📝 Transcript (EN)
Okay, everybody, let's go ahead and get started here.
All right, so we went through this last week.We're doing a report,we're running a report on AI and unemployment.We're just doing research right now.And this is a macro force that,I'm not sure if it's gonna come to a head this year,but in the next few years,it's gonna get very interesting.And just to kinda show youthe typical pattern that we're accustomed towhen it comes to using economic data, macro data,in order to foresee volatility in markets.Typically when companies, when businesses see trouble ahead,they stop hiring, right?They don't start firing, they just stop hiring.So private sector jobs start to go lower.This typically coincides with corporate profits going lowerand it also coincides with investmentand updating equipment, software,things of that nature tends to go lowerand then the stock market tends to be the lastto get the message and you see a period of volatilitythen recovery.We saw this again, same pattern going into COVID.And I talked about this before,if COVID would have happened say in mid-2017,I'm not sure it would have gone down,the market would have gone down 30%,but we're in a very weak environmentgoing into the COVID crash, which was right here.I mean, look, you saw private sector jobsdecelerating all the way to the blows,corporate profits were decelerating all through 2019as was investment in equipment.And then the market had the COVID panic into 30%.So this is typically the pattern you seeand it makes a lot of sense until now.We are seeing from March to 2022,job openings in the private sector are down 50%.
And to give you an idea of how big that is,from the 2018 peak to the COVID low,that's about a 45% drop.And during that time, corporate profits decelerated 20%and the S&P dropped 30%, roughly,I'm not sure what it was,but it dropped like in the 30s, right?Today, with a bigger decelerationover a longer period of time,corporate profits are up 35%,investment in equipment for corporations is up 32%,and the S&P 500 is up 55%.And so you have to scratch your headand wonder what's changed, what's going on.And I think we all know the answer to this.I mean, this is the AI economybeing implemented right in front of our eyes.And this isn't the first time this has happened.We've had periods of technology displace laborquicker than the economy can absorb it.We saw that in the 20s and 30swith the mechanization of agriculture,with the assembly line and factories.We just saw lots of jobs just basically vanishfor the sake of corporate profitsand a more efficient business, right?And it makes sense.That's what you wanna do if you're running a business.What's the most efficient way to maximize profits,reduce overhead, but when everyone's doing itat the same time, it creates the situationwhere there aren't a lot of jobs opening upwhile corporations are doing phenomenally.Now, this doesn't mean unemployment has gone lower.As we know, unemployment's hanging steady.This is a lot of details, but look right here,unemployment rate is at 4.3, right?I mean, it's not 3.9, which it was in 2024,but this is very, very low.Furthermore, initial claims for unemploymentare basically just flat to not seeing a problem hereon the unemployment front.And so if this does become a problem,if unemployment does go higher,it could be an issue because more peoplewill be looking for fewer jobs, right?Because of what we're seeing with AI.Where this could really turn into an issueis when it comes to passive flows.Now, this is, what do I mean by passive flows?I mean, if you're employing them a 401K,monthly income is automatically put into your 401K, right?Some people manage it on their own,but the amount of money every month that goes inis automatic, it just happens.This money goes into the marketregardless of fundamentals, right?It just goes into the market.Same thing with buybacks.There's a little bit of active management,but there's amount that's written off onand it has to go in the market within that quarter.IRAs are the same thing.And there was a really, really good investor, economist,
chief investment officer, Michael Green,who's done a phenomenal amount of work on passive flows.He estimates that roughly 45% of all flowsgoing into US markets are passive.They're going in without any ideaor caring at all about fundamentalsor what's going on in the economy.It's just automatically going in.And it's very closely tied to employment.He also estimates that at employment,somewhere between the five to 6% range,this flow of money going in can reverseand we can see money flowing out.And so think about it, almost half of the market,the US market is just seeing buysthat has no idea about what fundamentals are.It doesn't care at all.It just goes in the market.So the reverse could happen as well.And there wouldn't be much of a cushionto reverse it if that does happen.It's like a momentum.And how that would really affect the economyis when it comes to the K-shaped economy,which we've been talking about.It's not fair.It's not sustainable.But currently about 56% of all retail salesare being done by the top 10% of wealth earners in the US.Well, the rest, especially in like the middleto lower quintiles are really struggling.You can see that with consumer sentiment.It's a K-shaped economy.It's working for a very small fewand not working for a lot.But as long as assets stay elevated,the stock market, housing, the wealth effect,propels these top earners to keep spending,which keeps this thing going.So if we see jobs not opening up,unemployment kick higher,it could really reverse this thingin a meaningful way,in a way that a lot of people realizethat nearly half of all flows are doneon a passive basis, which is tied to employment.So that could be a really big deal.Like I said, I don't knowif that's gonna happen this year.I think in the next five years,we're going to see something,we're gonna see this come to a head, right?We're gonna see corporations basicallythrow the baby out of the bathwater.In this mad rush to be competitive in AI economyby improving margins and investing in AI equipmentand reducing human labor,which is their biggest line item in all businesses.In all businesses, basically most businesses,they could create an economythat would cause their earnings to tank.It's a very interesting dynamicthat's playing out right now in real time.And it's not the first time, like I said,we saw in the 