO. This is just one of the tools that you want to put in your toolbox for newer issues, right? I have tons of these tools, but this is a really good one because it's simple. Earnings comes out Bonk, tries to break out Mutombo, tries to break out again Mutombo, right? So you know that this is an area where if you're long, that becomes your target. If you're looking to short, this becomes your short area and it works pretty well. And you can see that on Circle. And of course you can remember everyone's favorite time when Rivian and we all had to get in Rivian because it was going to be the cat's pajamas. And of course it was not. Shocker. And if you just watch this, you'll see it can't miss it. Again, you break the VWAP up here and then you come back down and you try to get over that VWAP and you cannot get over it. It doesn't matter the name. It doesn't matter what they do. What you're really charting with all of this is you're very simply just charting human behavior, Coinbase. Same thing. You can see, tries to break it. Can't get over it right here. Hits, rejects, comes down, tries to get over, can't, finally gets over. And that becomes what? Support. That's what you're looking at. It's not a coincidence when you get to these areas and it starts to hold, right? Just like what are you doing now? You're fighting the long-term holders. Will it hold? Will it not hold, right? You know, acquiring minds want to know. So when we get back to SpaceX and we take a look at this, same thing. We want to watch that IPO VWAP. So sometimes me doing those examples and wasting two minutes to do it might be more helpful to you so you understand why I say some of the stuff I say. So we know we're trapped between 190 to 170 and we know that we're going to watch that. Please, God, do I have the magnet on? Not today. Not today, Satan. All right, good. So now we've mopped off those levels. I'm going to move that up just a little bit. Cool. So now we have that laid off. So the next thing that we could do that would be helpful is just look at a volume profile. So like where are the majority of value at and where are they trading? And we can see the majority is up here to that 200 level up the top and we can see that the rest is down at that 150. And that does make sense. I mean, this is really the majority of the trading. I just think it's getting tighter and tighter in here. So we'd watch that. The next thing that we'd want to do with this and the levels that you'd want to use to me are just taking fibs and dropping it from the top down to here and just watching those and seeing if they coincide anywhere. For example, 38.2 coincides perfectly with that 170 level we were talking about. And it's not that far off of that point of control. So that definitely is becoming an area of interest. Like, hey, if we came back down to here, you know, not only do you have this area of interest, but you also have a point of control and you have a 38.2. And the reason that these work, just to be candid, when you have three points of convergence, like you have right here, one, two, three, we just went over. Why do they work? Because people like me are looking at them and saying, well, we might hold here. So then we have a fight, the buyers and the sellers fight, and then we go from there. You always want to stay above the 50 on these newer issues. But it's not as important as staying above the VWAP. And of course, they're going to be two different things. But most important about this to me, again, is that IPO VWAP over everything. That's like, that's the cat's pajamas. You see 191 right in here, you can see how we got right to that 190 level. And that's your 61.8. And then if you flip that, you're probably heading to 200. So your levels are marked off pretty good here. And if you're looking at this, I could just put this out in, you know, probably on Substack, but you can just screenshot it as well. But to me, this wasn't even the, you know, the absolute most craziest thing that I saw. I saw a bunch of people that were selling preferreds on these Bitcoin names instead of selling the underlying names, which was just absolutely fascinating. So let's cover that. So I want to take a moment to talk about STRC because I see these kinds of things a lot, specifically with access to social media. And I just want to point some things out. So structurally, what changed with STRC? And what is STRC? It is a preferred link to Bitcoin. If it gets to a certain level, STRC will go out there and actually issue more of this. And then after they issue more of this and they will pay more in yield, and then they will go buy more Bitcoin. And because they have the Bitcoin, then they will pay the yield. They're not the only ones that do this. And if you don't know, there is another one by STRIVE, S-A-T-A. And you also see that this one came down the same exact day. So I'm going to preface this with S-A-T-A is doing something a little different and they are called