Market Divergence: Dow Highs, Tech Weakness — Full Breakdown & Transcript

[00:02] completely bad news, but it's mostly bad news. Um, that I came into the day light. I believe I mentioned on Friday that I was deliberately lightening up. Things are looking a little bit fishy and we've all

[00:18] become acquainted with the taco phenomena. That happened again. Um, and so I came into the day quite light, like at 45% or something. I've continued to at 45% or something. I've continued to trim that down, maybe 35% exposure now.

[00:33] trim that down, maybe 35% exposure now. Um, there is still some hope in the tech world for a reversal, but as we're going to see in a moment, uh, things are looking a little scary if there's one or two surviving bears out there. Um, so

[00:46] let's dive in and let me talk to the charts instead of just to the air. Um, here is the diamond. We are not at lifetime highs, but boy are we close. Uh it's looking like a lifetime high close is on the way on an intraday basis. We

[01:01] haven't quite bested the peak we saw back here on um back on uh July 7, I guess that was. But uh yeah, the diamonds continue to push higher. If we diamonds continue to push higher. If we do push to lifetime highs, the last

[01:16] underbelly of that trend line, which is a ways away. You know, we could easily lift up many hundreds more points before we tap that. But that's where things are configured right now. I mean, for myself, I don't have any uh nor did I

[01:29] enter the day with any big ETF positions. Uh the spider, and this is the scary one. Uh the spider is still rangebound, but it is getting close to

[01:41] the top of its range. This is a big green bar we're dealing with here. Uh we green bar we're dealing with here. Uh we are up uh about one and a half% on SPY. And if we I mean we're we're close to a lifetime high close. We may well push a

[01:57] rectangle that I'm focused on. If we can push above that, that's going to really give the bulls some um some gasoline to fly things higher because a couple of reasons. One, lifetime highs tend to be get new lifetime highs. And secondly,

[02:12] all that pentup energy from all of May and all of June and all of July will get and all of June and all of July will get released in that excitement. So that it happen before that we're closed today, but it absolutely happen tomorrow. Um

[02:26] why might it happen? Well, if we're just going to speculate, you know, time and again we've been through this. We're talking about peace with Iran thing and it's, you know, 3 days later the bombs start dropping again. But what if this

[02:39] time the entire retinue of Iranians delegation comes forward on TV with the president said he's right, it's a done deal. Well, something like that would do unlikely something like that would happen, but just throwing an idea out

[02:53] there of what could make it happen. Um, there are a smattering of interesting earnings coming out that may also compel things a little higher. Uh, these aren't things a little higher. Uh, these aren't huge names, but like Palunteer, AMD,

[03:05] Caterpillar, these are all coming out in the next day or two. Uh, but yeah, this the next day or two. Uh, but yeah, this is uh, you know, things looked fantastic on Wednesday's close. looking a little iffy on Thursday, worse on Friday. Today

[03:18] just plain bad. So, uh it's a shame things were really cooking at the end of things were really cooking at the end of Wednesday, but we got uh got a V turn right there. Um now, crude oil. Now, this is an

[03:32] interesting one. Crude oil is down obviously and uh one might think that, uh wow, cheap gas is coming. I don't think so. Uh this actually may look like

[03:44] a buying opportunity because there's first of all we're in this right triangle pattern. We've pushed above it briefly here and that got repelled. But as I mentioned this morning, we seem to be finding some support round about 77

[03:57] or so. And let's just say that things get ugly with Iran again. Uh, I could easily see this flying above the highs we saw last week and turning this into a really bullish setup. Uh, it's gotten beaten

[04:13] down on Friday before the latest taco and then today, but we're not collapsing. It's actually little different than it's been for the past couple of weeks, which is sort of extraordinary because you would think

[04:27] on, but it's it's you know, we're trading now where we were trading just a trading now where we were trading just a few days ago before Taco Time. So, just saying you you can also see this illustrated by way of XLE, which is big