20s and 30s.This is not the first time this has happened.We're basically seeing a displacement of the labor forceand a change within the economy due to technology.And it's happening probably fasterthan this economy can absorb it.So anyway, it's just something to keep an eye on.So moving forward with the current market,here's the S&P 500, excuse me.From the April low, I have this in a fifth wave,a large degree fifth wave.That's how I'm counting this until proven otherwise.But even in a large degree fifth wave,we should see sizable volatility into this year.How I'm counting this is that this is your A wave upright here into May of 2025, very shallow B wave.And it's followed by this really drawn out C wavethat's taking the shape of a diagonal.So one, two, three for one, there's your second wave.One, two, three for three, there's your fourth wave.And this does count as the end right here.You can easily say that this was your fifth waveright up here.And it would fit the symmetry of this move.The most I could give it would be one more pushhigher maybe into late March, early April,somewhere in there.I don't see it extending too much farther beyond there,but betting as this market is not a good idea.What we do know for a fact is that we have beenin this really gnarly consolidation for five months.The only other time I've seen a consolidationof this magnitude for this length was in 2015,it was six months.And when support broke within two days,we dropped 11%.It was very fast and furious drop.And so some kind of accumulation or distributionis happening in this range.When they're done accumulating or distributing,will you see a big breakoutor we're gonna see some kind of a drop?The breakout would likely be a pop and drop situationconsidering what this pattern is saying.So that's kind of the bigger picture.We're talking about maybe just a little bit more upsidefor the next month versus a much needed volatilityto pick up in order to propel this market higher in time.If we were to analyze the pattern a little closer,let's see here, five minute chart.So actually like the 15 minute chart better.It's what we're looking at.So in order to break down,you really need to see a move below 6751.That will start shifting the odds below 7200 again,and especially below the low at 710, 42,it should be a pretty sharp drop.And next stop would be in the 660s, 650s, 650s,but the pattern it would be takingis this diagonal pattern for a C wave.So we had from the top here in January 28th,there's A, B, one, two, A, B, C for three, four, five,
which would take you probably between somewherebetween six, five, 50 and 6,300sometime into like April, March.That to me would be the end of the A wave.Then you would see a really large B wavethat would take months to play out,likely make a lower high,and then the real drop begins,which is the C wave.The C wave is always the worst part of a correction,always the most emotional, direct drop within a correction.So that's what makes the most sense to me.Now the other scenario is that,this was wave one and wave two.We're gonna hold here, maybe go a little lower, who knows,but we're gonna break out over a 6886.That's your first sign that we're going higherabove 6952, right here, this high right here,and the odds are almost certain,almost certain that we are going higherin a bigger fifth wave.
And that would be targeting somewhere around 7,200in this very extended pattern.Now, if that does happen,the divergences that I've been talking about for monthswill just get worse and worse and worse.Each week it seems like a new market tops,but before getting into that,and just keeping it on tech,I'm not sure the cues will make a new high.The cues have a full pattern right hereinto that late October cycle windowthat we were talking about.And then we just consolidated right hereand then broke below this downtrend lineand we're just consolidating underneath it.I would see this making a triple top,maybe a slight spillover and then drop,but when you look at the underlying constituentswithin the big tech generals, for example,they just don't look good.They don't look good at all.And I'll talk about this also every week,but Microsoft right here, I mean, it's topped.It had a truncated top right here in Octoberand it's just been an epic 30% drop ever since.We have three waves up off the low.I'm not sure if that's a fourth waveand we get one more fifth wavebefore we get our lower high bounce.Or if this is the start of that lower high bounce,that wouldn't really matter to me.What does matter is that the odds are pretty highthat Microsoft has put in a meaningful top right hereand that any kind of move higher will be a lower high.Same with Amazon.I think it's pretty clearthat Amazon put in the top here in November.I'm not sure if this is a very large fourth waveand we get one more drop to new lows.Once again, doesn't really matter.We have all waves in place to say that this is over,but what we'll determine where we gois if the next drop is a three wave movethat makes a higher low.If so, then we're probably heading up in herein a larger B wave like Microsoftand then we have our C wave to new lows.But Amazon and Microsoft clearly to me have topped.AAPLe, it's just such a mess.I mean, we'd have three waves up off this low.This looks like five downthen three up and another five down,which is not good for this green count.If we break below 255.45,the odds are very highthat AAPLe has put in the top as well right herein December, 243.19, and it's all but certain.And then it'll trace something like Microsoft,just this downward trend for months.Best case scenario is we're in some kindof an ending diagonal.We would need to break out over 280.64for that to happen.And once this completes,it will get reversed pretty quickly.Google, you know, I see a path higher for Google.I think it's in a fourth wave.So right here, the green count says that this is A,this was a small B, and we get a C wave down to like 280.Ideally this 271 would be a good spotor this is A and we're still in the B wave.So A, B, and then we get a C waveup into this kind of 320, 328 region.And then we get a drop down to 271.60.As long as we hold 252.40,it counts better as a fourth wave,which means a fifth wave high in the coming monthsonce all this volatility is over.That has just hanging strong.It's just consolidating by the highs.This is a huge activity zone for institutions.So I don't really want