STRIVE and their underlying security is now. A-S-S-T does not make money off of this unless S-A-T-A makes money first and their individuals make money and then they will make money off of it. Why do you care about this? You should care about it for a couple of reasons, I think. And the first reason I think you should care about it is because STRC, all I heard on Friday, well, actually Thursday and earlier in the week was, this is a scam. The whole thing's a scam. When you go on social media and you hear it's a scam, it's a scam, and people are making their TikToks and they're making their STRC dances and, you know, he's doing this, he's doing that. When you ask questions and say like, well, what is he doing? He's issuing security. He's issuing this at 100 or 90, depending on when it was first issued. It was first issued at 90 and then a par became a hundred. So he issued it as a discount and then at a hundred. So to be clear at these levels, the way that they now read is he can't even issue more of this at a discount. It has to go back to a hundred before they could even issue more of that. That's the very first thing. So all liability stops the minute that these things break a hundred. They can't issue more of it. So there's no, it's going to be a Ponzi scheme. A Ponzi scheme means you just keep doing it over and over again. If this never gets back to a hundred S-A-T-A, they will not issue more. It's in their bylaws. You can read this. I'm doing this for a reason. So whether or not you want to trade these names or don't trade these names. But if somebody doesn't know that and they're doing what we refer to as not critical thinking and they're using tick tocks and Twitter and some guy who's got, you know, a hundred thousand followers who saying, you know, his name's like crypto Bobby or whatever you got, you crazy kids watch. You have no idea who that is or what his motivations are. Half of these guys that have these huge followings are paid to promote the other side of a trade that somebody wants to get it. And people don't even realize that people on Reddit and their posts and Wall Street bets and they all take money from the street. They just do. You don't have to believe it. It's just a fact. I mean, they've been caught enough times to do it. And what you have to understand about this is these people, they they're more interested in the clicks and the likes than actually telling you what the heck is going on. So when you start to see something like this drop, oh, it's a scam. It's a scam. It's gone to zero. Okay. Did it miss a dividend payment? No. Do you know what scams don't do? And I'm not sticking up for him. Far from it. I'm actually short MSTX and we can get into that in a second. What I'm getting at here is, you know what scams don't do? They don't start paying their debts earlier. So if you're going to go from a monthly and you're going to say, no, we want to go to every two weeks, they don't increase the amount of money that they have to pay you to increase their own liability. When you see something like STRC start breaking down, just disclosure, we're long this now. I did it two separate ways. I did it through stock and married puts, which was not really the absolute way to do it because of the cost associated with it. But long term, I might want to stay in this and see if it gets back to par. And I also did it with calls and the calls were up like 35% or something by the end of the day. And really, where are you going to go? Well, I don't know that you're going to go past 100. You might go past 100 because when the shorts start to realize what actually happened here, you'll start to see that this, and this is where it gets super interesting. So the CEO of Strive comes out and says, yep, we looked into it and somebody had a massive margin call. So somebody owned SATA and somebody owned STRC. And what they did is they levered their fund. They went out there and they're buying like four to one or five to one leverage. Why are they doing that? Why would they do that? Because they're getting this yield. And again, SATA is paying daily. So it went from this thing where they were paying, oh, here's a dollar every single dollar, eight every month. Here you go. Thank you very much. Right. To what are they doing now? We're going to pay you daily. You know what scams don't do? Pay you daily. So why you might have a problem with the structure, why you might not like the structure that they're borrowing money to buy more Bitcoin. Here are the facts. They can't issue more of this, which would make it the dumbest Ponzi scheme in the world if you can't issue more of them. Right. Like that's a problem. Okay. Then the second part of it is that they're actually increasing how often they're making payments so that they can streamline this and make it smoother for their the people that actually own it. That's not what somebody does when they're in trouble. What they do is they miss their payments. Common