[04:41] energy ETF. Um, this is certainly not a bearish setup and it may well be uh bearish setup and it may well be uh getting ready to spring above that definitely testing it. Pushed above it here. It's pushing above it here. Um,

[04:57] here. It's pushing above it here. Um, energy could be in for a new bull run. um if things really fall apart. But as it is now, yet again, they are talking for all the good talking's done for I've lost track of how many months this war

[05:12] has been going on, but there we have it. Um South Korea EW is relatively stable all heard about Leopold Ashen Briner's blow up in his fund, a 67% wipeout. Uh

[05:27] blow up in his fund, a 67% wipeout. Uh the narrative going around um seems to be that well that's that's cleared things out. Now we can really start pushing higher. I don't know. I mean having one fund blow up doesn't seem

[05:40] like a amazing sign to me but it it did get bought pretty much for all its get bought pretty much for all its public assets. Um and the South Korea semiconductor memory chip wipeout was of course the the driving force of that

[05:54] because it was very heavily margined in the fund. Uh but we are uh up on this as well about the same as the cubis really. Um and the topping pattern is still in place but uh we'll see if that line holds or not. Um, my kind of main uh,

[06:13] options position now, as I've been mentioning, continues to be China. Uh, I'm relieved that this isn't springing higher. It's actually down a little bit, but this is a longerterm trade. These are uh, March 2027 puts at $37.

[06:28] So, the wiggles and waggles of the past few hours, I don't care. I'm looking for a a nice reversal lower. Um, as we look at the entirety of this data set, um,

[06:40] world. It's more of a, um, looks like a seismma graph like this. There's no real clear pattern, but there is a dividing line, it seems to me, um, which suggests at these levels resistance and it has had it had a exceptionally

[06:57] and I would really appreciate it if we would weaken uh, in the weeks and the months forward. So FXI for the moment uh is down a bit. Uh let's go back to the

[07:09] doesn't take so long to load. Uh the cubes are okay. So let let me just I've painted like a big scary oh all the bears are going to die, you know, picture here. Let me put an asterisk next to that. Um tech stocks still have

[07:26] next to that. Um tech stocks still have a fighting chance of reversing away. Why mean, they're not near lifetime highs at all. The ENQ, even after these past several days, it's thousands of points below its high. It has a tremendous

[07:40] amount of overhead supply. Um, and so looking at the cubes here, there's looking at the cubes here, there's plenty of bearish perspective. You're below a broken symmetric triangle. You are approaching but have not violated a

[07:53] are approaching but have not violated a price gap. Um, so yeah, all is not lost. And this morning when you know for a while there I was having a very super green all day because semiconductors are really weak that

[08:06] reversed as you can see we did get strength in the cube. So I I I was ready to have a really defiant day here because in spite of the market rallying my shorts were doing just dandy. They stopped being dandy. Um, so we are up on

[08:21] stopped being dandy. Um, so we are up on the cubes now almost 2%. But we are approaching that gap and that gap is worth worth watching. Um, but as a good relieved to have covered some stuff. Meta is a great example. You remember

[08:34] last week Meta reported uh I was short up here and it worked its way down. They had earnings and it just plunged down here. I covered at the open plunged down here. I covered at the open way down here. It rallied on Thursday.

[08:49] It rallied on Friday and boy is it rallying today. Um it may start to tire of this because now we're into this thicket of trading. But if it just keeps if stomping stomping ahead, I'm watching that. The closer you get to that

[09:04] gap, the more interesting it becomes to reenter the position. But you know, unfortunately, um in this trendless market, you got to be nimble. And part of that nimleness, for example, was getting the devil out of that meta

[09:19] short, you know, down here when it was uh way way way below where it is right [clears throat] get back into it at the right price. Um SMH, as I said, was providing me some comfort today. Uh it's still it's I mean, it's up, but you

[09:34] know, it's up almost it's up about half as much as the cubes in general. So it's relatively weak. The topping pattern is still very much in place. and it would take a violation of Friday's high to call that into question. So, not all