to see it break belowthis level right here.What is that?Like 543, somewhere around in there.I would give it down to 42 for like a spillover,but then it needs to jump right back in there.Below 42 in this uber green count right here,which the patterns of ports is deadand we're in some kind of a deep second wavethat will take months to fill out.Okay, but instead of going through every single one,I mean, look at this pattern.This is the S&P 500 from July, clear uptrend, right?But Microsoft topped in July, meta topped in August,Nvidia topped in October,Amazon topped in November, AAPLe topped in December,Tesla topped in late December,and Google basically topped with the S&P 500.Like I said, it's like dominoes right here.These are the generals of the marketand you may be thinking to yourselfor hearing on social media or anywhere elsethat this is healthy.This is a broadening out of the love, right?It's not just concentrated with the MAG7and it's going to other sectors.I'll show you that's not the case in a minute,but assuming it is,how far do you think the S&P 500is gonna go without these names?These are the generals.These names alone account for like 30%of the S&P 500's weight.You think it's gonna go really farto new highs without these names?It's not how the markets typically workon a market cap weighted basis.Usually when the general start falling,you wanna pay attention.Every one of the MAG7 is underwater.Every one of them.And it's not just with the MAG7.If we go into semiconductors, for example,we've been tracking this one for a while.From the November low in 25,one, two, three, four, there's your fifth wave, right?Now, best interpretation is this is some kindof an extended fifth wave in a diagonal.This is A, this is B.We get a double bottom.And then we get one more push up to like 440, 446,something like that.If we break below 379, 47,the odds are pretty high.That this was a fifth waveand we're starting a deeper correction.The absolute last stand I would give itwould be 359.88 below there.And the odds are really high.That is put in a pretty meaningful top.And we're going to see months of volatility follow.And if you look at the underlying names,TSM was the strongest stock
for the last like six months really.So if you take a look from the April low, one, two, three,there's your vertical price movement.There's your max volume, max momentum, congestion for four.And then we push higher on a fifth waveon less volume, less momentum, right here.And a clear five-way pattern.I mean, look at like volume going into wave 505.I mean, it just falls off a clip as does momentum.I mean, it's clear as day.And then almost something to get a gap movewith elevated volume.So the odds look like TSM has put in a top two.The pattern is completely filled out.And it's extended as well.Can we push one more level higher?Sure, we could say maybe this is threeand this is four.Let me get one more little five up there.But that would be, to me, based off this informationlike picking up pennies in front of the steamroller,eventually this five-way pattern is gonna end.It's as filled out as it can get.And video, I mean, the best case scenariois that this mess from the November lowis some kind of an ending diagonal.And we get up into this range here in the 224s, 240s.It'll be on really low volume and really weak momentum,which would be a clear signal.But what's gonna be the catalyst?The market didn't like a phenomenal earnings report.It said just, it said very low valuationsbased off of where it's been tradingfor the last few years.So what's the catalyst?Once NVIDIA breaks below 170,we're heading towards 155, probably 135 to 117over the span of a few months.So NVIDIA, the general of the market,really topped here in October.And it's just been in consolidation for a whilewith the market not really caringor reacting to its awesome earnings report.Same with Avgo Broadcom, excellent earnings report,really was very favorable for the future as well.However, we have a filled out pattern in Aprilof one, two, three, four, five.And then we kind of have this huge institutionalactivity zone and it's kind of stayingon the lower range of it or below it.At best, I see it push, make it one more push up into hereon a wave C of B.As long as it stays under 390,I see it heading towards 245 to complete this larger A waveand then you get B and then you get C.From get above 390, we can start talkingabout this being some nasty fourth waveand we can get one more highbefore having to deal with this volatility.But, you know, simis don't look healthy,they just don't as well.And like I said before, it's not just with tech.So if we take a look here, where we have,financials were one of the first sectors to talk,this is the big banks, you know,they topped here in January.This drop right here is just too deep to fitwith the pattern.We have a filled out five wave pattern.All the signals are there with volume and momentum.And if we were going to hold,I mean, we really needed to hold like rightaround in here and instead we're down here,which tells me that this was a top.This is the A wave, we're going to get a lower highand then one more drop like Microsoft.And then look at industrials,one of the strongest sectors out there.Very filled out pattern.One, two, three, four.Here's your fifth wave happening on lower volumeand lower momentum.And the fifth wave is filled out.One, two, three, four, five,giving you kind of a triple top right here.And then all of a sudden we gap down below this level,volume picks up and it's not looking ideal.So like I said before, many, many sectors,including small caps, you know,are, they look like they've put in a topand we're just kind of waiting for the shoe to drop,if you will, the bigger shoe to drop.So I'm not trying to scare anybody, I'm really not.I'm just showing you how I manage risk in real time,everyone thinks that like some news event triggersmarket volatility is just not the case.There's been tons of studies to provethat news does not move markets.At best it's somewhere around 20%.There are many forces in play at markets.And if you're paying attention,like you've been on these webinars,like I'm showing you really since likearound Thanksgiving Christmas of last year,we started getting talking signalsand it's just every time we get on,I'm like, one more market is top,one more stock is top.So you can kind of see the pattern here.And it's not just tech.So usually markets