stock. If common stock's having a hard time, what do they do? They cut the dividend. They suspend the dividend. And we've seen corporations do that and then reinstitute the dividend because they're going to get their capital together and go from there. That's what they do. And so what's important about this and what you take from it is you probably had a good old fashioned margin call that exacerbated upon itself. And then a bunch of people went out and put up TikTok videos and said Ponzi. And then everyone went out there and bought puts and shorted it. Now they're trapped in something that's paying them, what, 17%. And understand that if you're short this or you have puts, guess who's paying the 17% now? You are, if you're short it. So let's explain that so people understand what happened to the short sellers. See, the short sellers, if they're short this, the very first thing they have to realize is that at $89, if they're short, your dividend that you're going to owe is roughly, I think it's 12.9%. That's what's important. So if you're short this right now, guess who doesn't have to pay the dividend? STRC doesn't pay the dividend. You're paying the dividend if you're short it. So as more people short this, it actually reduces the burden of micro strategies. No different than it reduces the burden of those that are short here. When I looked into the filings, which are not easy to do, it took a while, you have about an 11% short position here. So 11% of what needed to be paid no longer needs to be paid. By the way, money is not a problem. I think they have 32 years, they're saying in reserves, but they're tying that to Bitcoin. So I think that that's a pretty not clean way to look at it. I'll give the shorts that. But what you had here was an old fashioned squeeze, not on sale or whether you agree with what he does or not, not here to judge that. But what you had is a good old fashioned run on a margin call. And there's nothing wrong with that. Like trade it, call it what it is. But the same thing with SATA. They don't increase their margin requirements and they don't say we're going to stop issuing debt unless we're at parity. They just wouldn't do that. So the interesting thing about this is of all the things in the world that people could go out there and short right now is they're shorting something that they're going to have to pay double digits to do. It makes zero sense to me. The only way it makes sense is if you truly believe that Bitcoin is going to go to zero and that there will be no yield because Bitcoin will be at zero. If you believe that, then that makes sense. In regards to STCR or STRC, dyslexia kicked in again. Here's what I would say to you. Here's who the short sellers are betting against who have this quarter increased their percentages. Just to put it in perspective, D.E. Shaw, one of the largest hedge funds in the world, increased their percentage of this by 99% and owns over, I think a million shares of it. BlackRock owns 800,000 shares of this right now. So when you start to look at these positions, it's kind of interesting. To me, Millennia increased their position by 394%. They now own 100 million shares of this. I mean, it's kind of crazy. No, it's $180 million of it. Sorry. So when I look at this, I'm just looking at the numbers trying to get the right, they're aligning this. It's bonds held on a percentage basis. So let me see this. Let me give you a sample. I'm just going to do this raw. I'm not going to edit this out. D.E. Shaw owns 7% of the entire thing, 7.7% of it. BlackRock owns 6% of it. I mean, it's pretty darn insane when you start looking at who actually owns this thing. But sure, you guys can bet that it's going to blow up. You have to look at what's actually going on. And I do want to take a second on this. That doesn't mean that MSTR should be trading at a premium to its Bitcoin holdings. It doesn't mean that, right? I always think that these things should be trading at a discount to their holdings because they don't really give you the yield. And what he did with STC and everything else so he can go out and buy more versus going to banks and insurance companies, I think was a mistake. I'm not a rock. I'm not a PhD, MIT, a rocket scientist guy. But the fact that you had people that were willing to buy those and you had secured money that was solid versus this that you're going to be dealing with is like night and day. And now he's having all these mechanics where he had to sell and it doesn't really work. If you're in the community, you already know this. I'm short the MST Act. And I don't have a problem with that trade. You can see we hit an all-time low. And we just redid this short, actually. Whenever I say these things, I like to make sure that I can just show this timestamp. So I put this out as an alert, 6-3-26, MSTXC short. It's just, I put out what I'm doing. 