Kimi K3 Just Crushed Nvidia’s AI DreamSPY, QQQ, SMH

[00:00:00]Welcome back everybody. Today, the big reason the sell-off kept going is that the big AI story is starting to feel a bit overdone. People who bought tech and chip stocks after they ran up quite a bit are now selling because they're questioning if all the huge spending on data centers and chips will really pay off as fast as everybody hoped. We had Netflix which gave us softer guidance than expected after their earnings which added to the worry. Then adding even more fuel to the fire, China announced their own super advanced AI model which made people suddenly wonder if American tech companies might face serious competition sooner than they thought. A Chinese startup called Moonshot walked on stage at the World AI conference and unveiled a model called Kimmy K3. Open weights 2.8 trillion parameters and benchmarks that reportedly reportedly beat almost everybody. And the market heard about it and they had kind of like a flashback because we've seen this movie before. And this is the deepseek moment of 2025 all over again.

[00:01:20]Now, I'm not saying it's going to continue, but just be mindful. And that one in 2025 erased $600 billion of Nvidia in a single session. They're already calling this one the Kimmy moment. And the logic is simple here. If a free model that anybody can download does frontier level work, then why is the entire planet paying for a trillion dollars of Nvidia GPUs to do the same thing? That one question is what put the whole chip sector further into a bare market today. The semiconductor index is now down nearly 20% from its record. And we got the worst week for chips since the tariff meltdown back in April of last year. And at the same time, you have tensions with Iran heating up again. And it seems that the White House strategy is escalation in order to force deescalation, if that makes any sense.

[00:02:22]So, we got a big mess going on here and oil is just continuing to inch upward.

[00:02:29]We got this perfect storm brewing and it's anybody's guess where we go from here. Next, I'm going to share with you my personal game plan and how I'm going to be trading this market next week. But before we get into it, a quick reminder.

[00:02:44]This is not financial advice, so do your own research. Starting off with the triple Q's. We kind of did have a mean reversion play today, but I decided to pass on it. I think that we might have even more downside here to about 680. I think we come down and fill some more of this gap here. And something I was mentioning early in the day in Discord is just because you see buyers stepping in on the open today, do not FOMO because after a big drop like this, you can see a bounce back up to resistance and then it rolls over. So, if you want a clean signal, you're going to have to wait a little bit longer. That's just how it works. If you're day trading, that's a whole different story. But here, we're focused on the swing trading part, and you need to wait for that candle to close. Now, the good part is we may have found some support here. We have filled the gap here on the left side, but we may still come down a bit lower. So, practice caution here. Size smaller and above all, if you decide to use leverage, make sure you don't overdo it. A lot of people blow up their accounts in this type of market because they have their thesis that the market's going up or it's going down and they get in heavy thinking that it can only go one way and then they turn out to be wrong. Do not do that. Have the math on your side. Make sure that your account can withstand, I don't know, 10, 12 losing trades in a row if possible. That way, you can stay in the game and you can make a comeback. You don't want to wreck your account and then have to build it back up from scratch and then start trading again. Just uh tough lessons learned that every experienced trader knows. And I'm sharing this with you in case you're new to the game. Now, let's talk about the SPX. So, here's the deal. We broke out of that uh wedge here and we came back for the retest. Now, we're holding right at the 50. And if you zoom in here a bit, you'll see that purple line. That's our 50 EMA. So, we've been saying that there's this kind of like a divergence going between the SNP and the triple Q's where the S&P has been heading up and the Q's are just rolling over. So, we're going to see, you know, what happens from here. If this buy begins to roll over as well, and it just gave up that uh support line right here, things could get really ugly. Now, even the RSP is starting to come down, but it's still intact. It's still holding that 21 EMA. IWM actually showing very decent strength here. Still holding support. small caps. Not a bad idea to have some money in small caps right now, believe it or not. It's just because money is rotating. It's not that the market is crashing. I don't think the market's going to crash, but money is rotating and you got to know where to place your money. If you want to get in on semis, yeah, you could get in on semis, but you got to have a much much bigger time span to wait for that recovery. Now, first, let's talk about Oracle. And I have been covering this for the past couple videos.

[00:06:14]We finally seem to have found support here. I said the same thing yesterday, but I want to see more favorable market conditions. Now, let's go back to the daily here. You can see already where support was previously here and here.