top as a topping is a process,it takes a while and we're seeing that.And once it drops, everyone should be,you know, prepared, that's what we've been doing.We were raising cash, we're hedged,we have a pretty strict hedge plan that we're enacting.And that's what we're doing.So regarding other markets,which I think is very interesting right now.So TLT, long dated bonds,very important how this breaks with our debtand our debt that's growing this year.We're only really allowed to continue playing this debt gameas long as the bond market allows it.And at some point the bond market won't allow it.And what I mean by that isif you're running 7% deficit to GDP,excuse me, that means that, you know,we're gonna need to create about 7% of our GDPand money we don't have.And so what happens when you print more money,more base units and time that creates inflation.And so higher deficits tends to lead to more inflation.And that's where that's where we're going.So who wants to own a fixed yield for 20 yearswith inflation running higherthan what expectations are right now.Typically what happens is, you know,bond holders demand a higher yield, a risk premiumin order to hold that bond for that period of timewith the structural inflationary issuesgoing on in that country.The problem is we can't afford to have yields go too highbecause that means we have to borrow more moneyto service our debt.The biggest line item, one of the biggest line itemsin our budget is servicing our debt.The higher yields go, the worse the problem getsand it creates this spiral.Now, when the bond market lets goand says we're not gonna let you do this anymore,it doesn't mean the game's over.The Fed will probably step inand we'll do a yield curve control.The Fed has a huge balance sheet that's,I know it's being used,but it has a lot more room on its balance sheetin order to basically keep this thing going.So I'm just getting way out in the future.I bet we'll see something like thatin the next five to 10 years.But right now it's interesting that bondsdon't like this war.Bonds are going lower right now,not by meaningful amount,but they did not like this war.And reason being is more money must be borrowedin order to service the war.And so kind of creates that problem.So bonds are going lower, something to watch.We start going down in the 86, 83 range.You can see trouble.But the bond market basically stopped liberation dayand the bond market stopped the Fedfrom cutting rates back in 2024.You are looking on this screen,you're looking at the 800 pound gorillain the global economy.It's more powerful, the presidents,it's more powerful than central banks.If this bond market says we're not going here,then we're not going here.And so that's why it's so important.We've been in this trading rangefor a very, very long time.And if we start breaking,if we can break above 92, 18,then we can start talking about, you know,yields going way lower,which would be a boon for risk assetsfor the short to intermediate or medium term.But if they go lower, it will create a problem.Oil also, we're getting a breakoutfrom this downtrend line.If I put an Elliott wave count on this,there's so many ways it can go.I had this WXYZ pattern,which is the most complex correction in Elliott wave.It's extremely rare to see that,especially of this magnitude.So how I'm counting this is as an A, B,and then we're in a diagonal for C.One, two, three, A, B, C, that's four.And then we get a fifth wave low down into here.There's 47, 41 range somewhere in here.That will complete a massive correctionin an ongoing uptrend.I don't know what that uptrend will be,something horrible or something less horrible,but this is important spot right here.If we break out over 87, 67,then we've started some kind of a new uptrend.You know, it started here or here, something like that.But that's the level that matters.78, 40 kind of forced me to change my account.I'm kind of going deep into the, you know,the bullpen to find what pattern that can explain thisthat would suggest lower levelsand this being a false breakout,but 87, 67 over the second wave right here,I don't have anything.And that means that we put in a lowand that we're gonna be trending higher.The higher oil goes,the more it's gonna cost of a currencyin order to service it,which means global liquidity will go lower.That's not good for risk assets.That's not good for bonds.So this can be an issue right here,something to keep an eye on.And finally, when it does come to global liquidity,DXY is doing some very interesting things.DXY is probably the biggest,if you want to like a very general proxyfor global liquidity, follow DXY.DXY is the dollar index.There are many factors that contribute to liquidity,but the US dollar is the number one.I think something like 65% of all debtin the US is denominated in dollars.And so if the dollar goes higher against other currencies,then foreigners who have dollar denominated debtneed to find more of their currency to service that debt.That means less money to buy Bitcoin, to buy risk assets.That saps up global liquidity in a big, big way.Also, it affects collateral,which a lot of back to 90,I can remember the status of like 90 something percentof all loans in the macro, global macro spacehas needs collateral and the number one collateralis treasuries.So a higher dollar needs a more new pay for collateral,not ideal.So this is important.And I've had since, you know,there's no coincidence that DXY toppedin September of 2022, right?Bitcoin and the US market bottomed, right?There's an inverse correlation.And this drop right here since Januaryis a pretty clean five-way pattern.One, two, three, four, and then five.Let me do this to make it.So the blue count basically says we're done.It's over.And so what we have is A, one, two, three for B,one, two, one, two.This is your third wave.And you'll know that it's the blue count.We go over 100, kind of 0.4 over this high right here.That means that we are in this A waveof this very large B wave.That's going to also sat global liquidity.I had to change my account because this bounce went too high,but what the bulls wanna see is a reversal here.And then we go back below this level right hereand trace out this more extended fifth wave.Either way you slice it, either the dollar has bottomedor the dollar has maybe into like Q2, Q3on this ending diagonal pattern before bottoming.And then we see global liquidity become