1950, 22 and a half stop swing. So what I'm doing is I'm shorting it on the third. And then really what we're doing right in here, I'm shorting it. And then my plan is to just leave it on. This short, and this is just to be clear, I started doing this as a short versus MSTR. I read a really good research report, maybe it was two years ago on this. We're still short. I did trim on the way down. You have to trim this stuff when it pops up, and then you have to trim it when it rolls back over. You have to play with shorts, especially 3X shorts, or you will lose your shorts. See, I tied that whole thing together, huh? But you'll be thinking about that all day. I read this report, I guess it was in here, back in the day. Einhorn had it on Greenlight Capital. And I tend to read a lot of research. And he was walking through what it costs MSTX to mimic MSTR. And the spread with synthetics and swaps and the option market, he estimated was 89% a year. Like just to do that, to mimic it. That's what a lot of people don't understand about these levers. They think they're buying stock. They're not. They're buying swaps with these huge spreads in it, which really takes them down. So here's the thing that I'm getting at where I'm going with this. This makes sense to me to stay short this because theoretically, it can't possibly mimic what MSTR is doing. It just can't. And so you're going to get those levered moves up, those levered moves down. Do I think MSTR should trade at a premium to its Bitcoin holdings? No, I think it should trade at a discount. And I agree with some of those big time short sellers that have been around for decades that will short MSTR. Like the big trade here, if I could tell you what I think the big trade is. And it's like what all those big short sellers do. Chanos does this regularly. He has a model set up. MSTR gets over 1.2 of its NAV or its Bitcoin holdings. He shorts it. When it gets down to 0.8, he's more of a net buyer or he's closing out that short. And that puts him into a deferred position. So he'll go out there and go long Bitcoin and then just wait for MSTR to go back to 1.2. And then he'll just short against that. He just keeps doing that trade over and over again. Really interesting. He wrote a piece on it. You can find it on Google. But the point that I'm getting at, no, I don't think they should trade at that because you're not getting the benefit. What he's done here, and I don't really understand it, is he stripped out the benefits of all this yield into his business and put it out here so he could perpetually buy something that he can't buy unless it's over this par. But the reason that you would short this would not be him, nor the same thing with SATA. It wouldn't be because you don't like them. It would be that there is something inherently wrong with the structure of this, which I don't believe that there is. And if you believe that, you can put it in the comments and we'll talk about it. But I believe that this is being shorted because a bunch of people have no idea what they're doing and they're watching other people that have no idea what they're doing or are putting something out for other reasons. And so they're shorting it. And this presents opportunity. And I think the opportunity with something like this, frankly, is to have a long position or I'll tell you how I'm set up and you do what you're comfortable with. But it's all information education, right? Guys, you have to make your own financial decisions. But to me, STRC, being long this, and then I can have a safety net of puts underneath of it if I'm really that concerned about it. And then being short MSTX makes the most sense to me because the benefit of MSTR has basically gone away. And I think that that's one of the things that they're doing here. And I do think that is going to weigh on the company. The other side of this, and since we're on this and I want to stay on the vein, do I think it's an overhang for Bitcoin? I don't think it helps Bitcoin. I don't think it hurts Bitcoin. If these net buyers go away, I think a lot of people that are interested in Bitcoin being Bitcoin, which is what it was supposed to be, which was supposed to be something I was supposed to have. And it was supposed to be, we're going to fight the system and not turned into BlackRock ETFs and synthetic preferreds. It's more hijacked than the US dollar now. So it's not really like this thing where we're fighting the system anymore, is it? It turned into, please BlackRock, save us. Funny how money does that. But when you look at this, I actually think it'd be a long-term net positive to get rid of some of this stuff. I don't foresee that happening. I don't foresee these cracks out there. And the whole purpose of me spending time on this was for you guys to kind of go out there and just don't be sheep, do your own work, do your own research. And if you still come up with the conclusion that it's a pig, it's a zero, then that's where you come up. But do your own homework. I can't stress it enough. That's it.