[00:06:28]Nice area to attempt a long, but I didn't see much follow through. I was going to pull the trigger. I was going to uh get along and target the 151 at least and see if the you know if we can go up to 170 give this a couple months out on the contracts but I started seeing a bit more of a fade. I want to see a real reversal before I get in. I haven't seen that yet. Broadcom unfortunately stopped me out. This market is a pain in the you know what.

[00:06:58]But the half size and pulled back stopped me out. It is what it is. We are in a channel though now and I was looking for a breakout here. We did not get the breakout as I brought this one up in yesterday's video. I bought some here and got a really nice pop uh in the morning and we had the ESTX, which is D2X. It may not seem like much, but when you grab the measuring tool, we're talking uh about a 20% move because this is multiplied by two. So, this was a nice overnight trade. I unloaded the majority of it uh on the open, holding a bit more in case we come up and fill that gap. Next up is Netflix showing up a little bit of buyers coming in here and it could be short covering as well.

[00:07:47]We could still come down to 61 in my opinion. It's not over. The trend is still headed lower. I would not be playing a hero here. Um, not just yet.

[00:07:58]Not until this trend line breaks. You see how long this trend line goes back right all the way back here. So what makes you think that this is going to break out here? It could come back up here and then just chop and chop and continue. So patience until you break out here. TSM looking not so bad.

[00:08:19]However, you know, like so many other stocks, we've given up the 50. We've given up the point of control. And uh even though we got two green candles, I hate to say this, unless this shows us a nice move to the upside, uh we're the market could roll over here. We got our support right down here about 385, 384, 385. This breaks, see you later. But I think we are due for a bit of a reversion. We'll see how much United today uh gave us another pop and fade.

[00:08:54]Not sure if this really wants to rally or if it wants to roll over. However, healthc care had did show us some strength. But taking a look at the heat map later in the day, most of the market rolled over. It began to uh roll over later in the day.

[00:09:10]So, it seems like a a broad sell-off here with the exception of a few names.

[00:09:16]One we were discussing in Discord was uh AET and this one a really really volatile day the past couple sessions.

[00:09:25]Look at that drop. But if you zoom out I mean we got a 17% drop here. When you zoom out we got a very bullish uh trend forming here. And we had our first trade here which went phenomenal. So we're going to see on Monday if this can hold.

[00:09:42]I think the trend is not done. Uh it's back again at the 50. And if you zoom in here, you'll see, man, that was one heck of a wick. Uh volume just below average, but not bad for a Friday in my opinion.

[00:09:56]Let's take a quick look at Tesla. Tesla is starting to look attractive, believe it or not, because we are at the bottom of the range here, and it hasn't broken.

[00:10:07]So that is uh a little bit of strength on Tesla here. And if you zoom out, you'll see how far back this trend line goes.

[00:10:15]Now, we just need to see a bit of a bounce. And I think this gives us about 10 or 11% to the upside. Let's grab our measuring tool. And yep, I was right.

[00:10:25]About 11 or 12% to the upside. Without the breakout. You get the breakout, you get much more. So, we'll keep an eye out on that. SpaceX below IPO price. And man, if you are a believer in this, maybe pick some up. But I'm I'm going to wait. We It could go even lower.

[00:10:42]Palanteer still showing relative strength here. Still holding, but sideways chop. Waiting to see the real move. Meta is going to be on my radar next week. I really like how we came down, fill this gap here, and came back up. And I was saying, switch over to the weekly. Look at this trend line up here.

[00:11:03]We got rejected once, twice, three, four times. We just reclaim this trend line on the weekly. And if we can hold this trend line, this sets us up for a long to about 714. So meta on the watch list.

[00:11:18]Also, uh, MRNA, this one, I'm going to move this up higher on the list. I'm really liking this chart for the following reasons. You got this area down here. We had broken through it. We had that really nice consolidation and now we're back at the 50 and we have this trend line. So you have confluence here of support and even though the volume's a bit low, that's okay. We're really oversold as well on the RSI and we should expect a bit of a short-term bounce. So Monday, I will look at buying up some MRNA and the upside. We got a lot of upside here on this one. So, I'll keep you updated. Before I head out, I just want to let you know we have a Discord community for swing traders, and we all work together to help each other out. We got a free section with over 1,500 members, and we also got a VIP section for people that want some more one-on-one, you know, handholding and [music] little help in their journey. So, make sure you check that out. And also make sure to like and subscribe. It helps this channel grow and it helps you as well because you get notifications for videos every time I post one. Take care everybody. I hope you enjoy your weekend and I will update you again pretty soon.

[00:12:48]Peace.