a problem.So anyway, those are markets that I'm tracking right now.So to sum it up on a kind of a market basis,just keep it simple on SPY is if we go below 6751,especially 6720, we have topped.And we're gonna see some kind of a pretty nasty dropfrom there before seeing a bigger bounce.If we can break out over 6886,that supports that we're going higher above 6952and we certainly are going higher.Okay, but if we do from everything I seeand all the divergences, it will likely bea final fifth wave move and before we see,both will become a much bigger problem.So moving on to stocks, light.So, let's see here.This is the count that we're tracking.One reason that we took gains in light,two reasons, one was a portfolio decisionto be just becoming too big of a position.And secondly, on a weekly basis,you can see this is one of my favorite cell signals.Markets tend to top on the bigger timeframe chartsand then work its way lower.But on the weekly chart, you can see price made threeconsecutive higher highs with momentummaking three consecutive lower highs.And then this final move happened on much lower volume.So it just looked like it was comingto the end of a third wave.I'm not sure, maybe it has, maybe it hasn't.It's hard to really determine where this third wave will endwith all of these AI focused stocks.We could keep extending, but at some point,we need to get a fourth wave.If this was it, then we'll see a drop below 528.And then we're gonna head towards 405,probably down to like 267 over the spanof a few weeks to months or so.And we have to hold 233.That'll be a problem if we go below thereand definitely 170, 265.That would be a pretty big problem if we go below there.So there's a lot of roomin this ongoing aggressive uptrendfor volatility to take us lower,lower than most people wanna go.But this is what I mean is like,this is a really, really large five-way pattern.So the more fourth waves that we have to deal with,the deeper and more challenging the volatility will become.It'll be a correction with an ongoing uptrend.Think Palantir for example,like it's been pretty volatile and painfulif you've been buying and holding it.And it's in a very large degree fourth wave.We'll get into that as well.So light will start entering into those phasesaccording to these patterns, okay?Sand disk, so sand disk has been in a consolidationfor some time, it looks like a fourth wave.Notice how volume isn't really,it's kind of not really too accelerated.We tend to see the pattern of like volume expandingwith price and then we see volatility, it goes lower.And this congestion right hereis very typical of a fourth wave.So I'd wanna see us break above 676.58and then we'll be in that fifth wave move right there.We'll be looking for volume and for momentumto make a lower height of signal that.So this is one of those stocks that fundamentally,we're not very concerned about it giving us lotsof volatility, it's something we'd hedgepeople are probably, we made a pretty large positionin it around this level.So one could say easily we bought it at the highs.And if yes, if our whole portfolio was sand diskthen yes, you could make that argumentand then we're giving you the age old excuse.I don't care what happens in such a great stockthat we're gonna hold it no matter what.This is a stock that probably built half the position in it.We plan on it being a very large positionbut from a holistic perspective,from a portfolio perspective,even with the buys we made today,we are roughly 30% cash and 20% hedged.It's extremely defensive.So what we did was we rebalanced our portfolio.Once again, if you're isolating our position in sand diskis oh, we bought sand disk at these highs.Technically we did, but we took it from other stockswhile also selling more stocks.So we raised cash at the same timethat we built the position in sand diskbecause this is a more high conviction play.I'm not sitting here saying that we think it's gonnago to the moon from here.According to the LA wave analysis alone,we should get another highand then get a period of volatilitythat will be difficult.But anyway, that's what's going on there.Micron from the April low,that's wave one, wave two, wave one, wave two.So back and forth, back and forth.Explosion higher, that's three, four.Then we have an extended fifth wavefor the larger third wave.So one, two, three, four, five, and that's three.So if we are in a fourth wave, which I think we are,we really need to drop down into this 350 to 321 range,this red zone right here, we can even drop lower.I mean, this thing, if we do drop lower,it could go down to like 266 to 233and still be a valid fourth wave patternbefore getting a fifth wave.But anyway, if we can see it drop down into here,that would be ideal.That would complete at least this leg of that correction.I don't see us going straight downinto this 266 to 233 rangeon this back and forth right here.That would just be too extended.That'd be some kind of like panic momentthat would affect the entire market.And still, I don't see it going down that muchin a panic moment.Who knows, who knows anything gonna happen.But if we do go down here, it would be something like this.A, B, C into this range, that's your A wave.Then you get an overlapping move for B.Then you get a deeper drop for C.It'd be something like that.And so if we get down to this range,we'll be looking at that rangeand then we'll have to see what the next move higher is.If it's a five wave move or three wave move,it would be the tell.But no matter how you count it,or slice it, if you will,I think that micron is an incomplete uptrend.That it needs at least another fifth wave higherin order to complete the larger five wave pattern and play.AOI, so we've been showing this chart for a long time.And it was like a moonshot in a way.However, it had the AI story behind it.It was more than just a moonshot.It wasn't just like we're hoping here.But the technicals lined up with the fundamentalsand then basically what this pattern is suggestingis from the 2020 low, one, two, three, four, five,large first wave, three waves back,making a higher low, that's two.So one, two, another one, two, another one, two.So back and forth, back and forth, back and forth.And in order for this bullish pattern to play out,what we needed was a gap on elevated volume and momentum.Now, in the grand scheme of things,this made that earnings, this looks like nothing,but that was a 