[09:49] call that into question. So, not all hope is lost. I still have my SMH puts. Uh, but we'll see how that all turns out. Um, the past few hours have not been great for semi bears, but like I said, I mean, not only did I come into

[10:01] the daylight, but I lightened up along the way, not getting aggressive in this know, some individual positions which I have no no position in. But for example, uh, AXT, which was a favorite of short of mine when it was like getting this

[10:15] business going on. Uh, this is up almost 16% right now. The Hyperscalers, 16% right now. The Hyperscalers, Cororeweave, here we have about a 20% rise today. Here we have Nebus, competitor of theirs, up over 15% and

[10:30] completely negating this topping pattern. So, a lot of ugliness going on pattern. So, a lot of ugliness going on for any hyperscaler um, bears out there. Uh I did say that there's a smattering of earnings that the one I think that'll

[10:44] attract far and away the most attention this week is SpaceX and that's going to this week is SpaceX and that's going to be tomorrow after the close. Uh SpaceX incredibly had another lifetime low today uh on an intraday basis. I mean

[10:57] even on a day like this it can't manage to you know not do that. But at the moment it's up a little you know about the same as like it's not even up as much as the spiders. So, um I guess it's up cuz everything else is up, so it

[11:10] can't help itself. But Wednesday will be the tell after the earnings are done, conference call. Wednesday should be very interesting. I said it before, I'll say it again. I want this stock to thrive and go up, but it's probably

[11:26] thing to be in the double digits on Wednesday, as much as I don't want that to happen. So, it has been a stinker of a stock uh for almost its entire lifetime. Um we're down what 55 56%.

[11:40] I've lost track. It's worth well less than half what it was, but that is coming in about 25 hours. All eyes will be on SpaceX. It could turn out like this though. I mean, this is uh this is Cabris. This IPOed not that long ago,

[11:54] and it's stabilizing, and it's got a 10% gain today. And as you can see, it's maybe it's kind of bottomed out. It's got a subtle series of higher lows and seems to be, you know, kind of finding a base here. So, could happen. That'd be

[12:07] nice. Uh over in Michael Sailorland, [clears throat] he sold billions more of Bitcoin and that seems to be not hurting him at the moment. Uh STRC, uh their their big dividend, big yield, uh way to draw cash

[12:22] dividend, big yield, uh way to draw cash in for strategy that is up and uh MSTR in for strategy that is up and uh MSTR itself is also up. um roughly as much as Bitcoin, which is no surprise. But generally speaking, over the past month,

[12:35] still just kind of hanging out there. But Bitcoin itself, um it was really the only market to watch this weekend in terms of any kind of indication of what the market thought of this Iran thing. Uh at the moment, IBIT

[12:49] is uh up a little, but on the whole, it's been a pretty dull run for crypto for about the past month or so. Just really nothing to drive it up or down. substantially. So, um, this evening is Palanteer PLTR.

[13:05] Um, no strong feelings about this. It's, uh, one could make a pretty good argument for a topping pattern here, but this is a very robust creature. We've had this and this and this and this. There are definitely robust rallies

[13:19] along the way to fight back. Um, I was short. I covered earlier today uh, for a I'm a little too shell shocked right now to just hang on to this one. Uh, but evening, tomorrow morning. There's Caterpillar cat. Still a nice setup

[13:36] here. I've reduced my ris risk in this one in as much as I sold my put position for a good profit and I just have a simple plain old boring short on it right now. Not particularly big either. So, um, uh, we'll see how that goes, but

[13:51] that'll be tomorrow before the opening bell. But just to close out with um with the ENQ um we continue to push higher here. Uh this was a enormous rally. Uh not so much today, but still positive. The next

[14:07] meaningful level of resistance is this blue line up here. But as I said, we've blue line up here. But as I said, we've got a nice blob of overhead supply to slow things down. So, I think simply stated the bears out there, you've got a

[14:20] much better chance with the cubes and and and and those components than you do the spiders and diamonds. All right, good luck everybody. I'll see you good luck everybody. I'll see you tomorrow. Take care. Bye-bye.