56% earnings gap.I mean, it was a huge gap.I mean, what are we saying here?Oh, that's yeah, from here, from right there.Oh, no, no, it was right here.It was a 58% earnings gap and then we just kept going higher.I mean, we went up like 108% in just a couple of days.So that's what we were looking for,but these are really large patterns here.And this dip right here may be scary to some,but it looks like a consolidation around the highs,which would be a minor fourth wave and we should push higher.So anyway, for me, as long as 6.657 and 5.8.95 hold,basically this gap, the earnings gap,we're gonna keep tracing this.Now, I'm not saying that AAOI is going to 1,000.What I do as a technician is that I look for the patternand project it into the futureand then I follow that pattern until that pattern breaks.We did this with ALAP.It was a standard five wave pattern.And then all of a sudden we started getting likea fourth wave pullback a little bit shallowand then it became too deepand it had to kind of pivot in that moment.So, you know, this could turn into something like ALAP,like a diagonal if we started breaking these support zones,but this is basically what we're followinguntil price proves otherwise.And so far it's proving it.So anyway, CLS, this is like an AI networking stock.We are, I added to it because of the pattern.This move off the high right here in November,look at how much of a mess it is.I mean, it's just a clear overlapping disasterof a pattern.Congestion, typically it's a fourth wave.Volume keeps decelerating the lower we go.I mean, look how extremely oversold we are.So to me, this is likely a fourth waveas long as we hold over 235.50.Maybe I could even give it to this gap reallyaround 221 around there.Then that's my primary perspective.But if this holds, then the fifth wave is pointing you upto like 460, 516, something around there, okay?Moving on to Palantir.So it's looking like the low might be in for this one.I mean, really, I mean, there's a lot of good signs.For one, it's above these moving averages,which tends to dictate the bulls or bearsor earned control.We're closing a few days above it.We are below 160, 173.You know, that this is kind of the levelI would give it for a very extended fourth wave.If we can get above that level,then we very clearly are some kind of a B wave,a larger B wave.But if that's the case, we have one, two, three up.If the next drop like Amazon is three down,then we're setting up for a C wave pushfor this bigger B wave that should hold under 196.35,then turn lower for, you know, better buyon a larger C wave.If we can break above 196.35,then this isn't the larger fourth wave.It's a fourth wave of one degree lower,which is why we tend to buy, you know,this is kind of my longer-term target down herebased off the bigger pattern.But we tend to buy at the bottomor around the bottom of the A wave,because sometimes you don't get that C wave.Sometimes the market just breaks outand it extends higher.You have to wait before you get the bigger fourth wave,but so far the move off this low is clearly three waves,which means that it's either a fourth waveand we're gonna drop to new lows in the coming weeksor before staging a bigger bounceor we're already in that bounceand it's clearly a B wave, right?If this was the start of a new uptrend,the whole pattern has been a clear five-wave move.So this bounce would need to be a five-wave move and it's not.So anyway, that's Palantir right there.Reddit, I'm still not convinced that it's done.This move off the low is pretty overlapping and messy.I'd like to see it drop down to this like 118and that would be a fifth wave when it does drop.But as I said before,we need to see a vertical move off that lowin order to kind of confirm the bigger pattern in play.A-lab, so we got our fifth wave we're looking for.It hit that 113, which is the minimum targetI was looking for.I would prefer it to hit 96.50, you know,and until we can break over 135.20,then that's very much on the table.But that would be the symmetrical length,the symmetrical move of this correction.So from this high down to here, that's your A-wave.It is the same length as from the top of the Ball the way down to that 96.And these corrections love symmetry,but so far it's a pretty clean three-wave move,which lines up with the bigger pattern, okay?BE, we're getting some consolidation at the high.You know, the way I'm looking at this is,you know, we're either starting the first,you know, we're either starting the second wave,which I think is going to take us a little bit lower,as long as it's a three-wave movethat's holding over like 88, 35.That's a lot of room to drop,but keep in mind we're talkingabout a pretty big five-way pattern here.Then I think we're setting up for this bigger move up.So anyway, I'm going to talk about Bitcoin for a second.So we're looking for a fourth wave right hereand it didn't happen.And that's totally fine with us.We still hold, we're still holding, you know,position of Bitcoin around that 70,000 rangefor the bounce.If we are going to get a more immediate drop,then Bitcoin's drop has to be tracingthis complex correction, this WXY pattern.Now that's exactly what the pattern was in 2020-22.2021 to 2022 lows, it was a WXY pattern.It was very messy and very challenging.What that would look like is that we getsome kind of a continued bounceup into like maybe the low 80sand then we turn lower in five waves towards the 50s.That would complete the A waveand then we get our bigger B wavethat makes a lower highfollowed by the final C wave drop.The other scenario is that this is all of A right here.So instead of this being A in a complex fashion,this would be it right here.We have A, B, and C, that would be A, B, then Cand then we get some kind of a push, you know,that would take us up into like the 90s to the low 100s.As long as Bitcoin stays under 106, 874,and 115, 432, this range right here,you know, I'm not really getting excitedabout buying Bitcoin for the long hauluntil we get down to the 40s to 30s.So anyway, that's Bitcoin.And Coinbase was the same in the same boat.I was hoping to get one more drop in Coinbase,which would complete the larger,like the larger second wave pattern,but we're not getting that.We're getting a bounce,which has me thinking it's lining up a Bitcoin.And so it's also an A wave,we get a B wave and then a final C wave drop.So, okay, I'll take some questions right there.
See here, right?What's the plan with Sandisk?We swallowed a boulder.Hopefully I explained it with my actual rebalancing.So yeah, we bought Sandisk in a vacuum, sure.We bought it at the highs,but in light of our total portfolio moves,we rebalanced into a name that we think is safer,that we like better and raise a boatload of cashand are also hedged.So anyway, that's our game plan.We planned to hedge it and look to buy moreif we get the opportunity to buy it lower.On the minimum, I noticed an allocationwent from around 14% to 11% after the trim,but shortly afterwards,it appeared around 16% in the portfolio snapshot.It made the same trend on my side.So I'm trying to understandwhat caused the waiting to increase.It's relative performance.So this happens.So whenever I calculate what we sell or buy,I calculated according to our portfolio valueand that's the percentage I'm sending out.However, I'm gonna look at what light's been doingwhile the S&P 500 is compared to any stock.I mean, light topped here on March 2nd.The S&P topped in January, right here.The NASDAQ topped in October of last year.So while the market, so let's see here.Yeah, where are we at?So light finally saw some volatility on March 2nd.So where is March 2nd?March 2nd is right here.That's why light continues to take upmore of a percentage of our portfoliois because we're trimming it and it keeps going upwhile the rest of our portfolio was mostly going down.So hopefully that makes sense.It's relative performance.If I rebalanced every day,it would be different percentagesbecause one stock goes up,other one goes down, vice versa.And we get a stock like lightthat just kept going verticalwhile the bulk of the market was going lower.I mean, Sandisk too was going sidewayswhile light was going up.Micron going sideways to down while light was going up.AOI, I mean, if you notice AOI went from like 4%to now it's 10%.All we bought was 1% today.And the reason it did that is because it's gone up so muchcompared to the rest of our portfolio going down.So that's the answer to that question.Okay.So this is a question about trying to mirror our portfolio.Like we're not trying to indirectly manage anyone's money here.We're not.We're trying to show you what we're buying,how we're buying it, why we're buying itand what our conviction is based off of the percentages.So anyway, just trying to say thatwe're not trying to do that.So let's see here.We don't look for the next one to two months.So Coin follows Bitcoin.Let's see here.Actually, I think I have Coin out of the Merus coin.There it is.Yeah, Coin follows Bitcoin.So Coin doesn't follow its fundamentalsor anything like that.It follows Bitcoin.Sometimes it leads, sometimes it lags.But this is clearly three waves up so far.And it's looking like this is the pattern.We'll get some kind of an A wave, maybe a B wave,and then one more push higher.This would have to be a fourth wave to this move right here.One, two, three, four.It's just too deep to be a fourth wave.Typically, a fourth wave will retrace the 23 to 38.2%
of the third wave, which is right here.So one, two, there's your third wave.So I'm just doing retracement levels of that.Typically, a fourth wave will move upinto this range right here.Somewhere in the 23 to 38% retrace of the third wave.On rare occasions, it goes to the 50%.But I mean, extremely rare occasionsthat I'll go to the 61.8, I'm talking like less than 5%.And now we're above it.So odds are favoring that it's not a fourth wave,that it's the start of this B wave.And Coinbase has its work cut outfrom around this 294 to 324 range.So that's a target I'd be looking for some kind of a topand then lower.And that's where we'd be, that would be,I mean, just not gonna say anythingother than I see this as the end of wave one.That would be the end of wave twoand you can defer the rest, okay?Can you give practical informationhow one is to use today's stop?No, stop, SMH cover 30, 20% hedge.How to use in our portfolio.I don't have any information to provideother than what it is that we're doing.I know people want things to be clean and easy.In my experience, especially when managing riskon the downside, it's never easy and clean.It just isn't.In 2022, I don't know how many timeswe would put on a hedge and take it off, put it back on.I know members are frustrated,but it was one of the primary reasonswe didn't see our portfolio down to 60, 70%.So the reason that I'm being a little bit moreof a stickler this timeand hedging intraday is because of the situation right here.
Let me see here.So the last time I saw a consolidation like thatwas in 2015.And once we started breaking supportsand one, two days, we dropped 11%, just in two days.And that's not including the already moved from the high.So when these ranges break, they break quickly.Also, if it breaks to the upside,it'll probably be a pretty violent, quick move higher.So anyway, we're not trying to tell anyone what to do.We're not licensed financial advisors.What I'm providing is like, if these levels break,the odds favor more downside.We broke 7,200 and then just immediately reversed.So I'm not gonna hang on to a hedgebecause I'm embarrassed I put it on or something like that.I'm just kind of following the markets.So I put it on at 72
and then took it off and we brokeabove a certain resistance level.So I'm not sure what more I can sayother than this is just how we're doing it.I know some people like to buy protect puts.Some people like to just hedgeand just wait for a bigger level to break.It's really up to you how you wanna do this,but you're just kind of watching us do this in real time.So if you're having questions about a hedge,I would recommend that you go to our siteand go to this pane right here, risk management.This, we go into excruciating detail.If you are on seeking alpha,then going to right here is the PEND article,three risk management tools that we offer.This is the same article just kind of broken downexplains all the questions you'll have on hedging.Why we do this and how we do itand that it may not be appropriate for everyone.So anyway, right?Let's see, release stocks.An AI cybersecurity disaster will surely comebesides in that any opportunities.We're not really seeing the real strengthin cybersecurity pickup just yet,
but once it does, you'll probably get a gap moveand that will be the start of somethingbut trying to like foresee a black swan eventand plan for it ahead of timeis either get extremely luckyor just be close to impossible and see.So CLS is a company that's been in our wheelhouse for a while.We've been tracking it for a while.I think we were reported on it as well.So it's something we're trackingand we decided to make a position today.Let's see, what?I'm assuming your 2025 returns to not include cash.How will be your return if you include cash?Yeah, it included cash.It's our portfolio, it's our entire portfolio.Like I said before, there are many reasons.We're not trying to indirectly manage people's money.
Trying to mirror our portfolio,we're just not gonna take that responsibility on at all.We're not licensed to do that.And regarding cash, that's one reason.The other reason is that our risk toleranceis gonna be completely differentthan someone who's close to retirementversus someone who's just starting out.And so having our risk profile,which can be measured in cash,it's just not what we're trying to do hereas like a tech research site.We are moving into the ETF world where we are managing.We are gonna be managing money as an RIA.And that would be more appropriate thereto where the research site,I know people have reared our returnswith mixed results.Some have matched it, some have done better,some have done worse.It's just, you know, once again,we're not trying to take that on,you know, unless not the point of this service.Okay, picking the job openingsat the height of the COVID reboundis not a good reference point.Cherry picking for some reason.I don't know, man,I'm just going from the top to the bottom here.Does that look like cherry picking to me?There's the peak right here in March of 2022.All I'm doing is just doing a percentage deceleration to now.Right here is where it peaked in this cycle,right here in November of 2018.And yes, you can see it made lower highsuntil it dropped from the COVID low.So I don't really know what you're talking aboutin your attempt to have gotten me.Let's see here.Any plans to re-enter Credo?No, not right now.We're not going to get into Broadcom's call,but we've been on every single callfor three, four years with Broadcomand they've never mentioned Copper.And Copper is not going to be a partof the expanding systemsand the capacity that the price was justifyingbefore that was announced.So until Credo can actually pivot with successand they have a great management team,they might be able to do that.We have zero plans to get back into Credo.So there we go.Let's see, A.To me, this looks like probably A, there's your A.B, maybe you get a C wave up back upinto this range right here.If we get a little push,if not then we're looking at something like,what is that, W, probably a WXY,like a C, no?What a mess.This to me looks like a one, two, three, four,maybe get a fifth wave down into this zonein the 80s, we'll have to see.Anyway, not ideal.It's just nothing that we're really looking into right now.Okay, the hedging article on the websitedoesn't mention SMH.Can you please clarify the hedge ratio for SMHto offset the portfolio beta?So every, we say it in the article,every quarter we run a correlation screento what our portfolio currently is, right?I mean, looking for a single ETFor a combination of maybe twothat comes close to matching our beta.So we're trying to approach market neutrality, okay?I think that our beta right now, believe it or not,this is it for every,we put it here short right there.So for every $1 invested,we're shorting 90 cents of SMH, okay?So that's what our correlation screen's picked up onand our last quarterly rebalance.It's not gonna be perfect at all,but basically it's saying that our beta,our current beta is lower than SMH, but just barely lower.Now, for those that are thinking to themselves,like you wanna more diversified portfolio,like some energy, maybe some commodities,maybe some bonds, something like that,and you have like 30% to techand you're following this,you're not going market neutral,you're going net short in a waythat may not be ideal for what you're looking to do.It could really hurt you.And so that's why we say we're not licensed,we're shorting everybody what we're doing.There are many ways to manage risk.Some people don't manage risk.We watched a lot of tech investorsjust ignore risk completelyand their portfolios were down like 60, 70% in 2022.We're trying to avoid those holes.These hedges drag on our returns and bull markets,some periods more than others,but we're not really concerned about like,we could have been up 50%, we were up 30%,or we could have been up like,
usually a hedge doesn't drag that much on our portfolio,but it could knock off 5% in an upmarket.That doesn't matter to us as muchas my whole portfolio is down 60%.That's a hole that can change your life,but losing 5% in upmarket,not really gonna affect your life that much.You know what I mean?So that's why we're sticklers about managing risk,why I have these calls,while we're being upfront with what it isthat we do for better or worse,there are many ways to do this, many ways.And we provide tools to do thatin terms of our technical analysis,the signals that we follow.So, you know, how we raise cash,I mean, though we're not like postinghow much cash we have,in periods like this where we think it's important,we're letting you know that we're raising cashbecause it's an important cuefor how we perceive risk in this market.Then it's up to every investor to say,well, you know, I don't wanna be in 30%,I'd rather be in like 20% or 10%that fits my profile.Somebody say, I don't wanna deal with this at all,I'm being 50% cash.It's just, that's up to you.That's a question that you have to determine for yourself.And we're not licensed to do that.See here, would you look at gold happy to do that?Then we'll call it a day.This is what I have on gold.I think that I haven't gotten too deep into it,but I think that was the start of the A wave.This looks like an overlapping mess higher, ABC.And this looks like the start of C.So I'm putting a lot of somewhere around here, 42.I'm not sure if that'll be all of four,that'll just be A.Then we get a B and a C of a bigger four,but I think we're heading down herebefore heading higher, that's just my take.Okay, I'm gonna stop right there and call it a day.I appreciate everyone hereand I hope you have a good evening.Thanks a lot.